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MAJEDIE INVESTMENTS PLC - Annual Financial Report.

Majedie Investments PLC

Annual Financial Report for the year ended 30 September 2012

The full Annual Report and Accounts will shortly be available via
the Company's website at www.majedie.co.uk or by contacting the
Company Secretary on telephone number 020 7954 9527.

The Directors present the results of the Company for the year ended
30 September 2012.

 Investment Objective 

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

 Investment Policy
General
The Company invests principally in securities of publicly quoted
companies worldwide and in funds managed by Javelin Capital LLP, though
it may invest in unquoted securities up to levels set periodically by
the Board, including its investment in Majedie Asset Management Limited.
Investments in unquoted securities, other than those managed by Javelin
Capital, (measured by reference to the Company's cost of
investment) will not exceed 10 per cent. of the Company's gross
assets.
Risk diversification 

Whilst the Company will at times invest and manage its assets in a
manner that is consistent with spreading

investment risk, there will be no rigid industry, sector, region or
country restrictions.

The overall investment approach is based on an analysis of global
economies sector trends with a focus on companies and sectors judged
likely to deliver strong growth over the long term. The number of
investments held, together with the geographic and sector diversity of
the portfolio, enable the Company to spread its risks with regard to
liquidity, market volatility, currency movements and revenue streams.
 The Company will not invest in any holding that would, at the time of
investment, represent more than 15 per cent. of the value of its gross
assets save that the Company may invest up to 25 per cent. of its gross
assets in any single fund managed by Javelin Capital. The Company will
only invest in funds managed by Javelin Capital where the Board believes
that the investment policy of such funds is consistent with the
Company's objective of spreading investment risk.
The Company may utilise derivative instruments including index-linked
notes, contracts for difference, covered options and other
equity-related derivative instruments for efficient portfolio management
and investment purposes.

Any use of derivatives for investment purposes will be made on the
basis of the same principles of risk spreading and diversification that
apply to the Company's direct investments, as described above.

Asset allocation

 The assets of the Company are split into four major groups. These are
the Core Portfolio, funds managed by Javelin Capital LLP, and the
Company's investments in Majedie Asset Management Limited and
Javelin Capital LLP.

Benchmark

The Company does not have one overall benchmark, rather each
distinct group of assets is viewed independently. For the actively
managed Core Portfolio the benchmark comprises 70 per cent. FTSE
All-Share Index and 30 per cent. FTSE World ex-UK Index (Sterling) on a
total return basis. Any investments made into Javelin Capital LLP
products are measured against the relevant fund benchmark as contained
in the fund's prospectus. It is important to note that in all cases
investment decisions and portfolio construction are made on an
independent basis. The Board however sets various specific portfolio
limits for stocks and sectors in order to restrict risk levels from time
to time, which remain subject to the investment restrictions set out in
this section.
 

Gearing

The Company uses gearing currently via long term debentures. The
Board has the ability to borrow up to 100 per cent. of adjusted capital
and reserves. The Board also reviews the level of gearing (borrowings
less cash) on an ongoing basis and sets a range at its discretion as
appropriate. The Company's current debenture borrowings are limited
by covenant to 66 2/3 per cent. and any additional indebtedness is not
to exceed 20 per cent. of adjusted capital and reserves.
 Highlights for 2012
Total shareholder return:              19.6%
Net asset value total return:           5.5%
Final dividend (per share):            6.3p

Total dividends (per share): 10.5p

 Directors' valuation of investment in Majedie Asset Management
Limited:    [pounds sterling]39m

Investment in Javelin Capital LLP of: [pounds sterling]8m

 Group Summary
Total assets*     [pounds sterling]146.1m
Shareholders' funds             [pounds sterling]112.2m
Market capitalisation    [pounds sterling]81.8m
Capital structure 10p ordinary shares           52,528,000
                                                [pounds sterling]13.5m
9.5% debenture stock
                  Debt                          2020
                                                [pounds sterling]20.7m
7.25% debenture
                                                stock 2025
                  Up to [pounds sterling]11,280 for 2012/13 tax ISA
Status        year.
* Represents total assets less current liabilities as at 30 September
2012.
Year's Summary
Financial*                                   2012    2011       %
as at 30 September
                                                                  

Total assets less current liabilities [pounds sterling]146.1m
[pounds sterling]145.7m 0.3

 Shareholders' funds                         [pounds
sterling]112.2m [pounds sterling]111.6m   0.5
 Net asset value per share                    215.6p  214.5p   0.5
Share price                                  155.8p  139.5p  11.7
                                                                  

Discount to net assets (debt at par value) 27.8% 35.0%

Discount to net assets (debt at fair value) 20.0% 29.8%

 Revenue return before tax                     [pounds
sterling]2.7m   [pounds sterling]2.6m   3.8
 Earnings per share                             4.9p    4.6p   6.5
Core dividends per share**                    10.5p   10.5p
                                                                  

Group costs (administrative expenses) [pounds sterling]3.2m [pounds
sterling]4.8m (33.3)

 Company ongoing charges**                       1.8%    1.9%
Gearing/(Net cash)                             9.2%  (1.7%)
Maximum potential gearing                     30.1%   30.3%
Company gearing                               11.1%   15.8%

** Excludes performance fees and one off costs, but includes
estimated running costs of pooled fund investments.

* Financial information is disclosed in respect of the consolidated
accounts unless otherwise stated.

 ** Core dividends per share represent dividends that relate to the
Company's financial year. However under IFRS dividends are not
accrued until paid or approved.
Year's high/low                                          2012
2011
Share price                                   high      168.5p
203.5p
                                              low       139.5p
133.8p
Net asset value                               high      226.5p
214.8p
                                              low       202.7p
196.3p
Discount (debt at par)                        high       29.8%
32.3%
                                              low        16.9%
13.1%
Discount (debt at fair value)                 high       35.0%
26.3%
                                              low        20.0%
8.8%
Chairman's Statement
Following a strong recovery in world equity markets in the first half of
the year volatility returned in the 3rd quarter as fears about the
Eurozone returned before unprecedented action by Central Banks caused
markets to recover and move ahead in the 4th quarter.
During the year to 30 September 2012, the NAV and share price, both on a
total return basis, returned 5.5% and 19.6% respectively, with the
latter reflecting a fall in the Company's discount over the year. I
highlight various aspects of performance for the year below which is
further detailed and explained in the Investment Manager's report.
Results and Dividends
The Group results for the year ended 30 September 2012 include the
consolidation of the investments made in the Javelin funds, the Javelin
Capital Global Equity Strategies Fund (QIF) and the Javelin Capital
Emerging Markets Alpha Fund (UCITS), under a new classification of
Assets held for sale, both in accordance with IFRS. This requirement,
due to the Company's controlling interest in the funds, results in
various large presentational and disclosure impacts, but has had no
material effect on the results for the year.
The Group's net revenue return before tax for the year to 30
September 2012 was [pounds sterling]2.7m compared to [pounds
sterling]2.6m for the prior year period. Group income for the period was
[pounds sterling]5.2m which overall is [pounds sterling]0.3m less than
last year. However income from Majedie Asset Management Limited (MAM)
was [pounds sterling]2.2m compared to [pounds sterling]1.9m in the prior
year period, reflecting a change in the allocation between interim and
final dividends. Group income for the period was reduced by a decrease
in dividend income from the QIF. Additionally, Core Portfolio dividend
income decreased as a result of the [pounds sterling]15.0m of cash
raised for investment into the lower income UCITS fund during the year.
Finally, with the introduction of third party client assets during the
year, Group income was modestly improved by external fee income from
Javelin Capital.
Total group costs were [pounds sterling]3.2m for the period compared to
[pounds sterling]4.8m in the prior year period. This decrease reflects
cost reductions across the group but primarily reflects the substantial
cost reduction efforts made last year at Javelin Capital. Additionally,
normalised Company costs continued to reduce during the year which is
reflected in the Company's ongoing charges percentage (which
replaces previous TER figures as from May 2012) falling to 1.8% from
1.9%. Cost control remains a key focus of the Board.
The Board has decided that the final dividend is to be maintained at 6.3
pence per share which is consistent with previous years. The final
dividend will be paid on 23 January 2013 to shareholders on the register
on 11 January 2013.
The investment in MAM is held at fair value in both the Company and
Group accounts and its valuation is reviewed by the Board regularly. The
Board have determined that the carrying value of our holding will remain
at [pounds sterling]39.0m as at 30 September 2012 as I explain in the
investment portfolio section below.
In contrast the investment in Javelin Capital is consolidated in the
Group accounts at net asset value (and is included at this value in the
weekly NAVs released to the market) as required under IFRS, but is held
in the Company accounts at cost in accordance with our policy for
unquoted investments. The Board has reviewed the valuation of Javelin
Capital, which includes the additional [pounds sterling]1.0m of capital
provided in September 2012, and has determined that as at 30 September
2012 the valuation of Javelin Capital will be kept at cost, being
[pounds sterling]8.0m, in the Company accounts.

Investment Portfolio

 The Investment Manager's Report below provides the detailed
commentary on the Company's investment activity and performance.
However I would like to provide an overview of the key issues affecting
the outturn for the year.
Firstly the Core Portfolio outperformed its benchmark by 1.2%. This is
especially creditable in a strong year for equities given the bias of
the portfolio towards defensive income generating stocks. I am pleased
to report this performance following the considerable restructuring
undertaken by the portfolio manager in the previous two years and in
particular the successful broadening of the company's exposure to
markets outside the UK, Europe and the United States which utilised the
expertise of the Global Team. Furthermore the performance of the Core
Portfolio compares favourably not only with the benchmark but also with
other successful managers in the income category.
Secondly I would like to turn to the absolute return Funds managed by
Javelin Capital. These are now concentrated on the UCITS fund following
the General Meeting to which I refer later. The fund aims to produce an
absolute return irrespective of the direction of the stock market and so
in a strong year for equity markets it would be expected to underperform
equities. Conversely in a poor year for equities, the fund would be
expected to outperform this asset class as was the case last year.
Whilst the Board had taken the decision by investing part of the
portfolio in an absolute return product, to create a lower overall risk
return profile for its assets, it is nevertheless disappointing the
return was negative. One of the underlying reasons for the rise in stock
markets during the period was monetary intervention on an unprecedented
scale. This resulted in extreme market moves that the fund's
particular strategy found difficult to turn to its advantage. Looking
forward, the extreme policy of recent years should diminish and have
less effect on markets and the Board remains confident the strategy will
perform. In the longer term, exposure to the Javelin funds should reduce
the volatility of the overall portfolio owing to a lower correlation
with stock markets and therefore improve the risk/return characteristics
of the Company.

Thirdly I would draw attention to MAM which has had a successful
year with solid investment performance and good financial performance.
The Board of Majedie Investments has decided to maintain its valuation
of the investment at [pounds sterling]39.0m, on a basis consistent with
prior years.

 Javelin Capital
Following the General Meeting and the consolidation of the
Company's funds into the UCITS product, Javelin Capital has been
able to simplify its structure and close its Irish entities. This has
beneficial cost implications for both Javelin Capital and the Company.
Also throughout the year Javelin Capital has made further operational
and staff savings beyond those which I reported on at the half year
stage. The extent of these savings is approximately 23% on an annualised
basis and compares with a 37% reduction a year ago and it has been
achieved whilst retaining key partners and staff. Overall it has reduced
the breakeven level of external third party assets under management to
circa [pounds sterling]70m from [pounds sterling]300m at June 2011 and
[pounds sterling]100m at the date of last year's report. The
environment for fund raising remains difficult and good performance will
be a prerequisite for successful marketing. The UCITS fund is part of
the Goldman Sachs International Serviced Platform in Luxembourg which
has strong credibility with investors. As performance improves and a
track record is built the Board believes the fund will attract further
assets under management.
Board Composition
Hubert Reid will retire from the Board after the AGM on 16th January
2013. Hubert has served as a non executive Director for 14 years having
been appointed in 1999. He has been both Deputy Chairman and Chairman of
the Audit Committee and his wise counsel will be greatly missed. I wish
him a long and happy retirement and along with my co directors would
like to thank him for his contribution to the Company. Looking forward
it has been decided not to appoint a new non executive director as the
Board believes the remaining directors provide the necessary breadth of
skills and experience to run the Company.

Change in Investment Trust Rules

 From the 1st January 2012 the tax rules governing Investment Trusts
changed. The Company has received approval to operate under the new
regime from 1 October 2012. The main details are that income can be paid
from realised capital gains and that the Company can invest more than
15% in a single holding. To this end I wrote to you in September to seek
permission to allow the Company to invest up to 25% in a single
investment, specifically in a Javelin Capital fund. I am pleased to
report that this was supported strongly. At the AGM it is proposed to
put a resolution to shareholders asking for permission to amend the
Company's Articles of Association so as enable us to pay dividends
from realised capital gains. As you know the Company currently has
substantial revenue reserves and hence would not need to take advantage
of the change. However shareholder support for such a resolution would
provide flexibility for the future to manage a greater range of
eventualities. As I have said previously these new rules represent a
good outcome for your Company.
Regulation
In addition to the changes in tax rules mentioned above, other
regulations are proposed which will have an impact on investment trust
companies. These include the UK Retail Distribution Review (RDR), the EU
Alternative Investment Fund Managers Directive (AIFMD) and the US
Foreign Account Tax Compliance Act (FATCA). Whilst the rationale behind
the introduction of each of these new regulations is different they will
potentially increase operational and regulatory risk for the Company.
The RDR is due to take effect from 31 December 2012 with the aim of
reducing conflicts of interest for advisors, clarity in terms of cost of
advice and providing a more consistent level of advice across the retail
investment sector. The Company's savings plan products are within
the scope of RDR however as we are not advisors the RDR will not apply
to those plans. We continue to monitor these regulations carefully and I
will report on relevant developments as and if they impact on the
Company in my future statements.
Annual General Meeting
The AGM will be held on 16 January 2013 at 12.00 noon at the City of
London Club, 19 Old Broad Street London EC2N 1DS. Details are set out in
the Annual Report. As in prior years there will be presentations and an
opportunity to ask questions. I do hope that you will be able to attend.

Summary

 There are a number of regulatory uncertainties facing the investment
industry at present and I have outlined the most significant. On the
other hand the tax changes affecting Investment Trusts have been
beneficial as I stated earlier.

Overarching the above has been the lacklustre recovery in financial
markets since 2008. I hope we will begin to see a steady, if seemingly
muted, recovery from here, which will create a healthier base for the
investment industry.

 Andrew J Adcock
Chairman 4 December 2012

Investment Manager's Report

The Company's assets are managed in four separate major groups
which the Board continues to believe provide the correct balance in
order to achieve the Investment Objective of maximising shareholder
return whilst looking to increase dividends by more than the rate of
inflation over the long term.

The chart on page 10 in the Annual Report demonstrates the impact
that each investment group and the other characteristics of the Company
have had on the Net Assets Performance during the year. Note that the
reports below are based on the aggregate value of the total assets of
the Company.
 

Core Portfolio

 The Core Portfolio comprises holdings in large-cap UK and international
stocks and a small number of carefully selected mid-cap companies,
managed under an equity income investment mandate. The portfolio is
benchmarked to perform against an index of 70% in UK listed companies
and 30% overseas.
Markets proved volatile during the last quarter of 2011 but rallied
strongly during the late winter and early spring of 2012. The second
calendar quarter of 2012 was, however, particularly disappointing for
equity markets as fears of a slowdown in Chinese growth combined with
renewed problems in the peripheral Eurozone dominated investor
sentiment. However, action by both the Federal Reserve and the European
Central Bank in the summer, in tandem with the election of a Greek
government not set on a path of immediate withdrawal from the Eurozone
reassured global markets and a substantial rally developed from the end
of June. Some evidence of a pickup in the US housing market and better
employment data were also helpful factors.
One of the key elements of some underperformance over the past couple of
years had been the area of the portfolio invested outside UK, Europe and
the United States. Measures were taken in the early months of 2012 with
the help of the Global Team to broaden and diversify the portfolio. It
is pleasing to report that this exercise has proved successful and that
performance of the portion of the portfolio allocated to these two areas
has been in line with benchmark over the second half of the financial
year. Given the troubles of countries within the Eurozone, a decision
was taken to reduce some exposure to companies within the Eurozone and
rebalance European exposure to companies operating in Switzerland and
Norway. In the United States, where some evidence emerged of renewed
growth in the summer of 2012, new positions were taken in Mosaic Corp, a
major agrochemical company, QualComm, a key supplier of semiconductors
to the telecommunications industry, Southern Company, a major supplier
of electricity to the growing part of the sunbelt area, and Kellogg
Corp, a well regarded consumer goods company. Within the existing
portfolio, Home Depot was a star performer, rising by nearly 75% over
the year. Illinois Tool Works and Coca Cola were also good performers
over the twelve month period and, overall, a policy of gradually
increasing the exposure of the portfolio to America over the year proved
beneficial, as the US was by some margin the best performing of the
major developed markets. In Europe, Bayer, Sanofi, Nestle and Telenor
performed pleasingly over the year whilst Vivendi rallied strongly later
in the summer after a torrid period in the earlier part of 2012.
In the UK, economic data was distorted by both the Jubilee holidays and
the Olympic Games in August. Although it appeared the economy was
entering a secondary recession, unemployment data continued to improve
during the period and inflation continued to fall. The FTSE 100 index
rallied strongly from the doldrums of the summer and by the early autumn
was again challenging the highs of March. Within the portfolio, new
holdings of WH Smith, ITV and Smiths Group performed pleasingly whilst
financial stocks such as Aviva and Barclays, which had sold off
particularly sharply over the summer, rallied well in the third quarter
of the year. Existing holdings in the UK portion of the portfolio such
as UBM, the UK media group, Legal and General, Babcock, the outsourcing
specialist and Beazley, the Lloyds insurer, performed notably well over
the year, whilst mining stocks such as Rio Tinto and BHP Billiton proved
a little disappointing. The Board took out some portfolio insurance to
protect the portfolio in late 2011 which impacted performance.

During the year, however, the Core Portfolio Total Return was 18.6%,
an outperformance of its investment benchmark of 1.2%. Outperformance
was particularly noticeable in the UK portion of the portfolio, but both
the European and North American parts of the portfolio outperformed
their respective benchmarks. The Far East, Japan and other parts of the
world underperformed somewhat, but it was noticeable that this
underperformance occurred in the first half of the financial year before
the portfolio was restructured and broadened. Thereafter, performance
tended to be in line.

There has been little change in the overall strategy of the Core
Portfolio, which continues to seek out well financed dividend paying
companies throughout the world. Cash has been invested where possible
throughout the year and on an asset allocation basis some priority has
been given to opportunities outside the UK where growth prospects seem
somewhat brighter. Nevertheless, it has been pleasing to note the
resilience of world equity markets against a background of indifferent
macroeconomic and political news. Within the corporate sector, company
balance sheets have continued to strengthen and overall dividend
payments have risen substantially. With the continuing global policy of
particularly loose monetary policy and historically low interest rates,
it appears that bond markets are remaining remarkably complacent in the
light of prospective inflation in the future. Against this backdrop, it
appears that well financed, solid dividend paying companies will retain
their attraction for investors and thus the policy of the Core Portfolio
to seek out and invest in such companies will remain unchanged.
 

Turnover within the portfolio remains at relatively low levels
although there has been some movement towards consumer orientated stocks
after a period of underexposure to this area. The banking sector
still

appears to be mired in problems, particularly in mainland Europe,
and thus the fund has no exposure in this geographical area, whilst
globally the portfolio remains underexposed to banking stocks, to stocks
orientated towards domestic consumers and also towards the technology
sector where dividend yields generally tend to be low. Overweight
positions continue to be held in industrial stocks, utilities and the
oil and gas sector.
 At current levels, equity markets have rallied well from the low point
of the summer but key uncertainties remain concerning the future of the
Eurozone and the sluggish levels of economic growth in the developed
world. However, there is some evidence beginning to emerge of a recovery
in the key American housing market and, in the UK, the end of the
'double dip' recessionary pattern that has dogged economic
recovery for the past year. Against this background, equities may remain
relatively well supported into 2013.

Finally, we continue to manage a small non-core realisation
portfolio, consisting of small-cap and early stage investments that were
initiated between 2005 and 2008. The objective is to maximise the return
available by exiting from these stocks, although by their very nature
all of them tend to be illiquid. The value of the non-core realisation
portfolio was [pounds sterling]3.1m, representing less than 3% of the
Group's total assets.

Javelin Capital Funds

 The Funds both follow an identical strategy but with different
domiciles. The Javelin Capital Global Equity Strategies Fund (JCGES), an
Irish QIF, was seeded in September 2010 and the Javelin Capital Emerging
Markets Alpha Fund (JCEMA), a UCITS Fund on the Goldman Sachs
International Platform, was seeded in February 2012. Following the
General Meeting in October 2012 the QIF was closed, the Company having
withdrawn its capital in September 2012. The capital was redeployed into
the UCITS Fund in November 2012. The combination into one fund will have
benefits both in terms of cost savings and marketability.
The strategy utilises a range of proprietary long/short models with an
emphasis on Emerging Markets. The objective of the Fund is to deliver
absolute returns that are uncorrelated to the direction of the Core
Portfolio and therefore lessening the overall market risk of the
combined assets of the Company. After a promising 2010/11 against the
background of the initial Eurozone crisis this year has proved more
difficult to navigate. The QIF returned a disappointing -7.9% and the
UCITS -4.9%. The strategies struggled against a backdrop of
unprecedented intervention by Central Banks particularly the ECB. This
caused the market to be volatile over the short term as pronouncements
were made, but trendless over the medium term. It meant that the
strategies found it difficult to capture market movements, but looking
ahead past experience suggests that market trends will reassert
themselves and the strategies are well placed to benefit from less
random market movements.
At 30 September 2012 the value of the JCEMA was [pounds sterling]14.1 m
representing 9.7% of the Group's total assets whilst the proceeds
from the closure of JCGES, which are held in cash awaiting reinvestment,
was [pounds sterling]18.2m representing 12.5% of the Group's total
assets.

Majedie Asset Management (MAM)

 MAM was launched in 2002 using finance provided by the Company, which
retains a near 30% interest. The business has grown to approximately
[pounds sterling]6.5bn in assets under management, predominantly
long-only equity mandates for institutional clients. Its market leading
investment performance has been recognised by the loyalty of its clients
and the outside world having recently won an award for European Fund
Manager of the year. During the year [pounds sterling]2.2m was received
in dividend income from MAM.

Taking account of, inter alia, MAM's current and forecasted
financial performance the Board has decided to retain its valuation of
the Company's holding at [pounds sterling]39.0m, representing some
26.8% of the Group's total assets.

Javelin Capital LLP

 The Company launched Javelin Capital LLP on 1 September 2010. An
initial [pounds sterling]4.5m was invested by the Company to finance the
start-up, initial operating costs and regulatory capital. However, in
the difficult market environment of 2011, it became apparent that it
would take appreciably longer to gain traction within third party and
outsourced funds for its initial investment product and thus further
investment would be necessary to grow the investment proposition. A
restructuring of the business was completed and further funding was
secured of up to [pounds sterling]3.5m, of which [pounds sterling]2.5m
was provided in June 2011. A further [pounds sterling]1.0m was provided
in September 2012 comprising the total funding allocation.

Javelin Capital is now focussed on gaining assets under management
in accordance with its revised business plan. The Company holds an
equity participation of 75% with 25% held by the individual partners.
The performance of the two funds has been discussed earlier.

 As at 30 September 2012, the net assets in Javelin Capital LLP have
been included in the Consolidated Report & Accounts at [pounds
sterling]2.6m, representing 1.8% of the Group's total assets. This
represents the original investment less start-up costs and losses
incurred to date and is in accordance with consolidation accounting
rules.

In the Company accounts the value of the investment in Javelin
Capital LLP has been valued at cost, being [pounds sterling]8.0m.

Development of Net Asset Value (NAV)

 The chart in the Annual Report demonstrates the NAV of the Company
during the year to 30 September 2012. In aggregate, the NAV attributable
to the Company has increased by [pounds sterling]0.6m, having incurred
net administration and finance costs of [pounds sterling]5.4m, and
having paid out [pounds sterling]5.5m in dividends.
The core portfolio rose by [pounds sterling]11.6m including the receipt
of dividends, whilst MAM provided a contribution of [pounds
sterling]2.5m, being dividends of [pounds sterling]2.2m and a capital
increase of [pounds sterling]0.3m. JCGES and JCEMA together contributed
a reduction in value of [pounds sterling]2.5m.
Investment Outlook
The long standing problems within the peripheral parts of the Eurozone
remain relatively intractable despite a variety of initiatives launched
by both domestic and supra-national financial institutions. Growth in
China has notably slowed during the year and this has impacted somewhat
on the patterns of economic development of other Far Eastern countries.
On a brighter note, however, there do appear to be some encouraging
signs of life in the American housing and employment markets, although
the looming 'fiscal cliff' of automatic tax rises and spending
reductions remains a key problem to be resolved in early 2013.
Nevertheless, the outlook for equity markets remains reasonable given
the very substantial amounts of cash earning little return in both money
market funds and corporate balance sheets worldwide. At least a part of
this cash may be expected to be deployed in capital markets over the
coming year.
Nick Rundle
Investment Director
Javelin Capital LLP
4 December 2012
Twenty Largest UK Investments
at 30 September 2012
                                           2012                   2011
                                      Market Value  % of     Market
Value  % of Company                                       [pounds
sterling]000  Fund             [pounds sterling]000  Fund
Majedie Asset Managementa                   39,000  26.8
39,000  26.8
Royal Dutch Shell 'B'                        4,176   2.9
4,426   3.0
BP                                           3,164   2.2
3,302   2.3
HSBC                                         3,010   2.1
3,727   2.6
Vodafone                                     2,856   2.0
3,533   2.4
GlaxoSmithKline                              2,712   1.9
3,199   2.2
Rio Tinto                                    2,020   1.4
1,878   1.3
Vostok Energya                               1,858   1.3
1,926   1.3
BHP Billiton                                 1,732   1.2
1,912   1.3
Antofagasta                                  1,578   1.1
1,158   0.8
Centrica                                     1,475   1.0
1,191   0.8
Barclays                                     1,397   0.9
1,049   0.7
BAE Systems                                  1,203   0.8
989   0.7
BG Group                                     1,125   0.8
1,117   0.8
SSE                                          1,044   0.7
842   0.6
Sainsbury (J)                                1,042   0.7
962   0.7
Aviva                                        1,036   0.7
1,145   0.7
Smiths GroupU                                  933   0.6
Legal & General                                923   0.6
1,256   0.9
British Land                                   914   0.6
833   0.6
                                            73,198  50.3
73,445  50.5

Ten Largest Overseas Investments

 at 30 September 2012
                                                          2012
2011
                                                      Market      Market
                                                       Value % of  Value
% of Company                                                 [pounds
sterling]000 Fund   [pounds sterling]000  Fund
Javelin Capital Emerging Markets Alpha Fund (Lux)U    14,144  9.7
Altria (USA)                                             827  0.6    774
0.5
McDonalds (USA)                                          824  0.6    817
0.6
AT&T (USA)                                               817  0.6
769   0.5
Roche (Switzerland)                                      810  0.6    831
0.6
Johnson & Johnson (USA)                                  810  0.6
777   0.5
Schlumberger (USA)                                       806  0.5    575
0.4
Statoil (Europe)U                                        800  0.5
Southern Copper (USA)U                                   799  0.5
Telenor (Norway)                                         785  0.5    498
0.3
                                                      21,422 14.7  5,041
3.4
a Unlisted 

U There is no comparative information for the investments listed as
they represent new holdings.

 Board of Directors
Andrew J Adcock* MA Chairman 

Hubert V Reid* Deputy Chairman

 J William M Barlow BA
 Paul D Gadd*
R David C Henderson* FCA
* Non-executive

Extracts from the Directors' Report

The directors submit their report and the accounts for the year
ended 30 September 2012.

 Introduction
The Directors' Report includes the Business Review, the Corporate
Governance Statement and the Report on Directors' Remuneration
which can be found in the Annual Report. A review of the developments
during the year is contained in the Chairman's statement and should
be read in conjunction with the Directors'
Report.
Principal Activity and Status
The Company is a public limited company and an investment company under
Section 833 of the Companies Act 2006. It operates as an investment
trust and is not a close company.
The Company has received written confirmation from HM Revenue &
Customs that it was an approved investment trust for taxation purposes
under Sections 1158/59 of the Corporation Tax Act 2010 in respect of the
year ended 30 September 2011. In the opinion of the directors the
Company has subsequently directed its affairs so as to enable it to
continue to qualify for such approval for the year ended 30 September
2012 and will request formal confirmation of this in due course.
Due to the change in the investment trust tax rules for accounting
periods commencing on or after 1 January 2012, the annual retrospective
compliance process, as above, is replaced by an initial single
pre-approval upon joining the new regime. The Company, in July 2012,
received written approval from HM Revenue & Customs that it will be
an approved investment trust under the new regime commencing from 1
October 2012.

Results and Dividend

 Consolidated net revenue return before taxation amounted to [pounds
sterling]2,681,000 (2011: [pounds sterling] 2,624,000). The directors
recommend a final ordinary dividend of 6.3p per ordinary share, payable
on 23 January 2013 to shareholders on the register at the close of
business on 11 January 2013. Together with the interim dividend of 4.2p
per share paid on 27 June 2012, this makes a total distribution of 10.5p
per share in respect of the financial year (2011: 10.5p per share).
Business Review
Introduction 

The purpose of the Business Review is to provide a review of the
business of the Company by:

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

-- providing information about persons with whom the Company has
contractual or

    other arrangements which are essential to the business of the
Company;
--  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.

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 such, it analyses its Statement of Comprehensive
Income between profits available for distribution by way of dividends
and capital profits. The financial statements report on these 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, supplemented by the
Revised Statement of Recommended Practice for Investment Trust Companies
and Venture Capital Trusts (SORP) issued in January 2009. The principal
accounting policies of the Company are set out in note 1 to the
accounts. The Auditor's opinion on the financial statements, which
is unqualified, appears in the Report of the Independent Auditor.
In addition to the annual and half-yearly results and Interim Management
Statements, the Company makes weekly net asset value (NAV) announcements
via an authorised Stock Exchange regulatory information service. The
Company also reports to shareholders on performance against benchmark,
corporate governance and investment activities.

The directors meet with larger shareholders outside the Annual
General Meeting as appropriate. Meetings are also held with investment
trust analysts and stockbroking firms. The Company has three investor
savings schemes which provide shareholders with cost effective and
convenient ways of investing. Communication of up-to-date information is
provided through the website at www.majedie.co.uk.

At least one shareholders' meeting is held in each year in
January to allow shareholders to vote on the appointment of directors
and the Auditor, the payment of dividends, authority for share buybacks
and any other special business. The business of the next such
shareholders' meeting, being the Annual General Meeting, scheduled
for 16 January 2013 is set out in the Annual Report and Accounts.
 

A General Meeting was held on 9 October 2012 at which proposed
modifications to the Company's investment policy were approved.

The Company is subject to corporation tax on its net revenue
profits but is exempt from corporation tax on capital gains, provided it
complies at all times with Sections 1158 to 1162 of the Corporation Tax
Act 2010. For the year ended 30 September 2012 these sections broadly
require that:
 

-- the Company's revenue (including dividend and interest
receipts but excluding profits on the sale of shares and securities)
should be derived wholly or mainly from shares and securities;

-- the Company must not retain in respect of any accounting period
more than 15% of its income from shares and securities;

-- no holding in a company should represent more than 15% by value
of the Company's investments in shares and securities unless the
holding was acquired previously and the value has risen to exceed the
15% limit; and

-- realised profits on the sale of shares and securities may not be
distributed by way of dividend.

Amendments to the Investment Trust regulations were approved by
Parliament on 6 December 2011 and adopted for accounting periods
beginning on or after 1 January 2012. This will amend the existing
requirements to gain approval annually under S1158/59 of the Corporation
Taxes Act 2010. Additionally in order to align company law with tax
legislation, Section 833 of the Companies Act 2006 was amended with
effect for accounting periods beginning on or after 6 April 2012. These
amendments will be adopted for the year ending 30 September 2013 and
include:
 -- The previous requirement to derive a minimum of 70% of income from
shares and securities has been replaced by a more general requirement
that the business must consist of "investing in shares, land or
other assets with the aim of spreading investment risk and giving
members of the Company the benefit of the results."

-- The 15% distribution requirement has been maintained but now
incorporates all income not just income from shares and securities.

-- The previous 15% holding test has been omitted from the new
regulations. Instead a similar spread of

risk test is incorporated within the new definition of an
investment trust: the "aim of spreading investment risk and giving
members the benefit of the results." The Company has submitted its
original and revised investment policy to HMRC as required under the new
regime.
 

-- The requirement for the Articles to prohibit the distribution of
realised gains on the sale of investments has now been removed.

Capital Structure

 As part of its corporate governance the Board keeps under review the
capital structure of the Company. At 30 September 2012 the Company had a
nominal issued share capital of [pounds sterling]5,252,800, comprising
52,528,000 ordinary shares of 10p each, carrying one vote each.
The Board seeks each year to renew the authority of the Company to make
market purchases of its own shares. However, the Board is only likely to
use such authority in special circumstances. In general the directors
believe that the discount to net assets will be reduced sustainably over
the long term by the creation of value through the development of the
business.
In 1994 and 2000 the Company issued two long term debentures: [pounds
sterling]15m 9.5% debenture stock 2020 and [pounds sterling]25m 7.25%
debenture stock 2025 respectively. In 2004 the Company redeemed [pounds
sterling]1.5m of the 2020 issue and [pounds sterling]4.3m of the 2025
issue as an opportunity arose to redeem at an attractive price.

As noted above gearing is via two long term debentures. The limits
on the ability to borrow are described in the investment policy above.
The Board is responsible for setting the overall gearing range in which
the Investment Manager may operate.

 Group gearing (borrowings less cash and equivalents) as at 30 September
2012 was 9.2% (2011: net cash of 1.2%) which reflects the cash held,
primarily due to proceeds held from the redemption of the Company's
holding in the QIF held pending reinvestment in the Javelin UCITS fund
(2011: cash held for initial investment into the UCITS fund plus large
cash balances held in the QIF fund). At the Company level, gearing as at
30 September 2012 was 11.1% (2011: gearing of 15.8%). This also reflects
the cash held from the QIF held pending reinvestment in the UCITS fund
(2011: cash held last year for the initial investment into the UCITS
fund).
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
following a takeover bid.

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.
 The Company has a range of equity investments including substantial
investments in two unlisted asset management businesses, large cap
global equities and an investment in an emerging market equities
absolute return fund. The major risk for the Company remains, investment
risk, primarily market risk, however it is recognised that the
investments in the two unlisted asset management businesses, and in
particular the investment in Majedie Asset Management, represent a
degree of concentration risk for the Company.

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

Under the terms of the Management Agreement the Investment Manager
manages the Company's assets. The Core Portfolio is managed with
various specific limits for individual stocks and market sectors which
are employed to restrict risk levels. The level of portfolio risk in the
Core Portfolio is assessed in relation to the benchmark utilising
various portfolio risk management tools. It should be noted that whilst
we have a benchmark in the Core Portfolio, the portfolio is constructed
independently and can be significantly different. Therefore the Core
Portfolio can experience periods of volatility over the short term. Also
the level of risk at a net asset value level increases with gearing. In
certain circumstances cash balances may be raised to reduce the
effective level of gearing. This would result in a lower level of risk
in absolute terms.
 

Other risks faced by the Company include the following:

i. Strategy Risk:

an inappropriate investment strategy could result in poor returns
for shareholders and a widening of the discount of the share price to
the NAV per share. The Board regularly reviews strategy with the
Investment Manager in relation to a range of issues including the
allocation of assets between geographic regions and industrial sectors,
level and effect of gearing and currency exposure;

 ii. Business Risk:
inappropriate management or controls in either Majedie Asset Management
and/or Javelin Capital LLP could result in financial loss, reputational
risk and regulatory censure. The Board has representation on both
entities' governing boards to monitor business financial
performance and operations;

iii. Compliance Risk:

 failure to comply with regulations could result in the Company losing
its listing and/or being subjected to corporation tax on its capital
gains. The Board receives and reviews regular reports from the fund
administrator on its controls in place to prevent non-compliance of the
Company with rules and regulations. The Board also receives regular
investment listings and income forecasts as part of its monitoring of
compliance with Sections 1158 to 1162 of the Corporation Tax Act 2010;
and

iv. Operational Risk:

 inadequate financial controls and failure by an outsourced supplier to
perform to the required standard could result in misappropriation of
assets, loss of income and debtor receipts and mis-reporting of NAVs.
The Board regularly reviews statements on internal controls and
procedures and subjects the books and records of the Company to an
external annual audit. The Board has representation on the governing
board of Javelin Capital LLP who will also monitor the performance of
other outsourced service providers.

The systems in place to manage the Company's internal controls
are described further in the Corporate Governance Statement in the
Annual Report.

Management of Assets and Shareholder Value

The Company invests around the world in markets, sectors and
companies that the Board and Investment Manager believe will generate
long term growth in capital and income for shareholders. The Company
manages its assets by allocating resources to the following major
groups:
 

-- Core Portfolio;

-- Funds managed by Javelin Capital LLP;

 -- MAM; and
 -- Javelin Capital LLP.
The Board believes that the groups will enable a spread of risk and
deliver a higher quality of earnings. The Investment Manager manages the
Core Portfolio by analysing potential and current investments against a
range of parameters. Many potential investments are considered each
year. Investment risks are spread through holding a range of securities
across a range of sectors and countries.
The Company has invested seed capital in two funds managed by Javelin
Capital LLP. In September 2010, the Company invested [pounds sterling]20
million in the Javelin Capital Global Equity Strategies Fund, an Irish
QIF.  In February 2012, the Company invested [pounds sterling]15 million
in the Javelin Capital Emerging Markets Alpha Fund, a sub-fund of the
Serviced Platform SICAV (UCITS). Both Javelin Capital Funds were
emerging market equity funds with an absolute return objective which
they aim to achieve through a market-neutral investment strategy.
At the time Javelin Capital launched the Javelin Capital Global Equity
Strategies Fund, it considered an Irish QIF to be the best structure to
adopt for the fund. Since then and following a review by Javelin
Capital, it has become apparent that UCITS-compliant funds have become
increasingly attractive to investors. As at 30 September 2012 the
Company had redeemed the vast majority of its investment in the QIF
which will be held in cash pending re-investment in the UCITS. The QIF
will be wound down and de-registered with the Irish Central Bank and be
placed into voluntary liquidation. This is expected to be complete in
early 2013.
Finally the Company has significant investments in Majedie Asset
Management Limited (MAM) and Javelin Capital LLP, both asset management
businesses. The Board believes that these investments provide or will
provide a valuable source of future return. The Board has representation
on both entities' governing boards in order to monitor strategy and
financial performance.

The Board reviews the investment performance of the Company against
a range of measures relevant to each investment group.

Performance Highlights

 The Board uses the following Key Performance Indicators (KPIs) to help
assess progress against the Company's objectives. The KPIs are
commented on within the Chairman's Statement and Investment
Manager's Report above.

-- NAV total return and total shareholder return: as above and in
the Annual Report.

-- Investment group portfolio return: see the chart in the
Investment Manager's Report in the Annual Report. Both of these are
discussed in detail in the Chairman's Statement and the Investment
Manager's Report.

 -- Share price discount: The level of the discount at the end of the
financial year calculated with debt at par was 27.8%, as compared to
35.0% in 2011. The prior year discount was distorted due to revisions to
investments, primarily MAM, which were not reflected in the share price
at year end.

-- Ongoing Charges

 From May 2012 a new measure of investment trust operating costs was
introduced to the sector called ongoing charges, which replaced the
previous Total Expense Ratio. Ongoing charges shows the annual normal or
ongoing costs of an Investment Trust excluding performance fees, one off
expenses and investment dealing costs as a percentage of average
shareholder's funds. Where investments have been made into pooled
funds estimated ongoing fund costs have been included in the
Company's ongoing charges percentage.

The ongoing charges of the Company for the year ended 30 September
2012 was 1.8% (2011: 1.9%).

 Dividend growth:
Dividend growth over the long term (as recognised for this purpose as
from 1985 when the Company became an investment trust), has been at
4.9%, 5.5% including special dividends, which is ahead of inflation over
the same period. Further details regarding the results and dividends can
be found in the Chairman's Statement above.

Total Return Philosophy & Dividend Policy

The directors believe that investment returns will be maximised if
a total return policy is followed whereby the Investment Manager pursues
the best opportunities. The Company has a comparatively high level of
revenue reserves for the investment trust sector.  At [pounds
sterling]23.7m, the revenue reserves represent more than four times the
current annual core dividend distribution. The strength of these
reserves will from time to time assist in underpinning our progressive
dividend policy in years when the income from the portfolio is
insufficient to cover completely the annual distribution.
 

The policy aim is to increase dividends by more than the rate of
inflation over the long term.

Employees, Social, Environmental and Ethical policy

 The Company has no employees and the Board consists entirely of
non-executive Directors and as a result the Group has limited impact on
the environment. When considering its day to day operations, the Company
aims to conduct itself responsibly, ethically and fairly.

The Company has appointed Javelin Capital LLP to manage its
portfolio of investments. Javelin has been tasked with managing the
portfolio, and its operations, with a view to achieving the
Company's investment objective and in doing so takes account of
social, environmental and ethical factors, where appropriate.

 Costs
The Company's ongoing charges percentage over net assets is 1.8%.
Company operating costs continued to decrease this year, even excluding
the impact of the increased investment made into the Javelin Capital
pooled funds but the ratio reflects the lower average asset base and the
allocation to emerging markets via the Javelin Funds. The Board pays
close attention to cost control and the current situation is referred to
further in the Chairman's Statement above.
Material Contracts
-- Javelin Capital LLP
i. LLP Agreement 

The investment in Javelin Capital LLP is in accordance with the
terms of a Limited Liability Partnership Agreement dated 31 August 2010,
which was subsequently amended and restated on 29 June 2011. The revised
terms include:

 -- The Company will provide [pounds sterling]4.5m initial capital and a
further capital contribution of [pounds sterling]3.5m. Both will attract
interest at a commercial rate, until it is repaid from future Javelin
Capital LLP profits. This repayment has priority over other
distributions from residual profits. On 29 June 2011 [pounds
sterling]2.5m was provided with the remainder at the Board's
discretion. This was obtained and the remaining [pounds sterling]1m was
provided on 25 September 2012.

-- The Company has a 75% interest in Javelin Capital LLP with the
other partners holding the remaining 25%. On achieving certain pre-set
financial targets, which were revised in conjunction with the
restructuring in June 2011, the Company will reduce its interest to
ultimately 55%.

-- The agreement provides for various types of profit share
including performance fee, bonus and residual profit share. Under the
agreement the Company is to receive an entitlement to profits equal to
its capital contribution plus accumulated interest first before other
partners are entitled to bonus or residual profit shares.

 --The Board has representation on the Javelin Capital Management Board
(Javelin governance is outlined in the Corporate Governance Statement in
the Annual Report), including the appointment of the Chairman. This
includes various control, meeting and voting rights. The agreement also
provides for the requirement to obtain Majedie approval in a variety of
areas including anything considered a restricted matter. The Board can
appoint or remove the Managing Partner/Chief Executive who has day to
day operational control and also must approve his remuneration.

-- In the event of a sale proposed by the Company the agreement
includes drag along provisions including certain pre-emption rights to
the other partners.

There are also two side letters that relate to the LLP Agreement
which provide for a possible change in control rights and provide for
the liability of partners in respect of their capital and current
account balances.

ii. Management and Administration Services Agreements

 The Board has appointed Javelin Capital LLP as its investment manager
and general administrator. The terms of the appointment are defined
under a Management Agreement and Administration Services Agreement dated
31 August 2010. The agreement divides the Company's investments
into distinct portfolios which are the Core Portfolio, non-core
portfolio, MAM, Javelin Capital Funds and the Treasury account. The fees
payable under the Management Agreement are detailed below:
Fund/Portfolio                                   Management Performance
                                                        Fee         Fee
Core Portfolio***                              0.70% p.a. *        10%**
Treasury Account                                 0.70% p.a.        NIL
MAM                                                   NIL**       NIL**
                                                                       

Javelin Capital Global Equity Strategies Fund# 1.25% p.a. 20%***

Javelin Capital Emerging Markets Alpha Fund^ 1-1.25% p.a.
10-20%#

* The management fee is on a sliding scale ranging from 0.7% p.a. to
0.4% p.a. based on the combined value of the core and non-core
portfolios.

** The performance fee is based on outperformance against the
benchmark on a rolling three year basis.

 # The Javelin Capital Global Equity Strategies Fund is a sub-fund of
Javelin Capital Strategies plc, which is an Irish Qualifying Investment
Fund  (QIF) listed on the Irish Stock Exchange.   The QIF closed and
holding redeemed in September 2012.

** The agreements provide for a fee of [pounds sterling]60,000 per
annum in respect of MAM duties.

*** The fees are as set in the supplement to the funds
documentation. The performance fee entitlement only occurs once the
hurdle has been exceeded and is calculated on a high water mark basis
(using an equalisation method in respect of the QIF).

*** The non-core portfolio attracts a management fee as per the Core
Portfolio but has no performance fee.

^ The Javelin Capital Emerging Markets Alpha Fund is a sub-fund of
the Serviced Platform SICAV, which is a Luxembourg based UCITS.

The Management Agreement entitles either party to terminate the
arrangement with six months' notice after an initial period of
three years. Additionally the Company can terminate the Manager's
appointment in respect of a distinct portfolio if the performance of
that portfolio falls below a nominated benchmark. The Administration
Services Agreement delegated, to Javelin Capital LLP, various rights to
enable it to act as general administrator. Fees payable under the
Administration Services Agreement are capped at [pounds sterling]265,000
per annum with fees agreed on a cost only basis. The Administration
Services Agreement may be terminated on three months' notice.
 

iii. Intra Group Asset Lease Agreement

The asset lease agreement with Javelin Capital Services Limited
identifies certain assets to be leased to and used by Javelin. Javelin
will pay a lease charge equal to the depreciation suffered by the
Company on those assets. The agreement provides for these assets to be
transferred to Javelin at a future date at net book value.
 

-- Capita Sinclair Henderson Ltd

 The Board has appointed Capita Sinclair Henderson Ltd (trading as
Capita Financial Group - Specialist Fund Services) in November 2000 to
act as Company Secretary and undertake certain administration services.
The terms of Capita Sinclair Henderson Ltd's appointment are
defined under a secretarial and administration services agreement dated
6 February 2012. The agreement entitles either party to terminate the
arrangement with twelve months' notice.

Policy on Payment of Suppliers

 It is the Company's policy to settle all investment transactions
in accordance with the terms and conditions of the relevant market in
which it operates. All other expenses are paid on a timely basis in the
ordinary course of business.

At 30 September 2012 the Group and the Company had nine and eight
days respectively of suppliers' invoices outstanding in respect of
trade creditors (2011: Group and Company four days).

Majedie Asset Management Limited

Majedie Asset Management is an investment management boutique
specialising in UK equities which launched in 2003. Having started with
a 70% shareholding the Company now retains a 29.8% interest. The
relevant developments during the year are referred to in the Investment
Manager's report and further referred to in note 13 below.
 Javelin Capital LLP 

Javelin Capital LLP commenced operations on 1 September 2010. On
that date Javelin Capital LLP assumed responsibility for managing the
Company's investments and the provision of general administration
services. All previous Majedie employees transferred to Javelin Capital
LLP under the new arrangements.

The Company initially provided [pounds sterling]4.5m in
operational and regulatory capital for Javelin Capital LLP. At a General
Meeting on 29 June 2011, the shareholders approved a further investment
of up to [pounds sterling]3.5m in Javelin Capital LLP to provide
additional operational and regulatory capital, of which [pounds
sterling]2.5m was paid on 29 June 2011 and the remainder on 25 September
2012.
 

The Company has an initial 75% ownership. This will fall to 55% if
the partnership achieves certain preset financial targets. The
Chairman's Statement above and additionally the notes to the
accounts below provide further information on developments.

 On 20 September 2010 the Company invested [pounds sterling]20m into the
Javelin Capital Global Equity Strategies Fund (QIF) which was followed
on 16 February 2012 by [pounds sterling]15m being invested into the
second Javelin Capital fund, the Javelin Capital Emerging Markets Alpha
Fund (UCITS). Following a review by Javelin Capital in 2012, it became
apparent that the UCITS fund was more attractive to investors, the QIF
was closed with all remaining investor funds being redeemed in September
2012. It was proposed that the Company's investment in the QIF
would be redeployed into the UCITS fund. After the Company's
shareholders approved a change to the Company's investment policy
on 9 October 2012 to permit this the funds were invested in November
2012. The characteristics and performance of these two fund investments
are detailed in the Investment Manager's Report section.

Continued Appointment of the Manager

The Board has concluded that it is in shareholders' interests
that Javelin Capital LLP should continue as Manager of the Company on
the existing terms. The Board considers the arrangements for the
provision of investment management and other services to the Company on
an annual basis.
 

The principal terms of the agreement with the Investment Manager
have been set out above.

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 International Financial Reporting Standards 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:
 

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

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

 uA 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;

uA state that the Group has complied with IFRSs, subject to any
material departures disclosed and explained in the financial statements;
and

uA make judgements and estimates that are reasonable and
prudent.

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.
 By order of the Board
Andrew J Adcock
Chairman
4 December 2012
NON-STATUTORY ACCOUNTS
The financial information set out below does not constitute the
Company's statutory accounts for the years ended 30 September 2012
and 2011 but is derived from those accounts. Statutory accounts for 2011
have been delivered to the Registrar of Companies, and those for 2012
will be delivered in due course. The Auditor has reported on those
accounts; their report was (i) unqualified, (ii) did not include a
reference to any matters to which the Auditor drew attention by way of
emphasis without qualifying their report and (iii) did not contain a
statement under Section 498 (2) or (3) of the Companies Act 2006. The
text of the Auditor's report can be found in the Company's
Annual Report and Accounts at www.majedie.co.uk. 

Consolidated Statement of Comprehensive Income

for the year ended 30 September 2012

                                                                 2012
2011
                                                      Revenue  Capital
Revenue  Capital
                                                       return   return
Total   return   return   Total
                                                Notes    [pounds
sterling]000     [pounds sterling]000    [pounds sterling]000
[pounds sterling]000     [pounds sterling]000    [pounds sterling]000
Investments
Gains on investments at fair value through profit or loss
13              7,832   7,832             2,233   2,233
Exchange loss on disposal of foreign subsidiary                   (840)
(840)
Net investment result                                            6,992
6,992             2,233   2,233
Income
Income from investments                           3     5,100
5,100    5,434            5,434
Other income                                      3        63
63      106              106
Total income                                            5,163
5,163    5,540            5,540
Expenses
Administrative expenses                           5    (1,777)  (1,442)

(3,219) (2,195) (2,633) (4,828)

 Return/(loss) before finance
 costs and taxation                                      3,386    5,550

8,936 3,345 (400) 2,945

 Finance costs                                     8      (705)  (2,115)

(2,820) (721) (2,165) (2,886)

 Net return/(loss) before taxation                       2,681    3,435
6,116    2,624   (2,565)     59
Taxation                                          9      (132)
(132)    (200)            (200)
Net return/(loss) after taxation for the year           2,549    3,435
5,984    2,424   (2,565)   (141)
Other comprehensive income -
exchange differences on
translation of foreign operations
                 (37)    (37)
Attributable to:
Equity holders of the company                                        37
37              (37)    (37)
Non-controlling interest                                             37
37              (37)    (37)
                                                                     37
37
Total comprehensive income for the year                 2,549    3,472
6,021    2,424   (2,602)   (178)
Net return/(loss) after taxation attributable
to:
Equity holders of the Company                           2,552    3,445
5,997    2,427   (2,568)   (141)
Non-controlling interest                                   (3)     (10)
(13)      (3)       3
                                                        2,549    3,435
5,984    2,424   (2,565)   (141)
Return/(loss) per ordinary share:                       pence    pence

pence pence pence pence

 Basic and diluted                                11       4.9      6.6
11.5      4.6     (4.9)   (0.3)

The total column of this statement is the Consolidated Statement of
Comprehensive Income of the Group prepared in accordance with
International Financial Reporting Standards (IFRS). The supplementary
revenue return and capital return columns are prepared under guidance
published by the Association of Investment Companies (AIC).

All revenue and capital items in the above statement derive from
continuing operations. No operations were acquired or discontinued in
the year.

The notes below form part of these accounts.

Company Statement of Comprehensive Income

for the year ended 30 September 2012

                                                             2012
2011
                                                  Revenue  Capital
Revenue  Capital
                                                   return   return
Total   return   return   Total
                                            Notes    [pounds
sterling]000     [pounds sterling]000    [pounds sterling]000
[pounds sterling]000     [pounds sterling]000    [pounds sterling]000
Investments
Gains on investments at fair value
through profit or loss                       13              6,258
6,258             1,547   1,547
Net investment result                                        6,258
6,258             1,547   1,547
Income
Income from investments                       3     5,132
5,132    5,382            5,382
Other income                                  3        34
34       19               19
Total income                                        5,166
5,166    5,401            5,401
Expenses
Management fees                               4      (382)    (412)
(794)    (418)    (519)   (937)
Administration expenses                       5      (568)    (237)
(805)    (730)    (320) (1,050)
Return before finance costs
and taxation                                        4,216    5,609
9,825    4,253      708   4,961
Finance costs                                 8      (701)  (2,104)
(2,805)    (701)  (2,102) (2,803)
Net return/loss before taxation                     3,515    3,505
7,020
  3,552   (1,394)  2,158
Taxation                                      9      (113)
(113)    (121)            (121)
                                                                                                     

Net return/loss after taxation for the year 3,402 3,505 6,907

  3,431   (1,394)  2,037
 Return/loss per ordinary share:                     pence    pence
pence
  pence    pence   pence
Basic and diluted                            11       6.6      6.7
13.3      6.5     (2.6)    3.9
The total column of this statement is the Statement of Comprehensive
Income of the Company prepared under IFRS. The supplementary revenue
return and capital return columns are prepared under guidance published
by the AIC.

All revenue and capital items in the above statement derive from
continuing operations. No operations were acquired or discontinued in
the year.

The notes below form part of these accounts.

Consolidated Statement of Changes in Equity

for the year ended 30 September 2012

                                         Capital    Share

Own Currency Non-

                        Share   Share    redemption options  Capital
Revenue  shares  translation    controlling  l
capital

premium reserve reserve reserve reserve reserve reserve interest
Total

               Notes    [pounds sterling]000    [pounds sterling]000
[pounds sterling]000       [pounds sterling]000     [pounds sterling]000
[pounds sterling]000     [pounds sterling]000    [pounds sterling]000
[pounds sterling]000        [pounds sterling]000
Year ended 30 September 2012 As at 1 October 2011          5,253     785
56        (178)    84,377   23,006   (1,628)  (37)         248
111,882
Net gain for the year
3,445     2,552                         (13)        5,984
Other comprehensive income - exchange differences on translation of
foreign subsidiary                                                                                37                    37
Share options expense    25                                        31
              31
                                                                                                                        Dividends declared and
paid in year
          10                                                        (5,465)                                  (5,465)
Cessation of Non Controlling interest
          15                                                                                        (235)     (235)
As at 30 September
2012                  5,253     785         56    (147)   87,822
20,093    (1,628)                         112,234
Year ended 30 September 2011
As at 1 October 2010                 5,253     785         56    (220)
86,945   26,042   (1,702)                          117,159
Net loss for the year                                     (2,568)
2,427                                       (141)
Other comprehensive income -exchange differences on translation of
foreign subsidiary                                                                         (37)                  (37)
Share options expense     25                                    116
               116
Dividends declared and paid in year
           10                                                      (5,463)                                    (5,463)
Consolidation of subsidiary
                                     15
                 248       248
Own shares                                                                                                                  (sold)/ purchased by
Employee Incentive Trust (EIT)
(74)                        74
As at 30 September
2011                5,253     785         56      (178)  84,377
23,006   (1,628)        (37)         248    111,882

The notes below form part of these accounts.

Company Statement of Changes in Equity

for the year ended 30 September 2012

                                         Capital    Share
Own
                       Share   Share    redemption options  Capital
Revenue  shares
                       capital premium  reserve    reserve  reserve 

reserve reserve Total

               Notes    [pounds sterling]000    [pounds sterling]000
[pounds sterling]000       [pounds sterling]000     [pounds sterling]000
[pounds sterling]000     [pounds sterling]000    [pounds sterling]000
Year ended 30 September 2012
As at 1 October 2011                   5,253      785    56        (178)
86,067   25,811  (1,628) 116,166
Net profit for the year
3,505    3,402             6,907
Share options expense          25                                   31
31
Dividends declared and paid
in year         10                                                  (5,465)           (5,465)
As at 30 September 2012         5,253      785         56    (147)
89,572   23,748   (1,628) 117,639 

Year ended 30 September 2011

 As at 1 October 2010                  5,253      785         56
(220)  87,461   27,843   (1,702) 119,476
Net profit for the year
(1,394)   3,431             2,037
Share options expense       25                                    116
116
Dividends declared and paid in year
              10                                                   (5,463)           (5,463)
Own shares (sold)/ purchased by Employee Incentive Trust (EIT)
(74)                        74
As at 30 September
2011                 5,253      785         56    (178)   86,067
25,811   (1,628)  116,166

The notes below form part of these accounts.

 Consolidated Balance Sheet
as at 30 September 2012
                                                                                     2012     2011
                                                                            Notes    [pounds sterling]000     [pounds sterling]000
Non-current assets
Property and equipment
12       247      410
Investments held at fair value through profit or loss  13   108,217
112,822
                                                                                  108,464  113,232
Current assets
Derivative instruments held at fair value through
profit or loss                                                               14                136
Trade and other receivables

16 1,418 5,817

Cash and cash equivalents  17    23,287   37,553
                                                                                    24,705   43,506
Assets classified as held for sale  13    14,199
Total current assets
38,904   43,506
Total assets                                                                      147,368  156,738
Current liabilities
Financial liabilities held at fair value through
profit or loss                                                               12             (3,311)
Derivative instruments held at fair value through
profit or loss                                                               14                (99)
Trade and other payables
18    (1,256)  (7,645)
                                                                                   (1,256) (11,055)
                                                                                                   

Liabilities directly associated with the assets classified as held
for sale

 13       (55)
 Total current liabilities
(1,311) (11,055)
Total assets less current liabilities
      146,057  145,683
Non-current liabilities
Debentures                                                                   18   (33,823) (33,801)
Total liabilities                                                                 (35,134) (44,856)
Net assets                                                                        112,234  111,882
Represented by:
Ordinary share capital
19     5,253    5,253
Share premium                                                                         785      785
Capital redemption reserve
56       56
Share options reserve
(147)    (178)
Capital reserve                                                                    87,822   84,377
Revenue reserve                                                                    20,093   23,006
Own shares reserve                                                           20    (1,628)  (1,628)
Currency translation reserve
(37)
Equity Shareholders' Funds
112,234  111,634
Non-controlling interest
15                248
Total equity                                                                      112,234  111,882
Net asset value per share
pence    pence
Basic and fully diluted
21     215.6    214.5

Approved by the Board of Majedie Investments PLC (Company no.109305)
and authorised for issue on 4 December 2012.

 Andrew J Adcock
J William M Barlow
Directors

The notes below form part of these accounts.

 Company Balance Sheet
as at 30 September 2012
                                                                      Notes    2012      2011
Non-current assets                                                             [pounds sterling]000      [pounds sterling]000
Property and equipment
12       133       178
Investments held at fair value through profit or loss
13  

122,361 127,176

Investments in subsidiaries held at fair value through profit or
loss 13

8,021 7,000

Investments in subsidiaries held at cost
13
     171       171
                                                                            130,686   134,525
Current assets
Trade and other receivables
16       855     1,180
Cash and cash equivalents
17    20,922    15,245
                                                                             21,777    16,425
Total Current Assets
21,777    16,425
Total assets                                                                152,463   150,950
Current liabilities
Trade and other payables
18    (1,001)     (983)
Total current liabilities
(1,001)     (983)
Total assets less current liabilities 151,462   149,967
Non-current liabilities
Debentures                                                             18   (33,823)  (33,801)
Total liabilities                                                           (34,879)  (34,784)
Net assets                                                                  117,639   116,166
Represented by:
Ordinary share capital
19     5,253     5,253
Share premium                                                                   785       785
Capital redemption reserve
56        56
Share options reserve
(147)     (178)
Capital reserve                                                              89,572    86,067
Revenue reserve                                                              23,748    25,811
Own shares reserve                                                     20    (1,628)   (1,628)
Equity Shareholders' Funds
117,639   116,166

Approved by the Board of Majedie Investments PLC (Company no.
109305) and authorised for issue on 4 December 2012.

 Andrew J Adcock
J William M Barlow
Directors

The notes below form part of these accounts.

Consolidated Cash Flow Statement

for the year ended 30 September 2012

                                                                              2012        2011
                                                                   Notes
[pounds sterling]000        [pounds sterling]000
Net cash flow from operating activities
Consolidated net return before taxation 6,116          59
Adjustments for:
Gains on investments                                                13
(7,832)     (2,233)
Dividends reinvested
(5)
Share based remuneration
31         116
Depreciation                                                                  166         208
Purchases of investments
(116,131) (1,300,122)
Sales of investments
125,175   1,319,735
Adjustment to non-current asset investments
on consolidation                                                                       20,000
Proceeds from derivative contracts

(911) 483

Exchange gains on translation of foreign
  investments                                                                   10        (109)
Increase in non-controlling interest
              248
                                                                            6,624      38,380
Finance costs                                                               2,820       2,886
Operating cashflows before movements
 in working capital                                                         9,444      41,266
(Decrease)/increase in trade and other payables

(528) 139

Decrease/(increase) in trade and other receivables

204 (758)

Net cash inflow from operating activities
  before tax                                                                 9,120      40,647
Tax recovered                                                                  37          29
Tax on unfranked income
(158)       (245)
Net cash inflow from operating activities 8,999      40,431
Investing activities
Purchases of tangible assets
(3)        (87)
                                                                                              

Investment in Javelin UCITS Fund classified as Asset held for sale
(14,990)

 Net cash outflow from investing activities
(14,993)        (87)
Financing activities
Interest paid                                                              (2,797)     (2,866)
Dividends paid                                                             (5,465)     (5,463)
Net cash outflow from financing activities (8,262)     (8,329)
(Decrease)/increase in cash and cash
equivalents for year                                                22
(14,266)     32,015
Cash and cash equivalents at start of year

37,553 5,538

Cash and cash equivalents at end of year 23,287      37,553
 

The notes below form part of these accounts.

 Company Cash Flow Statement 

for the year ended 30 September 2012

                                                                  2012
2011
                                                        Notes   [pounds
sterling]'000     [pounds sterling]000
Net cash flow from operating activities
Company net return before taxation                              7,020
2,158
Adjustments for:
Gains on investments                                     13    (6,258)
(1,547)
Dividends reinvested
(5)
Share based remuneration                                           31
116
Depreciation                                                       45
47
Purchases of investments                                      (32,901)
(15,692)
Sales of investments                                           43,944
35,546
Proceeds from derivative contracts                                183
                                                               12,064
20,623
Finance costs                                                   2,805
2,803
                                                                               

Operating cashflows before movements in working capital 14,869
23,426

 Increase/(decrease)in trade and other payables                     18

(210)

 Decrease/(increase) in trade and other receivables                135

(141)

 Net cash inflow from operating activities before tax           15,022
23,075
Tax recovered                                                      37
29
Tax on unfranked income                                          (134)
(166)
Net cash inflow from operating activities                      14,925
22,938
Investing activities
Purchases of tangible assets
(4)
Investment in subsidiaries                                     (1,000)
(2,500)
Net cash outflow from investing activities                     (1,000)
(2,504)
Financing activities
Interest paid                                                  (2,783)
(2,783)
Dividends paid                                                 (5,465)
(5,463)
Net cash outflow from financing activities                     (8,248)  

(8,246)

 Increase in cash and cash equivalents for year           22     5,677

12,188

 Cash and cash equivalents at start of year                     15,245

3,057

 Cash and cash equivalents at end of year                       20,922
15,245

The notes below form part of these accounts.

 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 in the
Annual Report. The nature of the Group's operations and its
principal activities are set out in the Business
Review.

Critical Accounting Assumptions and Judgements

 The preparation of financial statements in conformity with IFRS
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.

Unquoted Investments

Unquoted investments are valued at management's best estimate
of fair value in accordance with IFRS having regard to International
Private Equity and Venture Capital Valuation Guidelines as recommended
by the British Venture Capital Association. The principles which the
Group applies are set out in the Annual Report. The inputs into the
valuation methodologies adopted include observable historical data such
as earnings or cash flow as well as more subjective data such as
earnings forecasts or discount rates. As a result of this, the
determination of fair value requires significant management judgement.
At the year end, unquoted investments (including MAM) represent 37.4% of
consolidated shareholders' funds.
 Share-based payments
The Group measures the cost of equity-settled transactions with
employees by reference to the fair value of the equity instruments at
the date at which they are granted. Estimating fair value for
share-based payment transactions requires determination of the most
appropriate valuation model, which is dependent on the terms and
conditions of the grant. This estimate also requires determination of
the most appropriate inputs to the valuation model including the
expected life of the share option, volatility and dividend yield and
making assumptions about them. The assumptions and models used for
estimating fair value for share-based payment transactions are disclosed
in Note 25 in the Annual Report.

1 Significant Accounting Policies

The principal accounting policies adopted are set out as
follows:

 The accounts above comprise the audited results of the Company and its
subsidiaries for the year ended 30 September 2012, 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 operational existence for the
foreseeable future. Accordingly the Financial Statements have been
prepared on a going concern basis.

 Basis of Accounting
The accounts of the Group and the Company have been prepared in
accordance with International Financial Reporting Standards (IFRS). They
comprise standards and interpretations approved by the International
Accounting Standards Board and International Financial Reporting
Committee, interpretations approved by the International Accounting
Standards Committee that remain in effect, to the extent they have been
adopted by the European Union.
Where presentational guidance set out in the Statement of Recommended
Practice (SORP) regarding the Financial Statements of Investment Trust
Companies and Venture Capital Trusts issued by the Association of
Investment Companies in January 2009 is not inconsistent with the
requirements of IFRSs, the directors have sought to prepare the
financial statements on a basis compliant with the recommendations of
the SORP. All the Group's activities are continuing except as
indicated in note 15. It is considered that the relevant sections of
IFRS 5 in respect of discontinued operations do not apply.

Basis of Consolidation

 The Consolidated Accounts incorporate the accounts of the Company and
entities controlled by the Company (its subsidiaries) made up to 30
September each year. Control is achieved where the Company has the power
to govern the financial and operating policies of an investee entity so
as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during this year 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 except for the Javelin Capital Emerging Markets Alpha
Fund which has a 31 December year end.
Non-controlling interests in the net assets of consolidated subsidiaries
are identified separately from the Group's equity therein.
Non-controlling interests consist of the amount of those interests at
the date of the original business combination and the
non-controlling's interest share of changes in equity since the
date of combination. Losses applicable to the non-controlling's
interest in excess of the non-controlling's interest in the
subsidiary's equity are allocated against the interest of the Group
except to the extent that the non-controlling interest has a binding
obligation and is able to make an additional investment to cover losses.

Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used into line with those
used by the Group.

All intra-group transactions, balances, income and expenses are
eliminated on consolidation.

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:

Standards Issued But Not Yet Effective

 International Accounting Standards (IAS/IFRSs)
Effective 

date

IFRS 9 Financial Instruments: Classification & Measurement 1
January 2013

 IFRS 10 Consolidated Financial Statements                       1
January 

2013

 IFRS 12 Disclosure of Interests in Other Entities               1
January 

2013

 IFRS 13 Fair Value Measurement                                  1
January 

2013

 Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) 1
January 2014
Management anticipates that all of the relevant pronouncements will be
adopted in the next accounting period, subject to the results of the
detailed review as outlined below. Information on new standards,
amendments and interpretations that are expected to be relevant to the
Group's financial statements is provided below. Certain other new
standards and interpretations have been issued but are not expected to
have a material impact on the Group's financial statements.
The Directors do not anticipate that the adoption of these standards and
interpretations will have a material impact on the financial statements
in the period of initial application, except for IFRS 10. A detailed
review will be performed by the Board to quantify any potential impact
on the subsequent application of IFRS 10.
IFRS 10 supersedes IAS 27 'Consolidated and Separate Financial
Statements' (IAS 27) and SIC 12 'Consolidation - Special
Purpose Entities'. IFRS 10 revises the definition of control and
provides extensive new guidance on its application. These new
requirements have the potential to affect which of the Group's
investees are considered to be subsidiaries and therefore change the
scope of consolidation. On 31 October 2012 the IASB issued Investment
Entities (Amendments to IFRS 10, IFRS 12 and IAS 27). The amendment
gives entities that meet the criteria of an investment entity the
ability to measure particular subsidiaries at fair value through profit
or loss, rather than consolidate them. However, the requirements on
consolidation procedures, accounting for changes in non-controlling
interests and accounting for loss of control of a subsidiary remain the
same. Management's provisional analysis is that IFRS 10 and the
Investment Entities amendment, which can be early adopted, will change
the classification (as subsidiary or otherwise) of the JCEMA investee
entity as at 1 October 2012. This change will have no material effect on
the Group's overall results, but will provide a much simpler view
of its activities.

Presentation of Statement of Comprehensive Income

 In order to reflect better the activities of an investment trust
company and in accordance with guidance issued by the AIC, supplementary
information which analyses the Statement of Comprehensive Income between
items of a revenue and capital nature has been presented alongside the
Statement of Comprehensive Income. Up until 6 April 2012 in accordance
with the Company's status as a UK investment company under Section
833 of the Companies Act 2006, net capital returns may not be
distributed by way of dividend. Additionally the net revenue is the
measure that the directors believe to be appropriate in assessing the
Company's compliance with certain requirements set out in Section
1158 of the Corporation Tax Act 2010.
Foreign Currencies
The individual financial statements of each Group entity are presented
in the currency of the primary economic environment in which the entity
operates, i.e. its functional currency. For the purpose of the
consolidated financial statements, the results and financial position of
each entity are expressed in Pounds Sterling (Sterling) which is the
functional currency of the Company, and the presentational currency of
the Group. Transactions in currencies other than Sterling are recorded
at the rate of exchange prevailing on the dates of the transactions. At
each balance sheet date, monetary items and non-monetary assets and
liabilities that are fair valued and are denominated in foreign
currencies are re-translated at the rates prevailing on the balance
sheet date. Gains and losses arising on retranslation are included in
net profit or loss for the year in respect of those investments which
are classified as fair value through profit or loss. All foreign
exchange gains and losses, except those arising from the translation of
foreign subsidiaries, are recognised in the consolidated statement of
comprehensive income. In accordance with IAS 21, a foreign currency
translation reserve has been established in respect of the exchange
movements arising on consolidation since 30 September 2011. On disposal
of a foreign operation, the component of other comprehensive income
relating to that particular foreign operation is recognised in profit or
loss.
Segmental Reporting
A segment is a distinguishable component of the Group that is engaged in
business activities from which it may earn revenues and incur expenses
(including intra-group revenues and expenses), for which discrete
financial information is available and whose operating results are
regularly renewed 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. Divided expense relating to equity securities sold
short is recognised when the Shareholders' right to receive payment
is established. UK dividends are included net of tax credits. Overseas
dividends are included gross of any withholding tax. Where the Company
has elected to receive scrip dividends in the form of additional shares
rather than in cash, the amount of the cash dividend foregone is
recognised as income. Any excess in the value of the shares received
over the amount of the cash dividend is recognised in the capital
column.
The fixed return on a debt security is recognised on a time
apportionment basis so as to reflect the effective yield on the debt
security. Deposit interest and other interest receivable is included on
an accruals basis.

Special dividends are taken to the revenue or capital account
depending on their nature.

 Expenses
All expenses are accounted for on an accruals basis. In respect of the
analysis between revenue and capital items presented within the
Statement of Comprehensive Income, all expenses have been presented as
revenue items except as follows:

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

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

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

Pension Costs

Payments made to the Group's defined contribution group
personal pension plan are charged as an expense as they fall due on an
accruals basis.

Finance Costs

 75% of finance costs arising from the debenture stocks are allocated to
capital at a constant rate on the carrying amount of the debt; 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.
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.

 This category has two sub-categories: financial assets or financial
liabilities held for trading; and those designated at fair value through
profit or loss at inception.

(i) Financial assets and liabilities held for trading

A financial asset or financial liability is classified as held for
trading if it is acquired or incurred principally for the purpose of
selling or repurchasing in the near term or if on initial recognition is
part of a portfolio of identifiable financial investments that are
managed together and for which there is evidence of a recent actual
pattern of short-term profit taking. Derivatives are also categorised as
held for trading. The Group does not currently classify any derivatives
as hedges in a hedging relationship.

(ii) Financial assets and liabilities designated at fair value
through profit or loss at inception

Financial assets and financial liabilities designated at fair
value through profit or loss at inception are financial instruments that
are not classified as held for trading but are managed, and their
performance is evaluated on a fair value basis in accordance with the
Group's documented investment strategy.
 The Group's policy requires the Investment Manager and the Board
to evaluate the information about these financial assets and liabilities
on a fair value basis together with other related financial information.
These financial assets and liabilities are expected to be realised
within 12 months of the statement of financial position date.
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 is substantially the same earnings multiples,
discounted cash flow analysis and option pricing models. Where there is
a valuation technique commonly used by market participants to price the
instrument and that technique has been demonstrated to provide reliable
estimates of prices obtained in actual market transactions, that
technique is utilised.

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

Non-current assets (or disposal groups) held-for-sale

 Non-current assets (or disposal groups) are classified as assets held
for sale when their carrying amount is to be recovered principally
through a sale transaction and a sale is considered highly probable.
They are stated at the lower of carrying amount and fair value less
costs to sell if their carrying amount is to be recovered principally
through a sale transaction rather than through continuing use.
Investment in Subsidiaries
In its separate financial statements the Company recognises its
investment in subsidiaries at cost, less any impairment or if they are
held and managed as investments they are valued 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
liabilities are initially measured at fair value.

Derivative Financial Instruments

 Derivatives financial instruments are initially recognised on trade
date and are measured at fair value. After initial recognition,
derivative financial instruments are measured at fair value through
profit and loss. Derivatives are carried as financial assets when the
fair value is positive and as financial liabilities when the fair value
is negative.
The Group's activities expose it primarily to the financial risks
of changes in market prices, foreign currency exchange rates and
interest rates. Derivative transactions which the Company may enter into
comprise forward foreign exchange contracts (the purpose of which is to
manage currency risks arising from the Company's investing
activities), quoted options or Contracts For Difference (CFDs) on shares
held within the portfolio, or on indices appropriate to sections of the
portfolio (the purpose of which is to provide protection against falls
in the capital values of the holdings) and futures contracts on indices
appropriate to sections of the portfolio (one purpose for which may be
to provide protection against falls in the capital values of the
holdings). The Group does not use derivative financial instruments for
speculative purposes.

The use of financial derivatives is governed by the Group's
policies as approved by the Board, which has set written principles for
the use of financial derivatives.

 Changes in the fair value of derivative financial instruments that do
not qualify for hedge accounting are recognised in the Statement of
Comprehensive Income as they arise. If capital in nature, the associated
change in value is presented as a capital item in the Statement of
Comprehensive Income.
Short sales are those in which a borrowed security is sold in
anticipation of a decline in the market value of that security, or for
various arbitrage transactions. Short sales are classified as financial
liabilities at fair value through profit and loss.

Changes in the fair value of derivative financial instruments are
recognised as they arise in the Statement of Comprehensive Income.

Trade Receivables

Trade receivables do not carry any interest and are stated at
carrying value which equates to their fair value as reduced by
appropriate allowances for estimated irrecoverable amounts.

Cash and Cash Equivalents

Cash and cash equivalents comprise cash deposited with banks, cash
balances at brokers and short-term highly liquid investments with
maturities of three months or less from the date of acquisition. Prime
broker cash balances are held with Goldman Sachs International and
Morgan Stanley & Co International. Short and long cash positions
held with these brokers can be netted off as per the prime broker
agreements.
 

Collateral Cash held at brokers

Collateral cash consists of margin cash held as collateral for open
derivative positions with the prime brokers, Goldman Sachs International
and Morgan Stanley & Co International. Short and long cash positions
held with these brokers can be netted off as per the prime broker
agreements.

Financial Liabilities and Equity

 Financial liabilities and equity instruments are classified according
to the substance of the contractual arrangements entered into. An equity
instrument is any contract that evidences a residual interest in the
assets of the Group after deducting all of its liabilities.
Financial liabilities are either classified as financial liabilities at
fair value through profit or loss and are recognised initially at fair
value or "other financial liabilities" (including borrowings
and trade and other payables that are classified and subsequently
measured at amortised cost). Financial liabilities are subsequently
measured at fair value and changes in fair value are recognised in the
Statement of Comprehensive Income.
Non current liabilities
The debentures are initially recognised at cost, being the fair value of
the consideration received less issue costs where applicable. After
initial recognition, all interest-bearing loans and borrowings are
subsequently measured at amortised cost using the effective interest
method, with the interest expense recognised on an effective yield
basis. The effective interest method is a method of calculating the
amortised cost of a financial liability and of allocating interest
expense over the relevant period. The effective interest rate is the
rate that exactly discounts estimated future payments over the expected
life of the financial liabilities, or, where appropriate, a shorter
period, 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. The translation reserve is used
to record exchange differences arising from the translation of the
financial statements for the Group's foreign subsidiary.
Share options reserve represents the expense of share based payments.
The fair value of share options is measured at grant date and spread
over the vesting period. The deemed expense is transferred to the share
options reserve.

Share premium account represents the excess over nominal value of
consideration received for equity shares net of expenses of the share
issue.

Own Shares

 Own shares held under option are accounted for in accordance with IFRS
2: Share-based Payments. This requires that the consideration paid for
own shares held be presented as a deduction from shareholders'
funds, and not recognised as an asset.

Dividends payable to shareholders

Dividends to shareholders are accounted for in the period in which
they are paid or approved in general meetings. Dividends payable to
shareholders are recognised in the Statement of Changes in Equity when
they are paid, or have been approved by shareholders in the case of a
final dividend and become a liability of the Company.

 2. Business segments 

For management purposes, the Group is currently organised into the
following two principal activities:

 Investing activities 

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

 The Company operates as an investment trust company and its portfolio
contains investments in companies listed in a number of countries.
Geographical information about the portfolio is provided in the Annual
Report and exposure to different currencies is disclosed in note 26.

Investment management services

 To complement this investment objective and create income and capital
for the Group, Javelin Capital LLP has been launched to market a range
of funds to third party investors and provide investment management and
advisory services.
                                          Group
Group
                                          2012
2011
                                       Investment
Investment
                                       management
management
                                             and
and
                             Investing   advisory
Investing    advisory
                            activities    services  Eliminations
Total  activities    services  Eliminations   Total
                                  [pounds sterling]000        [pounds
sterling]000          [pounds sterling]000     [pounds sterling]000
[pounds sterling]000        [pounds sterling]000          [pounds
sterling]000    [pounds sterling]000
External income from investment management services
18                     18                   1,318       (1,318)
Intra-group income from investment management services
1,241       (1,241)
Other operating and investment income                5,142         3
5,145       5,537       3                    5,540
Intra-group finance income
(25)                      25
                                 5,142       1,262        (1,241)
5,163       5,512       1,321       (1,293)   5,540
Performance shares and options fair value charge          (31)
(31)               (116)                              (116)
Other administrative costs      (1,194)     (1,716)
(2,910)     (1,304)     (2,979)               (4,283)
Intra-group investment management services expenses
(1,181)        (60)        1,241               (1,318)
1,318
Other operating expenses          (78)       (200)
(278)
      13        (442)                  (429)
                                (2,484)     (1,976)        1,241
(3,219)     (2,725)     (3,421)        1,318  (4,828)
Operating profit/(loss)          2,658        (714)
1,944
    2,787      (2,100)         25      712
Finance costs                   (2,820)
(2,820)     (2,886)                           (2,886)
Intra-group finance costs
25           (25)
Gains on fair value through profit and loss                  7,832
7,832       2,233                             2,233
Foreign exchange loss on disposal of subsidiary           (840)
(840)
Profit/(loss) before tax         6,832        (714)
6,116       2,134      (2,075)                   59
Total assets                   144,094       3,274
147,368     152,949       3,789               156,738
Total liabilities              (34,911)       (223)
(35,134)    (44,131)       (725)              (44,856)
Intra-group assets/ (liabilities)                    8,426        (426)
(8,000)               7,419        (419)      (7,000)
Net assets                     117,609       2,625        (8,000)
112,234     116,237       2,645       (7,000) 111,882
3. Income
                                     Group    Group   Company   Company
                                      2012     2011      2012      2011
                                      [pounds sterling]000     [pounds
sterling]000      [pounds sterling]000      [pounds sterling]000
Income from investments
Franked investment income**           4,113   4,153      4,113     4,153
UK unfranked investment income         135     138        135       138
Overseas dividends                     835   1,105        867     1,053
Fixed interest and convertible bonds    17      38         17        38
                                     5,100   5,434      5,132     5,382
Other income
Deposit interest                        32      68         21         6
Other interest                                  19                   19
Sundry income                           31      19         13        (6)
                                        63     106         34        19
Total income                         5,163   5,540      5,166     5,401
Total income comprises:
Dividends                            5,083   5,396      5,115     5,344
Interest                                49     125         38        63
Other income                            31      19         13        (6)
                                     5,163   5,540      5,166     5,401
Income from investments
Listed UK                            2,033   2,377      2,033     2,377
Listed overseas                        852   1,143        884     1,091
Unlisted                             2,215   1,914      2,215     1,914
                                     5,100   5,434      5,132     5,382
** Includes MAM ordinary dividend income of [pounds sterling]2,215,000
(2011: [pounds sterling]1,914,000).
4. Management Fees
                              Company               Company
                                 2012                  2011
                      Revenue Capital       Revenue Capital
                       return  return Total  return  return Total
                         [pounds sterling]000    [pounds sterling]000
[pounds sterling]000    [pounds sterling]000    [pounds sterling]000
[pounds sterling]000
Investment management     137     412   549     173     519   692
Administration            245           245     245           245
                          382     412   794     418     519   937
A summary of the terms of the Management Agreement for the Company with
Javelin Capital LLP is given in the Business Review. At 30 September
2012, an amount of [pounds sterling]52,000 was outstanding for payment
of investment management fees when due (2011: [pounds sterling]49,000)
and outstanding administration fees of [pounds sterling]22,000 (2011:
[pounds sterling]22,000).
The Manager is also entitled to a performance fee from the Company in
accordance with the provisions of the Management Agreement, the
calculation of which is also described in the Business Review. No
performance fee is due in respect of the year ended 30 September 2012
(2011: [pounds sterling]nil).
5. Administrative Expenses
                                        Group   Group    Company
Company
                                         2012    2011       2012
2011
                                         [pounds sterling]000    [pounds
sterling]000       [pounds sterling]000       [pounds sterling]000
Staff costs - note 7                      720   1,385         31
122
Other staff costs and directors' fees     304     354        233
239
Advisers' costs                           569     715        322
379
Restructuring costs                               265
139
Information costs                         454     738         44
52
Establishment costs                       121     119
Operating lease rentals - premises        124     123
Depreciation on tangible assets           166     208         45
47
Auditors' remuneration                     73     110         55
55
  (see below)
Pre start-up costs                                195
Other expenses                            688     616         75
17
                                        3,219   4,828        805
1,050
A charge of [pounds sterling]1,442,000 (2011: [pounds
sterling]2,633,000) to capital and an equivalent credit to revenue has
been made in the Group and a charge of [pounds sterling]237,000 (2011:
[pounds sterling]320,000) in the Company has been made to recognise the
accounting policy of charging 75% of direct investment management
expenses to capital.
Total fees charged by the Auditor for the year, all of which were
charged to revenue, comprised:
                              Group    Group     Company     Company
                               2012     2011        2012        2011
                               [pounds sterling]000     [pounds
sterling]000        [pounds sterling]000        [pounds sterling]000
Audit services
  - statutory audit              66      103          48          48
Other non-audit services          7        7           7           7
                                 73      110          55          55
All fees incurred during the year were to Ernst & Young LLP (2011:
All Ernst & Young LLP except for [pounds sterling]18,200 to
PricewaterhouseCoopers LLP in respect of the QIF).
6. Directors' Emoluments
                      Company             Company
                         2012                2011
                         [pounds sterling]000                [pounds
sterling]000
Fees                      209                 207
                          209                 207

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

7. Staff Costs including Executive Directors

                                       Group    Group   Company
Company
                                       2012     2011      2012      2011
                                       [pounds sterling]000     [pounds
sterling]000      [pounds sterling]000      [pounds sterling]000
Salaries and other payments             591    1,089
Social security costs                    69      129                   6
Pension contributions                    29       51
                                                                        

Share based remuneration - note 25 31 116 31 116

                                         720    1,385        31
122
                                      Group    Group   Company   Company
                                       2012     2011      2012      2011
                                     Number   Number    Number    Number
Average number of employees:
Management and office staff               8       11
8. Finance Costs
                                                                   Group
Group
                                                                    2012
2011
                                                         Revenue Capital
Revenue Capital
                                                          return  return
Total  return  return Total
                                                            [pounds
sterling]000    [pounds sterling]000  [pounds sterling]000    [pounds
sterling]000    [pounds sterling]000  [pounds sterling]000
Interest on 9.5% debenture stock 2020                        321     962

1,283 321 962 1,283

 Interest on 7.25% debenture stock 2025                       375
1,125 

1,500 375 1,125 1,500

 Amortisation of expenses associated with debenture issue       5
17    22       5      15    20
Other interest payable                                         4      11
15      20      63    83
                                                             705   2,115
2,820     721   2,165 2,886
                                                                 Company
Company
                                                                    2012
2011
                                                         Revenue Capital
Revenue Capital
                                                          return  return
Total  return  return Total
                                                            [pounds
sterling]000    [pounds sterling]000  [pounds sterling]000    [pounds
sterling]000    [pounds sterling]000  [pounds sterling]000
Interest on 9.5% debenture stock 2020                        321     962

1,283 321 962 1,283

 Interest on 7.25% debenture stock 2025                       375
1,125 

1,500 375 1,125 1,500

 Amortisation of expenses associated with debenture issue       5
17    22       5      15    20
                                                             701   2,104
2,805     701   2,102 2,803

Further details of the debenture stocks in issue are provided in
note 18.

 9. Taxation
Analysis of tax charge
                                Group    Group    Company  Company
                                 2012     2011       2012     2011
                                 [pounds sterling]000     [pounds
sterling]000       [pounds sterling]000     [pounds sterling]000
Tax on overseas dividends         132      200        113      121
Reconciliation of tax charge:
The current taxation for the year is lower (2011: higher) than the
standard rate of corporation tax in the UK 24% (2011: 27%). The
differences are explained below:
                                  Group     Group    Company    Company
                                   2012      2011       2012       2011
                                   [pounds sterling]000      [pounds
sterling]000       [pounds sterling]000       [pounds sterling]000
Net return before taxation        6,116        59      7,020      2,158
Taxation at UK Corporation Tax
  rate of 25% (2011: 27%)         1,529        16      1,755        583
                                 Group      Group   Company    Company
                                  2012       2011      2012       2011
                                  [pounds sterling]000       [pounds
sterling]000      [pounds sterling]000       [pounds sterling]000
Effects of:
  - UK dividends which are
        not taxable             (1,054)   (1,158)    (1,054)    (1,158)
  - foreign dividends which are
        not taxable               (213)     (278)      (213)      (278)
  -gains on investments
       which are not taxable    (1,748)     (603)    (1,564)      (417)
  - expenses not deductible for
        tax purposes                28        53         33         57
  - excess expenses for
        current year             1,458     1,970      1,043      1,213
  - overseas taxation which is
        not recoverable            132       200        113        121
Actual current tax charge          132       200        113        121
Group
After claiming relief against accrued income taxable on receipt, the
Group has unrelieved excess expenses of [pounds sterling]67,564,000
(2011: [pounds sterling]61,728,000). 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 [pounds sterling]60,681,000
(2011: [pounds sterling]56,597,000). 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:

                                                        Group and
Group and
                                                         Company
Company
                                                            2012
2011
                                                            [pounds
sterling]000        [pounds sterling]000
2010 Final dividend of 6.30p paid on 26 January 2011                   

3,277

 2011 Interim dividend of 4.20p paid on 29 June 2011                    

2,186

2011 Final dividend of 6.30p paid on 25 January 2012       3,279
 2012 Interim dividend of 4.20p paid on 27 June 2012        2,186
                                                           5,465
5,463
                                                            2012
2011
                                                            [pounds
sterling]000     [pounds sterling]000
Proposed final dividend for the year ended
  30 September 2012 of 6.30p (2011: final dividend
  of 6.30p) per ordinary share                             3,279
3,279
                                                           3,279
3,279

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

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

                                                             2012
2011
                                                            [pounds
sterling]000    [pounds sterling]000
Interim dividend for the year ended 30 September 2012
  of 4.20p (2011: 4.20p) per ordinary share                2,186   2,186
Proposed final dividend for the year ended 30 September
  2012 of 6.30p (2011: 6.30p) per ordinary share           3,279   3,279
                                                           5,465   5,465

11. Return/(Loss) per Ordinary Share

 Basic return/(loss) per ordinary share is based on 52,044,613 (2011:
52,029,833) ordinary shares, being the weighted average number of shares
in issue having adjusted for the shares held by the Employee Incentive
Trust referred to in note 20. Basic returns per ordinary share are based
on the net return after taxation attributable to equity shareholders.
There is no dilution to the basic return/(loss) per ordinary share shown
for the years ended 30 September 2012 and 2011 since the share options
referred to in note 20 would, if exercised, be satisfied by the shares
already held by the Employee Incentive Trust.
                                                     Group    Group
                                                      2012     2011
                                                      [pounds
sterling]000     [pounds sterling]000
Basic and diluted revenue returns are based on net
  revenue after taxation of:                         2,552    2,427
Basic and diluted capital returns are based on net
  capital return/(loss) of:                          3,445   (2,568)
Basic and diluted total returns are based on
return/(loss) of:                                    5,997     (141)
                                                     Company   Company
                                                        2012      2011
                                                        [pounds
sterling]000      [pounds sterling]000
Basic and diluted revenue returns are based on net
  revenue after taxation of:                           3,402     3,431
Basic and diluted capital returns are based on net
  capital return/(loss) of:                            3,505    (1,394)
Basic and diluted total returns are based on
 return of:                                            6,907     2,037
12. Property and Equipment
                                       Group            Group
                                   Leasehold           Office
Group
                                Improvements        Equipment
Total
                                        [pounds sterling]000
[pounds sterling]000        [pounds sterling]000
Cost:
At 1 October 2011                        171              581
752
Additions                                                   3
Disposals                                                  (1)
(1)
At 30 September 2012                     171              583
754
Depreciation:
At 1 October 2011                         40              302
342
Charge for year                           17              149
166
Disposals                                                  (1)
(1)
At 30 September 2012                      57              450
507
Net book value:
At 30 September 2012                     114              133
247
At 30 September 2011                     131              279
410
                                     Company        Company
                                   Leasehold         Office      Company
                                Improvements      Equipment        Total
                                        [pounds sterling]000
[pounds sterling]000         [pounds sterling]000
Cost:
At 1 October 2011                        171            168          339
Additions
Disposals
At 30 September 2012                     171            168          339
Depreciation:
At 1 October 2011                         40            121          161
Charge for year                           17             28           45
Disposals
At 30 September 2012                      57            149          206
Net book value:
At 30 September 2012                     114             19          133
At 30 September 2011                     131             47          178

13. Investments at Fair Value Through Profit or Loss

                                                     Group
Group
                                                     2012
2011
                                        Listed  Unlisted     Total
Listed  Unlisted       Total
                                          [pounds sterling]000
[pounds sterling]000      [pounds sterling]000        [pounds
sterling]000      [pounds sterling]000        [pounds sterling]000
                                                                                                     

Opening cost at beginning of year 69,262 12,862 82,124 110,166
14,034 124,200

Gains /(losses ) at beginning of year (2,195) 29,582 27,387 369
20,854 21,223

Opening fair value at beginning of
 year                                    67,067    42,444   109,511
110,535    34,888     145,423
Transfer on consolidation of QIF
(20,000)              (20,000)
Purchases at cost                      110,270             110,270
1,305,385             1,305,385
Sales - proceeds                      (120,422)     (574) (120,996)

(1,322,570) (512) (1,323,082)

 Gains/(losses) on sales                  1,500    (1,957)
(457)     (3,791)     (660)     (4,451)
 Increase/(decrease) in investment
holding gains                            7,904     2,022     9,926
(2,564)    8,728       6,164
Foreign exchange (losses)/gains on retranslation of foreign investment
(37)                (37)         72                    72
Closing fair value at end of year       66,282    41,935    108,217
67,067    42,444     109,511
Closing cost at end of year             60,573    10,331    70,904
69,262    12,862      82,124
Gains/(losses) at end of year            5,709    31,604    37,313
(2,195)   29,582      27,387
Closing fair value at end of year       66,282    41,935   108,217
67,067    42,444     109,511

The comparative figures for the Group investments on the Balance
Sheet are disclosed as investments held at fair

 value of [pounds sterling]112,822,000 less financial liabilities held
at fair value of [pounds sterling] 3,311,000.
                                                        Company
                                                         2012
                                                              Related
                                                                  and
                                                           subsidiary
                                         Listed  Unlisted   companies
Total
                                           [pounds sterling]000
[pounds sterling]000        [pounds sterling]000     [pounds
sterling]000
                                                                               

Opening cost at beginning of year 86,830 12,814 8,010 107,654

Losses/(gains) at beginning of year (2,098) 29,630 (839) 26,693

 Opening fair value at beginning of year  84,732    42,444       7,171
134,347
Purchases at cost                         32,901                1,000
33,901
Sales - proceeds                        (43,196)     (574)
(43,770)
Losses on sales                            (973)   (1,957)
(2,930)
                                                                               

Increase in investment holding gains 6,962 2,022 21 9,005

 Closing fair value at end of year        80,426    41,935       8,192
130,553
Closing cost at end of year              75,562    10,283       9,010
94,855
Gains/(losses) at end of year             4,864    31,652        (818)
35,698
Closing fair value at end of year        80,426    41,935       8,192
130,553
                                                    Company
                                                     2011
                                                          Related
                                                              and
                                                       subsidiary
                                     Listed  Unlisted   companies
Total
                                       [pounds sterling]000      [pounds
sterling]000        [pounds sterling]000     [pounds sterling]000
Opening cost at beginning of year   110,166    13,986       5,510
129,662
Gains/(losses) at beginning of year     369    20,902        (839)
20,432
Opening fair value at beginning of
year                                110,535    34,888       4,671
150,094
Purchases at cost                    15,094                 2,500
17,594
Sales - proceeds                    (34,376)     (512)
(34,888)
Losses on sales                      (4,054)     (660)
(4,714)
(Decrease)/increase in investment holding gains
(2,467)    8,728                6,261
Closing fair value at end of year    84,732    42,444       7,171
134,347
Closing cost at end of year          86,830    12,814       8,010
107,654
(Losses)/gains at end of year        (2,098)   29,630        (839)
26,693
Closing fair value at end of year    84,732    42,444       7,171
134,347 

All operating subsidiaries are held at cost, less any impairment,
unless considered to be an investment fund and then held at fair
value.

 Unlisted investments include an amount of [pounds sterling]2,935,000 in
18 various companies (2011: [pounds sterling]3,186,000 in 20 companies),
[pounds sterling]39,000,000 (2011: 39,000,000) for our investment in MAM
and [pounds sterling]nil (2011: [pounds sterling]258,000) of loan or
convertible notes that pay a fixed rate of interest.  The valuation of
investments includes 6 unlisted investments of over [pounds
sterling]100,000 (including MAM).
During the year the Company incurred transaction costs amounting to
[pounds sterling]113,000 (2011: [pounds sterling]151,000) of which
[pounds sterling]59,000 (2011: [pounds sterling]74,000) related to the
purchases of investments and [pounds sterling]54,000 (2011: [pounds
sterling]77,000) related to the sales of investments. These amounts are
included in gains/(losses) 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:

                                                                                                                                                                          Group   Group  Company  Company
                                                                                                                                                                          2012    2011     2012     2011
                                                                                                                                                                          [pounds sterling]000    [pounds sterling]000
[pounds sterling]000     [pounds sterling]000
                                                                                                                                                  

Net losses on sales of equity investments (457) (4,451) (2,930)
(4,714)

 Net loss on sale Javelin UCITS investment classified as an asset held
for sale (page 68 in the Annual Report)                   (10)

Increase in holding gains on equity investments 9,926 6,164 9,005
6,261

 Decrease in value of Javelin UCITS investment classified as an asset
held for sale (page 68 in the Annual Report)             (716)
Proceeds on sale of derivative contracts (note 14)
(911)    483      183
Unrealised gains on derivative contracts (note 14)        37
Net return on investments                       7,832   2,233    6,258
1,547
 

Fair value hierarchy disclosures

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

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

 An active market is a market in which transactions for the asset or
liability occur with sufficient frequency and volume on an ongoing basis
such that quoted prices reflect prices at which an orderly transaction
would take place between market participants at the measurement date.
Quoted prices provided by external pricing services, brokers and vendors
are included in Level 1, if they reflect actual and regularly occurring
market transactions on an arms length basis.
-- Level 2 - Inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly (that
is, as prices) or indirectly (that is, derived from prices).

Level 2 inputs include the following:

-- quoted prices for similar (ie not identical) assets in active
markets.
 -- quoted prices for identical or similar assets or liabilities in
markets that are not active. Characteristics of an inactive market
include a significant decline in the volume and level of trading
activity, the available prices vary significantly over time or among
market participants or the prices are not current. 

-- inputs other than quoted prices that are observable for the asset
(for example, interest rates and yield curves observable at commonly
quoted intervals).

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

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

 The level in the fair value hierarchy within which the fair value
measurement is categorised in its entirety is determined on the basis of
the lowest level input that is significant to the fair value measurement
in its entirety. For this purpose, the significance of an input is
assessed against the fair value measurement 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 in its entirety 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 investments actively traded in organised financial markets, fair
value is generally determined by reference to Stock Exchange quoted
market bid prices at the close of business on the balance sheet date,
without adjustment for transaction costs necessary to realise the asset.

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

                                    Group                       Group
                                   2012                        2011
                         Level Level  Level   Total  Level Level  Level
Total
                             1     2      3              1     2      3
Financial assets          [pounds sterling]000  [pounds sterling]000
[pounds sterling]000    [pounds sterling]000   [pounds sterling]000
[pounds sterling]000   [pounds sterling]000    [pounds sterling]000
Financial assets designated at fair value through profit or loss
Equities and managed funds
Listed equity securities              66,089               66,089 70,009
70,009
Unlisted equity securities                           41,935  41,935
42,182  42,182
Unlisted preference shares
4       4
Listed exchange traded funds                            193
193          369            369
Interest bearing securities
Unlisted convertible bonds
258     258
Derivatives financial assets
Contracts for difference
136            136
                        66,089   193 41,935 108,217 70,009   505 42,444
112,958
Financial liabilities
Financial liabilities designated at fair value through profit or loss
Listed equities                                      2,093
2.093
Listed exchange traded funds
1,218                1,218
Derivatives
Contracts for difference
96             96
Index futures                                            3
3
                                                     3,314    96
3,410
                                 Company                     Company
                                   2012                        2011
                         Level Level  Level   Total  Level Level  Level
Total
                             1     2      3              1     2      3
Financial assets          [pounds sterling]000  [pounds sterling]000
[pounds sterling]000    [pounds sterling]000   [pounds sterling]000
[pounds sterling]000   [pounds sterling]000    [pounds sterling]000
Financial assets designated at fair value through profit or loss
Equities and managed funds
Listed equity securities              80,233               80,233 84,732
84,732
Unlisted equity securities                           50,127  50,127
49,353  49,353
Unlisted preference shares
4       4
Listed exchange traded funds                            193
193
Interest bearing securities
Unlisted convertible bonds
258     258
                        80,233   193 50,127 130,553 84,732       49,615
134,347
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.
Investments classified within Level 3 have significant unobservable
inputs. Level 3 instruments include private equity and corporate debt
securities. As observable prices are not available for these securities,
the Group has used valuation techniques to derive the fair value. In
respect of unquoted instruments, or where the market for a financial
instrument is not active, fair value is established by using recognised
valuation methodologies, in accordance with International Private Equity
and Venture Capital ("IPEVC") Valuation Guidelines. New
investments are initially carried at cost, for a limited period, being
the price of the most recent investment in the investee. This is in
accordance with IPEVC Guidelines as the cost of recent investments will
generally provide a good indication of fair value. Fair value is the
amount for which an asset could be exchanged between knowledgeable,
willing parties in an arm's length transaction.
The following table presents the movement in level 3 instruments for the
year ended 30 September 2012:
                                               Group
                                                2012
                                  Equity  Convertible  Convertible
Preference
                      Total  investments        bonds   loan notes
shares
                       [pounds sterling]000         [pounds sterling]000
[pounds sterling]000         [pounds sterling]000        [pounds
sterling]000
Opening balance      42,444       42,182          258
4
Purchases
Transfers from Level 1
Sales - proceeds       (574)        (324)        (243)
(7)
Total gains/(losses) for the year included in the Statement of
Comprehensive Income     65           77          (15)
3
                     41,935       41,935
                                                              Group
                                                               2011
Opening balance                                   34,888  34,325  260
298   5
Purchases
Transfers from Level 1
Sales - proceeds                                    (512)   (217)
(295)
Total gains/(losses) for the year included in the Statement of
Comprehensive
Income                                             8,068   8,074   (2)
(3) (1)
                                                  42,444  42,182  258
4
                                               Company
                                                2012
                                   Equity  Convertible  Convertible
Preference
                       Total  investments        bonds   loan notes
shares
                        [pounds sterling]000         [pounds
sterling]000         [pounds sterling]000         [pounds sterling]000
[pounds sterling]000
Opening balance       49,615       49,353          258
4
Purchases              1,000        1,000
Transfers from Level 1
Sales - proceeds        (574)        (324)        (243)
(7)
Total gains/(losses) for the year included in the Statement of
Comprehensive Income      86           98          (15)
3
                      50,127       50,127
                                                             Company
                                                               2011
Opening balance                                   39,559  38,996  260
298   5
Purchases                                          2,500   2,500
Transfers from Level 1
Sales - proceeds                                    (512)   (217)
(295)
Total gains/(losses) for the year included in the Statement of
Comprehensive
Income                                             8,068   8,074   (2)
(3) (1)
                                                  49,615  49,353  258
4
Substantial Share Interests 

The Group has a number of investee company holdings where its
investment is greater than 3% of any class of capital in those
companies. Those that are considered material (excluding MAM and Javelin
Funds which are disclosed separately below) in the context of these
accounts are shown below:

               Fair
             Value       % of
              [pounds sterling]000 Class Held
AOI Medical    152       4.76

The Group does not exercise significant influence over the operating
and financial policies of the above companies which are therefore not
considered to be associated companies.

Javelin Capital Global Equity Strategies Fund (JCGES)

 The Company invested [pounds sterling]20m of seed capital into the
JCGES fund on 20 September 2010. During the year, after a review by
Javelin Capital, it was agreed to close the fund. As such on 21
September 2012 the Company, at that time the only remaining shareholder,
redeemed its participating redeemable shares for [pounds sterling]17.7m
and a loss of [pounds sterling]2.3m (excluding a gain of [pounds
sterling]0.8m received from the FX hedging programme undertaken on the
investment). The Company has a residual interest in the JCGEF as the
only holder of subscriber shares in the umbrella company, Javelin
Capital Strategies plc, and will receive any surplus assets on
liquidation. Due to its controlling interest in the JCGES fund, the
holding was fully consolidated into the group accounts during the year
in accordance with IFRS. The results for the JCGES fund for the year are
shown in note 15 of the Annual Report.

Javelin Capital Emerging Markets Alpha Fund (JCEMA)

 The Company invested [pounds sterling]15m of seed capital into the
JCEMA fund on 16 January 2012 and as at 30 September 2012 has an 82.15%
controlling interest. On 24 February 2012 a small holding was
transferred into a different share class in the fund resulting in a loss
of [pounds sterling]10,000. This holding is consolidated into the group
accounts in accordance with IFRS 5 under the classification of Assets
held for sale. Further information is in the Annual Report.  The results
for the JCEMA fund for the year are shown in note 15 of the Annual
Report.

On 2 November 2012, the Company subscribed to an additional 194,571
Class D GBP shares in the Javelin Capital Emerging Markets Alpha Fund at
a cost of [pounds sterling]18.15m.

Majedie Asset Management (MAM)

MAM is a UK based asset management firm, which provides investment
management and advisory services relating to UK equities.

 The carrying value of the Company's investment in MAM is included
in the Consolidated Balance Sheet as part of investments at fair value
through profit or loss:
                                                  2012         2011
                                                  [pounds sterling]000
[pounds sterling]000
Deemed cost of investment                        1,197        1,207
Holding gains                                   37,803       37,793
Fair value at 30 September                      39,000       39,000
The carrying value of MAM in the 30 September 2012 Consolidated
Financial Statements is its fair value as assessed at 30 September 2012.
The above valuation exercise was carried out by the Board in accordance
with the Company's accounting policy for the valuation of unlisted
investments. The approach adopted involved the consideration of earnings
for the 2012 and the 2013 financial years, the inclusion of estimated
performance fee income on a discounted basis, the application of a
relevant market-based multiple to earnings and an overall marketability
discount.
The results of MAM for the year ended 30 September 2012 show a net
profit after taxation of [pounds sterling]172,296,000 (2011: [pounds
sterling]10,630,000) and shareholders' funds of [pounds sterling]
30,041,000 (2011: [pounds sterling]25,134,000). As the Company does not
exercise significant influence over the operating and financial policies
of MAM it is not considered to be an associate, and their results are
not consolidated in the Group's results but are incorporated into
the directors' valuation of the fair value of MAM as detailed
above.
In accordance with the revised shareholders' agreement, the
founding shareholders (including the Company) will sell a certain number
of shares to the MAM Employee Benefit Trust, usually annually and at the
prescribed price (as calculated in accordance with the revised
shareholders' agreement). During the year on 27 October and 16
December 2011 the Company sold 590 and 431 shares to the MAM Employee
Benefit Trust for an overall consideration of [pounds sterling]324,000
and a gain of [pounds sterling]314,000. Following these transactions the
Company holds 127,550 ordinary 0.1p shares representing a 29.8%
shareholding.

Assets classified as held-for-sale

 As noted in the Annual Report and above the Company has made
investments into JCEMA which result in a controlling interest. At the
time of the initial investment (and which currently remains the case),
the fund is thought more attractive to investors and along with active
marketing it was considered that the Company's interest could
become non-controlling within 12 months. The fund therefore could be
consolidated in accordance with IFRS 5, which was not available to the
JCGES fund, under a new classification called asset classified as held
for sale. Within that timeframe if the Company's interest becomes
non-controlling it will be reclassified to investments held at fair
value through profit or loss, however should this not be the case the
investment will be accounted for in accordance with IFRS 10 and the
investment entities exemptions, as appropriate.
14.  Derivative financial instruments
Introduction
Typically, derivative contracts serve as components of the Group's
investment strategy and are utilised primarily to structure and hedge
investments, to enhance performance and reduce risk to the Group (the
Group does not designate any derivative as a hedging instrument for
hedge accounting purposes). The derivative contracts that the Group
typically holds in the portfolio include:

-- Futures and forward contracts relating to foreign currencies,
market indices and bonds

-- Options relating to foreign currencies, market indices, equities
and interest rates

-- Swaps relating to equity indices and Contracts for Difference
(CFDs)

-- Short selling equities

As explained above, the Group uses derivative financial instruments
to economically hedge its risks associated primarily with interest rate
and foreign currency fluctuations. Derivative financial instruments may
also be used for trading purposes where the Investment Manager believes
this would be more effective than investing directly in the underlying
financial instruments.

 The notional amount of certain types of financial instruments provides
a basis for comparison with instruments recognised on the balance sheet
but does not necessarily indicate the amount of future cash flows
involved or the current fair value of the derivatives.
The derivative instruments become favourable (assets) or unfavourable
(liabilities) as a result of fluctuations in market interest rates,
indices, security prices or foreign exchange rates relative to the
derivatives terms. The aggregate contractual or notional amount of
derivative financial instruments held, the extent to which instruments
are favourable or unfavourable and thus the aggregate fair values of
derivative financial assets and liabilities can fluctuate significantly
from time to time.
Derivatives often reflect, at their inception, only a mutual exchange of
promises with little or no transfer of tangible consideration. However,
these instruments frequently involve a high degree of leverage and are
very volatile. A relatively small movement in the underlying of a
derivative contract may have a significant impact on the profit or loss
of the Group.

OTC derivatives may expose the Group to the risks associated with
the absence of an exchange market on which to close out an open
position.

The Group's investment objective sets limits on investments
in derivatives with high risk profile. The Investment Manager is
instructed to closely monitor the Group's exposure under derivative
contracts as part of the overall management of the Group's market
risk (see also note 26).
 As mentioned in note 13, included within the composition of investment
return for the year is a realised derivatives gain of [pounds
sterling]0.8m in relation to the FX hedging programme undertaken on the
Javelin Capital Global Equity Strategies Fund (JCGES) - a US denominated
Irish listed fund.
Additionally, during the year, the Company purchased some FTSE 100 put
options for portfolio protection purposes. These were held until expiry
and expired out of the money resulting in a loss of [pounds
sterling]0.6m. Details of the Group and Company's unsettled
derivatives are below:
                             Group 2012                 Group 2011
                         Assets Liabilities  Net Assets Liabilities  Net
                           [pounds sterling]000        [pounds
sterling]000 [pounds sterling]000   [pounds sterling]000        [pounds
sterling]000 [pounds sterling]000
Derivatives instruments
Contracts for difference                            136        (96)   40
Index Futures                                                   (3)
(3)
                                                    136        (99)   37

15. Investment in Subsidiaries

a) Subsidiary undertakings at 30 September 2012

                                                    Company
                  Country of
Profit after
                Registration Number and          Capital
tax for the
               Incorporation   class of   Group Reserves
year ended
                                 shares               at
Company and    and Operation    held by Holding 30.09.12
30.09.12 business                          group
                                                    [pounds sterling]000
[pounds sterling]000
Majedie Portfolio Management Limited
- Majedie share plan manager, authorised                    1,000,000
and regulated                  Ordinary by the FSA                UK
shares    100%      162
Majedie Unit Trust
 - Unauthorised unit trust to receive Javelin
10,000 Capital  income                   UK      Units    100%  (3,458)
(1,852)
Javelin Capital LLP
 - Asset Management, authorised and                      75% regulated
by the FSA                   UK   interest     75%    2,625
(714)
Javelin Capital Services Limited
                                    100 - Administration
Ordinary Services                  UK     shares     75%
Javelin Capital Fund Management                            2 Limited#
                               Ordinary - Not trading        Ireland
shares     75%
Javelin Capital Strategies Plc ^ (subfund:  Javelin Capital Global
Equity                                2 Strategies
Subscriber                                                 (1,391) Fund)
Ireland     shares    100%       21
- Qualifying Investment Fund (QIF), supervised by the Central Bank of
Ireland - Not trading
Serviced Platform SICAV **
(subfund: Javelin                         140,000 Capital Emerging
Class D Markets Alpha Fund)                    LUX GBP shares   82.2%
-Undertakings for Collective Investment in                     5,000
Transferable Securities                      Class D (UCITS), supervised
by                USD shares the Commission de
10,407 Surveillance du Secteur                      Class E Financier
(CSSF)                       USD shares

Javelin Capital Services Limited (JCS) and Javelin Capital Fund
Management Limited (JCFM) are all wholly owned subsidiaries of Javelin
Capital LLP.

#JCFM ceased trading on 19 June 2012 and its regulatory capital was
returned to Javelin Capital LLP.

 ^ The QIF ceased trading on 21 September 2012 with all redeemable
preference shares being redeemed. The Company owns 2 subscriber shares
which will receive any surplus on liquidation.
** The Javelin Capital Emerging Markets Alpha Fund is a sub-fund of the
Services Platform SICAV. The SICAV has a financial year end of December
with its first accounts being in respect of the period to 31 December
2012.

(b) Non-Controlling Interest

Following the closure of the QIF on 21 September 2012, the
non-controlling interest previously reflected in the Consolidated
Statement of Comprehensive Income and Balance Sheet, and including its
proportion of results for the current period of the QIF up to the date
of closure, representing the other investors in the QIF has been
derecognised in accordance with IFRS.

 In respect of the consolidation of the Javelin Capital entities into
the Group accounts, in accordance with the Company's accounting
policies and the income and loss recognition provisions of the Limited
Liability Partnership Agreement for Javelin Capital LLP there is no
Non-controlling Interest to be recognised in the Consolidated Statement
of Comprehensive Income or Balance Sheet.

16. Trade and Other Receivables

                                   Group    Group    Company    Company
                                   2012     2011       2012       2011
                                   [pounds sterling]000     [pounds
sterling]000       [pounds sterling]000       [pounds sterling]000
Sales for future settlement                4,179                   174
Prepayments                       1,111    1,256         27        193
Dividends receivable                254      298        254        298
Accrued income                        3       18          3          8
Taxation recoverable                 50       66         50         66
Amounts due from subsidiary
  undertakings                                          521        441
                                  1,418    5,817        855      1,180

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

 17. Cash and Cash Equivalents
                                    Group    Group    Company    Company
                                     2012     2011       2012       2011
                                     [pounds sterling]000     [pounds
sterling]000       [pounds sterling]000       [pounds sterling]000
Deposits at banks                  22,129   17,051     20,431     14,809
Collateral cash held with brokers      91    2,115
Cash held with brokers                      17,575
Other balances                      1,067      812        491        436
                                   23,287   37,553     20,922     15,245

Cash used for collateral is restricted.

18. Trade and Other Payables

Amounts falling due within one year:

                                     Group    Group    Company
Company
                                     2012     2011       2012       2011
                                     [pounds sterling]000     [pounds
sterling]000       [pounds sterling]000       [pounds sterling]000
Purchases for future settlement              5,861
Accrued expenses                      313      285        249        276
Other creditors                       943    1,499        752        707
                                    1,256    7,645      1,001        983

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:

                                   Group     Group    Company    Company
                                   2012      2011       2012       2011
                                   [pounds sterling]000      [pounds
sterling]000       [pounds sterling]000       [pounds sterling]000
[pounds sterling]13.5m (2011: [pounds sterling]13.5m) 9.5%
  debenture stock 2020           13,401    13,392     13,401     13,392
[pounds sterling]20.7m (2011: [pounds sterling]20.7m) 7.25%
  debenture stock 2025           20,422    20,409     20,422     20,409
                                 33,823    33,801     33,823     33,801
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
Company
                                                             2012
2011
                                                             [pounds
sterling]000      [pounds sterling]000
Allotted and fully paid at 30 September:
52,528,000 (2011: 52,528,000) ordinary shares of 10p each   5,253
5,253

There are 483,387 (2011: 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.

20. Own Shares

 The total number of options outstanding at the date of this report is
201,601 under the Long Term Incentive Plan ("LTIP") and the
total shareholding of the Employee Incentive Trust is 483,387 ordinary
shares. The shares will be held by the Trust until the relevant options
are exercised or until they lapse. They are presented on the Balance
Sheet as a deduction from shareholders' funds, in accordance with
the policy detailed in note 1.
                                          Group and
                                            Company
                                         Own Shares
                           Number of        Reserve
                              Shares           [pounds sterling]000
As at 1 October 2011         483,387         (1,628)
Options exercised
As at 30 September 2012      483,387         (1,628)
21. Net Asset Value
The consolidated net asset value per share has been calculated based on
equity shareholders' funds of [pounds sterling]112,234,000 (2011:
[pounds sterling]111,634,000) and on 52,044,613 (2011: 52,044,613)
ordinary shares, being the shares in issue at the year end having
deducted the number of shares held by the EIT.

22. Analysis of Changes in Net Cash/(Debt)

                                   At 30                Non        At 30
                              September      Cash     Cash    September
                                   2011     Flows    Items         2012
Group                              [pounds sterling]000      [pounds
sterling]000     [pounds sterling]000         [pounds sterling]000
Cash at bank and with brokers    37,553    14,266                23,287
Debt due after one year         (33,801)               (22)     (33,823)
                                  3,752    14,266      (22)     (10,536)
                                  At 30                Non        At 30
                              September      Cash     Cash    September
                                   2011     Flows    Items         2012
Company                            [pounds sterling]000      [pounds
sterling]000     [pounds sterling]000         [pounds sterling]000
Cash at bank                     15,245     5,677                20,922
Debt due after one year         (33,801)               (22)     (33,823)
                                (18,556)    5,677      (22)     (12,901)

23. Operating Lease Commitments

 The Group has a 10 year non-cancellable operating lease (with a break
clause in 5 years) in respect of premises, including a rent free period.
The rent free element has been apportioned over the lease up to the date
of the break clause. The Group has an annual commitment at 30 September
2012 under the lease of [pounds sterling] 145,000 (2011: [pounds
sterling]145,000). This operating lease commitment is disclosed in the
table below.
Expiry Date                                 Group   Group
                                             2012    2011
                                             [pounds sterling]000
[pounds sterling]000
Within one year                               145     145
Between one and two years                      34     145
Between two and three years                            32
                                              179     322
24. Financial Commitments 

At 30 September 2012 the Group had no financial commitments which
had not been accrued for (2011: none).

 25. Share-based Payments
The Group currently operates one share-based payment scheme being the
2006 LTIP which in turn has two sections relating to Total Shareholder
Return (TSR) based Awards and Matching Awards. With the introduction of
Javelin Capital LLP and resultant employee transfers from the Company no
further awards will be made under the LTIP. Javelin Capital LLP does not
operate any share-based payment schemes.

Long Term Incentive Plan: TSR-based Awards

Awards of restricted shares up to a maximum value of one
year's salary have performance conditions based on total
shareholder return in relation to two separate performance conditions
over a period of five years. The performance conditions contain higher
and lower thresholds that determine the extent of the vesting of the
award.
 

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.
                                                 Group
                                                 2012
                                    TSR - based          Matching
                                       Awards             Awards
                                          Weighted           Weighted
                                     No.   Average      No.   Average
                                      of  Exercise       of  Exercise
                                 Options  Price (p) Options  Price (p)
                                                                      

Outstanding at 1 October 2011 178,319 0.0 10,437 0.0

 During the year:
  Awarded
  Forfeited
  Exercised
  Expired
  Increase in awards due to
  dividends paid                  12,134       0.0      711       0.0
                                                                      

Outstanding at 30 September 2012 190,453 0.0 11,148 0.0

 Exercisable at 30 September 2012                     11,148       0.0
                                                         Group
                                                          2011
                                             TSR - based
Matching
                                               Awards
Awards
                                                   Weighted
Weighted
                                              No.   Average      No.
Average
                                               of  Exercise       of
Exercise
                                          Options  Price (p) Options
Price (p)
Outstanding at 1 October 2010             291,268       0.0   17,812
0.0
During the year:
Awarded
Forfeited
Exercised                                 (13,430)      0.0   (8,673)
0.0
Expired                                  (122,965)      0.0
Increase in awards due to dividends paid   23,446       0.0    1,298
0.0
                                                                               

Outstanding at 30 September 2011 178,319 0.0 10,437 0.0

Exercisable at 30 September 2011
10,437 0.0
 The awards outstanding at 30 September 2012 had a weighted average
remaining contractual life of 1.4 years and nil in respect of the
TSR-based Awards and Matching Awards respectively (2011: 3.4 years and
0.1 years respectively).

Awards and options are usually forfeited if the employee leaves
employment before vesting.

For the year ended 30 September 2012, the Company recognised a
total share options expense of [pounds sterling]31,000 (2011: [pounds
sterling]116,000 including a one-off vesting charge of [pounds
sterling]59,000) relating to share-based payment transactions in the
year ended 30 September 2011.
 

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 at the
start of this announcement. 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 therefore does not include
disclosures in relation to the investment in the QIF (previously
consolidated as a subsidiary and which closed during September 2012).
 

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 senior
management. The Company has complied with the requirement of the
relevant tax legislation for an investment trust not to invest more than
15% of the total value of its investments in the securities of any one
group at the time of the initial acquisition, or subsequent purchase.
From time to time, the Group may seek to reduce or increase its exposure
to stock markets and currencies by taking positions in currency forward
contracts, index futures and options relating to one or more stock
markets. These instruments are used for the purpose of hedging some or
all of the existing exposure within the Group's investment
portfolio to those currencies or particular markets or to enable
increased exposure when deemed appropriate and with the specific
approval of the Board.
The Company's financial instruments comprise its investment
portfolio - see note 13 - cash balances, debtors and creditors that
arise directly from its operations such as sales and purchases awaiting
settlement and accrued income, and the debenture loans used to finance
its operations. The Company is unlikely to use derivatives for hedging
purposes and then only in exceptional circumstances with the specific
prior approval of the Board.
In pursuing its investment objective the Company is exposed to various
risks which could cause short term variation in its net assets and which
could result in both or either a reduction in its net assets or a
reduction in the profits available for distribution by way of dividend.
The main risk exposures for the Company from its financial instruments
are market risk (including currency risk, interest rate risk and other
price risk), liquidity risk and credit risk.

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

-- a full range of financial instruments in both developed and
emerging markets

   including equities, equity-related securities, futures, options,
warrants and
  other access products;
                                                                               

-- other financial instruments may be used, including, but not
limited to, index

   futures, structured products, swaps and contracts for difference
("CFDs");
-- commodity futures and commodity-related exchange traded funds
("ETFs");
-- spot and forward foreign currency exchange contracts, options and
related
  instruments; and
                                                                               

-- cash on deposit or cash equivalents may be held; these deposits
may, or may

  not, be held through the Prime Brokers and its Custodian.
 Market Risk
The principal risk in the management of the portfolio is market risk
i.e. the risk that values and future cashflows will fluctuate due to
changes in market prices. This comprises:
-- foreign currency risk;
-- interest rate risk; and 

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

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

 Foreign Currency Risk 

Exposure to foreign currency risk arises through investments in
securities listed on overseas stock markets. A

 proportion of the net assets of the Group and Company are denominated
in currencies other than sterling, with the effect that the balance
sheet and total return can be materially affected by currency movements.
The Group and Company's exposure to foreign currencies through its
investments in overseas securities as at 30 September 2012 was [pounds
sterling]24,793,000 and [pounds sterling]25,653,000 respectively (2011:
[pounds sterling]24,640,000 and [pounds sterling]22,210,000
respectively).
In respect of the Company, the Investment Manager monitors the
Company's exposure to foreign currencies and the Board receives
reports on a regular basis. In making investment decisions the
Investment Manager is mindful of the Company's Core Portfolio
benchmark allocation to foreign currencies but takes independent
positions based on a long term view on the relative strengths and
weaknesses of currencies. Additionally the currency of investment is not
the only relevant factor considered as many portfolio investment
companies are global in scope and nature. The Company does not normally
hedge against foreign currency movements.
The Group is able, although unlikely, to enter into forward currency
contracts as a means of limiting or increasing its exposure to
particular currencies. Such contracts can be used for the purpose of
hedging the existing currency exposure of elements of the Group's
portfolio (as a means of reducing risk) or to enable increased exposure
when this is deemed appropriate.
During the year, part of the Company's portfolio currency exposure
in respect of its [pounds sterling]20m US dollar investment in Javelin
Capital Global Strategies Fund (QIF) was managed by a hedging programme
until the fund was closed on 21 September 2012 (as discussed on the
Annual Report). There were no other forward currency contracts
undertaken during the year.

The currency risk of the Group and Company's non-sterling
monetary financial assets and liabilities at the Balance Sheet date
was:

                            Group 2012                     Group 2011
                                   Net    Total                  Net
Total
                     Overseas monetary currency    Overseas monetary
currency
                  investments   assets exposure investments   assets
exposure
Currency exposure        [pounds sterling]000     [pounds sterling]000
[pounds sterling]000        [pounds sterling]000     [pounds
sterling]000      [pounds sterling]000
US Dollar              16,509       91   16,150      12,304   19,417
31,721
Euro                    2,729             2,729       3,905      285
4,190
Yen                     1,540             1,540       2,134
2,134
Other                   4,465             4,465       6,297      (12)
6,285 non-sterling
                       24,793       91   24,884      24,640   19,690
44,330
                           Company 2012                  Company 2011
                                    Net    Total                  Net
Total
                      Overseas monetary currency    Overseas monetary
currency
                   investments   assets exposure investments   assets
exposure
Currency exposure        [pounds sterling]000     [pounds sterling]000
[pounds sterling]000        [pounds sterling]000     [pounds
sterling]000     [pounds sterling]000
US Dollar               16,920            16,920     12,361
12,361
Euro                     2,729             2,729      4,013
4,013
Yen                      1,540             1,540      2,134
2,134
Other non-sterling       4,464             4,464      3,702
3,702
                        25,653            25,653     22,210
22,210
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 2011. The revenue impact is an estimated figure for
12 months based on the relevant cash balances at the reporting date.
                  Group   Group  Company  Company

Income Statement 2012 2011 2012 2011

                    [pounds sterling]000    [pounds sterling]000
[pounds sterling]000     [pounds sterling]000
Revenue return               (1)

Capital return (1,240) (1,232) (1,283) (1,110)

 Net assets       (1,240) (1,233)  (1,283)  (1,110)
 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 no 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:
                                                Group      Group
Company    Company
                                                 2012       2011
2012       2011
                                                 [pounds sterling]000
[pounds sterling]000       [pounds sterling]000       [pounds
sterling]000
Floating rate financial assets
  UK sterling                                  23,196     17,746
28,922     22,245
  US dollars                                       91     19,807
Fixed rate financial assets Euros
  As referred to in note 13                                  258
258
                                                                                         

Financial assets not carrying interest 109,882 118,927 123,541

   128,447
                                               133,169    156,738
152,463    150,950
Fixed rate financial liabilities
  UK sterling                                 (33,823)   (33,801)
(33,823)   (33,801)
Financial liabilities not carrying interest    (1,256)   (11,055)
(1,001)      (983)
                                              (35,079)   (44,856)
(34,824)   (34,784)

Floating rate financial assets usually comprise collateral cash and
also cash on deposit with banks and prime

 brokers which is repayable on demand and receive a rate of interest
based on the base rates in force over the period. The Company balance
includes the [pounds sterling]8.0m (2011: [pounds sterling]7.0m)
investment in Javelin Capital LLP which receives a commercial rate of
interest from 31 August 2010 until full repayment occurs in accordance
with the terms of the LLP Agreement. Fixed rate financial assets
comprise convertible bonds or loan notes. The fixed rate financial
liabilities comprise the Group and Company's debentures totalling
[pounds sterling]34.2m nominal. They pay a weighted average rate of
interest of 8.1% per annum and mature in 2020 ([pounds sterling]13.5m)
and 2025 ([pounds sterling]20.7m).
Sensitivity analysis 

Based on closing cash balances held on deposits with banks, a 0.50%
decrease (2011: 0.50%) in base interest rates would have the following
effect on net assets of the Group and Company:

                  Group  Group  Company  Company
Income Statement  2012   2011     2012     2011
                  [pounds sterling]000   [pounds sterling]000
[pounds sterling]000     [pounds sterling]000

Revenue Return (106) (184) (95) (74)

 Net assets        (106)  (184)     (95)     (74)

A 0.5% increase (2011: 0.5%) in interest rates would have resulted
in 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. 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
current strategy.
 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 reviews it on a quarterly basis.
As mentioned earlier, the Investment Manager may use derivative
instruments in order to 'hedge' the market risk, including
foreign currency 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.

At the year end there were no derivative contracts open. During the
year, the Company entered into two Index Put Options contracts to
provide a limited degree of protection from a fall in the value of the
FTSE 100 index.

These contracts incurred net losses of [pounds sterling]0.6m and are
included within the investment return in note 13.

Concentration of exposure to other price risks

An analysis of the Group's investment portfolio is shown in the
Annual Report. This shows that the largest amount of equity investments
by value is in UK companies (30.4%), with 24.8% of total investments
listed or exposed to overseas countries (including listed Javelin
Funds). It also shows the concentration of investments in various
sectors.

The following table details the exposure to market price risk on its
quoted and unquoted equity investments:

                                           Group     Group    Company
Company
                                           2012      2011       2012
2011
                                           [pounds sterling]000
[pounds sterling]000       [pounds sterling]000      [pounds
sterling]000
Non-current Asset Investments at Fair Value through Profit or Loss
Listed equity investments                66,282    70,378     80,426
84,732
Unlisted                                 41,935    42,444     41,935
42,444
Related and Subsidiary Companies                               8,193

7,171

Unsettled derivatives contracts                       136
                                         108,217   112,958    130,553
134,347
Financial Liabilities at Fair Value
through Profit and Loss
Listed equity investments
 - sold short                                      (3,311)
Unsettled derivatives contracts                       (99)
                                                   (3,410)
Sensitivity analysis
If share prices on listed equity investments had decreased by 10% at the
reporting date with all other variables remaining constant, the income
and the net assets attributable to the equity holders of the Group would
have decreased by the amounts shown below.
                           Group       Group      Company      Company
                            2012        2011         2012         2011
                            [pounds sterling]000        [pounds
sterling]000         [pounds sterling]000         [pounds sterling]000
Income Statement
Capital return            (6,628)     (6,706)      (8,043)      (4,237)
Net assets                (6,628)     (6,706)      (8,043)      (4,237)
A 10% increase (2011:10%) in share prices would have resulted in a
proportionate equal and opposite effect on the above amounts on the
basis that all other variables remain constant. The analyses has been
calculated on the investments held at the year end and this may not be
representative of the year as a whole
Credit Risk 

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

-- The Company's listed investments are held on its behalf by
RBC Investor

Services, the Company's custodian which if it became bankrupt
or insolvent

   could cause the Company's rights with respect to
securities held to be
    delayed. The Company receives regular internal control reports from
the
   Custodian which are reviewed by Management and reported to the Board.
--  Investment transactions are undertaken by the Investment Manager
with a
   number of approved brokers in the ordinary course of business. All
new
   brokers are reviewed by the Investment Manager for credit worthiness
and
   added to an approved brokers list if not considered to be a credit
risk.
                                                                               

-- Cash is held at banks that are considered to be reputable and
high quality.

   Cash balances are spread across a range of banks to reduce
concentration
    risk.
--  Where the Company makes an investment in a loan or other security
with
   credit risk, that credit risk is assessed and considered as part of
the
   investment decision making process by the Investment Managers. 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 fulfil its
contractual
   obligations.
Credit Risk Exposure
At the reporting date the financial assets exposed to credit risk
amounted to the following:
                                             Group    Group   Company
Company
                                              2012     2011      2012
2011
                                              [pounds sterling]000
[pounds sterling]000      [pounds sterling]000      [pounds sterling]000
Investments in debt instruments                         258 258
Cash on deposit and at banks                22,129   17,863    20,922
15,245
Collateral cash held with brokers               91    2,115
Cash held with brokers                       1,067   17,575
Sales of future settlement                            4,179
174
Unsettled derivatives contracts                         136
Interest, dividends and other receivables    1,419    1,638       848
1,006
                                            24,706   43,764    21,770
16,683
Minimum exposure during the year            44,524   50,099    21,777

16,683

 Maximum exposure during the year            24,706    6,552     3,118
2,815

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 (2011: 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 not significant as the majority of the
Group's assets are investments in quoted equities and other quoted
securities that are readily realisable. The Board has various limits in
respect of how much of the Group's resources can be invested in any
one company. The unlisted investments in the portfolio are subject to
liquidity risk but such investments are subject to limits set by the
Board and liquidity risk is taken into account by the directors when
arriving at their valuation. The Company does have exposure to
concentration risk due to its two investments in MAM and Javelin
Capital, primarily in relation to MAM at 26.8% (2011: 26.8%) of the
Company's investment portfolio. The Company closely monitors these
investments and received regular financial reports and believes that the
current concentration risk is in-line with the Company's objective
of diversifying its investment portfolio into four major groups.
 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
Groups's cash balances. The Group does not have any overdraft or
other borrowing facilities to provide liquidity.
Collateral 

Collateral is posted by the Group in relation to derivative
transactions. These are transacted under auspices of the International
Swaps and Derivatives Association and may require collateral to be
posted from time to time. The Group does not hold collateral from other
counterparties.

At the year end there were no financial assets pledged as
collateral.

 A maturity analysis of financial liabilities showing the remaining
contractual maturities is detailed below:
                                     Group
                                     2012
Undiscounted cash flows           Due within   Due between   Due between
Due 3 years
                                      1 year 1 and 2 years 2 and 3 years
and beyond  Total
                                        [pounds sterling]000
[pounds sterling]000          [pounds sterling]000        [pounds
sterling]000   [pounds sterling]000
9.5% debenture stock 2020
13,500 13,500
7.25% debenture stock 2025
20,700 20,700
                                                                                           

Interest on financial liabilities 2,783 2,783 2,783

  20,029 28,378
 Trade payable and other liabilities (excluding social security and
sundry taxes)             1,256
1,256
                                       4,309         2,783         2,783
54,229 63,834
                                     Group
                                     2011
Undiscounted cash flows                                  Due within
Due

between Due between Due 3 years

                                                              1 year 1
and 2 years 2 and 3 years  and beyond  Total
                                                               [pounds
sterling]000          [pounds sterling]000          [pounds sterling]000
[pounds sterling]000   [pounds sterling]000
9.5% debenture stock 2020
13,500 13,500
7.25% debenture stock 2025
20,700 20,700
Interest on financial liabilities                             2,783

2,783 2,783 23,650 31,999

Listed investments sold short
3,311
                                  3,311
Derivative instruments                                           99
99
Trade payable and other
liabilities (excluding social security and sundry taxes)      7,645
                                 7,645
                                                             13,838
2,783         2,783      57,850 77,254
                                    Company
                                     2012
Undiscounted cash flows                                  Due within
Due

between Due between Due 3 years

                                                              1 year 1
and 2 years 2 and 3 years  and beyond  Total
                                                               [pounds
sterling]000          [pounds sterling]000          [pounds sterling]000
[pounds sterling]000   [pounds sterling]000
9.5% debenture stock 2020
13,500 13,500
7.25% debenture stock 2025
20,700 20,700
Interest on financial liabilities                             2,783
2,783         2,783      20,029 28,378
Trade payable and other
liabilities (excluding social security and sundry taxes)      1,001
                                 1,001
                                                              3,784
2,783         2,783      54,229 63,579
                                    Company
                                     2011
Undiscounted cash flows                                   Due within
Due

between Due between Due 3 years

                                                               1 year 1
and 

2 years 2 and 3 years and beyond Total

                                                                 [pounds
sterling]000          [pounds sterling]000          [pounds sterling]000
[pounds sterling]000   [pounds sterling]000
9.5% debenture stock 2020
13,500 13,500
7.25% debenture stock 2025
20,700 20,700
Interest on financial liabilities                              2,783
2,783         2,783      23,650 31,999
Trade payable and other liabilities  (excluding social security and
sundry taxes)
                                                                 983
983
                                                               3,766
2,783         2,783      57,850 67,182

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:

                                            Group     Group   Company
Company
                                            2012      2011      2012
2011
Financial assets                            [pounds sterling]000
[pounds sterling]000      [pounds sterling]000      [pounds sterling]000
Financial assets at fair value through
profit or loss
Equity and debt securities               108,217   112,822   130,553
134,347
Derivatives contracts                                  136   130,553
                                         108,217   112,958   116,409
134,347
Other financial assetsa                   24,705    43,370    21,777
16,425
                                         132,922   156,328   152,330
150,772
Financial liabilities
Financial liabilities at fair value
through profit or loss
Equities                                             3,311
Derivatives Contracts                                   99
                                                     3,410
Financial liabilities measured at
amortised costU                           35,079    41,446    34,824
34,784
                                          35,079    41,856    34,824
34,784

a Other financial assets include: cash and cash equivalents, due
from brokers, cash collateral on securities borrowed, dividend and
interest receivables, other receivables and prepayments.

U 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 the fair value. The
fair value of the debenture stock is calculated using Discounted Cash
Flow analysis and by reference to the redemption yields of a similar
companies' debt instrument, with an appropriate margin spread
added.

                                       Book      Book      Fair
Fair
                                     Value     Value     Value     Value
Group and Company                     2012      2011      2012      2011
Financial liabilities                 [pounds sterling]000      [pounds
sterling]000      [pounds sterling]000      [pounds sterling]000
[pounds sterling]13.5m (2011: [pounds sterling]13.5m) 9.5%
debenture stock 2020                13,401    13,392    18,895    17,168
[pounds sterling]20.7m (2011: [pounds sterling]20.7m) 7.25%
debenture stock 2025                20,422    20,409    25,815    24,790
                                    33,823    33,801    44,710    41,958

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. As at 30 September 2012, in respect of the
Group and Company this was 30.1% and 28.8% respectively (2011: Group and
Company 30.3% and 29.1% respectively).

Capital at 30 September comprises:

                                          Group    Group  Company
Company
                                          2012     2011     2012
2011
                                          [pounds sterling]000
[pounds sterling]000     [pounds sterling]000     [pounds sterling]000
Debt/(Net Cash)
  Adjusted Cash and cash equivalents   (23,449) (35,725) (20,776)
(15,442)
  Debentures                            33,823   33,801   33,823
33,801
Sub total                               10,374   (1,924)  13,047
18,359
Equity
  Equity share capital                   5,253    5,253    5,253
5,253
  Retained earnings and other reserves 106,931  106,981  112,386
110,913
Shareholders' funds                    112,234  111,634  117,639
116,166
Gearing
  Debt/(Net Cash) as a percentage
  of shareholders' funds                   9.2%   (1.7%)    11.1%
15.8%

Maximum potential gearing represents the highest gearing percentage
on the assumption that the Group or Company held no cash.

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

-- the level of net gearing, taking into account the Investment
Manager's views on the market;

-- the level of the Company's free float of shares as the
Barlow family owns approximately 55% of the share capital of the
Company; and

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

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

The Company is subject to various externally imposed capital
requirements:

-- the debentures are not to exceed in aggregate 662/3% of adjusted
share capital and reserves in accordance with the respective Trust
Deeds; and

-- the Company has to comply with statutory requirements regarding
minimum share capital and restriction tests relating to dividend
distributions.

These requirements are unchanged since last year and the Company has
complied with them.

27. Related Party Transactions

Javelin Capital LLP

Javelin Capital LLP (Javelin Capital) is the investment manager
and general administrator to the Company and is also the parent entity
of Javelin Capital Fund Management Limited (JCFM) and Javelin Capital
Services Limited (JCS) all of which are consolidated in the MI group
accounts as part of the Javelin Capital group of entities. During the
year, following a review of the Javelin Capital group structure, it was
determined that JCFM was no longer required. JCFM ceased operations in
June 2012 with its management company functions being undertaken by the
QIF directly. As part of its closure JCFM received Central Bank of
Ireland approval to cease as a regulated entity and with the resultant
capital structure reorganisation, JCFM's existing regulatory share
capital of [pounds sterling] 125,000 was returned to Javelin Capital.
New nominal share capital of [euro]2 was introduced and JCFM will be
wound up in due course.
 Javelin Capital Strategies Plc is an Irish Stock Exchange listed
Qualifying Investment Fund (QIF). Its one sub-fund, the Javelin Capital
Global Equity Strategies Fund was closed in September 2012 with all
participating redeemable preference share funds being returned to
investors. The QIF will be liquidated in due course. JC and JCFM (until
June 2012) acted as investment manager and manager for the QIF
respectively and were entitled to receive management or advisory and
performance fees. Javelin Capital Emerging Markets Alpha Fund is a
sub-fund of the Serviced Platform SICAV, a Luxembourg Undertakings for
Collective Investment Scheme (UCITS), as established by Goldman Sachs
International. Javelin Capital acts as investment manager to the
sub-fund and is entitled to receive management and performance fees.
In addition to any fees received from the QIF and UCITS, Javelin Capital
is also entitled to receive management, performance and administration
fees from the Company in accordance with the relevant agreements. These
agreements take account of any fees charged in the QIF and UCITS so that
no double charging occurs.
JCS provides administrative services to the group and in performing
these services it incurs expenses. Additionally for administrative
reasons the Company pays certain expenses on behalf of the Group. In
both cases recharges and/or management fees are used such that each
group entity bears its appropriate relevant portion of the group
expenses incurred. The Company allows Javelin Capital group entities use
of various assets to perform their respective functions for which it
receives a lease fee ; however this can be waived by the Company at its
discretion.

Javelin Capital, as investment manager to its various funds or
accounts, is required to, or chooses to do so, under certain
circumstances make payments to reimburse the fund or account for expense
rebates or compensation payments.

The Company provided an additional [pounds sterling]1.0m of partner
capital to Javelin Capital on 25 September 2012.

 On 20 September 2010 the Company invested [pounds sterling]20m into the
Javelin Capital Global Equity Strategies Fund (QIF) which was followed
on 16 February 2012 by [pounds sterling]15m being invested into the
second Javelin Capital fund, the Javelin Capital Emerging Markets Alpha
Fund (UCITS). Following a review by Javelin Capital in 2012 when it
became apparent that the UCITS fund was more attractive to investors the
QIF was closed with all remaining investor funds being redeemed in
September 2012. The Company redeemed its entire redeemable preference
shares for [pounds sterling]17.7m and a loss of [pounds sterling]2.3m
(which excludes a gain of [pounds sterling]0.8m received as a result of
an FX hedging programme undertaken by the Company on this investment).
It was proposed that the Company's investment in the QIF would be
redeployed into the UCITS fund. After the Company's shareholders
approved a change to the Company's investment policy on 9 October
2012 to permit this [pounds sterling] 18.15m was invested in November
2012. These investments are subject to management and performance fees
in accordance with the relevant prospectus.

The Company pays certain costs on behalf of Majedie Portfolio
Management Limited (MPM) for operating the

Majedie Investments PLC Share Plan and additionally is charged a
management fee by MPM. Any such costs paid by the Company are recharged
to MPM, net of any management fees due.

 The table below discloses the transactions and balances between those
entities:
                                                           2012  2011
Transactions during the period:                            [pounds
sterling]000  [pounds sterling]000
QIF fee revenue due to JCFM                                 179   270
                                                                     

Advisory fee revenue due to Javelin Capital from JCFM 145 209

Company management fee revenue due to Javelin Capital 549 692

Company administration fee revenue due to Javelin Capital 265
265

 JCS management fee income from Javelin Capital            1,878 3,033
Javelin Capital LLP payments made to funds                    1     5
MPM costs recharged by the Company                           35    35
Balances outstanding at the end of the period:
Between JCS and the Company                                 426   348
Between JCS and Javelin Capital                             131   133
Between JCS and JCFM                                          1    10
Between the Company and MPM                                  95    93
Between JCFM and Javelin Capital                             18    55
Between the QIF and Javelin Capital                                 5
Between JCFM and the QIF                                           48

Transactions between group companies during the year were made on
terms equivalent to those that occur in arm's length
transactions.

Majedie Asset Management (MAM)

MAM is accounted for as an investment in both the Company and Group
accounts and is valued at fair value

through profit or loss. During the year the Company received
dividends from MAM of [pounds sterling]2,215,000 and proceeds of [pounds
sterling]324,000, as a result of the sale of shares to the MAM Employee
Benefit Trust, of which none was outstanding at year end (2011: [pounds
sterling]1,914,000 of dividends and nil). The Company has no investments
in any MAM funds.
 Remuneration
The remuneration of the directors, who are the key management personnel
of the Company, is set out below in aggregate for each of the categories
specified in IAS24: Related Party Disclosures. Further information about
the remuneration of individual directors is provided in the audited part
of the Report on Directors' Remuneration in the Annual Report.
                              2012  2011
                             [pounds sterling]'000 [pounds
sterling]'000
Short term employee benefits   348   244
                               348   244
National Storage Mechanism

A copy of the Annual Report will be submitted shortly to the
National Storage Mechanism ("NSM") and will be available for
inspection at the NSM, which is situated at:
http://www.morningstar.co.uk/uk/NSM .

A copy of the Annual Report and Notice of Annual General Meeting
will be delivered to shareholders shortly.

 Annual General Meeting

The Company's Annual General Meeting will be held on 16 January
2013 at 12.00 noon at City of London Club, 19 Old Broad Street, London
EC2N 1DS.

 ENQUIRIES 

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

 END

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

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