Annual Report • Aug 31, 2016
Annual Report
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Annual Report for the year ended 31 August 2016
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 MSCI Small Cap UK 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 |
| Strategic Report including: | |
| – Chairman's statement | 2 |
| – Investment Manager's overview | 4 |
| – Portfolio review | 6 |
| – Portfolio holdings | 8 |
| – Portfolio breakdown by sector and by index | 9 |
| – Other statutory information | 10 |
| Directors | 14 |
| Investment Manager, Secretary and Advisers | 15 |
| Corporate Governance Statement | 16 |
| Report of the Directors | 23 |
| Directors' remuneration report | 27 |
| Statement of Directors' responsibilities in respect of the financial statements | 30 |
| Independent Auditors' report | 31 |
| Income statement | 35 |
| Statement of changes in equity | 36 |
| Statement of financial position | 37 |
| Statement of cash flows | 38 |
| Notes to the financial statements | 39 |
| Shareholder information | 54 |
| Notice of Annual General Meeting | 55 |
| Form of Proxy | 59 |
| Benchmark | MSCI Small Cap UK Index |
|---|---|
| Investment Manager | Chelverton Asset Management Limited See page 15 for further details |
| Total net assets | £3,987,000 as at 31 August 2016 |
| Market capitalisation | £5,229,000 as at 31 August 2016 |
| Capital structure | 6,377,088 Ordinary 1p shares carrying one vote each. |
| Year ended | Year ended | ||
|---|---|---|---|
| 31 August 2016 | 31 August 2015 | % Change | |
| Net assets | £3,987,000 | £4,672,000 | (14.66) |
| Net asset value per share (NAV) | 62.53p | 54.95p | 13.79 |
| MSCI Small Cap UK Index | 363.11 | 349.89 | 3.78 |
| Share price | 82.00p | 42.50p | 92.94 |
| Premium/(discount) to net asset value | 31.14% | (22.66)% | |
| Revenue loss after taxation | £(140,000) | £(68,000) | |
| Revenue loss per share | (1.86)p | (0.75)p | |
| Capital gain per share | 8.26p | 3.97p |
An investment company as defined under Section 833 of the Companies Act 2006.
The Strategic Report has been prepared in accordance with section 414A of the Companies Act 2006 (the"Act"). Its purpose is to inform the Members of the Company and help them understand how the Directors have performed their duty under section 172 of the Act to promote the success of the Company.
I am pleased to announce another year of good progress in which the fund's Net Asset Value ("NAV") per share has increased from 54.95p to 62.53p – an increase of 13.79% a significant outperformance over the Company's benchmark index, the MSCI Small Cap UK Index which rose by 3.78%.
The period under review has been dominated by the run-up to the EU Referendum Vote and the ensuing outcome. We have now entered a period of uncertainty fuelled by seemingly endless media speculation. This state of affairs is likely to last for a significant period of time.
Generally speaking, the companies in the portfolio are domestically focused and their business dealings are therefore linked directly to the prosperity and growth of the UK economy. With the substantial and sudden decline in sterling since the Referendum Vote many will see a rise in their impute costs, it is hoped that this will be compensated by increased export opportunity and increased market share in their UK markets due to the competitive advantage a lower pound gives vis a vis overseas product and services. It should be noted that many investee companies employ people from the EU whom have come to work in the UK, it is important that their future status is defined as quickly as possible.
In the period under review, the UK economy grew at, or around, the long-term average rate. Both the IMF and Treasury have had to consistently increase their assessment of the rate of economic growth in the UK. It no longer looks like the UK will slip into recession in the short term, as had been widely forecast before the Referendum vote, and whilst growth may be subdued for a period, it is widely expected that the Government will announce measures in the Autumn Statement to bolster the economy and provide a much needed investment in the infrastructure of the UK.
Inflation, although expected to rise in the short term, is still at historically low levels and well below the Bank of England's target of 2%. Whilst bank base rates look like they will remain at historically low levels the access to credit for many small companies is still difficult and even if secured, expensive.
The companies in the portfolio have generally made progress over the past year and as ever we hope that the investment and development that has taken place in the past few years will, notwithstanding the comments above, begin to bear fruit over the coming years.
As noted in my statement last year, the Board continue to examine strategic options that will enable all Shareholders to realise full value efficiently in the medium term. The tender process is a key element of this strategy and the Board remains committed to an annual tender as a means of offering Shareholders the ability to realise some of their shareholding at a modest discount to net asset value. In order to provide some logical consistency, the tender will take place the same time as it has this year, in March with the pricing to be decided when the interim accounts are produced at the end of February 2017. Given the continued strong performance of the unquoted portfolio and the oversubscribed tender earlier this year, it is the Board's intention, if possible, to maintain the tender at 25% in 2017.
I do not usually comment on short term fluctuation in the Company Share price as we are focussed upon the creation of long term value as measured by the NAV of the Company.
It would be my reasonable expectation that the share price would trade around the NAV of the Company as reflected in the report and accounts (currently 62.53p). Therefore, I see no fundamental reason for the current 108% premium to the NAV to be maintained.
I would like to thank David Horner and his team for the excellent performance achieved over the last 12 months and although undoubtedly challenges exist the portfolio seems well positioned and I am hopeful of continued good performance over the longer term.
Kevin Allen
Chairman 7 November 2016
In the past year the UK economy has again grown steadily. However, given the result of the EU Referendum in June no-one can now be sure how things will develop going forward. This uncertainty will, for a few years, become the "new normal" and companies and investors will have to adapt.
Given the instability and tensions, both political and economic, in the European Union this change in attitude is long overdue. The unexpected result of the EU Referendum has acted as a catalyst for investors, economists and politicians to consider the overall EU/UK relationship with more clarity. The position of the UK has been well documented but there are currently profound political and economic questions being asked in Italy, Austria, Holland, France, Germany and Hungary. There is little doubt that in a year's time the whole political landscape may have changed very dramatically.
Without wishing to appear complacent, we believe that the difficult change that the UK will need to go through over the next two to five years will leave the country in a better position politically and economically.
The companies that this portfolio invests in are essentially small UK businesses that will need to adapt and be "fleet of foot" to ensure that they are winners going into the future. The Government appear to have recognised that the SME sector is critical to the future wealth and development of the UK economy and that these businesses need help to prosper.
The Eurozone continues to sluggishly recover from the "Great Recession". The ongoing problems in Greece have not been resolved, and probably cannot be until Greece is allowed to leave the Euro. There is clear evidence that many parts of the EU banking system will require restructuring and substantial recapitalisation. The migrant crisis does not seem to abate and with major offensives in Syria and Iraq this human tragedy is only likely to get worse.
The most important change to the portfolio was the sale of Parmenion Capital Partners LLP to Aberdeen Asset Management plc at the beginning of the year for £1.78m with a possible further payment, dependent on Parmenion's performance, up to a maximum of £674,000. Taking the progress of Parmenion since the sale and the many factors that could possibly de-rail any earn-out being achieved, it was decided at this stage to include £100,000 in these accounts in respect of this possible future sum. We will continue to closely monitor performance against the earn-out criteria and revalue the asset accordingly.
This year we have sold the balance of the shareholding in IDOX plc which has been a major contributor to the fund over many years. We have reduced our holding in LPA plc as its share price has finally recognised its value as a specialist supplier to the manufacturers of railway rolling stock.
Additional investments were made in Touchstar plc, the new name for Belgravium Technologies plc, which, following its interim results has begun to see some recognition in the share price of the operational progress that has been made. Further investments were made in Petards plc and Lombard Risk Management plc both of which we expect to make good contributions to the growth of the fund in the current year.
A new unquoted investment was made in Pedalling Forth Limited, trading as VeloVixen. This young business supplies by an internet "shop" cycling clothing for women. As most people are aware, cycling is enjoying a massive growth in participation and the percentage increase in women cyclists is probably greater than that of the overall market. This funding is to finance additional marketing of the business as it develops.
The holding in Chelverton Asset Management Holdings Limited, the company used to finance the MBO of Chelverton Asset Management, the Investment Manager of this fund, was again revalued upwards reflecting the growth in funds under management. The investment in Transflex Vehicle Rental was also increased, recognising the significant progress made; this was highlighted with the company coming third in a league table of the fastest growing North East companies. The holding in La Salle Education was written off to reflect the disappointing take up in their product by the market place.
The ongoing growth of Transflex Vehicle Rental, the largest holding in the fund, is expected to continue with the opening of new sales and operational outlets. Expected further recovery and growth in the share prices of a number of the AIM holdings should also contribute to the future increase in the asset value.
We expect to see further share price recovery and growth across the portfolio over the next twelve months and another year of good progress in 2016/17.
Chelverton Asset Management Limited 7 November 2016
| Investment | Sector | Valuation £'000 |
% of total portfolio |
|---|---|---|---|
| AIM traded | |||
| Alliance Pharma | Pharmaceuticals & Biotechnology | 49 | 1.3 |
| Acquisition of the manufacturing, sales and distribution rights to pharmaceutical products | |||
| CEPS | Support Services | 614 | 15.6 |
| Trading holding company for a number of companies supplying services and products | |||
| Lombard Risk Management | Software & Computer Services | 201 | 5.1 |
| analysis and regulatory compliance software to financial organisations | Lombard Risk is one of the world's leading providers of collateral management, liquidity | ||
| LPA Group | Electronic & Electrical Equipment | 123 | 3.1 |
| Design, manufacture and marketing of industrial electrical accessories | |||
| MTI Wireless Edge | Technology Hardware & Equipment | 165 | 4.2 |
| Developer and manufacturer of sophisticated antennas and antenna systems | |||
| Northbridge Industrial Services | Industrial Engineering | 32 | 0.8 |
| Specialist industrial hire services | |||
| Petards Group | Support Services | 335 | 8.5 |
| Development, provision and maintenance of advance security systems and related services | |||
| Plutus Powergen | Flexible Energy Supply | 400 | 10.2 |
| flexible electricity generation | Providers of management infrastructure and expertise to operate power plants and provide | ||
| Touchstar* | Technology Hardware & Equipment | 406 | 10.4 |
| Software systems for warehousing and distribution | |||
| Universe Group | Support Services | 73 | 1.9 |
| Provision of credit fraud prevention, loyalty and retail systems | |||
| Nasdaq Traded | |||
| One Horizon Group | Support Services | 84 | 2.1 |
| Provider of mobile satellite communications equipment and airtime |
| Investment | Sector | Valuation £'000 |
% of total portfolio |
|---|---|---|---|
| Unquoted | |||
| Airways Engineering | Support Services | ||
| Ordinary B Shares | – | – | |
| Loan Stock | – | – | |
| Commercial aviation maintenance | |||
| Anaxsys Technology | Healthcare Equipment & Services | 23 | 0.6 |
| A medical device company for patient monitoring and screening | |||
| Chelverton Asset Management Holdings | Support Services | 141 | 3.6 |
| Investment management, including providing services to Chelverton Growth Trust Plc | |||
| La Salle Education | Support Services | – | – |
| A UK based company dedicated to improving mathematics education | |||
| Main Dental Partners | Support Services | ||
| Ordinary B Shares | 175 | 4.5 | |
| Loan Stock | – | – | |
| Operator of dental surgeries | |||
| Pedalling Forth | General Retailers | 150 | 3.8 |
| Internet retailer of cycling clothing for women | |||
| Security Research Group | Support Services | 52 | 1.3 |
| Leading provider of Local Authority residential property searches; provision of packaging solutions |
|||
| Transflex Vehicle Rental | Support Services | 902 | 23.0 |
| Light commercial vehicle rental | |||
| Portfolio Valuation | 3,925 | 100.0 |
* Formerly Belgravium Technologies
| 31 August 2016 | 31 August 2015 | |||
|---|---|---|---|---|
| Investment | Valuation £'000 |
% of total portfolio |
Valuation £'000 |
% of total portfolio |
| Transflex Vehicle Rental | 902 | 23.0 | 555 | 11.0 |
| CEPS | 614 | 15.6 | 610 | 12.1 |
| Touchstar* | 406 | 10.4 | 337 | 6.7 |
| Plutus Powergen | 400 | 10.2 | 290 | 5.8 |
| Petards Group | 335 | 8.5 | 169 | 3.4 |
| Lombard Risk Management | 201 | 5.1 | 144 | 2.9 |
| Main Dental | 175 | 4.5 | 175 | 3.5 |
| MTI Wireless Edge | 165 | 4.2 | 86 | 1.7 |
| Pedalling Forth | 150 | 3.8 | – | – |
| Chelverton Asset Management Holdings | 141 | 3.6 | 120 | 2.4 |
| LPA Group | 123 | 3.1 | 118 | 2.3 |
| One Horizon Group | 84 | 2.1 | 134 | 2.7 |
| Universe Group | 73 | 1.9 | 65 | 1.3 |
| Security Research Group | 52 | 1.3 | 62 | 1.2 |
| Alliance Pharma | 49 | 1.3 | 56 | 1.1 |
| Northbridge Industrial Services | 32 | 0.8 | 60 | 1.2 |
| Anaxsys Technology | 23 | 0.6 | 13 | 0.3 |
| Airways Engineering | – | – | – | – |
| IDOX** | – | – | 164 | 3.3 |
| La Salle Education | – | – | 25 | 0.5 |
| Parmenion Capital Partners LLP** | – | – | 1,839 | 36.6 |
| Total | 3,925 | 100.0 | 5,022 | 100.0 |
* Formerly Belgravium Technologies
** Sold during the year
Percentage of portfolio by sector
Percentage of portfolio by index
As explained within the Report of the Directors on page 23, the Company carries on business as an investment trust. Investment trusts are collective closed-ended public limited companies.
Chelverton Growth Trust plc is a public limited company incorporated in England and Wales (registration number 2989519) with its registered office being Suite 8, Bridge House, Courtenay Street, Newton Abbot TQ12 2QS.
The Company is an investment company under section 833 of the Companies Act.
The Company's shares are listed on the London Stock Exchange main market under the code CGW (sedol 0262134).
The Board of Directors is responsible for the overall stewardship of the Company, including investment and dividend policies, corporate and gearing strategy, corporate governance procedures and risk management. Biographical details of the three Directors, can be found on page 14.
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.
The Company invests principally in securities of publicly quoted UK companies, though it may invest in unquoted securities. The performance of the Company's investments is compared to the MSCI Small Cap UK Index.
The Company may 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 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 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 earnings prospects over a five year time horizon.
The Company's Investment Manager is Chelverton Asset Management Limited, an independent investment manager focussing exclusively on achieving returns for investors based on UK investment analysis of the highest quality. The founder 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 pages 2 and 3 and the Investment Manager's overview on pages 4 and 5 give details of the Company's activities during the year under review.
At each Board meeting, the Board considers compliance with the Company's investment policy and other investment restrictions during the reporting period. An analysis of the portfolio on 31 August 2016 can be found on pages 6 to 9 of the report.
All of the Company's activities are outsourced to third parties. As such it does not have any physical assets, property, or operations of its own and does not generate any greenhouse gas or other emissions.
Reviews of the Company's returns during the financial year, the position of the Company at the year end, and the outlook for the coming year are contained in the Investment Manager's overview on pages 4 and 5.
As stated within the Corporate Governance Statement on pages 16 to 22, the Board applies the principles detailed in the internal control guidance issued by the Financial Reporting Council, and has established a continuing process designed to meet the particular needs of the Company in managing the risks and uncertainties to which it is exposed.
The principal risks and uncertainties faced by the Company are described below and in note 15 which provides detailed explanations of the risks associated with the Company's financial instruments.
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 Corporate Governance Statement.
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, premiums/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"), the Alternative Investment Fund Managers Directive ("AIFMD") and the Listing Rules of the Financial Conduct Authority ("FCA"). The Company has noted the recommendations of the UK Corporate Governance Code and its statement of compliance appears on pages 16 to 22. 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 FCA. 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 financial statements 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 15 to the financial statements.
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 15 to the financial statements.
The Board seeks to mitigate and manage these risks through continual review, policy setting and enforcement of contractual obligations. It also regularly monitors the investment environment and the management of the Company's investment portfolio. Investment risk is spread through holding a wide range of securities in different industrial sectors.
Following a detailed review of the Annual Report and Accounts by the Audit Committee, the Directors consider that taken as a whole it is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company's performance, business model and strategy.
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's share price and the premium/discount of the share price in relation to the NAV.
The Company's income statement is set out on page 35.
The movement of the NAV is compared to the MSCI Small Cap UK Index, the Company's benchmark. The NAV per Ordinary share at 31 August 2016 was 62.53p (2015: 54.95p), an increase of 13.79%. By comparison the benchmark rose 3.78%.
The Company's share price at the year end was 82.00p (2015: 42.50p).
The Board reviews the performance and progress of the Company over various time periods and uses these assessments, regular investment performance updates from the Investment Manager and a continuing programme of monitoring risk, to assess the future viability of the Company. The Directors consider that a period of three years is the most appropriate time horizon to consider the Company's viability and after careful analysis, the Directors believe that the Company is viable over a three-year period. The Directors are of the opinion that the Company has sufficient liquidity in the portfolio in readily realisable smaller capitalised AIM traded securities.
In order to maintain viability, the Company has a robust risk control framework for the identification and mitigation of risk which is reviewed regularly by the Board. The Directors also seek reassurance from suppliers that their operations are well managed and they are taking appropriate action to monitor and mitigate risk. The Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period of assessment.
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 to 5.
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 purchase of the Company's 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 Board has registered itself as the AIFM with the FCA under the Directive and confirm that all required returns have been completed and filed.
By Order of the Board
Kevin Allen Chairman 7 November 2016
The Directors are:
Kevin Allen (Chairman) 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 the chairman of CEPS plc. He qualified as a chartered accountant and has considerable experience of analysing and working with smaller companies. In 2013 he resigned his membership of The Institute of Chartered Accountants in England and Wales, as his career is now fully involved in fund management.
Ian Martin has successfully headed both quoted and unquoted companies in both the insurance and media industry. From 2002 to 2012, he oversaw the growth of Avesco, the AIM quoted provider to the broadcast industry, including delivering Olympic ceremonies in London and Beijing. Prior to that he held senior board positions at Ascot Underwriting, Admiral Insurance and the Brockbank Group plc. Ian is currently chairman of the Internet Safe Search company Hypersonica plc, Touchstar plc, managing director of Neon Underwriting, a Lloyds Managing Agency and a non-executive director of JJ Location one of the most respected photographic studios in London.
Chelverton Asset Management Limited 12B George Street Bath BA1 2EH Tel: 01225 483 030
Chelverton Asset Management Limited was formed in 1998. The investment team consists of David Horner, David Taylor and James Baker 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.
ISCA Administration Services Limited Suite 8, Bridge House Courtenay Street Newton Abbot TQ12 2QS
Share Registrars Limited The Courtyard 17 West Street Farnham Surrey GU9 7DR
HSBC 46 Market Street Falmouth Cornwall TR11 3AA
Hazlewoods LLP Windsor House Bayshill Road Cheltenham GL50 3AT
Jarvis Investment Management Limited 78 Mount Ephraim Royal Tunbridge Wells Kent TN4 8BS
Shareholders hold the Directors of a Company responsible for the stewardship of that Company's affairs. Corporate governance is the process by which a board of directors discharges this responsibility. The Company's arrangements in respect of corporate governance are explained in this report.
The Company is required to comply with, or to explain its non-compliance with, the relevant provisions of the UK Corporate Governance Code issued by the Financial Reporting Council (the 'FRC') in September 2012 which can be found at www.frc.org.uk.
The Board recognises the importance of a strong corporate governance culture and has established a framework for corporate governance which it considers appropriate to the business of the Company as an investment trust.
The Company has not complied with the provisions of the Corporate Governance Code in respect of the following:
At the end of the year the Board consisted of two independent Directors and Mr Horner, who is not considered independent. The biographies of all the Directors are contained on page 14.
The Board believes that the two independent Directors are independent in character and that there are no relationships or circumstances which are likely to affect their judgement. All Directors receive relevant training, collectively or individually, as necessary. The Directors believe that the Board has the balance of skills, experience, ages and length of service to enable it to provide effective leadership and proper governance of the Company. The Directors possess a range of business and financial expertise relevant to the direction of the Company and consider that they commit sufficient time to the Company's affairs.
The Directors of the Company meet at regular Board Meetings. During the year to 31 August 2016, the Directors' attendance at meetings has been recorded as follows:
| Board Meetings |
Audit Committee |
|
|---|---|---|
| K J Allen | 4 of 4 | 2 of 2 |
| D A Horner | 4 of 4 | n/a |
| I P Martin | 4 of 4 | 2 of 2 |
The Board subscribes to the view that long-serving Directors should not be prevented from forming part of an independent majority. It does not consider that the length of a Director's tenure reduces his ability to act independently. The Board's policy on tenure is that continuity and experience are considered to add significantly to the strength of the Board and, as such, no limit on the overall length of services of any of the Company's Directors, including the Chairman, has been imposed, although the Board believes in the merits of periodic and progressive refreshment of its composition.
The basis on which the Company aims to generate value over the longer term is set out in the Strategic Report on pages 2 to 13. All matters, including corporate and gearing strategy, investment and dividend policies, corporate governance procedures and risk management are reserved for the approval of the Board of Directors. The Board receives full information on the Company's investment performance, assets, liabilities and other relevant information in advance of Board meetings.
In accordance with the Listing Rules for investment entities, the Board has reviewed the status of its individual Directors and the Board as a whole. The non-executive Directors are considered by the Board to be independent and free of any business or other relationship which could interfere with the exercise of their independent judgement.
The three Directors were appointed at the 2015 Annual General Meeting for a term to expire at the next Annual General Meeting. All three non-executive Directors offer themselves for re-election at the forthcoming Annual General Meeting.
Mr Allen and Mr Martin 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. Mr Allen and Mr Martin are the founding Board members. Mr Martin, having previously resigned from the Board, was re-appointed on 19 December 2013. Their knowledge of the Company and experience is considered extremely valuable by the other Director. Mr Horner, as managing director of Chelverton Asset Management Limited 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 14.
The Board is responsible for the investment policy and strategic and operational decisions of the Company and for ensuring that the Company is run in accordance with all regulatory and statutory requirements. These matters include:
The Investment Manager ensures that Directors have timely access to all relevant management and financial information to enable informed decisions to be made and contacts the Board as required for specific guidance. The Company Secretary and Investment Manager prepare monthly reports for Board consideration on matters of relevance, for example current valuation and portfolio changes, cash availability and requirements and a breakdown of shareholdings by listing and sector. The Board takes account of Corporate Governance best practice.
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 Chelverton Asset Management Limited, which has discretion to manage the assets of the Company in accordance with the Company's investment objectives and policies subject to the following:
• Opportunistic top-up investments of up to £50,000 are permitted in any company on the basis that the Board is informed.
The Board is aware of its duty to act in the interests of the Company. The Board acknowledges that there are risks associated with investment in companies which fail to conduct business in a socially responsible manner. The Investment Manager considers social environmental and ethical factors which may affect the performance or value of the Company's investments. The Directors, through the Manager, encourage companies in which investments are held to adhere to best practice in the area of Corporate Governance. They believe that this can best be achieved by entering into a dialogue with company management to encourage them, where necessary, to improve their policies in this area. The Company's ultimate objective is to deliver superior long term returns for Shareholders which the Board believe will be produced on a sustainable basis by investing in companies which adhere to best practice in the area of Corporate Governance. Accordingly the Fund Manager will seek to favour companies which pursue best practice in this area.
The Chairman, Mr Allen, is independent. He considers himself to have sufficient time to commit to the Company's affairs. Given the size and nature of the Board it is not considered appropriate to appoint a Senior Independent Director.
The Company also uses a number of committees to control and monitor 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 and is chaired by Mr Martin.
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, finanical reporting process 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 Committee has advised the Board that based on its assessment of their performance and independence Hazlewood's LLP has fulfilled its obligations to the Company and Shareholders and recommends their re-appointment as Auditors.
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.
| Matter | Action |
|---|---|
| Investment Portfolio Valuation The Company's portfolio is invested predominantly in Listed and Unquoted securities. Sixty three percent of the portfolio is highly liquid and listed on recognised stock exchanges. Errors in the portfolio valuation could have a material impact on the Company's NAV per share. |
The Listed portfolio is valued at bid price at the end of each month by the Company Secretary. The Unquoted Securities are reviewed on a quarterly basis by the Investment Manager and at the year end with the Auditors. |
| Misappropriation of Assets Misappropriation of the Company's investments or cash balances could have a material impact on its NAV per share. |
The portfolio is valued at bid price at the end of each month by the Company Secretary. The portfolio is agreed on a monthly basis by the Company Secretary and the Investment Manager during the completion of the monthly accounts. The Company Secretary reconciles cash balances on a monthly basis. |
| Income Recognition Incomplete or inaccurate income recognition could have an adverse effect on the Company's NAV and earnings per share and its level of dividend cover. |
The level of income received for the year is agreed on a monthly basis with the Investment Manager and the Company Secretary. |
The Audit Committee reviews the scope and results of the audit and, during the year, considered and approved Hazlewoods plan for the audit of the financial statements for the year ended 31 August 2016. At the conclusion of the audit Hazlewoods did not highlight any issues to the Audit Committee which would cause it to qualify its audit report nor did it highlight any fundamental internal control weaknesses. Hazlewoods issued an unqualified audit report which is included on pages 31 to 34.
Hazlewoods LLP was first appointed as Auditor to the Company on 27 February 2007. As part of its review of the continuing appointment of the Auditor, the Committee considers the length of tenure of the audit firm, its fees and independence, along with any matters raised during each audit. The Committee has discussed with Hazlewoods LLP its objectivity, independence and experience in the investment trust sector.
The Committee has recommended the re-appointment of Hazlewoods LLP on each occasion since their initial appointment, and no tender has been undertaken for the audit of the Company. The Audit Partner for the Company has been rotated once since their initial appointment, most recently in respect of the financial year ended 31 August 2012. 2017 will be Hazlewoods LLP's tenth year as Auditor and in accordance with Auditing Practice Board Ethical Standard 3 (Revised) the audit will be put to tender in 2017 for the 2018 audit. In light of this tender the Audit Committee consider it appropriate to extend the Audit Partner's period of appointment for a further year to safeguard the quality of the audit, and Hazlewoods LLP have confirmed that appropriate safeguards will be implemented to ensure their continued objectivity and independence.
Hazlewoods LLP has indicated its willingness to continue in office as Auditor of the Company. Following its review, the Committee considers that individually and collectively the Auditor is appropriately experienced to fulfil the role required and has recommended their re-appointment to the Board. A Resolution for their re-appointment will be proposed at the forthcoming Annual General Meeting.
The Committee has considered the independence and objectivity of the Auditor and it is satisfied in these respects that Hazlewoods LLP has fulfilled its obligations to the Company and its Shareholders. During the year Hazlewoods provided tax compliance services to the Company. These were not provided by the audit team and the fee is not significant at £2,000 plus VAT. No other non-audit services were provided in the year. The Committee has advised that based on its assessment of their performance and independence, Hazlewoods LLP has fulfilled its obligations to the Company and its Shareholders and on this basis recommends their reappointment as Auditor.
The Nomination Committee considers the appointment and re-appointment of Directors and meets as and when required, and is chaired by Mr Allen. The Committee meets for the purpose of considering appointments to, and removals from, the Board and determining the appointment process.
The Management Engagement Committee reviews the performance of the Investment Manager under the Investment Management Agreement. Based on this review it has recommended to the Board that the Investment Manager's appointment continues. The Committee also reviewed the performance of the Company Secretary, the Custodian and the Registrar and matters concerning their respective agreements with the Company.
The Directors met on 20 October 2016 and decided that given the functions performed by the Management Engagement and Nominations Committees and the size and composition of the Board, the Committees should be dissolved. The functions previously undertaken by the Committees will in future be performed by the Board of the Company.
The Board of Directors of the Company comprised three male Directors in the year to 31 August 2016. While the Board recognises the benefits of diversity in future appointments to the Board, the key criteria for the appointment of new directors will be the appropriate skills and experience in the interest of shareholder value. The Directors are satisfied that the Board currently contains members with an appropriate breadth of skills and experience.
The Board as a whole fulfils the function of a Remuneration Committee. Remuneration details are given in the Directors' remuneration report on pages 27 to 29. At 31 August 2016 there were no Directors' service agreements and no Director had been granted any options to acquire shares in the Company.
On 21 December 2015, ISCA Administration Services Limited was appointed as Company Secretary and Administrator to the Company and is responsible for ensuring that Board and Committee procedures are followed and that applicable regulations are complied with. The Company Secretary also ensures timely delivery of information and reports and that the statutory obligations of the Company are met. All the Directors have access to the advice and services of the Company Secretary.
There is an agreed procedure for Directors to seek independent professional advice if necessary at the Company's expense on any matter that concerns them in the furtherance of their duties. The Chairman liaises on a regular basis with the other Directors and the Company Secretary to ensure that they are maintaining adequate training and continuing professional development.
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 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 16.
• The Board is seeking to renew its current powers to buy back and issue shares as detailed on page 25.
Communication with Shareholders is addressed by both the Board and the Investment Manager and the Directors are available to enter into dialogue with Shareholders. Shareholders of the Company are encouraged to take the opportunity to meet with the Directors of the Board at the Annual General Meeting and 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 15. 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. The Annual and Half Yearly Reports are also available for downloading from the Company's website maintained by the Investment Manager at www.chelvertonam.com.
The Board is responsible for the Company's system of internal control and for reviewing its effectiveness. It has established an ongoing process designed to meet the particular needs of the Company in managing the risks to which it is exposed, consistent with the internal control guidance issued by the FRC.
Adequate internal controls are in place for identifying, evaluating and managing risks faced by the Company. This process, together with key procedures established with a view to providing effective financial control, has been in place for the full financial year and up to the date the financial statements were approved and is consistent with the internal control guidance issued by the FRC.
The Board has reviewed the need for an internal audit function. It has decided that the systems and procedures employed by the Directors, provide sufficient assurance that a sound system of internal control, which safeguards the assets, is maintained. An internal audit function specific to the Company is therefore considered unnecessary.
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:
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
Chairman 7 November 2016
The Directors present their report and audited financial statements of the Company for the year ended 31 August 2016. This report also contains certain information required in accordance with s992 of the Companies Act 2006.
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 ('HMRC') as an authorised investment trust under Section 1158 of the Corporation Tax Act 2010. The Company will be treated as an investment trust company for each subsequent accounting period, subject to there being no serious breaches of the conditions. The Directors are of the opinion that the Company has conducted its affairs for the year ended 31 August 2016 so as to be able to continue to qualify as an authorised investment trust. The Company is an investment company as defined in Section 833 of the Companies Act 2006.
The results for the year and the proposed transfer from revenue reserves are set out in the income statement on page 35. 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 | |
|---|---|
| K J Allen | 8 November 1994 |
| D A Horner | 1 May 2006 |
| I P Martin | 19 December 2013 |
Mr Allen and Mr Martin will offer themselves for re-election at the Annual General Meeting.
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.
The Board as a whole believes that Messrs Allen, Horner and Martin, 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 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 Martin is also a founding Director of the Company although he was only re-elected to the Board in 2013. He has also held a number of management positions within varied sectors where he gained a thorough knowledge of smaller companies' managerial issues. His financial experience enables him to contribute significantly on accounting and reporting matters. Mr Martin is deemed wholly independent by the other Board members.
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 Horner is the managing director of Chelverton Asset Management Limited, the Company's Investment Manager and is also the chairman of CEPS PLC in which the Company has an investment. The three Directors also have personal holdings in Chelverton Asset Management Holdings in which Mr Horner is a director and in which the Company has an investment. Mr Martin is the chairman of Touchstar plc in which the Company has an investment.
The Directors had been notified of the following notifiable interests in the voting shares of the Company at 31 August 2016.
| Number of shares |
% of total voting rights |
|
|---|---|---|
| IONIC Investments SA | 968,539 | 15.19 |
| Miton Global Opportunities PLC | 750,057 | 11.76 |
| Mr D A Horner | 557,197 | 8.74 |
| Charles Stanley Group PLC | 335,736 | 5.26 |
| Mrs RJ Dale Harris | 325,000 | 5.10 |
| Mr K Allen | 221,762 | 3.48 |
At the date of this report Miton Global Opportunities PLC notified the. Company that they were interested in 500,000 shares (7.84%), no other changes have been notified.
On 3 March 2016 the Company announced the result of the tender offer and buyback offer issued to Shareholders on 28 January 2016. Under the tender offer, 2,124,562 Ordinary shares, representing 24.99% of the issued share capital with a nominal value of £21,245, were repurchased for cancellation on 18 March 2016, at a price of 52.92p per share for a total consideration of £1,149,000 including the tender offer costs.
At the year end and as at the date of this report there were 6,377,088 Ordinary 1p shares in issue each carrying one vote in the event of a poll. No shares are held in Treasury.
The Company's investments are managed by Chelverton Asset Management Limited ("CAM") under an agreement dated 28 June 2001. As previously stated above, Mr Horner is a director of CAM.
The Company pays CAM, in respect of its services as Investment Manager, an annual fee of 1% payable monthly in arrears.
The amount payable to CAM for the year ending 31 August 2016 was £46,000. At the year-end £3,500 was outstanding to CAM.
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 21 December 2015, company secretarial services and the general administration of the Company are undertaken by ISCA Administration Services Limited for an annual fee of £40,000.
The Board, excluding Mr Horner, 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. 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 2016 all suppliers' invoices received had been settled.
In assessing the going concern basis of accounting, the Directors have had regard to the guidance issued by the Financial Reporting Council. They have considered the current cash position of the Company, and forecast revenues for the current financial year. The Directors have also taken into account the Company's investment policy, which is described on page 10 and which is subject to regular Board monitoring processes, and is designed to ensure the Company holds sufficient liquid securities to meet possible cash flow needs.
The Company retains title to all assets held by its custodian. Note 15 to the financial statements sets out the financial risk profile of the Company and indicates the effect on its assets and liabilities of falls and rises in the value of securities, market rates of interest and changes in exchange rates.
The Directors believe, in the light of the controls and review processes noted above and bearing in mind the nature of the Company's business and assets, that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the accounts.
The Company's financial instruments comprise its investment portfolio, cash balances and debtors and creditors that arise directly from its operations such as sales and purchases awaiting settlement and accrued income. The financial risk management objectives and policies arising from its financial instruments and the exposure of the Company to risk are disclosed in note 15 to the financial statements.
The Notice of Annual General Meeting is set out on pages 55 to 58.
It is also proposed in Resolutions 7 and 8 that at the Annual General Meeting the Company be given renewed authority to buy back its own shares in the market and through a Tender Offer, 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 and at prices below NAV. Of the authority granted at the 2015 Annual General Meeting to repurchase shares other than under a tender offer, authority to repurchase 1,274,397 shares remained outstanding.
As at 4 November 2016, 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.
The Directors who held office at the date of approval of the Report of the 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
Kevin Allen Chairman 7 November 2016
The Board has prepared this report, in accordance with Schedule 8 to The Large and Medium-Sized Companies and Groups (Accounts and Reports) Regulations 2013. 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 31 to 34.
The Company has three non-executive directors. The Board as a whole fulfils the function of a Remuneration Committee which considers and approves Directors' remuneration.
The Board is mindful of its obligation to set remuneration levels which will attract and maintain an appropriate calibre of individuals whilst simultaneously protecting the interests of Shareholders. The Company's Articles cap Directors' fees to £100,000 per annum. During the year to 31 August 2016, the Board reviewed the exisiting remuneration levels and recommended they remain unchanged from those to 31 August 2015.
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 shows the percentage growth over the past five years in the Company's NAV and share price compared to the growth in the MSCI Small Cap UK Index.
The Directors who served during the year received the following emoluments in the form of fees:
| 2016 £ |
2015 £ |
|
|---|---|---|
| K J Allen | 18,750 | 18,750 |
| I P Martin | 15,000 | 15,000 |
| D A Horner* | – | – |
| 33,750 | 33,750 |
*Mr Horner has waived his fees.
The interests of the Directors and their families in the Ordinary shares of the Company are set out below:
| At 31 August 2016 |
At 31 August 2015 |
|
|---|---|---|
| K J Allen | 221,762 | 221,762 |
| D A Horner | 557,197 | 557,197 |
| I P Martin | 1,200 | 1,200 |
There have been no changes to any of the above holdings between 31 August 2016 and the date of this report. None of the Directors has any non-beneficial interests to disclose.
| 2016 | 2015 | % Change | |
|---|---|---|---|
| Cost of shares purchased for cancellation under tender offer | 1,124,318 | 445,862 | 152.17 |
| Total remuneration paid to Directors | 33,750 | 33,750 | 0.00 |
None of the Directors nor any persons connected with them had a material interest in the Company's transactions, arrangements or agreements during the year.
The Directors' Remuneration Report for the year ended 31 August 2015 was approved by Shareholders at the Annual General Meeting held on 15 December 2015. The votes cast by proxy were as follows:
| Number of votes | % of votes cast | |
|---|---|---|
| For | 3,474,797 | 99.65 |
| Against | 12,055 | 0.35 |
| Total votes cast | 3,486,852 | 100.00 |
| Number of votes withheld | Nil |
The Directors' Remuneration Policy was approved by Shareholders at the Annual General Meeting held on 15 December 2015. The votes cast by proxy were as follows:
| Number of votes | % of votes cast | |
|---|---|---|
| For | 3,474,797 | 99.65 |
| Against | 12,055 | 0.35 |
| Total votes cast | 3,486,852 | 100.00 |
The Board's policy is that the remuneration of non-executive Directors should be sufficient to attract and retain directors with suitable skills and experience, and is determined in such a way as to reflect the experience of the Board as a whole, in order to be comparable with other organisations and appointments. It is intended that this policy will continue for the year ending 31 August 2017 and thereafter.
The fees for non-executive Directors are determined within the limits set out in the Company's Articles of Association. The approval of Shareholders would be required to increase the limits set out in the Articles of Association. Directors are not eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits, as the Board does not consider such arrangements or benefits necessary or appropriate. Fees for any new Director appointed will be made on the same basis.
The policy was approved by Shareholders at the Annual General Meeting on 15 December 2015.
| Expected Fees for Year | Fees for Year | |
|---|---|---|
| to 31 August 2017 | to 31 August 2016 | |
| Chairman's fee | 18,750 | 18,750 |
| Non-Executive Director fee | 15,000 | 15,000 |
This Directors' remuneration report was approved by the Board of Directors on 7 November 2016.
On behalf of the Board
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.
Under applicable law and regulations, the Directors are also responsible for preparing a Report of the Directors, Directors Remuneration Report and Corporate Governance Statement.
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.
On behalf of the Board
Chairman 7 November 2016
To the members of Chelverton Growth Trust PLC
We have audited the financial statements of the Company for the year ended 31 August 2016 which comprise the Income statement, the Statement of changes in equity, the Statement of financial position, 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 30), the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards required us to comply with the Auditing Practices Board'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 addition, we read all the financial and non-financial information in the Strategic Report and the Report of the Directors to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
In our opinion the financial statements:
Without modifying our opinion, we highlight the following matters that are, in our judgement, likely to be most important to a users' understanding of our audit. Our audit procedures relating to these matters were designed in the context of our audit of the financial statements as a whole, and not to express an opinion on individual transactions, balances or disclosures.
The Company is required to apportion its expenses between revenue and capital. The allocation is important as the Company can only purchase shares under a tender offer out of revenue or the Special reserve. The split has to be performed on the basis of the Board's expected long-term capital and revenue returns. Our audit work included, but was not restricted to, a detailed review of the actual dividend and capital income received in the past 10 years compared to the Board's expected long-term capital and revenue returns. The company's accounting policy on this allocation is included in note 1.
Investment income is the Company's main source of revenue and is recognised when the Company's right to the return is established in accordance with the Statement of Recommended Practice. Our audit work included, but was not restricted to a detailed review of those sources of income recorded in the financial statements and further consideration of other potential sources of income. The Company's accounting policy on income is included in note 1 and its disclosures about income are included in note 2.
The Company operates a system of financial controls to mitigate its vulnerability to fraud and its financial statements to material error and is reliant upon the efficacy of these controls to ensure that its financial statements present a true and fair view. The financial statements contain a number of significant accounting estimates that require an element of judgement on behalf of management and that are, therefore, potentially open to manipulation. Our audit work included, but was not restricted to, a review of all significant management estimates and detailed consideration of all material judgements applied during the completion of the financial statements. We also reviewed material journal entries processed by management during the period. The Company's principal accounting policies are included in note 1.
The Company owns a number of unquoted fixed asset investments. The valuation of unquoted investments is subjective and requires an element of judgement on behalf of management and are, therefore, potentially open to manipulation. Our audit work included, but was not restricted to, a review of all significant management estimates and detailed consideration of all material judgements applied during the valuation of the unquoted investments at the balance sheet date.
We apply the concept of materiality in planning and performing our audit, in evaluating the effect of any identified misstatements and in forming our opinion. For the purpose of determining whether the financial statements are free from material misstatement, we define materiality as the magnitude of a misstatement or an omission from the financial statements or related disclosures that would make it probable that the judgement of a reasonable person, relying on the information would have been changed or influenced by the misstatement or omission. We also determine a level of performance materiality, which we use to determine the extent of testing needed, to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole.
We established materiality for the financial statements as a whole to be £79,000, which is 2.0% of the value of the Company's net assets. For income and expenditure items we determined that misstatements of lesser amounts than materiality for the financial statements as a whole would make it probable that the judgement of a reasonable person, relying on the information would have been changed or influenced by the misstatement or omission. Accordingly, we established materiality for revenue items within the income statement to be £26,000, which is 18.5% of the Company's net return on ordinary activities before taxation, excluding gains on investments at fair value.
Our audit approach was based on a thorough understanding of the Company's business and is risk-based. The day-today management of the Company's investment portfolio, the custody of its investments and the maintenance of the Company's accounting records is outsourced to third-party service providers. Accordingly, our audit work is focused on obtaining an understanding of, and evaluating, internal controls at the Company and the third-party service providers and inspecting records and documents held by the third-party service providers. We undertook substantive testing on significant transactions, balances and disclosures, the extent of which was based on various factors such as our overall assessment of the control environment, the effectiveness of controls over individual systems and the management of specific risks.
In our opinion:
We have nothing to report in respect of the following:
Under the International Standards on Auditing (UK and Ireland), we are required to report to you if, in our opinion, information in the Strategic Report and the Report of the Directors is:
In particular, we are required to consider whether we have identified any inconsistencies between our knowledge acquired during the audit and the Directors' Statement that they consider the Annual Report is fair, balanced and understandable and whether the Annual Report appropriately discloses those matters that we communicated to the Audit Committee which we consider should be disclosed.
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:
For and on behalf of Hazlewoods LLP, Statutory Auditor, Cheltenham 7 November 2016
for the year ended 31 August 2016
| 2016 | 2015 | ||||||
|---|---|---|---|---|---|---|---|
| Note | Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
|
| Gains on investments at fair value | 7 | – | 565 | 565 | – | 406 | 406 |
| Income | 2/9 | 27 | 100 | 127 | 60 | – | 60 |
| Investment management fee | 3 | (12) | (35) | (47) | (12) | (37) | (49) |
| Other expenses | 4 | (155) | (7) | (162) | (116) | (12) | (128) |
| Net return on ordinary activities before taxation |
(140) | 623 | 483 | (68) | 357 | 289 | |
| Taxation on ordinary activities | 5 | – | – | – | – | – | – |
| Net return on ordinary activities after taxation |
(140) | 623 | 483 | (68) | 357 | 289 | |
| Revenue | Capital | Total | Revenue | Capital | Total | ||
| Return per Ordinary share | 6 | (1.86)p | 8.26p | 6.40p | (0.75)p | 3.96p | 3.21p |
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 Other Comprehensive Income has not been prepared as all such gains and losses are included in the Income statement.
The notes on pages 39 to 53 form part of these accounts.
for the year ended 31 August 2016
| Called up Share Capital £'000 |
Share Premium Account £'000 |
Special Reserve £'000 |
Capital Reserve £'000 |
Capital Redemption Reserve £'000 |
Revenue Reserve £'000 |
Total £'000 |
|
|---|---|---|---|---|---|---|---|
| Year ended 31 August 2016 | |||||||
| 1 September 2015 | 86 | 2,674 | – | 913 | 103 | 896 | 4,672 |
| Cost of shares purchased for cancellation under tender offer |
(22) | – | (1,149) | – | 22 | – | (1,149) |
| Cancellation of share premium account |
– | (2,674) | 2,674 | – | – | – | – |
| Costs of cancelling share premium account |
– | – | (19) | – | – | – | (19) |
| Net return after taxation for the year |
– | – | – | 623 | – | (140) | 483 |
| 31 August 2016 | 64 | – | 1,506 | 1,536 | 125 | 756 | 3,987 |
| Year ended 31 August 2015 | |||||||
| 1 September 2014 | 96 | 2,674 | – | 556 | 93 | 1,435 | 4,854 |
| Cost of shares purchased for cancellation under tender offer |
(10) | – | – | – | 10 | (446) | (446) |
| Net return after taxation for the year |
– | – | – | 357 | – | (93) | 264 |
| 31 August 2015 | 86 | 2,674 | – | 913 | 103 | 896 | 4,672 |
The notes on pages 39 to 53 form part of these accounts.
as at 31 August 2016
| Note | 2016 £'000 |
2015 £'000 |
|
|---|---|---|---|
| Fixed assets | |||
| Investments at fair value | 7 | 3,925 | 5,022 |
| Current assets | |||
| Debtors | 9 | 6 | 9 |
| Cash at bank | 261 | 69 | |
| 267 | 78 | ||
| Creditors – amounts falling due within one year | 10 | (305) | (428) |
| Net current liabilities | (38) | (350) | |
| Debtors – amounts falling due after one year | 9 | 100 | – |
| Net assets | 3,987 | 4,672 | |
| Share capital and reserves | |||
| Called up share capital | 11 | 64 | 86 |
| Share premium account | 12 | – | 2,674 |
| Special reserve | 12 | 1,506 | – |
| Capital reserve | 12 | 1,536 | 913 |
| Capital redemption reserve | 12 | 125 | 103 |
| Revenue reserve | 12 | 756 | 896 |
| Equity shareholders' funds | 3,987 | 4,672 | |
| Net asset value per Ordinary share | 13 | 62.53p | 54.95p |
The notes on pages 39 to 53 form part of these accounts.
These accounts were approved by the Board of Directors of Chelverton Growth Trust PLC and authorised for issue on 7 November 2016. They were signed on its behalf by
Kevin Allen Chairman
for the year ended 31 August 2016
| 2016 | 2015 | |
|---|---|---|
| £'000 | £'000 | |
| Cash flows from operating activities | ||
| Net return on ordinary activities | 483 | 289 |
| Adjustment for: | ||
| Net capital return | (623) | (357) |
| Income credited to capital | 100 | – |
| Expenses charged to capital | (42) | (48) |
| Interest paid | 11 | 15 |
| Increase in creditors | 27 | 7 |
| (Increase)/decrease in debtors | (97) | 1 |
| Other | – | (2) |
| Cash used in operations | (141) | (95) |
| Cash flows from investing activities | ||
| Purchase of investments | (420) | (549) |
| Proceeds from sales of investments | 2,082 | 960 |
| Net cash from investing activities | 1,662 | 411 |
| Cash flows used in financing activities | ||
| Cost of shares purchased for cancellation under tender offer | (1,149) | (472) |
| Cost of cancelling share premium account | (19) | – |
| New loan advanced | 300 | 200 |
| Capital repayment of loan | (450) | - |
| Interest paid | (11) | (15) |
| Net cash used in financing activities | (1,329) | (287) |
| Net increase in cash | 192 | 29 |
| Cash at the beginning of the year | 69 | 40 |
| Cash at the end of the year | 261 | 69 |
The notes on pages 39 to 53 form part of these accounts.
for the year ended 31 August 2016
The financial statements are prepared in accordance with applicable United Kingdom accounting standards, including Financial Reporting Standard 102 ("FRS 102"), the Companies Act 2006 and with the AIC Statement of Recommended Practice ("SORP") issued in November 2014, 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 traded on other financial markets such as the OTCQB, fair value is generally determined by reference to the share price at close of business on the balance sheet date, discounted to reflect the best estimate of the discount that may need to be applied for the shares to be sold as a single investment.
For investments that are not actively traded in organised financial markets, fair value is determined as set out below under the heading 'significant judgements and estimation uncertainty'.
for the year ended 31 August 2016
Preparation of the financial statements requires the Investment Manager to make significant judgements. The items in the financial statements where these judgements have been made are:
Investments that are not actively traded in organised financial markets, are valued at the Directors' estimate of the investment's 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.
The following are accounted for in this reserve:
The Special reserve was created by the cancellation of the Share Premium account by order of the High Court on 13 January 2016. It can be used for the repurchase of the Company's own shares.
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 102.
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.
for the year ended 31 August 2016
| 2016 | 2015 | ||||||
|---|---|---|---|---|---|---|---|
| Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
||
| Income from investments | |||||||
| Income from LLP investments | 15 | 100 | 115 | 35 | – | 35 | |
| UK net dividend income | 12 | – | 12 | 21 | – | 21 | |
| Income from loan interest | – | – | – | 4 | – | 4 | |
| Total income | 27 | 100 | 127 | 60 | – | 60 |
| 2016 | 2015 | |||||
|---|---|---|---|---|---|---|
| Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
|
| Investment management fee | 12 | 35 | 47 | 12 | 37 | 49 |
The investment management fee is calculated at the rate of 0.0833% per month, equating to 1% per annum, of the gross value of funds under management and is payable monthly in arrears. At 31 August 2016 there was £3,500 outstanding (2015: £4,000).
| 2016 £'000 |
2015 £'000 |
|
|---|---|---|
| Administrative and secretarial services | 59 | 36 |
| Directors' remuneration | 34 | 34 |
| Audit fee | 19 | 15 |
| Other expenses | 50 | 43 |
| 162 | 128 |
| 2016 | 2015 | ||||||
|---|---|---|---|---|---|---|---|
| Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
||
| Analysis of charge in period | |||||||
| Current Tax | – | – | – | – | – | – |
for the year ended 31 August 2016
The tax assessed for the period is lower than the standard rate of corporation tax in the UK of 20%. The differences are explained below:
| 2016 | 2015 | |||||
|---|---|---|---|---|---|---|
| Revenue £'000 |
Capital £'000 |
Total £'000 |
Revenue £'000 |
Capital £'000 |
Total £'000 |
|
| Theoretical tax at UK corporation tax rate of 20.00% (2015: 20.42%) |
||||||
| Corporation tax | (28) | 125 | 97 | (14) | 73 | 59 |
| Investment income not taxable | (5) | (20) | (25) | (12) | - | (12) |
| Non-taxable investment gains | – | (113) | (113) | - | (83) | (83) |
| Excess expenses for the period | 33 | 8 | 41 | 26 | 10 | 36 |
| Current tax charge for the period |
– | – | – | – | – | – |
At 31 August 2016 the Company had surplus management expenses of £3,925,000 (2015: £3,720,000) 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.
| 2016 | 2015 | ||||||
|---|---|---|---|---|---|---|---|
| Revenue | Capital | Total | Revenue | Capital | Total | ||
| pence | pence | pence | pence | pence | pence | ||
| Basic | (1.86)p | 8.26p | 6.40p | (0.75)p | 3.96p | 3.21p |
Revenue return per Ordinary share is based on the net revenue loss on ordinary activities after taxation attributable of £140,000 (2015: £68,000) and on 7,538,051 (2015: 9,019,251) Ordinary shares, being the weighted average number of Ordinary shares in issue during the year.
Capital return per Ordinary share is based on the net capital gain of £623,000 (2015: £357,000) and on 7,538,051 (2015: 9,019,251) Ordinary shares, being the weighted average number of Ordinary shares in issue during the year.
Total return per Ordinary share is based on the total gain of £483,000 (2015: £289,000) and on 7,538,051 (2015: 9,019,251) Ordinary shares, being the weighted average number of Ordinary shares in issue during the year.
for the year ended 31 August 2016
| 2016 | 2015 | ||||
|---|---|---|---|---|---|
| £'000 | £'000 | ||||
| AIM | 2,398 | 2,099 | |||
| Unquoted | 1,443 | ||||
| NASDAQ | 84 | 134 | |||
| 3,925 | 5,022 | ||||
| AIM £'000 |
Unquoted* £'000 |
NASDAQ £'000 |
Total £'000 |
||
| Opening book cost | 2,990 | 1,539 | 166 | 4,695 | |
| Opening investment holding (losses)/gains | (891) | 1,250 | (32) | 327 | |
| 2,099 | 2,789 | 134 | 5,022 | ||
| Movements in the year: | |||||
| Purchases in the year | 232 | 188 | – | 420 | |
| Sales – proceeds | (300) | (1,782) | – | (2,082) | |
| – gains on sales | 233 | 1,667 | – | 1,900 | |
| Movement in investment holding (losses)/gains | 134 | (1,419) | (50) | (1,335) | |
| Closing valuation | 2,398 | 1,443 | 84 | 3,925 | |
| Closing book cost | 3,155 | 1,612 | 166 | 4,933 | |
| Closing investment holding losses | (757) | (169) | (82) | (1,008) | |
| Closing valuation | 2,398 | 1,443 | 84 | 3,925 | |
| 2016 £'000 |
2015 £'000 |
||||
| Realised gains on sales | 1,900 | 511 | |||
| Movement in fair value of investments | (1,335) | (105) | |||
| Net gains on investments | 565 | 406 |
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.
for the year ended 31 August 2016
| Cost | Valuation | Valuation | ||||||
|---|---|---|---|---|---|---|---|---|
| Cost at 31 | at 31 | Unrealised | at 31 | at 31 | ||||
| August | August | Realised | gain/ | August | August | |||
| 2015 | Additions | Disposals | 2016 | gain | (loss) | 2016 | 2015 | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Investment | ||||||||
| Anaxys Technology | 284 | 8 | – | 292 | – | 2 | 23 | 13 |
| Airways Engineering | ||||||||
| Loan stock | 45 | – | – | 45 | – | – | – | – |
| Ordinary B shares | 30 | – | – | 30 | – | – | – | – |
| Chelverton Asset Management |
||||||||
| Holdings | 2 | – | – | 2 | – | 21 | 141 | 120 |
| Closed Loop Recycling* | ||||||||
| Loan stock | 252 | – | – | 252 | – | – | – | – |
| Ordinary B shares | 84 | – | – | 84 | – | – | – | – |
| La Salle Education | 100 | 30 | – | 130 | – | (55) | – | 25 |
| Main Dental | ||||||||
| Loan stock | 75 | – | – | 75 | – | – | – | – |
| Ordinary B shares | 175 | – | – | 175 | – | – | 175 | 175 |
| Parmenion Capital | ||||||||
| Partners LLP | 115 | – | (115) | – | 1,667 | (1,724) | – | 1,839 |
| Pedalling Forth | – | 150 | – | 150 | – | – | 150 | – |
| Security Research Group |
52 | – | – | 52 | – | (10) | 52 | 62 |
| Transflex Vehicle Rental |
325 | – | – | 325 | – | 347 | 902 | 555 |
| 1,539 | 188 | (115) | 1,612 | 1,667 | (1,419) | 1,443 | 2,789 |
* In administration
During the year, the Company incurred transaction costs of £nil (2015: £366) and £667 (2015: £2,309) on purchases and sales of investments, respectively. These amounts are included in 'Gains on investments at fair value' as disclosed in the Income statement.
for the year ended 31 August 2016
| Valuation | Valuation | |||||||
|---|---|---|---|---|---|---|---|---|
| Cost at | at | Cost at | at | Last | Net | Pre tax | ||
| 31 August | 31 August | 31 August | 31 August | Accounts | Assets/ | (loss)/ | ||
| 2016 | 2016 | 2015 | 2015 | Period End | Liabilities | Turnover | profit | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Investment | ||||||||
| Anaxys Technology | 292 | 23 | 284 | 13 | 31 Jan '16 | 59 | – | – |
| Airways Engineering | 31 Oct '15 | (65) | – | – | ||||
| Loan stock | 45 | – | 45 | – | ||||
| Ordinary B shares | 30 | – | 30 | – | ||||
| Chelverton Asset Management Holdings* |
2 | 141 | 2 | 120 | 31 Mar '16 | 2,005 | 3,797 | 1,384 |
| Closed Loop Recycling** | 30 Jun '13 | (10,534) | 15,424 | (5,666) | ||||
| Loan stock | 252 | – | 252 | – | ||||
| Ordinary B shares | 84 | – | 84 | – | ||||
| La Salle Education | 130 | – | 100 | 25 31 Dec '15 | 965 | – | – | |
| Main Dental | 31 Mar '16 | 806 | – | – | ||||
| Loan stock | 75 | – | 75 | – | ||||
| Ordinary B shares | 175 | 175 | 175 | 175 | ||||
| Pedalling Forth | 150 | 150 | – | – | 31 Dec '15 | (210) | – | – |
| Security Research Group |
52 | 52 | 52 | 62 31 Mar '16 | 10,527 | 6,843 | (57) | |
| Transflex Vehicle Rental |
325 | 902 | 325 | 555 31 Dec '15 | 6,666 | 11,504 | 1,253 |
* Consolidated figures
** In administration
A full listing of portfolio holdings is included in the portfolio review on pages 6 and 7.
for the year ended 31 August 2016
At 31 August 2016 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 shares |
Percentage of issued share capital |
Issued share capital |
|
|---|---|---|---|
| Security | |||
| Main Dental | 23,000 | 24.08 | 95,500 |
| CEPS | 1,535,000 | 16.03 | 9,573,822 |
| Pedalling Forth | 150,000 | 12.00 | 1,250,000 |
| Touchstar | 625,000 | 9.91 | 6,308,750 |
| Transflex Vehicle Rental | 277,500 | 8.15 | 3,405,000 |
| Anaxsys Technology | 39,525 | 6.17 | 640,791 |
| Petards | 2,000,000 | 5.70 | 35,089,677 |
| La Salle Education | 160,000 | 5.07 | 3,158,179 |
| Plutus Powergen | 33,333,334 | 4.82 | 691,428,935 |
| 2016 £'000 |
2015 £'000 |
|
|---|---|---|
| Amounts falling due within one year Prepayments and other debtors |
6 | 9 |
| Amounts falling due after one year Other debtors* |
100 | – |
* The other debtor relates to capital income due from Parmenion Capital Partners LLP as detailed in the Investment Manager's overview on page 4.
| 2016 £'000 |
2015 £'000 |
|
|---|---|---|
| Accruals and other creditors | 55 | 28 |
| Short term loan | 250 | 400 |
| 305 | 428 |
On 17 June 2016 the Company entered in to a £250,000 loan agreement with Jarvis Investment Management Limited. Interest is payable monthly in arrears at the rate of 4.5% plus the Bank of England base rate.
At the year end £250,000 is outstanding of which £125,000 was drawn down on 17 June 2016 and £125,000 on 8 August 2016. The loan is secured on the assets of the Company and is repayable on demand.
On 18 November 2015 the Company entered in to a £50,000 loan agreement with Chelverton Asset Management Limited. Interest was payable at the rate of 4.75%. The loan was repaid in full on 14 January 2016.
The £400,000 loan outstanding at 31 August 2015 was repaid in full on 13 January 2016.
for the year ended 31 August 2016
| 2016 £'000 |
2015 £'000 |
|
|---|---|---|
| Allotted, called up and fully paid: 6,377,088 (2015: 8,501,650) Ordinary shares of 1p each |
64 | 86 |
Pursuant to the Tender Offer, 2,124,562 ordinary shares being 24.99 per cent of the issued ordinary shares were repurchased and cancelled with settlement on 18 March 2016. As a result, there are 6,377,088 ordinary shares of 1p each in issue and circulation.
At the Annual General Meeting of the Company falling in the calendar year 2020 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.
| Share premium £'000 |
Special reserve* £'000 |
Capital reserve £'000 |
Capital redemption reserve £'000 |
Revenue reserve* £'000 |
|---|---|---|---|---|
| 2,674 | – | 913 | 103 | 896 |
| – | – | 1,900 | – | – |
| – | – | (1,335) | – | – |
| – | (1,149) | – | 22 | – |
| (2,674) | 2,674 | – | – | – |
| – | (19) | – | – | – |
| – | – | 100 | – | – |
| – | – | (42) | – | – |
| – | – | – | – | (140) |
| – | 1,506 | 1,536 | 125 | 756 |
*Distributable reserves. The Special reserve and Revenue reserve may be used for the repurchase of the Company's own shares.
for the year ended 31 August 2016
| Share premium £'000 |
Capital reserve £'000 |
Capital redemption reserve £'000 |
Revenue reserve £'000 |
|
|---|---|---|---|---|
| Year ended 31 August 2015 | ||||
| At 1 September 2014 | 2,674 | 556 | 93 | 1,435 |
| Net gains on realisation of investments | – | 511 | – | – |
| Movement in fair value of investments | – | (105) | – | – |
| Cost of shares purchased for cancellation under tender offer |
– | – | 10 | (471) |
| Costs charged to capital | – | (49) | – | – |
| Retained net loss for the year | – | – | – | (68) |
| At 31 August 2015 | 2,674 | 913 | 103 | 896 |
The basic net asset value per Ordinary share is based on net assets of £3,987,000 (2015: £4,672,000) and on 6,377,088 (2015: 8,501,650) Ordinary shares, being the number of shares in issue at the year end.
At 31 August 2016 there were no capital commitments or contingent liabilities (2015: £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, existing reserves and the loan from the Custodian as detailed in note 10.
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.
for the year ended 31 August 2016
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:
A 20% decrease in the market value of investments at 31 August 2016 would have decreased net assets attributable to Shareholders by 12 pence per share (2015: 12 pence per share). An increase of the same percentage would have an equal but opposite effect on net assets available to Shareholders.
| 2016 £'000 |
2015 £'000 |
|
|---|---|---|
| Fair value through profit or loss investments | 3,925 | 5,022 |
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:
| 2016 £'000 |
2015 £'000 |
|
|---|---|---|
| Cash at bank | 261 | 69 |
| Loan from Custodian | 250 | 400 |
As the Company receives no interest on its bank balances and pays interest on its loan then the effect of an interest rate increase of 1% would decrease net revenue before taxation on an annualised basis by £2,500 (2015: £4,000). If there was a decrease in interest rates of 0.5% net revenue before taxation would increase by £1,250 (2015: £2,000). These calculations are based on balances as at 31 August 2016 and may not be representative of the year as a whole.
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.
for the year ended 31 August 2016
Sixty one percent of the Company's assets are AIM quoted securities and two percent NASDAQ quoted 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 unquoted investments, representing the remaining thirty seven percent of the portfolio, could be more difficult to realise as they are not tradable instruments.
The Company's financial liabilities comprise of creditors as disclosed in note 10. All items are due within one year.
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 MSCI Small Cap UK Index.
Primarily the Company finances its operations through its issued capital and existing reserves. However to help fund further investment the Company borrowed on a short term loan £250,000 from its Custodians, Jarvis Investment Management. At the year end an amount of £250,000 was outstanding. The previous loans of £400,000 and £50,000 were repaid during the year. Further details are given in note 10.
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
| 31 August 2016 | At amortised cost £'000 |
Loans and receivables £'000 |
Assets at fair value through profit and loss £'000 |
Total £'000 |
|---|---|---|---|---|
| Assets as per the Balance Sheet | ||||
| Investments | – | – | 3,925 | 3,925 |
| Debtors | – | 106 | – | 106 |
| Cash at bank | 261 | – | – | 261 |
| Total | 261 | 106 | 3,925 | 4,292 |
| Liabilities as per the Balance Sheet | ||||
| Creditors | 55 | 250 | – | 305 |
| Total | 55 | 250 | – | 305 |
for the year ended 31 August 2016
| 31 August 2015 | At amortised cost £'000 |
Loans and receivables £'000 |
Assets at fair value through profit and loss £'000 |
Total £'000 |
|---|---|---|---|---|
| Assets as per the Balance Sheet | ||||
| Investments | – | – | 5,022 | 5,022 |
| Debtors | – | 9 | – | 9 |
| Cash at bank | 69 | – | – | 69 |
| Total | 69 | 9 | 5,022 | 5,100 |
| Liabilities as per the Balance Sheet | ||||
| Creditors | 28 | 400 | – | 428 |
| Total | 28 | 400 | – | 428 |
In accordance with FRS 102, the Company must disclose the fair value hierarchy of financial instruments.
The fair value hierarchy consists of the following three classifications:
Classification A – Quoted prices in active markets for identical assets or liabilities.
Quoted in an active market in this context means quoted prices are readily and regularly available and those prices represent actual and regularly occurring market transactions on an arm's length basis.
Classification B – The price of a recent transaction for an identical asset, where quoted prices are unavailable.
The price of a recent transaction for an identical asset provides evidence of fair value as long as there has not been a significant change in economic circumstances or a significant lapse of time since the transaction took place. If it can be demonstrated that the last transaction price is not a good estimate of fair value (e.g. because it reflects the amount that an entity would receive or pay in a forced transaction, involuntary liquidation or distress sale), that price is adjusted.
Classification C – Inputs for the asset or liability that are based on observable market data and unobservable market data, to estimate what the transaction price would have been on the measurement data in an arm's length exchange motivated by normal business considerations.
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 classification C 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.
for the year ended 31 August 2016
Investments, whose values are based on quoted market prices in active markets, and therefore classified within classification A, 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 as B.
Investments classified within classification C have significant unobservable inputs. Classification C 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 classification B investments, and classification C investments consist only of unquoted holdings.
| Classification A £'000 |
Classification B £'000 |
Classification C £'000 |
Total £'000 |
|
|---|---|---|---|---|
| At 31 August 2016 | ||||
| Equity investments | 2,482 | – | 1,443 | 3,925 |
| Total | 2,482 | – | 1,443 | 3,925 |
| Classification A £'000 |
Classification B £'000 |
Classification C £'000 |
Total £'000 |
|
| At 31 August 2015 | ||||
| Equity investments | 2,233 | – | 2,789 | 5,022 |
| Total | 2,233 | – | 2,789 | 5,022 |
The following table presents the movement in the classification C investments for the period ended 31 August 2016:
| Equity Investments £'000 |
|
|---|---|
| Opening balance | 2,789 |
| Purchases | 188 |
| Sales at cost | (115) |
| Total losses on investments in the Income statement | (1,419) |
| Closing balance | 1,443 |
for the year ended 31 August 2016
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 24 and in note 3 to the accounts. Mr Horner, a Director of the Company, is also a director of Chelverton Asset Management Limited and chairman of CEPS PLC, in which the Company has an investment. Mr Martin is the chairman of Touchstar plc, in which the Company holds an investment as set out on pages 6 and 7.
The three Directors also have individual holdings in Chelverton Asset Management Holdings, a Company which has Mr Horner as a director and which the company also has a direct holding. The directors' holdings are detailed below:
| Percentage | ||||
|---|---|---|---|---|
| Percentage of holding in shares % |
Ordinary shares held £'000 |
of Loan stock holding % |
Loan stock held £'000 |
|
| K J Allen | 1 | 1 | – | – |
| D A Horner | 56 | 56 | 93 | 1,000 |
| I P Martin | 2 | 2 | – | – |
The Company's capital management objectives are:
The Company actively and regularly reviews and manages its capital structure to ensure an optimal capital structure, taking into consideration the future capital requirements of the Company and capital efficiency, projected operating cash flows and projected strategic investments opportunities. The management regards capital as total equity and reserves, for capital management purposes.
Shareholders wishing to communicate directly with the Board should contact the Company Secretary who will pass on Shareholder details to the relevant Board member.
| ISCA Administration Services Limited | Tel: 01392 487 056 Fax: 01392 891 155 |
|---|---|
| Share Registrars Limited | Tel: 01252 821 390 www.shareregistrars.uk.com |
| Chelverton Asset Management Limited | Tel: 0207 222 8989 |
| www.chelvertonam.com | |
| Postal address details are shown on page 15. | |
| Company year end | |
| Annual results | |
| AGM | |
| 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.
This document is important and requires your immediate attention. If you are in any doubt as to what action you should take, you are recommended to seek your own financial advice from your stockbroker or other independent adviser authorised under the Financial Services and Markets Act 2000 immediately.
If you have sold or otherwise transferred all of your shares in Chelverton Growth Trust PLC, please forward this document as soon as possible to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.
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, 12b George Street, Bath BA1 2EH at 12:00pm on Thursday, 15 December 2016, 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.
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 Suite 8, Bridge House ISCA Administration Services Limited Courtenay Street Secretary Newton Abbot TQ12 2QS 7 November 2016
1. Pursuant to Regulation 41 of The Uncertificated Securities Regulations 2001 and paragraph 18(c) of The Companies Act 2006 (Consequential Amendments) (Uncertificated Securities) Order 2009, the Company specifies that only those members registered on the Company's register of members 48 hours before the time of the Meeting shall be entitled to attend and vote at the Meeting. In calculating the period of 48 hours mentioned above no account shall be taken of any part of a day that is not a working day.
6. The notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold their vote.
To appoint a proxy using the proxy form, the form must be:
In the case of a member which is a company, the proxy form must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company.
Any power of attorney or any other authority under which the proxy form is signed (or a duly certified copy of such power or authority) must be included with the proxy form.
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the Annual General Meeting and any adjournment(s) thereof by using 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 using the CREST service to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with CRESTCO Limited's specifications and must contain the information required for such instructions, as described in the CREST Manual.
The message, regardless of whether it relates to the appointment of a proxy or to an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer's agent 7RA36 by the latest time(s) for receipt of proxy appointments specified 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 issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that CRESTCO Limited 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 or her 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 CREST 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.
7. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company's register of members in respect of the joint holding (the first-named being the most senior).
8. To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note that the cut-off time for receipt of proxy appointments (see above) also apply in relation to amended instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded.
Where you have appointed a proxy using the hard-copy proxy form and would like to change the instructions using another hard-copy proxy form, please contact Share Registrars Limited on 01252 821 390.
If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence.
9. In order to revoke a proxy instruction you will need to inform the Company using one of the following methods:
By sending a signed hard copy notice clearly stating your intention to revoke your proxy appointment to Share Registrars Limited at The Courtyard, 17 West Street, Farnham, Surrey GU9 7DR or by facsimile transmission to 01252 719 232. In the case of a member which is a company, the revocation notice must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified copy of such power or authority) must be included with the revocation notice.
In either case, the revocation notice must be received by Share Registrars Limited no later than 48 hours (excluding non-business days) prior to the Meeting.
If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subject to the paragraph directly below, your proxy appointment will remain valid.
Appointment of a proxy does not preclude you from attending the Meeting and voting in person. If you have appointed a proxy and attend the Meeting in person, your proxy appointment will automatically be terminated.
10. As at 4 November 2016, the Company's issued share capital comprised 6,377,088 ordinary shares of 1p each. No ordinary shares are held in treasury. Each ordinary share carries the right to one vote at an Annual General Meeting of the Company and, therefore, the total number of voting rights in the Company as at 4 November 2016 is 6,377,088.
11. Except as provided above, members who have general queries about the Meeting should telephone the Company Secretary on 01392 487 056 (no other methods of communication will be accepted). You may not use any electronic address provided either in this notice of general meeting; or any related documents (including the chairman's letter and proxy form), to communicate with the Company for any purposes other than those expressly stated.
12. This notice, together with information about the total number of shares in the Company in respect of which members are entitled to exercise voting rights at the meeting at 4 November 2016 (the business day prior to the approval of this Notice) and, if applicable, any members' statements, members' resolutions or members' matter of business received by the Company after the date of this Notice, will be available on the Company's website: www.chelvertonam.com.
For use at the Annual General Meeting of Chelverton Growth Trust PLC
| I/We (Block Capitals please). | |
|---|---|
| . a member/members of Chelverton Growth Trust PLC ("the Company"), hereby appoint the Chairman of the Meeting/ |
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, 12b George Street, Bath BA1 2EH at 12:00pm on Thursday, 15 December 2016, and at any adjournment thereof.
| Signature | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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.
| ORDINARY RESOLUTIONS | FOR | AGAINST WITHHELD | |
|---|---|---|---|
| RESOLUTION 1 | To adopt the financial statements for the year ended 31 August 2016, 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 K Allen as a Director of the Company. | ||
| RESOLUTION 4 | To re-elect Mr D Horner as a Director of the Company. | ||
| RESOLUTION 5 | To re-elect Mr I Martin 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. |
||
| SPECIAL RESOLUTIONS | |||
| RESOLUTION 7 | To authorise the Company to renew its authority to make market purchases of its Ordinary shares. |
RESOLUTION 8 To authorise the Company to purchase Ordinary shares under a Tender Offer.
1. A member may appoint a proxy of his/her own choice. If such an appointment is made, delete the words 'the Chairman of the Meeting' and insert the name of the person appointed proxy in the space provided.
2. If the appointer is a corporation, this form must be under its common seal or under the hand of some officer or attorney duly authorised on that behalf.
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