2014
Majedie Investments PLC
Annual Report
30 September 2014
Contents
Overview 1 to 3
1
1
2
3
Investment Objective
Highlights for 2014
Year’s Summary
Ten Year Record
Strategic Report 4 to 15
4
6
11
14
15
Chairman’s Statement
Business Review
Chief Executive’s Report
Fund Analysis
Twenty Largest MAM UK Equity
Segregated Fund Holdings
Governance 16 to 40
16
17
23
28
31
39
40
Board of Directors
Directors’ Report
Corporate Governance Statement
Report of the Audit Committee
Report on Directors’ Remuneration
Statement of Directors’ Responsibilities
Report of the Depositary
Financial Statements 41 to 92
41
44
45
46
48
50
51
52
53
54
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 93 to 102
93
99
101
Loose
Notice of Meeting
Majedie Savings Plans
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
2014
Total shareholder return (including dividends):
49.7%
Net asset value total return (including
dividends and debt at par value):
Total dividends (per share):
Directors’ valuation of investment
in Majedie Asset Management Limited:
10.8%
7.5p
£41.3m
REPORT & ACCOUNTS 2014
1
Year’s Summary
Group Capital Structure
Note
2014
2013
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)
Net asset value per share (debt at fair value)
Share price
Group capital returns
Net asset value per share (debt at par value)
Net asset value per share (debt at fair 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
3
6
6
6
7
6
£167.9m
£159.0m
£33.9m
£134.0m
23.4%
25.3%
+10.8%
+12.4%
+49.7%
256.7p
241.8p
229.0p
10.8%
5.3%
£4.9m
9.4p
7.5p
£1.9m
1.8%
1.7%
£33.8m
£125.2m
21.5%
27.0%
+16.9%
+20.2%
+9.7%
240.5p
223.4p
160.0p
33.5%
28.4%
£3.7m
6.8p
10.5p
£2.0m
2.1%
1.7%
%
+5.6
+7.0
+6.7
+8.2
+43.1
+38.2
2. Debt at par or fair value Par value is the nominal or face value attaching to the debentures which will be paid by the Company to the debenture holders on maturity. Fair value
is the estimated market price the Company would pay (on the relevant year end date), as a willing buyer, to a debenture holder, as a willing seller, in an arms-length transaction.
3. Net Asset Value The Net Asset Value (NAV) is the value of all the Company’s assets less any liabilities. The NAV is usually expressed as an amount per share.
4. Gearing and Potential Gearing Gearing represents the amount of borrowings that a company has and is calculated using AIC guidance. It is usually expressed as a
percentage of Equity Shareholders Funds and a positive percentage or ratio above one shows the extent of the borrowings. Gearing is calculated as borrowings less net
current assets to arrive at a net borrowings figure. Potential Gearing excludes cash from the calculation. Details of the calculation for the Company are in note 26 on page 89.
5. Total Return Total returns include any dividends paid as well as capital returns as a result of an increase or decrease in a company’s share price or net asset value.
6. Includes both continuing and discontinued operations.
7. Ongoing charges Ongoing charges are a measure of the normal ongoing costs of running a company. Further information is contained in the Business Review section of
the Strategic Report on page 9.
Year’s high/low
Share price
Net asset value – debt at par
Discount – debt at par
(Premium)/Discount – debt at fair value
high
low
high
low
high
low
high
low
2014
240.0p
160.0p
256.7p
228.6p
33.5%
1.4%
28.4%
(4.6%)
2013
183.0p
151.5p
240.5p
211.9p
33.5%
21.7%
28.4%
13.2%
2
MAJEDIE INVESTMENTS PLC
Ten Year Record
to 30 September 2014
Equity
share-
holders’
Funds
£000
NAV
Per Share
(Debt at
par)
Pence
Share
Price
Pence
Total†
Assets
£000
Discount
%
Earningsˆ
Pence
Dividend
Pence
Gearing†
%
Potential
Gearing†
%
Company
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
167,934
134,061
296.5
238.7
225.2
214.5
215.6
240.5
256.7
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
229.0
10.79
4.66
4.90
6.80
9.36
10.50**
10.50**
10.50**
7.50**
14.51
16.18
13.94
10.65
16.69
17.22
24.11
(1.72)
9.24
21.47
23.39
24.25
18.65
16.12
13.32
21.99
27.19
28.83
30.28
30.14
27.04
25.27
1.36
1.19
1.28
1.24
1.61
2.06
2.36
1.92
1.83
1.73
1.66
Year
End
2004
2005
2006*
2007*
2008
2009
2010
2011
2012
2013
2014
Notes:
* Restated to reflect the review of the treatment of the investment in Majedie Asset Management Limited.
** Net dividends represent dividends that relate to the Company’s financial year. Under International Financial Reporting Standards (IFRSs) dividends are not accrued until paid or approved.
ˆ
Includes both continuing and discontinued operations.
# As from May 2012, Ongoing Charges replace previous cost ratios.
† Calculated in accordance with AIC guidance.
REPORT & ACCOUNTS 2014
3
Strategic Report
Chairman’s Statement
The Company undertook a major change in the past year with the closure of Javelin Capital
LLP and the movement of the management of the majority of the Company’s assets to
Majedie Asset Management (MAM). I am glad to say that the change has gone well, and I
am particularly pleased that the reorganisation has led to a significant re-rating of the
Company’s share price, with the shares regularly trading at a premium to NAV having,
historically, traded at a significant discount.
During the year, the NAV and share price returned 10.8% and 49.7% respectively on a total
return basis.
Results and Dividends
Under IFRS the Company is required to disclose
separately continuing operations from discontinued
operations, which relate to Javelin Capital. The capital
return from continuing operations for the year was
£11.0m compared to £15.7m in 2013. The capital loss
from discontinued operations for the year was £2.6m,
reflecting principally the £2.1m write off of the Company’s
investment in Javelin Capital. This write off was taken
in January and April 2014 and Javelin Capital has now
been fully written down.
The net revenue return from continuing operations
increased from £3.9m in 2013 to £5.1m and is due
primarily to an increase in the dividend paid by MAM.
Total administrative and management fees, on a
continuing basis, have risen from £0.7m in 2013 to
£1.6m in 2014 whilst the discontinued expenses
relating to Javelin have fallen from £1.3m to £0.7m.
The increase in continuing administrative and
management fees reflects the investment management
fees paid to MAM, which were not incurred in 2013,
and the Company paying certain expenses previously
borne by Javelin. The future reduction of administrative
expenses is a key area of focus for the Board and they
will, over time, fall. However the self managed nature of
the Company means that ongoing costs will remain
higher than those of the average investment trust.
The Board announced in January 2014 that the full
year dividend would be rebased to not less than
7.5 pence per share. In line with that announcement,
following the payment of an interim dividend of
3.0 pence per share in June 2014, the final dividend
will be 4.5 pence per share. The final dividend will be
paid on 21 January 2015 to shareholders on the
register on 9 January 2015.
Alternative Investment Fund Managers Directive
(AIFMD or the Directive)
Under AIFMD, the Company is treated as an
Alternative Investment Fund (AIF) and has applied for
authorisation by the Financial Conduct Authority (FCA)
to act as its own Alternative Investment Fund Manager
(AIFM). Pursuant to the AIFMD the Company appointed
Bank of New York Mellon Trust and Depositary (UK)
Limited (BNYM (UK)) to act as the Company’s
Depositary and Bank of New York Mellon SA/NV
London Branch has been appointed as its Custodian.
The appointment of a Depositary will increase costs.
AGM
The AGM will be held on 14 January 2015 at 12.00
noon at the City of London Club, 19 Old Broad Street,
London EC2N 1DS. Details are set out in the notice of
meeting on page 93. There will be presentations and
an opportunity to ask questions. I do hope you will be
able to attend.
4
MAJEDIE INVESTMENTS PLC
Summary
The past year has been transformational for the
Company and I am pleased with the positive reaction
of investors. This is partially due to a general narrowing
of investment trust discounts as investors have noted
the attractions of investment trusts for broad equity
exposure following recent changes to legislation. More
specifically, it reflects recognition of the unique nature
of the Company’s asset allocation. The Company’s
investments are now managed by a leading boutique
manager across a variety of strategies, including an
absolute return fund, and the Company retains a
significant investment in MAM.
In the past year, the Company has issued a small
amount of stock from its EBT at a premium to NAV
and also has permission to issue up to 10% of its
equity at a premium to the prevailing NAV. It is intended
to renew this permission at the AGM. The benefits for
shareholders, of an increase in stock in issue, will be a
dilution in gearing and the cost of debentures, a
reduction in administrative expenses per share and
increased liquidity in the Company’s shares.
I would like to thank my fellow directors and particularly
the staff for their contributions and hard work throughout
the restructuring of the Company and I look forward to
further progress being made in the current year.
Andrew J Adcock Chairman
4 December 2014
REPORT & ACCOUNTS 2014
5
Strategic Report
Business Review
Introduction and Strategy
Majedie Investments PLC (the Company) is an
investment trust company and self managed AIF with
an investment objective to maximise total shareholder
return, whilst increasing dividends by more than the
rate of inflation over the long term. In seeking to
achieve this objective, the Board has determined an
investment policy and related guidelines or limits (as
described on pages 6 and 7). The investment objective
and policy (as detailed on pages 6 and 7) were both
approved by shareholders at a General Meeting of the
Company on 27 February 2014 (which incorporated
various changes following the restructuring of the
Group, including the appointment of MAM). Further
details concerning the restructuring that occurred
during the year are detailed in the Chief Executive’s
Report on pages 11 to 13.
The year under review also saw the introduction of the
AIFMD, which applies to the Company. Following careful
analysis the Board has chosen to become its own AIFM
under the Directive and has appointed BNYM (UK) to
be its depositary. This meant that the Company applied
to become authorised and regulated by the FCA for
the first time. Further details concerning the Company’s
regulatory environment are on pages 7 and 8.
In January 2014, the Company joined the Association
of Investment Companies (AIC) (the trade body for
closed-ended investment companies).
The purpose of the Strategic Report (which is the
Strategic Report for the Group) is to inform the
shareholders of the Company and help them assess
how the directors have performed their duty to
promote the success of the Company in accordance
with section 172 of the Companies Act 2006 by:
• analysing development and performance using
appropriate Key Performance Indicators (KPIs);
• providing a fair and balanced review of the
Company’s business;
• outlining the principal risks and uncertainties
affecting the Company;
• describing how the Company manages these risks;
• setting out the Company’s environmental, social and
ethical policy;
• outlining the main trends and factors likely to affect
the future development, performance and position
of the Company’s business; and
• explaining the future business plans of the Company.
Business Model
In pursuing its investment objective, the Company’s
business model includes other entities which together
form the Group. Active companies in the Group
currently consist of the Company (as a global equity
investment trust and FCA regulated self-managed AIF)
and Majedie Portfolio Management Limited (which is
the FCA regulated Majedie Investments PLC Share
Plan Manager). Further details about subsidiary entities
can be found in note 14 to the Accounts on page 75.
The business model currently used by the Company
delegates certain arrangements to other service
providers. These delegations are in accordance with
the AIFMD, (the details of the material delegations can
be found on pages 20 and 21), but the Board, as an
AIFM and in accordance with the Company’s
investment objective and policy, directs, controls and
monitors the overall performance or operations and
direction of the Company.
Investment Objective
The Company’s investment objective is to maximise
total shareholder return whilst increasing dividends by
more than the rate of inflation over the long term.
Investment Policy
• General
The Company invests principally in securities of publicly
quoted companies worldwide and in funds managed
by its investment manager, though it may invest in
unquoted securities up to levels set periodically by the
Board, including its investment in MAM. Investments in
unquoted securities, other than those managed by its
investment manager or made prior to the date of
adoption of this investment policy, (measured by
reference to the Company’s cost of investment) will not
exceed 10% of the Company’s gross assets.
6
MAJEDIE INVESTMENTS PLC
• Risk Diversification
Whilst the Company will at times invest and manage its
assets in a manner that is consistent with spreading
investment risk, there will be no rigid industry, sector,
region or country restrictions. The overall approach is
based on an analysis of global economies sector trends
with a focus on companies and sectors judged likely to
deliver strong growth over the long term. The number
of investments held, together with the geographic and
sector diversity of the portfolio, enable the Company to
spread its risks with regard to liquidity, market volatility,
currency movements and revenue streams.
The Company will not invest in any holding that would,
at the time of investment, represent more than 15% of
the value of its gross assets save that the Company
may invest up to 25% of its gross assets in any single
fund managed by its investment manager where the
Board believes that the investment policy of such funds
is consistent with the Company’s objective of
spreading investment risk.
The Company may utilise derivative instruments
including index-linked notes, contracts for difference,
covered options and other equity-related derivative
instruments for efficient portfolio management and
investment purposes.
Any use of derivatives for investment purposes will be
made on the basis of the same principles of risk
spreading and diversification that apply to the
Company’s direct investments, as described above.
• Asset Allocation
The assets of the Company will be allocated principally
between investments in publicly quoted companies
worldwide and in investments intended to provide an
absolute return (in each case either directly or through
other funds or collective investment schemes managed
by the Company’s investment manager) and the
Company’s investment in MAM itself.
• Benchmark
The Company does not have one overall benchmark,
rather each distinct group of assets is viewed
independently. Any investments made into funds
managed by the Company’s investment manager will
be measured against the benchmark or benchmarks, if
any, whose constituent investments appear to the
Company to correspond most closely to those
investments. It is important to note that in all cases
investment decisions and portfolio construction are
made on an independent basis. The Board however
sets various specific portfolio limits for stocks and
sectors in order to restrict risk levels from time to time,
which remain subject to the investment restrictions set
out in this section.
• Gearing
The Company uses gearing currently via long term
debentures. The Board has the ability to borrow up to
100% of adjusted capital and reserves. The Board also
reviews the level of gearing (borrowings less cash) on
an ongoing basis and sets a range at its discretion as
appropriate. The Company’s current debenture
borrowings are limited by covenant to 662/3% and any
additional indebtedness is not to exceed 20% of
adjusted capital and reserves.
Regulatory and Competitive Environment
The Company is an investment trust and has a
premium listing on the London Stock Exchange. It is
subject to United Kingdom and European legislation
and regulations including UK company law,
International Financial Reporting Standards, Listing,
Prospectus and Disclosure and Transparency Rules,
taxation law and the Company’s own Articles of
Association. The directors are charged with ensuring
that the Company complies with its objectives as well
as these regulations.
Under the Companies Act 2006, section 833, the
Company is defined as an investment company.
As outlined previously the Company has become
subject to the AIFMD during the year. The AIFMD
regulates investment entities defined as AIFs, as from
22 July 2014.
REPORT & ACCOUNTS 2014
7
Strategic Report
Business Review
The AIFMD requires that all AIFs are managed by a
regulated AIFM in accordance with the requirements of
the Directive. These requirements are in respect of risk
management, conflicts of interest, leverage, liquidity
management, delegation, the requirement to appoint a
depositary, regulatory capital, valuations, disclosure of
information to investors or potential investors,
remuneration and marketing.
In accordance with the AIFMD, the Company has
applied to become authorised and regulated by the
FCA as its own AIFM (becoming an internally, or self
managed AIF).
The financial statements, starting on page 44, report
on profits, the changes in equity, the balance sheet
position and the cash flows in the current and prior
financial period. This is in compliance with current
International Financial Reporting Standards (IFRS) as
adopted by the EU, supplemented by the Statement of
Recommended Practice for Investment Trust
Companies and Venture Capital Trusts (SORP) issued
in January 2009. The principal accounting policies of
the Company are set out in note 1 to the accounts on
pages 55 to 61. The Auditor’s opinion on the financial
statements, which is unqualified, appears on pages 41
to 43.
Total Return Philosophy & Dividend Policy
The directors believe that investment returns will be
maximised if a total return policy is followed whereby
the Investment Manager pursues the best opportunities.
The policy aim is to increase dividends by more than
inflation over the long term. The Board has decided to
rebase the dividend as from this financial year. Further
details are under the Dividend Growth Section on page
9. The Company has a comparatively high level of
revenue reserves for the investment trust sector. At
£21.9m, the revenue reserves represent approximately
five times the current annual dividend distribution. The
strength of these reserves will assist in underpinning
the Company’s progressive dividend policy in years
when the income from the portfolio is insufficient to
cover completely the annual distribution, although it is
not currently anticipated.
Performance Management
The Board uses the following Key Performance
Indicators (KPIs) to help assess progress against the
Company’s objectives. Further comments on these KPIs
are contained in the Chairman’s Statement and Chief
Executive’s Report sections of the Strategic Report on
pages 4 and 5 and pages 11 to 13 respectively.
• Net Asset Value (NAV) and Total Shareholder Return:
The Board believes that asset return is fundamental
to delivering value over the long term and is a key
determinant of shareholder return. The Board further
believes that, in accordance with the Company’s
objective, the total return basis (which includes
dividends paid out to shareholders) is the best
measure of how to measure long term shareholder
return. The Board, at each meeting, receives reports
detailing the Company’s NAV and shareholder total
return performance, asset allocation and related
analyses. Details of the NAV and share price total
return performance for the year are shown on
page 13.
• Investment Group performance:
The Board believes that after asset allocation, the
performance of each of the investment groups is the
key driver of NAV return and hence shareholder
return. The Board receives, at each meeting,
detailed reports showing the performance of the
investment groups which also includes relevant
attribution analysis. The Chief Executive’s Report on
pages 11 to 13 provides further detail on each
investment group’s performance for the year.
• Share price premium/discount:
As a closed ended listed investment company, the
share price of the Company can and does differ
from that of the NAV. This can give rise to either a
premium or discount and as such is another
component of Total Shareholder Return. During the
year the Company’s share price gain outperformed
the gain in the Company’s NAV resulting in the
Company regularly trading at a premium.
8
MAJEDIE INVESTMENTS PLC
The Board continually monitors the Company’s
premium or discount, and has received approval
(and is seeking to renew such approval for another
year) to issue new shares, at a premium to the
relevant NAV, in order to meet natural market
demand. Additionally for maximum flexibility the
Board does have the ability to buy back shares if
thought appropriate, although it must be noted that
this ability is limited by the majority shareholding
held by members of the Barlow family. Details of
movements in the Company’s share price discount
or premium over the year is shown in the Year’s
Summary on page 2.
• Expenses:
The Board is aware of the impact of costs on
returns and is conscious of seeking to minimise
these both at the Company and Group level. The
industry wide measure for investment trusts is
ongoing charges, which seeks to quantify the
ongoing costs of running the Company. This
measures the annual normal ongoing costs of an
investment trust, excluding performance fees, one
off expenses and investment dealing costs, as a
percentage of average equity shareholders funds.
Any investments made into pooled funds are
included using the Company’s share of estimated
ongoing fund running costs. The Board does also
pay close attention to costs in the subsidiary
entities. Details of ongoing charges for the year are
shown in the Year’s Summary on page 2.
• Dividend Growth:
Dividends paid to shareholders are an important
component of Total Shareholder Return and this has
been included in the Company’s investment
objective. The Board is aware of the importance of
this objective to the Company’s shareholders and in
recent years has maintained the dividend by using
some of the Company’s large revenue reserves. The
Board had hoped that a successful development of
Javelin Capital would allow the Company to maintain
and grow its dividend with the benefit of income
from Javelin Capital. With the closure of Javelin
Capital, the Board has resolved to rebase the annual
dividend with a view to moving to a sustainable and
progressive dividend policy, paying dividends out of
current year income rather than from revenue
reserves. The Board receives detailed management
accounts and forecasts which show the actual and
forecast financial outturns for the Company and the
Group. For the year to 30 September 2013, being
the period prior to the rebasing of the dividend,
dividend growth since 1985 has been 4.7% (5.3%
including special dividends) which is ahead of
inflation over that period.
Principal Risks
The principal risks and the Company’s policies for
managing these risks and the policy and practices with
regard to financial instruments are summarised below
and in note 26 to the accounts on pages 81 to 90.
i
Investment Risk:
The Company has a range of equity investments,
including a substantial investment in an unlisted
asset management business, UK and global equities
(both on a direct basis (via the MAM UK Equity
Segregated Fund (UKESF)) and via collective
investment vehicles (the Funds), and an investment
in an absolute return fund, the Tortoise Fund
(Tortoise). The major risk for the Company remains
investment risk, primarily market risk; however it is
recognised that the investment in MAM continues to
represent a degree of concentration risk for the
Company, (although reducing given the divestment
programme announced as part of the restructuring
in January 2014).
REPORT & ACCOUNTS 2014
9
Strategic Report
Business Review
The number of investments held, together with the
geographic and sector diversity of the portfolio,
enables the Company to spread its risks with regard
to liquidity, market volatility, currency movements
and revenue streams.
Under the terms of the Investment Agreement the
Investment Manager manages the majority of the
Company’s investment assets. The portfolios of
UKESF and the Funds are actively managed by
MAM against benchmarks and each have specific
limits for individual stocks and market sectors that
are monitored in real time. It should be noted that
UKESF and the Funds’ returns will differ from the
benchmark returns. The Tortoise Fund is an
absolute return fund whose returns are not
correlated to equity markets. The principal risks are
moderated by strict control of position sizing, low
use of leverage and investing in liquid stocks. Also
the level of risk at a net asset value level increases
with gearing. In certain circumstances cash
balances may be raised to reduce the effective level
of gearing. This would result in a lower level of risk
in absolute terms.
ii. Strategy Risk:
An inappropriate investment strategy could result in
poor returns for shareholders and the introduction of
or a widening of the discount of the share price to
the NAV per share. The Board regularly reviews
strategy in relation to a range of issues including
investment policy and objective, the allocation of
assets between investment groups, the level and
effect of gearing and currency or geographic
exposure;
iii. Business Risk:
Inappropriate management or controls in the
Company or at MAM could result in financial loss,
reputational risk and regulatory censure. The Board
has representation on the MAM governing board to
monitor business financial performance and
operations and also receives detailed reports from
Company management on financial and non-
financial performance;
iv. Compliance Risk:
Failure to comply with regulations could result in the
Company losing its listing, losing its FCA
authorisation as a self managed AIF or being
subjected to corporation tax on its capital gains.
The Board receives and reviews regular reports from
its service providers and Company management on
the controls in place to prevent non-compliance of
the Company with rules and regulations. The Board
also receives regular investment listings and income
forecasts as part of its monitoring of compliance
with sections 1158 to 1162 of the Corporation Tax
Act 2010; and
v. Operational Risk:
Inadequate financial controls and failure by an
outsourced supplier to perform to the required
standard could result in misappropriation of assets,
loss of income and debtor receipts and mis-
reporting of NAVs. The Board and Audit Committee
regularly review statements on internal controls and
procedures and subject the books and records of
the Company to an annual external audit. The
Corporate Governance statement on pages 23 to
27 and the Report of the Audit Committee on pages
28 to 30 provide further information in respect of
internal control systems and risk management
procedures.
On behalf of the Board
Andrew J Adcock Chairman
4 December 2014
10
MAJEDIE INVESTMENTS PLC
Strategic Report
Chief Executive’s Report
Introduction
In January 2014 the Company announced the closure
of Javelin Capital LLP and that the majority of the
Company’s assets would be managed by MAM. The
changes were detailed in a letter to shareholders dated
5 February 2014 which preceded the General Meeting
of the Company to approve the changes. Under the
new investment management arrangements the
Company’s assets, other than the direct stake in MAM
and the residual non core portfolio, are allocated at the
discretion of the Board between investment strategies
managed by MAM. Initially the assets were allocated to
a segregated fund tracking MAM’s UK Equity Fund, to
MAM’s UK Income Fund and to MAM’S Tortoise Fund.
In June the Company allocated £5m each to the MAM
Global Equity, MAM Global Focus and MAM US Equity
funds, at their launch, the investments being funded by
reducing the assets in the segregated fund.
MAM Funds
The UK Equity Fund is the flagship product of MAM
having started in March 2003 and since inception
to September 2014 has returned 14.0% per annum
net of fees with a relative outperformance against its
benchmark FTSE All Share Index of 4.2% per annum.
The Company’s assets are invested in a segregated
fund that is managed in parallel to the MAM UK Equity
Fund. The assets are predominately UK equities with
overseas equities limited to 20%, and the strategy
incorporates a dedicated allocation to UK smaller
companies. The sum invested by the Company in the
segregated fund at 30 September 2014 was £65.5m,
representing 39.1% of the Company’s total assets.
The Tortoise Fund is a global equity absolute return
fund which started in August 2007 and has returned
10.5% per annum net of fees since that date. The total
sum invested in the Tortoise Fund at 30 September
2014 was £27.7m, representing 16.5% of the
Company’s total assets.
The UK Income Fund is an income fund which started
in December 2011 and has returned 22.6% per annum
net of fees with a relative outperformance against its
benchmark of 9.5% per annum. The assets are
predominantly UK equities, with overseas equities
limited to 20%. The total sum invested by the
Company in the UK Income Fund at 30 September
2014 was £17.5m, representing 10.4% of the
Company’s total assets.
Following the recruitment of experienced Fund
Managers the Global Equity, Global Focus Fund and
US Equity Funds were launched by MAM in June 2014
and the Company invested £5m in each. The total
sums invested in the Global Equity, Global Focus and
US Equity funds by the Company as at 30 September
2014 were £5.1m, £5.0m and £5.4m which represents
3.0%, 3.0% and 3.2% respectively of total assets.
Performance
The Company’s assets were managed by Javelin
Capital until January 2014 and thereafter the majority
have been managed by MAM. Under Javelin Capital
the assets were split between the Core Portfolio, which
comprised holdings in large cap UK and international
companies and was measured against a benchmark of
70% FTSE All Share and 30% ROW ex UK, and
investments in the Javelin Emerging Alpha Fund. The
return on the Core Portfolio was 6.1%, which was an
outperformance of 0.7% against its index. The Javelin
Emerging Market Alpha Fund was an Absolute Return
Fund which returned -3.0% from 30 September 2013
until its closure in January 2014. The Company
received £29.5m which was invested in MAM Funds.
In the period from the Company’s investment
in January 2014, the MAM UK Equity Segregated Fund
returned -1.7% net of fees compared to the
benchmark of -0.7%. This return is net of the trading
costs incurred in restructuring the portfolio following
the appointment of MAM. Details of the principal
investments held within the segregated portfolio are set
out on page 15. The cumulative geographic and sector
split of the UK Segregated Fund, UK Income Fund,
Global Equity Fund, Global Equity Focus Fund and US
Equity Fund are shown on page 14.
REPORT & ACCOUNTS 2014 11
Realisation portfolio and cash
The realisation portfolio and cash are 0.1% and 0.1% of
total assets. The cash figure excludes cash held in the
MAM Segregated Fund and other MAM Funds in which
the Company is invested.
Javelin Capital
Javelin Capital has been written down by £2.1m and is
now held at zero. It is in the process of being liquidated.
Strategic Report
Chief Executive’s Report
The Tortoise Fund had a difficult period following the
Company’s investment in the Fund in January with a
return of -4.9% net of fees. In the period from January
2014, the UK Income Fund returned 4.4% net of fees
compared to its benchmark of 2.7%. The Global Equity
and Global Equity Focus Funds returned 1.7% and
-0.1% net of fees compared to their benchmark (MSCI
World Sterling) of 3.0% in the three months from their
launches to 30 September. The US Equity Fund had a
good return in the same period of 7.5% net of fees
compared to its benchmark (S&P Sterling) of 6.1%. The
return was enhanced by the strength of the US dollar
against sterling. The sterling share classes in the Global
and US Funds are not hedged.
MAM
MAM had a strong year with assets under management
rising from £7.7bn to £10.2bn over the year to
30 September 2014. The increase in assets is across all
existing MAM Funds which reflects rising markets, fund
performance and fund inflows. The new Global Equity,
Global Focus and US Funds have not materially
influenced the growth in assets under management due
to their recent launch in June 2014.
In March 2014 the Company sold 10% of MAM for
£18.0m and now holds 18%; the shares sold were
subsequently cancelled. It is intended that further
reductions will be made over the next four years, with
the Company having agreed to sell up to 2.5% of MAM
each year. These shares will be acquired by an
employee benefit trust or by MAM for cancellation. The
Board has raised the value of its holding in MAM at
30 September 2014 to £41.3m, which represents
24.6% of the Company’s total assets.
12
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
2014. In aggregate, the NAV has increased by £8.9m, having incurred net administration (including both continuing
and discontinuing operations) and finance costs of £4.6m and having paid out £4.8m in dividends (being comprised
of the 6.3p 2013 final dividend and the 3p 2014 interim). In relation to the Group’s investments, the UKES portfolio
(and Core Portfolio to January 2014) gained £4.2m, including dividend receipts, whilst MAM provided a total
contribution of £18.1m (comprised of dividends of £3.6m and total capital gains of £14.5m). Lastly the realisation
portfolio declined by £0.4m, the JCEMAF by £1.0m, the MAM funds, as a group, by £0.5m. Additionally, Javelin
Capital was written down by £2.1m.
+£18.1m (£0.5m)
(£1.0m)
(£0.4m)
(£1.8m)
(£2.1m)
(£2.8m)
(£4.8m)
£134.1m
+£4.2m
£125.2m
NAV
30.09.13
Core &
MAM UKES
Portfolio
MAM
MAM
Funds
JCEMAF
Realisation
Portfolio
Admin
Costs
Capital write
down of
Javelin Capital
Finance
Costs
Dividend
Paid
NAV
30.09.14
Note: Net admin costs are net of Javelin Capital management fee income as received from external investors and also in respect of the Company’s investment in the
JCEMAF. They also include the net increase from the sale of the EIT shares.
MAM Fund Performance
MAM UK Equity Segregated Fund
MAM UK Income Fund
MAM Global Equity Fund
MAM Global Focus Fund
MAM US Equity Fund
MAM Tortoise Fund
Notes:
% Fund Return
(net of fees) % Benchmark Return
-1.5
4.4
1.8
-0.1
7.9
-4.9
-0.7
2.8
3.0
3.0
6.1
–
The MAM UK Equity Segregated Fund commenced on 22 January 2014.
The investment in the MAM UK Income Fund was made on 29 January and 19 March 2014.
The investments in the MAM Global Equity, MAM Global Focus and MAM US Equity were made on 27 June 2014 and funded from the MAM UK Equity Segregated Fund.
The investment in the MAM Tortoise Fund was made on 29 January and 18 March 2014. The fund is an absolute return fund and therefore has no benchmark.
William Barlow CEO
4 December 2014
REPORT & ACCOUNTS 2014 13
Strategic Report
Fund Analysis
at 30 September 2014
Geographical Analysis
UK
Europe
US
Japan
Developed Asia
Emerging Markets
Cash
Sector Analysis
Basic Materials
Consumer Goods
Consumer Services
Financials
Health Care
Industrials
Oil & Gas
Technology
Telecommunications
Utilities
Cash
Notes:
% of Total
70.0
10.9
13.9
0.7
0.2
1.1
3.2
100.0
% of Total
3.0
2.1
17.2
20.0
11.0
10.7
11.4
5.3
11.2
4.9
3.2
100.0
Exposures are based on the stock exchange on which the underlying equity is listed and FTSE sector classification.
The assets analysed above are the aggregate exposure of MAM UK Equity Segregated Fund, MAM UK Income Fund, MAM Global Equity Fund, MAM Global Focus
Fund and MAM US Equity Fund Investments. The aggregate represent a total of 58.7% of the Company total assets.
14
MAJEDIE INVESTMENTS PLC
Strategic Report
Twenty Largest MAM UK Equity Segregated Fund Holdings
at 30 September 2014
Company
MAM Special Situations Fund
Royal Dutch Shell plc
GlaxoSmithKline plc
BP plc
Vodafone Group Plc
AstraZeneca PLC
BAE Systems PLC
Marks & Spencer Group PLC
Orange SA
Centrica plc
BT Group plc
HSBC Holdings plc
Telecom Italia SpA
Tesco PLC
Royal KPN NV
Royal Bank of Scotland Group plc
Carnival plc
Standard Life plc
Aviva PLC
National Grid plc
Market Value
£000
% of UK
Segregated
Fund
5,722
4,299
3,946
3,877
3,171
2,879
2,637
2,120
1,971
1,942
1,905
1,643
1,419
1,272
1,264
1,243
1,155
989
964
905
9.1
6.8
6.3
6.1
5.0
4.6
4.2
3.4
3.1
3.1
3.0
2.6
2.3
2.0
2.0
2.0
1.8
1.6
1.5
1.4
45,323
71.9
REPORT & ACCOUNTS 2014 15
R David C Henderson* FCA
Mr Henderson, a Chartered Accountant, is currently
Special Advisor to Kleinwort Benson, Chairman of
Alder Asset Management, Chairman of TClarke plc 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 the Company on
22 September 2011, is Chairman of the Audit
Committee and a member of the Remuneration,
Nomination and Management Engagement
Committees.
* Independent 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 and Kleinwort Benson Bank Limited. He was
appointed as a non-executive director of Foxtons
Group plc in September 2013 and is Chairman of their
Remuneration Committee. Also in September 2013, he
was appointed as a non-executive director of JP
Morgan European Investment Trust plc. He is also
Chairman of the Samuel Courtauld Trust and a Director
of The Courtald Institute of Art, and is acting Chairman
of the Institute’s Audit Committee.
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
the Company 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 Executive Officer of the
Company from 1 April 2014, before which he was a
member and Chief Operating Officer at Javelin Capital
LLP. Prior to Javelin Capital LLP, he was at Newedge
Group. 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, Javelin
Capital Services Limited, and is also a non-executive
director of MAM.
Paul D Gadd*
Mr Gadd was appointed as a director of the Company
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.
16
MAJEDIE INVESTMENTS PLC
Directors’ Report
The directors submit their report and the accounts for
the year ended 30 September 2014.
Introduction
The Directors’ Report includes the Corporate
Governance statement, which can be found on pages
23 to 27, the Report of the Audit Committee, which
can be found on pages 28 to 30 and the Directors’
Remuneration Report on pages 31 to 38. A review of
the Company’s business is contained in the Strategic
Report which includes the Chairman’s statement and
should be read in conjunction with the
Directors’ Report.
Principal Activity and Status
The Company is a public limited company and an
investment company under section 833 of the
Companies Act 2006. It operates as an investment
trust and is not a close company. The Company is also
a member of the AIC.
The Company has received written confirmation from
HM Revenue & Customs that it meets the eligibility
conditions and is an approved investment trust for
taxation purposes under sections 1158/59 of the
Corporation Tax Act 2010, with effect from 1 October
2012, subject to it continuing to meet the eligibility
conditions and on-going requirements. In the opinion
of the directors, the Company continues to direct its
affairs so as to enable it to continue to qualify as an
approved investment trust.
Results and Dividend
The consolidated net revenue return before taxation
arising from continuing operations amounted to
£5,148,000 (2013: £3,995,000), and the net loss
before taxation arising from discontinued operations
amounted to £232,000 (2013: £339,000). The
directors recommend a final ordinary dividend of 4.5p
per ordinary share, payable on 21 January 2015 to
shareholders on the register at the close of business
on 9 January 2015. Together with the interim dividend
of 3.0p per share paid on 27 June 2014, this makes a
total distribution of 7.5p per share in respect of the
financial year (2013: 10.5p per share).
Risk Management and Objectives
The Company as an investment trust, and the Group,
are subject to various risks in pursuing their objectives.
The nature of these risks and the controls and policies
in place across the Group that are used to minimise
these risks are further detailed in the Strategic Report
on pages 9 and 10 and in note 26 of the Accounts on
pages 81 to 90.
Directors
The directors in office at the date of this report are
listed on page 16.
Directors’ retirement by rotation and appointment is
subject to the Company’s Articles of Association and
the UK Corporate Governance Code.
The Company’s Articles of Association require that at
every Annual General Meeting any director who has not
retired from office at the preceding two Annual General
Meetings shall stand for re-appointment by the Company.
Therefore in accordance with the Company’s Articles of
Association, Mr AJ Adcock, having been last
re-appointed at the Annual General Meeting in 2012,
will retire at the forthcoming Annual General Meeting
and, being eligible, will offer himself for re-appointment.
Additionally Mr RDC Henderson, having last been
appointed at the Annual General Meeting in 2012, will
retire at the forthcoming Annual General Meeting and,
being eligible, will offer himself for re-appointment.
In accordance with Listing Rule 15.2.13A and in
accordance with the UK Corporate Governance Code
with respect of directors who have served over nine
years, Mr JWM Barlow, being a non-executive director
of Majedie Asset Management Limited, the Investment
Manager, must submit himself for annual
re-appointment.
The Board has considered the continued appointment
of Mr JWM Barlow who has served for over 14 years.
The Board’s view is that length of tenure does not
compromise independence and that experience and
continuity can add strength to a Board. Given the
restructuring that was undertaken during the year the
Board is conscious of the need to maintain continuity
on the Board and believes retaining directors with
sufficient experience of both the Company and the
markets is of great benefit to the shareholders. The
Board believes that the performance of Mr JWM
Barlow continues to be effective, that he demonstrates
commitment to his role and has a range of business,
financial and asset management skills and experience
relevant to the direction and control of the Company.
The Board, having considered the retiring directors’
performance within the annual Board performance
evaluation, hereby recommends that shareholders vote
in favour of the proposed re-appointments.
REPORT & ACCOUNTS 2014 17
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
Mr RDC Henderson
30 September
2014
50,000
676,083
30,000
4,700
1 October
2013
20,000
676,083*
10,000
Nil
* The Company’s Annual Report and Accounts for the year ended 30 September
2013 incorrectly stated Mr JWM Barlow’s beneficial holding as being 658,779
ordinary shares. Mr JWM Barlow’s beneficial holding has remained unchanged
since the disclosure to the market made on 5 October 2010.
Non-beneficial interests in ordinary shares as trustees
for various settlements as at:
Mr JWM Barlow
30 September
2014
1,897,165
1 October
2013
1,897,165†
† The Company’s Annual Report and Accounts for the year ended 30 September
2013 incorrectly stated Mr JWM Barlow’s non-beneficial holding as being 2,160,779.
There have been no changes to any of the above
holdings between 30 September 2014 and the date of
this report.
Substantial Shareholdings
At 30 November 2014 the Company has been notified
of the following substantial holdings in shares carrying
voting rights:
Mr HS Barlow
Beneficial
Non-beneficial
Axa Group
Mr MHD Barlow Beneficial
Sir JK Barlow
Non-beneficial
Beneficial
Non-beneficial
Mr GB Barlow
Miss AE Barlow
Mr JWM Barlow Beneficial
Non-beneficial
613,084
15,017,619 28.59%
1.17%
7,103,119 13.52%
3.38%
1,776,241
2.59%
1,360,750
2.97%
1,561,805
1.65%
869,086
1.67%
877,433
3.87%
2,034,948
1.29%
676,083
3.61%
1,897,165
The substantial voting rights disclosed above include
the total holdings of shares within certain trusts where
there are other beneficiaries.
There have been no changes to any of the above
holdings between 30 November 2014 and the date of
this report.
Annual General Meeting
The Annual General Meeting will be held at City of
London Club, 19 Old Broad Street, London EC2N 1DS
on Wednesday, 14 January 2015 at 12 noon. The
notice convening the Annual General Meeting is set out
on pages 93 to 98.
The Board considers that Resolutions 1 to 13 are likely
to promote the success of the Company and are in the
best interests of the Company and its shareholders as
a whole. The Directors unanimously recommend that
you vote in favour of the Resolutions as they intend to
do in respect of their own beneficial holdings.
Issue and Buyback of Shares
As part of the restructuring of the Company during the
year the Board received approval, at a General Meeting
on 27 February 2014, to allot new shares for cash, and
without first offering them to existing shareholders in
proportion to their holdings, up to a maximum of
5,200,000 shares (being approximately 9.99% of the
Company’s existing share capital). These two authorities
will expire at the 2015 Annual General Meeting. The
directors undertake not to allot any such new shares
unless they are allotted at a price representing a premium
to the Company’s then prevailing NAV per share, with
debt at market value. No shares have been allotted
from the date of the General Meeting to 30 September
2014, or subsequently to the date of this report.
During the year, 175,000 shares were sold by the
Company’s Employee Incentive Trust.
The directors are of the view that they are prepared to
issue new shares in order to meet natural market
demand, subject to the restriction that any new shares
will be issued at a premium as above, and as such
shareholder approval is sought at the Annual General
Meeting to renew the authority to issue new shares,
without first offering them to existing shareholders in
proportion to their holdings, up to a maximum of
5,200,000 shares (being approximately 9.99% of the
Company’s existing share capital).
Since 1 October 2013, and up to the date of this
report, the Company has made no buybacks for
cancellation of its ordinary shares. At the Annual
General Meeting in 2014 the directors were given
power to buy back 7,873,947 ordinary shares (being
14.99% of the Company’s existing share capital). Since
the Annual General Meeting the directors have not
bought any shares under this authority. This authority
will expire at the 2015 Annual General Meeting.
18
MAJEDIE INVESTMENTS PLC
In order to provide maximum flexibility, the directors
consider it appropriate that the Company be authorised
to make such purchases and accordingly shareholder
approval is sought at the Annual General Meeting to
renew the authority of the Company to exercise the
power contained in its Articles of Association to make
buybacks of its own shares. The maximum number of
shares which may be purchased is 14.99% of the
issued share capital. Any shares so purchased will be
cancelled. The restrictions on such purchases,
(including minimum and maximum prices), are outlined
in the Notice of Meeting on pages 93 to 98. The
Authority will be used where the directors consider it to
be in the best interests of the shareholders.
Capital Structure
As part of its corporate governance the Board keeps
under review the capital structure of the Company. At
30 September 2014, the Company had a nominal issued
share capital of £5,252,800, comprising 52,528,000
ordinary shares of 10p each, carrying one vote each.
All of the shares of the Company are listed on the
London Stock Exchange, which is a regulated market.
The directors consider that new shares should be
issued to meet natural market demand, so long as any
such shares are issued at a premium to the Company’s
NAV (as measured with debt at fair value).
Additionally the Board has, each year, renewed the
authority of the Company to make market buybacks of
its own shares. However, the Board is only likely to use
such authority in special circumstances. In general the
directors believe that a discount to net assets will be
reduced sustainably over the long term by the creation
of value through the development of the business.
The Company deploys gearing through two long term
debentures: £15m 9.5% debenture stock 2020 and
£25m 7.25% debenture stock 2025, which were
issued in 1994 and 2000, respectively. In 2004 the
Company redeemed £1.5m of the 2020 issue and
£4.3m of the 2025 issue as an opportunity arose to
redeem at an attractive price.
The limits on the ability to borrow are described in the
investment policy on pages 6 and 7. The Board is
responsible for managing the overall gearing of the
Company. Details of gearing levels are contained in the
Year’s Summary on page 2, and in note 26 to the
Accounts on page 90.
There is one employee share scheme operated by the
Group. Further details are in note 25 to the accounts
on pages 79 and 80.
There are: no restrictions on voting rights; no
restrictions concerning the transfer of securities in the
Company; no special rights with regard to control
attached to securities; no agreements between holders
of securities regarding their transfer known to the
Company; and no agreements which the Company is
party to that might affect its control or trigger any
compensatory payments for directors, following a
takeover bid.
Notice period for general meetings
The Board believes that it is in the best interests of
shareholders of the Company to have the ability to call
meetings on 14 days’ clear notice should a matter
require urgency. The Board will therefore, as last year,
propose a resolution at the Annual General Meeting to
approve the reduction in the minimum notice period
from 21 clear days to 14 clear days for all general
meetings other than annual general meetings. The
directors do not intend to use fewer than 21 clear
days’ notice unless immediate action is required.
Future Developments
The Chairman’s Statement and the Chief Executive’s
Report on pages 4 and 5 and 11 to 13 provide details
as concerning relevant future developments of the
Company and the Group in the forthcoming year.
Employees, Social, Environmental, Ethical and
Human Rights policy
The Company, as an investment trust, has a limited
direct impact upon the environment. In carrying out its
activities and relationships with its employees, suppliers
and the community, the Company aims to conduct
itself responsibly, ethically and fairly.
The Company has appointed MAM to manage the
majority of its investment assets. In doing so it takes
account of social, environmental, ethical and human
rights factors, where appropriate.
Carbon Reporting
In accordance with the Companies Act 2006 (Strategic
Report and Directors’ Reports) Regulations 2013, the
Company is required to report on its greenhouse gas
emissions for those financial years ending on or after
30 September 2013. In accordance with the regulations,
the Company has determined that its organisational
boundary, to which entities the regulations apply, is
consistent with its consolidated accounts.
REPORT & ACCOUNTS 2014 19
Directors’ Report
The Group operates in the financial services sector and
in common with many organisations employs
outsourcing such that most of its activities are
performed by other outside organisations which do not
give rise to any reportable emissions by the Group.
However the Group, as a self managed investment
trust, does undertake activities at its leased premises.
In accordance with the provision of the centrally
provided building services (including heating, light,
cooling etc) to all lessees in the building by the
landlord, it is considered that the Group does not have
emissions responsibility in respect of these services,
which rather rest with the landlord. The Group does
however have responsibility for various other emissions
in the usage of electricity by its office equipment in the
course of undertaking its duties but it is not able to
determine their amounts as compared to those
provided by the landlord.
Additionally, the Company has many investments in
companies around the world, however the Company
does not have the ability to control the activities of
these investee companies and as such has no
responsibility for their emissions. Therefore the
directors believe that the Group has no reportable
emissions for the year ended 30 September 2014
(2013: nil).
Donations
The Company made no political or charitable donations
during the year (2013: nil) to organisations either within
or outside of the EU.
Gender Diversity
The Board are aware of the recommendations made in
the Lord Davies Review in 2011 in respect to Board
diversity. The Company’s policy on diversity is included
in the section on the Nomination Committee on pages
24 and 25 and this is applied when a new appointment
to the Board is required. There has been no change in
the Board and at the year end the composition of the
Board was that all the directors were male. The
composition of the Company's employees is 66.6%
male and 33.3% female.
20
MAJEDIE INVESTMENTS PLC
Post Balance Sheet Events
There have been no significant post balance sheet
events of the Company or its subsidiaries.
Material Contracts
• Majedie Asset Management Limited
The Board has appointed MAM, as its investment
manager, the terms of which are defined under an
Investment Agreement dated 13 January 2014. The
agreement divides the Company’s investment
assets into a combination of a segregated portfolio
and the MAM in-house funds, with the Board having
the ability, subject to certain capacity constraints in
respect of the MAM funds, for the determination of
the asset allocation of its investment assets, both
initially and on an on-going basis.
The Investment Agreement provides that the
segregated portfolio is to be managed within MAM’s
UK Equity Fund, with initial investments into the
MAM Tortoise Fund and MAM Income Fund.
Additionally it was agreed that the Company would
invest, by amending its initial asset allocation, into
other named funds scheduled to be launched by
MAM within 12 months. Accordingly the Company
amended its allocation to the segregated portfolio
and invested into the MAM Global Equity Fund, the
MAM Global Focus Fund and the MAM US Equity
Fund in June 2014.
The fees payable under the Investment Agreement
are detailed below:
Portfolio/Fund*
MAM UK Equity
Management
Feeˆ
Performance
Feeˆ
Segregated Fund
MAM Tortoise Fund
MAM UK Income Fund
MAM Global Equity Fund
MAM Global Focus Fund 0–1.00% p.a.**
MAM US Equity Fund
0.75% p.a.
1.50% p.a.
0.75% p.a.
0.75% p.a.
0.75% p.a.
Nil
20%†
Nil
Nil
Nil
Nil†
* The fees are calculated under the terms of the Investment Agreement
or the relevant fund prospectus.
† The performance fee entitlement only occurs once the hurdle has
been exceeded and is calculated on a high water mark basis.
** The management fee range reflects the investments made into
different share classes.
ˆ The fees charged to the MAM UK Equity Segregated Fund are
charged directly to the Company’s Statement of Comprehensive
Income. All other fund fees are charged within the relevant fund.
The Investment Agreement entitles either party to
terminate the arrangement with six months’ notice,
after an initial period ending on 31 December 2015.
• BNY Mellon Trust & Depositary (UK) Limited
The Company has appointed BNYM (UK) to provide
depositary services as required by the AIFMD and
certain other associated services under the terms of
a depositary agreement dated 19 June 2014. The
services provided by BNYM (UK) as Depositary for
the Company include:
• general oversight responsibilities over the issue
and cancellation of the Company’s share capital,
the carrying out of net asset value calculations,
the application of income, and the ex-post review
of investment transactions;
• monitoring of the Company’s cash flows and
ensuring that all cash is booked in appropriate
accounts in the name of the Company or BNYM
(UK) acting on behalf of the Company; and
• ensuring that the Bank of New York Mellon SA/
NV, London Branch (BNYM) (to whom BNYM
(UK) has delegated the safekeeping of all assets
held within the Company’s investment portfolio,
including those classed as financial instruments
for the purpose of the AIFMD), in accordance
with the terms of a Global Custody Agreement,
retains custody of the Company’s financial
instruments in segregated accounts so that they
can be clearly identified as belonging to the
Company and maintains records sufficient for
verification of the Company’s ownership rights in
relation to assets other than financial instruments.
No specific conflicts have been identified as arising as
a result of the delegation of the provision of custody
and safekeeping services by BNYM (UK) to BNYM. The
terms of the depositary agreement provide that, where
certain assets of the Company are invested in a
country whose laws require certain financial
instruments to be held in custody by a local entity and
no such entity is able to satisfy the requirements under
the AIFMD in relation to use of delegates by
depositaries, BNYM (UK) may still delegate its functions
to such a local entity and be fully discharged of all
liability for loss of financial instruments of the Company
by such local entity.
The Depositary receives an annual fee for its services
on a sliding scale of 0.04% up to total gross portfolio
assets of £100 million and 0.035% between
£100 million and £250 million and 0.03% above
£250 million, payable monthly in arrears. The
depositary agreement in place with BNYM (UK) and the
related custody agreement in place with BNYM
continues unless and until terminated: without cause
upon the Company and BNYM (UK) giving not less
than 90 days’ notice and upon BNYM (UK) giving
notice expiring not less than 18 months after the date
of the agreement, in each case such notice to be
effective only if a new Depositary has been appointed.
• Capita Sinclair Henderson Limited
The Board has appointed Capita Sinclair Henderson
Limited (trading as Capita Asset Services)
in November 2000 to act as Company Secretary
and undertake fund administration services. The
terms of Capita Sinclair Henderson Limited’s
appointment are defined under a Secretarial and
Administration Services Agreement dated
6 February 2012. The agreement entitles either
party to terminate the arrangement with twelve
months’ notice.
Listing Rule Disclosure
The Company is listed on the London Stock Exchange
and is subject to the UKLA listing rules. These require
various disclosures, which are included in this report,
and now also include the requirement, under Listing
Rule 9.8.4R, to disclose, where applicable, certain
specific items separately. These as they apply to the
Company, in respect of the year ended 30 September
2014, are:
• that the Company has not capitalised any interest
during the year (all interest has been included in the
Group and Company’s respective Statement of
Comprehensive Income);
• that no director waived or has agreed to waive any
entitlements during the year, nor for any future periods;
• that the Company had a contract of significance
in respect of Javelin Capital LLP, in which
Mr JWM Barlow was a partner and received profit
shares. Details of these entitlements are contained
in the Report on Directors’ Remuneration on pages
31 and 32; and
REPORT & ACCOUNTS 2014 21
Directors’ Report
• that the Company’s Employee Incentive Trust has, in
accordance with its Trust Deed dated 19 January
1998, agreed to waive its entitlement to dividends in
respect of its holdings of Company shares, to the
extent that they exceed 0.001p per share. Further
details in respect of the Employee Incentive Trust
are contained in note 20 on pages 77 and 78.
AIFMD
The Company, as from 22 July 2014, is subject to the
AIFMD, which requires certain financial and non-
financial disclosures in respect of Annual Reports.
These disclosures are already made by the Company
in its Annual Report. In addition, certain specific
disclosures are required which are:
• Remuneration
Total remuneration details for the directors (who are
considered to be code staff under the Directive) are
shown in the Report on Directors’ Remuneration on
pages 31 to 38. Remuneration details for staff are
included in note 7 on page 65. There was no
variable remuneration paid during the year.
• Leverage
Under the AIFMD, the Company is required to
disclose its actual leverage (calculated in accordance
with the Directive under the Gross & Commitment
methods) and it must also set a limit in respect of
leverage it can use. The Company has set a limit of
1.5 times (1 being no leverage) and as at
30 September 2014 had leverage of 1.23 under the
Gross method and 1.26 under the Commitment
method, note 26 on page 90 provides further details.
• Investor Pre-investment information
The AIFMD requires that potential investors are
provided with certain information. The Company
provides this information on its website at
www.majedieinvestments.com and there have been
no material changes since 22 July 2014 to the date
of this report.
Disclosure of Information to Auditors
As far as each of the directors are aware:
• there is no relevant audit information of which the
Company’s Auditors are unaware; and
• they have taken all steps that they ought to have
taken as directors in order to make themselves
aware of any relevant audit information and to
establish that the Company’s Auditors are aware of
that information.
This confirmation is given and should be interpreted in
accordance with the provisions of Section 418 of the
Companies Act 2006.
Auditors
Ernst & Young LLP were re-appointed as Auditors on
15 January 2014. Ernst & Young LLP have indicated
their willingness to continue in office and a resolution
will be proposed at the Annual General Meeting to
re-appoint them as Auditors.
Going Concern
The directors believe, after review and due consideration
of future forecast and cashflow projections, that the
Company has adequate financial resources to continue
in operational existence for the foreseeable future. For
this reason and taking account of the large number of
readily realisable investments held within its portfolio,
the Board continues to adopt the going concern basis
in preparing the financial statements.
By Order of the Board
Capita Sinclair Henderson Limited
Company Secretary
4 December 2014
22
MAJEDIE INVESTMENTS PLC
Corporate Governance Statement
The Corporate Governance Statement forms part of the Directors’ Report.
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 FCA. A copy of the Code can be found
at www.frc.org.uk. During the year the Company
became a member of the AIC, which publishes its own
Code of Corporate Governance for investment
companies. In order to avoid reporting under both
Codes, the Company has opted during the year to
continue to report under the Corporate Governance
Code, but intends to comply with the provisions of the
AIC Code in the future.
The Board considers that the Company has complied
with the provisions of the Code throughout the year
ended 30 September 2014 except as set out below.
Provision A.4.1 – The directors have determined that
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 20 and 21.
The Company
The Company has a history of self management which
it retains following the restructuring in January 2014,
which included the appointment of MAM, and in July
2014, the introduction of the AIFMD, with the
Company becoming a self managed AIF under the
Directive. 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 management and
compliance with regulations (including its responsibilities
as AIFM under the AIFMD), overall investment policy,
asset allocation and gearing. 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 the CEO.
Biographical details of the directors are shown on
page 16.
Messrs AJ Adcock, PD Gadd and RDC Henderson are
considered to be independent as defined by the Code
as, in the opinion of the Board, each is independent in
character and judgment and there are no relationships
or circumstances relating to the Company that are
likely to affect their judgment. However, the Board
considers that all directors exercise their judgements in
an independent manner. The Chairman’s other
commitments are in his biography on page 16.
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 2014, the
Company held six Board meetings, two Audit
Committee meetings, one Management Engagement
Committee meeting, one Nomination Committee
meeting and three Remuneration Committee meetings.
Attendance at these Board and Committee meetings is
detailed below.
Number of meetings
Board
Audit Management
Engagement
Remuneration Nomination
Directors
AJ Adcock
JWM Barlow
RDC Henderson
PD Gadd
9
9
9
9
9
2
2
n/a
2
2
1
1
n/a
1
1
3
2
n/a
3
3
1
1
n/a
1
1
REPORT & ACCOUNTS 2014 23
Corporate Governance Statement
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, with the exception of AJ Adcock who was
unable to attend a Remuneration Committee meeting.
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.
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 28 to 30.
• The Nomination Committee comprises:
Mr AJ Adcock (Chairman) and all of 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. The
Articles of Association can be amended by
shareholders at a General Meeting.
Towards the end of each fixed term the Nomination
Committee and the Board will consider whether to
renew a particular appointment.
24
MAJEDIE INVESTMENTS PLC
Following the recommendation from the MEC, the
Board has concluded that it is in the best interests of
shareholders that MAM 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
depositary and 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.
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. Details of the Chief Executive
Officer’s employment contract can be found in the
Remuneration Report on pages 34 and 35.
The Nomination Committee met on 16 October
2014 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 they continued to
make valuable contributions and exercise judgement
and express opinions in an independent manner, the
Committee has decided to recommend the
re-appointment of Messrs AJ Adcock, RDC
Henderson and JWM Barlow.
The Committee believes the directors provide the
necessary breadth of skills and experience to run
the Company.
• The Remuneration Committee comprises:
Mr PD Gadd (Chairman), Mr AJ Adcock and
Mr RDC Henderson. Mr JWM Barlow is 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 31 to 38.
• The Management Engagement Committee
(MEC) comprises:
Mr PD Gadd (Chairman), and all of 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 2014 and recommended that
MAM be retained as Investment Manager. In
determining their recommendation, the MEC
concluded that MAM have an excellent track record
and offer a broad range of products to meet the
Company’s investment policy.
REPORT & ACCOUNTS 2014 25
Corporate Governance Statement
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 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
15 provide further information.
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.majedieinvestments.com.
Voting policy
The exercise of voting rights attached to the
Company’s investment portfolio has been delegated to
MAM in the absence of explicit instructions from the
Board. MAM subscribe to the NAPF Voting Issues
Service (ISS) which forms part of their voting process.
MAM provides quarterly a report detailing the voting
activity on the Company’s investment portfolio which
includes details of the votes made as well as the
reasons explaining the rationale for the voting decision.
MAM 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.majedie.com.
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. This has
been refined further following the introduction of the
AIFMD, which requires the Board, as AIFM, to
implement effective risk management policies and
procedures. Key procedures are also in place to provide
effective financial control over the Group’s operations,
and these were amended following the closure of
Javelin Capital and the transfer of the majority of the
investment assets to be managed by MAM.
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.
26
MAJEDIE INVESTMENTS PLC
A risk assessment and a 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.
Further details relating to risk management and internal
controls are contained in the Report of the Audit
Committee on page 30.
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
Capita Sinclair Henderson Limited
Company Secretary
4 December 2014
REPORT & ACCOUNTS 2014 27
Report of the Audit Committee
The Report of the Audit Committee forms part of the Corporate Governance Statement.
During the year ended 30 September 2014 the Audit
Committee comprised independent non-executive
directors, being Mr RDC Henderson (Chairman),
Mr AJ Adcock and Mr PD Gadd. 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 Sinclair Henderson
Limited (trading as Capita Asset Services), acts 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
effectiveness, independence and developing and
implementing a policy on the engagement of the
external auditor to supply non-audit services.
In respect of the year under review the Committee met
twice, in May and November 2014, 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 2014 the
Committee considered the following issue 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 judgement.
Although these are small in number (and also usually
by value) they do include the investment in MAM 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 CEO recommends a fair
value for the relevant investment to the Committee using
the Company’s policy as set out in note 1 to the
Accounts on pages 55 to 61. All unquoted investments
are subject to review by the Committee and the Auditor.
The fair value of MAM is based on the price at which
the Company can sell its shares back to MAM, which
is currently considered to be the sole market for the
Company’s shares. The significant input in assessing the
price is the earnings of MAM and a 5% increase/
decrease in MAM’s earnings would result in an increase/
decrease of 4.3% in the carrying value of MAM.
Ownership of Investments
The Company’s investments are held in safe custody
by BNYM (UK) as depositary. The Committee receives
regular reports on BNYM (UK)’s internal controls.
The Chairman of the Committee will be available at the
Annual General Meeting to answer any questions
relating to the Annual Report.
28
MAJEDIE INVESTMENTS PLC
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 relative 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 the Company faces.
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 the
Company’s 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 2014 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 2014 29
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 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. In the year under
review, the auditor provided a review of the Half-Yearly
Financial Report and a review of the Company’s
debenture covenant reporting (to the trustee for the
debenture holders), both of which are separately
disclosed as “Other Assurance Services” in the
Accounts. 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. Following its review, the
Committee is satisfied that they are independent
having fulfilled their 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
services being undertaken by MAM, Fund Administration
and Company Secretarial functions by Capita Asset
Services and Depositary services by BNYM (UK) Limited
(with custody being delegated to BNYM).
For the year ended 30 September 2014 the Group’s
risk management and internal controls were reviewed
and enhanced in order to meet the requirements of the
AIFMD. Additionally, they were also amended following
the transfer of the majority of the investment assets
from Javelin Capital to MAM reflecting the fact that the
Group no longer provides these specific services. The
Committee considers that they have been, and 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 Fund 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
4 December 2014
30
MAJEDIE INVESTMENTS PLC
Report on Directors’ Remuneration
Annual Statement
During the financial year ended 30 September 2014,
the Group undertook a significant restructuring which
included the closure of Javelin Capital. This resulted in
the transfer of some Javelin Capital staff and partners
to the Company, including the executive director,
Mr JWM Barlow, who became Chief Executive Officer
(CEO) on 1 April 2014. The other significant event
affecting the Company during the financial year was
the introduction of AIFMD, in July 2014. Pursuant to
the AIFMD the Company has applied to be a self
managed AIF, which has given rise to additional
responsibilities for the Board. There were no changes
to the composition of the Board during the year.
The Remuneration Committee has decided that there
should be no change to the remuneration of the non-
executive directors in respect of the financial year
ended 30 September 2014, save for an ad-hoc fee
supplement of £25,000, which was paid during the
year to Mr PD Gadd, in respect of extra duties
undertaken by him in relation to the Group restructuring
and the appointment of MAM. This was approved by
the Remuneration Committee with Mr PD Gadd not
participating and Mr AJ Adcock chairing the meeting.
At a meeting of the Remuneration Committee held on
the 16 October 2014, it was resolved to increase the
fees of the directors by 5%, such change to take effect
from 1 October 2014. The directors’ fees were last
increased on 1 April 2008 (with the Chairman receiving
a further increase to the current level on 20 January
2010, on his appointment as Chairman). This increase
was approved in the context of the revised Group
structure, the ongoing performance of the Company,
the responsibilities of the directors under the AIFMD,
the fees payable to non-executive directors of other
investment trusts and the time commitment involved.
There have been a number of changes to the
remuneration of the executive director, Mr JWM Barlow,
during the financial year, principally as a result of
Mr JWM Barlow transferring back to being an
employee of the Company, rather than a partner in
Javelin Capital. Prior to 1 April 2014, Mr JWM Barlow
was a partner of Javelin Capital, and received or was
entitled to receive various types of profit share, as
detailed below, and additionally his director’s fees of
£27,000 per annum.
As a partner of Javelin Capital, Mr JWM Barlow was
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 was in fact profitable
during that year. In respect of the financial year ended
30 September 2014, Javelin Capital made a loss; the
Company was accordingly advised that the Priority
Profit Shares of Mr JWM Barlow and the other partners
of Javelin Capital would not be subject to tax until
Javelin Capital was profitable. Mr JWM Barlow’s Priority
Profit Share was £99,068 per annum. The Company
agreed with Mr Barlow that as and when Javelin
Capital became 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, equal to his previous salary as an employee
of Javelin Capital prior to his becoming a partner.
As a partner in Javelin Capital, Mr JWM Barlow was
entitled to a share in any profits of Javelin Capital. The
percentage profit share of each partner in Javelin
Capital was to be determined annually by the
managing partner of Javelin Capital (with the profit
shares of the managing partner and any partner who
was a director of the Company being subject to
approval by the Remuneration Committee of the
Company). As Javelin Capital was not profitable, no
such profit share was made.
REPORT & ACCOUNTS 2014 31
Report on Directors’ Remuneration
Mr JWM Barlow was also entitled to a performance-
based bonus in two broad areas: first, if Javelin Capital
had become profitable on an on-going basis, he would
have been eligible to receive a bonus based on his
performance in relation to certain operational and/or
business development targets which would have been
set by the Board. Secondly, in respect of his marketing
responsibilities, he was 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 were agreed to be attributable to
him. Any such bonus would be paid in cash in respect
of such monies whilst they continued 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 2014 he received no
performance bonus.
Following the restructuring of the Group and the
closure of Javelin Capital, Mr JWM Barlow became
CEO of the Company on 1 April 2014, on a salary of
£168,750 per annum. His new salary was equal to his
previous salary of £135,000 prior to his becoming a
partner of Javelin Capital, as noted above, increased
by 5% and his director’s fees of £27,000 per annum,
which is no longer paid separately to him from 1 April
2014. There has been no change to his previous
benefits under Javelin Capital.
Subject to the approval of the revised Directors
Remuneration Policy set out below at the Annual
General Meeting, the Remuneration Committee has
resolved to award Mr JWM Barlow a bonus of £40,000
in respect of the year ended 30 September 2014 for
his additional work in connection with the restructuring
of the Company and the appointment of MAM and to
institute a new bonus scheme for Mr JWM Barlow
which would be dependent on the Company issuing
new shares representing at least 5% of the issued
share capital of the Company during a financial year.
The Board is aware of the benefits of increasing the size
of the Company in order to spread the Company’s fixed
costs over a larger asset base. Under the new bonus
scheme proposed to be awarded to Mr JWM Barlow,
he will be entitled to a bonus of £25,000 in any financial
year in which the Company’s issued share capital is
increased by at least 5%, rising to £50,000 on a
straight line basis if it increases by 10%. No bonus
would be paid in the absence of any such increase,
and no other bonus arrangements are proposed.
P D Gadd
Chairman of the Remuneration Committee
32
MAJEDIE INVESTMENTS PLC
Directors’ Remuneration Policy
Given the restructuring that occurred during the year, including the closure of Javelin Capital, and 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 a new
directors’ remuneration policy, as set out in this Section, at the Company’s Annual General Meeting (see page 93 to
98). It is proposed that this new policy will be adopted at that meeting with effect from 1 October 2014 and will
replace the previous policy that was approved last year. Changes are in respect of the policy on the remuneration of
the CEO, with the removal of all policy elements relating to Javelin Capital, removal of directors’ fees entitlement (with
an increase in base salary equal to the fees forgone) and a revised bonus entitlement. The new policy will remain in
force until the annual general meeting of the Company in 2018, at which time a further resolution will be proposed.
Non-Executive Directors
The components of the remuneration package for non-executive directors, which comprise 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
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 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.
REPORT & ACCOUNTS 2014 33
Report on Directors’ Remuneration
CEO
The components of the remuneration package for the CEO, and which comprise in directors’ remuneration policy of
the Company, are set out below:
Remuneration type
Company to determination
Maximum Potential Value
Description and approach by the
Fixed
Salary
Set at a competitive level for the industry and
appropriate for role and based on individual skills, time
commitment and experience.
£168,750 per annum unless
otherwise resolved by the
Remuneration Committee
Healthcare
Medical and death or disability insurance.
Variable
Annual bonus
Payable in the event that the Company’s issued share
capital increases by at least 5% in any financial year
(treating for this purpose sales of shares from treasury or
by any employee benefit trust as if they were not
previously part of the Company’s issued share capital).
Additionally, in respect of the financial year ended
30 September 2014 only, a bonus of £40,000 for his
additional work in connection with the restructuring of
the Company and the appointment of MAM.
As per Group healthcare
provider quote
Not to exceed 50% of
base salary
Mr JWM Barlow is a member of the Company’s pension scheme but does not receive any pension benefits. His
contract of employment provides for six months' notice of termination by either party and various post employment
obligations and restrictions considered to be appropriate for a role of this type within the financial services sector. There
are no provisions which would give rise to or impact upon remuneration payments of payments for loss of office.
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’ (save that he is not eligible to receive any fees). Subject to approval of this
remuneration policy, the Company intends to award him a bonus of £25,000 in any financial year in which the
Company’s issued share capital is increased by at least 5%, rising to £50,000 on a straight line basis if it increases
by 10%.
Each component of the remuneration package set out above supports the short and long-term strategic objectives
of the Company as follows:
• The remuneration ensures that the CEO’s base salary is set at a competitive level;
• The annual bonus is payable only if there is a material increase in the issued share capital of the Company. The
Directors believe that the growth of the Company, to spread its fixed costs over a larger asset base, is one of
their key aims, and the annual bonus directly aligns the interests of the CEO with this aim.
34
MAJEDIE INVESTMENTS PLC
Save as set out above, there are no specific additional
performance measures or targets applicable to any of
the components of the CEO’s remuneration.
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.
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 the CEO, 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, as shown
above, 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 in line with the Group
objectives. Any new executive director’s remuneration
package would contain a fixed salary, in line with that
set out above, together with an entitlement to
participate in the bonus scheme as 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 maximum bonus set out above.
Policy on payment for loss of office
The Company’s policy is that notice periods for loss of
office for the CEO of the Company should be of six
months’ duration. It is also the Company’s policy that
no payment should be made for loss of office, save for
any remuneration 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 at the time payment
falls due, and no payment will be made in the event of
prior loss of office.
Consideration of employment conditions elsewhere
in the Company
The pay and performance conditions of any CEO of
the Company are designed to be consistent with those
of the employees of the Company. The same
remuneration policies apply to the other senior
employee of the Company. The remuneration of the
other senior employee of the Group is a material factor
in setting the remuneration of the CEO.
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
CEO
£000
250
225
200
175
150
125
100
75
50
25
0
Minimum
Meets
expectations
Maximum
Fixed remuneration
Annual variable remuneration
Notes:
1. Fixed remuneration includes salary and benefits.
2. Annual variable remuneration is a Company bonus calculated at £25,000
under meets expectations column or £50,000 under the maximum column.
REPORT & ACCOUNTS 2014 35
Report on Directors’ Remuneration
Annual Report on Remuneration
AUDITED SECTION
Annual Report
The remuneration of the directors for the year ended
30 September 2014 was as follows:
Salary
& Fees
Fixed
Profit Share
Taxable
Benefits
Total
Remuneration
2014
£000
2013
£000
2014
£000
2013
£000
2014
£000
2013
£000
2014
£000
2013
£000
Non-executive
Directors
AJ Adcock
HV Reid
PD Gadd
RDC Henderson
75
56
31
75
13
35
35
Executive director/CEO
JWM Barlow (fees only)
14
27
Fees sub-total
JWM Barlow
176
185
84
45
(other remuneration)
Total
260
230
75
56
31
75
13
35
35
14
176
140
27
185
116
316
301
50
50
66
66
6
6
5
5
Mr JWM Barlow’s taxable benefits relate to healthcare
costs (he receives no pension contributions). Directors’
fees are set at £75,000 per annum for the Chairman
and £27,000 basic, per annum, for each of the other
non-executive directors. In addition there is a £3,000
per annum supplement for each of the Chairman of the
Audit and Remuneration Committees. A further
supplement was paid to those directors on the Javelin
Capital Management Board of £500 per Board
meeting. An additional fee supplement of £25,000 was
paid to Mr PD Gadd to reflect his additional time
commitment during the year on Company duties in
connection with the Group restructuring and the
appointment of MAM.
The CEO does not receive any fees from 1 April 2014.
With effect from 1 October 2014, the fees will be
increased so that the chairman’s fee will increase to
£78,750 per annum, the non-executive directors fees will
increase to £28,350 per annum, and the additional fees
payable to the chairs of the Audit and Remuneration
Committees will increase to £3,150 per annum.
There have been no payments to past directors during
the financial year ended 30 September 2014, 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.
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), in securities of the
Company as at 30 September 2014, and as at
4 December 2014 are as follows:
No of fully paid
ordinary 0.1p shares
Director
Type of holding
30 September
2014
4 December
2014
Mr AJ Adcock
Mr RDC Henderson
Mr PD Gadd
Mr JWM Barlow
Beneficial
Beneficial
Beneficial
Beneficial
Non-beneficial
50,000
4,700
30,000
676,083
1,897,165
50,000
4,700
30,000
676,083
1,897,165
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 six financial years ended
30 September 2014 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 as it was the benchmark at the start of the
period and it includes a weighting to overseas assets
suitable in respect of the Company’s assets.
180%
160%
140%
120%
100%
80%
60%
2008
2009
2010
2011
2012
2013
2014
Total Shareholder Return
Benchmar
k
36
MAJEDIE INVESTMENTS PLC
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 CEO over the preceding six
financial years:
Director
undertaking
role of CEO
Total
remuneration
Year ended
30 Sept 2014 Mr JWM Barlow
£153,358
30 Sept 2013 Mr JWM Barlow
£143,531
30 Sept 2012 Mr JWM Barlow
£166,640
30 Sept 2011 Mr GP Aherne
30 Sept 2010 Mr GP Aherne
30 Sept 2009 Mr GP Aherne
30 Sept 2008 Mr RE Clarke
£185,040
£260,000
£147,000
£902,994
Current year
variable
remuneration
awarded vrs
maximum
potential
value
Prior year or
future year
awards vested
vrs maximum
potential
value
0%
0%
0%
0%
100%
0%
95%
0%
0%
0%
0%
0%
0%
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 2014
+6.8% +8.4% +14.3% +16.8%
0%
0%
Notes:
1. The change in the CEO fixed remuneration reflects the 5% salary increase,
as explained in the annual statement on page 31, expressed against his
previous lower priority profit share. Average staff fixed remuneration has
increased which reflects the change in composition of staff numbers after
the restructuring and cost of living increases.
2. The percentage increase in benefits shown includes the increased costs by
the relevant providers and the change in the staff composition following the
restructuring; however given the small staff numbers involved the actual
change in monetary terms is quite small.
Relative importance of spend on pay
The table below sets out, in respect of the financial
year ended 30 September 2014 and the preceding
financial year:
a) the actual administration expenses 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);
c) the distributions made to shareholders by way of
dividend or share buyback
£m
6
5
4
3
2
1
0
Note:
2014
2013
Admin
expenses
Total staff
remuneration
Dividends
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 the understanding of the relative
importance of the spend on staff pay.
REPORT & ACCOUNTS 2014 37
Report on Directors’ Remuneration
Statement of implementation of Remuneration Policy in
respect of the financial year ending 30 September 2015
Non-Executive Directors’
The Remuneration Committee will review directors fees
during the financial year, but does not expect to
recommend any change in the absence of
unforeseen circumstances.
Remuneration Committee
Details of the membership of the Remuneration
Committee are set out on page 25. No external
remuneration consultant was consulted by the
Company during the year ended 30 September 2014.
The Report on Directors’ Remuneration on pages 31 to
38 was approved by the Board on 4 December 2014.
CEO
The Remuneration Committee intends to review the
salary of the CEO in light of prevailing market conditions.
On behalf of the Board
PD Gadd
Chairman of the Remuneration Committee
Statement of voting at General Meeting
At the annual general meeting of the Company held on
15 January 2014, resolutions were proposed by the
Company to approve the Report on Directors’
Remuneration for the year ended 30 September 2013
and to approve the Directors’ Remuneration Policy. For
both resolutions 99.8% of the votes cast were in favour
with 0.1% against and 0.1% of the votes being 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.
38
MAJEDIE INVESTMENTS PLC
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 16 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 profit or loss of the Group;
• the Annual Report includes a fair review of the
development and performance of the business and
the position of the Group, together with a
description of the principal risks and uncertainties
that it faces; and
• they consider that the Annual Report, taken as a
whole, is fair, balanced and understandable and
provides the information necessary for shareholders
to assess the Company’s performance, business
model and strategy.
• 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
4 December 2014
REPORT & ACCOUNTS 2014 39
Report of the Depositary
Report of the Depositary to the shareholders of
Majedie Investments PLC
Depositary’s responsibilities
The Depositary is responsible for the safekeeping of all
custodial assets of the Company, for verifying and
maintaining a record of all other assets of the Company
and for the collection of income that arises from
those assets.
It is the duty of the Depositary to take reasonable care
to ensure that the Company is managed in accordance
with the Alternative Investment Fund Managers
Directive (AIFMD), the FUND Sourcebook and the
Company’s Instrument of Incorporation, in relation to
the calculation of the net asset value per share and the
application of income of the Company. The Depositary
also has a duty to monitor the Company’s compliance
with investment restrictions and leverage limits set in its
offering documents.
Report of the Depositary to the shareholders of
Majedie Investments PLC for the year ended
30 September 2014
Having carried out such procedures as we consider
necessary to discharge our responsibilities as
Depositary of the Company, it is our opinion, based on
the information available to us and the explanations
provided, that in all material respects the Company,
acting through the AIFM has been managed in
accordance with AIFMD, the FUND sourcebook, the
Instrument of Incorporation of the Company in relation
to the calculation of the net asset value per share, the
application of income of the Company; and with
investment restrictions and leverage limits set in its
offering documents.
For and on behalf of
BNY Mellon Trust & Depositary (UK) Limited
160 Queen Victoria Street
London EC4V 4LA
Manager
40
MAJEDIE INVESTMENTS PLC
Report of the Independent Auditor
Independent Auditor’s Report to the Members of Majedie Investments PLC
Opinion on financial statements
In our opinion:
• the financial statements give a true and fair view of
the state of the Group’s and of the parent
company’s affairs as at 30 September 2014 and of
the Group’s and the parent Company’s profit for the
year then ended;
• the financial statements have been properly
prepared in accordance with IFRSs as adopted by
the European Union; 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.
What we have audited
We have audited the financial statements of Majedie
Investments PLC for the year ended 30 September
2014, 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 27. The financial
reporting framework that has been applied in their
preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the
European Union.
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 Directors’ Responsibilities
Statement set out on page 39, the directors are
responsible for the preparation of the 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 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 and the parent company’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.
Following our assessment of the risk of material
misstatement to the Group annual financial statements,
our audit scope consists of the parent company and
its subsidiaries which are subject to a full scope audit
by the group audit team.
Our assessment of risk 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:
• Incorrect valuation of the Group’s investment in
Majedie Asset Management Limited
• Incorrect valuation of other Group investments; and
• Existence and ownership of the Group’s investments
REPORT & ACCOUNTS 2014 41
Report of the Independent Auditor
Independent Auditor’s Report to the Members of Majedie Investments PLC
An overview of the scope of our audit
• We considered the appropriateness of the valuation
model used to value Majedie Asset Management
Limited. Our assessment included the review of an
indicative valuation based on metrics obtained from
broadly comparable listed asset managers.
• We agreed year end prices for all listed investments
to an independent source; and on a sample basis
considered the appropriateness of the valuation
methodology applied to the remaining unlisted
investments.
• We obtained independent confirmation from the
Custodian of the Group’s investments and agreed
this to the books and records.
Opinion on other matters prescribed by the
Companies Act 2006
In our opinion:
• the part of the Directors’ Remuneration Report to
be audited has been properly prepared in
accordance with the Companies Act 2006; and
• 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;
• the information given in the Corporate Governance
Statement set out on pages 23 to 27 with respect
to internal control and risk management systems in
relation to financial reporting processes and about
share capital structures is consistent with the
financial statements.
Our application of materiality
We apply the concept of materiality both in planning
and performing our audit, in evaluating the effect of
misstatements on our audit and on the financial
statements and in forming our audit opinion. For the
purposes of determining whether the financial
statements are free from material misstatement we
define materiality as the magnitude of misstatement
that, individually or in aggregate in light of surrounding
circumstances, could reasonably be expected to
influence the readers the economic decisions of the
users of the financial statements. We also determine a
level of performance materiality which we use to
determine the extent of testing needed to reduce to an
appropriately low level the probability that the
aggregate of uncorrected and undetected
misstatements exceeds materiality for the financial
statements as a whole.
When establishing our overall audit strategy, we
determined planning materiality for the Group to be
£1.34 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 assessments, 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 planning materiality,
namely £1.01 million. Our objective in adopting this
approach was to ensure that total detected and
undetected audit differences in all accounts did not
exceed our planning materiality level.
Given the importance of the distinction between
revenue and capital for the Group and Company, we
have applied a separate performance materiality of
£0.26m for the income statement, being 5% of the
return on ordinary activities before taxation.
We have reported to the Committee all audit
differences in excess of £0.7 million, as well as
differences below that threshold that, in our view
warranted reporting on qualitative grounds.
42
MAJEDIE INVESTMENTS PLC
Under the Listing Rules we are required to review:
• the directors’ statement, set out on page 22, in
relation to going concern; and
• 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.
Sarah Williams (Senior statutory auditor)
for and on behalf of Ernst & Young LLP,
Statutory Auditor
London
4 December 2014
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.
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 parent company, or returns adequate for our
audit have not been received from branches not
visited by us; or
• the parent company financial statements and the
part of the Directors’ Remuneration Report 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; or
• a Corporate Governance Statement has not been
prepared by the Company.
REPORT & ACCOUNTS 2014 43
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2014
Revenue
return
£000
Notes
2014
Capital
return
£000
Total
£000
Revenue
return
£000
2013
Capital
return
£000
Total
£000
Investments
Gains on investments at fair value
through profit or loss
Net investment result
Income
Income from investments
Other income
Total income
Expenses
Management fees
Administrative expenses
Return before finance cost
and taxation
Finance costs
Net return before taxation
Taxation
13
3
3
4
5
8
9
13,933
13,933
13,933
13,933
18,046
18,046
18,046
18,046
6,549
47
6,596
6,549
47
6,596
5,120
93
5,213
5,120
93
5,213
(93)
(653)
(280)
(528)
(373)
(1,181)
(516)
(197)
(713)
13,125
(2,107)
11,018
5,850
(702)
5,148
(45)
18,975
(2,809)
16,166
(45)
17,849
(2,105)
15,744
4,697
(702)
3,995
(115)
22,546
(2,807)
19,739
(115)
Net return after taxation for the
year from continuing operations
5,103
11,018
16,121
3,880
15,744
19,624
Discontinued operations
Net return after taxation for the year
from discontinued operations
Total comprehensive income for
15
(232)
(2,584)
(2,816)
(339)
(912)
(1,251)
the year
4,871
8,434
13,305
3,541
14,832
18,373
Return per ordinary share:
Basic and diluted for continuing
operations
Basic and diluted for discontinued
operations
Basic and diluted total
11
11
11
pence
pence
pence
pence
pence
pence
9.8
21.2
31.0
7.5
30.3
37.8
(0.4)
9.4
(5.0)
16.2
(5.4)
25.6
(0.7)
6.8
(1.8)
28.5
(2.5)
35.3
The total column of this statement is the Consolidated Statement of Comprehensive Income of the Group prepared in accordance with IFRSs as
adopted by the European Union. The supplementary revenue return and capital return columns are prepared under guidance published by the AIC.
The notes on pages 54 to 92 form part of these accounts.
44
MAJEDIE INVESTMENTS PLC
Company Statement of Comprehensive Income
for the year ended 30 September 2014
Revenue
return
£000
Notes
2014
Capital
return
£000
Total
£000
Revenue
return
£000
2013
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
6,008
6,008
6,008
6,008
17,679
17,679
17,679
17,679
3
3
4
5
8
9
6,549
56
6,605
6,549
56
6,605
5,120
112
5,232
5,120
112
5,232
(207)
(691)
(404)
(641)
(611)
(1,332)
(404)
(516)
(415)
(197)
(819)
(713)
5,707
4,963
10,670
4,312
17,067
21,379
(702)
5,005
(45)
4,960
(2,107)
2,856
2,856
(2,809)
7,861
(45)
7,816
(702)
3,610
(115)
3,495
(2,105)
14,962
14,962
(2,807)
18,572
(115)
18,457
Return per ordinary share:
Basic and diluted
11
pence
9.5
pence
5.5
pence
15.0
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.
The notes on pages 54 to 92 form part of these accounts.
REPORT & ACCOUNTS 2014 45
Consolidated Statement of Changes in Equity
for the year ended 30 September 2014
Share
capital
£000
Share
premium
£000
Notes
Capital
redemption
reserve
£000
Share
options
reserve
£000
Capital
reserve
£000
Revenue
reserve
£000
Own shares
reserve
£000
Total
£000
Year ended 30 September 2014
As at 1 October 2013
Net return for the year from continuing
operations
Net return for the year from discontinued
operations
Share options expense
Sale of own shares by Employee Incentive
Trust (EIT)
Dividends declared and paid in year
15
25
20
10
5,253
785
56
(123)
102,654
18,169
(1,628)
125,166
19
11,018
5,103
(2,584)
(232)
(178)
589
(4,840)
As at 30 September 2014
5,253
785
56
(104)
110,910
18,200
(1,039)
134,061
Year ended 30 September 2013
As at 1 October 2012
Net return for the year from continuing
operations
Net return for the year from discontinued
operations
Share options expense
Dividends declared and paid in year
15
25
10
5,253
785
56
(147)
87,822
20,093
(1,628)
112,234
24
15,744
3,880
(912)
(339)
(5,465)
As at 30 September 2013
5,253
785
56
(123)
102,654
18,169
(1,628)
125,166
16,121
(2,816)
19
411
(4,840)
19,624
(1,251)
24
(5,465)
The notes on pages 54 to 92 form part of these accounts.
46
MAJEDIE INVESTMENTS PLC
Share
capital
£000
Share
premium
£000
Notes
Capital
redemption
reserve
£000
Share
options
reserve
£000
Capital
reserve
£000
Revenue
reserve
£000
Own shares
reserve
£000
Total
£000
5,253
785
56
(123)
102,654
18,169
(1,628)
125,166
11,018
5,103
(2,584)
(232)
(178)
589
(4,840)
16,121
(2,816)
19
411
(4,840)
As at 30 September 2014
5,253
785
56
(104)
110,910
18,200
(1,039)
134,061
5,253
785
56
(147)
87,822
20,093
(1,628)
112,234
15,744
3,880
(912)
(339)
(5,465)
19,624
(1,251)
24
(5,465)
As at 30 September 2013
5,253
785
56
(123)
102,654
18,169
(1,628)
125,166
Year ended 30 September 2014
As at 1 October 2013
Net return for the year from continuing
operations
operations
Trust (EIT)
Net return for the year from discontinued
Share options expense
Sale of own shares by Employee Incentive
Dividends declared and paid in year
Year ended 30 September 2013
As at 1 October 2012
Net return for the year from continuing
operations
operations
Net return for the year from discontinued
Share options expense
Dividends declared and paid in year
15
25
20
10
15
25
10
19
24
REPORT & ACCOUNTS 2014 47
Company Statement of Changes in Equity
for the year ended 30 September 2014
Share
capital
£000
Share
premium
£000
Notes
Capital
redemption
reserve
£000
Year ended 30 September 2014
As at 1 October 2013
Net return for the year
Share options expense
Sale of own shares by Employee Incentive Trust (EIT)
Dividends declared and paid in year
As at 30 September 2014
Year ended 30 September 2013
As at 1 October 2012
Net return for the year
Share options expense
Dividends declared and paid in year
25
20
10
25
10
5,253
785
56
(123)
104,534
21,778
(1,628)
130,655
5,253
785
56
(104)
107,212
21,898
(1,039)
134,061
5,253
785
56
(1,628)
117,639
As at 30 September 2013
5,253
785
56
(123)
104,534
21,778
(1,628)
130,655
Share
options
reserve
£000
19
Capital
reserve
£000
Revenue
reserve
£000
Own shares
reserve
£000
2,856
4,960
(178)
589
(4,840)
(147)
24
89,572
14,962
23,748
3,495
(5,465)
Total
£000
7,816
19
411
(4,840)
18,457
24
(5,465)
The notes on pages 54 to 92 form part of these accounts.
48
MAJEDIE INVESTMENTS PLC
Share
capital
£000
Share
premium
£000
Notes
Capital
redemption
reserve
£000
Share
options
reserve
£000
Capital
reserve
£000
Revenue
reserve
£000
Own shares
reserve
£000
Total
£000
5,253
785
56
(123)
104,534
21,778
(1,628)
130,655
2,856
4,960
19
(178)
589
(4,840)
7,816
19
411
(4,840)
As at 30 September 2014
5,253
785
56
(104)
107,212
21,898
(1,039)
134,061
As at 30 September 2013
5,253
785
56
(123)
104,534
21,778
(1,628)
130,655
5,253
785
56
(147)
24
89,572
14,962
23,748
3,495
(5,465)
(1,628)
117,639
18,457
24
(5,465)
Year ended 30 September 2014
As at 1 October 2013
Net return for the year
Share options expense
Sale of own shares by Employee Incentive Trust (EIT)
Dividends declared and paid in year
Year ended 30 September 2013
As at 1 October 2012
Net return for the year
Share options expense
Dividends declared and paid in year
25
20
10
25
10
REPORT & ACCOUNTS 2014 49
Consolidated Balance Sheet
as at 30 September 2014
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
Notes
12
13
16
17
2014
£000
80
165,342
165,422
338
3,512
3,850
2013
£000
105
151,939
152,044
2,690
5,523
8,213
169,272
160,257
18
(1,338)
(1,244)
Total assets less current liabilities
167,934
159,013
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
18
19
20
21
(33,873)
(35,211)
(33,847)
(35,091)
134,061
125,166
5,253
785
56
(104)
110,910
18,200
(1,039)
134,061
pence
256.7
5,253
785
56
(123)
102,654
18,169
(1,628)
125,166
pence
240.5
Approved by the Board of Majedie Investments PLC (Company no. 109305) and authorised for issue on 4 December 2014.
Andrew J Adcock
Director
The notes on pages 54 to 92 form part of these accounts.
50
MAJEDIE INVESTMENTS PLC
Company Balance Sheet
as at 30 September 2014
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
Equity Shareholders’ Funds
Notes
12
13
13
16
17
18
18
19
20
2014
£000
80
165,342
172
165,594
432
3,246
3,678
169,272
(1,338)
167,934
(33,873)
(35,211)
134,061
5,253
785
56
(104)
107,212
21,898
(1,039)
134,061
2013
£000
98
151,939
8,193
160,230
1,313
3,991
5,304
165,534
(1,032)
164,502
(33,847)
(34,879)
130,655
5,253
785
56
(123)
104,534
21,778
(1,628)
130,655
Approved by the Board of Majedie Investments PLC (Company no. 109305) and authorised for issue on 4 December 2014.
Andrew J Adcock
Director
The notes on pages 54 to 92 form part of these accounts.
REPORT & ACCOUNTS 2014 51
Consolidated Cash Flow Statement
for the year ended 30 September 2014
Notes
13
15
Net cash flow from operating activities
Consolidated net return before taxation from continuing operations
Consolidated net return before taxation from discontinued operations
Adjustments for:
Gains on investments relating to continuing operations
Losses on investments relating to discontinued operations
Consolidation adjustment for Javelin Capital fee income
Share based remuneration
Depreciation
Purchases of investments
Sales of investments
Finance costs
Operating cashflows before movements in working capital
Decrease in trade and other payables
Increase in trade and other receivables
Net cash inflow/(outflow) from operating activities before tax
Tax recovered
Tax on unfranked income
Net cash inflow/(outflow) from operating activities
Attributable to:
Net cash inflow/(outflow) from operating activities attributable to
continuing operations
Net cash outflow from operating activities attributable to
discontinued operation
Financing activities
Interest paid
Dividends paid
Proceeds from sale of own shares by EIT
Net cash outflow from financing activities attributable to
continuing operations
Decrease in cash and cash equivalents for year
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year
22
2014
£000
16,166
(2,816)
(13,933)
2,084
118
19
25
(145,143)
145,976
2,496
2,809
5,305
(9)
(54)
5,242
26
(67)
5,201
7,907
(2,706)
(2,783)
(4,840)
411
(7,212)
(2,011)
5,523
3,512
2013
£000
19,739
(1,251)
(18,046)
368
24
142
(31,862)
19,724
(11,162)
2,807
(8,355)
(137)
(916)
(9,408)
28
(136)
(9,516)
(8,288)
(1,228)
(2,783)
(5,465)
(8,248)
(17,764)
23,287
5,523
The notes on pages 54 to 92 form part of these accounts.
52
MAJEDIE INVESTMENTS PLC
Company Cash Flow Statement
for the year ended 30 September 2014
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
Finance costs
Operating cashflows before movements in working capital
Increase/(decrease) in trade and other payables
Decrease/(increase) in trade and other receivables
Net cash inflow/(outflow) from operating activities before tax
Tax recovered
Tax on unfranked income
Net cash inflow/(outflow) from operating activities
Investing activities
Proceeds from liquidation of subsidiaries
Net cash inflow from investing activities
Financing activities
Interest paid
Dividends paid
Proceeds from sale of own shares by EIT
Net cash outflow from financing activities
Decrease in cash and cash equivalents for year
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year
Notes
13
22
2014
£000
2013
£000
7,861
18,572
(6,008)
19
18
(145,143)
145,983
2,730
2,809
5,539
203
559
6,301
26
(67)
6,260
207
207
(2,783)
(4,840)
411
(7,212)
(745)
3,991
3,246
(17,679)
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
The notes on pages 54 to 92 form part of these accounts.
REPORT & ACCOUNTS 2014 53
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 101. The nature of the Group’s operations and its
principal activities are set out in the Business Review on pages 6 to 10.
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 pages 6 and 7), 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 55 to 61. The inputs into
the valuation methodologies adopted include historical data such as earnings or cash flow as well as more
subjective data such as earnings forecasts or discount rates. As a result of this, the determination of fair value
requires significant management judgement. At the year end, unquoted investments (including MAM) represent
31.1% (2013: 37.4%) of consolidated shareholders’ funds.
54
MAJEDIE INVESTMENTS PLC
1 Significant Accounting Policies
The principal accounting policies adopted are set out as follows:
The accounts on pages 44 to 53 comprise the audited results of the Company and its subsidiaries for the year
ended 30 September 2014, and are presented in pounds sterling rounded to the nearest thousand, as this is the
functional currency in which the Group and Company transactions are undertaken.
Going Concern
The Directors have a reasonable expectation that the Company has sufficient resources to continue in operational
existence for the foreseeable future. Accordingly the Financial Statements have been prepared on a going concern basis.
Presentation of Statement of Comprehensive Income
In order to reflect better the activities of an investment trust company and in accordance with guidance issued by
the AIC, supplementary information which analyses the Statement of Comprehensive Income between items of a
revenue and capital nature has been presented alongside the Statement of Comprehensive Income. Additionally the
net revenue is the measure that the directors believe to be appropriate in assessing the Company’s compliance with
certain requirements set out in section 1158 of the Corporation Tax Act 2010.
Basis of Accounting
The accounts of the Group and the Company have been prepared in accordance with IFRSs. They comprise
standards and interpretations approved by the International Accounting Standards Board and International Financial
Reporting Committee, interpretations approved by the International Accounting Standards Committee that remain in
effect, to the extent they have been adopted by the European Union.
Where presentational guidance set out in the SORP regarding the Financial Statements of Investment Trust Companies
and Venture Capital Trusts issued by the AIC in January 2009 is not inconsistent with the requirements of IFRSs, the
directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.
Discontinued operations
On 13 January 2014, the Company publicly announced the decision of the Board to close Javelin Capital LLP,
including its two wholly owned subsidiaries – Javelin Capital Services Limited and Javelin Capital Fund Management
Limited – following the appointment of MAM to become the Investment Manager for the Company. The Company
also decided to wind down its wholly owned subsidiary, Majedie Unit Trust. Accordingly these have been classified
as discontinued operations of the Group.
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount
as profit or loss after tax from discontinued operations in the Consolidated Statement of Comprehensive Income.
Additional disclosures are provided in note 15. All other notes to the financial statements include amounts for continuing
operations, unless otherwise mentioned.
REPORT & ACCOUNTS 2014 55
Notes to the Accounts
1 Significant Accounting Policies continued
Basis of Consolidation
The Company is an investment entity as defined by IFRS 10 and, as such, does not consolidate the entities it
controls which do not provide investment related services to the Company. Instead, interests in such entities are
classified as fair value through profit or loss, and measured at fair value.
The Consolidated Accounts incorporate the accounts of the Company and entities controlled by the Company
which provide investment related services made up to 30 September each year. An investor controls an investee
when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to
affect those returns through its power over the investee.
The results of subsidiaries acquired or disposed of are included in the Consolidated Statement of Comprehensive
Income from the effective date of acquisition or disposal as appropriate. When the Group ceases to have control any
retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in
carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of
subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any
amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the
Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in
other comprehensive income are reclassified to profit or loss. All Group entities have the same year end date.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies
used into line with those used by the Group.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Standards Issued But Not Yet Effective
At the date of authorisation of these financial statements, the following relevant Standards and Interpretations have
not been applied in these financial statements since they were in issue but not yet effective and/or adopted:
International Accounting Standards and Interpretations (IAS/IFRS/IFRICs)
Financial Instruments: Classification & Measurement
IFRS 9
Revenue from Contracts with Customers
IFRS 15
Related Party Disclosures*
IAS 24
Financial Instruments: Presentation*
IAS 32
Impairment of Assets*
IAS 36
Financial Instruments: Recognition & Measurement*
IAS 39
Levies
IFRIC 21
* Amendments to current standards.
Effective date
1 January 2018
1 January 2017
1 January 2013
1 January 2014
1 January 2014
1 January 2014
1 January 2014
The Directors do not anticipate that the adoption of the above Standards and Interpretations would have no material
impact on the financial statements in the period of initial application.
Management anticipates that all of the relevant pronouncements will be adopted in the next accounting period.
The Directors do not anticipate that the adoption of these standards and interpretations will have a material impact
on the financial statements in the period of initial application.
56
MAJEDIE INVESTMENTS PLC
1 Significant Accounting Policies continued
Changes in accounting policies and disclosures
New and amended standards and interpretations
IFRS 13 Fair Value Measurement
IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not
change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under
IFRS when fair value is required or permitted. The application of IFRS 13 has not materially impacted the fair value
measurements carried out by the Group.
IFRS 13 also requires specific disclosures on fair values, some of which replace existing disclosure requirements in
other standards, including IFRS 7 Financial Instruments: Disclosures.
Foreign Currencies
The individual financial statements of each Group entity are presented in the currency of the primary economic
environment in which the entity operates, i.e. its functional currency. For the purpose of the consolidated financial
statements, the results and financial position of each entity are expressed in Pounds Sterling (Sterling) which is the
functional currency of the Company, and the presentational currency of the Group. Transactions in currencies other
than Sterling are recorded at the rate of exchange prevailing on the dates of the transactions. At each balance sheet
date, monetary items and non-monetary assets and liabilities that are fair valued and are denominated in foreign
currencies are re-translated at the rates prevailing on the balance sheet date.
Segmental Reporting
A segment is a distinguishable component of the Group that is engaged in business activities from which it may
earn revenues and incur expenses (including intra-group revenues and expenses), for which discrete financial
information is available and whose operating results are regularly reviewed by the entity’s chief decision maker who
can make decisions on resource allocation and performance assessment. An operating segment could engage in
business activities in order to earn potential future revenues.
Income
Dividend income from investments is taken to the revenue account on an ex-dividend basis. UK dividends are
included net of tax credits. Overseas dividends are included gross of any withholding tax. Where the Company has
elected to receive scrip dividends in the form of additional shares rather than in cash, the amount of the cash
dividend foregone is recognised as income. Any excess in the value of the shares received over the amount of the
cash dividend is recognised in the capital column.
The fixed return on a debt security is recognised on a time apportionment basis so as to reflect the effective yield on
the debt security. Deposit interest and other interest receivable is included on an accruals basis.
Special dividends are taken to the revenue or capital account depending on their nature.
Expenses
All administrative expenses are accounted for on an accruals basis. In respect of the analysis between revenue and
capital items presented within the Statement of Comprehensive Income, all expenses have been presented as
revenue items except as follows:
•
Expenses which are incidental to the acquisition or disposal of an investment are treated as capital costs and
separately identified and disclosed (see note 13).
REPORT & ACCOUNTS 2014 57
Notes to the Accounts
1 Significant Accounting Policies continued
•
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.
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.
58
MAJEDIE INVESTMENTS PLC
1 Significant Accounting Policies continued
Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and
rewards of ownership to the lessee. All other leases are classified as operating leases.
Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the
relevant lease.
Investments Held at Fair Value Through Profit or Loss
The Group classifies its investments in debt and equity securities, and derivatives, as financial assets or financial
liabilities at fair value through profit or loss.
When a purchase or sale is made under a contract, the terms of which require delivery within the timeframe of the
relevant market, the investments concerned are recognised or derecognised on the trade date.
All investments are classified as fair value through profit or loss as defined by IAS 39.
All investments are designated upon initial recognition as held at fair value through profit or loss, and are measured
at subsequent reporting dates at fair value, which is either the bid price or the last traded price for listed securities,
depending on the convention of the exchange on which the investment is quoted. Investments in unit trusts or open
ended investment companies are valued at the closing price, the bid price or the single price as appropriate,
released by the relevant investment manager.
Fair values for unquoted investments, or investments for which the market is inactive, are established by using various
valuation techniques in accordance with the International Private Equity and Venture Capital Valuation Guidelines.
These may include recent arm’s length market transactions, the current fair value of another instrument which has
substantially the same earnings multiples, discounted cash flow analysis and option pricing models. Where there is a
valuation technique commonly used by market participants to price the instrument and that technique has been
demonstrated to provide reliable estimates of prices obtained in actual market transactions, that technique is utilised.
The fair value of an investment at the beginning of the year is used when an investment is transferred between
hierarchy levels.
Changes in the fair value of investments and gains on the sale of investments are recognised as they arise in the
Statement of Comprehensive Income.
Investment in Subsidiaries
In its separate financial statements the Company recognises its investment in subsidiaries at fair value.
Financial Instruments
Financial assets and financial liabilities are recognised on the Group’s Balance Sheet when the Group becomes a
party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at
fair value.
Trade Receivables
Trade receivables do not carry any interest and are stated at carrying value which equates to their fair value as
reduced by appropriate allowances for estimated irrecoverable amounts.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash deposited with banks, cash balances at brokers and short-term highly
liquid investments with maturities of three months or less from the date of acquisition.
REPORT & ACCOUNTS 2014 59
Notes to the Accounts
1 Significant Accounting Policies continued
Financial Liabilities and Equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements
entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after
deducting all of its liabilities.
Financial liabilities are either classified as financial liabilities at fair value through profit or loss and are recognised
initially at fair value or 'other financial liabilities' (including borrowings and trade and other payables that are classified
and subsequently measured at amortised cost). Financial liabilities are subsequently measured at fair value and
changes in fair value are recognised in the Statement of Comprehensive Income.
Non current liabilities
The debentures are initially recognised at cost, being the fair value of the consideration received less issue costs
where applicable. After initial recognition, all interest-bearing loans and borrowings are subsequently measured at
amortised cost using the effective interest rate. The effective interest rate is the rate that exactly discounts estimated
future payments over the expected life of the financial liabilities to the net carrying amount on initial recognition.
Trade Payables
Trade payables are not interest bearing and are stated at carrying value which equates to their fair value.
Reserves
Gains and losses on the sale of investments and investment holding gains and losses are accounted for in the
Statement of Comprehensive Income and subsequently in the capital reserve.
Share options reserve represents the expense of share based payments. The deemed expense is transferred to the
share options reserve.
Share premium account represents the excess over nominal value of consideration received for equity shares, net of
expenses of the share issue.
60
MAJEDIE INVESTMENTS PLC
1 Significant Accounting Policies continued
Own Shares
The consideration paid for own shares is treated as a deduction from shareholders’ funds, and not recognised as
an asset.
Dividends payable to shareholders
Dividends to shareholders are accounted for in the period in which they are paid or approved in general meetings.
Dividends payable to shareholders are recognised in the Statement of Changes in Equity.
2 Business segments
For management purposes for the year ended 30 September 2014, the Group was organised into the following two
principal activities:
Investing activities
The Company’s investment objective is to maximise total shareholder return whilst increasing dividends by more
than the rate of inflation over the long term.
The Company operates as an investment trust company and its portfolio contains investments in companies listed in
a number of countries. Geographical information about the portfolio is provided on page 14 and exposure to
different currencies is disclosed in note 26 on pages 82 and 83.
Investment management services
To complement this investment objective and create income and capital for the Group, Javelin Capital LLP was
launched to market a range of funds to third party investors and provide investment management and advisory services.
Javelin Capital LLP has now been discontinued please see note 15 on pages 75 and 76 for further information.
Therefore, going forward the Group’s activities comprise solely investing activities.
REPORT & ACCOUNTS 2014 61
Notes to the Accounts
2 Business Segments continued
Group
2014
Investment
management
and advisory
services
£000
Investing
activities
£000
Eliminations
£000
Total
£000
Group
2013
Investment
management
and advisory
services
£000
Investing
activities
£000
Eliminations
£000
External income
from investment
management services
Intra-group income
from investment
management services
Other operating and
investment income
Share based
payments charge
Other administrative costs
Intra-group investment
management services
expenses
Other operating expenses
Operating profit/(loss)
Finance costs
Gains on fair value
6,605
6,605
(19)
(1,686)
(238)
(1,943)
4,662
(2,809)
Total
£000
31
4
4
31
356
(356)
1,187
(1,187)
(10)
350
(9)
6,586
5,232
(6)
(19)
5,207
(365)
6,590
5,232
1,212
(1,206)
5,238
(24)
(688)
(819)
(1,162)
19
(24)
(1,831)
1,187
(368)
(134)
(134)
(525)
9
(19)
(2,202)
356
(45)
(118)
(45)
(688)
(338)
4,324
(2,809)
3,701
(2,807)
365
(2,266)
(1,531)
(1,664)
1,206
(1,989)
through profit and loss
13,801
(1,966)
11,835
17,678
Profit/(loss) before tax
15,654
(2,304)
13,350
18,572
Attributable to:
Continuing operations
Discontinued operations
Total assets
Total liabilities
Intra-group assets/(liabilities)
15,805
(151)
169,272
(35,211)
(2,304)
361
(361)
16,166
(2,816)
18,572
169,272
(35,211)
157,026
(34,945)
8,542
(452)
368
(84)
(84)
3,231
(146)
(542)
3,249
(2,807)
18,046
18,488
1,167
(1,167)
19,739
(1,251)
160,257
(35,091)
(8,000)
Net assets
134,061
134,061
130,623
2,543
(8,000) 125,166
62
MAJEDIE INVESTMENTS PLC
3 Income
Income from investments
Franked investment income†
UK unfranked investment income
Overseas dividends
Fixed interest and
convertible bonds
Other income
Deposit interest
Sundry income
Total income
Total income comprises:
Dividends
Interest
Other income
Income from investments
Listed UK
Listed overseas
Unlisted
Group
2014
£000
6,165
30
354
13
34
6,549
13
34
2,576
354
3,619
Group
2013
£000
4,114
63
943
Company
2014
£000
6,165
30
354
Company
2013
£000
4,114
63
943
6,549
5,120
6,549
5,120
19
74
12
44
19
93
47
6,596
93
5,213
56
6,605
112
5,232
5,120
19
74
6,549
12
44
5,120
19
93
6,596
5,213
6,605
5,232
1,917
943
2,260
2,576
354
3,619
1,917
943
2,260
6,549
5,120
6,549
5,120
† Includes MAM ordinary dividend income of £3,619,000 (2013: £2,260,000).
REPORT & ACCOUNTS 2014 63
Notes to the Accounts
4 Management Fees
Investment management
Investment management
Administration
Group
2014
Capital
return
£000
280
280
Company
2014
Capital
return
£000
404
Revenue
return
£000
93
93
Revenue
return
£000
134
73
207
404
Total
£000
373
373
Total
£000
538
73
611
Group
2013
Capital
return
£000
Revenue
return
£000
Company
2013
Capital
return
£000
415
Revenue
return
£000
139
265
404
415
Total
£000
Total
£000
554
265
819
The Group’s accounts now include an investment management fee expense following the appointment of an external
investment manager (MAM). Investment management fees of £165,000 (2013: £554,000) were paid to Javelin Capital
LLP under the terms of the agreement which has now been terminated. Under this agreement an administration fee
was also due. The Company’s investment management fee is higher than the Group due to Javelin Capital LLP
management fee being consolidated out of the Group.
A summary of the terms of the Investment Agreement for the Company with MAM is given in the Directors’ Report on
pages 20 and 21. At 30 September 2014, an amount of £132,000 was outstanding for payment of investment
management fees when due to MAM (2013: £nil). At 30 September 2014, an amount of nil was outstanding for
Javelin Capital LLP investment management fees (2013: £47,000) and outstanding administration fees of £nil (2013:
£22,000).
There were no performance fees during the year (2013: nil).
5 Administrative Expenses
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
2014
£000
225
220
327
54
61
65
18
53
158
Group
2013
£000
24
206
261
33
35
57
97
Company
2014
£000
Company
2013
£000
225
220
327
54
61
65
18
53
309
24
206
261
33
35
57
97
1,181
713
1,332
713
A charge of £808,000 (2013: £197,000) to capital and an equivalent credit to revenue has been made in the Group
and a charge of £1,045,000 (2013: £612,000) in the Company has been made to recognise the accounting policy
of 75% of direct investment management expenses to capital.
64
MAJEDIE INVESTMENTS PLC
5 Administrative Expenses continued
Administration expense disclosures are in respect of continuing operations only. Further details on discontinued
operations are in note 15 on page 75.
Total fees charged by the Auditor for the year, all of which were charged to revenue, comprised:
Audit services
– statutory audit
Other assurance services
Group
2014
£000
44
9
Group
2013
£000
50
7
Company
2014
£000
44
9
Company
2013
£000
50
7
53
57
53
57
Additional statutory audit fees of £6,500 are included within the administrative expenses of the discontinued
operations in note 15.
6 Directors’ Emoluments
Fees
Salary
Other benefits
Partnership profit shares
Company
2014
£000
176
84
6
50
Company
2013
£000
185
45
5
66
316
301
The Report on Directors’ Remuneration on pages 31 to 38 explains the Company’s policy on remuneration for
directors for the year. It also provides further details of directors’ remuneration.
7 Staff Costs including CEO
Salaries and other payments
Social security costs
Pension contributions
Share based remuneration
– note 25
Group
2014
£000
171
21
14
19
Group
2013
£000
Company
2014
£000
Company
2013
£000
171
21
14
19
24
24
225
24
225
24
Average number of employees:
Management and office staff
Group
2014
Number
Group
2013
Number
2
5
REPORT & ACCOUNTS 2014 65
Notes to the Accounts
8 Finance Costs
Interest on 9.5% debenture stock
2020
Interest on 7.25% debenture stock
2025
Amortisation of expenses associated
with debenture issue
Group and Company
2014
Group and Company
2013
Revenue
return
£000
Capital
return
£000
Total
£000
Revenue
return
£000
Capital
return
£000
Total
£000
321
375
6
702
961
1,282
1,126
1,501
20
26
2,107
2,809
321
375
6
702
962
1,283
1,125
1,500
18
24
2,105
2,807
Further details of the debenture stocks in issue are provided in note 18.
9 Taxation
Analysis of tax charge
Tax on overseas dividends
Group
2014
£000
45
Group
2013
£000
115
Company
2014
£000
45
Company
2013
£000
115
Reconciliation of tax charge:
The current taxation rate for the year is lower (2013: lower) than the standard rate of corporation tax in the UK of
22% (2013: 23.5%). The differences are explained below:
Net return before taxation for the
year from continuing operations
Net return before taxation for the
Group
2014
£000
Group
2013
£000
Company
2014
£000
Company
2013
£000
16,166
19,739
7,861
18,572
year from discontinued operations
(2,816)
(1,251)
Net return before taxation
13,350
18,488
7,861
18,572
Taxation at UK Corporation Tax
rate of 22% (2013: 23.5%)
Effects of:
– UK dividends which are
not taxable
– foreign dividends which are
not taxable
– gains on investments which are
2,937
4,345
1,729
4,364
(1,365)
(76)
(985)
(213)
(1,365)
(76)
(985)
(213)
not taxable
(2,607)
(4,241)
(1,321)
(4,155)
– expenses not deductible for tax
purposes
52
– excess expenses for current year
1,059
– overseas taxation which is
not recoverable
45
22
1,072
115
54
979
45
22
967
115
Actual total tax charge
45
115
45
115
66
MAJEDIE INVESTMENTS PLC
9 Taxation continued
Group
After claiming relief against accrued income taxable on receipt, the Group has unrelieved excess expenses of
£76,940,000 (2013: £72,126,000). It is not yet certain that the Group will generate sufficient taxable income in the
future to utilise these expenses and therefore no deferred tax asset has been recognised.
Company
After claiming relief against accrued income taxable on receipt, the Company has unrelieved excess expenses of
£69,688,000 (2013: £64,796,000). It is not yet certain that the Company will generate sufficient taxable income in
the future to utilise these expenses and therefore no deferred tax asset has been recognised.
The allocation of expenses to capital does not result in any tax effect. Due to the Company’s status as an
investment trust, and the intention to continue meeting the conditions required to obtain approval in the foreseeable
future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or
disposal of investments.
10 Dividends
The following table summarises the amounts recognised as distributions to equity shareholders in the period:
2012 Final dividend of 6.30p paid on 23 January 2013
2013 Interim dividend of 4.20p paid on 26 June 2013
2013 Final dividend of 6.30p paid on 22 January 2014
2014 Interim dividend of 3.00p paid on 27 June 2014
Proposed final dividend for the year ended
30 September 2014 of 4.50p (2013: final
dividend of 6.30p) per ordinary share
Group and
Company
2014
£000
3,279
1,561
2014
£000
2,350
Group and
Company
2013
£000
3,279
2,186
4,840
5,465
2013
£000
3,279
2,350
3,279
The proposed final dividend has not been included as a liability in these accounts in accordance with IAS 10: Events
after the Balance Sheet date.
REPORT & ACCOUNTS 2014 67
Notes to the Accounts
10 Dividends continued
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 2014
of 3.00p (2013: 4.20p) per ordinary share
Proposed final dividend for the year ended 30 September
2014 of 4.50p (2013: 6.30p) per ordinary share
2014
£000
1,561
2,350
2013
£000
2,186
3,279
3,911
5,465
Distributable reserves of the Company comprise the Capital & Revenue Reserves.
Dividends for the period (and for 2013) have been solely made from the Revenue Reserve.
11 Return per Ordinary Share
Basic return per ordinary share from continuing and discontinued operations is based on 52,055,573 (2013:
52,044,613) ordinary shares, being the weighted average number of shares in issue having adjusted for the shares
held by the EIT referred to in note 20. Basic returns per ordinary share from continuing and discontinued operations
are based on the net return after taxation attributable to equity shareholders. There are 224,414 potentially dilutive
shares arising from the share options referred to in note 25. These do not give rise to a material dilution to the return
per ordinary share and therefore no diluted return per ordinary share has been calculated.
Basic and diluted revenue returns from continuing
operations are based on net revenue after taxation of:
Basic and diluted revenue returns from discontinued
operations are based on net revenue after taxation of:
Basic and diluted capital returns from continuing operations
are based on net capital return of:
Basic and diluted capital returns from discontinued
operations are based on net capital return of:
Group
2014
£000
5,103
(232)
11,018
(2,584)
Group
2013
£000
3,880
(339)
15,744
(912)
Basic and diluted total returns are based on return of:
13,305
18,373
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
2014
£000
4,960
2,856
Company
2013
£000
3,495
14,962
Basic and diluted total returns are based on return of:
7,816
18,457
68
MAJEDIE INVESTMENTS PLC
12 Property and Equipment
Cost:
At 1 October 2013
Additions
Disposals
At 30 September 2014
Depreciation:
At 1 October 2013
Charge for year*
Disposals
At 30 September 2014
Net book value:
At 30 September 2014
At 30 September 2013
Group
Leasehold
Improvements
£000
171
Group
Office
Equipment
£000
583
(3)
Total
£000
754
(3)
171
580
751
75
16
574
9
(3)
649
25
(3)
91
80
96
580
9
671
80
105
* The charge for the year includes both continuing and discontinued operations.
Cost:
At 1 October 2013
Additions
Disposals
At 30 September 2014
Depreciation:
At 1 October 2013
Charge for year*
Disposals
At 30 September 2014
Net book value:
At 30 September 2014
At 30 September 2013
Company
Leasehold
Improvements
£000
Company
Office
Equipment
£000
171
168
Total
£000
339
171
168
339
75
16
166
2
241
18
91
80
96
168
2
259
80
98
* Charge for the year includes both continuing & discontinued operations.
REPORT & ACCOUNTS 2014 69
Notes to the Accounts
13 Investments at Fair Value Through Profit or Loss
Opening cost at beginning of year
Gains at beginning of year
Listed
£000
94,334
10,741
Group 2014
Unlisted*
£000
4,575
42,289
Total
£000
98,909
53,030
Listed
£000
75,563
4,863
Group 2013
Unlisted
£000
10,331
31,604
Total
£000
85,894
36,467
Opening fair value at beginning of year
105,075
46,864
151,939
80,426
41,935
122,361
Purchases at cost
Sales – proceeds
Gains on sales
(Decrease)/increase in investment
145,246
(126,419)
11,562
(19,239)
18,747
145,246
(145,658)
30,309
31,987
(14,189)
994
(5,898)
121
holding gains
(11,777)
(4,717)
(16,494)
Transfer on de-listing of shares
5,878
(21)
10,685
21
31,987
(20,087)
1,115
16,563
Closing fair value at end of year
123,687
41,655
165,342
105,075
46,864
151,939
Closing cost at end of year
Gains at end of year
124,723
(1,036)
4,083
37,572
128,806
36,536
94,334
10,741
4,575
42,289
98,909
53,030
Closing fair value at end of year
123,687
41,655
165,342
105,075
46,864
151,939
* The decrease in investment holding gains for unlisted investments in 2014 is comprised of a £17,788,000 reversal of unrealised gains to realised gains
and a £13,071,000 change in unrealised gains for the year.
Opening cost at beginning of year
Gains/(losses) at beginning of year
Company
2014
Listed
£000
94,333
10,742
Unlisted*
£000
4,534
42,330
Related and
subsidiary
companies
£000
Total
£000
9,010
(817)
107,877
52,255
Opening fair value at beginning of year
105,075
46,864
8,193
160,132
Purchases at cost
Sales – proceeds
Gains/(losses) on sales**
Decrease in investment holding gains
145,246
(126,426)
11,570
(11,778)
(19,239)
18,764
(4,734)
(207)
(7,793)
(21)
145,246
(145,872)
22,541
(16,533)
Closing fair value at end of year
123,687
41,655
172
165,514
Closing cost at end of year
(Losses)/gains at end of year
124,723
(1,036)
4,059
37,596
1,010
(838)
129,792
35,722
Closing fair value at end of year
123,687
41,655
172
165,514
* The decrease in investment holding gains for unlisted investments in 2014 is comprised of a £17,805,000 reversal of unrealised gains to realised gains
and a £13,071,000 change in unrealised gains for the year.
** The loss of £7,793,000 represents the write off of the investment in Javelin Capital LLP, net of recoverable capital.
70
MAJEDIE INVESTMENTS PLC
13 Investments at Fair Value Through Profit or Loss continued
Opening cost at beginning of year
Gains/(losses) at beginning of year
Company
2013
Listed
£000
75,562
4,864
Unlisted
£000
10,283
31,652
Related and
subsidiary
companies
£000
9,010
(818)
Total
£000
94,855
35,698
Opening fair value at beginning of year
80,426
41,935
8,192
130,553
Purchases at cost
Sales – proceeds
Gains on sales
Increase in investment holding gains
Transfer on de-listing of shares
31,987
(14,189)
994
5,878
(21)
(5,898)
128
10,678
21
31,987
(20,087)
1,122
16,557
1
Closing fair value at end of year
105,075
46,864
8,193
160,132
Closing cost at end of year
Gains/(losses) at end of year
94,333
10,742
4,534
42,330
9,010
(817)
107,877
52,255
Closing fair value at end of year
105,075
46,864
8,193
160,132
All operating subsidiaries are held at fair value.
Unlisted investments include an amount of £355,000 in 4 various companies (2013: £864,000 in 5 companies) and
£41,300,000 (2013: £46,000,000) for the Company’s investment in MAM as detailed on pages 74 and 75.
During the year the Company incurred transaction costs amounting to £396,000 (2013: £105,000) of which £56,000
(2013: £78,000) related to the purchases of investments and £340,000 (2013: £27,000) related to the sales of
investments. These amounts are included in gains on investments at fair value through profit or loss, as disclosed in
the Consolidated and Company Statement of Comprehensive Income.
The composition of the investment return is analysed below:
Net gains on sales of
equity investments
Decrease/increase in holding gains
Group
2014
£000
30,309
Group
2013
£000
1,115
Company
2014
£000
Company
2013
£000
22,541
1,122
on equity investments
(16,494)
16,563
(16,533)
16,557
Consolidation adjustment on
Javelin Capital fee income
118
368
Net return on investments
13,933
18,046
6,008
17,679
REPORT & ACCOUNTS 2014 71
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 arm’s length basis.
•
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (that is, as prices) or indirectly (that is, derived from prices).
Level 2 inputs include the following:
• quoted prices for similar (ie not identical) assets in active markets.
• inputs other than quoted prices that are observable for the asset (for example, interest rates and yield curves
observable at commonly quoted intervals).
• inputs that are derived principally from, or corroborated by, observable market data by correlation or other
means (market-corroborated inputs).
• Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The level in the fair value hierarchy within which an asset or liability is categorised is determined on the basis of the
lowest level input that is significant to the fair value measurement of the asset. For this purpose, the significance of
an input is assessed against the fair value measurement of an asset or liability in its entirety. If a fair value
measurement uses observable inputs that require significant adjustment based on unobservable inputs, that
measurement is a Level 3 measurement. Assessing the significance of a particular input to the fair value
measurement requires judgement, considering factors specific to the asset or liability.
The determination of what constitutes ‘observable’ requires significant judgement by the Group. The Group
considers observable data to be investments actively traded in organised financial markets, fair value is generally
determined by reference to Stock Exchange quoted market bid prices at the close of business on the balance sheet
date, without adjustment for transaction costs necessary to realise the asset.
72
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:
Group
2014
Group
2013
Level 1
£000
Level 2
£000
Level 3
£000
Total
£000
Level 1
£000
Level 2
£000
Level 3
£000
Total
£000
Financial assets designated at
fair value through profit or loss
Equities and managed funds
Listed equity securities
Unlisted equity securities
Listed exchange traded funds
123,687
123,687
41,655
41,655
104,893
182
46,864
104,893
46,864
182
123,687
41,655 165,342
105,075
46,864 151,939
Company
2014
Company
2013
Level 1
£000
Level 2
£000
Level 3
£000
Total
£000
Level 1
£000
Level 2
£000
Level 3
£000
Total
£000
Financial assets designated at
fair value through profit or loss
Equities and managed funds
Listed equity securities
Unlisted equity securities
Listed exchange traded funds
123,687
123,687
41,827
41,827
104,893
182
55,057
104,893
55,057
182
123,687
41,827 165,514
105,075
55,057 160,132
Investments whose values are based on quoted market prices in active markets, and therefore classified within
Level 1, include active listed equities. The Group does not adjust the quoted price for these instruments.
Financial instruments that trade in markets that are not considered to be active but are valued based on quoted
market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within
Level 2. As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer
restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on
available market information. During the year there were transfers of £nil (2013: £193,000) from Level 2 to Level 1 for
Listed exchange traded funds.
Investments classified within Level 3 have significant unobservable inputs. Level 3 instruments include private equity
and corporate debt securities. As observable prices are not available for these securities, the Group has used valuation
techniques to derive the fair value. In respect of unquoted instruments, or where the market for a financial instrument
is not active, fair value is established by using recognised valuation methodologies, in accordance with International
Private Equity and Venture Capital (“IPEVC”) Valuation Guidelines. New investments are initially carried at cost, for a
limited period, being the price of the most recent investment in the investee. This is in accordance with IPEVC
Guidelines as the cost of recent investments will generally provide a good indication of fair value. Fair value is the
amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
REPORT & ACCOUNTS 2014 73
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 2014:
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
Group
2014
Total
£000
Equity
investments
£000
46,864
46,864
(19,239)
(19,239)
14,030
41,655
14,030
41,655
Company
2014
Total
£000
Equity
investments
£000
55,057
55,057
(19,446)
(19,446)
6,216
41,827
6,216
41,827
Group
2013
Total
£000
41,935
21
(5,898)
10,806
46,864
Equity
investments
£000
41,935
21
(5,898)
10,806
46,864
Company
2013
Total
£000
50,127
21
(5,898)
10,807
55,057
Equity
investments
£000
50,127
21
(5,898)
10,807
55,057
Substantial Share Interests
Javelin Capital Emerging Alpha Fund (JCEMAF)
The Company invested £33.2m of seed capital into the JCEMAF resulting in a substantial majority interest in the
Fund. The JCEMAF was closed in January 2014 and the Company received £29.5m which has since been invested
in MAM Funds as described in the Strategic Report on pages 11 to 13. The investment in JCEMAF is shown in the
Company and Group accounts as an investment held at fair value through profit or loss rather than being
consolidated which is in accordance with the Investment Entities amendment to IFRS 10, which the Group early
adopted last year.
Majedie Asset Management (MAM)
MAM is a UK based asset management firm providing investment management and advisory services primarily
relating to UK equities.
The carrying value of the investment in MAM is included in the Consolidated Balance Sheet as part of investments
at fair value through profit or loss:
Deemed cost of investment
Holding gains
Fair value at 30 September
2014
£000
627
40,673
2013
£000
1,038
44,962
41,300
46,000
74
MAJEDIE INVESTMENTS PLC
13 Investments at Fair Value Through Profit or Loss continued
The carrying value is assessed twice a year by the Directors and is approved in the Audit Committee. The fair value
of MAM is based on the price at which the Company can sell its shares back to MAM, which is currently considered
to be the sole market for the Company’s shares. The significant input in assessing the price is the earnings of MAM
and a 5% increase/decrease in MAM’s earnings would result in an increase/decrease of 4.3% in the carrying value
of MAM.
In accordance with the revised shareholders’ agreement, the Company will sell a certain number of shares to the
MAM Employee Benefit Trust (EBT) and at the relevant prescribed price (as calculated in accordance with the
revised shareholders’ agreement).
During the year the Company sold 43,747 (2013: 1,975) for a total consideration of £19,177,000 (2013: £5,899,000)
resulting in a realised gain of £18,766,000 (2013: £5,739,000).
After these transactions the Company holds 66,828 (2013: 110,575) ordinary 0.1p shares which represents a 18.0%
(2013: 26.7%) shareholding in MAM.
14 Investment in Subsidiaries
Subsidiary undertakings at 30 September 2014
Company and business
Country of
Registration
Incorporation
and Operation
Number and
class of shares
held by Group
Company
Group
Holding
Capital &
Reserves at
30.09.14
thousand
Profit after
tax for the
year ended
30.09.14
thousand
Majedie Portfolio Management Limited
UK
– Majedie share plan manager,
authorised and regulated by
the FCA
Majedie Unit Trust
– Unauthorised unit trust
1,000,000
Ordinary
shares
100%
£162
UK
10,000
100%
(£3,521)
(£63)
As at 30 September 2014 the Company, in addition to Majedie Portfolio Management Limited and Majedie Unit Trust
as above, had residual holdings in the following subsidiary undertakings; Javelin Capital LLP, Javelin Capital Services
Limited and Javelin Capital Fund Management Limited. These subsidiary undertakings are in the process of being
liquidated. There are no further write offs in respect of these holdings and any costs of liquidation will be met by the
Company. Details of the transactions can be found in note 27 Related Party Transactions.
15 Discontinued operations
On 13 January 2014, the Board announced that it would close Javelin Capital LLP, including its two wholly owned
subsidiaries – Javelin Capital Services Limited and Javelin Capital Fund Management Limited – following the
appointment of MAM to become the Investment Manager for the Company. The Company also decided to wind
down its wholly owned subsidiary, Majedie Unit Trust.
Accordingly these have been classified as a disposal group with a fair value of its combined net assets of £10,000.
During the year ended 30 September 2014, a net loss after tax of £2,816,000 (2013: £883,000) was recorded in
respect of these subsidiaries as disclosed within the Consolidated Statement of Comprehensive Income.
The financial statements as at 30 September 2013 have been re-presented to reflect the disposal group. This has
had an impact on all the primary statements, with the exception of the Balance Sheet, and a number of the Notes to
the Accounts. The investment management and advisory services segment detailed in note 2 on page 62 has
ceased to exist, consequently, the investing activity segment is the only active segment at the year end.
REPORT & ACCOUNTS 2014 75
Notes to the Accounts
15 Discontinued operations continued
Discontinued operations
Income
Other income
Total income
Expenses
Administration expenses
Write off on disposal
Revenue
£’000
2014
Capital
£’000
Total
£’000
Revenue
£’000
2013
Capital
£’000
4
4
4
4
34
34
Total
£’000
34
34
(236)
(500)
(2,084)
(736)
(2,084)
(373)
(912)
(1,285)
Net return before taxation for the
year from discontinued operations
232
(2,584)
(2,816)
(339)
(912)
(1,251)
Taxation
Net return after taxation for the year
from discontinued operations
16 Trade and Other Receivables
Sales for future settlement
Prepayments
Dividends receivable
Accrued income
Taxation recoverable
Amounts due from subsidiary
undertakings
(232)
(2,584)
(2,816)
(339)
(912)
(1,251)
Group
2014
£000
45
127
127
39
Group
2013
£000
363
2,044
240
43
Company
2014
£000
Company
2013
£000
45
127
127
39
94
363
30
240
43
637
338
2,690
432
1,313
The Directors consider that the carrying amounts of trade and other receivables approximates to their fair value.
17 Cash and Cash Equivalents
Deposits at banks
Collateral cash held with brokers
Cash attributable to discontinued
operations
Other balances
Group
2014
£000
2,684
9
819
Group
2013
£000
4,641
91
Company
2014
£000
2,684
Company
2013
£000
3,466
791
562
525
3,512
5,523
3,246
3,991
76
MAJEDIE INVESTMENTS PLC
18 Trade and Other Payables
Amounts falling due within one year:
Purchases for future settlement
Accrued expenses
Other creditors
Group
2014
£000
228
314
796
Group
2013
£000
125
313
806
Company
2014
£000
228
314
796
Company
2013
£000
125
178
729
1,338
1,244
1,338
1,032
The Directors consider that the carrying amounts of trade and other receivables approximates to their fair value.
Amounts falling due after more than one year:
£13.5m (2013: £13.5m) 9.5%
debenture stock 2020
£20.7m (2013: £20.7m) 7.25%
debenture stock 2025
Group
2014
£000
13,421
20,452
Group
2013
£000
13,410
20,437
Company
2014
£000
13,421
20,452
Company
2013
£000
13,410
20,437
33,873
33,847
33,873
33,847
Both debenture stocks are secured by a floating charge over the Company’s assets. Expenses associated with the
issue of debenture stocks were deducted from the gross proceeds and are being amortised over the life of the
debentures. Further details on interest and the amortisation of issue expenses are provided in note 8.
19 Called Up Share Capital
Company
2014
£000
Company
2013
£000
Allotted and fully paid at 30 September:
52,528,000 (2013: 52,528,000) ordinary shares of 10p each
5,253
5,253
There are 308,387 (2013: 483,387) ordinary shares of 10p each held by the Employee Incentive Trust. See note 20.
Ordinary shares carry one vote each on a poll. The Companies Act 2006 abolished the requirement for the
Company to have authorised share capital. The Company adopted new Articles of Association on 20 January 2010
which, inter alia, reflected the new legislation. Accordingly the Company has no authorised share capital. The
Directors will still be limited as the number of shares they can allot at any one time as the Companies Act 2006
requires that directors seek authority from the shareholders for the allotment of new shares.
20 Own Shares
The total number of options outstanding at the date of this report is 214,628 (2013: 214,628) under the Long Term
Incentive Plan ("LTIP") and the total shareholding of the Employee Incentive Trust is 308,387 (2013: 483,387)
ordinary shares. The shares will be held by the Trust until the relevant options are exercised, until they lapse or until
they are sold back to the market. They are presented on the Balance Sheet as a deduction from shareholders’
funds, in accordance with the policy detailed in note 1.
REPORT & ACCOUNTS 2014 77
Notes to the Accounts
20 Own Shares continued
On 1 September 2014 and 11 September 2014 the Employee Incentive Trust sold 50,000 ordinary shares and 125,000
ordinary shares respectively back to the market, both at 236 pence per share. The own shares reserve has been
reduced to reflect the cost of the shares sold and the resultant loss of £178,000 has been taken to capital reserve.
Number of
shares
483,387
(175,000)
Group and
Company
Own Shares
Reserve
£000
(1,628)
589
308,387
(1,039)
As at 1 October 2013
Options exercised
Shares sold
As at 30 September 2014
21 Net Asset Value
The consolidated net asset value per share has been calculated based on equity shareholders’ funds of
£134,061,000 (2013: £125,166,000) and on 52,219,613 (2013: 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.
22 Analysis of Changes in Net Debt
Group
Cash at bank and with brokers
Debt due after one year
Company
Cash at bank
Debt due after one year
At 30
September
2013
£000
5,523
(33,847)
At 30
September
2013
£000
3,991
(33,847)
Cash
Flows
£000
(2,011)
Non
Cash
Items
£000
(26)
At 30
September
2014
£000
3,512
(33,873)
(28,324)
(2,011)
(26)
(30,361)
Cash
Flows
£000
(745)
Non
Cash
Items
£000
(26)
At 30
September
2014
£000
3,246
(33,873)
(29,856)
(745)
(26)
(30,627)
78
MAJEDIE INVESTMENTS PLC
23 Operating Lease Commitments
The Group entered into 10 year non-cancellable operating lease (with a rent review and break clause in 5 years) in
respect of premises, which included a rent free period. During the year the Group extended the lease for a further
period of 2 years which included an additional rent free period. The rent free elements have been apportioned over
the term of the lease. The Group has an annual commitment at 30 September 2014 under the lease of £163,000
(2013: £145,000). This operating lease commitment is disclosed in the table below:
Expiry Date
Within one year
Between one and two years
Between two and three years
Group
2014
£000
163
38
Group
2013
£000
159
163
41
201
363
24 Financial Commitments
At 30 September 2014 the Group had no financial commitments which had not been accrued for (2013: none).
25 Share-based Payments
The Group currently operates one share-based (equity settled) payment scheme being the 2006 LTIP which in turn
has two sections relating to Total Shareholder Return (“TSR”) based Awards and Matching Awards.
Long Term Incentive Plan: TSR-based Awards
Awards of restricted shares up to a maximum value of one year’s salary have performance conditions based on total
shareholder return in relation to two separate performance conditions over a period of five years. The performance
conditions contain higher and lower thresholds that determine the extent of the vesting of the award. In accordance
with the LTIP rules existing awards increase by any dividends declared by the Company until they are exercised.
REPORT & ACCOUNTS 2014 79
Notes to the Accounts
25 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 are exercised.
Outstanding at 1 October 2013
During the year:
Awarded
Forfeited
Exercised
Expired
Increase in awards due to dividends paid
Outstanding at 30 September 2014
Exercisable at 30 September 2014
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
Group
2014
TSR-based
Awards
Matching
Awards
No.
of
Options
Weighted
Average
Exercise
Price (p)
No.
of
Options
Weighted
Average
Exercise
Price (p)
202,759
0.0
11,869
0.0
9,232
211,991
125,664
0.0
0.0
0.0
554
12,423
12,423
0.0
0.0
0.0
Group
2013
TSR-based
Awards
Matching
Awards
No.
of
Options
Weighted
Average
Exercise
Price (p)
No.
of
Options
Weighted
Average
Exercise
Price (p)
190,453
0.0
11,148
0.0
12,306
202,759
36,208
0.0
0.0
0.0
721
11,869
11,869
0.0
0.0
0.0
The awards outstanding at 30 September 2014 had a weighted average remaining contractual life of 0.08 years and nil
in respect of the TSR-based Awards and Matching Awards respectively (2013: 0.6 years and nil years respectively).
Awards and options are usually forfeited if the employee leaves employment before vesting. The TSR-based awards
have a final vesting date of 8 December 2014, after which it is anticipated all relevant awards (including Matching
Awards) will be exercised and the scheme wound up.
For the year ended 30 September 2014, the Company recognised a total share options expense of £19,000 (2013:
£24,000) relating to share-based payment transactions.
80
MAJEDIE INVESTMENTS PLC
26 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 1. Accordingly it is the Board’s policy that no trading in investments or other financial
instruments be undertaken. The risk management processes of the Company are aligned with those of the Group
as a whole and it is at the Group level that the majority of the risk management procedures are performed. Where
relevant and materially different to the Group position, Company specific risk exposures are explained alongside
those of the Group. The following risk and sensitivity analysis included in this note are based on the ongoing
operations of the Group and Company.
Management of market risk
Management of market risk is fundamental to the Group’s investment objective and the investment portfolio is
continually monitored to ensure an appropriate balance of risk and reward.
Exposure to any one entity is monitored by the Board and the Investment Manager. The Board have complied with
the investment policy requirement not to invest more than 15% of the total value of its gross assets, save that the
Company can invest up to 25% of its gross assets in any single fund managed by MAM where the Board believes
that the investment policy of such funds is consistent with the Company's objective of spreading investment risk.
From time to time, the Group may seek to reduce or increase its exposure to stock markets and currencies by
taking positions in currency forward contracts, index futures and options relating to one or more stock markets.
There are no such positions as at 30 September 2014. These instruments are used for the purpose of hedging
some or all of the existing exposure within the Group’s investment portfolio to those currencies or particular markets
or to enable increased exposure when deemed appropriate and with the specific approval of the Board.
The Company’s financial instruments comprise its investment portfolio – see note 13 – cash balances, debtors and
creditors that arise directly from its operations such as sales and purchases awaiting settlement and accrued
income, and the debenture loans used to finance its operations. The Company, (as distinct from the Group), is
unlikely to use derivatives for hedging purposes and then only in exceptional circumstances with the specific prior
approval of the Board. No hedging was used during the year.
In pursuing its investment objective the Company is exposed to various risks which could cause short term variation
in its net assets and which could result in both or either a reduction in its net assets or a reduction in the profits
available for distribution by way of dividend. The main risk exposures for the Company from its financial instruments
are market risk (including currency risk, interest rate risk and other price risk), liquidity risk and credit risk.
The Board sets the overall investment strategy and has in place various controls and limits and receives various
reports in order to monitor the Company’s and Group’s exposure to these risks. The risk management policies
identified in this note have not changed materially from the previous accounting period in respect of the Company.
Market Risk
The principal risk in the management of the portfolio is market risk i.e. the risk that values and future cashflows will
fluctuate due to changes in market prices. This comprises:
•
•
•
foreign currency risk;
interest rate risk; and
other price risk i.e. movements in the value of investment holdings caused by factors other than interest rate or
currency movements.
These risks are taken into account when setting investment policy and making investment decisions.
REPORT & ACCOUNTS 2014 81
Notes to the Accounts
26 Financial Instruments and Risk Profile continued
Foreign Currency Risk
Exposure to foreign currency risk arises through investments in securities listed on overseas stock markets. A
proportion of the net assets of the Group and Company are denominated in currencies other than sterling, with the
effect that the balance sheet and total return can be materially affected by currency movements. The Group and
Company’s exposure to foreign currencies through its investments in overseas securities as at 30 September 2014
was £10,190,000 and £10,190,000 respectively (2013: £26,424,000 and £26,291,000 respectively).
The Company’s investments in the MAM Funds are in sterling denominated share classes. Within the MAM Funds
the foreign exchange exposure is not hedged.
In respect of the Company, the Investment Manager monitors the Company’s exposure to foreign currencies and the
Board receives reports on a regular basis.
The Group is able, although unlikely, to enter into forward currency contracts as a means of limiting or increasing its
exposure to particular currencies. Such contracts can be used for the purpose of hedging the existing currency
exposure of elements of the Group’s portfolio (as a means of reducing risk) or to enable increased exposure when
this is deemed appropriate.
The currency risk of the Group and Company’s non-sterling monetary financial assets and liabilities at the Balance
Sheet date was:
Currency exposure
US Dollar
Euro
Yen
Other non-sterling
Currency exposure
US Dollar
Euro
Yen
Other non-sterling
Group
2014
Net
monetary
assets
£000
Company
2014
Net
monetary
assets
£000
Overseas
investments
£000
1,771
8,028
275
116
10,190
Overseas
investments
£000
1,771
8,028
275
116
10,190
Total
currency
exposure
£000
1,771
8,028
275
116
10,190
Total
currency
exposure
£000
1,771
8,028
275
116
10,190
Group
2013
Net
monetary
assets
£000
91
Total
currency
exposure
£000
16,159
2,941
2,241
5,083
91
26,424
Company
2013
Net
monetary
assets
£000
Total
currency
exposure
£000
16,026
2,941
2,241
5,083
26,291
Overseas
investments
£000
16,068
2,941
2,241
5,083
26,333
Overseas
investments
£000
16,026
2,941
2,241
5,083
26,291
82
MAJEDIE INVESTMENTS PLC
26 Financial Instruments and Risk Profile continued
Sensitivity analysis
If sterling had strengthened by 5% relative to all currencies on the reporting date, with all the other variables held
constant, the income and the net assets attributable to equity holders of the parent would have decreased by the
amounts shown below. The analysis is performed on the same basis for 2013. The revenue impact is an estimated
figure for 12 months based on the relevant foreign currency denominated balances at the reporting date.
Income Statement
Revenue return
Capital return
Net assets
Group
2014
£000
Group
2013
£000
Company
2014
£000
Company
2013
£000
(510)
(1,321)
(510)
(1,315)
(510)
(1,321)
(510)
(1,315)
A 5% weakening of sterling against the above currencies would have resulted in an equal and opposite effect on the
above amounts, on the basis that all other variables remain constant. The Company’s exposure has been calculated
as at the year end and may not be representative of the year as a whole.
Interest Rate Risk
The Company’s direct interest rate risk exposure affects the interest received on cash balances and the fair value of
its fixed rate portfolio investments and debentures. Indirect exposure to interest rate risk arises through the effect of
interest rate changes on the valuation of the investment portfolio. The vast majority of the financial assets held by the
Company are equity shares, which pay dividends, not interest. The Company may however from time to time hold
small investments which pay a fixed rate of interest.
Derivative contracts are not used to hedge against the exposure to interest rate risk.
The Board sets limits for cash balances and receives regular reports on the cash balances of the Company. The
Company’s fixed rate debentures introduce an element of gearing to the Company which is monitored within limits
and reported to the Board. Cash balances are used to manage the level of gearing within a range set by the Board.
The Board sets an overall investment strategy and also has various limits on the investment portfolio which aim to
spread the portfolio investments to reduce the impact of interest rate risk on company valuations. Regular reports
are received by the Board in respect of the Company’s investment portfolio and the respective limits.
The interest rate risk profile of the financial assets and liabilities at the Balance Sheet date was:
Floating rate financial assets
UK sterling
US dollars
Financial assets not
carrying interest
Fixed rate financial liabilities
UK sterling
Financial liabilities not
Group
2014
£000
3,512
Group
2013
£000
5,432
91
Company
2014
£000
Company
2013
£000
3,246
11,991
165,680
154,734
165,946
153,543
169,192
160,257
169,192
165,534
(33,873)
(33,847)
(33,873)
(33,847)
carrying interest
(1,338)
(1,244)
(1,338)
(1,032)
(35,211)
(35,091)
(35,211)
(34,879)
REPORT & ACCOUNTS 2014 83
Notes to the Accounts
26 Financial Instruments and Risk Profile continued
Floating rate financial assets usually comprise cash on deposit with banks which is repayable on demand and
receive a rate of interest based on the base rates in force over the period. The fixed rate financial liabilities comprise
the Group and Company’s debentures 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 (2013: 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
2014
£000
(13)
Group
2013
£000
(16)
Company
2014
£000
(13)
Company
2013
£000
(14)
(13)
(16)
(13)
(14)
A 0.5% increase (2013: 0.5%) in interest rates would have resulted in a proportionate equal and opposite effect on
the above amounts on the basis that all other variables remain constant. The above analysis is based on closing
balances only and is not representative of the year as a whole.
Other Price Risk
Exposure to market price risk is significant and comprises mainly movements in the market prices and hence value
of the Company’s listed equity investments which are disclosed in note 13 on pages 70 to 75. The Company also
has unlisted investments which are indirectly impacted by movements in listed equity prices and related variables.
The Board sets an overall investment strategy to achieve a spread of investments across sectors and regions in
order to reduce risk. The Board receives reports on the investment portfolio, performance and volatility on a regular
basis in order to ensure that the investment portfolio is in accordance with the investment policy.
The Investment Manager’s policy is to manage risk through a combination of monitoring the exposure to individual
securities, industry and geographic sectors, whilst maintaining a constant awareness in real time of the portfolio
exposures in accordance with the investment strategy. Derivative positions are marked to market and exposure to
counterparties is also monitored on a daily basis by the Investment Manager; the Board review it on a quarterly basis.
As mentioned earlier, the Investment Manager may use derivative instruments in order to ‘hedge’ the market risk
inherent in the portfolio. The Investment Manager reviews the risk associated with individual investments and where
they believe it appropriate may use derivatives to mitigate the risk of adverse market or currency movements. The
Investment Manager discusses the hedging strategy with the Board at its quarterly meetings.
The following table details the exposure to market price risk on the quoted and unquoted equity investments:
Group
2014
£000
Non-current Asset Investments at
Fair Value through Profit and Loss
Listed equity investments
Unlisted
Related and Subsidiary Companies
123,687
41,655
Group
2013
£000
105,075
46,864
Company
2014
£000
123,687
41,655
172
Company
2013
£000
105,075
46,864
8,193
165,342
151,939
165,514
160,132
84
MAJEDIE INVESTMENTS PLC
26 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.
Income Statement
Revenue return
Net assets
Group
2014
£000
Group
2013
£000
(12,369)
(10,508)
Company
2014
£000
(12,369)
Company
2013
£000
(10,508)
(12,369)
(10,508)
(12,369)
(10,508)
A 10% increase (2013: 10%) in share prices would have resulted in a proportionate equal and opposite effect on the
above amounts on the basis that all other variables remain constant. The analysis has been calculated on the
investments held at the year end and this may not be representative of the year as a whole.
Credit Risk
Credit risk is the risk of other parties failing to discharge an obligation causing the Group financial loss. The Group’s
exposure to credit risk is managed by the following:
•
•
•
•
•
•
The Company’s listed investments are held on its behalf by Bank of New York Mellon SA/NV, London Branch,
the Company’s custodian which if it became bankrupt or insolvent could cause the Company’s rights with
respect to securities held to be delayed. However under the AIFMD, the Company's Depositary provides certain
indemnities in respect of the Company’s investments. The Company receives regular internal control reports from
the Custodian which are reviewed by the Investment Manager and reported to the Audit Committee.
Investment transactions are undertaken by the Investment Manager with a number of approved brokers in the
ordinary course of business on a delivery versus payment basis. All new brokers are reviewed by the Investment
Manager for credit worthiness and added to an approved brokers list if not considered to be a credit risk.
Credit risk is mitigated by diversifying the counterparties through whom the Investment Manager conducts
investment transactions. The credit standing of all counterparties is reviewed periodically with limits set on
amounts due from any one counterparty.
Cash is held at banks that are considered to be reputable and high quality. Cash balances are spread across a
range of banks to reduce concentration risk.
Where the Company makes an investment in a loan or other security with credit risk, that credit risk is assessed
and considered as part of the investment decision making process by the Investment Manager. The Board
receives regular reports on the composition of the investment portfolio.
A credit exposure could arise in respect of derivatives contracts entered into by the Group if the counterparty
were unable to fulfill its contractual obligations.
REPORT & ACCOUNTS 2014 85
Notes to the Accounts
26 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
Sales for future settlement
Interest, dividends and other
receivables
Group
2014
£000
3,512
45
293
Group
2013
£000
5,432
91
363
2,327
Company
2014
£000
3,246
45
387
Company
2013
£000
3,991
363
950
3,850
8,213
3,678
5,304
Minimum exposure during the year
3,850
Maximum exposure during the year 20,331
7,758
10,098
3,678
19,814
4,953
7,263
All amounts included in the analysis above are based on their carrying values.
None of the financial assets were past due or impaired at the reporting date (2013: none).
Liquidity Risk
Liquidity risk is the risk that the Group or Company will encounter difficulties meeting its obligations as they fall due.
The Company may periodically invest in derivatives contracts and debt securities that are traded over the counter.
The Company is exposed to the daily settlement of margin calls on derivatives.
Liquidity risk is monitored although it is recognised that the majority of the Group’s assets are investments in quoted
equities and other quoted securities that are readily realisable. The Board has various limits in respect of how much
of the Group’s resources can be invested in any one company. The unlisted investments in the portfolio are subject
to liquidity risk but such investments are subject to limits set by the Board and liquidity risk is taken into account by
the directors when arriving at their valuation. The Company does have exposure to concentration risk due to its
investment in MAM at 24.9% (2013: 29.2% in relation to MAM) of the Company’s investment portfolio. The Company
closely monitors this investment and receives regular financial reports and believes that the current concentration
risk is in-line with the Company’s objective of diversifying its investment portfolio into the investment groups as per
its investment policy.
The Group maintains an appropriate level of cash balances in order to finance its operations and the Investment
Manager regularly monitors the Group’s cash balances to ensure all known or forecasted liabilities can be met. The
Board receives regular reports on the level of the Group’s cash balances. The Group does not have any overdraft or
other borrowing facilities to provide liquidity.
86
MAJEDIE INVESTMENTS PLC
26 Financial Instruments and Risk Profile continued
A maturity analysis of financial liabilities showing the remaining contractual maturities is detailed below:
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
Undiscounted cash flows
9.5% debenture stock 2020
7.25% debenture stock 2025
Interest on financial liabilities
Trade payables and other liabilities
Group
2014
Due within
1 year
£000
Due between
1 and 2 years
£000
Due between
2 and 3 years
£000
Due 3 years
and beyond
£000
2,783
2,783
13,500
20,700
14,463
2,783
2,783
48,663
58,350
Group
2013
Due within
1 year
£000
Due between
1 and 2 years
£000
Due between
2 and 3 years
£000
Due 3 years
and beyond
£000
2,783
2,783
13,500
20,700
17,246
2,783
2,783
51,446
61,039
Company
2014
Due within
1 year
£000
Due between
1 and 2 years
£000
Due between
2 and 3 years
£000
Due 3 years
and beyond
£000
2,783
2,783
13,500
20,700
14,463
2,783
2,783
48,663
58,350
Company
2013
Due within
1 year
£000
Due between
1 and 2 years
£000
Due between
2 and 3 years
£000
Due 3 years
and beyond
£000
2,783
2,783
13,500
20,700
17,246
2,783
1,338
4,121
2,783
1,244
4,027
2,783
1,338
4,121
2,783
1,032
3,815
Total
£000
13,500
20,700
22,812
1,338
Total
£000
13,500
20,700
25,595
1,244
Total
£000
13,500
20,700
22,812
1,338
Total
£000
13,500
20,700
25,595
1,032
2,783
2,783
51,446
60,827
REPORT & ACCOUNTS 2014 87
Notes to the Accounts
26 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
Group
2014
£000
Group
2013
£000
Company
2014
£000
Company
2013
£000
Equity securities
165,342
151,939
165,514
160,132
165,342
151,939
165,514
160,132
Other financial assets1
3,850
169,192
8,213
160,152
3,678
169,192
5,304
165,436
Financial liabilities
Financial liabilities measured at
amortised cost2
35,211
35,091
35,211
34,879
35,211
35,091
35,211
34,879
1 Other financial assets include: cash and cash equivalents, due from brokers, cash collateral on securities borrowed, dividend and interest
receivables, other receivables and prepayments.
2 Financial liabilities measured at amortised cost include: debenture stock issued, due to brokers, fees and other payables and
accrued expenses.
The investment portfolio has been valued in accordance with the accounting policy in note 1 to the accounts, i.e. at
fair value. The debenture stocks are classified as level 3 under the fair value hierarchy The fair value of the debenture
stock is calculated using Discounted Cash Flow analysis and by reference to the redemption yields of a similar
companies’ debt instrument, with an appropriate margin spread added.
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
2014
£000
13,421
20,452
Book
Value
2013
£000
13,410
20,437
Fair
Value
2014
£000
16,916
24,737
Fair
Value
2013
£000
17,768
24,995
33,873
33,847
41,653
42,763
Capital Management Policies and Procedures
The Company’s capital management objectives are:
•
•
to ensure that it is able to continue as a going concern; and
to maximise the revenue and capital returns to its equity shareholders through an appropriate mix of equity
capital and debt. The Board sets a range for the Company’s debt (comprised of debentures less cash) at any
one time which is maintained by management of the Company’s cash balances.
88
MAJEDIE INVESTMENTS PLC
26 Financial Instruments and Risk Profile continued
Capital at 30 September comprises:
Net Debt
Net current asset
Debentures
Sub total
Equity
Equity share capital
Retained earnings and
other reserves
Group
2014
£000
(2,512)
33,873
Group
2013
£000
(6,969)
33,847
Company
2014
£000
(2,340)
33,873
Company
2013
£000
(4,272)
33,847
31,361
26,878
31,533
29,575
5,253
5,253
5,253
5,253
128,808
119,913
128,808
125,402
Shareholders’ funds
134,061
125,166
134,061
130,655
Gearing (calculated using
AIC guidance)
Net Debt as a percentage of
shareholders’ funds
23.4%
21.5%
23.5%
22.6%
Maximum potential gearing represents the highest gearing percentage on the assumption that the Group or
Company had no net current assets. As at 30 September 2014, in respect of the Group and the Company, this was
25.3% and 25.3% respectively (2013: Group and Company; 27.0% and 25.9% respectively).
The Board monitors and reviews the broad structure of the Company’s capital on an ongoing basis. The review includes:
•
•
the level of gearing, taking into account the Investment Manager’s views on the market;
the level of the Company’s free float of shares as the Barlow family owns approximately 55% of the share capital
of the Company; and
•
the extent to which revenue in excess of that required to be distributed should be retained.
These objectives, policies and processes for managing capital are unchanged from the prior period.
The Company is subject to various externally imposed capital requirements:
•
•
•
the debentures are not to exceed in aggregate 662/3% of adjusted share capital and reserves in accordance with
the respective Trust Deeds; and
the Company has to comply with statutory requirements relating to dividend distributions.
the AIFMD imposes a requirement for all AIFs to have in place a limit on the amount of leverage that they may
hold. It is then the responsibility of the relevant AIFM to ensure that this limit is not exceeded, which in this case
is the Company (being an internally managed AIF).
REPORT & ACCOUNTS 2014 89
Notes to the Accounts
26 Financial Instruments and Risk Profile continued
Leverage is similar to gearing (as calculated in accordance with AIC guidelines above) but the AIFMD mandates a
certain calculation methodology which must be applied. Leverage as calculated under the AIFMD methodology in
respect of the Company is:
Gross method
Investments held at fair value through profit or loss
Investments in subsidiaries held at fair value through profit or loss
Non sterling dominated cash balances
Total investments at exposure value as defined under AIFMD
Equity Shareholders Funds
Leverage
Commitment method
Investments held at fair value through profit or loss
Investments in subsidiaries held at fair value through profit or loss
Cash and cash equivalents
Total investments at exposure value as defined under AIFMD
Equity Shareholders Funds
Leverage
Group
2014
£000
165,342
Company
2014
£000
165,342
172
165,342
165,514
134,061
134,061
1.23
1.23
Group
2014
£000
165,342
3,512
168,854
Company
2014
£000
165,342
172
3,246
168,760
134,061
134,061
1.26
1.26
The leverage figures above represent leverage as calculated under the gross and commitment methods as defined
under the AIFMD (a figure of 1 represents no leverage or borrowings). The two methods differ in their treatment of
amounts outstanding under derivative contracts with the same counterparty, which are not applicable to the
Company and their treatment of cash balances. In both methods the Company has included debentures by
including the value of investments purchased by those borrowings, rather than their balance sheet value. The
Company’s leverage limit under the AIFMD is 1.5 which equates to a borrowing level of 50% (the Company has not
exceeded this limit as any time during the past year).
These requirements (except for the AIFMD leverage requirement), are unchanged since last year and the Company
has complied with them.
27 Related Party Transactions
Javelin Capital LLP
Javelin Capital LLP (Javelin Capital) was the Investment Manager and General Administrator to the Company until
13 January 2014, when Majedie Asset Management Limited (MAM) was appointed as Investment Manager, and is
also the parent entity of Javelin Capital Fund Management Limited (JCFM) and Javelin Capital Services Limited (JCS)
all of which are consolidated into the group accounts. As part of the appointment of MAM it was also announced
that Javelin Capital would cease operations. As such all Javelin Capital entities have ceased trading and are in the
process of being liquidated. This included the Company assuming various operating costs and certain staff from
Javelin Capital from 1 April 2014.
90
MAJEDIE INVESTMENTS PLC
27 Related Party Transactions continued
Javelin Capital Strategies Plc was an Irish Stock Exchange listed Qualifying Investment Fund (QIF). The QIF was
liquidated during the year with a small residual surplus of €10,000 being returned to the Company.
Javelin Capital Emerging Markets Alpha Fund (JCEMAF) was a sub-fund of the Serviced Platform SICAV, a
Luxembourg Undertakings for Collective Investment Scheme (UCITS), as established by Goldman Sachs
International. Javelin Capital did act as investment manager to JCEMAF and was entitled to receive management
and performance fees. As a consequence of the announcement made on 13 January 2014 the JCEMA was closed
with all investor monies being redeemed. The Company received, in total, £29.5m for its holding in the JCEMAF.
In addition to any fees received from JCEMAF, Javelin Capital was also entitled to receive management,
performance and administration fees from the Company itself in accordance with the relevant agreements up until
13 January 2014. These agreements did take account of any fees charged at the JCEMAF level so that no double
charging occurred.
JCS provided administrative services to the group and in performing these services it incurred expenses. Additionally,
for administrative, reasons the Company did pay certain expenses on behalf of the Group. In both cases recharges
and/or management fees were used such that each group entity bears its appropriate relevant portion of the group
expenses incurred. The Company allowed Javelin Capital group entities use of various assets to perform their
respective functions for which it received a lease fee, however this could be waived by the Company at its discretion.
During the year, Mr JWM Barlow ceased to be a partner of Javelin Capital in conjunction with the closure of Javelin
Capital. Further details are contained in the Directors Remuneration Report on pages 31 to 38.
The Company pays certain costs on behalf of Majedie Portfolio Management Limited (MPM) for operating the
Majedie Investments PLC Share Plan and additionally is charged a management fee by MPM. Any such costs paid
by the Company are recharged to MPM, net of any management fees due.
Majedie Asset Management (MAM)
As noted above MAM became investment manager to the Company from 13 January 2014 under the terms of an
investment agreement. The agreement provides for MAM to manage the Company’s investment assets on both a
segregated account basis and also by investments into various MAM collective investment vehicles or funds. Details
of the investment agreement are contained in the material contracts section of the directors’ report on page 20. As
investment manager MAM is entitled to receive investment management fees. In respect of segregated account
investments these are charged directly to the Company and are shown as an expense in its accounts. Any fees due
in respect of investments made into any MAM funds are charged to the fund and are therefore included as part of
the investment value of the relevant holdings. Details of the Company’s investments in the MAM funds are shown in
the Chief Executive’s Report on pages 11 to 13.
In addition to the above the Company retains an investment in MAM itself. Mr JWM Barlow is a non-executive
director of MAM but receives no remuneration for this role.
MAM is accounted for as an investment in both the Company and Group accounts and is valued at fair value through
profit or loss. During the year the Company received dividends from MAM of £3,619,000 (2013: £2,260,000) and
proceeds of £19,177,000 (2013: £5,899,000), as a result of the sale of shares to the MAM Employee Benefit Trust
and to MAM for cancellation, of which none was outstanding at year end (2013: nil outstanding).
REPORT & ACCOUNTS 2014 91
Notes to the Accounts
27 Related Party Transactions continued
The table below discloses the transactions and balances between those entities:
Transactions during the period:
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
MPM costs recharged by the Company
Management fee income due to MAM (segregated account only)
Balances outstanding at the end of the period:
Between JCS and the Company
Between JCS and Javelin Capital
Between the Company and MPM
Between JCFM and Javelin Capital
Between the Company and MAM (investment management fees)
2014
£000
122
165
73
9
571
35
373
95
132
2013
£000
368
554
265
19
1,292
35
542
377
95
9
Transactions between group companies during the year were made on terms equivalent to those that occur in arm’s
length transactions.
Remuneration
The remuneration of the directors, who are the key management personnel of the Company, is set out below in
aggregate for each of the categories specified in IAS24: Related Party Disclosures. There are no amounts
outstanding at 30 September 2014 for directors’ fees (2013: £nil). Further information about the remuneration of
individual directors is provided in the audited part of the Report on Directors Remuneration on page 36.
Short term employee benefits
Partnership profit shares
2014
£000
266
50
2013
£000
235
66
316
301
92
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 third Annual General Meeting of Majedie Investments PLC will be
held at City of London Club, 19 Old Broad Street, London EC2N 1DS on Wednesday, 14 January 2015 at 12 noon
for the purpose of transacting the following:
To consider and, if thought fit, pass the following Resolutions of which Resolutions 1 to 10 will be proposed as
Ordinary Resolutions and Resolutions 11 to 13 shall be proposed as Special Resolutions. All business to be
transacted at the AGM is Ordinary Business for the purpose of the Listing Rules.
Ordinary Resolutions
1. To receive the Directors’ Report and Accounts for the year ended 30 September 2014.
2. To approve the Directors’ Remuneration Report for the year ended 30 September 2014, which can be found on
pages 31 to 38.
3. To approve the Directors’ Remuneration Policy, which can be found on pages 33 to 35.
4. To declare a final dividend of 4.5p per share in respect of the year ended 30 September 2014.
5. To re-appoint AJ Adcock as a director
6. To re-appoint RDC Henderson as a director
7. To re-appoint JWM Barlow as a director.
8. To appoint Ernst & Young LLP as auditors.
9. To authorise the directors to fix the auditor’s remuneration.
10. THAT for the purposes of section 551 of the Companies Act 2006 the Directors be generally and unconditionally
authorised to exercise all the powers of the Company to allot shares and grant rights to subscribe for, or convert
any securities into, Ordinary Shares up to a maximum number of 5,200,000 Ordinary Shares, provided that:
a) The authority granted shall (unless previously revoked or renewed) expire at the conclusion of the next annual
general meeting of the Company in 2016, or if earlier, on the expiry of 15 months from the passing of this
Resolution; and
b) The authority shall allow and enable the Directors to make an offer or agreement before the expiry of that
authority which would or might require relevant securities to be allotted after such expiry and the Directors
may allot relevant securities in pursuance of any such offer or agreement as if that authority had not expired.
Special Resolutions
11. That, subject to the passing of resolution 10 above, the Directors be empowered in accordance with section
570 and 573 of the Companies Act 2006 (the “Act”) to allot equity securities (within the meaning of section 560
if the Act) of the Company for cash pursuant to the authority conferred by resolution 10 as if section 561 of the
Act did not apply to any such allotment, provided that:
a) The power granted shall be limited to the allotment of equity securities wholly for cash up to a maximum
number of 5,200,000 Ordinary Shares;
b) The authority granted shall (unless previously revoked) expire at the conclusion of the next Annual General
Meeting of the Company in 2016 or, if earlier, 15 months after the passing of this resolution;
c) The said power shall allow the enable the Directors to make an offer or agreement before the expiry of that
power which would or might require equity securities to be allotted after such expiry and the Directors may
allot equity securities in pursuance of such offer or agreement as if that power had not expired.
REPORT & ACCOUNTS 2014 93
Notice of Meeting
12. 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 7,813,947, 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 2016 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.
13. 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
4 December 2014
Registered in England Number: 109305
94
MAJEDIE INVESTMENTS PLC
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 2015 (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,
12 January 2015.
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.
REPORT & ACCOUNTS 2014 95
Notice of Meeting
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 2015 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 2015 (“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.
96
MAJEDIE INVESTMENTS PLC
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.
REPORT & ACCOUNTS 2014 97
Notice of Meeting
Note 13
A copy of this notice and any subsequent notices in respect of section 388A and any information required under
section 311A of the Companies Act 2006 will be available on the Company’s website www.majedieinvestments.com.
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.
Recommendation
The Directors believe that the resolutions contained in this Notice of Annual General Meeting are in the best interests
of the Company as a whole and recommend that you vote in favour of them as the Directors intend to do in respect
of their own beneficial shareholdings.
98
MAJEDIE INVESTMENTS PLC
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 £15,000 for the 2014/15 tax year. Investments can be split between a cash ISA
and a stocks and shares ISA).
The Majedie Corporate ISA is provided in conjunction with Halifax Share Dealing (HSDL) who act as a HM Revenue &
Customs Approved ISA Manager. 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 call 0845 850 0181 for further information
REPORT & ACCOUNTS 2014 99
Majedie Savings Plans
Majedie General ISA (formerly a PEP)
You are no longer able to put new money into a PEP. However, your existing PEP investments remain sheltered from
tax and can continue to grow. You may transfer an existing PEP or ISA from another manager to the Majedie
General ISA and, if you have not already subscribed to another Stocks & Shares ISA in this tax year, you can apply
to pay in to your Majedie General ISA.
Please note that ISA limits apply and taxation levels and bases are subject to change. Past performance of
investments is not a guide to future performance as their value can go down as well as up.
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).
100 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@majedieinvestments.com
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
Majedie Asset Management Limited
10 Old Bailey
London EC4M 7NG
Telephone: 020 7618 3900
Email: info@majedie.com
Depositary
BNY Mellon Trust & Depositary (UK) Limited
BNY Mellon Centre
160 Queen Victoria Street
London EC4V 4LA
The Depositary has delegated the safe keeping of the
Company’s assets to the Custodian, The Bank of New
York Mellon SA/NV, London Branch.
AIFM
Majedie Investments PLC
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
Westhouse Securities Limited
Heron Tower
110 Bishopsgate
London EC2N 4AY
ISIN
Ordinary: GB0005555221
Debenture 9.5% 2020: GB0005583389
Debenture 7.25% 31/03/2025: GB0006733058
Ticker
Ordinary: MAJE
Debenture 9.5% 2020: 86HK
Debenture 7.25% 31/03/2025: BD22
Sedol
Ordinary: 0555522
Debenture 9.5% 2020: 0558338
Debenture 7.25% 31/03/2025: 0673305
REPORT & ACCOUNTS 2014 101
Shareholder Information
Key Dates in 2015
Ex-dividend date
Record date
Annual General Meeting
2013/14 final dividend payable
Interim results announcement
2014/15 interim dividend payable
Financial year end
Final results announcement
Annual Report mailed to
shareholders
8 January 2015
9 January 2015
14 January 2015
21 January 2015
May 2015
June 2015
30 September 2015
December 2015
December 2015
Website
www.majedieinvestments.com
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 99). You may
transfer an existing PEP or ISA to the Majedie General
ISA (page 100). 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.
102 MAJEDIE INVESTMENTS PLC
Notes
REPORT & ACCOUNTS 2014 103
Notes
104 MAJEDIE INVESTMENTS PLC
REPORT & ACCOUNTS 2014 105
Majedie Investments PLC
Tower 42
25 Old Broad Street
London EC2N 1HQ
Telephone 020 7626 1243
Facsimile 020 7374 4854
E-mail majedie@majedieinvestments.com
www.majedieinvestments.com