CGW.L Regulatory News (CGW)

CHELVERTON GROWTH TRUST PLC

FINAL RESULTS FOR THE YEAR ENDED 31 AUGUST 2013

The full Annual Report and Accounts can be accessed via the Company's website

at www.chelvertonam.com or by contacting the Company Secretary on telephone

01326 378288

Investment objective

The Company's objectiveis to provide capital growth through investment in companies listed on the Official List and tradedon the Alternative Investment Marketwith a market capitalisation at the time of investment of up to £50 million, which are believed to be at a "point of change". The Company will also invest in unquoted investments where it is believed that there is a likelihoodof the shares becoming listed or traded on the Alternative Investment Market or the investeecompany being sold.Its investment objective is to increase net asset valueper share at a higherrate than otherquoted smaller company trusts and the MSCI Small Cap UK Index.

It is the Company's policy not to invest in any listed investment companies(including listed investment trusts).

Company summary

Benchmark MSCI Small Cap UK Index

Investment Manager Chelverton Asset Management Limited

See page 10 for further details

Total net assets £4,709,000 as at 31 August 2013

Market capitalization £3,516,000  as at 31 August 2013

Capital structure 10,495,860 Ordinary 1p shares carrying one vote each. 

Performance statistics

Chairman's statement

I am delighted to announce another year of good progress in which the fund's net asset value per share ('NAV') has increased from 35.74p to 44.87p - an increase of 25.5%.

In the same period the Company's benchmark index, the MSCI Small Cap UK Index rose by 28.7%. Since the year end the NAV has marginally increased to 46.47p, a further small rise of 3.6%.

The early part of the Company's year, the latter part of 2012, was again dominated by talk of recession or even "double-dip" recession, where a 0.1%, upwards or downwards movement in UK GDP was either Armageddon or the dawn of a New Age of prosperity. It now appears that the underlying economy did not go into a "double dip" recession in early 2012, and that for much of last year the UK Economy simply marked time. This year the economy is starting to grow: falling inflation and a rise in individuals' real incomes may then follow, which in turn will have a consequent positive effect on GDP growth and ultimately employment. All of this should mean, in time, a major boost to our essentially UK focused companies.

As is evident from the growth in net asset value per share, the companies in the portfolio have generally made further progress over the past year and as discussed above further progress may be expected in the current year.

On a personal note, I shall not offer myself for re-election at the forthcoming AGM. My seven years as Chairman have coincided with one of the most difficult investment climates, certainly of my lifetime, and possibly for over a century. It is therefore gratifying to note that the NAV is higher today than it was in December 2006. The credit for this belongs rightly to the Manager for the rigour of its investment processes, but I believe that the Board has also played its part by keeping the Company's portfolio under constant review. We have not been afraid to cut our losses when necessary, and to seek more positive opportunities for the funds released. Today the share price stands at 38.25p and shareholders will be happy that values have been maintained, and indeed enhanced, during the Recession.

As your Company is restricted in its ability to pay dividends, the Board has resolved once again to proceed with a Tender offer this year - the 5th such during my tenure. Thus shareholders have an opportunity - if they wish it - to realise an "income" from their holdings, often with advantageous taxation consequences. It therefore remains our intention to repeat this process each year so long as circumstances warrant it.

George Stevens

Chairman

4 November 2013

Investment Manager's overview

In the past year the UK economy has finally shown that the fabled "green shoots" really were there and were not just part of our wishful thinking. As unemployment, and the corollary, employment have fallen and risen respectively, already with anecdotal evidence of some skill shortages starting to emerge, we felt it was just a matter of time before the "statistics" would catch up with what we seemed to be hearing from our investee companies in this fund and in other investments.

As the UK re-establishes itself as a place to do business the types of companies in which the Fund is invested will prosper particularly as businesses in the UK have the confidence to start investing in equipment and people. The operational gearing effect of this will prove to be very rewarding whilst most costs are being held at current levels.

The European zone appears, for the moment, to have stabilised itself, and for the time being has managed to re-build confidence in the currency and the system. The UK's position is now clear and there is no pressure for the UK to engage further with Europe, with all the potential instability that might bring.

It is a relief that the Coalition are still talking about deficit, and subsequently debt reduction. It is imperative that the wealth creators - businesses, be given more room by the Public Sector to grow steadily and sensibly so as to generate the funds which alone can finance the appropriate level of Public Services in the UK.

In time it is to be hoped that bank lending to smaller companies does increase and that companies will want to borrow from banks rather than the alternative models for obtaining finance that have appeared to fill the vacuum left by the conventional sources of funding. However, as this fund is an equity provider, this shortage of finance is helpful as it ultimately provides us with attractive investment opportunities.

Portfolio review

This year we have continued the process of reducing the shareholding in IDOX with a near 60% reduction in the shareholding at an average price of 52.2p and a high of 59p against a current somewhat depressed price of 38p.

New investments were made in: A B Dynamics - a specialist engineer providing test equipment to the global automotive market; Main Dental Partners - a company established to buy dental practices; and a small investment in Airways Engineering Limited, a broker of aircraft maintenance, repair and overhaul services.

Additional investments were made in Transflex Vehicle Hire Limited - the company actually had two issues for additional equity capital to finance its strong growth. The second share issue was priced at a premium of 25% and all shareholders took up their rights. Further shares were acquired in Lombard Risk Management during a period of price weakness, which has since been corrected. Additional small investment has been made in Anaxsys.

In the unquoted investments we have increased a number of the valuations as significant progress was made during the year. One Horizon, previously traded on AIM before delisting, reversed into a Nasdaq OTC shell company with the intention, we understand, of obtaining a full Nasdaq listing as soon as possible. A change of year-end and a consolidation of the share capital might be indicators of this happening in 2014. Parmenion has continued its excellent progress of building up funds, making healthy profits and generating cash. The holding value has been increased to reflect this.

Closed Loop has also made very good progress and we expect, over the next few months, to see some tangible evidence of the hard work and progress of the past two years.

Outlook

With the sales from the IDOX shareholding, and the subsequent decline in its share price, the portfolio now has a more balanced look. With some other holdings having recovered strongly over the past year from the depths of a few years ago we have more scope for gradually selling down some shareholdings for further reinvestment.

I believe we can expect to see another year of progress in 2013 - 2014.

David Horner

Chelverton Asset Management Limited

4 November 2013

Portfolio review

as at 31 August 2013

Portfolio holdings

Percentage of portfolio by sector

Travel and leisure 3%

Technology, hardware & equipment distribution 5%

Pharmaceuticals & Biotechnology 6%

Mobile telecommunications 14%

Healthcare & equipment 3%

Industrial engineering 9%

Electronic & electrical equipment 3%

Software & computer services 17%

Support services 40%

Percentage of portfolio by sector

Unquoted 32%

Delisted 14%

AIM 54%

Directors (all non-executive)

George Stevens (Chairman)*

Kevin Allen *

David Horner 

* independent

Extracts from the Report of the Directors

Status, objective and review

The principal activity of the Company is to carry on business as an investment trust. The Company has been granted approval from HM Revenue & Customs ('HMRC') as an authorised investment trust under Section 1158 of the Corporation Tax Act 2010 for the year ended 31 August 2012. The Directorsare of the opinion that the Company has conducted its affairs for the year ended 31 August 2013 so as to be able to continue to obtain approval as an authorised investment trust under Section 1158 of theCorporation Tax Act 2010. TheCompany is aninvestment company asdefined in Section833 of the Companies Act 2006.

New regulations for obtaining and retaining investment trust status have been published by HMRC and came into force on 1 January 2012. An application for approval as an investment trust must be made within 90 days after the end of the first accounting period of the Company following implementation of the new regime. The first accounting period affected by the new regulations is the year ending 31 August 2013 and therefore application must be made by 29 November 2013. If the application is accepted, the Company will be treatedas an investment trust companyfor that periodand for each subsequent accounting period, subject to there being no subsequent serious breaches of the regulations.

Investment objective

The Company's objectiveis to provide capital growth through investmentin companies listed on the Official List and tradedon the Alternative Investment Marketwith a market capitalisation at the time of investment of up to £50 million, which are believed to be at a "point of change".The Company will also invest in unquotedinvestments where it is believed that there is a likelihood of the shares becoming listed or traded on the Alternative Investment Market or the investee company being sold. Its investment objective is also to increasenet asset value per share at a higher rate than other quoted smaller company trusts and the MSCI Small Cap UK Index.

Investment policy

The Companyinvests principally in securities of publicly quoted UK companies, though it may invest in unquoted securities. The concentrated UK portfoliocomprises between 20 to 35 securities. The performance of the Company's investments is compared to the MSCI Small Cap UK Index.

The Company will also invest in unquoted investments where it is believed that there is a likelihoodof the shares becoming listed or traded on the Alternative Investment Market or the investee company being sold.

It is the Company's policy not to invest in any listed investment companiesor listed investmenttrusts.

To comply with ListingRules the Company's investment policy is detailedabove and should be read in conjunction with the subsequent sections entitled investmentstrategy and the performance analysis.

It is intended from time to time, when deemed appropriate, that the Companywill borrow for investment purposes. The Company, however, does not currentlyhave any borrowing facilities.

The investment objective and policy stated are intended to distinguish the Company from other investment vehicles which have relatively narrow investment objectives and which are constrained in their decisionmaking and asset allocation. The investment objective and policyallow the Companyto be constrained in its investment selectiononly by valuation and to be pragmaticin portfolio construction by only investingin securities which the InvestmentManager considers to be undervalued on an absolute basis. Portfoliorisk is managed by investingin a diversified spread of investments.

Investment strategy

Investments are selected for the portfolioonly after extensiveresearch which the Investment Manager believes to be key.The whole processthrough which equity must pass in order to be included in the portfoliois very rigorous. Only a security where the Investment Manager believes that the price will be significantly higher in the future will pass the selection process. The Investment Manager believes the key to successful stock selection is to identifythe long-term value of a company's shares and to have the patienceto hold the shares until that value is appreciated by other investors. Identifying long-termvalue involves detailed analysis of a company's earning prospects over a five year time horizon.

The Company's InvestmentManager is Chelverton Asset Management Limited, an independent investment manager focusing exclusively on achieving returns for investors based on UK investment analysis of the highest quality. The founders and employee owners of Chelverton include experienced investment professionals with strong investment performance records who believerigorous fundamental research allied to patience is the basis of long-term investment success.

The Chairman's statement and the Investment Manager's overview give details of the Company's activities during the year under review.

Performanceanalysis using key performance indicators

At each Board meeting, the Directors consider a number of performance measures to assess the Company's success in achieving its objectives, for example:the NAV, the movement in the Companyshare price, the discount of the share price in relation to the NAV and the on going charges.

The Company's income statement is set out below.

The movementof the NAV is compared to the MSCI Small Cap UK Index, the Company's benchmark. The NAV per Ordinary share at 31 August 2013 was 44.87p (2012: 35.74p).

The Company's share price at the year end was 33.50p (2012: 27.00p).

Principal risks

The Board considers the following to be the principal risks facing the Company. Mitigation of these risks is sought and achieved in a number of ways:

Market risk

The Company is exposed to market risk due to fluctuations in the market prices of its investments.

The Investment Manager actively monitorseconomic and companyperformance and reportsregularly to the Board on a formal and informal basis.The Board formallymeets with the Investment Managerquarterly when portfolio transactions and performance are reviewed. The Management Engagement Committee meets as required to review the performance of the Investment Manager. Furtherdetails regarding the Company's various Committees and their duties are given on pages 19 and 20 of the statement on corporate governance.

The Companyis substantially dependent on the servicesof the Investment Manager's investment team for the implementation of its investmentpolicy.

The Company may hold a proportion of the portfolio in cash or cash equivalent investments from time to time. Whilst during positive stock market movementsthe portfolio may forego notionalgains, during negativemarket movements this may provide protection.

Discount volatility

As with many investmenttrust companies, discountscan significantly fluctuate.

The Boardrecognises that it is in the longterminterests of shareholders to reduce discountvolatility and believes that theprime driver of discounts over the longerterm is performance. The Board does not intendto adopt a precise discount target at which shares will be bought back. HoweverOrdinary shares will not be bought back for cancellation or into Treasuryat a discount to NAV of less than 7.5%.

Regulatory risks

Relevant legislation and regulations which apply to the Companyinclude the CompaniesAct 2006, the Corporation TaxAct 2010 ("CTA") and the ListingRules of the Financial ConductAuthority ("FCA"). The Company has noted the recommendations of the UK Corporate Governance Code and its statement of compliance appearson page 18. A breach of the CTA couldresult in the Company losing its status as an investment company and becoming subject to capitalgains tax, whilst a breach of the Listing Rules might result in censureby the FCA. At each Board meetingthe status of the Company is considered and discussed, so as to ensure that all regulations are being adhered to by the Company and its service providers.

The Board is not aware of any breachesof laws or regulations during the period under review and up to the date of this report.

Financial risk

The financialsituation of the Company is reviewed in detail at each Board meeting. The content of the Company's annual report and financial statementsis monitored and approved both by the Board and the Audit Committee.

Inappropriate accounting policies or failureto comply with current or new accounting standards may lead to a breach of regulations.

Liquidity risk

The Board monitors the liquidity of the portfolioat each Board meeting and regularly reviewsthe investments with theInvestment Manager.

A more detailed explanation of the investment management risks facingthe Company is given in note 18 to the accounts on pages 42 to 48.

Financial instruments

As part of its normal operations, the Company holds financial assets and financialliabilities. Full detailsof the role of financial instruments in the Company's operationsare set out in note 18 to the accounts.

Current and future developments

A review of the main featuresof the year is containedin the Chairman's statementand the Investment Manager's overview on pages 2 and 3.

The marketingand promotion of the Companywill continue to involve the Board, led by the Investment Manager, with a proactive communications programme either directlyor through its website, with existing and potential new shareholders and other external parties.

The Directors are seeking to renew the appropriate powersat the next Annual GeneralMeeting to enablethe issue and purchase of the company's own shares, when it is in the interests of shareholders as a whole.

Social, environmentaland employee issues

The Companydoes not have any employeesand the Board consists entirelyof non-executive directors. As the Company is an investmenttrust, which invests in other companies, it has no direct impact on the community or the environment, and as such has no policies in this area.

Results and dividend

The results for the year and the proposed transfer from revenue reserves are set out in the income statement. The Directors do not recommendthe payment of a dividend for the year.

Share Capital

On 18 December 2012 the Company announced the result of the tender offer and buyback offer issued to shareholders on6 November 2012. Underthe tender offer, 1,188,423 Ordinaryshares were repurchased for cancellation on 28 February 2013. On the same date, under the buybackoffer, 100,000 Ordinaryshares held in Treasury were cancelled. On 26 February 2013 the Company purchased100,000 Ordinary shares at 31p from the director Mr. D A Horner, the shares were cancelled on 27 February 2013.

At the year end and as at the date of this report there were 10,495,860 Ordinary 1p shares in issue each carryingone vote in the event of a poll.

Management and administration agreements

The Company's investments are managed by Chelverton Asset Management Limited ("CAM") under an agreement dated 28 June 2001. As previouslystated above, Mr. Horner is a director of CAM.

The Companypays CAM, in respect of its servicesas Investment Manager, a monthly fee (exclusive of VAT) payable in arrears as follows:

for the first£15 million of funds undermanagement at the rate of 1/12% per month of the grossvalue of funds under management ("the Value");

for the next £15 million of funds under management, at the rate of 1/16% per month of the amount by which the Value exceeds £15 million; and

for funds under management above £30 million, at the rate of 1/24% per month.

The appointment of CAM as Investment Managermay be terminated by either party giving to the other not less than twelve months' notice of such termination. There are no specific provisionscontained within the Investment Management Agreement relatingto the compensation payable in the event of termination of the agreementother than entitlement to fees, which would be payable within any notice period.

Under an agreement dated 26 June 2001, company secretarial services and the general administration of the Company were undertaken by CapitaSinclair Henderson Limited("CSH") for anannual fee in 2012 of£49,565. Notice was served on CSH and John Girdlestone was appointed with effect from 1 January 2013 for an annual fee of £30,000 plus VAT at the prevailing rate.

Appointment of Chelverton Asset Management("CAM") as the Investment Manager

The Board, excluding Mr. Horner, continually reviews the performance of the InvestmentManager. In the opinion of the independent Directorsthe continuing appointment of CAM, as Investment Manager, on the terms outlined in the Investment Management Agreement dated 28 June 2001 and amended on 1 December2006, is in the best interests of theshareholders as a whole. Further, the Board is satisfied that CAM has the required skill and expertise to continue to manage the Company's portfolio and charges fees that are reasonable when compared with those of similar investment trusts.

On behalf of the Board

George Stevens

Chairman

4 November 2013

Statement of Directors'responsibilities in respect of the financial statements

The Directors are responsible for preparing the Annual Reportand the financial statements and have elected to prepare them in accordance with applicable United Kingdom law and United Kingdom Accounting Standards (United Kingdom Generally AcceptedAccounting Practice). Under company law the Directorsmust not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of its profit or loss for that period.

In preparingthe financial statements, the Directors are required to:

select suitable accounting policies and then apply them consistently;

make judgementsand estimates that are reasonableand prudent;

present information, including accounting policies,in a manner that providesrelevant, reliable, comparable and understandable information;

state whetherapplicable UK Accounting Standards have been followed, subjectto any material departures disclosed and explained in the financial statements; and

prepare the financial statements on the goingconcern basis unlessit is inappropriate to presumethat the Company will continue in business.

The Directorsare responsible for keeping adequateaccounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy, at any time,the financial positionof the Company and to enablethem to ensurethat the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Report of Directors, Directors remuneration report and statement on corporate governance.

The Directors,to the best of their knowledge, state that:

the financialstatements, prepared in accordance with UK GenerallyAccepted Accounting Practice,give a true and fair view of the assets, liabilities, financial position and net return of the Company; and

the Chairman's statement,Investment Manager's overview and Report of the Directors include a fair review of the development and performance of the businessand the position of the Company togetherwith a description of the principalrisks and uncertainties that it faces.

The Directorsare responsible for the maintenance and integrity of the corporateand financial information related to the Company including on the website of the Investment Manager www.chelvertonam.com.

Legislation in the United Kingdom governingthe preparation and dissemination of financial statementsmay differ from legislation in other jurisdictions.

On behalf of the Board

George Stevens

Chairman

4 November 2013

NON-STATUTORY ACCOUNTS

The financial information set out below does not constitute the Company's

statutory accounts for the years ended 31 August 2012 and 2011 but is derived from those accounts. Statutory accounts for 2011 have been delivered to the registrar of companies, and those for 2012 will be delivered in due course. The auditors have reported on those accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (ii) did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. The text of the Auditor's report can be found in the Company's full Annual Report and Accounts on the Investment Manager's website: www.chelvertonam.com.

Income statement

for the year ended 31 August 2013

All revenue and capital items in the above statement derive from continuingoperations.

No operationswere acquired or discontinued during the year.

A separatestatement of totalrecognised gains and losses has not been prepared as all such gains and losses are included in the income statement.

The notes below form part of these accounts.

Reconciliation of movementsin shareholders' funds

for the year ended 31 August 2013

The notes below form part of these accounts.

Balance sheet

as at 31 August 2013

The notes below form part of these accounts.

These accounts were approved by the Board of Directors of Chelverton Growth Trust PLC and authorised for issue on 4November 2013. They were signed on its behalf by

George Stevens

Chairman

Statement of cash flows

for the year ended 31 August 2013

1  ACCOUNTINGPOLICIES

Accounting convention

The accounts are prepared in accordancewith UK Generally Accepted AccountingPractice ("UK GAAP") and with the AIC Statement of Recommended Practice("SORP") issued in January 2009,regarding the Financial Statements of InvestmentTrust Companiesand Venture Capital Trusts. All the Company's activitiesare continuing.

Income recognition

Dividends receivable on quoted equity shares are included as revenue when the investments concerned are quoted 'ex-dividend'. UK dividends are disclosed excluding the associated tax credit. Dividends receivable on equity and non-equity shares where no ex-dividend date is quoted are broughtinto account when the Company's right to receive payment is established. All other income is included on an accruals basis.

Expenses

All expensesare accounted for on an accruals basis and charged throughthe revenue accountin the income statement except as follows:

expenses which are incidental to the acquisition or disposal of an investment are treated as capital and separately identified and disclosed (see note 7):

management fees and bank interest have been allocated 75% to capital reserve and 25% to revenue reserve in the income statement, being in line with the Board's expected long-term split of returns, in the form of capital gains and income respectively, from the investment portfolio of the Company.

Investments

All investments held by the Company are classified as 'fair value through profit or loss'. Investments are initially recognised at cost, being the fair valueof the consideration given. After initial recognition investments are measured at fair value, with changes in the fair value of investments and impairment of investments recognised in the income statementand allocated to capital. Realisedgains and losses on investments sold are calculated as the difference between sales proceeds and cost.

Investments are recognised and derecognised on the trade date where a purchaseor sale is under a contractwhose terms require delivery within the timeframeestablished by the market concerned, and are initially measured at fair value.

For investments actively traded in organisedfinancial markets, fair value is generally determined by reference to StockExchange quoted market bid prices at the close of business on the balance sheet date, without adjustment for transaction costs necessaryto realise the asset. For investments traded on other financial markets such as the OTCQB, fair value is generally determined by reference to the share price at close of business on the balance sheet date, discounted to reflect the best estimate of the discount that may need to be applied for the shares to be sold as a single investment.

For investments that are not actively tradedin organised financial markets,the investments are valued at the Directors' estimate of its net realisable value being their estimate of fair value. Generally, fair value will be at cost or, where applicable, at the most recent transaction price. In the case of direct investments in unquoted companies the following valuation techniqueis applied. Initialvaluation is based on the transaction price. Where better indications of fair value become available, such as through subsequent issues of capital or dealings between third parties, the valuation is adjusted to reflect the new evidence.This represents the Directors' view of the amount for whichan asset could be exchangedbetween knowledgeable willing parties in an arm's length transaction.

Capital reserve

The followingare accounted for in this reserve:

gains and losses on the realisation of investments;

net movement arising from changes in the fair value of investments that can be readily converted to cash without accepting adverse terms;

realised exchange differences of a capital nature;

expenses, together with related taxation effect, charged to this account in accordance with the above policies; and

net movement arising from the changes in the fair value of investments that cannot be readily converted to cash without accepting adverse terms, held at the year end.

Taxation

The charge for taxation, where relevant, is based on the revenuebefore taxation for the year. Tax deferred or accelerated can arisedue to timing differencesbetween the treatment of certain itemsfor accounting and taxation purposes.

Full provisionis made for deferred taxationunder the liabilitymethod, on all timing differences not reversed by the balance sheet date, in accordance with FRS 19: Deferred tax.

The tax effect of different itemsof income/gain and expenditure/loss is allocated betweencapital and revenue on the same basis as the particular item to which it relates,using the Company's effective rate of tax for the accounting period.

The investmentmanagement fee is calculated at the rate of 1/12% per month of the gross value of funds under management and is payable monthly in arrears. At 31 August 2013 there was £3,600 outstanding (2012: £3,000).