Chelverton Growth Trust : Proposals for members’ voluntary liquidation of the Company and Notice of General Meeting

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the action you should take, you should immediately consult your stockbroker, bank manager, solicitor, accountant or other appropriately qualified independent financial adviser, authorised under the Financial Services and Markets Act 2000 (as amended) ("FSMA") if you are in the United Kingdom, or from another appropriately authorised independent financial adviser if you are in a territory outside of the United Kingdom. All Shareholders are strongly advised to consult their professional advisers regarding their own tax position.

If you have sold, transferred or otherwise disposed of all your Shares in Chelverton Growth Trust plc (the "Company"), please pass this document and the accompanying Form of Proxy at once to the purchaser or transferee, or to the stockbroker, bank or other agent through whom you made the sale, transfer or disposal for transmission to the purchaser or transferee, except that such documents should not be sent to any jurisdiction under any circumstances where to do so might constitute a violation of local securities laws and regulations. If you have sold, transferred or otherwise disposed of only part of your holding of Shares in the Company, you should retain this document and the accompanying Form of Proxy and consult the stockbroker, bank or other agent through whom you made the sale, transfer or disposal.

CHELVERTON GROWTH TRUST PLC

(Incorporated in England and Wales with registered number 02989519)

Recommended proposals for the members' voluntary liquidation of the Company

and

Notice of General Meeting

The Proposals described in this Circular are conditional on approval from Shareholders, which is being sought at a general meeting of the Company to be held at the offices of Charles Russell Speechlys LLP, 5 Fleet Place, London, EC4M 7RD at 3.00 p.m. on Monday 27 November 2023.

This Circular should be read in its entirety. Nevertheless, your attention is drawn, in particular, to the letter from the Chairman of the Company which is set out on pages 5 to 9 of this document and which contains a recommendation that you vote in favour of the Resolution to be proposed at the General Meeting.

Capitalised terms used throughout this document shall have the meanings ascribed to them in Part 3 of this document, unless the context otherwise requires.

The contents of this document should not be construed as legal, financial or tax advice. Each Shareholder should consult their own legal, financial or tax adviser for legal, financial or tax advice (as appropriate).

Notice of a general meeting of the Company to be held at the offices of Charles Russell Speechlys LLP, 5 Fleet Place, London, EC4M 7RD at 3.00 p.m. on Monday 27 November 2023 (the "General Meeting") is set out at the end of this document. Details of the actions you are recommended to take are set out on page 9 of this document.

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Whether or not you intend to be present at the General Meeting, you are requested to complete, sign and return the Form of Proxy for use at the General Meeting which accompanies this document. To be valid the Form of Proxy must be completed and signed in accordance with the instructions printed thereon and delivered to the Company's registrar, Share Registrars Limited (the "Registrar"), at 3 The Millennium Centre, Crosby Way, Farnham GU9 7XX as soon as possible but, in any event, so as to arrive not later than 3.00 p.m. on Thursday 23 November 2023 (or, in the case of any adjournment of the General Meeting, not later than 48 hours (excluding non-Business Days) before the time fixed for the holding of the adjourned meeting). Alternatively, Shareholders may complete the Form of Proxy electronically via by visiting www.shareregistrars.uk.com, clicking on the "Proxy Vote" button and then following the on-screen instructions. Instructions for this option are given in Note 3 in the Notice of General Meeting.

If you hold Shares in CREST you may also appoint a proxy by completing and transmitting a CREST Proxy Instruction to the Registrar (CREST participant ID 7RA36) in accordance with the procedures set out in the CREST Manual. Alternatively, you may give proxy instructions by logging onto www.euroclear.comand following the instructions. Proxies sent electronically must be sent as soon as possible and, in any event, so as to be received not later than 3.00 p.m. on Thursday 23 November 2023 (or, in the case of any adjournment of the General Meeting, not later than 48 hours (excluding non-Business Days) before the time fixed for the holding of the adjourned meeting).

The completion and return of a Form of Proxy (or the electronic appointment of a proxy) will not prevent Shareholders from attending and voting at the General Meeting, or any adjournment thereof, in person, should they wish to do so.

No person has been authorised to give any information or make any representation other than those contained in this document and, if given or made, such information or representation must not be relied on as having been so authorised. The delivery of this document shall not, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date of this document or that the information in it is correct as at any subsequent time.

The information included herein is based upon information available as at the date of this document and, except as requested by the FCA or required by the Listing Rules, the Disclosure Guidance and Transparency Rules or UK MAR, each as appropriate, or any other applicable law, will not be updated.

This document is dated 1 November 2023.

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CONTENTS

		Page
EXPECTED TIMETABLE OF PRINCIPAL EVENTS	4
PART 1	LETTER FROM THE CHAIRMAN	5
PART 2	ADDITIONAL INFORMATION	10
PART 3	DEFINITIONS	11
NOTICE OF GENERAL MEETING	14

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EXPECTED TIMETABLE OF PRINCIPAL EVENTS

		2023
Last day of dealing in the Shares for settlement through CREST on a	22	November
normal rolling two-day settlement basis in order to enable settlement
prior to the record date
Deadline for receipt of Forms of Proxy	3.00 p.m. on 23 November
Close of Register and Record Date for participation in the members'	6.00 p.m. on 24 November
voluntary liquidation
Suspension of Shares from listing on the Official List and from trading	7.30 a.m. on 27 November
on the London Stock Exchange and CREST disablement
General Meeting	3.00 p.m. on 27	November
Appointment of Liquidators	27	November
Cancellation of the listing of the Shares on the Official List and of the	8.00 a.m. on 28	November
trading of the Shares on the London Stock Exchange

Notes

1. The above times and/or dates may be subject to change and, in the event of such change, the revised times and/or dates will be notified to Shareholders by an announcement through a Regulatory Information Service.
2. All references to times in this document are to London times.

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PART 1

LETTER FROM THE CHAIRMAN

CHELVERTON GROWTH TRUST PLC

(Incorporated in England and Wales with registered number 02989519)

Directors:	Registered office:
Kevin John Allen (Chairman)	Suite 8, Bridge House,
David Alistair Horner	Courtenay Street,
Ian Paul Martin	Newton Abbot,
	England TQ12 2QS
	1 November 2023

Dear Shareholder

Recommended proposals for the members' voluntary liquidation of the Company

and

Notice of General Meeting

Introduction

In recent years, the Company's strategy has been to return cash to Shareholders via a series of tender offers. In total, 71% of the equity (£5.4 million by value) has been returned. The Board has concluded that the reduced size of the Company and its small number of investments preclude a further tender offer, and as reported in the Company's annual report and accounts, it has for some time been investigating other options to maximise the return of funds to Shareholders. Unfortunately, this process has been necessarily drawn out due to major economic events including Brexit, Covid 19 and the Russian invasion of Ukraine. These events have served to create market uncertainty and turmoil such that only in recent months has the Board felt able to move forward with its plans within a more stable economic environment.

After careful consideration, and following discussions with the Investment Manager, your Board believes that it is in Shareholders' best interests that the Company be wound up, with the intention that there will be an orderly, solvent distribution of certain assets in specie to Shareholders and realisation for cash of the Company's other assets, with a return of that cash (net of costs and other liabilities) to Shareholders. The Board has, therefore, resolved to recommend to Shareholders that a members' voluntary liquidation of the Company be undertaken and to cancel the admission of its Shares to the premium listing category of the Official List and on the Main Market. The Board's primary aim in making this recommendation is to seek to maximise the return to Shareholders using the most efficient route possible.

The purpose of this document is to provide Shareholders with further details of the Proposals and to convene a General Meeting at which Shareholders will be asked to approve the Proposals. No further distributions will be paid by the Company pending the voluntary liquidation of the Company.

The General Meeting will be held at the offices of Charles Russell Speechlys LLP, 5 Fleet Place, London, EC4M 7RD at 3.00 p.m. on Monday 27 November 2023.

The business to be conducted at the General Meeting is set out in the Notice of General Meeting at page 14 of this document. You will be asked to consider and vote on the Resolution set out in the Notice. An explanation of the Resolution is given below.

Background to the Proposals

The Company was launched in November 1994 with the intention to provide capital growth.

The remaining assets of the Company of approximately £2.9 million net of creditors and other liabilities as at 23 October 2023 are equivalent to approximately 53 pence per Share. Your Board and the Investment Manager

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are of the opinion that the Company is sub-scale and that the Company's ongoing charges ratio renders the ongoing operation of the Company uneconomic.

The Board considers that the reduced size of the Company and its small number of investments preclude a further tender offer, and it has been considering other options to return funds to Shareholders.

The Board has accordingly concluded that a members' voluntary liquidation of the Company should be undertaken, with the Company's shareholding in CEPS plc (comprising in terms of value, approximately 75% of the Company's remaining assets) being distributed in specie pro rata to Shareholders, with the Company's other investments being sold, and the proceeds used to satisfy creditors and the costs of the members' voluntary liquidation, with the remaining small cash balance being distributed to Shareholders.

CEPS plc is an AIM-listed, industrial trading holding company that combines the benefits of the financial structuring of private equity funding with the entrepreneurial drive and flair of incentivised management teams. Further information about CEPS can be found on its website www.cepsplc.com.

The Company's existing Investment Management Agreement, and the associated obligations of the parties, will terminate automatically in accordance with the terms of the relevant agreements on the Company's entry into liquidation with no further amounts payable in respect of such arrangements.

Further details of the Resolution required to be passed to allow the implementation of the Proposals are set out below.

The members' voluntary liquidation

The Board is recommending that the Company be placed into members' voluntary liquidation. This requires the approval of Shareholders at the General Meeting.

It is proposed that Milan Vuceljic and Michael Solomons, both licensed insolvency practitioners of Moorfields Advisory Limited, 82 St John Street, London ECM 4JN be appointed as joint liquidators of the Company (the "Liquidators"), and that their remuneration shall be determined in accordance with the letter of engagement between the Liquidators and the Company and as set out in in the Resolution. Further details regarding the Liquidators' proposed engagement and remuneration as agreed by the Directors can be made available on request to the Company Secretary, ISCA Administration Services Limited (01392 487056).

The winding-up of the Company will be a solvent winding-up in which it is intended that all creditors will be paid in full. The winding up will require a declaration of solvency to be sworn by the Directors. The appointment of the Liquidators becomes effective immediately upon the passing of the Resolution at the General Meeting, at which point the powers of the Directors will cease.

The Liquidators will then assume responsibility for the winding-up of the Company, including the realisation of the remaining assets of the Company, the payment of fees, costs and expenses, the discharging of the liabilities of the Company, and the distribution of the Company's surplus assets to Shareholders.

The Liquidators intend to return the majority of the remaining net asset value to Shareholders by the in specie distribution pro rata to Shareholders of the Company's shareholding in CEPS plc, the AIM listed industrial holding company in which the Company owns 5,460,301 shares. The Board believes that the Company's other assets and investments should be best realised, when appropriate to do so, given their size and illiquidity, and this is a policy which the Company have been pursuing. The net proceeds of the realisation of the Company's assets will be distributed to Shareholders after the Company's outstanding liabilities and the costs of implementing the Proposals, including the Liquidators' fees, have been met. The shares of the Company have historically traded at steep discount to the asset value of the Company and this strategy should enable higher value to be reflected for Shareholders, by removal of the future costs of the running the Company and the distribution of net cash and the direct ownership of shares in CEPS plc.

In order to facilitate the implementation of the Proposals, the Shares will be suspended from listing on the Official List and from trading on the London Stock Exchange with effect from 7.30 a.m. on Monday 27 November 2023, being the date of the General Meeting.

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If the Resolution is subsequently passed at the General Meeting, this will also result in the cancellation of the listing of the Shares on the Official List and the Shares ceasing to trade on the London Stock Exchange. It is expected that the cancellation of listing and trading would take effect from 8.00 a.m. on Tuesday 28 November 2023.

Distributions to Shareholders

Assuming the Resolution is passed, the Liquidators expect to make an initial in specie distribution pro rata to Shareholders of the Company's shares in CEPS plc, the AIM listed industrial holding company in which the Company owns 5,460,301 shares. Because David Horner and his family are currently beneficially interested in 6,299,000 ordinary shares in CEPS plc (representing 29.99% of the issued share capital of that company), any increase in that family shareholding may have consequences under The Takeover Code, which is currently being addressed by CEPS plc and the Horner family. This will not delay any distribution by the Liquidators.

The Liquidators will retain sufficient funds in the liquidation to meet the current, future and contingent liabilities of the Company, including the costs and expenses (inclusive of VAT, if applicable) of the liquidation not already paid at the point of liquidation.

Once the liquidators have satisfied the claims of creditors of the Company and paid the costs and expenses of the liquidation, it is expected that the Liquidators will make one final cash distribution to Shareholders, currently expected to be approximately 5 pence per Share.

All Shareholders on the Register as at 6.00 p.m. on Friday 24 November 2023 will be entitled to any distributions made during the course of the liquidation.

In order to comply with the Company's obligations under the UK's domestic and international sanctions regimes, no distribution made pursuant to the implementation of the Proposals will be paid to a Sanctions Restricted Person.

Once in liquidation, the Company will not make any further investments.

Suspension and cancellation of admission of the Shares to trading on the Main Market

The register will be closed at 6.00 p.m. on Friday 24 November 2023 and the Shares will be disabled in CREST at the start of business on Monday 27 November 2023. Accordingly, to be valid, all transfers must be lodged before 6.00 p.m. on Friday 24 November 2023. Application will be made to the FCA for suspension of listing of the Shares on the Official List and application will be made to the London Stock Exchange for suspension of trading in the Shares, in each case at 7.30 a.m. on Monday 27 November 2023. The last day for dealings in the Shares on the London Stock Exchange on a normal rolling two-day settlement basis will be Wednesday 22 November 2023. After Wednesday 22 November 2023, dealings should be for cash settlement only and will be registered in the normal way if the transfer, accompanied by the documents of title, is received by the Registrars by close of business on Friday 24 November 2023. The record date, being the date for determining which Shareholders are entitled to receive liquidation distributions, is close of business on 24 November 2023.

Transfers received after the time specified above will be returned to the person lodging them and, if the Resolution relating to the Proposals is passed, the original holder will receive any proceeds from distributions made by the Liquidators.

If the Resolution relating to the Proposals is passed, the Company will make applications for the cancellation of the admission of the Shares to listing on the Official List and to trading on the Main Market following the General Meeting with the cancellations expected to take effect at 8 a.m. on Tuesday 28 November 2023.

After the liquidation of the Company and the making of the final distribution to Shareholders (if any), existing certifications in respect of the Shares will cease to be of value and any existing credit of the Shares in any stock account in CREST will be redundant.

Costs and expenses of the Proposals

If appointed, the Liquidators will be entitled to receive remuneration for their services by reference to the terms set out in the Liquidators' Engagement Letter and in the Resolution.

The costs of the Proposals are estimated to be approximately £42,000 plus VAT. The costs will be discharged by the Company in due course following the General Meeting.

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Whilst the maximum costs of the winding-up of the Company have been estimated, unforeseen actual costs may exceed the estimates. The estimated total net return to Shareholders from the winding-up is, therefore, uncertain.

Service Providers

The Company's existing Investment Management Agreement will, in accordance with its terms, terminate automatically on the Company going into liquidation.

If the Resolution is passed, it is intended that David Horner, given his expertise and knowledge of the Company, will assist the Liquidators as required during the course of the liquidation. David has agreed he will not be paid for any such assistance required. In addition, the Company's Registrar, Share Registrars Limited, will be retained by the Company during the liquidation period.

Save as set out above, the Company is taking steps to ensure that the appointment of its other service providers will terminate should the Resolution be passed.

Taxation

Once the Resolution is passed at the General Meeting, the Company will notify HMRC that it is entering into members' voluntarily liquidation.

Any Shareholder who is UK tax resident may, depending on that Shareholder's personal circumstances, be subject to capital gains tax (or, in the case of a corporate Shareholder, corporation tax on chargeable gains) in respect of any gain arising on the disposal of their Shares. For such individuals, capital gains are taxed at a rate of 10 per cent, (for basic rate taxpayers) or 20 per cent, (for higher or additional rate taxpayers). Individuals may, depending on their personal circumstances, benefit from certain reliefs and allowances, including an annual exempt amount, which exempts the first £6,000 for the tax year 2023-2024 and £3,000 for the tax year 2024-2025. Shareholders who are not resident in the UK for taxation purposes will not normally be liable to UK taxation on chargeable gains arising from the disposal of their Shares unless those Shares are held for the purposes of a trade, profession or vocation through a UK branch, agency or permanent establishment, although they may be subject to foreign taxation depending on their own particular circumstances. Individual Shareholders who are temporarily not resident in the UK for tax purposes may, in certain circumstances, be liable to capital gains tax in respect of gains realised when they are not resident in the UK under anti-avoidance legislation.

For the purposes of UK capital gains tax (or, in the case of a corporate Shareholder, corporation tax on chargeable gains), the interim distribution in specie by the Liquidators of the Company's shareholding in CEPS plc will involve a part disposal of their Shares (notwithstanding such distribution is in non-cash form), with any final distribution by the Liquidators deemed to be a further part disposal of the Shares. The in specie distribution of the CEPS plc shares will be deemed, for capital gains tax and corporation tax on chargeable gains, to take place at their market value at the date of the interim distribution.

The information in this document relates to UK taxation applicable to the Company and its Shareholders and is based on current legislation and what is understood to be current HMRC practice. The statements above relate to persons who are absolute beneficial owners of the Shares and may not apply to certain classes of persons, such as dealers in securities. Such statements are given by way of a general summary only and do not constitute legal or tax advice to any Shareholder. Shareholders who are in any doubt as to any applicable taxation consequences to them of the Proposals should seek advice from a qualified independent financial adviser or tax specialist.

Summary of the Resolution to be proposed at the General Meeting

The implementation of the Proposals will require Shareholders to vote in favour of the Resolution to be proposed at the General Meeting.

Resolution

The Resolution is for the approval of the Company being wound-up voluntarily and the appointment of the Liquidators for the purpose of the winding-up. It also grants the Liquidators authority to make distributions in specie and in cash to the Shareholders (after payment of the Company's liabilities and after deducting the costs of implementation of the Company's winding-up), in proportion to their holdings of Shares in accordance with the provisions of the Articles. It also determines the remuneration of the Liquidators by reference to the engagement letter signed by the Company with Moorfields Advisory Limited and in the Resolution.

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The Resolution will be proposed as a special resolution. A special resolution requires a majority of at least 75 per cent. of votes cast by Shareholders to be cast in favour, in order for it to be passed.

If the Resolution is not passed at the General Meeting, the Company shall continue in operation until other proposals can be put forward. As noted above, the Board and the Investment Manager are of the opinion that the Company is sub- scale and that the Company's ongoing charges ratio renders the ongoing operation of the Company uneconomic.

The Notice of General Meeting at the end of this Circular sets out the full text of the Resolution.

Action to be taken

Whether or not you intend to attend the General Meeting in person, you are requested to appoint a proxy electronically via the Registrar's online proxy voting app at www.shareregistrars.uk.com(see Note 3 to the Notice of General Meeting for instructions) or by completing, signing and returning the enclosed Form of Proxy, in each case as soon as possible but, in any event, so as to be received by the Registrar by not later than 3.00 p.m. on Thursday 23 November 2023 (or, if the General Meeting is adjourned, 48 hours (excluding non-Business Days) prior to the adjourned General Meeting). Completed Forms of Proxy should be returned by post to the Registrar, Share Registrars Limited, at 3 The Millennium Centre, Crosby Way, Farnham, Surrey GU9 7XX. If the electronic proxy appointment or the Form of Proxy, as the case may be, is not received by the aforementioned date and time it will be invalid.

If you hold Shares in CREST, you may appoint a proxy by completing and transmitting a CREST Proxy Instruction to the Registrar (CREST Participant ID 7RA36) so that it is received by not later than 3.00 p.m. on Thursday 23 November 2023 (or, if the General Meeting is adjourned, 48 hours (excluding non-Business Days) prior to the adjourned General Meeting). The time of receipt will be taken to be the time from which the Company's Registrar is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. If the CREST Proxy Instruction is not received by the aforementioned date and time it will be invalid.

Appointing a proxy online, completing, signing and returning a hard copy Form of Proxy or completing and transmitting a CREST Proxy Instruction will not preclude Shareholders from attending and voting at the General Meeting in person, should they so wish.

Voting on the Resolution will be by way of a poll.

If you are in any doubt as to the action you should take, you are recommended to seek your own financial and/ or legal advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under FSMA if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

Recommendation

The Board considers that the Proposals and the Resolution to be proposed at the General Meeting are in the best interests of the Company and its Shareholders as a whole. Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Resolution, as the Directors (and their families) intend to do in respect of their own shareholdings, amounting to 1,001,168 Shares in aggregate (representing approximately 18.33 percent of the issued share capital of the Company (excluding any Shares held in the treasury)) as at 31 October 2023 (the last practical date prior to the publication of the Circular).

Yours faithfully,

Kevin Allen

Chairman

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PART 2

ADDITIONAL INFORMATION

1. THE COMPANY

1. Chelverton Growth Trust plc was incorporated and registered in England and Wales on 8 November 1994 as a public company limited by shares with registered number 02989519. The Company's legal entity identifier is: 213800I86P8BAE6UVI83.
2. The Company's registered office is at Suite 8, Bridge House, Courtenay Street, Newton Abbot, England, TQ12 2QS. The principal legislation under which the Company operates is the Companies Act.
3. The Company's website address ishttps://www.chelvertonam.com/. The information contained in the Company's website does not form part of this document, save to the extent that such information has been expressly incorporated by reference into this document.
4. Moorsfields Advisory Limited of 82 St John Street London ECM 4JN has given and not withdrawn its written consent to the publication of this Circular with the inclusion of the references to its name in the form and context which they appear.

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