Note GBP'000 GBP'000 


Operating activities 
                                                          2,618 
Investment income received                     1,447 
Investment management fee paid                 (469)      (605) 
Administration and secretarial fees paid       (64)       (64) 
Other cash payments                               (210)   (247) 
Cash generated from operations              19 704        1,702 
Purchases of investments                       (9,266)    (9,951) 
Sales of investments                           9,848      10,348 
Net cash in?ow from operating activites        1,286      2,099 
Financing activities 
Dividends paid                              9  (2,064)    (2,523) 
Net cash out?ow from ?nancing activities          (2,064)   (2,523) 
Change in cash and cash equivalents         20 (778)      (424) 
Cash and cash equivalents at start of year  21     1,266     1,690 
Cash and cash equivalents at end of year    21    488        1,266

The notes on pages 51 to 70 form part of these ?nancial statements. Notes to the Financial Statements

as at 30 April 2021 1 ACCOUNTING POLICIES

Chelverton UK Dividend Trust PLC is a public company, limited by shares, domiciled and registered in the UK. The consolidated ?nancial statements for the year ended 30 April 2021 comprise the ?nancial statements of the Company and its subsidiary SDV 2025 ZDP plc (SDVP) (together referred to as the 'Group'). Basis of preparation

The consolidated ?nancial statements of the Group and the ?nancial statements of the Company have been prepared in accordance with international accounting standards and in conformity with the requirements of the Companies Act 2006, and re?ect the following policies which have been adopted and applied consistently. 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 judgements and uses of estimation

The preparation of ?nancial statements in conformity with IFRS requires management to make judgements, estimates 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 judgements 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 estimates 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 signi?cant accounting estimates or signi?cant judgements in the current period. Basis of consolidation

The Group ?nancial statements consolidate the ?nancial statements of the Company and its wholly- owned subsidiary undertaking, SDVP, drawn up to the same accounting date.

The subsidiary is consolidated from the date of its incorporation, being the date on which the Company obtained control, and will continue to be consolidated until the date that such control ceases. Control comprises the power to govern the ?nancial and operating policies of the investee so as to obtain bene?t from its activities and is achieved through direct or indirect ownership of voting rights. The ?nancial statements of the subsidiary are prepared for the same reporting year as the Company, using consistent accounting policies. All inter-company balances and transactions, including unrealised pro?ts arising from them, are eliminated.

As permitted by Section 408 of the Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income. The amount of the Company's return for the ?nancial period dealt with in the ?nancial statements of the Group is a pro?t of GBP23,375,000 (2020: loss of GBP16,102,000).

1 ACCOUNTING POLICIES (continued) Convention

The ?nancial statements are presented in Sterling rounded to the nearest thousand. The ?nancial statements have been prepared on a going concern basis under the historical cost convention, except for the measurement at fair value of investments classi?ed as fair value through pro?t or loss. Where 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 April 2021) is consistent with the requirements of IFRS, the Directors have sought to prepare the ?nancial statements on a consistent basis compliant with the recommendations of the SORP. Segmental reporting

The Directors are of the opinion that the Group is engaged in a single segment of business, being investment business. The Group only invests in companies listed in the UK. Investments

All investments held by the Group are recorded at 'fair value through pro?t or loss'. Investments are initially recognised at cost, being the fair value of the consideration given.

After initial recognition, investments are measured at fair value, with unrealised gains and losses on investments and impairment of investments recognised in the Consolidated Statement of Comprehensive Income and allocated to capital. Realised gains and losses on investments sold are calculated as the difference between sales proceeds and cost.

For investments actively traded in organised ?nancial markets, fair value is generally determined by reference to quoted market bid prices at the close of business on the Balance Sheet date, without adjustment for transaction costs necessary to realise the asset. Trade date accounting

All 'regular way' purchases and sales of ?nancial assets are recognised on the 'trade date', i.e. the day that the Group commits to purchase or sell the asset. Regular way purchases, or sales, are purchases or sales of ?nancial assets that require delivery of the asset within a time frame generally established by regulation or convention in the market place. Income

Dividends receivable on quoted equity shares are taken into account on the ex-dividend date. Where no ex-dividend date is quoted, they are brought into account when the Group's right to receive payment is established. Other investment income and interest receivable are included in the ?nancial statements on an accruals basis. Overseas dividends received from UK Companies are stated gross of any withholding tax. Expenses

All expenses are accounted for on an accruals basis. All expenses are charged through the revenue account in the Consolidated Statement of Comprehensive Income except as follows: ? expenses which are incidental to the acquisition of an investment are included within the costs of the investment; ? expenses which are incidental to the disposal of an investment are deducted from the disposal proceeds of the

investment;

1 ACCOUNTING POLICIES (continued) ? expenses are charged to capital reserve where a connection with the maintenance or enhancement of the value of the

investments can be demonstrated; and ? operating expenses of the subsidiary are borne by the Company and taken 100% to capital.

All other expenses are allocated to revenue with the exception of 75% (2020: 75%) of the Investment Manager's fee which is allocated to capital. This is in line with the Board's expected long-term split of returns from the investment portfolio, in the form of capital and income gains respectively. Cash and cash equivalents

Cash in hand and in banks including where held by custodians and short-term deposits which are held to maturity are carried at cost. Cash and cash equivalents are de?ned as cash in hand, demand deposits and short-term, highly liquid investments readily convertible to known amounts of cash and subject to insigni?cant risk of changes in value. Loans and borrowings

All loans and borrowings are initially recognised at cost, being the fair value of the consideration received, less issue costs, where applicable. After initial recognition, all interest-bearing loans and borrowings are subsequently measured at amortised cost. Any difference between cost and redemption value is recognised in the Consolidated Statement of Comprehensive Income over the period of the borrowings on an effective interest basis. Zero Dividend Preference shares

Shares issued by the subsidiary are treated as a liability of the Group, and are shown in the Balance Sheet at their redemption value at the Balance Sheet date. The appropriations in respect of the Zero Dividend Preference shares necessary to increase the subsidiary's liabilities to the redemption values are allocated to capital in the Consolidated Statement of Comprehensive Income. This treatment re?ects the Board's long-term expectations that the entitlements of the Zero Dividend Preference shareholders will be satis?ed out of gains arising on investments held primarily for capital growth. Share issue costs

Costs incurred directly in relation to the issue of shares in the subsidiary are borne by the Company and taken 100% to capital. Share issue costs relating to Ordinary share issues by the Company are taken 100% to the share premium account in respect of premiums on issue of such shares. Where there is no premium on issue, costs are taken directly to equity against revenue reserves. Capital reserve

Capital reserve (other) includes: ? gains and losses on the disposal of investments; ? exchange differences of a capital nature; and ? expenses, together with the related taxation effect, allocated to this reserve in accordance with the above

policies.

Capital reserve (investment holding gains) includes increase and decrease in the valuation of investments held at the year end. This reserve is distributable to the extent that gains have been realised.

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