Final Results

SDV 2025 ZDP PLC

30 August 2024

 

SDV 2025 ZDP plc (the 'Company')

Legal Entity Identifier (LEI): 213800KMX33J3VAJUU95

Annual Report and Accounts for the year ended 30 April 2024

The Company's Report and Accounts should be read in conjunction with the Report and Accounts of Chelverton UK Dividend Trust PLC ("SDV"). SDV and its subsidiary, SDV 2025 ZDP PLC ('SDVP' or the 'Company') together form the Group.

The financial information set out below does not constitute the Company's statutory accounts for the year ended 30 April 2024.  The financial information for 2024 is derived from the statutory accounts for that year.  The auditors, Johnston Carmichael LLP, have reported on the 2024 accounts. Their report was unqualified but contained an Emphasis of Matter as the financial statements have been prepared on a basis other than going concern due to the fact that the zero dividend preference shares are due to be repaid on 30 April 2025. The financial information for 2023 is derived from the statutory accounts for that year.

The following text is copied from the Annual Report & Accounts.

Strategic Report

The Strategic Report has been prepared in accordance with Section 414A of the Companies Act 2006 (the 'Act'). Its purpose is to inform members of the Company and help them understand how the Directors have performed their duties under Section 172 of the Act to promote the success of the Company.  The Directors are conscious of their duties to promote the success of the Company under  the Act, for the benefit of the shareholders, giving careful consideration to wider stakeholders' interests and the environment in which it operates, including the Company's responsibilities to regulators and the wider community. The Board recognises that its decisions are material to the Company and also to the Company's key stakeholders. The Board considers its key stakeholders to be its shareholders, its Investment Manager and its third-party service providers and their priorities are taken into account during all the Board's discussions and form part of the Directors' decision-making process. Further details of how the Directors have performed their duty under Section 172 is contained within the Annual Report of SDV.

Chairman's Statement

The Chairman's report on the Group's activities for the year ended 30 April 2024 is contained within the Annual Report of SDV. A copy of the full SDV Annual Report can be found on the Investment Manager's website, www.chelvertonukdividendtrustplc.com and is available for inspection at the National Storage Mechanism ('NSM') which is situated at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Given that the Company is due to pay its final capital entitlement to the ZDP Shareholders on the ZDP repayment date of 30 April 2025 and the Company will be placed into members' voluntary liquidation and wound up thereafter, the Directors believe that it would not be reasonable to adopt the going concern basis in preparing the financial statements.  Accordingly, the financial statements have been prepared on a basis other than going concern. 

Howard Myles

Chairman

29 August 2024

Investment Manager's Report

For details of the Group's activities, development and performance during the year to 30 April 2024 shareholders should refer to the Annual Report of SDV, which can be found on the Investment Manager's website, www.chelvertonukdividendtrustplc.com and is available for inspection at the NSM, which is situated at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

David Horner

Chelverton Asset Management Limited

29 August 2024

Other Statutory Information

Company Activities, Strategy & Business Model

The Company was incorporated on 25 October 2017 as a wholly owned subsidiary of SDV. The Company was formed specifically for the issuing of Zero Dividend Preference ('ZDP') shares. It raised £10,978,000 before expenses on 8 January 2018 by the conversion of ZDP's from Chelverton Small Companies ZDP PLC (dissolved on 18 September 2019) of 10,977,747 ZDP shares and £1,802,000 before expenses on 8 January 2018 by a placing of 1,802,336 ZDP shares. The Company's shares are listed on the UK Official List and admitted to trading on the London Stock Exchange. Between 11 April and 15 May 2018, the Company placed an additional 1,719,917 shares raising a further £1,776,000. Further detail is set out in the Capital Structure section below.

Pursuant to a contribution agreement between the Company and SDV, the Company has loaned the proceeds of the ZDP share placings to SDV. The loan is non-interest bearing and is repayable three business days before the ZDP share redemption date of 30 April 2025 or, if required by the Company, at any time prior to that date in order to repay the ZDP share entitlement. The funds are to be managed in accordance with the investment policy of SDV.

Investment Objective & Policy

The objective of the Company is to provide the final capital entitlement of the ZDP shares to the holders of the ZDP shares at the redemption date of 30 April 2025. The proceeds of the placing of the ZDP shares have been loaned to SDV under a contribution agreement and the funds are managed in accordance with the investment policy of SDV, which is as follows (as extracted from the Annual Report of SDV):

·      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 Official List of the UK Listing Authority and traded on the London Stock Exchange Main Market, traded on AIM, or traded on other qualifying UK marketplaces.

·      The Company will not invest in preference shares, loan stock or notes, convertible securities or fixed interest securities or any similar securities convertible into shares; nor will it invest in the securities of other investment trusts or in unquoted companies. The Company may retain investments in companies which cease to be listed after the initial investment was made, so long as the total is non-material in the context of the overall portfolio; however, the Company may not increase its exposure to such investments.

·      The current activities of the Company are expected to continue until the scheduled ZDP repayment date of 30 April 2025 at which time the Company will enter into members' voluntary liquidation to wind up its operations.

Capital Structure & Contribution Agreement

The Company has a capital structure comprising unlisted Ordinary shares and ZDP shares listed on the Official List and admitted to trading on the London Stock Exchange. The Company is a wholly owned subsidiary of SDV which is a closed-ended investment company. On 8 January 2018, 10,977,747 ZDP shares were converted from the Company at 100p per share, and 1,802,336 ZDP shares were placed at 100p per share. This raised a net total of £12.4 million.

On 11 April 2018, the Company placed an additional 1,419,917 ZDP shares at 103p per share and this raised a net total of £1.5 million.

On 10 May 2018, the Company placed an additional 100,000 ZDP shares at 104.50p per share and this raised a net total of £104,500. 

On 15 May 2018, the Company placed an additional 200,000 ZDP shares at 104.25p per share and this raised a net total of £208,500. 

A contribution agreement between the Company and SDV has also been made whereby SDV will undertake to contribute such funds as would ensure that the Company will have in aggregate sufficient assets on 30 April 2025 to satisfy the final capital entitlement of the ZDP shares of 133.18p per share, being £19,311,100 in total. This assumes that the parent company and the Company have sufficient assets  as at  30 April 2025 to repay the ZDP shares. To this extent the Company is reliant upon the investment performance of the parent company and subject to the principal risks as set out in the Annual Report of SDV.

To protect the interests of ZDP shareholders, the contribution agreement contains a restriction on the Group incurring any other borrowings (other than short-term indebtedness in the normal course of business, such as when settling share transactions) except where such borrowings are for the purpose of paying the final capital entitlement due to holders of ZDP shares.

The value of the Group's net assets would have to fall by 63% (2023: 64%) for it to be unable to meet the full capital repayment entitlement of the ZDP shares on the scheduled repayment date of 30 April 2025.

Performance

The Board reviews performance by reference to a number of key performance indicators ('KPIs') and considers that the most relevant KPI is that which communicates the financial performance and strength of the Company as a whole being:

·      Total return per ZDP share

This is set out below:

	2024				2023
	Revenue	Capital	Total		Revenue	Capital	Total
	£'000	£'000	£'000		£'000	£'000	£'000
Return per ZDP share	-	4.89p	4.89p		-	4.69p	4.69p

Further KPIs for the parent company can be found in SDV's Annual Report.

Principal Risks and Uncertainties Facing the Company

Due to the Company's dependence on SDV to repay the loan and provide a contribution to meet the capital entitlement of the ZDP shareholders other risks faced by the Company are considered to be the same as for SDV and these are defined in note 21 of SDV's Annual Report.

Employees, Environmental, Human Rights and Community Issues

The Board recognises the requirement under Section 414C of the Act to detail information about employees, environmental, human rights and community issues, including information about any policies it had in relation to these matters and the effectiveness of these policies. The Company has no employees and the Board is comprised entirely of non-executive Directors.  Day-to-day management of the Company and SDV is delegated to the Investment Manager (details of the respective management agreements are set out in the Director's Report of SDV's Annual Report). The Company itself has no environmental, human rights or community policies. However, in carrying out its activities in relationships with suppliers, by way of SDV, the Company aims to conduct itself responsibly, ethically and fairly.

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 the final capital entitlement of the ZDP shares to the holders of the ZDP shares at the redemption date of 30 April 2025. 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.

Current and Future Developments

The current developments of the Company can be reviewed as part of the Group's activities for the year ended 30 April 2024 by reference to the Annual Report and financial statements of SDV.

The current activities of the Company are expected to continue until the scheduled ZDP repayment date of 30 April 2025 at which time the Company will enter into members' voluntary liquidation to wind up its operations.

Dividends

The Directors do not recommend the payment of a final dividend in respect of the year ended 30 April 2024.

Diversity and Succession Planning

The Board of Directors of the Company comprised one female and two male Directors during the year to 30 April 2024. The existing Directors intend to serve up to the anticipated date of the members' voluntary liquidation.

The Directors are satisfied that the Board currently contains members with an appropriate breadth of skills and experience and considers succession planning on at least an annual basis. The key criteria for the appointment of new Directors will be the skills and experience of candidates having regard also to the benefits of diversity in the interests of shareholder value.  In relation to any further future appointments the Board will seek to consider a wide range of candidates with due regard to diversity.

On behalf of the Board

Howard Myles

Chairman

29 August 2024

Directors' Report

The Directors present their Report and the financial statements of the Company for the year ended 30 April 2024. The comparative period covers the year to 30 April 2023. The Company's registered number is 11031268.

Directors

Directors who served during the year ended 30 April 2024, all of whom are non-executive were as follows:

H Myles

A Watkins

D Hadgill

Biographical details of the continuing Directors are given in the annual report.

Under the Company's Articles of Association, Directors are required to retire at the first Annual General Meeting ('AGM') following their appointment, and thereafter at three-yearly intervals.  At least one Director must retire at each annual general meeting.  The Directors to retire by rotation are first, a Director who wishes to retire and offer himself for reappointment and, second, those Directors who have been longest in office since their last appointment or reappointment. However, in accordance with the Articles of Association, and prevailing corporate governance best practice, all three directors will stand for re-election at the forthcoming AGM on 11 October 2024.

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 significant to the business of the Company, and which was effected by the Company during the current financial year.

There have been no loans or guarantees from the Company to any Director at any time during the year or thereafter.

The Company's Articles of Association provide the Directors of the Company, subject to the provisions of UK legislation, with an indemnity in respect of liabilities which they may sustain or incur in connection with their appointment. Save for this, there are no qualifying third party indemnities in place.

Formal performance evaluation of the Directors and the Board has been carried out and the Board considers that all of the Directors contribute effectively and have the skills and experience relevant to the future leadership and direction of the Company.

The rules concerning the appointment and replacement of Directors are contained in the Company's Articles of Association.

Corporate Governance

A formal statement on Corporate Governance is set out below.

Share Capital

At the date of this report, the issued share capital of the Company comprised of 50,000 Ordinary shares and 14,500,000 ZDP shares.

50,000 Ordinary shares of £1, each partly paid as to 25p (and each of which have been issued to SDV), represent 0.35% of the total share capital.  Holders of Ordinary shares are entitled to receive notice of, attend and vote at General Meetings of the Company. The Ordinary shares at are not admitted to trading on a regulated market.

12,780,083 ZDP shares of £1 each were issued on 8 January 2018, pursuant to the placing ZDP shares represent 99.65% of the total share capital. 1,419,917 additional ZDP shares for a total consideration of 103p each were issued on 11 April 2018. 300,000 ZDP shares were issued in May 2018 at a premium for a total consideration of 104p each.

Share Capital (continued)

Holders of ZDP shares are entitled to receive notice of, attend and vote at those General Meetings where ZDP shareholders are entitled to vote. They are not entitled to attend or vote at any General Meeting of the Company unless the business includes any resolution to vary, modify or abrogate any of the special rights attached to the ZDP shares.

Shareholders' Funds and Market Capitalisation

At 30 April 2024 the Company had a market capitalisation of £17,400,000 and total net assets amounted to £13,000.

ISA Status

The ZDP shares are eligible for inclusion in ISAs.

Management Agreements

The Group's assets are managed by Chelverton under an agreement (the 'Investment Management Agreement') dated 30 April 2006 (effective from 1 December 2005) with the parent company. 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 Group.

These fees are met entirely by the parent company.

The Investment Management Agreement may be terminated by twelve months' written notice. There are no additional arrangements in place for compensation beyond the notice period.

Under another agreement (the 'Administration Agreement') dated 1 January 2015, company secretarial services and the general administration of the Group are undertaken by Apex Fund Administration Services (UK) Limited . 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.

Management Fee

The management fee for the Group is charged to and paid in full by SDV.

Company Information

·      The Company's capital structure and voting rights are summarised on pages 8 and 9.

·      SDVP is a wholly-owned subsidiary of SDV.

·      The rules concerning the appointment and replacement of Directors are covered by Article 22 of the Company's Articles of Association.

·      There are no restrictions concerning the transfer of securities in the Company; no special rights with regard to control attached to securities; no agreements between holders of securities regarding their transfer known to the Company; and no agreements which the Company is party to that might affect its control following a successful takeover bid.

·      There are no agreements between the Company and its Directors that provide compensation for loss of office or as a result of a takeover.

Viability Statement

The intention is to wind up the Company following the repayment of the ZDP shares.

Basis Other Than Going Concern

Given that the Company is due to pay the capital entitlement to the ZDP Shareholders on the ZDP repayment date of 30 April 2025 and the Company will be placed into members' voluntary liquidation and wound up thereafter, the Directors believe that it would not be reasonable to adopt the going concern basis in preparing the financial statements.  Therefore, the financial statements have been prepared under a basis other than going concern.  Based on the assessment carried against the parent company, the parent company has adequate financial resources to meet liabilities as and when they fall due.  The cost of the liquidation will be borne by the parent company and as such a provision for the estimated liquidation costs has not been provided for.

Global Greenhouse Gas Emissions

The Company has no greenhouse gas emissions to report from its operations, nor does it have any responsibility for any other emission-producing sources under the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013.

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 Company's affairs.

As set out in the Prospectus dated 24 November 2017,  the Company, as a company with a standard listing, is not required to comply with the UK Corporate Governance Code and does not intend to do so. In the Directors' opinion, the interests of the Company and its shareholders are adequately covered by the governance procedures applicable to SDV. For example SDV's Audit Committee considers the financial reporting procedures and oversees the internal control and risk management systems for the Group as a whole and the Directors see no benefit in convening a separate Audit Committee for the Company.

Audit Tender

The Company's previous auditor, Hazlewoods LLP, resigned with effect from 31 October 2023 because they have taken the decision to no longer continue their registration as an auditor eligible to undertake Public Interest Entity audits.

SDV's Audit Committee (the 'Committee') carried out a formal, competitive tender process and, after careful consideration, recommended to the Board the appointment of Johnston Carmichael LLP as the Company's new auditors. This appointment was approved by the Board.

Johnston Carmichael LLP will carry out the audit of the Company's annual report and accounts for the year ending 30 April 2024 and their re-appointment will be put to a vote of the shareholders at the Company's Annual General Meeting on 11 October 2024.

Auditor

Johnston Carmichael LLP has indicated its willingness to continue in office as Auditor of the Group. Following its review, the Committee considers that, individually and collectively, the Auditor is appropriately experienced to fulfil the role required and has recommended its re-appointment to the Board.

The Committee has considered the independence and objectivity of the Auditor and has assessed its performance. The Committee is satisfied in these respects that Johnston Carmichael LLP has fulfilled its obligations to the Group and its shareholders.

The Directors who were in office on the date of approval of these financial statements have confirmed, as far as they are each aware, that there is no relevant audit information of which the Auditors are unaware. Each of the Directors has confirmed 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.  The Directors consider that the accounts taken as a whole are fair, balanced and understandable.

Annual General Meeting

A formal Notice convening the Annual General Meeting to be held on 11 October 2024 can be found in the annual report.

On behalf of the Board

Howard Myles

Chairman

29 August 2024

Statement of Directors' Responsibilities

in respect of the Annual Report and the financial statements

The Directors are responsible for preparing the Annual Report and the financial statements. Company law requires the Directors to prepare financial statements for each financial year.  Under that law the Directors have elected to prepare financial statements in accordance with UK-Adopted International Accounting Standards ('UK-Adopted IAS') and with the requirements of the Companies Act 2006 as applicable to companies reporting under international accounting standards.

Under company law the Directors must not approve the financial statements unless they are satisfied that they present fairly the financial position, financial performance and cash flows of the Company for that period.

In preparing the Company's financial statements, the Directors are required to:

·      select suitable accounting policies and then apply them consistently;

·      make judgments and estimates that are reasonable and prudent;

·      state that the Company has complied with UK-Adopted IAS, subject to any material departures disclosed and explained in the financial statements;

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

·      provide additional disclosures when compliance with specific requirements in UK-Adopted IAS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Company's financial position and financial performance; and

·      make an assessment of the Company's ability to continue as a going concern.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Company's financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for ensuring that the Directors' Report and other information included in the Annual Report is prepared in accordance with applicable company law. They are also responsible for ensuring that the Annual Report includes information required by the Listing Rules of the Financial Conduct Authority.

The Directors are responsible for the maintenance and integrity of the corporate and financial information relating to the Company on the Investment Manager's website. Legislation in the UK governing the preparation and dissemination of financial statements differs from legislation in other jurisdictions.

The Directors confirm that, to the best of their knowledge and belief:

·      the financial statements, prepared in accordance with the relevant financial framework, give a true and fair view of the assets, liabilities, financial position and profit of the Company;

·      the Annual Report includes a fair review of the development and performance of the Company, together with a description of the principal risks and uncertainties faced; and

·      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.

On behalf of the Board of Directors

Howard Myles             

Chairman

29 August 2024

Statement of Comprehensive Income

for the year ended 30 April 2024

		Year ended 2024				Year ended 2023
		Revenue	Capital	Total		Revenue	Capital	Total
	Note	£'000	£'000	£'000		£'000	£'000	£'000
Income		-	-	-		-	-	-
Accrued contribution from Chelverton UK Dividend Trust plc ('SDV') regarding the capital entitlement of the ZDP shares		-	709	709		-	680	680
Return before finance costs and taxation		-	709	709		-	680	680
Appropriations in respect of ZDP shares		-	(709)	(709)		-	(680)	(680)
Net return after finance costs and before taxation		-	-	-		-	-	-
Taxation on ordinary activities	2	-	-	-		-	-	-
Net return after taxation		-	-	-		-	-	-

The total column of this statement is the Statement of Comprehensive Income of the Company, prepared in accordance with UK-Adopted International Accounting Standards' and with the requirements of the Companies Act 2006. All revenue and capital return columns in the above statement derive from continuing operations.  No operations were acquired or discontinued during the year.  All of the net return for the year is attributable to the shareholders of the Company.  The supplementary revenue and capital columns are presented for information purposes as recommended by the Statement of Recommended Practice issued by the AIC.

The accompanying notes form part of these financial statements.

Statement of Changes in Net Equity

for the year ended 30 April 2024

	Share Capital	Total
	£'000	£'000
Year ended 30 April 2024
1 May 2023	13	13
Total comprehensive income for the year	-	-
30 April 2024	13	13
Year ended 30 April 2023
1 May 2022	13	13
Total comprehensive income for the year	-	-
30 April 2023	13	13

The accompanying notes form part of these financial statements.

Statement of Financial Position

as at 30 April 2024

	Note	2024	2023
		£'000	£'000
Non-current assets
Loans and receivables	4	18,575	17,866
Current assets
Trade and other receivables	5	13	13
Total assets		18,588	17,879
Current liabilities
ZDP shares	7	(18,575)	(17,866)
Net assets		13	13
Represented by:
Share capital	6	13	13
Equity shareholders' funds		13	13

The accompanying notes form part of these financial statements.

These financial statements were approved by the Board of SDV 2025 ZDP PLC and authorised for issue on 29 August 2024 and were signed on behalf of the Company by:

Howard Myles,

Chairman

29 August 2024

Company Registered No: 11031268

Notes to the Financial Statements

as at 30 April 2024

1. General Information

The Company is a public company incorporated and registered in England and Wales on 25 October 2017 with limited liability under the Companies Act 2006. All of its Ordinary shares are held by SDV. It is not regulated by the Financial Conduct Authority or any commission.

The financial information of the Company for the year ended 30 April 2024 has also been consolidated into the results of SDV.

2. Accounting Policies

Basis Other Than Going Concern

The financial statements of the Company have been prepared in accordance with UK-Adopted International Accounting Standards, and applicable requirements of UK company law, and reflect the following policies which have been adopted and applied consistently.  The Company has also followed presentational guidance set out in the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('SORP'), issued by the Association of Investment Companies (dated July 2022) when consistent with the requirements of UK-Adopted International Accounting Standards.  This is to ensure consistency with the Group accounts.

The financial statements are presented in Sterling, rounded to the nearest £'000.

The Company is due to pay its final capital entitlement to the ZDP Shareholders on the repayment date 30 April 2025 and the Company will be placed into voluntary liquidation and wound up thereafter.  Consequently, the Directors believe that it would be inappropriate to adopt the going concern basis in preparing the financial statements.  Therefore, the financial statements have been prepared on a basis other than going concern, however the ZDP's shown in the financial statements continue to be presented on an amortised basis rather than a settlement basis.  This is deemed appropriate given the purpose of the Company being limited to the issuance of ZDP shares.  The capital entitlement attached to the ZDP's will continue to be recognised until their maturity 30 April 2025.   

The Company relies on the parent company to pay the operational costs and repayment of the loan when it falls due.  Based on the assessment carried out against the parent company, the parent company has adequate financial resources to meet its liabilities as and when they fall due.  The Company does not have and, does not expect to have any other business interests, and the current activities of the Company are expected to continue to the scheduled repayment date of 30 April 2025 at which time will enter into voluntary liquidation.   The cost of the liquidation will be borne by the Parent Company, so no provision for the estimated liquidation costs has been provided.

New Standards, Interpretations and Amendments Adopted by the Group

There are no amendments to standards effective this year, being relevant and applicable to the Group.

Critical Accounting Judgments and Uses of Estimation

The preparation of financial statements in conformity with UK-Adopted International Accounting Standards requires management to make judgments, estimate and assumptions that affect the application of policies and the amounts reported in the Balance Sheet and the Statement of Comprehensive Income.  The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimate are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future period if the revision affects both current and future periods.  There were no significant accounting estimates or significant judgments in the current year.

Convention

The financial statements are prepared in accordance with UK-adopted International Accounting Standards and presentational guidance as set out in the Association of Investment Companies SORP (July 2022).

The Directors have sought to prepare the financial statements on a basis other than going concern with the ZDPs repayment date within the year.

The financial statements are presented in Sterling and rounded to the nearest £'000.

Segmental Reporting

The Company does not engage in any business activities from which it can earn revenues and therefore segmental reporting does not apply.

Loans and Receivables

The Company holds a non-interest-bearing secured loan in SDV. Under IAS 39 'Financial Instruments: Recognition and Measurement' the loan is carried at amortised cost using the effective interest method. Amortised cost represents the initial cost of the loan plus a proportion of the expected surplus on redemption. The expected surplus on redemption is allocated to capital at a constant rate over the life of the loan.

Expenses

All operating expenses (including the auditors' remuneration) of the Company are borne by SDV.

ZDP Shares

ZDP shares issued by the Company are treated as a liability under IAS 32 'Financial Instruments: Disclosure and Presentation' and are shown in the Balance Sheet at their redemption value at the Balance Sheet date. The appropriations in respect of the ZDP shares necessary to increase the Company's liabilities to the redemption values are allocated to capital in the Statement of Comprehensive Income. This treatment reflects the Board's long-term expectations that the entitlements of the ZDP shareholders will be satisfied out of gains arising on SDV investments held primarily for capital growth.

Statement of Cash Flows

The Company is a wholly owned subsidiary of SDV and the cash flows of the Company are included in the consolidated statement of cash flows of the parent undertaking. During the prior period the receipt of loan funding from the issue of ZDP shares was received directly by SDV.

The Company has no cash or cash equivalents at the beginning or end of the year.  There were no cash flows during the year ended 30 April 2024 therefore no cash flow statement is presented within the financial statements.

Taxation

There is no charge to UK income taxation as the Company does not have any income. There are no deferred tax assets in respect of unrelieved excess expenses as all expenses are borne by SDV.

3. Directors' Remuneration/Management Fee

The Directors and Manager are remunerated by SDV and the amounts in respect of their services as Directors and Manager of the Company are not separately identifiable.

4. Loans and Receivables

The Company has entered into a contribution agreement with SDV whereby the Company loaned SDV the gross proceeds of £12,780,000 raised from the conversion of SVC ZDP shares of 10,977,747 and the placing on 8 January 2018 of 1,802,336 ZDP shares at 100p.

On 11 April 2018, the Company loaned SDV the gross proceeds of £1,462,514 raised from the additional placing of 1,419,917 ZDP shares at 103p each.

On 10 May 2018, the Company loaned SDV the gross proceeds of £104,500 raised from the additional placing of 100,000 ZDP shares at 104.50p each.

On 15 May 2018, the Company loaned SDV the gross proceeds of £208,500 raised from the additional placing of 200,000 ZDP shares at 104.25p each.

The loan is non-interest bearing and is secured on SDV's total assets by a floating charge debenture entered into between the Company and SDV. The loan is repayable three business days prior to the ZDP share redemption date of 30 April 2025 or, if required by the Company at any time prior to that date in order to repay the ZDP share entitlement.

A contribution agreement between the Company and SDV has also been entered into whereby SDV will undertake to contribute such funds as would ensure that the Company will have in aggregate sufficient assets on 30 April 2025 to satisfy the final capital entitlement of the ZDP shares.

	2024	2023
	£'000	£'000
Loan opening book value at 1 May	17,866	17,186
Amount receivable from SDV under the contribution agreement	709	680
Loans and receivables book value at 30 April	18,575	17,866

5. Trade and Other Receivables

		2024	2023
		£'000	£'000
Intercompany account		13	13

6. Share Capital

Allotted, issued:

	2024	2024	2023	2023
	Number of shares	£'000	Number of shares	£'000
Ordinary shares of 100p each - issued and partly paid as to 25p each	50,000	13	50,000	13
ZDP shares of 100p each	14,500,000	14,557	14,500,000	14,557

The Company was incorporated on 25 October 2017 with 50,000 ordinary shares in issue partly paid as to 25p each. All of the ordinary shares are held by SDV.

On 8 January 2018, 12,780,083 ZDP shares were issued at 100p each. The share issue costs were borne by SDV.

On 11 April 2018, 1,419,917 additional ZDP shares were issued at 103p each.  The share costs were borne by SDV.

On 10 May 2018, 100,000 ZDP shares were issued at 104.5p each. The share issue costs were borne by SDV.

On 15 May 2018, 200,000 ZDP shares were issued at 104.25p each.  The share costs were borne by SDV.

As to Dividends

Ordinary shares are entitled to any revenue profits which the Company may determine to distribute as dividends in respect of any financial period. It is not expected that any such dividends will be declared.

The holders of ZDP shares are not entitled to dividends or other distributions out of the revenue or any other profits of the Company.

As to Capital on a Winding Up

On a winding up, and after payment of the Company's liabilities in full, holders of ZDP shares are entitled to a payment of an amount equal to 100p per share, increased daily from 8 January 2018 at such compound rate, equivalent to 4%, as will give an entitlement to 133.18p for each ZDP share at 30 April 2025, £19,311,100 in total. 

Following payment of the capital entitlement to the ZDP shareholders, Ordinary shareholders are entitled to any surplus assets of the Company.

As to Voting

Holders of Ordinary shares are entitled to receive notice of, attend and vote at General Meetings of the Company.

Holders of ZDP shares are entitled to receive notice of, attend and vote at those general meetings where ZDP shareholders are entitled to vote. They are not entitled to attend or vote at any general meeting of the Company unless the business includes any resolution to vary, modify or abrogate any of the special rights attached to the ZDP shares.

Commitment to Contribute to the Capital Entitlement of the ZDP Shares

The Company has entered a contribution agreement with its parent company, SDV, pursuant to which SDV will undertake to contribute such funds as would ensure that the Company will have in aggregate sufficient assets on 30 April 2025 to satisfy the final capital entitlement of the ZDP shares or, if required by the Company, the accrued capital entitlement at any time prior to that date. This assumes that SDV has sufficient assets to repay the capital entitlement of the ZDP shares. As at 30 April 2024, the Group had total assets less current liabilities available for repayment of the ZDP shares of £52,096,000 (2023: £53,429,000). The value of the Group's assets would have to fall at a rate of 62.9% (2023: 63.9%) for it to be unable to meet the full capital repayment entitlement of the ZDP shares on the scheduled repayment date of 30 April 2025.

Duration

The Articles of Association provide that the Directors shall convene a general meeting of the Company to be held on 30 April 2025 or, if that is not a business day, on the immediately following business day, at which a special resolution will be proposed requiring the Company to be wound up unless the Directors shall have previously been released from their obligations to do so by a special resolution of the Company (such special resolution having been sanctioned by any necessary class approval). If no variation of such date is approved and the Company is not wound up on such date, any holder of more than 1,000 ZDP shares shall have the right to requisition a general meeting of the Company to consider a resolution to wind it up.

At the general meeting, those shareholders present, in person or by proxy or by duly authorised representative who vote in favour of the resolution to wind up the Company will collectively have such total number of votes on a poll as is one more than the number of votes which are required to be cast for the resolution to be carried. The vote will be taken on a poll.

7. Net Asset Value Per Share

The net asset value per ZDP share and the net assets attributable to the ZDP shareholders are as follows:

		Net asset value per share	Net assets attributable	Net asset value per share	Net assets attributable
		2024	2024	2023	2023
		pence	£'000	pence	£'000
ZDP shares		128.11	18,575	123.21	17,866

8. Ultimate Parent Undertaking

The Company is a wholly owned subsidiary of SDV which is registered in England and Wales under company number 03749536.  The Annual Report of SDV is available from the website of the Manager at www.chelvertonukdividendtrustplc.com.

9. Financial Instruments

Investment Objective and Investment Policy

The objective of the Company is to provide the final capital entitlement of the ZDP shares to the holders of the ZDP shares at the redemption date of 30 April 2025.

The Company will fulfil its investment objective through the contribution agreement it has with SDV, as detailed in notes 5 and 7. The contribution from SDV will provide the capital entitlement of the ZDP shareholders. The principal risk the Company faces is therefore, that SDV would not have sufficient assets to repay the loan and to make a contribution to fulfil the amount of the capital entitlement due to the ZDP shareholders. Covenants are in place between SDV and the Company that ensure that SDV will not undertake certain actions in relation to both itself and the Company.

Due to the Company's dependence on SDV to repay the loan and provide a contribution to meet the capital entitlement of the ZDP shareholders other risks faced by the Company are considered to be the same as for SDV and these are defined in note 21 of SDV's Annual Report.

SDV has considerable financial resources and therefore the Directors believe that the Company is well placed to manage its business risks and also believe that SDV will have sufficient resources to continue in operational existence for the foreseeable future.

The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and to maximise equity holder returns, taking into consideration the future capital requirement of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows and projected strategic investment opportunities.  The management regards capital as total equity and reserves, for capital management purposes.  The Group does not currently have any loans and the Directors do not intend to have any loans or borrowings.

10. Financial instruments - Risk management policies and procedures for the Company

The Objective of the Company is to provide the Final Capital Entitlement of the ZDP Shares to ZDP holders at the redemption date.  Due to the Company's dependence on the Parent Company to repay the loan and provide contribution to meet the final capital entitlement of the ZDP shareholders, the risks faced by the Company are considered to be the same as the Parent Company.  The Company has exposure to the following risks from its use of financial instruments, Credit risk, Liquidity risk and Market Risk.

These risks have remained unchanged since the beginning of the year to which these financial statements relate and are summarised below:

            (a) Credit risk

This is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company. As at 30 April 2024, the Company's financial assets which are exposed to credit risk is the loan to the parent company, Chelverton UK Dividend Trust, and it amounted to £18,575,000 (2023: £17,866,000). Loan to the parent company has low credit risk as the parent has a strong capacity to meet its contractual cash flow obligations as they fall due.

The Company does not consider this risk to be significant as it has limited exposure to non-group third parties in respect of amounts receivable. Cash balances are only deposited with financial institutions with a high credit rating. The Company assesses all external counterparties for the credit risk before contracting with them.

            (b) Liquidity risk

This is the risk that the Company will not be able to meet its financial obligations as they fall due. The most significant cash outflow consists of the payment of the Final Capital Entitlement to the ZDP Holders at the ZDP repayment date of 30 April 2025.   Liquidity risk is considered to be significant with the Company's exposure dependent upon the Parent Company's ability to meet all current and future obligations of the Company.

The ZDP Shares capital entitlement amount of £19,311,000 will be repayable on the 30 April 2025.

(c) Market risk

The company has no exposure to market risk as it does hold or trade on any direct investment positions. And indirect market risks through the parent company are actively monitored throughout the year as part of the parent company's risk management policies and procedures.

(d) Interest rate risk

The company has no exposure to market risk as it does hold or trade on any direct investment positions. And indirect market risks through the parent company are actively monitored throughout the year as part of the parent company's risk management policies and procedures.

 

END