NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA (OTHER THAN THE UNITED KINGDOM), AUSTRALIA, CANADA, SOUTH AFRICA, JAPAN OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DO SO.

This announcement is an advertisement for the purposes of the Prospectus Rules of the UK Financial Conduct Authority (the "FCA") and not a prospectus and not an offer of securities for sale in any jurisdiction. Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. Investors should not purchase or subscribe for any shares referred to in this announcement except on the basis of information in a final prospectus (the "Prospectus"), if published, by the Company (as defined below) in due course. A copy of the Prospectus, if published, will, following its publication, be available from the Company's website (http://chelvertonam.com/fund/small-companies-dividend-trust-plc) and uploaded to the national storage mechanism (http://www.morningstar.co.uk/uk/NSM), subject to applicable securities laws, and available for viewing at its registered office at Springfield Lodge, Colchester Road, Springfield, Chelmsford, CM2 5PW.

Chelverton Small Companies Dividend Trust PLC (the “Company")

Chelverton Small Companies ZDP PLC (“Existing ZDPCo”)

LEIs: 213800DAF47EJ2HT4P78 and 213800OPDNDC5YERVG70

Potential Capital Raise

As previously announced by the Board on 13 January 2017, the Directors have been considering the options for a refinancing of the Zero Dividend Preference shares, which are due for final repayment on 8 January 2018.  In light of the Company’s strong and sustained track record as well as the availability of attractive investments, the Board believes that it is an appropriate point to seek to increase the size of the Company and raise additional capital. Accordingly, the Company is proposing an issue of C shares through a placing, intermediaries offer and offer for subscription of C Shares as well as an issue and placing of new ZDP Shares in connection with recommended proposals for the reconstruction and winding-up of Existing ZDP Co (collectively, the “Issue”).

The Company is seeking to raise up to £75 million new Ordinary shares, subject to market conditions and there being sufficient investor appetite for the C shares on agreeable terms. In addition, the Company will seek to issue c. £30 million of new ZDPs, on a term of 7.3 years with a gross redemption yield of 4.00 per cent. with an initial target cover ratio of circa 3.7x, subject to the level of rollover elections received. The existing investment objective and policy will remain unchanged and the Company intends to use the Net Proceeds of the Issue to add to existing holdings and to make new investments.

The Company will provide a further update in due course, as appropriate.

For further information contact

Chelverton Small Companies Dividend Trust

William van Heesewijk

Chelverton Asset Management

+44 20 7222 8989

Stockdale Securities Limited

Robert Finlay / Owen Matthews

+44 20 7601 6115

Important Notice

This announcement is a financial promotion and is not intended to be investment advice.

The contents of this announcement, which have been prepared by and are the sole responsibility of the Company, have been approved by Stockdale Securities Limited ("Stockdale") solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended).  

The information contained in this announcement is for background purposes only and does not purport to be full or complete. It is also subject to change. Before subscribing for any C Shares or ZDPs, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set out in the Prospectus when published. The value of C Shares and ZDPs is not guaranteed and can fall as well as rise due to stock market and currency movements.  When you sell your investment you may get back less than you originally invested. The price and value of securities can go down as well as up, and investors may get back less than they invested or nothing at all. There is no guarantee that the gross redemption yield may be achieved. Potential investors should consult an independent financial advisor as to the suitability of the securities referred to in this advertisement for the person concerned.

Neither this announcement nor the information contained herein is for publication, distribution or release, in whole or in part, directly or indirectly, in or into or from the United States (including its territories and possessions), any member state of the European Economic Area (other than the United Kingdom), Australia, Canada, South Africa, Japan or to any person in any of those jurisdictions or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. Any offer of C Shares or ZDPs (an "Offer") and the distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession this announcement or any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement does not contain or constitute an offer of, or the solicitation of an offer to buy or subscribe for, the securities referred to herein to any person in any jurisdiction, including the United States, Australia, Canada, South Africa or Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful.

The securities to which this announcement relates have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or with any regulating authority or under any applicable securities laws of any state or other jurisdiction of the United States, and may not be offered, sold, pledged or otherwise transferred within the United States or to US persons unless registered under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with applicable state law. There will be no public offer of the securities in the United States. The securities referred to herein have not been registered under the applicable securities laws of Australia, Canada, South Africa or Japan and, subject to certain exceptions, may not be offered or sold within Australia, Canada, South Africa or Japan or to any national, resident or citizen of Australia, Canada, South Africa or Japan.

This announcement is only addressed to and directed at qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC as amended, including by Directive 2010/73/EC) ("Qualified Investors") in the United Kingdom who (i) are persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), (ii) are persons who are high net worth entities falling within Article 49(2)(a) to (d) of the Order and (iii) are persons to whom it may otherwise be lawful to communicate it to (all such persons being referred to as "relevant persons"). Any investment or investment activity to which this announcement relates is available only to relevant persons in the United Kingdom and will be engaged in only with such persons. Other persons should not rely or act upon this announcement or any of its contents.

This announcement is not intended to be an offer or placement for the purposes of the Alternative Investment Fund Managers Directive ("AIFMD"), and any "marketing" as defined in AIFMD will, in due course, take place in accordance with the national private placement regimes of the applicable European Economic Area jurisdictions in which the Investment Manager registers under AIFMD for marketing.

This announcement contains statements that are, or may be deemed to be, "forward?looking statements". These forward?looking statements may be identified by the use of forward?looking terminology, including the terms "believes", "expects", "anticipates", "intends", "plans", "estimates", "aim", "forecast", "projects", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Forward?looking statements may and often do differ materially from actual results. The forward?looking statements reflect the Company's and the Investment Manager's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's business, results of operations, financial position, liquidity, prospects, growth, strategies and the industry in which the Company operates. The forward?looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance. Forward?looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, the Investment Manager, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward?looking statements. As a result, investors are cautioned not to place undue reliance on such forward?looking statements. Forward?looking statements speak only as of their date and the Company, the Investment Manager, Stockdale and any of such person's respective directors, officers, employees, agents, affiliates or advisors expressly disclaim any obligation to supplement, amend, update or revise any of the forward?looking statements made herein, except where it would be required to do so under applicable law. It is up to the recipient of this announcement to make its own assessment as to the validity of such forward?looking statements and assumptions. No statement in this announcement is intended as a profit forecast or a profit estimate.

There is no guarantee that any Offer will proceed and you should not base your financial decisions on the Company's intentions in relation to any Offer. This announcement does not constitute a recommendation concerning any Offer.   The Company is not regulated by the FCA and FCA protection does not apply to the Offer.

Stockdale, which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively for the Company and no one else in connection with the matters described in this announcement. Stockdale will not regard any other person (whether or not a recipient of this document) as a client in relation thereto and will not be responsible to anyone other than the Company for providing the protections afforded to its clients nor for giving advice in relation to an Offer, the contents of this announcement or any transaction or arrangement or other matter referred to herein.

In connection with any Offer, Stockdale and any of its affiliates, acting as investors for their own accounts, may subscribe for or purchase C Shares or ZDPs and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such C Shares or ZDPs and other securities of the Company or related investments in connection with any Offer or otherwise. Accordingly, references in the Prospectus, if published, to C Shares or ZDPs being offered, subscribed, issued, acquired, sold, placed or otherwise dealt in should be read as including any offer, subscription, issue, sale, acquisition, placing or dealing in the C Shares or ZDPs by Stockdale and any of its affiliates acting as investors for their own accounts. In addition, Stockdale or its affiliates may enter into financing arrangements and swaps in connection with which it or its affiliates may from time to time acquire, hold or dispose of C Shares or ZDPs. Neither Stockdale nor any of its affiliates intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

Apart from the responsibilities and liabilities, if any, which may be imposed on Stockdale by the FSMA or the regulatory regime established thereunder, or under the regulatory regime of any jurisdiction where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, neither Stockdale nor any of its affiliates, directors, officers, employees, advisors or agents accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy, completeness or fairness of the information contained in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.