Annual Report • Aug 31, 2011
Annual Report
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Annual Report for the year ended 31 August 2011
The Company's objective is to provide capital growth through investment in companies listed on the Official List and traded on the Alternative Investment Market with a market capitalisation at the time of investment of up to £50 million, which are believed to be at a "point of change". The Company will also invest in unquoted investments where it is believed that there is a likelihood of the shares becoming listed or traded on the Alternative Investment Market or the investee company being sold. Its investment objective is to increase net asset value per share at a higher rate than other quoted smaller company trusts and the FTSE All-Share Index.
It is the Company's policy not to invest in any listed investment companies (including listed investment trusts).
| Investment objective | inside front cover |
|---|---|
| Company summary | 1 |
| Performance statistics | 1 |
| Chairman's statement | 2 |
| Investment Manager's overview | 3 |
| Portfolio review | 4 |
| Top twenty investments | 6 |
| Portfolio breakdown by sector and by index | 7 |
| Directors | 8 |
| Investment Manager, Secretary and Advisers | 9 |
| Report of the Directors | 10 |
| Statement on corporate governance | 17 |
| Directors' remuneration report | 23 |
| Statement of Directors' responsibilities in respect of | |
| the financial statements | 25 |
| Independent Auditors' report | 26 |
| Income statement | 28 |
| Reconciliation of movements in shareholders' funds | 29 |
| Balance sheet | 30 |
| Statement of cash flows | 31 |
| Notes to the accounts | 32 |
| Shareholder information | 47 |
| Notice of Annual General Meeting | 48 |
| Form of Proxy | 53 |
| Benchmark | FTSE All-Share Index |
|---|---|
| Investment Manager | Chelverton Asset Management Limited See page 9 for further details. |
| Total net assets | £4,049,000 as at 31 August 2011 |
| Market capitalisation | £2,911,000 as at 31 August 2011 |
| Capital structure | 13,233,344 Ordinary 1p shares carrying one vote each . There are no shares held in Treasury. |
| ISA status | The Company's Ordinary shares are fully eligible for inclusion in ISAs. |
| Year ended 31 August 2011 |
Year ended 31 August 2010 |
% change | |
|---|---|---|---|
| Net assets | £4,049,000 | £3,630,000 | 11.54 |
| Net asset value per share | 30.60p | 24.66p | 24.09 |
| FTSE All-Share Index | 2,800.51 | 2,696.72 | 3.85 |
| Share price | 22.00p | 17.25p | 27.54 |
| Discount to net asset value | 28.10 % | 30.05 % | |
| Revenue loss after taxation | £69,000 | £75,000 | |
| Revenue loss per share | 0.50 p | 0.50 p | |
| Capital gain per share | 6.42p | 5.62p | |
An investment company as defined under Section 833 of the Companies Act 2006.
REGISTERED IN ENGLAND No. 2989519
I am pleased to announce another year of progress, albeit that much of the increase in value that we are reporting on here has already been recognised at the interim stage.
The Company's net asset value per share has increased this year from 24.66p to 30.60p – an increase of 24.09%. In the same period the Company's benchmark index, the FTSE All-Share, rose by 3.85%; the FTSE 100 rose by 3.24 %; and the AIM Index rose by 11.75 %. Since the year end the net asset value per share has marginally increased to 30.81p, a rise of 0.69%.
The year was again defined by the continuing fall out from the credit crunch and banking crisis of 2008/09 and the attempts by the Government to slow the continuing increase in public debt. A new form of financial crisis is now evident as a consequence of the creation of the euro which is threatening the financial stability of the Eurozone and as a result impacting on many countries. The "Arab Spring" which swept through the Middle East and remains ongoing with the military campaign in Libya has, as yet, been of little economic consequence.
In the UK the Government is coming under pressure to "ease back" on their programme of controlling and then reducing public expenditure with the opponents' rallying cry of "too deep and too fast" becoming louder. However against a backcloth of debt expected to peak in 2015/16 this currently seems a hollow cry. Until there is a more appropriate balance between the public and private sectors there will be no progress in national wealth creation.
In the portfolio almost all the companies have made progress over the past year which in the current tough environment is to be commended. With record low interest rates, and inflation expected to fall sharply next year, real returns and real growth will be hard won. This tough marketplace will lead to a further contraction in supply which should, for the survivors, provide greater opportunities in the future. Although the immediate economic outlook remains uncertain, we expect the domestic economy to gradually improve over the next few years, thus creating an environment more conducive to UK small company performance.
Given the increase in the asset value and with no bank debt the Board feel that it is in the best interest of all shareholders to proceed with a tender offer again this year. It remains our intention to repeat this process each year so long as circumstances warrant it. This year we also intend to offer shareholders with holdings of less than 4,000 shares the opportunity to dispose of their entire holding.
George Stevens Chairman 25 November 2011
Increasing concerns over the macro environment and downgrades to global growth rates have dominated headlines and led to the recent stockmarket falls. In particular, fears over a Greek debt default and the implications for the European banking system have served to increase risk premiums significantly. Although 'top down' forecasts have been under pressure for some time it is only in the last few months that we have seen 'bottom up' earnings estimates being reduced, and this has added another layer of uncertainty and provided more fuel to the bear arguments.
We have consistently highlighted the strong correlation between a healthy domestic economy and the relative performance of UK smaller companies. In light of the current slowdown and the reduced risk attitude of domestic investors it is fair to assume, as we look forward, that we will face some strong headwinds as we try to grow the portfolio over the next year. However it is reassuring to note that Corporate UK is still forecast to grow profitability in aggregate over the next couple of years and Company balance sheets are substantially more robust than they were at the time of the crash in 2008.
The year has seen small disposals in PSG Solutions and has otherwise been one of gently adding to existing undervalued holdings; AI Claims, CEPS and One Horizon Group (formerly Satcom) .
In May PSG Solutions announced that one of their subsidiaries had won a government contract for £11m and by August this was increased to £48m, representing some four times its historical turnover as a group. Having turned down a tender offer a year earlier from the management at 17.125p per share we sold a quarter of the holding at 120p per share and have recently participated in a tender offer by the company to buy 5% of the outstanding shares at 200p per share. As the share price at the time was 76p we tendered our entire holding obviously along with everyone else and consequently only just over 5% of our holding was acquired. The implication however is that the Board consider a price of 200p per share is a reasonable target price.
Belgravium Technologies has seen its share price rise from 2.5p to 7.5p reflecting its return to profits growth and the fact that it has repaid all of the acquisition debt it took on four years ago. As a highly operationally geared company a small increase in sales will lead to a disproportionate increase in profits.
In the unquoted investments we have made a provision against our holding in Closed Loop Recycling and consequent to its continuing growth increased the valuation of the investment in Parmenion Capital Partners.
We continue to believe that we are invested in a portfolio of undervalued assets but realise that we will need a more benign macro environment to prosper over the next twelve months. We expect markets to remain volatile and we will continue to look to realise funds from holdings when their valuations are more reflective of medium term prospects and to reinvest into other stocks that remain substantially undervalued.
Chelverton Asset Management Limited 25 November 2011
as at 31 August 2011
The Company's portfolio as at 31 August 2011 is set out below.
| Investment | Sector | Valuation £'000 |
% of total |
|---|---|---|---|
| AIM traded AI Claims Solutions The provision of non-fault accident management services |
Non Life Insurance | 570 | 14.1 |
| Alliance Pharma | Pharmaceuticals & Biotechnology Acquisition of the manufacturing, sales and distribution rights to pharmaceutical products |
264 | 6.5 |
| Belgravium Technologies Software systems for warehousing and distribution |
Technology Hardware & Equipment | 312 | 7.7 |
| CEPS | Support Services Production and supply of components for the footwear industry; personal protection equipment; production of printed lycra fabric; and services to the direct mail industry |
260 | 6.4 |
| Datong Electronics Develops, manages and supplies covert tracking and surveillance systems |
Electronic & Electrical Equipment | 62 | 1.5 |
| IDOX information management |
Software & Computer Services Software company specialising in the development of products for document and |
1,153 | 28.4 |
| LPA Group Design, manufacture and marketing of industrial electrical accessories |
Electronic & Electrical Equipment | 78 | 1.9 |
| MTI Wireless Edge | Technology Hardware & Equipment Developer and manufacturer of sophisticated antennas and antenna systems |
60 | 1.5 |
| Northbridge Industrial Services Consolidation vehicle for specialist industrial hire services in the UK |
Industrial Engineering | 132 | 3.3 |
| Pennant International Group Supplier of technology solutions to the defence and industrial sectors |
Software & Computer Services | 118 | 2.9 |
| Petards Group | Support Services Development, provision and maintenance of advanced security systems and related services |
11 | 0.3 |
| PSG Solutions | Support Services Leading provider of Local Authority residential property searches; provision of packaging solutions and technical surveillance countermeasures components |
114 | 2.8 |
| Richoux Group Owner and operator of Richoux Restaurants |
Travel & Leisure | 49 | 1.2 |
| Sanderson Group Provides software and IT services |
Software & Computer Services | 99 | 2.4 |
as at 31 August 2011
| Investment | Sector | Valuation £'000 |
% of total |
|---|---|---|---|
| AIM traded (continued) | |||
| Titan Europe | Industrial Engineering | 124 | 3.1 |
| Manufacture of big wheels for construction, mining and agricultural vehicles | |||
| Tristel | Health Care Equipment & Services | 160 | 3.9 |
| Healthcare business specialising in infection control in hospitals | |||
| Universe Group | Support Services | 10 | 0.2 |
| Provision of credit card fraud prevention system, loyalty systems and retail systems | |||
| Delisted | |||
| Bakabo (formerly Forest Support Services) | Industrial Transportation | 11 | 0.3 |
| (in members voluntary liquidation) | |||
| Supply of traffic management services | |||
| One Horizon Group (formerly Satcom Group) | Mobile Telecommunications | 32 | 0.8 |
| Provider of mobile satellite communications equipment and airtime | |||
| Unquoted | |||
| Closed Loop Recycling | Support Services | ||
| Loanstock | 0 | 0.0 | |
| Ordinary B shares | 0 | 0.0 | |
| Operation of a plastic recycling plant | |||
| Parmenion Capital Partners LLP | Support Services | 436 | 10.8 |
| Provides fund-based discretionary fund management services to Independent | |||
| Financial Advisors | |||
| Portfolio valuation | 4,055 | 100.0 |
The following companies in which the Company is invested are in liquidation or administration and no value is applied to these holdings as no realisations are anticipated from the insolvency process.
AT Communication Group Chromogenex General Capital Minorplanet Systems
| 31 August 2011 | 31 August 2010 | |||
|---|---|---|---|---|
| Valuation | % of | Valuation | % of | |
| Investment | £'000 | total | £'000 | total |
| IDOX | 1,153 | 28.4 | 596 | 16.6 |
| AI Claims Solutions | 570 | 14.1 | 47 9 | 13.3 |
| Parmenion Capital Partners LLP | 436 | 10.8 | 291 | 8.1 |
| Belgravium Technologies | 312 | 7.7 | 113 | 3.2 |
| Alliance Pharma | 264 | 6.5 | 345 | 9.6 |
| CEPS | 260 | 6.4 | 175 | 4.9 |
| Tristel | 160 | 3.9 | 188 | 5.3 |
| Northbridge Industrial Services | 132 | 3.3 | 85 | 2.4 |
| Titan Europe | 124 | 3.1 | 68 | 1.9 |
| Pennant International Group | 11 8 | 2.9 | 59 | 1.7 |
| PSG Solutions | 114 | 2.8 | 44 | 1.2 |
| Sanderson Group | 99 | 2.4 | 66 | 1.8 |
| LPA Group | 78 | 1.9 | 73 | 2.0 |
| Datong Electronics | 62 | 1.5 | 76 | 2.1 |
| MTI Wireless Edge | 60 | 1.5 | 84 | 2.4 |
| Richoux Group | 49 | 1.2 | 33 | 0.9 |
| One Horizon Group | 32 | 0.8 | 31 | 0.9 |
| Bakabo | 11 | 0.3 | 182 | 5.1 |
| Petards Group | 11 | 0.3 | 27 | 0.8 |
| Universe Group | 10 | 0.2 | 17 | 0.5 |
| Total | 4,05 5 100.0 | 3,03 2 | 84.7 |
Percentage of Portfolio by Index
George Stevens (Chairman) qualified as a member of the Institute of Taxation in 1969, and as a chartered accountant in 1970, but has spent most of his working career in the Insurance Industry. In 1978 he moved to Lloyd's and in a management buyout co-founded The Brockbank Group in 1985, for which he served as group managing director. Mr Stevens was also instrumental in establishing the motor underwriter Admiral Insurance Services and served as its first chairman. He retired from both these positions in 1995.
Kevin Allen is a chartered accountant. After qualifying with Coopers & Lybrand, he joined Overseas Containers (part of P&O Group) where he spent five years, latterly as chief accountant. In 1986 he joined Volvo Car UK as financial controller before joining Kellock Limited, the factoring and invoice discounting arm of Bank of Scotland Group, as finance and operations director. He became finance director of Brockbank Group PLC in 1993, serving on the boards of Brockbank Syndicate Management, Admiral Insurance Services and Brockbank Insurance Services Inc.
David Horner is managing director of Chelverton Asset Management Limited and a director of CEPS PLC. He is a chartered accountant and has considerable experience of analysing and working with smaller companies.
Chelverton Asset Management Limited 11 George Street Bath BA1 2EH Tel: 01225 483 030
Chelverton Asset Management Limited was formed in 1997. The investment team consists of David Horner and David Taylor who have considerable experience of companies in the smaller quoted market sector.
The Company website is maintained by the Investment Manager and can be found at www.chelvertonam.com.
Capita Sinclair Henderson Limited Hazlewoods LLP (trading as Capita Financial Group – Windsor House Specialist Fund Services) Bayshill Road Beaufort House Cheltenham GL50 3AT 51 New North Road Exeter EX4 4EP Tel: 01392 412 122
Suite E Level 29 First Floor 8 Canada Square 9 Lion and Lamb Yard London E14 5HQ Farnham Surrey GU9 7LL Tel: 01252 821 390 www.shareregistrars.uk.com
Share Registrars Limited HSBC Investment Bank plc
The Directors present their report, which incorporates the Business Review, and audited accounts for the year ended 31 August 2011. The registered company number for Chelverton Growth Trust PLC is 2989519.
The principal activity of the Company is to carry on business as an investment trust. The Company has been granted approval from HM Revenue & Customs as an authorised investment trust under Section 1158 of the Corporation Tax Act 2010 for the year ended 31 August 20 10. The Directors are of the opinion that the Company has conducted its affairs for the year ended 31 August 201 1 so as to be able to continue to obtain approval as an authorised investment trust under Section 1158 of the Corporation Tax Act 2010 . The Company is an investment company as defined in Section 833 of the Companies Act 2006.
The Company's objective is to provide capital growth through investment in companies listed on the Official List and traded on the Alternative Investment Market with a market capitalisation at the time of investment of up to £50 million, which are believed to be at a "point of change". The Company will also invest in unquoted investments where it is believed that there is a likelihood of the shares becoming listed or traded on the Alternative Investment Market or the investee company being sold. Its investment objective is also to increase net asset value per share at a higher rate than other quoted smaller company trusts and the FTSE All-Share Index.
The Company invests principally in securities of publicly quoted UK companies, though it may invest in unquoted securities. The concentrated UK portfolio comprises between 20 to 35 securities. The performance of the Company's investments is compared to the FTSE All-Share Index.
The Company will also invest in unquoted investments where it is believed that there is a likelihood of the shares becoming listed or traded on the Alternative Investment Market or the investee company being sold.
It is the Company's policy not to invest in any listed investment companies or listed investment trusts.
To comply with Listing Rules the Company's investment policy is detailed above and should be read in conjunction with the subsequent sections entitled investment strategy and the performance analysis.
It is intended from time to time, when deemed appropriate, that the Company will borrow for investment purposes. The Company, however, does not currently have any borrowing facilities.
The investment objective and policy stated are intended to distinguish the Company from other investment vehicles which have relatively narrow investment objectives and which are constrained in their decision making and asset allocation. The investment objective and policy allow the Company to be constrained in its investment selection only by valuation and to be pragmatic in portfolio construction by only investing in securities which the Investment Manager considers to be undervalued on an absolute basis. Portfolio risk is managed by investing in a diversified spread of investments.
Investments are selected for the portfolio only after extensive research which the Investment Manager believes to be key. The whole process through which equity must pass in order to be included in the portfolio is very rigorous. Only a security where the Investment Manager believes that the price will be significantly higher in the future will pass the selection process. The Company's Investment Manager believes the key to successful stock selection is to identify the long-term value of a company's shares and to have the patience to hold the shares until that value is appreciated by other investors. Identifying long term value involves detailed analysis of a company's earning prospects over a five year time horizon.
The Company's Investment Manager is Chelverton Asset Management Limited, an independent investment manager focusing exclusively on achieving returns for investors based on UK investment analysis of the highest quality. The founders and employee owners of Chelverton include experienced investment professionals with strong investment performance records who believe rigorous fundamental research allied to patience is the basis of long term investment success.
The Chairman's statement on page 2 and the Investment Manager's overview on page 3 give details of the Company's activities during the year under review.
At each Board meeting, the Directors consider a number of performance measures to assess the Company's success in achieving its objectives, for example: the NAV, the movement in the Company share price, the discount of the share price in relation to the NAV and the total expenses ratio.
The Company's income statement is set out on page 28.
The movement of the NAV is compared to the FTSE All-Share Index, the Company's benchmark. The NAV per Ordinary share at 31 August 2011 was 30.60p (2010: 24.66p).
The Company's share price at the year end was 22.00p (2010: 17.25p).
The Board considers the following to be the principal risks facing the Company. Mitigation of these risks is sought and achieved in a number of ways:
The Company is exposed to market risk due to fluctuations in the market prices of its investments.
The Investment Manager actively monitors economic and company performance and reports regularly to the Board on a formal and informal basis. The Board formally meets with the Investment Manager quarterly when portfolio transactions and performance are reviewed. The Management Engagement Committee meets as required to review the performance of the Investment Manager. Further details regarding the Company's various Committees and their duties are given on pages 18 and 19 of the statement on corporate governance.
The Company is substantially dependent on the services of the Investment Manager's investment team for the implementation of its investment policy.
The Company may hold a proportion of the portfolio in cash or cash equivalent investments from time to time. Whilst during positive stock market movements the portfolio may forego notional gains, during negative market movements this may provide protection.
As with many investment trust companies, discounts can significantly fluctuate.
The Board recognises that it is in the long term interests of shareholders to reduce discount volatility and believes that the prime driver of discounts over the longer term is performance. The Board does not intend to adopt a precise discount target at which shares will be bought back. However Ordinary shares will not be bought back for cancellation or into Treasury at a discount to NAV of less than 7.5%.
Relevant legislation and regulations which apply to the Company include the Companies Act 2006, the Corporation Tax Act 2010 ("CTA") and the Listing Rules of the Financial Services Authority ("FSA"). The Company has noted the recommendations of the UK Corporate Governance Code and its statement of compliance appears on page 17. A breach of the CTA could result in the Company losing its status as an investment company and becoming subject to capital gains tax, whilst a breach of the Listing Rules might result in censure by the FSA. At each Board meeting the status of the Company is considered and discussed, so as to ensure that all regulations are being adhered to by the Company and its service providers.
The Board is not aware of any breaches of laws or regulations during the period under review and up to the date of this report.
The financial situation of the Company is reviewed in detail at each Board meeting. The content of the Company's annual report and accounts is monitored and approved both by the Board and the Audit Committee.
Inappropriate accounting policies or failure to comply with current or new accounting standards may lead to a breach of regulations.
The Board monitors the liquidity of the portfolio at each Board meeting and regularly reviews the investments with the Investment Manager.
A more detailed explanation of the investment management risks facing the Company is given in note 1 8 to the accounts on pages 41 to 46.
As part of its normal operations, the Company holds financial assets and financial liabilities. Full details of the role of financial instruments in the Company's operations are set out in note 1 8 to the accounts.
A review of the main features of the year is contained in the Chairman's statement and the Investment Manager's overview on pages 2 and 3.
The marketing and promotion of the Company will continue to involve the Board, led by the Investment Manager, with a proactive communications programme either directly or through its website, with existing and potential new shareholders and other external parties.
The Directors are seeking to renew the appropriate powers at the next Annual General Meeting to enable the issue and purchase of its own shares, when it is in the interests of shareholders as a whole.
The Company does not have any employees and the Board consists entirely of non-executive directors. As the Company is an investment trust, which invests in other companies, it has no direct impact on the community or the environment, and as such has no policies in this area.
The results for the year and the proposed transfer from revenue reserves are set out in the income statement on page 28.
The Directors do not recommend the payment of a dividend for the year.
The Directors in office during the year and at the date of this report, all of whom are non-executive, are shown below:
| Date of appointment |
|---|
| 8 November 1994 |
| 2 August 2001 |
| 1 May 2006 |
| 20 December 2006 |
Mr Horner will offer himself for re-election in accordance with the Listing Rules, which stipulate that a director who is also a director of the investment manager should be subject to annual re-election.
In accordance with the UK Corporate Governance Code, that non-executive directors who have served on a board for more than nine years should be subject to annual re-election, Mr Allen will retire at the Annual General Meeting and, being eligible, will offer himself for re-election.
In accordance with the Company's Articles of Association and the UK Corporate Governance Code, Mr Stevens, will retire by rotation at the forthcoming Annual General Meeting and, being eligible, will offer himself for re-election.
The Board as a whole believes that Messrs Horner, Allen and Stevens, collectively and individually, make active and effective contributions in their roles as Directors of the Company and that shareholders should vote in favour of their re-election, respectively, for the following reasons:
Mr Horner is managing director of Chelverton Asset Management Limited, the Company's Investment Manager. He is a chartered accountant and has considerable experience of analysing and working with smaller companies.
Mr Allen is a founding Director of the Company. He is a chartered accountant and has held a number of financial management positions within varied sectors where he has gained a thorough knowledge of smaller companies' managerial issues. His financial experience enables him to contribute significantly on accounting and reporting matters. Mr Allen is deemed wholly independent by the other Board members notwithstanding his length of service.
Mr Stevens was appointed Director and Chairman of the Company on 20 December 2006. Formerly a chartered accountant, he has considerable experience in financial management, working primarily in the insurance industry. He is also a private investor with an interest in smaller companies which strengthens the Board's understanding of the Company's portfolio.
None of the Directors has a contract of service with the Company nor, save as disclosed below, has there been any other contract or arrangement between the Company and any Director at any time during the year. None of the Directors nor any persons connected with them had a material interest in any of the Company's transactions, arrangements or agreements during the year. Mr Allen was a director and employee of Forest Support Services PLC (in members' voluntary liquidation) now Bakabo plc, in which the Company has an investment. Mr Horner is the managing director of Chelverton Asset Management Limited, the Company's Investment Manager and is also a director of CEPS PLC in which the Company has an investment, as well as being a Director of the Company.
The interests of the Directors and their families in the Ordinary shares of the Company are set out below:
| At | At | |
|---|---|---|
| 31 August 2011 | 31 August 2010 | |
| K J Allen | 221,762 | 221,762 |
| D A Horner | 448,163 | 698,163 |
| G E Stevens | 669,694 | 1,221,315 |
There have been no changes to any of the above holdings between 31 August 2011 and the date of this Report. None of the Directors has any non-beneficial interests to disclose.
The Company's investments are managed by Chelverton Asset Management Limited ("CAM") under an agreement dated 28 June 2001.
The Company pays CAM, in respect of its services as Investment Manager, a monthly fee (exclusive of VAT) payable in arrears as follows:
The appointment of CAM as Investment Manager may be terminated by either party giving to the other not less than twelve months' notice of such termination. There are no specific provisions contained within the Investment Management Agreement relating to the compensation payable in the event of termination of the agreement other than entitlement to fees, which would be payable within any notice period.
Under an agreement dated 26 June 2001, company secretarial services and the general administration of the Company are undertaken by Capita Sinclair Henderson Limited for an annual fee of £4 7,115 This fee is subject to annual review based on the UK Retail Price Index. In the event that there is an increase in the issued share capital of the Company, the fee will be adjusted upwards by agreement between the Company and Capita Sinclair Henderson Limited. The agreement may be terminated by either party giving to the other not less than six months' notice at any time.
The Board continually reviews the performance of the Investment Manager. In the opinion of the independent Directors the continuing appointment of CAM, as Investment Manager, on the terms outlined in the Investment Management Agreement dated 28 June 2001 and amended on 1 December 2006, is in the best interests of the shareholders as a whole. The reason for this view is that the investment performance of the Company is satisfactory having regard to the exceptional circumstances of the past couple of years. Further, the Board is satisfied that CAM has the required skill and expertise to continue to manage the Company's portfolio and charges fees that are reasonable when compared with those of similar investment trusts.
The Company does not follow any code or standard on payment practice. However it is the Company's payment policy to obtain the best possible terms for all business and, therefore, there is no consistent policy as to the terms used. The Company agrees with its suppliers the terms on which business will be transacted, and it is the Company's policy to abide by those terms. At 31 August 201 1 all suppliers' invoices received had been settled.
The Notice of Annual General Meeting is set out on pages 48 to 51. In addition to the ordinary business of the meeting, the Directors are putting forward resolutions to allot shares, which will allow the Company to issue new shares or sell shares out of treasury equivalent to 10% of its existing issued share capital.
The Directors are also seeking to renew the authority to allot Ordinary shares held in treasury at a discount to NAV.
It is also proposed that at the Annual General Meeting the Company be given renewed authority to buy back its own shares, which may either be cancelled or held in treasury. Any decision regarding placing into treasury, or issuing shares from treasury will only be taken if, in the opinion of the Directors, the decision would be in the interest of shareholders as a whole.
As at 25 November 201 1, being the latest practicable date before the publication of this Annual Report, there are no outstanding warrants or options to subscribe for any Ordinary shares of the Company.
Resolution 10 if passed authorise s the Company to purchase its Ordinary shares in accordance with the terms and conditions contained in a Tender Offer Circular dated 2 8 November 201 1.
1,486,483 Ordinary shares, being 10 per cent of the issued Ordinary shares with an aggregate nominal value of £14,865, were repurchased for cancellation on 4 January 2011 further to a circular to shareholders, issued by the Company on 24 November 2010, concerning the tender offer by Merchant Securities Limited to purchase up to 10 per cent of the issued Ordinary shares in the Company.
The Board will continue to use buybacks and tender offers where it is deemed in the interest of Shareholders.
At the Company's AGM in 2007, a resolution was passed amending the Company's Articles of Association and extending the life of the Company. Unfortunately, due to an administrative oversight, the new Articles of Association adopted by the Company in 2008 did not contain the provisions approved in 2007 and, as a result, the Board did not comply with the obligation (as per the Articles prior to the 2007 AGM) to convene an extraordinary general meeting of the Company on 30 November 2009 to consider a resolution to wind up the Company. A resolution to ratify the Board's actions will be proposed at this year's AGM.
The new Articles of Association adopted by the Company in 2008 and 2010 altered the provisions relating to the life of the Company. These changes were not highlighted to the Company's shareholders at the time of adoption of these sets of Articles and the Company's Annual Report and Accounts in 2008, 2009 and 2010 did not properly describe the provisions of the Company's Articles relating to the life of the Company.
A resolution will be proposed at this year's AGM to ratify the adoption by the Company of the new Articles of Association in 2010. These articles provide that if the Company has not been liquidated, unitised or reconstructed by the Company's AGM in 2014 the board will propose an ordinary resolution that the Company should continue as an investment trust for a further five year period.
The Directors who held office at the date of approval of the Report of Directors' confirm that so far as they are aware:
A resolution will be put to the shareholders at the Annual General Meeting proposing the re-appointment of Hazlewoods LLP as Auditors to the Company. Hazlewoods LLP have indicated their willingness to continue in office.
On behalf of the Board George Stevens Chairman 25 November 2011
The Board considers that throughout the year the Company has been in compliance with the principles of the UK Corporate Governance Code ("the Code"), insofar as they are relevant to the Company's business, except where stated. Additional procedures have been adopted to ensure the Company's current practices are consistent with the recommendations of the Code in all material respects. The Code can be viewed at www.frc.org.uk This Statement forms part of the Report of the Directors as set out on pages 10 to 16.
Mr Stevens and Mr Allen are deemed by the Board to be independent of the Investment Manager. The continuing independence of Mr Allen has been fully considered in light of his having served for more than nine years on the Board since his first election. The Company experienced a significant change in structure and Board composition in August 2001 to the effect that Mr Allen is the only founding Board member, his knowledge of the Company and experience is considered extremely valuable by the other Directors. The Board also considers Mr Stevens is independent, notwithstanding that he is a significant shareholder in the Company. Mr Stevens is experienced in business and accountancy and provides a robust balanced view between the Investment Manager and the shareholders. Mr Horner as managing director of CAM the Investment Manager, is not independent. Given the size and nature of the Board, it is not considered appropriate to appoint a Senior Independent Director. This is a breach of code provision A.3.3. The Company does not have a chief executive officer, but by appointing a management company the roles of chairman and chief executive officer are effectively separated. Brief biographical details of the Directors can be found on page 8.
The Board has formal arrangements under which Directors, in the furtherance of their duties, may take independent professional advice. The Company has Directors' and Officers' liability insurance in place to cover legal defence costs. There are no qualifying third party indemnity provisions in place.
The Board also has direct access to the advice of the Company Secretary, which is responsible for ensuring that Board and Committee procedures are followed and that applicable regulations are complied with.
Directors are required to retire by rotation at least every three years, Mr Stevens is required to stand for re-election this year. Mr Allen stands for re-election annually having served on the Board for more than nine years, as does Mr Horner, as a director of the Investment Manager as a director of another company with the same Investment Manager.
The Chairman, Mr Stevens, is deemed by his fellow independent Board members to be independent and have no conflicting relationships. He considers himself to have sufficient time to commit to the Company's affairs.
During the year the Directors' attendance at meetings has been recorded as follows:
| Board meetings |
Audit Committee |
|
|---|---|---|
| K J Allen | 4 of 4 | 2 of 2 |
| B N Lenygon | 1 of 1 | n/a |
| D A Horner | 4 of 4 | n/a |
| G E Stevens | 4 of 4 | 2 of 2 |
The Directors review at each Board meeting the Company's investments and all other important issues to ensure that control is maintained over the Company's affairs. The Board is responsible for the investment policy and strategic and operational decisions of the Company. A formal schedule of matters specifically reserved for the Board's approval has been adopted. The management of the Company's assets is delegated to CAM, which has discretion to manage the assets of the Company in accordance with the Company's investment objectives and policies subject to the following:
To enable the Directors to fulfil their role, they have timely access to all relevant management and financial information. The full Board meets regularly and maintains contact with the Investment Manager between formal meetings.
The Company also uses a number of committees to control its operations. These committees comprise the full Board, except the Management Engagement and Audit Committees where Mr Horner is not a member by virtue of his association with the Investment Manager. Each committee's delegated responsibilities are clearly defined in written terms of reference, copies of which are available from the Company's Registered Office.
The Audit Committee provides a forum through which the Company's external Auditors report to the Board of Directors. The Committee meets at least twice a year. Mr Allen chairs the Audit Committee.
The primary responsibilities of the Audit Committee are: to review the effectiveness of the internal control environment of the Company and monitor adherence to best practice in corporate governance; to make recommendations to the Board in relation to the re-appointment of the Auditors and to approve their remuneration and terms of engagement; to review and monitor the Auditors' independence and objectivity and the effectiveness of the audit process and provide a forum through which the Company's Auditors report to the Board. The Audit Committee also has responsibility for monitoring the integrity of the financial statements and accounting policies of the Company and for reviewing the Company's financial reporting and internal control policies and procedures. Committee members consider that individually and collectively they are appropriately experienced to fulfil the role required.
The Audit Committee has direct access to the Company's Auditors, Hazlewoods LLP, whose representatives attend the year end Audit Committee meeting. On the basis of these meetings the Audit Committee has been able to assess the effectiveness of the external audit. A formal statement of independence is received from the external Auditors each year.
The Company does not have an internal audit function. All of the Company's management functions are delegated to independent third parties and, as a result, this function is not felt to be appropriate. However the need for one is reviewed annually.
The Management Engagement Committee is responsible for reviewing the terms of the Investment Manager's contract, and those of other service providers. The Committee meets as required and Mr Stevens chairs this committee. No meetings were held in the year.
The Nomination Committee considers the appointment and re-appointment of Directors and meets as and when required. Mr Stevens chairs this committee. No meetings were held during the year. The Committee meets for the purpose of considering appointments to, and removals from, the Board and determining the appointment process.
The Board as a whole fulfils the function of a Remuneration Committee. Remuneration details are given in the Directors' remuneration report on pages 23 and 24. At 31 August 2011 there were no Directors' service agreements and no Director had been granted any options to acquire shares in the Company.
On appointment to the Board, Directors are fully briefed as to their responsibilities by the Chairman and Investment Manager.
As an ongoing policy, Directors' skills and knowledge are updated regularly with information provided by the Company Secretary and various industry bodies.
In accordance with corporate governance best practice, formal performance evaluation of the Board, its committees and individual Directors was undertaken following the year end by verbal consultation. It was concluded that the Board represented an effective combination of skill and expertise and continued to operate successfully as a small, proficient unit. The performance of each Director continues to be effective and demonstrates commitment to the role.
The Directors had been notified of the following substantial interests in the voting shares of the Company at 31 August 2011.
| Number | % of total | |
|---|---|---|
| of shares | voting rights | |
| M E Brockbank | 1,970,760 | 14.8 9 |
| Granite Trust | 1,941,808 | 14.67 |
| Investec Wealth & Investment Limited | 1,671,318 | 12.63* |
| MAM Funds | 1,387,000 | 10.48 |
| Philip J Milton private clients | 1,242,493 | 9.39 |
| G E Stevens | 669,694 | 5.06 |
| M M Brooks | 475,354 | 3. 59 |
| D A Horner | 448,163 | 3.39 |
| Brewin Dolphin private clients | 435,285 | 3.29 |
* Since the year end, Investec Wealth & Investment Limited have notified the Company that they now hold 848,218 shares which equates to 6.41% of the total voting rights
The following information is disclosed in accordance with The Large and Medium-Sized Companies and Groups (Accounts and Reports) Regulations 2008 and DTR 7.2.6.
The rules concerning the appointment and replacement of Directors are contained in the Company's Articles of Association and are discussed on page 17.
The Board is seeking to renew its current powers to buy back and issue shares as detailed on page 15.
Communication with shareholders is given a high priority by both the Board and the Investment Manager and all Directors are available to enter into dialogue with shareholders. Major shareholders of the Company are offered the opportunity to meet with the independent non-executive Directors of the Board in an attempt to ensure that their views are understood. All shareholders are encouraged to attend and vote at the Annual General Meeting, during which the Board and the Investment Manager are available to discuss issues affecting the Company and shareholders have the opportunity to address questions to the Investment Manager, the Board and the Chairman of the Board's standing committees.
Any shareholder who would like to lodge questions in advance of the Annual General Meeting is invited to do so either on the reverse of the proxy card or in writing to the Company Secretary at the address given on page 9. The Company always responds to letters from individual shareholders.
The Annual and Half Yearly Reports of the Company are prepared by the Board and its advisers to present a full and readily understandable review of the Company's performance. Copies of the Annual Report are dispatched to shareholders by mail and are also available for downloading from the Company's website maintained by the Investment Manager at www.chelvertonam.com.
The Directors have reviewed the princip al risks and uncertainties facing the Company (as stated in the Report of the Directors and Business Review on pages 11 to 12). The Company's business activities, together with factors likely to affect its future development, performance and position are described in the Chairman's statement on page 2 and in the Investment Manager's overview on page 3. In addition, note 1 8 to the Financial statements includes the Company's objectives, policies, and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposure to credit risk and liquidity risk. The Company has adequate financial resources and no significant investment commitments and as a consequence, the Directors are of the opinion that the Company has adequate resources to meet all outstanding commitments and to continue in operational existence for the foreseeable future. For this reason, they consider it appropriate to continue to adopt the going concern basis in preparing the Annual Report.
The Directors acknowledge that they are responsible for the Company's systems of internal control and for reviewing their effectiveness.
An ongoing process in accordance with the guidance supplied by the Financial Reporting Council's Internal Control: Guidance for Directors on The UK Corporate Governance Code, has been established for identifying, evaluating and managing the significant risks faced by the Company. This process has been in place throughout the year and up to the date the Annual Report and Accounts were approved and is regularly reviewed by the Board. Key procedures established with a view to providing effective financial control have been in place for the full financial year and up to the date of approval of this report.
The risk management process and systems of internal control are designed to manage rather than eliminate the risk of failure to achieve the Company's objectives. It should be recognised that such systems can only provide reasonable, not absolute, assurance against material misstatement or loss.
Risk assessment and the review of internal controls are undertaken by the Board in the context of the Company's overall investment objective. The review covers the key business, operational, compliance and financial risks facing the Company. In arriving at its judgement of what risks the Company faces, the Board has considered the Company's operations in the light of the following factors:
Against this background, the Board has split the review of risk and associated controls into four sections reflecting the nature of the risks being addressed. These sections are as follows:
Given the nature of the Company's activities and the fact that most functions are subcontracted, the Directors have obtained information from key third party suppliers regarding the controls operated. To enable the Board to make an appropriate risk and control assessment the information and assurances sought from third party suppliers include the following:
The key procedures which have been established to provide internal controls are as follows:
In accordance with guidance issued to directors of listed companies, the Directors have carried out a review of the effectiveness of the system of internal control as it has operated over the year.
On behalf of the Board George Stevens Chairman 25 November 2011
The Board has prepared this report, in accordance with Schedule 8 to The Large and Medium-Sized Companies and Groups (Accounts and Reports) Regulations 2008. An ordinary resolution will be put to the members to approve the report at the forthcoming Annual General Meeting.
The law requires your Company's Auditors to audit certain disclosures provided. Where disclosures have been audited, they are indicated as such. The Auditors' opinion is included in their report on pages 26 and 27.
The Company has three non-executive directors. The Board as a whole fulfils the function of a Remuneration Committee.
The Board's policy is that the remuneration of non-executive Directors should reflect the experience of the Board as a whole and be fair and comparable to similar organisations and appointments. It is intended that this policy will continue for the year ending 31 August 201 2.
The fees of the non-executive Directors are determined within the limits set out in the Company's Articles of Association, and they are not eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits as the Board do not consider it to be appropriate at this time.
It is the Board's policy that none of the Directors has a service contract. The terms of their appointment provide that a Director may be removed without notice and that compensation will not be due on leaving office.
The graph below compares the return to Ordinary shareholders compared to the total shareholder return on a notional investment made up of shares of the same kinds and number as those by reference to which the FTSE All-Share Index is calculated. The index was chosen for comparison purposes, as it is the Company's benchmark used for investment performance measurement purposes.
Years ended 31 August
The Directors who served during the year received the following emoluments in the form of fees:
| 2011 | 2010 | |
|---|---|---|
| G E Stevens | 18,750 | 18,750 |
| K J Allen | 15,000 | 15,000 |
| B N Lenygon (deceased 25 November 2010) | 3,750 | 15,000 |
| 37,500 | 48,750 |
Mr Horner has waived his fees.
This Directors' remuneration report was approved by the Board of Directors on 25 November 2011.
Chairman
The Directors are responsible for preparing the Annual Report and the financial statements and have elected to prepare them in accordance with applicable United Kingdom law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of its profit or loss for that period.
In preparing the financial statements, the Directors are required to:
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy, at any time, the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors, to the best of their knowledge, state that:
The Directors are responsible for the maintenance and integrity of the corporate and financial information related to the Company including on the website of the Investment Manager www.chelvertonam.com.
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
By order of the Board George Stevens Chairman 25 November 2011
To the members of Chelverton Growth Trust PLC
We have audited the financial statements of Chelverton Growth Trust P LC for the year ended 31 August 2011 which comprise the income statement, the reconciliation of movements in shareholders' funds, the balance sheet, the statement of cash flows and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
As explained more fully in the Statement of Directors' responsibilities (set out on page 25), the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the financial statements.
In our opinion the financial statements:
To the members of Chelverton Growth Trust PLC
In our opinion:
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you if, in our opinion:
Under the listing rules we are required to review:
Senior Statutory Auditor For and on behalf of Hazlewoods LLP, Statutory Auditor 25 November 2011
for the year ended 31 August 2011
| 2011 | 2010 | |||||
|---|---|---|---|---|---|---|
| Note | Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
| 7 | – | 913 | 913 | – | 862 | 862 |
| 79 | ||||||
| 3 | (9) | (27) | (36) | |||
| 4 | – | (136) | (145) | – | (145) | |
| (75) | 835 | 760 | ||||
| 5 | – | – | – | – | – | – |
| (69) | 882 | 813 | (75) | 835 | 760 | |
| Revenue | Capital | Total | ||||
| pence | pence | pence | pence | pence | pence | |
| 6 | (0.50) | 6.4 2 | 5.9 2 | (0.50) | 5.62 | 5.12 |
| 2 | 77 Revenue |
– (10) (31) (136) (69) 882 Capital |
77 (41) 813 Total |
79 | – |
The total column of this statement is the profit and loss account of the Company.
All revenue and capital items in the above statement derive from continuing operations.
No operations were acquired or discontinued during the year.
A separate statement of total recognised gains and losses has not been prepared as all such gains and losses are included in the income statement.
The notes on pages 32 to 46 form part of these accounts.
for the year ended 31 August 2011
| Total £'000 3,630 |
|---|
| (394) |
| – |
| 813 |
| 4,049 |
| 2,895 |
| (25) |
| 760 |
| 3,630 |
| (394) ( 69) (25) (75) |
The notes on pages 32 to 46 form part of these accounts.
as at 31 August 2011
| Note | 2011 £'000 |
2010 £'000 |
|
|---|---|---|---|
| Fixed assets | |||
| Investments at fair value | 7 | 4,055 | 3,583 |
| Current assets | |||
| Debtors | 9 | 9 | 6 |
| Cash at bank | 30 | 86 | |
| 39 | 92 | ||
| Creditors – amounts falling due within | |||
| one year | 1 0 | 45 | 45 |
| Net current (liabilities)/assets | ( 6) | 47 | |
| Net assets | 4,049 | 3,630 | |
| Share capital and reserves | |||
| Called up share capital | 1 1 | 132 | 149 |
| Share premium account | 1 2 | 2,674 | 2,674 |
| Capital reserve | 1 2 | (1,857) | (2,739) |
| Capital redemption reserve | 1 2 | 57 | 40 |
| Revenue reserve | 1 2 | 3,043 | 3,506 |
| Equity shareholders' funds | 4,049 | 3,630 | |
| Net asset value per Ordinary share | 1 6 | 30.60p | 24.66p |
The notes on pages 32 to 46 form part of these accounts.
These accounts were approved by the Board of Directors of Chelverton Growth Trust PLC and authorised for issue on 25 November 2011. They were signed on its behalf by
George Stevens Chairman
for the year ended 31 August 2011
| 2011 | 2010 | |
|---|---|---|
| Note | £'000 | £'000 |
| Operating activities | ||
| Investment income received | 76 | 60 |
| Deposit interest received | – | 19 |
| Investment management fees paid | (41) | (35) |
| Secretarial fees paid | (46) | (49) |
| Other cash payments | (9 2) | (115) |
| Net cash outflow from operating activities 1 3 |
(10 3) | (120) |
| Investing activities | ||
| Purchases of investments | (15 6) | – |
| Sales of investments | 597 | 187 |
| Net cash inflow from investing activities | 44 1 | 187 |
| Financing | ||
| Cost of shares purchased for Treasury | – | (25) |
| Cost of shares purchased for cancellation under tender offer | (39 4) | – |
| Net cash outflow from financing activities | (39 4) | (25) |
| (Decrease)/increase in cash 1 5 |
(5 6) | 42 |
The notes on pages 32 to 46 form part of these accounts.
as at 31 August 2011
The accounts are prepared in accordance with UK Generally Accepted Accounting Practice ("UK GAAP") and with the AIC Statement of Recommended Practice ("SORP") issued in January 2009, regarding the Financial Statements of Investment Trust Companies and Venture Capital Trusts. All the Company's activities are continuing.
Dividends receivable on quoted equity shares are included as revenue when the investments concerned are quoted 'ex-dividend'. UK dividends are disclosed excluding the associated tax credit. Dividends receivable on equity and non-equity shares where no ex-dividend date is quoted are brought into account when the Company's right to receive payment is established. All other income is included on an accruals basis.
All expenses are accounted for on an accruals basis and charged through the revenue account in the income statement except as follows:
All investments held by the Company are classified as 'fair value through profit or loss'. Investments are initially recognised at cost, being the fair value of the consideration given. After initial recognition investments are measured at fair value, with changes in the fair value of investments and impairment of investments recognised in the income statement and allocated to capital. Realised gains and losses on investments sold are calculated as the difference between sales proceeds and cost.
Investments are recognised and derecognised on the trade date where a purchase or sale is under a contract whose terms require delivery within the timeframe established by the market concerned, and are initially measured at fair value.
For 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.
For investments that are not actively traded in organised financial markets, the investments are valued at the Directors' estimate of its net realisable value being their estimate of fair value. Generally, fair value will be at cost or, where applicable, at the most recent transaction price. In the case of direct investments in unquoted companies the following valuation technique is applied. Initial valuation is based on the transaction price. Where better indications of fair value become available, such as through subsequent issues of capital or dealings between third parties, the valuation is adjusted to reflect the new evidence. This represents the Directors' view of the amount for which an asset could be exchanged between knowledgeable willing parties in an arm's length transaction.
as at 31 August 2011
The following are accounted for in this reserve:
The charge for taxation, where relevant, is based on the revenue before taxation for the year. Tax deferred or accelerated can arise due to timing differences between the treatment of certain items for accounting and taxation purposes.
Full provision is made for deferred taxation under the liability method, on all timing differences not reversed by the balance sheet date, in accordance with FRS 19: Deferred tax.
The tax effect of different items of income/gain and expenditure/loss is allocated between capital and revenue on the same basis as the particular item to which it relates, using the Company's effective rate of tax for the accounting period.
as at 31 August 2011
| 2 INCOME |
2011 £'000 |
2010 £'000 |
|---|---|---|
| Income from investments | ||
| Dividends from UK companies | 77 | 60 |
| 77 | 60 | |
| Other income | ||
| Interest on Investment Management fee VAT refund | – | 19 |
| Total income | 77 | 79 |
| Total income comprises: | ||
| Dividends | 77 | 60 |
| Interest | – | 19 |
| 77 | 79 |
| 3 | INVESTMENT MANAGEMENT FEE | 2011 | 2010 | ||||
|---|---|---|---|---|---|---|---|
| Revenue | Capital | Total | Revenue | Capital | Total | ||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||
| Investment management fee | 10 | 31 | 41 | 9 | 27 | 36 | |
| 10 | 31 | 41 | 9 | 27 | 36 |
The investment management fee is calculated at the rate of 1/ 12% per month of the gross value of funds under management and is payable monthly in arrears. At 31 August 2011 there was £3,000 outstanding (2010: £3,000).
| 4 OTHER EXPENSES |
2011 | 2010 |
|---|---|---|
| Revenue | Revenue | |
| £'000 | £'000 | |
| Administrative and secretarial services | 4 7 | 46 |
| Directors' remuneration | 38 | 49 |
| Auditors' remuneration: | ||
| audit services | 13 | 12 |
| Other expenses | 3 8 | 38 |
| 136 | 145 |
as at 31 August 2011
| 5 | TAXATION | 2011 | 2010 | ||||
|---|---|---|---|---|---|---|---|
| Revenue | Capital | Total | Revenue | Capital | Total | ||
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||
| Analysis of charge in period | |||||||
| Current tax | – | – | – | – | – | – | |
The tax assessed for the period is lower than the standard rate of corporation tax in the UK of 28% to 31 March 2011 and 26% from 1 April 2011. The differences are explained below:
| 2011 | 2010 | |||||
|---|---|---|---|---|---|---|
| Revenue | Capital | Total | Revenue | Capital | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| (Loss)/profit on ordinary activities before taxation | (69) | 882 | 813 | (75) | 835 | 760 |
| Theoretical tax at UK corporation tax rate | ||||||
| of 2 7.17% (2010: 28%) | ( 1 9) | 2 40 | 2 21 | (21) | 234 | 213 |
| UK dividend income not taxable | ( 21) | – | ( 21) | (17) | – | (17) |
| Non-taxable investment gains | – | (2 48) | (2 48) | – | (241) | (241) |
| Excess expenses for the period | 40 | 8 | 4 8 | 38 | 7 | 45 |
| Current tax charge for the period | – | – | – | – | – | – |
At 31 August 2011 the Company had surplus management expenses of £ 3,312,000 (2010: £3,135,000) which have not been recognised as a deferred tax asset. This is because the Company is not expected to generate taxable income in a future period in excess of the deductible expenses of that future period and, accordingly, it is unlikely that the Company will be able to reduce future tax liabilities through the use of existing surplus expenses. Due to the Company's status as an investment trust and the intention to continue meeting the conditions required to obtain approval as an investment trust in the foreseeable future, the Company has not provided for deferred tax on any gains and losses arising on the revaluation or disposal of investments.
| 6 | RETURN PER ORDINARY SHARE | 2011 | 2010 | ||||
|---|---|---|---|---|---|---|---|
| Revenue | Capital | Total | Revenue | Capital | Total | ||
| pence | pence | pence | pence | pence | pence | ||
| Basic | (0.50) | 6.4 2 | 5.9 2 | (0.50) | 5.62 | 5.12 |
Revenue return per Ordinary share is based on the net revenue loss on ordinary activities after taxation attributable of £69, 362 (2010: £ 74,316) and on 13,7 42,414 (2010: 14,843,882) Ordinary shares, being the weighted average number of Ordinary shares in issue less treasury shares during the year.
Capital return per Ordinary share is based on the net capital gain of £882, 488 (2010: £83 4,570) and on 13,7 42,414 (2010: 14,843,882) Ordinary shares, being the weighted average number of Ordinary shares in issue less treasury shares during the year.
as at 31 August 2011
Total return per Ordinary share is based on the total gain of £813, 126 (2010: £760, 254) and on 13,7 42,414 (2010: 14,843,882) Ordinary shares, being the weighted average number of Ordinary shares in issue less treasury shares during the year.
| 7 INVESTMENTS |
2011 | 2010 |
|---|---|---|
| £'000 | £'000 | |
| Delisted | 43 | 213 |
| AIM | 3,576 | 2,827 |
| Unquoted | 436 | 543 |
| 4,055 | 3,583 |
| AIM £'000 |
Delisted £'000 |
Unquoted* £'000 |
Total £'000 |
|
|---|---|---|---|---|
| Opening book cost | 4,634 | 2,166 | 451 | 7,251 |
| Opening investment holding (losses)/gains | (1,807) | (1,953) | 92 | (3,668) |
| 2,827 | 213 | 543 | 3,583 | |
| Movements in the year: | ||||
| Purchases at cost | 154 | 2 | – | 156 |
| Sales: | – | |||
| Proceeds | ( 366) | ( 226) | (5) | (597) |
| (Losses)/gains on sales | ( 359) | (1, 386) | 5 | (1,740) |
| Movement in investment holding (losses)/gains | 1, 320 | 1, 440 | (107) | 2,653 |
| Closing valuation | 3,576 | 43 | 436 | 4,055 |
| Closing book cost | 4,063 | 556 | 451 | 5,070 |
| Closing investment holding losses | ( 487) | ( 513) | (15) | (1,015) |
| Closing valuation | 3,576 | 43 | 436 | 4,055 |
| 2011 | 2010 | |||
| £'000 | £'000 | |||
| Realised losses on sales | (1,740) | (222) | ||
| Movement in fair value of investments | 2,653 | 1,084 | ||
| Net gains on investments | 913 | 862 |
All quoted investments are made up of equity shares.
* Unquoted investments are valued at the Directors' estimate of their net realisable value, being their estimate of fair value.
as at 31 August 2011
| Cost at Valuation at | Movement | Cost at Valuation at | ||||
|---|---|---|---|---|---|---|
| 31 August | 31 August | Realised | in fair | 31 August | 31 August | |
| 2011 | 2011 | in year | value | 2010 | 2010 | |
| Investment | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| Closed Loop Recycling * | ||||||
| Loan Stock | 252 | – | – | (252) | 252 | 252 |
| Ordinary B Shares | 84 | – | – | – | 84 | – |
| Locker Group | – | – | 5 | – | – | – |
| Parmenion Capital Partners LLP ** | 115 | 436 | – | 145 | 115 | 291 |
| 451 | 436 | 5 | (107) | 451 | 543 |
The Company did not dispose of any unquoted investments in the year, but realised £5,000 in respect of its investment in Locker Group, being a distribution on liquidation.
During the year, the Company incurred transaction costs of £ 1,534 (2010: £nil) and £ 301 (2010: £149) on purchases and sales of investments, respectively. These amounts are included in 'Gains/(losses) on investments at fair value' as disclosed in the income statement.
| Valuation | Cost | Valuation | Last | |||||
|---|---|---|---|---|---|---|---|---|
| Cost at | at | at | at | accounts | Net | |||
| 31 August 31 August 31 August 31 August | period (liabilities) | Pre tax | ||||||
| 2011 | 2011 | 2010 | 2010 | end | /assets | Turnover | profit | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||
| Investment | ||||||||
| Parmenion Capital Partners LLP ** |
115 | 436 | 115 | 291 31/03/2011 | 695 | 1,686 | 80 |
* Closed Loop Recycling is the first food grade plastic recycler in the UK. The company produces food grade PET and HDPE from plastic bottle waste.
** Parmenion Capital Partners LLP offers fund based discretionary investment management services to the Independent Financial Adviser community.
as at 31 August 2011
At 31 August 2011 the Company had a holding of 3% or more of the issued class of share that is material in the context of the accounts in the following investments:
| Number of | Percentage of | ||
|---|---|---|---|
| Security | shares held | issued share capital | Issued share capital |
| CEPS, Ord 5p | 1,000,000 | 12. 027 | 8,314,310 |
| Belgravium Technologies, Ord 5p | 5,000,000 | 4.954 | 100,936,547 |
| AI Claims Solutions, Ord 10p | 2,375,000 | 3. 897 | 60,944,522 |
In addition to the above, the Company has a 5.526% interest in the capital and profits of Parmenion Capital Partners LLP.
| 9 | DEBTORS – amounts falling due within one year | 2011 | 2010 |
|---|---|---|---|
| £'000 | £'000 | ||
| Prepayments and other debtors | 9 | 6 | |
| 9 | 6 | ||
| 10 CREDITORS – amounts falling due within one year | 2011 | 2010 | |
| £'000 | £'000 | ||
| Other creditors | 45 | 45 | |
| 45 | 45 | ||
| 11 CALLED UP SHARE CAPITAL | 2011 | 2010 | |
| £'000 | £'000 | ||
| Allotted, called up and fully paid: | |||
| 13,233,344 (2010: 14,864,827) Ordinary shares of 1p each | 132 | 149 |
There were nil (2010: 145,000) shares held in Treasury at the date of this report. The Treasury shares were cancelled on 5 April 2011.
1,486,483 Ordinary shares, being 10 per cent of the issued Ordinary shares, were repurchased for cancellation on 4 January 2011 further to a circular to shareholders, issued by the Company on 24 November 2010, concerning the tender offer by Merchant Securities Limited to purchase up to 10 per cent of the issued Ordinary shares in the Company .
as at 31 August 2011
At the annual general meeting of the Company falling in the calendar year 2014 and, if the Company has not then been liquidated, unitised or reconstructed, at each fifth annual general meeting of the Company convened by the Board thereafter, the Board shall propose an ordinary resolution that the Company should continue as an investment trust for a further five year period.
If any such ordinary resolution is not passed, the Board shall draw up proposals for the voluntary liquidation, unitisation or other reorganisation of the Company for submission to the Members of the Company at a general meeting to be convened by the Board for a date not more than three months after the date of the meeting at which such ordinary resolution was not passed.
The Board shall ensure that such proposals for the liquidation, unitisation or reconstruction of the Company as are approved by special resolution are implemented as soon as is reasonably practicable after the passing of such resolution.
| 12 RESERVES | ||||
|---|---|---|---|---|
| Share | Capital redemption | Revenue | ||
| premium | reserve | reserve | reserve | |
| Year ended 31 August 2011 | £'000 | £'000 | £'000 | £'000 |
| At 1 September 2010 | 2,674 | (2,739) | 40 | 3,506 |
| Net losses on realisation of investments | – | (1,7 40 ) | – | – |
| Movement in fair value of investments | – | 2,653 | – | – |
| Cost of shares purchased for cancellation under tender offer | – | – | – | (394) |
| Shares cancelled | – | – | 17 | – |
| Costs charged to capital | – | (31) | – | – |
| Retained net loss for the year | – | – | – | (69) |
| At 31 August 2011 | 2,674 | (1,857) | 57 | 3,043 |
as at 31 August 2011
| 12 RESERVES (continued) | ||||||
|---|---|---|---|---|---|---|
| Share | Capital redemption | Revenue | ||||
| premium | reserve | reserve | reserve | |||
| Year ended 31 August 2010 | £'000 | £'000 | £'000 | £'000 | ||
| At 1 September 2009 | 2,674 | (3,574) | 40 | 3,606 | ||
| Net losses on realisation of investments | – | (222) | – | – | ||
| Movement in fair value of investments | – | 1,084 | – | – | ||
| Costs of shares purchased for Treasury | – | – | – | (25) | ||
| Costs charged to capital | – | (27) | – | – | ||
| Retained net loss for the year | – | – | – | (75) | ||
| At 31 August 2010 | 2,674 | (2,739) | 40 | 3,506 |
| 13 RECONCILIATION OF NET RETURN BEFORE FINANCE | |||
|---|---|---|---|
| COSTS AND TAXATION TO NET CASH OUTFLOW FROM | 2011 | 2010 | |
| OPERATING ACTIVITIES | £'000 | £'000 | |
| Net return before finance costs and taxation | 813 | 760 | |
| Net capital return before finance costs | (882) | (835) | |
| Expenses charged to capital | (31) | (27) | |
| Decrease in creditors and accruals | – | (18) | |
| Increase in prepayments and accrued income | (3) | – | |
| (103) | (120) | ||
| 14 RECONCILIATION OF NET CASH FLOW TO NET CASH | 2011 | 2010 | |
| £'000 | £'000 | ||
| Net cash at 1 September 2010 | 86 | 44 | |
| Net cash (outflow)/inflow | (56) | 42 | |
| Net cash at 31 August 2011 | 30 | 86 | |
| 15 ANALYSIS OF CHANGES IN NET CASH | At | At | |
| 31 August | Cash | 31 August | |
| 2010 | flows | 2011 | |
| £'000 | £'000 | £'000 | |
| Cash at bank | 86 | (56) | 30 |
| 86 | (56) | 30 |
as at 31 August 2011
The basic net asset value per Ordinary share is based on net assets of £4,049,000 (2010: £3,630,000) and on 13,233,344 (2010: 14,719,827) Ordinary shares, being the number of shares in issue at the year end, less treasury shares.
At 31 August 2011 there were no capital commitments or contingent liabilities (2010: £nil).
The Company's financial instruments comprise securities and other investments, cash balances and debtors and creditors that arise from its operations, for example, in respect of sales and purchases awaiting settlement and debtors for accrued income.
The Company primarily invests in companies traded on AIM with a market capitalisation at the time of investment of up to £50 million. The Company finances its operations through its issued capital and existing reserves.
In following its investment objective, the Company is exposed to a variety of risks that could result in a reduction in the Company's net assets. These risks are market risk (comprising exchange rate risk, interest rate risk and other price risk), credit risk and liquidity risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below:
Market price risk arises mainly from uncertainty about future prices of financial investments used in the Company's business. It represents the potential loss the Company might suffer through holding market positions by way of price movements other than movements in exchange rates and interest rates.
The Company's investment portfolio is exposed to market price fluctuations which are monitored by the Investment Manager who gives timely reports of relevant information to the Directors. Investment performance is also reviewed at each Board meeting.
The Directors are conscious of the fact that the nature of AIM investments is such that prices can be volatile. Investors should be aware that the Company is exposed to a higher rate of risk than exists within a fund which holds traditional blue chip securities.
Adherence to the investment objectives and the internal control limits on investments set by the Company mitigates the risk of excessive exposure to any one particular type of security or issuer.
The Company's exposure to other changes in market prices at 31 August on its investments is as follows:
| 2011 | 2010 | |
|---|---|---|
| £'000 | £'000 | |
| Fair value through profit or loss investments | 4,055 | 3,583 |
A 20% decrease in the market value of investments at 31 August 2011 would have decreased net assets attributable to shareholders by £811,000 (2010: £717,000). An increase of the same percentage would have an equal but opposite effect on net assets available to shareholders.
as at 31 August 2011
All of the Company's assets are in sterling and accordingly the only currency exposure the Company has is through the trading activities of its investee companies.
Changes in interest rates may cause fluctuations in the income and expenses of the Company.
The majority of the Company's financial assets are non-interest bearing. As a result, the Company's financial assets are not subject to significant amounts of risk due to fluctuations in the prevailing levels of market interest rates.
The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment decisions.
The exposure at 31 August of financial assets and financial liabilities to interest rate risk is as follows:
| 2011 | 2010 | |
|---|---|---|
| £'000 | £'000 | |
| Cash at bank | 30 | 86 |
| 30 | 86 |
The effect of an interest rate increase of 1% would increase net revenue before taxation on an annualised basis by £300. If there was a decrease in interest rates of 0.5% net revenue before taxation would decrease by £150. These calculations are based on balances as at 31 August 2011 and may not be representative of the year as a whole.
Credit risk is the risk of financial loss to the Company if the contractual party to a financial instrument fails to meet its contractual obligations.
The carrying amounts of financial assets best represent the maximum credit risk exposure at the balance sheet date. Bankruptcy or insolvency of the custodian may cause the Company's rights with respect to securities held with the custodian to be delayed.
The majority of the Company's assets are AIM listed securities, which under normal conditions can be sold to meet funding commitments if necessary. These may however be difficult to realise in adverse market conditions. The Company's investment in Parmenion Capital Partners LLP, representing 10.8% of the portfolio, could be more difficult to realise as it is not a tradable instrument.
The Company's financial liabilities comprise of creditors as disclosed in note 1 0. All items are due within one year.
as at 31 August 2011
The Company's capital management objectives are to increase net asset value per share at a higher rate than other quoted smaller company trusts and the FTSE All-Share Index.
Primarily the Company finances its operations through its issued capital and existing reserves. At 31 August 2011 the Company had no borrowings.
All of the financial assets and liabilities of the Company are held at fair value.
The financial instruments of the Company fall into the following categories.
| At | value | ||
|---|---|---|---|
| amortised | through | ||
| cost | Total | ||
| £'000 | £'000 | £'000 | £'000 |
| – | – | 4,055 | 4,055 |
| – | 9 | – | 9 |
| – | 9 | 4,055 | 4,064 |
| Loans and | Assets at fair receivables profit or loss |
| Creditors | 45 | – | – | 45 |
|---|---|---|---|---|
| 45 | – | – | 45 |
as at 31 August 2011
| Assets at fair | ||||
|---|---|---|---|---|
| At | value | |||
| amortised | Loans and | through | ||
| cost | receivables profit or loss | Total | ||
| £'000 | £'000 | £'000 | £'000 | |
| Assets as per the Balance sheet | ||||
| Investments | – | 252 | 3,331 | 3,583 |
| Debtors | – | 6 | – | 6 |
| Total | – | 258 | 3,331 | 3,589 |
| Creditors | 45 | – | – | 45 |
|---|---|---|---|---|
| 45 | – | – | 45 |
In accordance with Financial Reporting Standard No.29: 'Financial Instruments: Disclosures', the Company must disclose the fair value hierarchy of financial instruments.
The fair value hierarchy consists of the following three levels:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
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.
as at 31 August 2011
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:
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 Company. The Company considers observable data to be investments actively traded in organised financial markets, fair value is generally determined by reference to Stock Exchange quoted market bid prices (or last traded in respect of SETS) at the close of business on the balance sheet date, without adjustment for transaction costs necessary to realise the asset.
Investments whose values are based on quoted market prices in active markets, and therefore classified within level 1, include active listed equities. The Company 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.
Investments classified within level 3 have significant unobservable inputs. Level 3 instruments include unquoted holdings. As observable prices are not available for these securities, the Company has used valuation techniques to derive the fair value. The Company has no level 2 investments, and level 3 investments consist only of unquoted holdings.
as at 31 August 2011
| Level 1 £'000 |
Level 2 £'000 |
Level 3 £'000 |
Total £'000 |
|
|---|---|---|---|---|
| Equity investments | 3,576 | – | 479 | 4,055 |
| Total | 3,576 | – | 479 | 4,055 |
| At 31 August 2010 | Level 1 £'000 |
Level 2 £'000 |
Level 3 £'000 |
Total £'000 |
| Equity investments | 2,827 | – | 504 | 3,331 |
| Total | 2,827 | – | 504 | 3,331 |
The following table presents the movement in the level 3 investments for the period ended 31 August 2011:
| Equity investments | |
|---|---|
| £'000 | |
| Opening balance | 504 |
| Purchases | 2 |
| Sales proceeds: | ( 231) |
| Total gains included in gains on investments in the income statement | 204 |
| Closing balance | 479 |
Under the terms of the agreement dated 28 June 2001, the Company has appointed Chelverton Asset Management Limited to be the Investment Manager. The fee arrangements for these services and fees payable are set out in the Report of the Directors on page 14 and in note 3 to the accounts. Mr Horner, a Director of the Company, is also a director of Chelverton Asset Management Limited and CEPS PLC, in which the Company has an investment.
Shareholders wishing to communicate directly with the Board should contact the Company Secretary who will pass on shareholder details to the relevant Board member.
| Contact details | ||
|---|---|---|
| Company Secretary: | Capita Sinclair Henderson Limited | Tel: 01392 412122 Fax: 01392 253282 |
| Registrar: | Share Registrars Limited | Tel: 01252 821390 www.shareregistrars.uk.com |
| Investment Manager: | Chelverton Asset Management Limited | Tel: 01225 483030 |
| Website: | www.chelvertonam.com |
Postal address details are shown on page 9.
The Company's share price is listed in the Financial Times under "Investment Companies".
| August | Company year end |
|---|---|
| November | Annual results |
| December | AGM |
| April | Half-year results |
The Company's net asset value is released to the Stock Exchange monthly and is posted on the Investment Manager's website: www.chelvertonam.com.
Notice is hereby given that the Annual General Meeting of Chelverton Growth Trust PLC will be held at the offices of Chelverton Asset Management Limited, 9 Dartmouth Street, London SW1H 9BP at 11.00 am on Wednesday, 21 December 2011 for the following purposes:
To consider and if thought fit to pass the following resolutions as ordinary resolutions:
The following resolutions will be proposed as special resolutions.
i) up to an aggregate nominal amount of £ 13,233.
ii) the sale of shares which, immediately before such sale, were held by the Company as Treasury shares.
Save as expressly provided in this resolution, Terms and Conditions shall bear the same meanings in this resolution.
Registered Office: By Order of the Board Beaufort House Capita Sinclair Henderson Limited 51 New North Road Secretary Exeter EX4 4EP 25 November 2011
NOTES:
1. To be entitled to attend and vote at the meeting (and for the purpose of the determination by the Company of the number of votes they may cast) members must be entered on the Company's register of members at 6 pm on 13 December 201 1 (or, in the event of any adjournment, 6 pm on the date which is two days (excluding weekends and bank holidays) before the time of the adjourned meeting). Changes to the register of members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the meeting. A member entitled to attend, vote and speak at this meeting may appoint one or more persons as his/her proxy to attend, speak and vote on his/her behalf at the meeting. A proxy need not be a member of the Company. If multiple proxies are appointed they must not be appointed in respect of the same shares. To be effective, the enclosed form of proxy, together with any power of attorney or other authority under which it is signed or a certified copy thereof, should be lodged at the office of the Company's Registrar, Share Registrars Limited, Suite E, First Floor, 9 Lion and Lamb Yard, Farnham, Surrey GU9 7LL not later than 48 hours before the time of the meeting. The appointment of a proxy will not prevent a member from attending the meeting and voting and speaking in person if he/she so wishes. A member present in person or by proxy shall have one vote on a show of hands and on a poll shall have one vote for every Ordinary share of which he/she is the holder.
In the case of joint holders of a share, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the vote or votes of the other joint holder or holders, and seniority shall be determined by the order in which the names of the holders stand in the register.
Any question relevant to the business of the Annual General Meeting may be asked at the meeting by anyone permitted to speak at the meeting. You may alternatively submit your question in advance by letter addressed to the Company Secretary at the registered office.
a) A copy of the Articles of Association of the Company.
7. CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so for this meeting by following the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear's specifications and must contain the information required for such instructions, as described in the CREST Manual. The message, in order to be valid, must be transmitted so as to be received by the Company's agent (ID 7RA36) by the latest time for receipt of proxy appointments specified in Note 1 above. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the Company's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
For use at the Annual General Meeting of Chelverton Growth Trust PLC
| I/We (Block Capitals please) | ||||
|---|---|---|---|---|
| . | ||||
| Meeting/ | a member/members of Chelverton Growth Trust PLC ("the Company"), hereby appoint the Chairman of the | |||
| . Number of Shares held | ||||
| as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held at the offices of Chelverton Asset Management Limited, 9 Dartmouth Street, London, SW1H 9BP at 11.00 am on Wednesday, 21 December 2011, and at any adjournment thereof. |
||||
| Signature | ||||
| Date 2011 | ||||
| Please mark this box to indicate that this proxy appointment is one of multiple appointments being made (see note 7). | ||||
| Please indicate with an X in the spaces below how you wish your votes to be cast. | FOR | AGAINST WITHHELD | ||
| RESOLUTION 1 | To adopt the financial statements for the year ended 31 August 2011, together with the Reports of the Directors and Independent Auditors thereon. |
|||
| RESOLUTION 2 | To receive and accept the Directors' remuneration report. | |||
| RESOLUTION 3 | To re-elect Mr D Horner as a Director of the Company. | |||
| RESOLUTION 4 | To re-elect Mr K Allen as a Director of the Company. | |||
| RESOLUTION 5 | To re-elect Mr G Stevens as a Director of the Company. | |||
| RESOLUTION 6 | To re-appoint Hazlewoods LLP as Auditors to the Company, and to authorise the Directors to determine their remuneration. |
|||
| RESOLUTION 7 | To authorise the Directors to allot shares other than in accordance with statutory pre-emption rights. |
|||
| RESOLUTION 8 | To authorise the Directors to issue shares previously held in treasury at a discount to net asset value. |
|||
| RESOLUTION 9 | To authorise the Company to renew its authority to make market purchases of its Ordinary shares. |
|||
| RESOLUTION 10 | To authorise the Company to purchase its Ordinary shares under the Tender Offer and subsequent buyback. |
|||
| RESOLUTION 11 | To ratify previous actions of the Directors and the adoption of the new Articles in 2010. |
|||
Notes
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