DJ Chelverton UK Dividend Trust plc: Full year results for the year ended 30 April 2021
Chelverton UK Dividend Trust plc (SDVP)
Chelverton UK Dividend Trust plc: Full year results for the year ended 30 April 2021
24-Jun-2021 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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CHELVERTON UK DIVIDEND TRUST PLC
Annual Report and Accounts for the year to 30 April 2021
Printed copies of the Annual Report will be sent to shareholders shortly. Additional copies may be obtained from the
Corporate Secretary - Maitland Administration Services Limited, Hamilton Centre, Rodney Way, Chelmsford, Essex CM1 3BY.
The financial information set out below does not constitute the Company's statutory accounts for the year ended 30
April 2021. The financial information for 2021 is derived from the statutory accounts for that year. The auditors,
Hazlewoods LLP, have reported on the 2021 accounts. Their report was unqualified and did not include a reference to any
matters to which the auditors draw attention by way of emphasis without qualifying their report. The financial
information for 2020 is derived from the statutory accounts for that year. The following text is copied from the Annual
Report & Accounts.
Strategic Report
The Strategic Report comprising pages 1 to 17 has been prepared in accordance with Section 414A of the Companies Act
2006 ('the Act'). Its purpose is to inform shareholders and help them understand how the Directors have performed their
duty under Section 172 of the Act to promote the success of the Company.
Chelverton UK Dividend Trust PLC ('the Company') and its subsidiary SDV 2025 ZDP PLC ('SDVP') ('the subsidiary')
together form the Group. The Group's funds are invested principally in mid and smaller capitalised UK companies. The
portfolio comprises companies listed on the Of?cial List and companies admitted to trading on AIM. The Group does not
invest in other investment trusts or in unquoted companies. No investment is made in preference shares, loan stock or
notes, convertible securities or ?xed interest securities.
Financial Highlights
30 April 30 April
Capital 2021 2020 % change
Total gross assets (GBP'000) 64,013 42,040 52.27
Total net assets (GBP'000) 47,345 26,034 81.86
Net asset value per Ordinary share 227.07p 124.86p 81.86
Mid-market price per Ordinary share 220.00p 127.50p
72.55
(Discount)/premium (3.11%) 2.11%
Net asset value per Zero Dividend Preference share 2025 114.01p 109.67p 3.96
Mid-market price per Zero Dividend Preference share 2025 116.00p
102.00p (6.99%) 13.73
Premium/(discount) 1.75%
Year ended Year ended
Revenue 2021 2020 % change
Return per Ordinary share 6.12p 9.45p (35.24)
Dividends declared per Ordinary share 10.00p 9.60p 4.17
Special dividends declared per Ordinary share 0.272p - 100
Total return
Total return on Group gross assets 57.18%
(28.16%)
Total return on Group's net assets* (total return as proportion of net
(25.85%)
assets after the provision for the Zero Dividend Preference shares) 57.24%
Total return on Group's net assets* 89.79% (36.06%)
Ongoing charges** 2.33% 2.12%
Ongoing charges*** 1.56% 1.50%
* Adding back dividends paid in the year.
** Calculated in accordance with the Association of Investment Companies ('AIC') guidelines. Based on total expenses, excluding ?nance costs, for the year and average net asset value.
*** Based on gross assets. Chairman's Statement
It gives me great pleasure to introduce this Annual Report for the ?nancial year to 30 April 2021 to shareholders.
The last 12 months as a whole have undoubtedly been challenging, with a continuation of the problems arising from the global Covid-19 pandemic and considerable ongoing economic uncertainty. Nevertheless your company has performed very well, bene?tting from a strong recovery in the performance of its investee companies and an improving business and economic outlook in the UK from early 2021 onwards.
I and the Board would like to thank David Horner and the Chelverton team for delivering these excellent results, which are a testament to the skill of their portfolio management. Results
The Company's net asset value per Ordinary share as at 30 April 2021 was 227.07p (2020: 124.86p), an increase over the year of 81.86% with an Ordinary share price of 220.00p per share (2020: 127.50p). Total assets, including audited revenue reserves, were GBP64.013m (2020: GBP42.040m), an increase over the year of 52.3%, and the total net assets were GBP47.345m (2020: GBP26.034m). During the same period the MSCI Small Cap Index increased by 42.75%.
The Company was launched on 12 May 1999, and the net asset value per Ordinary share has risen by 138.2% and a total of 206.12p has been paid in dividends, including the fourth interim dividend announced with this report. Since the year end, the net asset value per Ordinary share has risen to 239.16p as at 21 June 2021 and the discount to market NAV is currently 2.99%.
In the year total dividends of 10.272p per Ordinary share were paid and proposed, including the fourth interim dividend of 2.50p and a special dividend of 0.272p. The total dividend in 2021 represents an increase of 7.0% year on year (2020: 9.60p). The Company uses its revenue reserves built over many years to declare the core and any special dividends each year.
The underlying portfolio yield has considerably stabilised this year as our investee companies either return to paying dividends or outline their future plans to do so. As a result of the policy over the past eleven years of growing the annual dividend and retaining to revenue reserves the maximum permitted under the legislation, the Company is in a strong position and can continue to pay its dividend for some time from accumulated reserves should it be required. The Board is con?dent that the company is well positioned to further grow the annual dividend, assuming more favourable macro-economic conditions continue.
The Company's portfolio is currently invested in 74 companies spread across 16 sectors. This spread creates a well diversi?ed portfolio which should, in the future, lead to a strong return of dividend income and subsequently steady revenue growth and, in time, capital growth. Capital structure
During the year the Company's shares occasionally traded at a premium to net asset value, and we have been asked to issue new shares in order to meet market demand. The Board's policy is that it will only consider issuing new shares if it can do so at a premium to NAV which is suf?cient not only to cover all the costs of issuance but also to recognise the value of the revenue reserves that have been built up over many years by retaining pro?ts which would otherwise have been distributed to holders of the existing share capital. Provided these criteria are met, the issue of new shares will enhance net asset value per share, and the increase in the size of the Company should improve liquidity in the market for its shares while making it more attractive to potential new investors.
If the issue of new shares is considered in the future, the Board will take into account the two factors discussed above, and the potential to improve the underlying performance and returns of the company for the bene?t of all shareholders. Dividend
As brie?y discussed in the Results section, the Board has declared a fourth interim dividend of 2.50p per Ordinary share (2020: 2.40p) which, when added to the three quarterly interim dividends of 2.50p per Ordinary share, brings the total to 10.0p (2020: 9.60p) for the year ended 30 April 2021, an increase of 4.2% over the previous year.
In addition, the Board has declared a special dividend of 0.272p per Ordinary share (2020: nil) to be paid with the fourth interim dividend. Shareholders will effectively receive a fourth dividend of 2.772p per Ordinary share. This equates to a total dividend for the year of 10.272p per Ordinary share.
In 2020 the Board successfully balanced the Company's income ?ows and reserves such that interim dividends are declared as four equal payments paid quarterly across the ?nancial year. This approach was maintained in 2021 and is expected to form the foundation of the Company's dividend policy for the foreseeable future. The Company has revenue reserves which after payment of the fourth interim dividend represent some 97.3% of the current annual dividend or some 9.9p per Ordinary share.
The Board is committed to progressively improving the Company's dividend for investors and as such has decided that the four interim dividends paid in respect of the ?nancial year ending 30 April 2022 will very likely exceed, but in any event will not be less than, that paid in respect of the ?nancial year ended 30 April 2021. Outlook
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DJ Chelverton UK Dividend Trust plc: Full year -2-
While there is some uncertainty as to the economic recovery in sectors with exposure to global trade, the outlook across the Company's portfolio companies is promising. The Board is con?dent that it is well placed to bene?t from both improving domestic activity and a potential rebound in consumer spending and corporate investment.
The Board accordingly looks forward to continuing to work with David Horner and his Chelverton team to seek out opportunities in the UK smaller companies sector, and to maintaining the Company's strong performance relative to its investment company peers. Lord Lamont of Lerwick
Chairman
24 June 2021 Investment Manager's Report
In the year to 30 April 2021 the Company's net asset value per share rose from 124.86p to 227.07p. At the same time the core dividend was increased 4.2% to 10.0p, in line with the intentions outlined in September 2020. The Company also announced a special dividend of 0.272p, which has been aggregated with the fourth interim dividend.
Including the special dividend the total dividend for the year was 10.272p, a 7.0% increase on the 9.6p paid in 2020. Prior to the Covid-19 pandemic it was the manager's intention to deliver a 7% increase in the core dividend for the year to April 2021, however given the unprecedented reduction in dividends and uncertainty across the market at the time of the ?rst interim dividend decision, we prudently took a more conservative approach to dividend growth. With the trading outlook for our investee companies back on ?rmer footing and dividend payments gradually returning to 'normal' levels, we now have the con?dence to pay a special dividend, in effect boosting the core dividend to the level originally planned. It is the intention to use the total dividend of 10.272p as the base from which to grow the core dividend in the current year.
While the 81.9% increase in NAV in the period is clearly pleasing, it should be taken in the context of the sharp fall in NAV in February and March 2020 during the initial phase of the pandemic. With this in mind, the two-year performance since 30 April 2019 is perhaps a more appropriate measure. During this period the Company's net asset value rose 6.01% from 214.19p to 227.07p. A satisfactory performance over a period of extreme volatility which was delivered alongside increases in the core dividend in both years.
The turning point in the year was the announcement of an effective Covid-19 vaccine in November. Prior to this, uncertainty and fear governed both share prices and management actions at our investee companies, with guidance largely removed from the market and analyst estimates focusing on the "worst case scenario". The impact on dividends across the market has been widely reported and our portfolio was not unaffected, with dividend income versus 2019 (the last year unaffected by Covid-19) reducing 53.0% to GBP1.71m. Given the high level of government support, corporate balance sheets were not, in the main, put under the same pressure as in previous crises. Despite this, due to the ?xation on worst case scenarios, there was a signi?cant uptick in equity issuance. As long-term income focused investors we see dilution as a major headwind against achieving good returns over the medium/long term. As such we believe additional equity should be issued sparingly. Unfortunately, the period saw a number of management teams raise new equity at very low prices, to give their businesses a short-term buffer against potential downside scenarios. While in some instances, particularly in the leisure sector, a capital injection was genuinely required to see them through the pandemic, other businesses raised cash where there simply was no need, and the dilution from these raises is permanent.
The announcement of multiple successful vaccine trials in November brought about a substantial swing in sentiment, with optimism now the order of the day. The market largely shrugged off new waves of the pandemic and additional lockdowns, with the focus now ?rmly on the post pandemic recovery and the expected wave of consumerism, funded by savings built up during the pandemic. Importantly, companies have been very cautious in their return to guidance, largely keeping enough powder dry to weather any re- opening delays.
During this time the much anticipated free trade agreement with the EU was also agreed and signed. The impact on our companies was relatively benign given the extensive preparations which had been taken previously for a "no-deal" scenario, however it removed a signi?cant element of medium-term uncertainty and perceived risk.
The strong NAV performance delivered in 2021 was a direct result of the careful management of the Company's revenue reserves in prior years. Going into this downturn the Company had suf?cient revenue reserves to cover around two years' worth of dividend payments. This level of cover, and the stable ?nancial position of the trust provided by the Zero Dividend Preference shares, allowed us to focus on capital growth during the ?rst phase of the recovery, adding to existing holdings which we felt were materially undervalued despite short term uncertainty over the ability to pay dividends. With the UK vaccination program continuing apace, the outlook for the vast majority of our holdings is more certain, with many currently bene?tting from an element of "pent-up demand". As such we have seen share prices recover strongly since the initial vaccine announcement, with some share prices now materially higher than in February 2020.
We wrote in last year's report that we expected companies to emerge from this downturn stronger and ?tter than before, as had been the case in previous crises. Having now been through several results seasons and been in regular contact with our management teams through the pandemic, we are increasingly convinced that this will be the case. Companies have not been idle through the pandemic, using the period of reduced business activity to accelerate planned improvement programs and speed up the digital transformation process. The pandemic forced us all to adopt new ways of working and interacting with each other. We see multiple examples across the portfolio where this has led to increased acceptance of more ef?cient business models, which would otherwise have taken a number of years to implement. How much of the changes in working practices will be permanent once the economy fully re-opens remains to be seen, but we believe the "hybrid" models which will likely emerge will leave our companies both more ef?cient and more scalable. Portfolio review
In the last year takeover activity in the portfolio signi?cantly reduced from the level seen in 2020 (7 takeovers). Moss Bros Group and Low & Bonar were the only deals completed in the year, although both were originally announced in the prior year. In addition to the takeovers, eight other holdings from the portfolio were sold in their entirety (2020: 2): Elementis, Entain, Foxtons Group, Galliford Try Holdings, Kin & Carter, Titon Holdings, XP Power and XPS Pensions.
Shareholdings were reduced in 21 companies (2020: 11) including Alumasc Group, Amino Technologies, Bloomsbury Publishing, Braemar Shipping Services, Diversi?ed Gas & Oil (now renamed Diversi?ed Energy), DX Group, Headlam Group, Polar Capital Holdings, Randall & Quilter, Strix Group, Tyman and UP Global Sourcing Holdings, all after strong share price performance.
Eight new shareholdings were added to the Company's portfolio in the year (2020: 8), including: Anglo Paci?c - a diversi?ed natural resources royalty company, Contour Global - wholesale power generation, Curtis Banks Group - pension administration services, Duke Royalty - private SME ?nancing, Hargreaves Services - industrial and property services, iEnergizer - business process outsourcing and content delivery services, MP Evans - sustainable palm oil producer and Vector Capital - commercial lending.
Shareholdings were increased in 33 companies (2020: 19) which were in the portfolio at the start of the year. As ever, this represents a signi?cant part of the portfolio and this year includes a number of holdings which were increased at the lows during the ?rst half of the year and were subsequently "top sliced" once the shares had rallied. Outlook
The positive momentum from the second half of last year has continued into the beginning of this year, with the Company's net asset value rising a further 5.3% since 30th April 2021 to 239.16p as at 21 June 2021.
As outlined above, we believe our investee companies are, in the main, emerging as better companies with more ef?cient processes. As the recovery continues, we expect the supply of skilled labour to become increasingly tight. This will make adoption of more ?exible working practices to access new pools of talent increasingly important, with processes which will allow businesses to grow without requiring additional labour also to be encouraged. The market is currently focused on how quickly businesses can return to pre- pandemic levels of activity however, in time, we believe our companies will get the credit they deserve for improving their business models over the course of the downturn.
Finally, while it feels like a long time ago now, the impact of Brexit on this portfolio should not be forgotten. While we now have a free trade agreement in place with the European Union, Covid-19 has focused investor attention elsewhere. We ?rmly believe the "Brexit discount" which our investee companies were suffering from has not yet reversed, a situation which we believe will start to rectify itself over the coming periods. David Horner
Chelverton Asset Management Limited
24 June 2021 Breakdown of Portfolio by Industry
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DJ Chelverton UK Dividend Trust plc: Full year -3-
at 30 April 2021
Market
Value
% of
Bid
Market sector GBP'000 portfolio
Financial Services 10,776 17.1
Industrial Goods & Services 10,460 16.6
Construction & Materials 6,050 9.7
Consumer Products and Services 5,582 9.0
Retail 4,442 7.1
Insurance 4,326 6.8
Real Estate 4,182 6.6
Travel & Leisure 3,526 5.6
Media 3,509 5.5
Food, Beverage & Tobacco 2,873 4.7
Telecommunications 2,184 3.5
Energy 1,827 2.9
Basic Resources 1,232 2.0
Banks 794 1.3
Utilities 597 1.0
Personal Care, Drugs & Grocery Stores 408 0.6
62,768 100.0 Breakdown of Portfolio by Market Capitalisation
at 30 April 2021
Number of Companies
>GBP500m - 20
GBP250-500m - 11
GBP100-250m - 17
GBP75-100m - 6
GBP50-75m - 9
GBP25-50m - 5
% of Portfolio as at 30 April 2021
>GBP500m - 27%
GBP250-500m - 15%
GBP100-250m - 23%
GBP75-100m - 8%
GBP50-75m - 12%
GBP25-50m - 7%
Source: Maitland Administration Services Limited Portfolio Statement
at 30 April 2021
at 30 April 2021 (continued)
Total Portfolio 62,768 100.0
Investment Objective and Policy
The investment objective of the Company is to provide Ordinary shareholders with a high income and opportunity for capital growth, having provided a capital return suf?cient to repay the full ?nal capital entitlement of the Zero Dividend Preference shares issued by the wholly owned subsidiary company SDVP.
The Company's investment policy is that: - The Company will invest in equities in order to achieve its investment objectives, which are to provide both income
and capital growth, predominantly through investment in mid and smaller capitalised UK companies admitted to the
Of?cial List of the UK Listing Authority and traded on the London Stock Exchange Main Market or traded on AIM. - The Company will not invest in preference shares, loan stock or notes, convertible securities or ?xed interest
securities or any similar securities convertible into shares; nor will it invest in the securities of other
investment trusts or in unquoted companies. Performance Analysis using Key Performance Indicators
At each quarterly Board meeting, the Directors consider a number of key performance indicators ('KPIs') to assess the Group's success in achieving its objectives, including the net asset value ('NAV'), the dividend per share and the total ongoing charges. - The Group's Consolidated Statement of Comprehensive Income is set out on page 47. - A total dividend for the year to 30 April 2021 of 10.272p (2020: 9.60p) per Ordinary share has been declared to
shareholders by way of three payments totalling 7.50p per Ordinary share plus a planned fourth interim dividend
payment of 2.50p per Ordinary share and a special dividend of 0.272p per Ordinary share. - The NAV per Ordinary share at 30 April 2021 was 227.07p (2020: 124.86p). - The ongoing charges (including investment management fees and other expenses but excluding exceptional items) for
the year ended 30 April 2021 were 2.33% (2020: 2.12%). The increase in the annualised ongoing charges during the
year is primarily due to the reduction in net asset value for the ?rst half of the year due to the uncertainties
around Covid-19.
The Directors, in conjunction with the Investment Manager, also took time during the 2020-21 ?nancial year to speci?cally benchmark the Group's performance against different comparator peer groups and performance metrics to inform decision making.
Further detailed information is available in the Company's Key Information Document which was updated during the year and can be found on the Company's website: https://www.chelvertonam.com/fund/ chelverton-uk-dividend-trust-plc/ Principal Risks
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DJ Chelverton UK Dividend Trust plc: Full year -4-
The Directors con?rm that they have carried out a robust annual assessment of the principal risks facing the Company, including those that would threaten its objectives, business model, future performance, solvency or liquidity. The Board regularly monitors the principal risks facing the Company, the likelihood of any risk crystallisation, the potential implications for the Company and its performance, and any additional mitigation that might be introduced. Mitigation of these risks is primarily sought and achieved in a number of ways as set out below:
Market risk
The Company is exposed to UK market risk due to ?uctuations in the market prices of its investments.
The Investment Manager actively monitors economic performance of investee companies and reports regularly to the Board on a formal and informal basis. The Board formally meets with the Investment Manager on a quarterly basis when the portfolio transactions and performance are discussed and reviewed.
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 potential gains, during negative market movements this may provide protection.
Discount volatility
The Board recognises that, as a closed ended company, 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 are pleased to report that discount volatility improved with Company's stronger Net Asset Value position and share price during the year. However, the Board, with its advisers, continues to monitor the Company's discount levels and shares may be bought back in future should it be thought appropriate to do so by the Board.
Regulatory risks
A breach of Companies Act provisions and Financial Conduct Authority ('FCA') rules may result in the Group's companies being liable to ?nes or the suspension of either of the Group companies from listing and from trading on the London Stock Exchange. The Board, with its advisers, monitors the Group and SDVP's regulatory obligations both on an ongoing basis and at quarterly Board meetings.
Financial risk
The ?nancial position of the Group is reviewed via detailed management accounts at each Board meeting and both ?nancial position and controls are monitored by the Audit Committee.
Political risk
The Board recognises that changes in the political landscape may substantially affect the Company's prospects and the value of its portfolio companies. There is continuing uncertainty as to the nature of and prospects for future global trading relationships following the end of the 'Brexit' transition period and the UK's departure from the European Union ('EU'). Potential future changes to the UK's policies and regulatory landscape following the UK's departure from the EU could also impact the Company and its portfolio companies. Potential consequences for the Company are regularly monitored and assessed by the Board.
Climate change risk
The Board and Investment Manager consider and discuss how climate change could affect the Company's portfolio companies and shareholder returns. Environmental, social and governance factors increasingly form a part of the dialogue between the Investment Manager and the management teams of portfolio companies and may also contribute to portfolio investment decisions.
The coronavirus pandemic
The Board recognises that despite an improving outlook as a result of successful vaccine rollouts, in the UK in particular, the pandemic continues to negatively impact economies and ?nancial markets worldwide. Certain sectors of economies, globally and in the UK, have been severely affected by the restrictions imposed by governments to reduce the spread of the virus and may in turn take considerable time to recover. The Board and Investment Manager continue to monitor the effects of the pandemic on the market and the future prospects of all portfolio companies.
Accounting policies
New developments in accounting standards and industry-related issues are actively reported to and monitored by the Audit Committee, the Board where applicable and the Company's advisers, ensuring that all appropriate accounting policies are adhered to.
A more detailed explanation of the ?nancial risks facing the Group is given in note 22 to the ?nancial statements on pages 65 to 69.
Gearing
The Company's shares are geared by the Zero Dividend Preference shares and should be regarded as carrying above average risk, since a positive NAV for the Company's shareholders will be dependent upon the Company's assets being suf?cient to meet those prior ?nal entitlements of the holders of Zero Dividend Preference shares. As a consequence of the gearing, a decline in the value of the Company's investment portfolio will result in a greater percentage decline in the NAV of the Ordinary shares and vice versa. Section 172 Statement
The Directors are conscious of their duties to promote the success of the Company under Section 172 of the Companies Act 2006, for the bene?t of the shareholders, giving careful consideration to wider stakeholders' interests and the environment in which the Company operates. The Board recognises that its decisions are material to the Company and its future performance but also the Company's key stakeholders as identi?ed below. In making decisions, the Board considered the outcome from its stakeholder engagement exercises as well as the need to act fairly between the members of the Company.
Key stakeholders
Investors - The Company's shareholders have a signi?cant role in monitoring and safeguarding the governance of the Company and exercise voting rights to do so at general meetings of the Company. Shareholders also bene?t from improving performance and returns.
All shareholders have access to the Board via the Company Secretary and the Investment Manager at key company events such as the annual general meeting and throughout the year if appropriate. These regular communications help the Board make informed decisions when considering how to promote the success of the Company for the bene?t of shareholders. This year, the Annual General Meeting to be held on 9 September 2021 is currently anticipated to be open to shareholders to attend in person. However, the Board reserves the right to change the arrangements for the meeting, if necessary at short notice, in order to ensure adherence to prevailing Government guidance in light of the ongoing Covid-19 pandemic. In any event, and to ensure all travel is minimised, shareholders are strongly encouraged to vote by proxy and to appoint the Chairman as their proxy. Shareholders are also encouraged to put forward any questions to the Company Secretary in advance of the Annual General Meeting, as was the case in 2020.
The Board received enhanced Investor Relations themed reporting from its broker Shore Capital during the year to ensure continuing awareness of key shareholder matters.
Investment Manager - The Board recognises the critical role of the Investment Manager in delivering the Company's future success. The Investment Manager attends Board and Audit Committee meetings, to participate in transparent discussions, where constructive and collegiate challenge is encouraged. The Board and Investment Manager communicate regularly outside of these meetings with the aim of maintaining an open relationship and momentum in the Company's performance and prospects. The Investment Manager's performance is evaluated informally on a regular basis, with a formal review carried out on an annual basis by the Board when performing the functions of a management engagement committee. The Investment Management Agreement is reviewed as part of this process as further discussed on page 21.
Key suppliers - The Company employs a collaborative approach and looks to build long term partnerships with its key suppliers. Key suppliers are required to report to the Board on a regular basis and their performance and the terms on which they are engaged, are evaluated and considered annually, as detailed from page 30.
Portfolio companies - The Investment Manager regularly liaises with the management teams of companies within the Investment Portfolio and reports on ?ndings and the performance of investee companies to the Board on at least a quarterly basis.
Regulators - The Board regularly reviews the regulatory landscape and ensures compliance with rules and regulations relevant to the Company via reporting at quarterly Board meeting from the Company Secretary. Compliance with relevant rules and regulations is formally assessed on at least an annual basis. Viability Statement
The Board and Investment Manager continuously consider the performance, progress and future prospects of the Company over a variety of future timescales. These assessments, including regular investment performance updates from the Investment Manager, and a continuing programme of risk monitoring and analysis, form the foundations of the Board's assessment of the future viability of the Company. The Directors are mindful of the Company's commitments to shareholders of the subsidiary SDVP in 2025 in forming their viability opinion for the Company each year.
The Directors consider that a period of three years is currently the most appropriate time horizon to consider the Company's future viability. After careful analysis, taking into account the potential impact of the current risks and uncertainties the Company is exposed to including the continuing implications of the Covid-19 pandemic and government responses globally, the Directors con?rm that in their opinion: - it is appropriate to adopt the going concern basis for this Annual Report & Accounts - the Company continues to be viable for a period of at least three years from the date of signing of this Annual
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Report and Accounts. Three years is considered by the Board to be the maximum period over which it is currently
feasible to make a viability forecast based on known risks and macro- economic trends.
The following facts, which have not materially changed in the last ?nancial year, support the Directors' view: - the Company has a liquid investment portfolio invested predominantly in readily realisable smaller capitalised
UK-listed and AIM traded securities and has some short-term cash on deposit; and - revenue expenses of the Company are covered multiple times by investment income, even in the event that lower
income levels as a result of the Covid-19 pandemic continue for some considerable time.
In order to maintain viability, the Company has a robust risk control framework for the identi?cation and mitigation of risk, which is reviewed regularly by the Board. The Directors also seek reassurance from independent service providers, to whom all management and administrative functions are delegated, 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 the assessment. Other Statutory Information
Company status and business model
The Company was incorporated on 6 April 1999 and commenced trading on 12 May 1999. The Company is a closed-ended investment trust with registered number 03749536. Its capital structure consists of Ordinary shares of 25p each, which are listed and traded on the main market of the London Stock Exchange.
The principal activity of the Company is to carry on business as an investment trust. The Company has been granted approval from HMRC as an investment trust under Sections 1158/1159 of the Corporation Tax Act 2010 ('1158/1159') on an ongoing basis. The Company will be treated as an investment trust company subject to there being no serious breaches of the conditions for approval. The Company is also an investment company as de?ned in Section 833 of the Companies Act 2006. The current portfolio of the Company is such that its shares are eligible for inclusion in ISAs up to the maximum annual subscription limit and the Directors expect this eligibility to be maintained.
The Group ?nancial statements consolidate the audited annual report and ?nancial statements of the Company and SDVP, its subsidiary undertaking, for the year ended 30 April 2021. The Company owns 100% of the issued ordinary share capital and voting rights of SDVP, which was incorporated on 25 October 2017.
Further information on the capital structure of the Company and SDVP can be found on pages 73 to 74.
AIFM
The Board is compliant with the directive and is registered as a Small Registered Alternative Investment Fund Manager ('AIFM') with the FCA and all required returns have been completed and ?led.
Employees, environmental, human rights and community issues
The Board recognises the requirement under Section 414C of the Companies Act to detail information about employees, environmental, human rights and community issues, including information about any policies it has in relation to these matters and the effectiveness of these policies. These requirements and the requirements of the Modern Slavery Act 2015 do not directly apply to the Company as it has no employees and no physical assets, all the Directors are non-executive and it has outsourced all its management and administrative functions to third-party service providers. The Company has therefore not reported further in respect of these provisions. However, in carrying out its activities and in relationships with service providers, the Company aims to conduct itself responsibly, ethically and fairly at all times.
Environmental, Social, Governance ('ESG')
ESG matters will have an increasing prominence in future ?nancial and regulatory reporting. In company meetings, the Investment Manager routinely questions the corporate management on a variety of topics, such as safety records, environmental footprint and the key areas of focus of their board papers, to ensure that portfolio companies and prospective investments are adhering to best practice and emerging market trends at all times.
The way companies respond to ESG issues can affect their business performance, both directly and indirectly. ESG factors are considered by Chelverton Asset Management investment teams and increasingly contribute to investment decision making, however investment decisions also continue to balance ESG performance in the context of overall investment potential.
The Investment Manager is successfully integrating responsible investing considerations more closely into investment processes for the Company and the other investment vehicles it operates on behalf of investors, a journey that began in 2018. The appointment and integration in 2018 of a Corporate Governance Manager within the investment team at Chelverton Asset Management has been supported by the appointment of an experienced ESG professional to the position of Responsible Investing Manager in October 2020. This renewed commitment is strengthening the Chelverton team's drive to focus on ESG priorities within all Chelverton's investment processes. Misjudgements on ESG matters can increasingly incur major additional costs to the portfolio holdings, as well as undermining their equity returns through reputational damage.
Global greenhouse gas emissions
The Company has no greenhouse gas emissions to report from its operations, nor does it have responsibility for any other emission-producing sources under the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013.
Streamlined energy and carbon reporting
The Company is categorised as a lower energy user under the HMRC Environmental Reporting Guidelines March 2019 and is therefore not required to make the detailed disclosures of energy and carbon information set out within the guidelines. The Company has therefore not reported further in respect of these guidelines.
Culture and values
The Company's values are to act responsibly, ethically and fairly at all times. The Company's culture is driven by its values and is focused on providing Ordinary shareholders with a high income and opportunity for capital growth, as set out on page 11. As the Company has no employees, its culture is represented by the values, conduct and performance of the Board, the Investment Manager and its key service providers, who all work collaboratively to support delivery of the Company's strategy.
Current and future developments
A review of the main features of the year and the outlook for the Company are contained in the Chairman's Statement on pages 2 and 3 and the Investment Manager's Report on pages 4 to 6.
Dividends declared/paid
The Directors have not recommended a ?nal dividend in respect of the year ended 30 April 2021 (2020: nil).
Diversity and succession planning
As there were no changes to Board composition during the year, the Board of Directors of the Company comprised four male Directors in the year to 30 April 2021. The key criteria for the appointment of new Directors will be the skills and experience of candidates having regard also to the bene?ts of diversity in the interests of shareholder value. The Directors are satis?ed that the Board currently contains members with an appropriate breadth of skills and relevant sector experience. Succession planning is considered on at least an annual basis, further details of which are on page 27. In relation to future appointments the Board will seek to consider a wide range of candidates with due regard to diversity, spanning gender, ethnicity, background and experience.
The Strategic Report is signed on behalf of the Board by Lord Lamont of Lerwick
Chairman
24 June 2021
Directors
The Rt Hon. Lord Lamont of Lerwick*+ (Chairman) was Chancellor of the Exchequer between 1990 and 1993. Prior to that appointment, Lord Lamont was Chief Secretary to the Treasury between 1989 and 1990. Following his retirement as a Member of Parliament in 1997, he has held numerous positions as a director of various organisations and funds, including NM Rothschild and Sons Limited. He is a director of European Opportunities Trust plc.
Lord Lamont was appointed to the Board on 27 February 2006.
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DJ Chelverton UK Dividend Trust plc: Full year -6-
William van Heesewijk began his career with Lloyds Bank International in 1981, working for both the merchant banking and investment management arms. He has been involved in the investment trust industry since 1987 in various capacities. During his tenure with Fidelity Investments International, Gartmore Investment Management PLC, BFS Investments PLC and Chelverton Asset Management Limited, he managed several launches of onshore and offshore investment funds, including a number of roll-overs and reconstructions involving complex capital structures and across several geographic regions. His roles involved business development, project management, sales compliance and marketing. He was a member of the Association of Investment Companies Managers forum.
Mr van Heesewijk was appointed to the Board on 1 December 2005.
Howard Myles*+ was a partner in Ernst & Young from 2001 to 2007 and was responsible for the Investment Funds Corporate Advisory Team. He was previously with UBS Warburg from 1987 to 2001. Mr Myles began his career in stockbroking in 1971 as an equity salesman and in 1975 joined Touche Ross & Co, where he quali?ed as a chartered accountant. In 1978 he joined W Greenwell & Co in the corporate broking team and in 1987 moved to SG Warburg Securities, where he was involved in a wide range of commercial and industrial transactions in addition to leading Warburg's corporate ?nance function for investment funds. He is now a non-executive director of Baker Steel Resources Trust Limited, Aberdeen Latin American Income Fund Limited and BBGI SICAV S.A., having stepped down from the Board of JPMorgan Brazil Investment Trust PLC in September 2020.
Mr Myles was appointed to the Board on 15 March 2011. He became Chairman of the Audit Committee on 15 June 2016.
Andrew Watkins*+ Has a wealth of experience in the ?nancial services industry working in senior positions at Kleinwort Benson, Flemings, Jupiter and most recently as Head of Client Relations, Sales & Marketing for Investment Trusts at Invesco Perpetual, retiring in 2017. He is currently a non-executive director and chairman of Ashoka India Equity Investment Trust plc and a non-executive director of Baillie Gifford European Growth Trust plc and BMO UK High Income Trust plc.
Mr Watkins was appointed to the Board on 6 September 2018.
* Independent
+ Audit Committee member Investment Manager, Secretary, Custodian and Registrar Investment Manager: Chelverton Asset Management Limited ('Chelverton')
Chelverton was formed in 1998 by David Horner, who has considerable experience of analysing investments and working with smaller companies. Chelverton is predominantly owned by its employees.
Chelverton is a specialist fund manager focused on UK mid and small companies and has a successful track record. At 31 March 2021, Chelverton had total funds under management of approximately GBP1.8 billion, including two investment trust companies and three OEICs. The fund management team comprises David Horner, David Taylor, Oliver Knott, James Baker and Edward Booth.
Chelverton is authorised and regulated by the FCA. Administrator and Corporate Secretary: Maitland Administration Services Limited
Maitland Administration Services Limited provides company secretarial and administrative services for the Group. The Maitland group provides administration and regulatory oversight solutions for a wide range of investment companies. Custodian: Jarvis Investment Management Limited
Established for over 30 years, Jarvis Investment Management Limited offers a wide range of administration services and solutions, including custody services. Registrar: Share Registrars Limited
Share Registrars Limited is a CREST registrar established in 2004 and provides share registration services to over 200 client companies. Directors' Report
The Directors present their Annual Report and ?nancial statements for the Group and the Company for the year ended 30 April 2021. Directors
The Directors who served during the year ended 30 April 2021 are listed on page 19. 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. None of the Directors has or has had any interest in any transaction which is or was unusual in its nature or conditions or signi?cant to the business of the Company, and which was effected by the Company during the current ?nancial year. There have been no loans or guarantees from the Company or its subsidiary undertakings, to any Director at any time during the year or thereafter. Corporate governance
A formal statement on corporate governance and the Company compliance with the UK Corporate Governance Code and the AIC Code of Corporate Governance can be found on pages 25 to 31. Management agreements
The Company's investments are managed by Chelverton Asset Management Limited under an agreement ('the Investment Management Agreement') dated 30 April 2006 (effective from 1 December 2005). A periodic fee is payable quarterly in arrears at an annual rate of 1% of the value of the gross assets under management of the Company. Fees payable under the Investment Management Agreement increased during the year, re?ecting the Company's improving underlying Net Asset Value over the ?nancial year.
The Investment Management Agreement may be terminated by 12 months' written notice. There are no additional arrangements in place for compensation beyond the notice period.
During the year the Board completed a bespoke review of the Investment Management Agreement and agreed minor changes with the Manager which the Directors considered to be neutral or bene?cial for the Company and more appropriately re?ect changes in operation of the agreement since inception.
Under another agreement ('the Administration Agreement') dated 1 January 2016, company secretarial services and the general administration of the Group are undertaken by Maitland Administration Services Limited ('Maitland'). Their fee is subject to review at intervals of not less than three years. The Administration Agreement may be terminated by six months' written notice.
It is the Directors' opinion that the continuing appointment of the Investment Manager and the Administrator/ Secretary on the terms agreed is in the best interests of the Group and its shareholders. The Directors are con?dent that Chelverton has the required skill and expertise to continue successfully to manage the Group's assets, and continues to be satis?ed with the services provided by Maitland. Dividends
Details of the dividends declared and paid by the Board are set out in the Strategic Report on page 1. Directors' indemni?cation and insurance
The Company's Articles of Association provide that, insofar as permitted by law, every Director shall be indemni?ed by the Company against all costs, charges, expenses, losses or liabilities incurred in the execution and discharge of the Directors' duties, powers or of?ce. The Company has arranged appropriate insurance cover in respect of legal action against its Directors. This cover was in place during the year, having been reviewed and renewed, and also to the date of signing this report. Substantial shareholdings
The Directors have been informed of the following noti?able interests in the voting shares of the Company at 30 April 2021:
Number of % of
The Company has not been noti?ed of any changes to the above holdings between 30 April 2021 and the date of this report. Special business at the Annual General Meeting
The Company's AGM will be held at 11.00 am on Thursday 9 September 2021. The Notice of Meeting is set out on pages 77 to 81.
In addition to the ordinary business of the meeting, there are items of special business, as follows:
Authority to issue shares and disapply pre-emption rights
An Ordinary Resolution was passed at the last AGM held on 9 September 2020 giving the Directors authority, pursuant to Section 551 of the Companies Act 2006, to allot Ordinary shares up to an aggregate nominal value equal to GBP781,875 (which ?gure represented 15% of the issued share capital of the Company). This authority expires at the conclusion of the next AGM. The Directors are accordingly seeking authorisation, pursuant to Section 551 of the Companies Act 2006, to allot up to an aggregate nominal value equal to GBP781,875, being 15% of the Ordinary shares in issue at the date of this report, as set out in Resolution 10 in the Notice of Meeting. This authority will expire at the AGM to be held in 2022 or 15 months from the passing of the Resolution, whichever is earlier.
A Special Resolution was also passed on 9 September 2020 giving the Directors power to issue Ordinary shares for cash notwithstanding the pre-emption provisions of the Companies Act 2006 and permitting the Directors to issue shares without being required to offer them to existing shareholders in proportion to their current holdings. This power expires at the conclusion of the next AGM and the Directors are accordingly seeking its renewal, pursuant to Sections 570 and 573 of the Companies Act 2006, to enable the Directors to issue up to 10% of the issued Ordinary share capital, representing 2,085,000 Ordinary shares at the date of this report, as set out in the Notice of Meeting as Resolution 10.
This authority will also cover the sale of shares held in Treasury, and will expire at the AGM to be held in 2022 or 15 months from the passing of the Resolution, whichever is earlier. The authorities to issue shares will only be used when it would be in the interests of shareholders as a whole. The Directors do not currently intend to issue or sell shares from Treasury other than above the prevailing NAV.
Purchase of own shares
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At the AGM held on 9 September 2020 the Directors were granted the authority to buy back in the market up to 14.99% of the Company's Ordinary shares in circulation at that date for cancellation or placing into Treasury. No shares have been purchased under this authority, which remains in force. Resolution 11 as set out in the Notice of Meeting will renew this authority for up to 14.99% of the current issued Ordinary share capital in circulation, which represents 3,125,415 Ordinary shares at the date of this report. The Directors do not intend to use the authority to purchase the Company's shares unless to do so would result in an increase in the net asset value per share for the remaining shareholders and would generally be in the interests of all shareholders. The authority, if given, will lapse at the AGM to be held in 2022 or 15 months from the passing of this Resolution, whichever is earlier.
Purchases will be made on the open market. The price paid for Ordinary shares will not be less than 25p and not more than the higher of (i) 5% above the average of the middle market quotations (as derived from the Daily Of?cial List of the London Stock Exchange) of the Ordinary shares for the ?ve business days immediately preceding the date on which the Ordinary share is purchased, and (ii) the higher of the price of the last independent trade and the current highest independent bid on the London Stock Exchange. Shares may be cancelled or placed in Treasury.
Pursuant to the loan agreement between the Company and SDVP, the Company will not purchase any of its Ordinary shares out of capital reserves unless the cover for the ?nal redemption value of the Zero Dividend Preference shares is at least 1.9 times after the purchase.
Notice period for general meetings
Resolution 12 is a Special Resolution that will give the Directors the ability to convene general meetings, other than Annual General Meetings, on a minimum of 14 clear days' notice. The minimum notice period for annual general meetings will remain at 21 clear days. The approval will be effective until the Company's Annual General Meeting to be held in 2022, at which it is intended that renewal will be sought. The Company will have to offer facilities for all shareholders to vote by electronic means for any general meeting convened on 14 days' notice. The Directors will only call a general meeting on 14 days' notice where they consider it to be in the interests of shareholders to do so and the relevant matter is required to be dealt with expediently.
Recommendation
The Board considers that the Resolutions to be proposed at the AGM are in the best interests of shareholders as a whole and the Company and, accordingly, recommends that shareholders vote in favour of each Resolution, as the Directors intend to do in respect of their own bene?cial shareholdings representing approximately 1.0% of the issued share capital. Company information
The following information is disclosed in accordance with the Companies Act 2006: - The Group's capital structure and voting rights are summarised on pages 73 and 74. - Details of the substantial shareholders in the Company are listed on page 22. - The rules concerning the appointment and replacement of Directors are contained in the Company's Articles of
Association. - The Articles of Association can be amended by the passing of a Special Resolution of the members in a General
Meeting. - Amendment of the Articles of Association and the giving of powers to issue or buy back the Company's shares require
the relevant Resolution to be passed by shareholders. The Board's current powers to issue or buy back shares and
proposals for their renewal are detailed on pages 22 and 23. - There are no restrictions concerning the transfer of securities in the Company; no restrictions on voting rights;
no special rights with regard to control attached to securities; no agreements between holders of securities
regarding their transfer known to the Company; and no agreements which the Company is party to that might affect
its control following a successful takeover bid. - Consideration of likely future developments is detailed in the Strategic Report on page 16. SDVP Annual General Meeting
SDVP's AGM will be held on Thursday 9 September 2021 following the Company's AGM. The Notice of Meeting is set out in the SDVP Annual Report. This year's arrangements for SDVP's AGM will mirror those for the Company's AGM, in line with the latest legislation and government guidance. The Board reserves the right to change arrangements for the meeting at short notice. Shareholders are strongly encouraged to vote by proxy and to appoint the Chairman of SDVP as their proxy. Going concern
The Group's business activities, together with the factors likely to affect its future development, performance and position, are described in the Chairman's Statement on pages 2 and 3 and in the Investment Manager's Report on pages 4 to 6. The ?nancial position of the Group, its cash ?ows, liquidity position and borrowing facilities are described in the ?nancial statements. In addition, note 22 on pages 65 to 69 to the ?nancial statements sets out the Group's objectives, policies and processes for managing its capital; its ?nancial risk management objectives; details of its ?nancial instruments; and its exposure to credit risk and liquidity risk. The Audit Committee has conducted stress testing of the balance sheet and future dividend streams in different scenarios to support the opinion regarding ?nancial position and outlook. Despite the ongoing challenges arising from the impact of Covid-19 and the economic effects of government restrictions to reduce the spread of the virus, the Investment Manager continues to operate and administer the Company in accordance with relevant accounting standards.
Notwithstanding the Company's improved performance and ?nancial position during the ?nancial year, the Directors have determined that there is continuing uncertainty as to the prospects for and timing of a full recovery from the economic effects of the Covid-19 pandemic. It is likely that different sectors of the domestic economy, and countries globally, will recover at different speeds and trajectories. The Group continues to bene?t from adequate ?nancial resources however and, as a consequence, having assessed the principal risks facing the Company and the other matters set out in the Viability Statement, the Directors believe that the Group is well placed to manage its business risks successfully and it is appropriate to adopt the going concern basis. Climate Disclosures
Statements regarding the Company's climate related activities and Board policies where applicable can be found in the Strategic Report on pages 15 and 16. Auditor
The Auditor, Hazlewoods LLP, has indicated its willingness to continue in of?ce and Resolutions 7 and 8 proposing its re-appointment and authorising the Directors to determine its remuneration for the ensuing year will be submitted for approval at the AGM.
The Directors who were in of?ce on the date of approval of these ?nancial statements have con?rmed, as far as they are each aware, that there is no relevant audit information of which the Auditor is unaware. Each of the Directors has con?rmed that they have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that it has been communicated to the Auditor.
On behalf of the Board Lord Lamont of Lerwick
Chairman
24 June 2021 Statement on Corporate Governance
The Company is committed to maintaining high standards of corporate governance and the Directors are accountable to shareholders for the governance of the Group's affairs.
Statement of compliance with the UK Corporate Governance Code 2018 ('the Governance Code') The Directors have reviewed the detailed principles outlined in the Governance Code and con?rm that, to the extent that they are relevant to the Company's business, they have complied with the provisions of the Governance Code throughout the year ended 30 April 2021 except as explained in this section as being non-compliant and that the Company's current practice is in all material respects consistent with the principles of the Governance Code.
The Board also con?rms that, to the best of its knowledge and understanding, procedures were in place to meet the requirements of the Governance Code relating to internal controls throughout the year under review. This statement describes how the principles of the Governance Code have been applied in the affairs of the Company.
As an investment trust, the Company has also taken into account the Code of Corporate Governance 2019 produced by the Association of Investment Companies ('the AIC Code'), which is intended as a framework of best practice speci?cally for AIC member companies.
The AIC Code addresses all the principles set out in the Governance Code, and there are some areas where the AIC Code is more ?exible than the Governance Code. The Board has taken steps to adhere to its principles for investment companies and follow the recommendations in the AIC Code where it believes they are appropriate.
A copy of the AIC Code and the AIC Guide can be obtained via the AIC website, www.theaic.co.uk, and a copy of the Governance Code can be obtained at www.frc.org.uk.
The Company has complied with the recommendations of the AIC Code and the relevant provisions of the Governance Code except as set out below: - owing to the size of the Board, it is felt inappropriate to appoint a senior independent non-executive Director as
further detailed on page 27. - as the Group has no staff, other than Directors, there are no procedures in place in relation to raising concerns
in con?dence and anonymously. The Board has satis?ed itself there are appropriate procedures for the workforce to
raise concerns in place at its service providers. - the Board has not established a remuneration committee or nomination committee as the functions of these are
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DJ Chelverton UK Dividend Trust plc: Full year -8-
performed by the Board. Board responsibilities and relationship with Investment Manager
The Board is responsible for the investment policy and strategic and operational decisions of the Group and for ensuring that the Group is run in accordance with all regulatory and statutory requirements. These procedures have been formalised in a schedule of matters reserved for decision by the Board. These matters include: - the maintenance of clear investment objectives and risk management policies, changes to which require Board
approval; - the monitoring of the business activities of the Group, including investment performance and annual budgeting; and - review of matters delegated to the Investment Manager, Administrator, Custodian or Secretary.
The Group's day-to-day functions have been delegated to a number of service providers, each engaged under separate legal agreements. At each Board meeting the Directors follow a formal agenda prepared and circulated in advance of the meeting by the Company Secretary to review the Group's investments and all other important issues, such as asset allocation, gearing policy, corporate strategic issues, cash management, peer group performance, marketing and shareholder relations, investment outlook and revenue forecasts, to ensure that control is maintained over the Group's affairs. The Board regularly considers its overall strategy and also regularly conducts one-off and more focused reviews of all matters within its remit, and the focus during the ?nancial year was on monitoring the continued effective working of the Investment Manager and third party advisers together with modelling changes to the Company's dividend income streams as discussed throughout this Strategic Report.
The management of the Group's assets is delegated to Chelverton. At each Board meeting, representatives of Chelverton are in attendance to present verbal and written reports covering its activity, portfolio composition and investment performance over the preceding period. Ongoing communication with the Board is maintained between formal meetings. The Investment Manager ensures that Directors have timely access to all relevant management and ?nancial information to enable informed decisions to be made and contacts the Board as required for speci?c guidance. The Company Secretary and Investment Manager prepare brie?ng notes for Board consideration on matters of relevance, for example changes to the Group's economic and ?nancial environment, statutory and regulatory changes and corporate governance best practice. Board membership
At the year end the Board consisted of four Directors, all of whom are non-executive. The Group has no employees. The Board seeks to ensure that it has the appropriate balance of skills, experience and length of service amongst its members. The Board's policy on tenure is that Directors can stand for more than nine years. The Board considers that length of service does not necessarily compromise the independence or contribution of directors of investment trust companies where experience and continuity can be a signi?cant strength. The Directors possess a wide range of business and ?nancial expertise relevant to the direction of the Group and Company and consider that they commit suf?cient time to the Group and Company's affairs. On appointment to the Board, Directors are fully briefed as to their responsibilities by the Chairman, the Investment Manager and the Company Secretary. Brief biographical details of the Directors can be found on page 19.
The Directors meet at regular Board meetings, held at least four times a year, and additional meetings and telephone meetings are arranged as necessary. During the year to 30 April 2021 the Board and its Committees met six times and all Directors were present at all formal Board meetings, and those speci?c purpose Committee meetings they were asked to attend. Board effectiveness
The Board, acting as the Nomination Committee, conducts a formal annual review of the size, composition and balance of the Board and the performance of the Board, its Committees and the Directors facilitated by feedback provided by each Director. The Chairman provides a summary of the ?ndings which are discussed at the meeting and an action plan is agreed if required. During the year, no issues were identi?ed requiring an action plan. The performance of the Chairman of the Board is evaluated by the other Directors. The Board is satis?ed from the results of the evaluation completed this year that the Board, its Committees and Directors function effectively, collectively and individually, and that the Board contains an appropriate balance of skills and experience to manage the Company. Chairman
The Chairman, Lord Lamont, is independent. He has shown himself to have suf?cient time to commit to the Group's affairs. The Company does not have a chief executive of?cer, as it has no executive directors. The Chairman has no relationships that may create a con?ict of interest between the Chairman's interest and those of the shareholders, and in fact is a shareholder himself. The Chairman does not sit on the Board of any other investment company managed by Chelverton. Directors' independence
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 Governance Code requires that this report should identify each non-executive Director the Board considers to be independent in character and judgement and whether there are relationships or circumstances which are likely to affect, or could appear to affect, the Director's judgement, stating its reasons if it determines that a Director is independent notwithstanding the existence of relationships or circumstances which may appear relevant to its determination.
Mr Watkins is deemed to be independent of the Investment Manager. Despite being on the Board for over nine years, the Board believes Lord Lamont and Mr Myles are also independent. They all continue to perform their roles effectively. Mr van Heesewijk was not deemed independent by virtue of his role as a consultant to Chelverton.
Under the Articles of Association, one-third of Directors is required to retire by rotation at each AGM and no Director shall serve a term of more than three years before re-election. However, in line with prevailing corporate governance best practice, all Directors will retire and offer themselves for annual re-election at this year's annual general meeting. The Board has therefore reviewed the appointment of all Directors and recommends that shareholders vote for the re-election of Lord Lamont, Mr Myles, Mr van Heesewijk and Mr Watkins respectively.
The Board believes that although certain Board members have served for more than the recommended nine years, the Board continues to bene?t from Directors' individual and collective expertise, their individual contributions to the Board remain effective, that they demonstrate commitment to their roles as non- executive Directors of the Company, and each has actively contributed throughout the year. Senior Independent Director
No separate Senior Independent Director has been appointed to the Board as, in the view of the Directors, it is inappropriate to do so given the size and composition of the Board. The Chairman's performance is evaluated annually by the Board when carrying out the functions performed by a nomination committee as detailed on page 28. All the Directors make themselves available to shareholders at general meetings of the Company. The Directors can be contacted at other times via the Company Secretary. Audit Committee
The Audit Committee comprises the independent Directors. The Committee met twice during the year ended 30 April 2021, with Mr Myles as Chairman. All members of the Committee were present at both meetings. The Audit Committee has direct access to the Group's Auditor, Hazlewoods LLP, and representatives of Hazlewoods LLP attend the year end Audit Committee meeting.
The primary responsibilities of the Audit Committee are: to review the effectiveness of the internal control environment of the Group and monitor adherence to best practice in corporate governance; to make recommendations to the Board in relation to the re-appointment of the Auditor and to approve their remuneration and terms of engagement; to review and monitor the Auditor's independence and objectivity and the scope and effectiveness of the audit process and to provide a forum through which the Group's Auditor reports to the Board. The Audit Committee also has responsibility for monitoring the integrity of the ?nancial statements and accounting policies of the Group and for reviewing the Group's ?nancial reporting and internal control policies and procedures. Committee members consider that, individually and collectively, they are appropriately experienced in accounting and audit processes to ful?l the role required. Management Engagement Committee
The functions performed by this type of Committee are carried out by the Board of the Company.
The Board reviewed the performance of the Investment Manager's obligations under the Investment Management Agreement and considered whether the terms and conditions of the Investment Management Agreement remain appropriate. The more detailed review of the terms of the Investment Management Agreement completed by the Board this year is discussed on page 21. Based on continuing performance, the Board decided that the Investment Manager's appointment should continue and no performance related changes would be made to the Investment Management Agreement. It also reviewed the performance of the Company Secretary, the Custodian and the Registrar and matters concerning their respective agreements with the Company. Nominations Committee
The functions performed by this type of Committee are carried out by the Board of the Company.
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DJ Chelverton UK Dividend Trust plc: Full year -9-
The Board, acting as the Nomination Committee, evaluated the performance of Directors and the Chairman for the year ended 30 April 2021. No third party was engaged to carry out an external valuation of the Board. As a result of the evaluation, the Board remains of the opinion that all Directors contribute effectively and have the skills and experience relevant to the leadership and direction of the Company as detailed on page 27. The Board assessed the time commitment for each Board post and agreed that suf?cient time was being spent by each Director to ful?l their duties. The Board also recommended the re-appointment of all Directors standing for re-election at the Annual General Meeting.
During the year, the Board gave consideration to the succession planning of Directors and the skills and experience required by the Board to face future opportunities and challenges. As stated on page 27, the Board believes that currently it has an appropriate balance of skills and experience to effectively manage the Company and, as a result, no changes to the composition of the Board are proposed at present. In the process of recruitment in the past it has not been considered necessary to engage the services of third- party recruitment consultants, but this will be reconsidered in relation to future appointments and the Board will seek to draw upon as diverse a pool of candidates as possible. Remuneration Committee
The functions performed by this type of Committee are carried out by the Board of the Company.
The Board assessed the Directors' fees, following proper consideration of the role that individual Directors ful?l in respect of Board and Committee responsibilities, the time committed to the Group's affairs and remuneration levels generally within the investment trust sector. The Board agreed that a more rigorous review of Board level remuneration would be completed in the 2022 ?nancial year.
Under the Listing Rules, the Governance Code principles relating to directors' remuneration do not apply to an investment trust company other than to the extent that they relate speci?cally to non-executive directors. Detailed information on the remuneration arrangements can be found in the Directors' Remuneration Report on pages 34 to 36 and in note 5 to the ?nancial statements. Independent professional advice
The Board has formalised arrangements under which the Directors, in the furtherance of their duties, may take independent professional advice at the Company's expense. Institutional investors - use of voting rights
The Investment Manager, in the absence of explicit instruction from the Board, is empowered to exercise discretion in the use of the Company's voting rights in investee companies. Con?icts of interest
It is the responsibility of each individual Director to avoid an unauthorised con?ict arising. He must notify and request authorisation from the Board as soon as he becomes aware of the possibility of a con?ict arising.
The Board is responsible for considering Directors' requests for authorisation of con?icts and for deciding whether or not the con?ict should be authorised. The factors to be considered will include whether the con?ict could prevent the Director from properly performing his duties, whether it has, or could have, any impact on the Group and whether it could be regarded as likely to affect the judgement and/or actions of the Director in question. When the Board is deciding whether to authorise a con?ict or potential con?ict, only Directors who have no interest in the matter being considered are able to take the relevant decision, and in taking the decision the Directors must act in a way they consider, in good faith, will be most likely to promote the Group's success. The Directors are able to impose limits or conditions when giving authorisation if they think this is appropriate in the circumstances.
A register of con?icts is maintained by the Company Secretary and is reviewed at Board meetings, to ensure that any authorised con?icts remain appropriate. Directors are required to con?rm at these meetings whether there has been any change to their position. Internal control review
The Board is responsible for establishing and maintaining the Group's systems of internal control and for reviewing their effectiveness.
An ongoing process, in accordance with the guidance supplied by the Financial Reporting Council, 'Guidance on Risk Management, Internal Control and Related Financial and Business Reporting', is in place for identifying, evaluating and managing risks faced by the Company and the Group. The Company's risks are documented and evaluated using a risk register. This register is reviewed regularly by Directors to ensure appropriate risk mitigation actions are in place. This process helps to ensure that the Board maintains a sound system of internal control to safeguard shareholders' investments and the Group's assets. This process also involves a review by Directors of reports on the internal control systems of the service providers who perform all the Company's administrative and managerial functions. As described below, this process, together with key procedures established with a view to providing effective ?nancial control, have been in place for the full ?nancial year and up to the date the ?nancial statements were approved.
The risk management process and systems of internal control are designed to manage rather than eliminate the risk of failure to achieve the Company's objectives. It should be recognised that such systems can only provide reasonable, rather than absolute, assurance against material misstatement or loss. No signi?cant failings or weaknesses have been identi?ed.
Re?ecting recent macro-economic and political uncertainty, the Board, on the recommendation of the Audit Committee, completed additional reviews of the Company's internal control environment during the year, with updates at each quarterly meeting. Internal control assessment process
Risk assessment and the review of internal controls is undertaken by the Board in the context of the Group's overall investment objective. The review covers the key business, operational, compliance and ?nancial 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: - the threat of such risks becoming a reality; - the Company's ability to reduce the incidence and impact of risk on its performance; - the cost to the Company and bene?ts related to the review of risk and associated controls of the Group; and - the extent to which third parties operate the relevant controls.
Against this background the Board has split the review into four sections re?ecting the nature of the risks being addressed. The sections are as follows: - corporate strategy; - published information and compliance with laws and regulations; - relationship with service providers; and - investment and business activities.
Given the nature of the Company's activities and the fact that most functions are subcontracted, the Group does not have an internal audit function. The Directors have obtained information from key third-party suppliers regarding the controls operated by them and have also sought reassurance from each as to their continuing performance across the ?nancial year. To enable the Board to make an appropriate risk and control assessment, the information and assurances sought from third parties include the following: - details of the control environment; - identi?cation and evaluation of risks and control objectives; - assessment of the communication procedures; and - assessment of the control procedures.
The key procedures which have been established to provide effective internal ?nancial controls are as follows: - Investment management is provided by Chelverton. The Board is responsible for the implementation of the overall
investment policy and monitors the actions of the Investment Manager at regular Board meetings. - The provision of administration, accounting and company secretarial duties is the responsibility of Maitland
Administration Services Limited. - Custody of assets is undertaken by Jarvis Investment Management Limited. - The duties of investment management, accounting and custody of assets are segregated. The procedures of the
individual parties are designed to complement one another. - The non-executive Directors of the Group clearly de?ne the duties and responsibilities of their agents and advisers
in the terms of their contracts. The appointment of agents and advisers is conducted by the Board after
consideration of the quality of the parties involved; the Board, acting as the Management Engagement Committee,
monitors their ongoing performance and contractual arrangements. - Mandates for authorisation of investment transactions and expense payments are set by the Board. - The Board reviews detailed ?nancial information provided by the Administrator on a regular basis. Company Secretary
The Board has direct access to the advice and services of the Company Secretary, Maitland Administration Services Limited, which is responsible for ensuring that Board and Committee procedures are followed and that applicable regulations are complied with. The Secretary is also responsible to the Board for ensuring timely delivery of information and reports and that the statutory obligations of the Group are met. Dialogue with shareholders
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Communication with shareholders is given a high priority by both the Board and the Investment Manager and all Directors are available to enter into dialogue with shareholders at any time. Major shareholders of the Group have the opportunity to meet with the independent non-executive Directors of the Board in order to ensure that their views are understood. All shareholders are encouraged to attend the AGM when Government guidelines permit, during which the Board and the Investment Manager are available to discuss issues affecting the Group and shareholders have the opportunity to address questions to the Investment Manager, the Board and the Chairmen of the Board's standing committees.
There are no signi?cant issues raised by major shareholders to bring to all shareholders' attention, topics of interest are covered in the Strategic Report on pages pages 1 to 17.
Any shareholder who would like to lodge questions in advance of the AGM is invited to do so either on the reverse of the Proxy Form or in writing to the Company Secretary at the address given on page 76. The Company always responds to letters from individual shareholders.
The Annual and Half Yearly Reports of the Group are prepared by the Board and its advisers to present a full and readily understandable review of the Group's performance. Copies are available for downloading from the Investment Manager's website, www.chelvertonam.com, and on request from the Company Secretary on 01245 398950. Copies of the Annual Report are circulated to shareholders. Audit Committee Report Role of the Audit Committee
The Audit Committee ('the Committee') provides a forum through which the Group's Auditor reports to the Board. The Committee is responsible for monitoring the process of production and ensuring the integrity of the Group's ?nancial statements. The other primary responsibilities of the Committee are: - to monitor adherence to best practice in corporate governance; - to review the effectiveness of the internal control and risk management environment of the Group; - to receive compliance reports from the Investment Manager; - to consider the accounting policies of the Group; - to make recommendations to the Board in relation to the re-appointment of the Auditor; - to make recommendations to the Board in relation to the Auditors' remuneration and terms of engagement; and - to review and monitor the Auditor's independence and objectivity and the effectiveness of the audit process.
The Committee's terms of reference were reviewed and updated in March 2021 to re?ect current recommended best practice. Matters considered in the year
The Committee met twice during the ?nancial year to consider the ?nancial statements and to review the internal control systems. The principal matters considered by the Committee were the valuation of the Group's assets, proof of ownership of its investments and cash, and the maintenance of its approval as an investment trust. The Audit Committee also ensured that the Board considered the Group's income forecasts with more regularity and in more detail than usual years, to closely monitor the impact of the Covid-19 pandemic on investee companies.
The Manager and Administrator have reported to the Committee to con?rm continuing compliance with their individual regulatory requirements and for maintaining the Company's investment trust status. These were also reviewed by the Auditor as part of the audit process.
The Committee liaised with the appointed Investment Manager, Chelverton Investment Management Limited, throughout the year, and received reports on their legal compliance. A Risk Assessment and Review of Internal Controls document maintained by the Board was considered in detail and amended as necessary. This document is reviewed by the Committee at each meeting. Internal audit
The Group does not have an internal audit function, as most of its day-to-day operations are delegated to third parties, all of whom have their own internal control procedures. The Committee discussed whether it would be appropriate to establish an internal audit function, and agreed that the existing system of monitoring and reporting by third parties remains appropriate and suf?cient. The need for an internal audit function is reviewed annually. External audit
The Audit Committee monitors and reviews the effectiveness of the external third-party service providers, audit process for the publication of the Annual Report and makes recommendations to the Board on the re-appointment, remuneration and terms of engagement of the Auditors.
Prior to each Annual Report being published, the Committee considers the appropriateness of the scope of the audit plan, the terms under which the audit is to be conducted, as well as the matter of remuneration, with a view to ensuring the best interests of the Group are promoted.
Audit fees are computed on the basis of the time spent on Group affairs by the Audit Senior Statutory Auditor and staff and on the levels of skill and responsibility of those involved.
Hazlewoods LLP was ?rst appointed as Auditor to the Group on 2 May 2007. As part of its review of the continuing appointment of the Auditor, the Committee considers the length of tenure of the audit ?rm, 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. The audit was put out to tender in 2017, and, as a result of that process, the Committee recommended to the Board, and the Board approved, the re-appointment of Hazlewoods LLP. The Senior Statutory Auditor for the Group has been rotated three times since the initial appointment, most recently in respect of the ?nancial year ended 30 April 2018.
Hazlewoods LLP has indicated its willingness to continue in of?ce as Auditor of the Group. Following its review, the Committee considers that, individually and collectively, the Auditor is appropriately experienced to ful?l the role required, and have recommended its re-appointment to the Board. A resolution for its 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 satis?ed in these respects that Hazlewoods LLP has ful?lled its obligations to the Group and its shareholders. In a change from previous years, Hazlewoods did not provide tax compliance services to the Group in the year ended 30 April 2021, which were outsourced to an alternative independent provider this year, and 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 ful?lled its obligations to the Group and its shareholders. Howard Myles
Audit Committee Chairman
24 June 2021 Directors' Remuneration Report
The Board has prepared this Report in accordance with the requirements of Schedule 8 to the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013. The law requires the Group's Auditor, Hazlewoods LLP, to audit certain disclosures provided. Where disclosures have been audited, they are indicated as such. The Auditor's opinion is included in their report on pages 39 to 45.
Last year, shareholders were asked to approve the Directors' Remuneration Report at the Annual General Meeting ('AGM') through an advisory vote, as has been the case in previous years, and this will again be the case at this year's AGM. Similarly, shareholders were also asked to give a binding vote on the Directors' Remuneration Policy at last year's AGM. The Remuneration Policy must be the subject of a binding vote at least every three years and will not therefore be proposed at this year's AGM.
The Board considers and approves Directors' remuneration. No major decisions on or changes to Directors' remuneration have been made during the year ended 30 April 2021. During the year ended 30 April 2021, the fees were continued at a rate of GBP20,000 for the Chairman and GBP17,500 for other Directors, with an additional payment of GBP2,500 to the Chairman of the Audit Committee. The Company's performance
The graph on page 34 of the Annual Report compares the total return (assuming all dividends are reinvested) to Ordinary shareholders, compared to the total shareholder return of the MSCI UK Small Cap Index. Although the Company has no formal benchmark, the MSCI UK Small Cap Index has been selected as it is considered to represent a broad equity market index against which the performance of the Company's assets may be adequately assessed. Directors' service contracts
None of the Directors has a contract of service with the Company, nor has there been any contract or arrangement between the Company and any Director at any time during the year. The terms of their appointment provide that a Director shall retire and be subject to re-election at the ?rst Annual General Meeting after their appointment, and at least every three years after that. Directors who have served on the Board for more than nine years must offer themselves for re-election on an annual basis. Directors' entitlements
Directors are only entitled to fees in accordance with the Directors' Remuneration Policy as approved by shareholders. None of the Directors has any entitlement to pensions or pension-related bene?ts, medical or life insurance, share options, long-term incentive plans, or any form of performance-related pay. Also, no Director has any right to any payment by way of monetary equivalent, or any assets of the Company
except in their capacity as shareholders. There is no notice period and no provision for compensation upon loss of of?ce. The Directors' emoluments table below therefore does not include columns for any of these items or their monetary equivalents. Directors' emoluments for the year ended 30 April 2021 (audited)
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The Directors who served in the year received the following emoluments wholly in the form of fees:
Fees/Total
* Mr van Heesewijk has waived his entitlement to fees.
During the year no Directors received taxable bene?ts (2020: same). Directors' interests (audited)
The interests of the Directors and any connected persons in the Ordinary shares and Zero Dividend Preference ('ZDP') shares of the subsidiary Company are set out below:
In August 2020 the Board acting its capacity as the Remuneration Committee approved a revised and updated Share Dealing Policy for Directors. Signi?cance of spend on pay
Change
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 30 April 2020 (Resolution 2) was approved by shareholders at the Annual General Meeting held on 9 September 2020. The votes cast by proxy were as follows:
Number of votes % of votes cast
The Board's policy is that the remuneration of non-executive Directors should be suf?cient to attract and retain directors with suitable skills and experience, and is determined in such a way as to re?ect the experience of the Board as a whole, in order to be comparable with other organisations and appointments.
The fees of the non-executive Directors are determined within the limits of GBP250,000, as 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 bene?ts, share options, long-term incentive schemes or other bene?ts, as the Board does not consider such arrangements or bene?ts necessary or appropriate. Fees for any new Director appointed will be made on the same basis.
The Directors' Remuneration Policy (Resolution 7) was approved by shareholders at the Annual General Meeting held on 9 September 2020. The votes cast by proxy were as follows:
Number of votes % of votes cast
The Company intends to continue with the Directors' Remuneration Policy approved by shareholders in 2020 over the next ?nancial year. Fees payable in respect of subsequent periods will be determined following an annual review. Any views expressed by shareholders on remuneration being paid to Directors would be taken into consideration by the Board. In accordance with the regulations, an Ordinary Resolution to approve the Directors' Remuneration Policy will be put to shareholders at least once every three years. Approval
The Directors' Remuneration Report on pages 34 to 36 was approved by the Board on 24 June 2021. On behalf of the Board Lord Lamont of Lerwick
Chairman
24 June 2021 Statement of Directors' Responsibilities
in respect of the Annual Report and the ?nancial statements
The Directors are responsible for preparing the Annual Report and the ?nancial statements. Company law requires the Directors to prepare ?nancial statements for each ?nancial year. Under that law the Directors have elected to prepare ?nancial statements in accordance with International Financial Reporting Standards ('IFRSs') as adopted by the EU in conformity with the requirements of the Companies Act 2006 and applicable law.
Under company law the Directors must not approve the ?nancial statements unless they are satis?ed that they present fairly the ?nancial position, ?nancial performance and cash ?ows of the Group and the Company for that period.
In preparing each of the Group and the Company's ?nancial statements, the Directors are required to: - select suitable accounting policies and then apply them consistently; - make judgements and estimates that are reasonable and prudent; - state that the Group and the Company have complied with IFRSs, as adopted by the EU subject to any material
departures disclosed and explained in the ?nancial statements; - present information, including accounting policies, in a manner that provides relevant, reliable, comparable and
understandable information; - provide additional disclosures when compliance with speci?c requirements in IFRSs is insuf?cient to enable users to
understand the impact of particular transactions, other events and conditions on the Group and the Company's
?nancial position and ?nancial performance; and - make an assessment of the Group's ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting records that are suf?cient to show and explain the Group's transactions and disclose with reasonable accuracy at any time the ?nancial position of the Group and enable them to ensure that the Group's ?nancial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, a Directors' Report, Directors' Remuneration Report and Statement on Corporate Governance that comply with that law and those regulations, and for ensuring that the Annual Report includes information required by the Listing Rules of the FCA.
The Directors are responsible for the maintenance and integrity of the corporate and ?nancial information relating to the Company on the Investment Manager's website. Legislation in the UK governing the preparation and dissemination of ?nancial statements differs from legislation in other jurisdictions.
The Directors con?rm that, to the best of their knowledge and belief: - the ?nancial statements, prepared in accordance with the relevant ?nancial framework, give a true and fair view of
the assets, liabilities, ?nancial position and pro?t of the Group; - the Annual Report includes a fair review of the development and performance of the Group and the position of the
Group, together with a description of the principal risks and uncertainties faced; - the Annual Report is fair, balanced and understandable and provides the information necessary for shareholders to
assess the Company's performance, business model and strategy; and - the Investment Managers' Report includes a fair review of the development and performance of the business and the
Group and its undertakings included in the consolidation taken as a whole and adequately describes the principal
risks and uncertainties they face.
On behalf of the Board of Directors Lord Lamont of Lerwick
Chairman
24 June 2021 Independent Auditor's Report
to the members of Chelverton UK Dividend Trust PLC Opinion
In our opinion, the ?nancial statements: - give a true and fair view of the state of the Group's and Parent Company's affairs as at 30 April 2021 and of the
Group's and the Parent Company's pro?t for the year then ended; - have been properly prepared in accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006 and International Financial Reporting Standards ("IFRSs") as adopted by the
European Union and IFRSs as issued by the International Accounting Standards Board ("IASB);
We have audited the ?nancial statements of Chelverton UK Dividend Trust plc (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 30 April 2021, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Statement of Changes in Net Equity, the Consolidated and Parent Company Balance Sheets, the Consolidated and Parent Company Statement of Cash Flows and the related notes, including a description of signi?cant accounting policies.
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The ?nancial reporting framework that has been applied in their preparation is applicable law and international accounting standards in conformity with the requirements of the Companies Act 2006 and IFRSs as adopted by the European Union and IFRSs as issued by the IASB. Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) ('ISAs (UK)') and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the ?nancial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the ?nancial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have ful?lled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is suf?cient and appropriate to provide a basis for our opinion. Conclusions relating to going concern
In auditing the ?nancial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the ?nancial statements is appropriate. Our audit procedures to evaluate the directors' assessment of the group and the parent company's ability to continue to adopt the going concern basis of accounting included but were not limited to: - undertaking an initial assessment at the planning stage of the audit to identify events or conditions that may cast
signi?cant doubt on the group's and the parent company's ability to continue as a going concern; - evaluating the directors' method to assess the group's and the parent company's ability to continue as a going
concern; - a review of the available cash and highly liquid assets; - assessing the Group's ability to convert other less liquid assets into cash; - comparing those resources against ongoing expenditure and charges; and - reviewing the appropriateness of the directors' disclosures in the ?nancial statements.
Based on the work we have performed, we have not identi?ed any material uncertainties relating to events or conditions that, individually or collectively, may cast signi?cant doubt on the Group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the ?nancial statements are authorised for issue.
In relation to the entities reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the directors' statement in the ?nancial statements about whether the director's considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. Our approach to the audit
Our audit approach is based on a thorough understanding of the Group's business and is risk-based. The day-to-day management of the Group's investment portfolio, the maintenance of the Group's accounting records and the custody of its investments is outsourced to third-party service providers. Accordingly, our audit work is focused on obtaining an understanding of, and evaluating, internal controls by the Group and inspecting records and documents held by the third-party service providers. We undertook substantive testing on signi?cant 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 speci?c risks.
Our approach to the audit is also based on the key audit matters identi?ed. Key audit matters are those matters that, in our professional judgement, were of most signi?cance in our audit of the ?nancial statements of the current period and include the most signi?cant assessed risks of material misstatement (whether or not due to fraud) we identi?ed, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the ?nancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
The key audit matters identi?ed were the valuation, ownership and existence of investments and the allocation of capital and revenue items. Revenue recognition and management override of controls are always deemed risks in any audit. This is not a complete list of all risks identi?ed by our audit.
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We apply the concept of materiality in planning and performing our audit, in evaluating the effect of any identi?ed misstatements and in forming our opinion. For the purpose of determining whether the ?nancial statements are free from material misstatement, we de?ne materiality as the magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to in?uence the economic decisions of the users of the ?nancial statements. We also determine a level of performance materiality, which we use to determine the extent of testing needed, to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the ?nancial statements as a whole.
We established materiality for the ?nancial statements as a whole to be GBP640,000, which is 1% of the value of the Group's net assets. Performance materiality was set at GBP512,000, being 80% of the ?nancial statement materiality. For income and expenditure items we determined that misstatements of lesser amounts than materiality for the ?nancial statements as a whole would make it probable that the economic decisions of the users of the ?nancial statements would have been changed or in?uenced by the misstatement or omission. Accordingly, we established materiality for revenue items within the income statement to be
GBP160,000, which is 25% of the ?nancial statement materiality, based on long-term expectations of the split of revenue and capital income. We agreed with the Audit Committee that we would report all differences in excess of 5% of materiality as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters that we identi?ed during the course of assessing the overall presentation of the ?nancial statements. Other information
The other information comprises the information included in the annual report, other than the ?nancial statements and our Auditor's Report thereon. The Directors are responsible for the other information. Our opinion on the ?nancial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the ?nancial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the ?nancial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard. Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the Directors' remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit: - the information given in the Strategic Report and the Directors' Report for the ?nancial year for which the
?nancial statements are prepared is consistent with the ?nancial statements and those reports have been prepared in
accordance with applicable legal requirements; - the information about internal control and risk management systems in relation to ?nancial reporting processes and
about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Rules and
Transparency Rules sourcebook made by the Financial Conduct Authority ('the FCA Rules'), is consistent with the
?nancial statements and has been prepared in accordance with applicable legal requirements; and - information about the Group's corporate governance code and practices and about its administrative, management and
supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules. Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course of the audit, we have not identi?ed material misstatements in: - the Strategic Report or the Directors' Report; or - the information about internal control and risk management systems in relation to ?nancial reporting processes and
about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 of the FCA Rules. - We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires
us to report to you if, in our opinion: - adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not
been received from branches not visited by us; or - the Parent Company ?nancial statements and the part of the Directors' Remuneration Report to be audited are not in
agreement with the accounting records and returns; or - certain disclosures of Directors' remuneration speci?ed by law are not made; or - we have not received all the information and explanations we require for our audit; or - a corporate governance statement has not been prepared by the Parent Company. Corporate governance statement
The Listing Rules require us to review the directors' statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Group's compliance with the provisions of the UK Corporate Governance Statement speci?ed for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the ?nancial statements or our knowledge obtained during the audit: - Directors' statement with regards the appropriateness of adopting the going concern basis of accounting and any
material uncertainties identi?ed set out on page 14; - Directors' explanation as to its assessment of the entity's prospects, the period this assessment covers and why
that period is appropriate set out on page 14; - Directors' statement on fair, balanced and understandable set out on page 38; - Board's con?rmation that it has carried out a robust assessment of the emerging and principal risks set out on page
11; - The section of the annual report that describes the review of effectiveness of risk management and internal control
systems set out on page 29; and - The section describing the work of the audit committee set out on page 27. Responsibilities of Directors
As explained more fully in the Directors' Responsibilities Statement, set out on pages 37 and 38, the Directors are responsible for the preparation of the ?nancial statements and for being satis?ed that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of ?nancial statements that are free from material misstatement, whether due to fraud or error.
In preparing the ?nancial statements, the Directors are responsible for assessing the Group's and the Parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so. Auditor's responsibilities for the audit of the ?nancial statements
Our objectives are to obtain reasonable assurance about whether the ?nancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to in?uence the economic decisions of users taken on the basis of these ?nancial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
Based on our understanding of the group and the parent company and its activities, we identi?ed that the principal risks of non-compliance with laws and regulations related to UK tax legislation, money laundering, and the Listing Rules, and we considered the extent to which non-compliance might have a material effect on the ?nancial statements. We also considered those laws and regulations that have a direct impact on the preparation of the ?nancial statements such as the Companies Act 2006.
We evaluated the directors' and management's incentives and opportunities for fraudulent manipulation of the ?nancial statements (including the risk of override of controls) and determined that the principal risks were related to posting manual journal entries to manipulate ?nancial performance, management bias through judgements and assumptions and signi?cant one-off or unusual transactions.
Our audit procedures were designed to respond to those identi?ed risks, including non-compliance with laws and regulations (irregularities) and fraud that are material to the ?nancial statements. Our audit procedures included but were not limited to: - Discussing with the directors and management their policies and procedures regarding compliance with laws and
regulations; - Communicating identi?ed laws and regulations throughout our engagement team and remaining alert to any indications
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of non-compliance throughout our audit; - Considering the risk of acts by the group and the parent company which were contrary to the applicable laws and
regulations, including fraud.
Our audit procedures in relation to fraud included but were not limited to: - Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged
fraud; - Gaining an understanding of the internal controls established to mitigate risks related to fraud; - Discussing amongst the engagement team the risks of fraud; and - Addressing the risks of fraud through management override of controls by performing journal entry testing.
We consider that our procedures are suf?cient to detect irregularities, including fraud, although they are not designed speci?cally for the detection of irregularities. The primary responsibility for the prevention and detection of irregularities including fraud rests with both those charged with governance and management. As with any audit, there remains a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls. The risks of material misstatement that had the greatest effect on our audit, including fraud, are discussed under "Audit Approach" within this report.
A further description of our responsibilities is available on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report. Other matters which we are required to address
Following the recommendation of the Audit Committee, we were appointed by the Board on 13 October 2017 to audit the ?nancial statements for the year ending 30 April 2018 and subsequent ?nancial periods. The period of total uninterrupted engagement including previous renewals and reappointments of the ?rm is 15 years, covering the years ending 2007 to 2021.
The non-audit services prohibited by the FRC's Ethical Standard were not provided to the Group or the Parent Company and we remain independent of the Group and Parent Company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit committee. Use of this report
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. Ryan Hancock (Senior Statutory Auditor)
For and on behalf of Hazlewoods LLP, Statutory Auditor Cheltenham
24 June 2021
Consolidated Statement of Comprehensive Income
for the year ended 30 April 2021
The total column of this statement is the Statement of Comprehensive Income of the Group prepared in accordance with international accounting standards and in conformity with the requirements of the Companies Act 2006. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year. All of the net return for the period and the total comprehensive income for the period is attributable to the shareholders of the Group. The supplementary revenue and capital return columns are presented for information purposes as recommended by the Statement of Recommended Practice issued by the AIC.
The notes on pages 51 to 70 form part of these ?nancial statements. Changes in Net Equity
for the year ended 30 April 2021
Share Capital
Share premium redemption Capital Revenue
The notes on pages 51 to 70 form part of these ?nancial statements. Consolidated and Parent Company Balance Sheets
as at 30 April 2021
Investments at fair value through pro?t or loss 10 62,768 40,588 62,768 40,588 Investments in subsidiary
12 - -
13 13
62,768 40,588 62,781 40,601 Current assets
The notes on pages 51 to 70 form part of these ?nancial statements.
These ?nancial statements were approved by the Board of Chelverton UK Dividend Trust PLC and authorised for issue on 24 June 2021. Lord Lamont of Lerwick
Chairman
Company Registered Number: 03749536 Cash Flows
for the year ended 30 April 2021
2021 2020
(MORE TO FOLLOW) Dow Jones Newswires
June 24, 2021 02:04 ET (06:04 GMT)
Market value % of
Security Sector GBP'000 portfolio
Belvoir Lettings Real Estate 2,150 3.4
Diversi?ed Gas & Oil Energy 1,827 2.9
Alumasc Group Construction & Materials 1,712 2.7
UP Global Sourcing Holdings Consumer Products and Services 1,610 2.6
Jarvis Securities Financial Services 1,500 2.4
Finncap Group Financial Services 1,320 2.1
Randall & Quilter Insurance 1,320 2.1
Flowtech Fluid Power Industrial Goods & Services 1,265 2.0
Devro Food, Beverage & Tobacco 1,230 2.0
STV Media 1,220 1.9
MTI Wireless Edge Telecommunications 1,206 1.9
DFS Furniture Retail 1,197 1.9
Redde Northgate Industrial Goods & Services 1,091 1.7
Vistry Group Consumer Products and Services 1,065 1.7
Tyman Construction & Materials 1,056 1.7
Epwin Group Construction & Materials 1,045 1.7
Premier Miton Group Financial Services 1,032 1.6
Coral Products Industrial Goods & Services 1,015 1.6
Brewin Dolphin Holdings Financial Services 1,014 1.6
Clarke (T.) Construction & Materials 1,000 1.6
Brown (N) Group Retail 983 1.6
Amino Technologies Telecommunications 978 1.6
Sever?eld Construction & Materials 975 1.6
Marston's Travel & Leisure 970 1.5
Chesnara Insurance 964 1.5
Polar Capital Holdings Financial Services 958 1.5
Numis Corporation Financial Services 950 1.5
MP Evans Food, Beverage & Tobacco 918 1.5
Castings Industrial Goods & Services 915 1.5
Bloomsbury Publishing Media 903 1.4
Vertu Motors Retail 902 1.4
TheWorks.co.uk Retail 876 1.4
Regional REIT Real Estate 840 1.3
Crest Nicholson Consumer Products and Services 818 1.3
Ramsdens Holdings Financial Services 810 1.3
Headlam Group Consumer Products and Services 796 1.3
Close Brothers Group Banks 794 1.3
Essentra Industrial Goods & Services 794 1.3
Appreciate Group Financial Services 760 1.2
Smiths News Industrial Goods & Services 760 1.2
Braemar Shipping Services Industrial Goods & Services 756 1.2
Bakkavor Food, Beverage & Tobacco 725 1.2
Restaurant Group Travel & Leisure 720 1.1
Centaur Media Media 714 1.1
Personal Group Holdings Insurance 708 1.1
Photo-me International Consumer Products and Services 693 1.1
Anglo Paci?c Basic Resources 692 1.1 Portfolio Statement
Market value % of
Security Sector GBP'000 portfolio
Curtis Banks Group Financial Services 690 1.1
Hansard Global Insurance 684 1.1
Palace Capital Real Estate 674 1.1
Wilmington Group Media 672 1.1
Saga Travel & Leisure 665 1.1
Sabre Insurance Insurance 650 1.0
Duke Royalty Financial Services 630 1.0
iEnergizer Industrial Goods & Services 612 1.0
Go-Ahead Group Travel & Leisure 611 1.0
Portmeirion Group Consumer Products and Services 600 1.0
Contour Global Utilities 597 1.0
Gattaca Industrial Goods & Services 592 0.9
Babcock International Industrial Goods & Services 576 0.9
Revolution Bars Group Travel & Leisure 560 0.9
Chamberlin Basic Resources 540 0.9
Town Centre Securities Real Estate 518 0.8
Hargreaves Services Industrial Goods & Services 505 0.8
Strix Group Industrial Goods & Services 493 0.8
Shoe Zone Retail 484 0.8
Orchard Funding Group Financial Services 480 0.8
RTC Group Industrial Goods & Services 441 0.7
RPS Group Industrial Goods & Services 440 0.7
McColl's Retail Group Personal Care, Drugs & Grocery Stores 408 0.6
Vector Capital Financial Services 352 0.6
GLI Finance Financial Services 280 0.4
Kier Group Construction & Materials 262 0.4
DX Group Industrial Goods & Services 205 0.3
30 April 2021 30 April 2020
Payment date p p
First interim 2 October 2020 2.50 2.40
Second interim 2 January 2021 2.50 2.40
Third interim 3 April 2021 2.50 2.40
Fourth interim 16 July 2021 2.50 2.40
10.00 9.60
Special dividend 0.272 -
10.272 9.60
Ten year dividend history
2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
p p p p p p p p p p
1st Quarter 2.50 2.40 2.19 2.02 1.85 1.70 1.575 1.475 1.40 1.35
2nd Quarter 2.50 2.40 2.19 2.02 1.85 1.70 1.575 1.475 1.40 1.35
3rd Quarter 2.50 2.40 2.19 2.02 1.85 1.70 1.575 1.475 1.40 1.35
7.50 7.20 6.57 6.06 5.55 5.10 4.725 4.425 4.20 4.05
4th Quarter 2.50 2.40 2.40 2.40 2.40 2.40 2.40 2.40 2.40 2.35
10.00 9.60 8.97 8.46 7.95 7.50 7.125 6.825 6.60 6.40
% increase of core
dividend 4.17 7.02 6.03 6.47 6.00 5.26 4.40 3.41 3.12 3.23
Special dividend 0.272 - 2.50 0.66 1.86 1.60 0.30 2.75 - -
Total dividend 10.272 9.60 11.47 9.12 9.81 9.10 7.425 9.575 6.60 6.40
Ordinary shares shares voting rights
Philip J Milton & Company Plc 1,051,833 5.04%
Integrated Financial Arrangements Limited 801,748 4.05%
Year to 30 April 2021 Year to 30 April 2020
GBP GBP
Lord Lamont (Chairman) 20,000 20,000
H Myles 20,000 20,000
W van Heesewijk* - -
A Watkins 17,500 17,500
57,500 57,500
Number of Number of Number of Number of
Ordinary shares ZDP shares Ordinary shares ZDP shares
held at held at held at held at
Director 30 April 2021 30 April 2021 30 April 2020 30 April 2020
Lord Lamont (Chairman) 84,201 10,000 76,415 10,000
W van Heesewijk 110,000 Nil 110,000 Nil
H Myles Nil Nil Nil Nil
A Watkins 13,100 Nil 13,100 Nil
2021 2020 %
GBP GBP
Dividends paid to Ordinary shareholders in the year 2,064,000 2,523,000 (18.19)
Total remuneration paid to Directors 57,500 57,500 -
For 1,011,835 94.0
Against 64,210 6.0
At Chairman's discretion 0 0.0
Total votes cast 1,076,045
Number of votes abstained 19,964 Remuneration policy
For 991,995 91.9
Against 87,732 8.1
Total votes cast 1,079,727
Number of votes abstained 16,282
Expected Fees for Year to Fees for Year to
30 April 2022 30 April 2021
Chairman basic fee
20,000 20,000
Non-Executive Director basic fee 17,500 17,500
Audit Committee Chairman additional fee 2,500 2,500
Key Audit Matter How our scope addressed this matter
Valuation, ownership and existence of investments Our audit work included, but was
not restricted to:
The Group's business is to invest predominantly in small capitalised UK companies,
listed on the Of?cial List and admitted to trading on AIM, to achieve a high income - understanding management's
and opportunity for capital growth. Accordingly, the investment portfolio is a process to recognise and
signi?cant, material balance in the ?nancial statements. We therefore identi?ed the measure quoted investments;
valuation, ownership and existence of the investment portfolio as a risk that - assessing whether the Group's
requires particular audit attention. accounting policy for valuation
of quoted investments is in
accordance with IAS 39;
- comparing quoted investment
valuations to an independent
source of market prices;
Key Audit Matter How our scope addressed this matter
- testing investment additions and disposals to contracts and
bank statements; and
- con?rming investment holdings third-party con?rmations.
The Group's accounting policy on valuation of investments is
shown in note 1 to the ?nancial statements and related
disclosures are included in note 10. The Audit Committee
identi?ed the valuation and ownership of investments as a
signi?cant issue in its report on page 32, where the Committee
also described the action that it has taken to address this risk.
Allocation of capital and revenue items
The Group is required to apportion its expenses
between revenue and capital. This allocation is Our audit work included, but was not restricted to, examining the
important as the Group can only pay dividends out of historical trends of the Company and assessing whether the
revenue reserves. allocation of cost between revenue and capital is fair and
reasonable.
The split has to be performed on the basis of 'the
Board's expected long-term split of returns.
Our audit work included, but was not restricted to:
Management override of controls
- reviewing material estimates, judgements and decisions made
Under ISA 240 there is a presumption that the risk of by management; and
management override of controls is always present. - testing all material manual journal entries.
The Group's accounting policies in respect of material estimates
and judgements are set out in note 1.
Revenue recognition Our audit work included, but was not restricted to:
Under ISA 240 there is always a presumed risk that - assessing whether the Group's accounting policy for revenue
revenue may be misstated due to the improper recognition is in accordance with IAS 18 'Revenue';
recognition of revenue. In particular we identi?ed - obtaining an understanding of management's process to
completeness and occurrence of investment income as a recognise revenue in accordance with the stated accounting
risk that requires particular audit attention. policy;
- testing income transactions by comparing dividends during the
year obtained from an independent source with those
recognised by the group;
Key Audit Matter How our scope addressed this matter
- testing gains and losses on investments to third party contracts;
- performing cut-off testing of dividend income around the year end; and
- checking the classi?cation of special dividends as either revenue or capital receipts.
The accounting policy on income, including its recognition, in shown in note 1 to the ?nancial statements
and the components of that income are included in note 2. Our application of materiality
2021 2020
Revenue Capital Total Revenue Capital Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains/(losses) on investments at fair
value through pro?t or loss 10 - 23,110 23,110 - (17,046) (17,046)
Investment income 2 1,708 - 1,708 2,414 - 2,414
Investment management fee 3 (124) (372) (496) (135) (407) (542)
Other expenses 4 (280) (10) (290) (270) (13) (283)
Net surplus/(de?cit) before ?nance
costs and taxation 1,304 22,728 24,032 2,009 (17,466) (15,457)
Finance costs 6 - (630) (630) - (607) (607)
Net surplus/(de?cit) before taxation 1,304 22,098 23,402 2,009 (18,073) (16,064)
Taxation 7 (27) - (27) (38) - (38)
Total comprehensive income/
(expense) for the year 1,277 22,098 23,375 1,971 (18,073) (16,102)
Revenue Capital Total Revenue Capital Total
pence pence pence pence pence pence
Net return per:
Ordinary share 8 6.12 105.99 112.11 9.45 (86.68) (77.23)
Zero Dividend Preference share 2025 8 - 4.34 4.34 - 4.19 4.19
capital account reserve reserve reserve Total
Note GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended 30 April 2021
30 April 2020 5,213 17,517 5,004 (5,148) 3,448 26,034
Total comprehensive income
for the year - - - 22,098 1,277 23,375
Dividends paid 9 - - - - (2,064) (2,064)
30 April 2021 5,213 17,517 5,004 16,950 2,661 47,345
Year ended 30 April 2020
30 April 2019 5,213 17,517 5,004 12,925 4,000 44,659
Total comprehensive (expense)/
income for the year - - - (18,073) 1,971 (16,102)
Dividends paid 9 - - - - (2,523) (2,523)
30 April 2020 5,213 17,517 5,004 (5,148) 3,448 26,034
Group Group Company Company
2021 2020 2021 2020
Note GBP'000 GBP'000 GBP'000 GBP'000 Non-current assets
Trade and other receivables 13 757 186 757 186
Cash and cash equivalents 488 1,266 488 1,266
1,245 1,452 1,245 1,452
Total assets 64,013 42,040 64,026 42,053
Current liabilities
Trade and other payables 14 (136) (104) (149) (117)
(136) (117)
(104) (149)
Total assets less current liabilities 63,877 41,936
41,936 63,877
Non-current liabilities
Zero Dividend Preference shares 15 (16,532) (15,902) - -
Loan from subsidiary 16 - - (16,532) (15,902)
(15,902)
(16,532) (15,902) (16,532)
Total liabilities (16,668) (16,006) (16,681) (16,019)
Net assets 26,034
47,345 26,034 47,345
Represented by:
Share capital 17 5,213 5,213 5,213 5,213
Share premium account 17,517 17,517 17,517 17,517
Capital redemption reserve 5,004 5,004 5,004 5,004
Capital reserve 16,950 (5,148) 16,950 (5,148)
Revenue reserve 2,661 3,448 2,661 3,448
Equity shareholders' funds 47,345 47,345 26,034
26,034
