Annual Report and Accounts

for the year ended 30 November 2022

www.bellevuehealthcaretrust.com

Healthcare Trust plc

Bellevue Healthcare Trust plc Annual Report and Accounts 2022

WWW.BELLEVUEHEALTHCARETRUST.COM

CONTENTS

Strategic Report

Investment Objective, Financial Information,

Performance Summary and

Alternative Performance Measures......................... 1

Chairman’s Statement ........................................... 2

Investment Manager’s Report ................................ 6

Investment Policy, Results and

Key Performance Indicators ................................. 14

Risk and risk management .................................. 17

Viability statement ................................................ 21

Stakeholder Engagement .................................... 22

Environmental, Social and

Governance (“ESG”) Policy .................................. 25

Other Information ................................................. 32

Governance

Directors’ Report ................................................. 34

Corporate Governance ........................................ 40

Directors’ Remuneration Implementation Report .. 46

Report of the Audit and Risk Committee .............. 50

Statement of Directors’ Responsibilities ............... 53

Independent Auditor’s Report .............................. 54

Financials

Statement of Comprehensive Income .................. 62

Statement of Financial Position ............................ 63

Statement of Changes in Equity ........................... 64

Statement of Cash Flows ..................................... 65

Notes to the Financial Statements ....................... 66

Other Information

Alternative Performance Measures....................... 81

Glossary .............................................................. 83

Notice of Annual General Meeting ........................ 85

Notes to Notice of Annual General Meeting ......... 87

Form of Proxy ...................................................... 91

Directors, Investment Manager and Advisers ......IBC

Bellevue – one of the largest

healthcare investors

INDEPENDENT - ENTREPRENEURIAL - COMMITTED

Bellevue Healthcare Trust plc is a high conviction,

long-only investment trust invested in listed or quoted

global healthcare equities. It is unconstrained and

able to invest regardless of market cap, sub sector

or region, and the portfolio is concentrated with a

maximum of 35 holdings. Bellevue Healthcare Trust

is managed by Bellevue Asset Management (UK) Ltd,

regulated by the FCA, who have built a successful

track record in this sector.

Excellence in Specialty

Investments

Healthcare Trust plc

This document is printed on Experian Satin,

a paper sourced from well managed,

responsible, FSC

certified forests and

other controlled sources. The pulp used in

this product is bleached using an elemental

chlorine free (ECF) process.

DIRECTORS, INVESTMENT

MANAGER AND ADVISERS

DIRECTORS

Randeep Grewal (Chairman)

Josephine Dixon

Paul Southgate

Professor Tony Young OBE

Kate Bolsover

CORPORATE BROKER

J.P. Morgan Cazenove

25 Bank Street

Canary Wharf

E14 5JP

DEPOSITARY

CACEIS Bank, UK Branch

Broadwalk House

5 Appold Street London

EC2A 2DA

REGISTRAR

Link Group

10th Floor Central Square

29 Wellington Street

Leeds

LS1 4DL

INVESTMENT MANAGER (“AIFM”)

Bellevue Asset Management (UK) Ltd

32 London Bridge Street

24th Floor London

SE1 9SG

SECRETARY & ADMINISTRATOR

Apex Listed Companies Services (UK) Limited (formerly Sanne

Fund Services (UK) Limited)

6th Floor, 125 London Wall

Barbican,

London

EC2Y 5AS

AUDITORS

Ernst & Young LLP

25 Churchill Place

Canary Wharf

London

E14 5EY

REGISTERED OFFICE

6th Floor, 125 London Wall

Barbican,

London

EC2Y 5AS

LEGAL ADVISER

Stephenson Harwood LLP

1 Finsbury Circus

London

EC2M 7SH

Designed and

printed by:

perivan.com

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 1

Strategic Report

INVESTMENT OBJECTIVE

The investment objective of Bellevue Healthcare Trust plc (“the Company”) is to provide Shareholders with capital growth and income over

the long term, through investment in listed or quoted global healthcare companies. The Company’s specific return objectives are: (i)to beat

the total return of the MSCI World Healthcare Index (in sterling) on a rolling 3 year period (the index total return including dividends reinvested

on a net basis); and (ii) to seek to generate a double-digit total Shareholder return per annum over a rolling 3 year period.

FINANCIAL INFORMATION

As at 30 November

2022

As at 30 November

2021

Net asset value (“NAV”) per Ordinary Share (cum income) 171.16p 184.91p

Ordinary Share price 158.20p 186.20p

Ordinary Share price (discount)/premium to NAV

(7.6)% 0.7%

Ongoing charges ratio (“OCR”)

1.04% 1.08%

PERFORMANCE SUMMARY

% change

30 November 2022

% change

30 November 2021

Share price total return per Ordinary Share

1,4

-11.9% +11.4%

NAV total return per Ordinary Share

1,4

-4.1% +10.3%

MSCI World Healthcare Index total return (GBP)

+14.1% +16.3%

These are Alternative Performance Measures.

Total returns in sterling terms for the year ended 30 November 2022.

Total returns in sterling terms for the year ended 30 November 2021.

Including dividends reinvested in the year.

Source: Bloomberg.

ALTERNATIVE PERFORMANCE MEASURES (“APMs”)

The financial information and performance summary data highlighted in the footnote to the above tables represent APMs of the

Company. In addition to these APMs other performance measures have been used by the Company to assess its performance;

these can be found in the key performance indicators section of the Annual Report, on page 16. Definitions of these APMs together

with how these measures have been calculated can be found on pages 81 and 82.

Overview

Bellevue Healthcare Trust plc Annual Report and Accounts 20222

Chairman’s Statement

Dear Shareholders

This is the sixth annual report of your Company. And this is

the first one in what has hopefully become the post-Covid era

(outside of China).

Whilst not everything has yet returned to pre-pandemic norms,

I remain satisfied that both as a Board and a Company we

have continued to operate effectively alongside our service

providers. Our Managers also report that pandemic-era

disruptions are no longer an issue.

PERFORMANCE

Over the financial year, the Company’s total NAV return (i.e.

including reinvestment of dividends) was -4.1%. In contrast the

MSCI World Healthcare total return Index produced a positive

total return of 14.1%, representing an underperformance of

18.2% over the year.

The returns are summarised in the following table:

Randeep Grewal

Chairman

Cumulative & annualised performance

Cumulative Annualised

1 Year 2 Years 3 Years 4 Years 5 Years

Since

inception 1 Year 3 Years 5 Years

Since

inception

Share Price -11.9% -1.8% 20.3% 28.6% 56.4% 88.5% -11.9% 6.3% 9.4% 11.1%

NAV (inc.dividend

reinvested) -4.1% 5.8% 31.8% 40.5% 74.2% 104.2% -4.1% 9.6% 11.7% 12.6%

MSCI World Healthcare

Index (GBP) 14.1% 32.2% 45.8% 57.5% 85.9% 112.8% 14.1% 13.4% 13.2% 13.4%

This is the second annual report where I have to acknowledge

underperformance of the Company against the index and

the first where the absolute total return was negative. As per

last year, I will refer readers to the longer term track record.

However, this is not to minimise any potential concerns that

investors may have; I will seek to address those below.

Nevertheless, some of my comments from last year’s

statement bear repeating in what has remained a challenging

macro environment for active equity managers: “Short term

variations should never change an investment process”; the

“Investment Manager remains true to its investment process”

and “continues to focus on bottom-up fundamental analysis

to drive stock selection predicated on superior long-term

returns.”

BOARD COMPOSITION AND EVALUATION

The Board remains unchanged from last year. Though we

have no immediate plans for recruiting new Board members,

succession planning and maintaining competencies

and skills is paramount and considered regularly by the

Board. The current Board composition complies with the

recommendations of the Hampton-Alexander and Parker

reviews.

Per the AIC Code’s recommendations, the Board undertakes

an annual evaluation of its performance and that of its

committees and individual Directors. This year an internal

review process was undertaken and the results were

positive. The next external review will take place within the

next 12 months.

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 3

Strategic Report

FEES AND CHARGES

The Board undertook its annual review of fees and ongoing

charges. Our OCR improved to 1.04% (2021: 1.08%) as the

Manager absorbed the Company’s marketing costs within

the existing management fee. However, there are a number

of fixed costs in our cost base, thus reduction in AUM

(discussed below) may adversely impact OCR.

PORTFOLIO POSITIONING

The portfolio remains US centric, with particular exposure to

the Small/Mid Cap end of the market capitalisation spectrum.

The Investment Mandate has few constraints beyond

liquidity (at both the portfolio and individual company level),

giving the Investment Manager free reign to pursue a ‘best

ideas’ approach and optimise the risk/return potential of the

Company’s concentrated investment portfolio over the long

term, in line with the Company’s stated investment objectives.

Our active share versus the comparator Index at the end of

November 2022 was 95.9% and has averaged 93.4% since

inception. Such a highly active strategy will inevitably result in

a return profile that does not correlate to that comparator in

the short-to-medium term, for better and for worse.

For more detailed stock and sub-sector commentary I refer

readers to the Investment Manager’s report in the following

pages and also the monthly factsheets, which remain the

best resource for timely updates on the portfolio and the

healthcare sector’s performance.

The portfolio’s substantial exposure to American companies

leaves the Company exposed to moves in exchange

rates. We do not hedge currency risk, albeit we match the

borrowing currency to the assets held. The 2022 financial

year saw significant sterling volatility.

Some readers may wonder why we do not hedge this

currency exposure. Having run currency hedged portfolios

myself, I can attest to the complexities of its execution.

For a portfolio with a long-term focus, we remain of the view

hedging adds complexity, distraction and operational risk

without sufficient offsetting benefit. That having been said,

the Board regularly reviews its position on this topic with the

Investment Manager.

GEARING

The Company has access to a multi-currency revolving

credit facility (“RCF”) with The Bank of Nova Scotia, that

allows it to borrow up to USD $280million. The facility is

‘committed’ through to December 2024; i.e. the Investment

Manager has guaranteed access to this borrowing

(within limits agreed by the Board) should it see attractive

opportunities. As of 30 November 2022, the Company’s

leverage ratio (under the “gross method”) was 4.0% and our

aim is to run a mid-single digit average over the long run (the

average gearing since inception is 2.8%).

RESPONSIBLE INVESTING

Both the Company and the Appointed Manager, Bellevue

Asset Management are committed to Environmental, Social

& Governance issues (“ESG”) being an important part of the

decision making process. More details around this topic can

be found on pages 25 to 31 of the Report.

SHARE CAPITAL AND ISSUANCE

The Company’s issued share capital was 586,783,083

Ordinary Shares as of 30 November 2022 (30 November 2021:

558,910,904).

In the first half year to 31 May 2022, the Company issued

27,872,179 new Ordinary Shares. Thereafter, share issuance

was not possible because the shares were trading at a

discount to NAV. During the year ended 30 November 2022,

the Company’s average discount was 1.6%. In November we

received redemption notices for 30.6 million shares, more

than offsetting the issuance during the year.

Bellevue Healthcare Trust plc Annual Report and Accounts 20224

At the AGM, we will be seeking authority to issue c. 55m new

Ordinary Shares to meet potential investor demand and to fulfil

the scrip dividend commitment. Any new tap issuance can only

be done at a premium to NAV and continued issuance will only

be possible if the Company’s shares again trade at a premium

toNAV.

BUYBACK AUTHORITY

The Company has authority to buyback 86,904,879

Ordinary Shares (14.99% of the shares outstanding at the

last AGM on 22 April 2022). The buyback is managed on

an arm’s-length basis by our broker, under a framework

set by the Board. This may change depending on market

circumstances and regulatory requirements; however, it is

always undertaken at a discount to NAV and is thus accretive

to shareholders. At the forthcoming AGM, we will be seeking

to renew the buyback authority.

PERFORMANCE, REDEMPTIONS AND

BUYBACKS

The Company holds a concentrated portfolio of focused,

high growth healthcare companies and eschews the highly

diversified leviathans that dominate the comparator Index

(the combined market value of the top 10 companies in the

142 stock MSCI World Healthcare Index is greater than the

combined value of the 121 “smallest” companies within it).

Generally speaking, the valuations ascribed to such

companies can be more sensitive to interest rates, assumed

growth rates and market sentiment than larger, more

pedestrian companies. Short term, however the biggest

driver of stock prices is not theoretical valuation, but the

balance between buy and sell orders (as the investment

manager highlighted in the interim report).

Where does this demand originate? A lot of asset allocators

have historically followed variants of the ’60:40’ portfolio

model – i.e. 60% equities and 40% bonds, particularly in

the US. Calendar 2022 was one of the few years on record

where both equities and fixed income fell. Inevitably such a

situation leads to ‘de-risking’, where investors hoard cash

and allocate more conservatively in terms of what securities

they hold. This often means a pivot from smaller to larger

companies (and more ‘index hugging’).

Combine the above with central banks moving to a tighter

monetary policy, and governments reversing pandemic

largesse, and we have market conditions where liquidity is

less abundant than it was. In such an environment, selling

pressure on smaller companies leads to disproportionate

moves and reconfirms Benjamin Graham’s adage that ‘In

the short run, the market is a voting machine, but in the

long run, it is a weighing machine’. Graham also described

the market as a ‘manic-depressive’ which, in the depths

of despondency, offers the intelligent investor attractive

opportunities at discounted prices.

The first consequence of all of the previously described

market dynamic is that our portfolio, more exposed to

innovation and growth and so concurrently more exposed to

smaller companies, did less well than the wider market or our

comparator index.

A second, perhaps less than surprising, consequence is that

a combination of reweighting by asset allocators, and relative

underperformance led to some investors availing themselves

of the opportunity to redeem shares via the annual

redemption option. The redemptions represented 5.2% of

the outstanding share capital at the time. For a variety of

reasons, some investors did not take up the redemption

opportunity, and chose to sell in the market instead. This

‘selling pressure’ led to our shares trading at a larger

discount, which in turn triggered the buyback programme.

The objective of a buyback is to provide some blunting of

extreme market moves when there is a mismatch of buying

and selling. As we only execute buybacks at a discount, the

procedure is accretive to shareholders. We hope that the

New Year will bring improved performance that in turn will

attract buyers and contribute to a narrowing of the discount

and ultimately share price appreciation.

DIVIDEND

The Company targets an annual dividend of 3.5% of

preceding year-end NAV, paid out in two equal instalments.

The Company paid out a final dividend of 3.015p in respect

of the year 2021, in April 2022 and an interim dividend of

3.235p in respect of the financial year 2022 in September

2022.

Chairman’s Statement continued

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 5

Strategic Report

The Board has proposed a final dividend of 3.235p per

Ordinary Share in respect of the financial year 2022 and, if

approved at the forthcoming Annual General Meeting, this will

be paid to Shareholders in May 2023.

For the financial year 2023, the Board is proposing a total

dividend of 5.990p per Ordinary Share, composed of interim

and final dividends of 2.995p per Ordinary Share, to be

paid in August 2023 and April 2024 respectively, subject

to shareholder approval. This will be the first year that the

Company’s dividend pay-out will be reduced, reflecting the

lower year-end NAV.

The Company introduced a scrip dividend alternative in

2019, allowing Shareholders to elect for their cash dividend

to be automatically subscribed on their behalf for new

Ordinary Shares. Certificated Shareholders who have already

joined the scheme through the Registrar’s website need take

no further action to continue with it. Certificated Shareholders

who wish to elect for the scrip dividend alternative for the

first time can do so online or by contacting the Company’s

registrar. Further details can be found on page 89.

Uncertificated Shareholders can make an election via the

CREST system.

Uptake of the scrip dividend has not been as high as we

had hoped and has declined in recent years, which appears

due to a number of insurmountable technical issues relating

to the administration of nominee accounts. The Board is

monitoring the cost-effectiveness of the scrip programme;

but the proposal this year will be for it to continue.

ANNUAL GENERAL MEETING &

SHAREHOLDER COMMUNICATION

The next AGM will be on 28 April 2023. Last year, we

eschewed a formal presentation in favour of a very interesting

and engaging Q&A session between investors and the

investment management team. We plan to do the same

again this year and hope to see more investors participate,

and that the discussion is similarly engaging.

We recognise it is not possible for everyone to attend

an AGM hence may I remind readers that we have a

dedicated email address for investors to submit any

enquiries or feedback they might have: shareholder_

questions@bellevuehealthcaretrust.com. I encourage

you to make use of this facility. In the meantime, we will

continue to post content from the Investment Manager

onto the Company’s website to keep you informed of the

Company’s progress.

On behalf of the Board, may I wish you both a prosperous

and healthy year ahead and thank you for your continued

support of Bellevue Healthcare Trust Plc.

Randeep Grewal

Chairman of the Board of Directors

3 March 2023

Bellevue Healthcare Trust plc Annual Report and Accounts 20226

Investment Manager’s Report

PERFORMANCE SUMMARY –

MACRO THOUGHTS

Bellevue Healthcare Trust plc is now more than six years old. In

historical terms, this is a mere snippet of time, but our epoch has

included more than its fair share of macroeconomic and geo-

political turmoil.

We saw the end of the greatest bull market run in US stock

market history (US S&P500 rose 671% from Mar 09 – Dec 21)

amidst the return of positive real interest rates and double-digit

inflation. The multi-decade trend of supply chain globalisation

and offshoring looks to have gone into reverse; the fashionable

mantra of “just in time” lean inventory is now “just in case” working

capital investment.

Britain has endured four prime ministers in this six year period,

compared to one in the prior six years. America has seen a reality

TV star ascend to the most powerful political position in the world;

after losing it he appears to have tried to foment an insurrection in

a fit of pique (a trick recently copied in Brazil). Congress remains

fractious, infested with in-fighting and division. Any meaningful

legislative progress looks very unlikely over the next two years.

We have lived through a global pandemic that is estimated to

have cost more than 20m lives and counting, and that triggered

an economic tsunami which continues to reverberate to this day.

We have another war in Eastern Europe (although you could argue

this started in 2014 rather than 2021, and Russia’s irredentist

tendencies have been on display since 2004’s intervention in

Georgia). North Korea and Iran have joined the ranks of unfriendly

states with apparent offensive nuclear capabilities. Democracy has

receded across the world, notably in Asia and Latin America and

autocrats are notably on the ascendency.

Human casualties aside, all of these geopolitical and economic

uncertainties raise the perceived “risk premium” and elevate

market volatility, which was already rising due to human

disintermediation (in the 15 years from 2003-2018, the proportion

of shares traded algorithmically rose from ~15% to ~75%). It

is perhaps no surprise that stock markets have become less

predictable in recent years.

As we noted in last year’s Annual Report, 2021 was a very

challenging period for active investment managers as market

sentiment vacillated from pricing in a lockdown “stay at home”

dynamic to “the great re-opening”. As we have now witnessed via

the unwind in the share prices of many technology companies,

the “stay at home” winners were hugely over-bought and the

“great re-opening” has been more of a whimper than a bang

amidst persistent inflation and pressure on the consumer

discretionary wallet.

If one were to scan the platitudinous prognostications of Wall

Street’s panjandrums as we exited 2021, most people got most

things wrong (and we do not seek to exclude ourselves here).

Seldom has a high active share been so unhelpful. Within this,

we have seen a persistent and fundamentally unjustifiable size

factor bias that leaves small cap indices much cheaper relative to

historical norms than the rest of the market.

Over the financial year in review, most broad regional and

global indices were down in dollar terms (Figure 1 below) and,

on a calendar year basis, this was one of the worst annual

performances in decades. Value outperformed growth and GDP

forecasts were cut almost in half.

100

110

120

Nov 21 Dec 21 Jan 22 Feb 22 Mar 22 Apr 22 May 22 Jun 22 Jul 22 Aug 22 Sep 22 Oct 22 Nov 22

Performance (rebased to 100 as of 30-11-22)

S&P 500 TR (-9.2%) FTSE All Share TR (-4.1%) S&P 500 TR (-9.2%) FTSE All Share TR (-4.1%)

Figure 1 FY2022 Total Return Data – Key Broad Indices

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 7

Strategic Report

Most of the negative performance from equity indices came

from de-rating. Indeed, the resilience of corporate earnings

(and margins) in the face of declining consumer sentiment,

broad inflation, a doubling of interest rates and markedly

higher energy costs has been one of the most surprising

things about the year overall.

Hindsight is informative and irritating in equal measure. We

can look back and muse “If only we had done XYZ instead

of ABC”, but of course we did not know then what we know

now, so one must be careful when retrospectively assessing

the usefulness of various alternative approaches.

As we will discuss in more detail later, the most notable thing for us

about fiscal 2022 was how little the investment portfolio changed.

Why was this the case? Simply put, the answer is that very little

has changed in the world of healthcare, unlike most other aspects

of society; it is a complex industry with long development cycles

but also a simple demand driver. The more people there are,

especially older people, the more demand there is for healthcare

services. This demographic multiplier will not change in the

foreseeable future and that is a large part of the reason why we

saw no need to significantly alter the investment portfolio.

PERFORMANCE SUMMARY –

HEALTHCARE HIGHLIGHTS

It is a truism that investors abhor uncertainty and the

healthcare sector’s classical defensive attributes were much

favoured by generalists during the year and, in general, the

duller the better. Managed Care (US health insurers) and

Mega-Cap Pharmaceuticals, especially the US ones, were

the preferred hiding place. As a consequence, healthcare

outperformed the wider market by 15% in sterling terms over

the course of FY2022.

As we discussed in detail in the 2022 interim report, the

overwhelming dynamic within the healthcare sector over the

past 18 or so months has been a size factor bias favouring

larger, liquid names as well as preference for much more

defensive characteristics (and also away from growth and

more toward value), leading the US S&P Pharmaceutical and

Managed Care sub-sector indices to make new highs in Q4

2022, whilst the wider S&P 500 Healthcare Index peaked in

April 2022.

Figure 2 below illustrates the contribution of the overall

positive healthcare sector performance by sub-sector. One

could describe this as a tabulation of tediousness, since

the four best-performing subsectors also equates to a list

of the most predictable (and thus dull) sub-sectors within

healthcare. The same top four also includes three of the

most liquid and highest weighted sectors in the MSCI World

Healthcare Index, our preferred comparator.

Nothing could more succinctly encapsulate the power of

the “safety trade” during the period in review. Put another

way, it seems reasonable to conclude that the majority of

generalist ownership of healthcare was indeed a place to

park some cash during a period of wider macro-economic

and geopolitical uncertainty.

Weighting Performance (USD) Performance (GBP)

Distributors 1.0% 56.2% 73.5%

Managed Care 9.6% 29.7% 44.0%

Diversified Therapeutics 32.7% 15.9% 28.8%

Conglomerate 11.6% 4.3% 15.9%

Focused Therapeutics 8.0% 3.3% 14.7%

Facilities 1.3% -2.6% 8.2%

Generics 0.4% -10.4% -0.4%

Healthcare Technology 1.1% -12.0% -2.2%

Tools 9.5% -16.1% -6.8%

Med-Tech 15.2% -17.8% -8.7%

Healthcare IT 1.5% -29.2% -22.9%

Other HC 1.6% -31.0% -24.2%

Diagnostics 2.4% -33.9% -28.8%

Services 3.3% -35.5% -28.8%

Dental 0.9% -61.2% -57.0%

Index performance (ex. Dividends) 1.5% 12.7%

Figure 2 FY2022 MSCI World Healthcare Index sub-sector performance data

Bellevue Healthcare Trust plc Annual Report and Accounts 20228

Figure 3 below illustrates the impact of these trends on the

dispersion of US dollar returns between various healthcare

indices by composition and by geography. The US S&P500

Healthcare Index has the highest weighting toward Mega-Cap

Pharma, Distributors and Managed Care. Conversely, the

European Index has little exposure to Distributors and zero to

Managed Care and fared less well. Finally, one can see the US

Nasdaq Biotech Index, which is where most of the innovation

(and thus growth) claimed by the Mega-Cap Pharma companies

actually originates, fared poorest of all.

It is worth noting also that most of the European companies

within the Stoxx 600 and many of the non-US companies in

the MSCI World Healthcare will have benefitted earnings-wise

from the strengthening of the dollar.

Investment Manager’s Report continued

100

110

120

Nov 21 Jan 22 Mar 22 May 22 Jul 22 Sep 22 Nov 22

Performance (rebased to 100 at 30-11-21)

EU Stoxx 600 HC TR (-8.8%) MSCI World HC TR (+2.8%) US S&P 500 HC TR (+8.9%)US Nasdaq Biotech TR (-8.5%)

To summarise: in what is generally a stable sector from a

regulatory perspective, with very visible long-term demand

growth drivers, the macro demand picture seldom changes

quickly. As a consequence, stock-picking wins out over

sub-sector allocations and the best long-term strategy has

been to own the true innovators or the stocks where any future

success has been fully discounted by the market for some

reason or otherwise where one can get comfortable that this

is the wrong conclusion. However, these approaches did not

work well in 2022 and few active managers were able to beat

the index. Generally speaking, the more tilted you were toward

innovation and growth, the worse the performance.

The important question for any healthcare investor is whether

or not this dynamic represents a ‘new normal’ (after all, it has

persisted for some fifteen months) or is simply an aberration.

As noted previously, such things can only really be determined

in hindsight, when one looks back at a situation after it has

changed or reverted to historical norms.

Ahead of any obvious inflection, one can only really ponder

the question as to whether or not a revised dynamic would be

appropriate. We all know the cost of equity has risen due to

higher risk free rates. However, as we discussed in the May

2022 factsheet, the market’s multiple compression went far

beyond anything that could be justified by the application of

a higher discount rate; the reverse discount rates implied by

share prices between different sub-sectors and also between

companies in the same sub-sectors suggest that the multiple

compression was rather arbitrary and even capricious.

Has the regulatory or payor landscape changed in a way

that merits lower valuations/higher risk premia on top of that

risk-free rate increase? The simple answer is no. What about

funding for non-commercial and non-profitable entities? The

oft-touted biotech funding crisis (i.e. the risk that companies

will not be able to raise money to continue operations) is a

canard. Bad companies (of which the post-COVID IPO and

SPAC boom created many) struggle and deservedly so. The

good ones donot.

Figure 3 FY2022 Total Return Data – Key Healthcare Indices

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 9

Strategic Report

During 2022, we actually had quite a low level of exposure

to companies that we expected would need or want to

raise money on a 1-2 year view (six of 37 owned during the

period), and five companies actually raised money through

additional equity issuance during the year, but that low

exposure still didn’t help performance-wise.

In conclusion, 2022 feels like an aberration to us and we

continue to expect our investors to be handsomely rewarded

for their patience in the fullness of time. To paraphrase (and

misquote) Hemingway, these sorts of things happen slowly

at first and then very quickly, so you need to stick to your

knitting rather than try to rotate into these things when the

timing feels right. The cream rises to the top eventually, even

if the milk is sour.

PERFORMANCE SUMMARY –

BELLEVUE HEALTHCARE TRUST

It bears repeating that the stated investment strategy leads to a

portfolio with certain inherent characteristics: dollar dominance,

mid-cap focus and low benchmark correlation and it must be

obvious from the comments in the previous section that such

factor characteristics have been negatively correlated with wider

market performance over the past year and 2022 again saw an

underperformance versus our key comparator index, the MSCI

World Healthcare Index (Figure 4).

Total Return (GBP) Fiscal year 2022 Rolling 3 Year

Rolling 3 Year

(annual eq.)

Since Inception

(1-12-16)

Company Share Price -11.9% +20.3% +6.3% +88.5%

Company NAV -4.1% +31.8% +9.6% +104.2%

MSCI World Healthcare Index +14.1% +45.8% +13.4% +112.8

Relative to MSCI World Healthcare Index

Company Share Price -26.0% -25.5% -7.1% -24.3%

Company NAV -18.2% -14.0% -3.8% -8.6%

Performance of other comparator indices

MSCI World Total Return Index -1.0% +34.6% +10.4% +86.1%

FTSE All Share Total Return Index +2.8% +12.2% +3.9% +39.5%

Source: Bloomberg. All performance figures are calculated as total return with dividends being reinvested in the relevant security, calculated in GBP and with the

relevant period ending on 30 November 2022.

The poor investment return performance in late FY2021

and FY2022 has taken us behind the benchmark for our

performance since inception when measured to the end

of FY2022. When considering the total shareholder return,

the emergence of a discount rating on the Company’s

share price during the year has compounded the negative

performance. The shares flirted with a discount rating at

some point during every month of 2022 but the discount

became entrenched in late June.

Thereafter, the discount mainly hovered around the 3-5% level

until late November when we saw a material seller emerge,

pressuring the shares through the end of November 2022

to January 2023, sending the discount to 7.6% at the end

of the fiscal year and 9% at the end of the calendar year,

compared to a premium of 0.7% and 0.8% respectively for the

same points in 2021. The performance since inception has

recovered materially during the first three months of FY2023.

However, the discount persists, in line with our sector peers.

It is of little consolation to us that, since the inception of the

company, the Bellevue Healthcare Trust remains the best

performing UK-listed healthcare-oriented Investment Trust

;

we have very little interest in what other people are doing;

our focus is on making money for our investors and our aim

to deliver material outperformance over the longer-term.

Source: Bloomberg. All performance figures are calculated from the inception date of the Trust (1 December 2016) as total return with dividends being reinvested

in the relevant security, calculated in GBP and with the relevant period ending on last practicable date before publication (17 January 2023). The UK Healthcare

peer group consists of Worldwide Healthcare Trust, Polar Capital Global Healthcare Trust, Biotech Growth Trust, Syncona and International Biotech Trust.

Figure 4 Bellevue Healthcare Trust – FY2022 Financial Performance Summary

Bellevue Healthcare Trust plc Annual Report and Accounts 202210

Figure 5 Total Return (NAV) since inception of Bellevue Healthcare Trust vs. UK listed comparables

BBH

MSCI WHC

Comp A

Comp B

Comp C

Comp D

Comp E

0 20 40 60 80 100 120

112.4%

106.1%

92.7%

77.6%

57.7%

40.8%

30.0%

Investment Manager’s Report continued

PORTFOLIO SUMMARY

During fiscal 2022, the Company held positions in 37

companies (compared to 40 in FY2021) and we began the

year with 31 positions and ended the year with 29 (i.e. four

additions and six exits). As noted previously, this was a more

consistent portfolio than in 2021; where we saw 19 changes

over the year, versus 10 during FY2022.

The portfolio constituents as of November 2022 were

unchanged since June 2022. Two of the six additions

during the year were reinvestments in companies that had

been in the portfolio previously (Intuitive Surgical and Pacific

Biosciences). Of the six exits, only one was due to M&A,

whereas four were M&A-related in FY2021.

Of the remaining five exits, two were due to the companies

reaching our fair values and us seeing insufficient further

upside to justify continued ownership and the remainder

were cases where the investment thesis failed or the

company changed its strategic direction in a manner that we

did not find compelling.

The evolution of the portfolio at a sub-sector level is

illustrated in Figure 6 below. Investors can find commentary

on the month-by-month evolution of the sub-sector

exposure in the monthly factsheets. The table illustrates

a few broad trends that were driven by a combination of

relative performance and valuation (generally speaking,

we exited outperforming sectors to rotate into those with

a more compelling risk/reward profile). This is exemplified

by the evolution of our holdings in diversified Therapeutics,

Managed Care and Healthcare IT. On the opposite side,

we have re-entered the Dental market and increased

our exposure to Services, Med-Tech and Diagnostics on the

re-emergence of compelling valuation opportunities.

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 11

Strategic Report

Figure 6 Portfolio sub-sector evolution

Subsector Allocation as of November 2021 May 2022 November 2022

Change

(year-on-year, bp)

Conglomerates 0.0% 0.0% 0.0% n/a

Dental 0.0% 0.7% 1.2% +122bp

Diagnostics 9.5% 11.9% 10.5% +101bp

Distributors 0.0% 0.0% 0.0% n/a

Diversified Therapeutics 10.9% 8.1% 6.4% -454bp

Facilities 0.0% 0.0% 0.0% n/a

Focused Therapeutics 28.7% 24.5% 24.3% -434bp

Generics 0.0% 0.0% 0.0% n/a

Healthcare IT 8.2% 4.9% 5.4% -279bp

Healthcare Technology 4.3% 3.5% 3.9% -41bp

Managed Care 14.7% 9.8% 7.0% -774bp

Medical Technology 10.0% 15.2% 19.3% +932bp

Services 11.5% 15.8% 15.3% +387bp

Tools 2.1% 5.6% 6.5% +440bp

Other Healthcare 0.1% 0.0% 0.2% n/a

Total 100.0% 100.0% 100.0%

With regard to the portfolio breakdown by market

capitalisation and geography, the previous comments

regarding a rotation from outperforming sectors toward those

with more compelling valuations and growth prospects are

similarly reflected in a slight downward drift in the median

market capitalisation. We had around 600bp less exposure

to Mega-Cap companies, with around 300bp more in both

the Small-Cap and Mid-Cap categories.

The Company’s portfolio liquidity parameters are unchanged.

The portfolio remained highly liquid; we estimate 90% of

the portfolio could be liquidated within eight days at a

participation rate of 20%. The strong geographical bias to

the United States continued, although exposure to Europe

and Rest of World has risen mainly because valuations in

China came under significant pressure due to COVID-19

disruptions, lowering the relative contribution of this region.

Market capitalisation breakdown Geographical breakdown (operational HQ)

Mega-Cap

Large-Cap

Mid-Cap

Small-Cap

Asia

(inc. China & Japan)

13.4% 13.1%

17.2%

56.3%

Rest of World

Europe

(inc. UK & CH)

95.2%

0.7%

1.3%

United States

2.8%

Market capitalisation breakdown

Geographical breakdown (operational HQ)

Mega-Cap

Large-Cap

Mid-Cap

Small-Cap

Asia

(inc. China & Japan)

13.4% 13.1%

17.2%

56.3%

Rest of World

Europe

(inc. UK & CH)

95.2%

0.7%

1.3%

United States

2.8%

Figure 7

Bellevue Healthcare Trust plc Annual Report and Accounts 202212

Our top five and bottom five contributors to the evolution

of the NAV are summarised in Figure 8 below, along with

their share price development in sterling over the fiscal year

(which does not necessarily correspond to their performance

for the Company, since the size and duration of our holdings

may vary over the year). We would note that none of the top

performers were M&A targets, which is a contrast to 2021,

when the top three performers were all acquired during the

year.

Investment Manager’s Report continued

Top 5 Performers Bottom 5 Performers

Company Sub-sector Performance (GBP) Company Sub-sector Performance (GBP)

Jazz Pharmaceuticals

Diversified

Therapeutics +45.4% Insmed Focused Therapeutics -25.4%

Sarepta Pharmaceuticals

Focused

Therapeutics +68.8% Hutchmed Focused Therapeutics -60.2%

Vertex Pharmaceuticals

Focused

Therapeutics +88.0% Accolade Healthcare IT -61.8%

United Healthcare Managed Care +37.0% Tandem Diabetes Care

Healthcare

Technology -63.4%

Elevance Health Managed Care +45.7% CareDx Diagnostics -66.7%

Insmed and Accolade were in the bottom five performers

in 2021, as were Vertex and Jazz; nothing really changed

for either of these latter companies during the year. Both

Vertex and Jazz delivered on their pipeline as expected

and were re-rated by the market and we sit on substantial

positive IRRs over our ownership period (2.3 and 6.1 years

respectively). To our minds, this serves to highlight the fickle

nature of market sentiment and the costs and opportunities

that are created by it. We do not hold on to “losing” stocks

out of belligerence or intellectual arrogance, but because

sometimes the market is too short-term or just plain wrong:

there would be no opportunities to outperform the market if

this were not the case.

Insmed seemingly panicked into what we consider to be

an ill-judged multi-faceted financing round. However, the

business has continued to hit its marks and so we have

elected to remain substantial owners of what we consider

to be a very undervalued asset. Tandem Diabetes Care

confused the market with comments on the outlook in Q3

22 that raised some justifiable concerns with respect to

management’s visibility over the business. However, its new

product cycle is strong and it trades at a depressed valuation

both relative to peers, its own history and on an absolute

basis.

Hutchmed suffered a regulatory setback (based on FDA

protocol revisions rather than a drug not working) and has

been caught up in the wider China-COVID negative sentiment

and concerns over potential US de-listing due to a US-China

spat over audit data that was resolved in December 2022.

Accolade supplies benefit navigation software to help

employees optimise their use of available healthcare benefits.

Sentiment toward the company turned negative due to

perceived concerns about the impact of such “premium”

services and wider employment trends in the event of a US

recession and the loss of the company’s first ‘cornerstone’

customer, compounded by cautious guidance. This has

all proven to be misplaced; the business outlook remains

very robust and we remain committed long-term holders of

a company that has demonstrated it adds tangible value to

its clients with respect to optimising its clients’ employee

healthcare provision.

Figure 8 FY2022 Top and Bottom performers

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 13

Strategic Report

Full investment portfolio as of 30 November 2022

Company Sub-sector classification % Portfolio

1 SAREPTA THERAPEUTICS Focused Therapeutics 6.8

2 JAZZ PHARMACEUTICALS Diversified Therapeutics 6.4

3 AXONICS Med-Tech 5.9

4 OPTION CARE HEALTH Services 5.8

5 CHARLES RIVER Services 5.7

6 INSMED Focused Therapeutics 4.9

7 APELLIS PHARMACEUTICALS Focused Therapeutics 4.4

8 SILK ROAD MEDICAL Med-Tech 4.3

9 UNITEDHEALTH GROUP Managed Care 4.0

10 TANDEM DIABETES CARE Health Tech 3.9

Total Top 10 52.1

11 AMEDISYS Services 3.9

12 EXACT SCIENCES Diagnostics 3.8

13 BIO-RAD LABORATORIES Tools 3.6

14 EVOLENT HEALTH Healthcare IT 3.4

15 VERTEX PHARMACEUTICALS Focused Therapeutics 3.1

16 CAREDX Diagnostics 3.1

17 ELEVANCE HEALTH Managed Care 3.0

18 INTUITIVE SURGICAL Med-Tech 3.0

19 OUTSET MEDICAL Med-Tech 2.9

20 PACIFIC BIOSCIENCES Tools 2.8

21 AXSOME THERAPEUTICS Focused Therapeutics 2.6

22 ATRICURE Med-Tech 2.3

23 ACCOLADE Healthcare IT 2.0

24 ADAPTIVE BIOTECHNOLOGIES Diagnostics 1.9

25 HUTCHMED Focused Therapeutics 1.9

26 CASTLE BIOSCIENCES Diagnostics 1.7

27 STRAUMANN HOLDINGS Dental 1.2

28 VENUS MEDTECH Med-Tech 0.9

29 AURINIA PHARMACEUTICALS Focused Therapeutics 0.8

Total portfolio 100.0

Gross exposure £1,043.3 million

Net value of assets £1,004.3 million

Recent trading and outlook

In these fast moving and macro-oriented times, we continue to recommend that investors rely upon the detailed and discursive monthly factsheets

for an up-to-date view on the outlook. These can be found on the Company’s website

As noted previously, we are pleased to report that the Company’s performance in the three months to the end of February 2023 has been positive

on a relative and absolute basis.

Paul Major and Brett Darke

Bellevue Asset Management (UK) Ltd

3 March 2023

www.bellevuehealthcaretrust.com/uk-en/private/portfolio-strategy/performance-and-portfolio/bellevue-healthcare-trust-lse-gbp

Bellevue Healthcare Trust plc Annual Report and Accounts 202214

Investment Policy, Results and

Key Performance Indicators

INVESTMENT POLICY

The Company invests in a concentrated portfolio of

listed or quoted equities in the global healthcare industry.

The Company may also invest in ADRs, or convertible

instruments issued by such companies and may invest in,

or underwrite, future equity issues by such companies. The

Company may utilise contracts for differences for investment

purposes in certain jurisdictions where taxation or other

issues in those jurisdictions may render direct investment in

listed or quoted equities less effective. Any use of derivatives

for investment purposes is made on the basis of the same

principles of risk spreading and diversification that apply to the

Company’s direct investments, as described below, and such

use is not expected in the normal course to form a material

part of the Gross Assets.

The investable universe for the Company is the global

healthcare industry including companies within industries

such as pharmaceuticals, biotechnology, medical devices

and equipment, healthcare insurers and facility operators,

information technology (where the product or service supports,

supplies or services the delivery of healthcare), drug retail,

consumer healthcare and distribution.

No single holding will represent more than 10 per cent.

of Gross Assets at the time of investment and, when fully

invested, the portfolio will have no more than 35 holdings.

The Company will typically seek to maintain a high degree of

liquidity in its portfolio holdings (such that 90 per cent of the

portfolio may be liquidated in a reasonable number of trading

days) and as a consequence of the concentrated approach, it

is unlikely that a position will be taken in a company unless a

minimum holding of 1.0 per cent. of Gross Assets at the time

of investment can be achieved within an acceptable level of

liquidity.

There are no restrictions on the constituents of the Company’s

portfolio by index benchmark, geography, market capitalisation

or healthcare industry sub-sector. Whilst the MSCI World

Healthcare Index (in sterling) will be used to measure the

performance of the Company, the Company does not seek

to replicate the index in constructing its portfolio. The portfolio

may, therefore, diverge substantially from the constituents of

this index (and, indeed, it is expected to do so). However,

the portfolio is expected to be well diversified in terms of

industry sub-sector exposures. Given the nature of the

wider healthcare industry and the geographic location of the

investable universe, it is expected that the portfolio will have

a majority of its exposure to stocks with their primary listing

in the United States and with a significant exposure to the

US dollar in terms of their revenues and profits. Although the

base currency of the Company is sterling which creates a

potential currency exposure, this will not be hedged using any

sort of foreign currency transactions, forward transactions or

derivative instruments.

The Company will not invest in any companies which are, at

the time of investment, unquoted or untraded companies and

has no intention of investing in other investment funds.

BORROWING POLICY

The Company may deploy borrowing to enhance long-term

capital growth. Gearing will be deployed flexibly up to

20 per cent. of the Net Asset Value, at the time of borrowing,

although the Portfolio Manager expects that gearing will,

over the longer term, average between 5 and 10 per cent.

of Net Asset Value. In the event that the 20 per cent. limit is

breached as a result of market movements, and the Board

considers that borrowing should be reduced, the Portfolio

Manager shall be permitted to realise investments in an orderly

manner so as not to prejudice shareholders.

No material change will be made to the investment policy

without the approval of shareholders by ordinary resolution.

DIVIDEND POLICY

The Company will set a target dividend each financial year

equal to 3.5% of Net Asset Value as at the last day of the

Company’s preceding financial year. The target dividend will be

announced at the start of each financial year. This is a target

only and not a profit forecast and there can be no assurance

that it will be met.

Dividends will be financed through a combination of available

net income in each financial year and other reserves. It is

currently expected that most of the total annual dividend

will be financed from other reserves. In order to increase

the distributable reserves available to facilitate the payment

of dividends, the Company cancelled the amount of

£146,412,136 standing to the credit of its share premium

account immediately following first admission of its Ordinary

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 15

Strategic Report

Shares to trading on the London Stock Exchange in order

to create a special distributable reserve. The Company may,

at the discretion of the Board, pay all or part of any future

dividends out of this special distributable reserve, taking into

account the Company’s investment objective.

The Company intends to pay dividends on a semi-annual

basis, by way of two equal dividends, with dividends declared

in July and February/March and paid in August and March/

April in each year.

In accordance with regulation 19 of the Investment Trust

(Approved Company) (Tax) Regulations 2011, the Company

will not (except to the extent permitted by those regulations)

retain more than 15 per cent. of its income (as calculated for

UK tax purposes) in respect of an accounting period.

RESULTS AND DIVIDEND

The Company’s revenue return after tax for the year amounted

to a loss of £1,655,000 (2021: profit of £357,000). The

Company’s capital return after tax for the year amounted to a

loss of £36,769,000 (2021: profit of £86,893,000). Therefore,

the total return after tax for the Company was a loss of

£41,424,000 (2021: profit of £87,250,000).

The Company targeted a total dividend for the year ended

30 November 2022 of 6.47p per Ordinary Share.

Interim dividend of 3.235p paid on 2 September 2022

Final dividend of 3.235p to be paid on 5 May 2023

(to Shareholders on the register at the close of business

on 17 March 2023), subject to Shareholder approval at the

2023 AGM.

TARGET TOTAL DIVIDEND FOR THE YEAR

ENDING 30 NOVEMBER 2023

As announced by the Company on 21 December 2022,

for the financial year ending 30 November 2023, the target

total dividend will be 5.99p per Ordinary Share, this being

3.5% of the audited net asset value per Ordinary Share of

171.16p (including current financial year revenue items)

as at 30 November 2022. The Board intends to declare

an interim dividend of 2.995p per Ordinary Share, being

half of the target total dividend for the financial year ending

30 November 2023, in July 2023 and intends to pay this

dividend in August/September 2023. The Board intends to

propose a final dividend of 2.995p per Ordinary Share for the

financial year ending 30 November 2023, in February/March

2024 and intends to pay this dividend in March/April 2024.

At the Company’s AGM in March 2022, a resolution was

passed allowing Shareholders the right to elect to receive

their entitlement to the interim dividend in new Ordinary

Shares instead of cash in respect of the whole or part of

any dividend. The resolution was passed with 99.96% of

the proxy votes cast (including discretionary votes) being

in favour of the resolution. Shareholders can elect to receive their entitlement to the interim dividend in new Ordinary Shares

instead of cash in respect of the whole or part of any dividend.

Interim dividend Final dividend Total dividend

Dividends paid/payable

Year ended 30 November 2021 3.015p 3.015p 6.03p

Year ended 30 November 2022 3.235p 3.235p 6.47p

Target dividend*

Year ending 30 November 2023 2.995p 2.995p 5.99p

* This is a target and should not be taken to imply a profit forecast.

Bellevue Healthcare Trust plc Annual Report and Accounts 202216

KEY PERFORMANCE INDICATORS (“KPIs”)

The Board measures the Company’s success in attaining its

investment objective by reference to the following KPIs:

(i) To beat the total return of the MSCI World

Healthcare Index (in Sterling) on a rolling three

year period

The NAV total return from 1 December 2019 to 30 November

2022 was 31.8%. The total return of the MSCI World

Healthcare Index (in sterling terms) over the same period was

45.8%.

The Investment Manager’s report on pages 6 to 13

incorporates a review of the highlights during the financial

year ended 30 November 2022. The Investment Manager’s

report on pages 6 to 13 gives details on investments made

during the year and how performance has been achieved.

(ii) To seek to generate a double-digit total Shareholder

return per annum over a rolling three year period

The NAV total returns from 1 December 2019 to

30November 2022 was 31.8.

(iii) To meet its target total dividend in each

financial year

The Company targeted a total dividend of 6.47p per Ordinary

Share for the year ended 30 November 2022. The Company

paid an interim dividend of 3.235p per Ordinary Share in

September 2022 and proposes a final dividend in respect

of the year to 30 November 2022 of 3.235p per Ordinary

Share.

(iv) Discount/premium to NAV

The discount/premium relative to the NAV per Ordinary Share

represented by the share price is monitored by the Board.

The share price closed at a 7.6% discount to the NAV as at

30 November 2022 (2021: 0.7% premium).

(v) Maintenance of reasonable level of ongoing

charges

The Board monitors the Company’s operating costs. Based

on the Company’s average net assets during the year ended

30 November 2022 the Company’s ongoing charges figure

calculated in accordance with the Association of Investment

Companies (“AIC”) methodology was 1.04% (2021: 1.08%).

Investment Policy, Results and Key Performance Indicators continued

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 17

Strategic Report

Risk and Risk Management

PRINCIPAL AND EMERGING RISKS AND

UNCERTAINTIES

The Board is responsible for the management of risks faced

by the Company and delegates this role to the Audit and

Risk Committee (the “Committee”). The Committee carries

out, at least annually, a robust assessment of principal and

emerging risks and uncertainties and monitors the risks

on an ongoing basis. The Committee has a dynamic risk

assessment programme in place to help identify key risks in

the business and oversee the effectiveness of internal controls

and processes, providing a visual reflection of the Company’s

identified principal and emerging risks. The Committee

considers both the impact and the probability of each risk

occurring and ensures appropriate controls are in place to

reduce risk to an acceptable level.

During the year under review the Committee was particularly

concerned with the increase in geopolitical risk following the

outbreak of war in the Ukraine. The subsequent rise in global

energy prices, inflation and rising interest rates worldwide

have led to a more uncertain investment environment. The

Committee continues to review the processes in place to

mitigate risk; and to ensure that these are appropriate and

proportionate in the current market environment.

The principal and emerging risks, together with a summary

of the processes and internal controls used to manage and

mitigate risks where possible are outlined below.

(I) MARKET RISKS

Economic conditions

Changes in general economic and market conditions including,

for example, impact of pandemics on global economies and

national responses to ameliorate such challenges, interest

rates, rates of inflation, industry conditions, competition, political

events and trends, tax laws, national and international conflicts

and other factors could substantially and adversely affect the

Company’s prospects and thereby the performance of its

Ordinary Shares.

Healthcare companies

The Company invests in global healthcare equities. There are

many factors that could adversely affect the performance of

investee companies. The healthcare sector may be affected

by government regulations and government healthcare

programs, increases or decreases in the cost of medical

products and services and product liability claims, among other

factors. Many healthcare companies are heavily dependent

on patent protection, and while this is a manageable risk, the

expiration of a company’s patent may adversely affect that

company’sprofitability. Healthcare companies are subject to

competitive forces that may result in price discounting and may

be thinly capitalised and susceptible to product obsolescence.

The market prices for securities of companies in the healthcare

sector may be highly volatile.

Sectoral diversification

The Company has no limits on the amount it may invest in

the healthcare sector and is not subject to any sub-sector

investment restrictions. Although the portfolio is expected to

be well diversified in terms of industry sub-sector exposures,

the Company may have significant exposure to portfolio

companies from certain sub-sectors from time-to-time.

Greater concentration of investments in any one sub-sector

may result in greater volatility in the value of the Company’s

investments and consequently its NAV and may materially and

adversely affect the performance of the Company and returns

toShareholders.

The impact on the portfolio from Brexit and other geopolitical

changes, including the trade war between the US and China

and the war in Ukraine are monitored and discussed regularly

at Board meetings. While it is difficult to quantify the impact of

such changes, it is not anticipated that they will fundamentally

affect the business of the Company or make the Company’s

investment case any less desirable.

Management of risks

The Directors acknowledge that market risk is inherent in the

investment process. The Company invests in the healthcare

sector and has a concentrated high conviction portfolio. It has a

well-defined investment policy that states that no single holding

will represent more than 10 per cent. of gross assets at the time

of investment and, when fully invested, the portfolio will have no

more than 35holdings.

The Investment Manager also has a well-defined investment

objective and process which is regularly and rigorously reviewed

by the independent Board of Directors and performance is

reviewed at quarterly Board meetings. The Investment Manager

is experienced and employs its expertise in selecting the stocks

in which the Company invests.

Bellevue Healthcare Trust plc Annual Report and Accounts 202218

Risk and Risk Management continued

The Board closely monitors the Company’s share price

relative to NAV and the Company’s discount / premium

relative to their peer group, and recognises the importance

that investors attach to the ordinary shares not trading at a

significant discount or premium to the prevailing NAV. Should

the Company’s shares trade at a significant discount to

the prevailing NAV, the Board has a discount management

programme that will be considered, to determine whether the

Company should purchase its own ordinary shares, pursuant

to the general authority renewed at each AGM. Conversely,

the Board will issue new Ordinary Shares should the shares

trade at a premium to their prevailing NAV, pursuant to the

general authority renewed at each AGM. Extensive marketing

is carried out by the Company’s Investment Manager, Broker

and a specialist PR company. An investment research

consultant is engaged to provide independent research for retail

shareholders.

In addition to regular market updates from the Investment

Manager and reports at Board meetings, the Board convenes

more often as required.

(II) FINANCIAL RISKS

The Company’s investment activities expose it to a variety of

financial risks which include liquidity, currency, leverage, interest

rate and credit risks.

The Company invests in equities, with equities subject to strong

price fluctuations and specifically healthcare equities, which

can be subject to sudden substantial price movements owing

to market, sector or company factors. There is therefore a risk

that the Company’s holdings may not be able to be realised

at reasonable prices in a reasonable timeframe. Although

the Company’s performance is measured in sterling, a high

proportion of the Company’s assets may be either denominated

in other currencies or be in investments with currency exposure.

The Company pays interest on its borrowings and as such, the

Company is exposed to interest rate risk due to fluctuations in

the prevailing market rates. The Company may take a leverage,

which may lead to higher price movements compared to the

underlying market.

The increasing levels of inflation worldwide and the rising

interest rates has contributed to investment risk.

Further details on financial risks can be found in note 19 to the

financial statements.

Management of risks

The Company will typically seek to maintain a high degree of

liquidity in its portfolio holdings. The Company’s Investment

Manager monitors these financial risks to the Company’s

portfolio on a continuous basis. Prevailing interest rates are

taken into account when deciding on borrowings.

Further details on the management of financial risks can be

found in note 19 to the financial statements.

(III) CORPORATE GOVERNANCE AND

INTERNAL CONTROL RISKS

The Board has contractually delegated to service providers the

management of the investment portfolio, the custodial services

(which include the safeguarding of the assets), the registration

services, and the accounting and company secretarial

requirements. The service providers are outlined on page 35 of

the Directors’ Report.

The main risk areas arising from the above contracts relate to

allocation of the Company’s assets by the Investment Manager,

and the professional execution of their duties of performance

of administrative, registration and custodial services. These

could lead to various consequences including the loss of the

Company’s assets, inadequate returns to Shareholders and loss

of investment trust status. Cyber security risks could lead to

breaches of confidentiality, loss of data records and inability to

make investment decisions.

Management of risks

The Board has appointed experienced service providers.

Each of the contracts were entered into after full and proper

consideration of the quality and cost of services offered,

including the financial control systems in operation in so far as

they relate to the affairs of the Company.

All of the above services are subject to ongoing oversight of the

Board and the performance of the principal service providers is

reviewed on a regular basis.

All key service providers produce annual internal control reports

for review by the Audit and Risk Committee. These reviews

include consideration of their business continuity plans and the

associated cyber security risks. The Company’s key service

providers report on cyber risk mitigation and management

on a quarterly basis. This includes confirmation of business

continuity capability in the event of a cyber-attack and each

service provider is reminded of their duty to disclose any cyber

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 19

Strategic Report

security breaches to the Company Secretary at least annually.

Penetration testing is carried out by the Investment Manager

and key service providers at least annually.

(IV) REGULATORY RISKS

Breaches of Section 1158 of the Corporation Tax Act could

result in loss of investment trust status. Loss of investment

trust status would lead to the Company being subject to tax on

any gains on the disposal of its investments. Breaches of the

FCA’s rules applicable to listed entities could result in financial

penalties or suspension of trading of the Company’s shares on

the London Stock Exchange. Breaches of the Companies Act

2006, The Alternative Investment Fund Managers’ Directive,

accounting standards, the Listing Rules, Disclosure Guidance

and Transparency Rules, and Prospectus Rules could result in

financial penalties or legal proceedings against the Company or

its Directors.

Management of risks

The Company has contracted out relevant services to

appropriately qualified professionals. The Investment Manager,

Depositary and Administrator provide regular reports to the

Audit and Risk Committee on their monitoring programmes.

The Investment Manager monitors investment positions and

the Investment Manager and Administrator monitor the level

of forecast income and expenditure. Major regulatory change

could impose disproportionate compliance burdens on the

Company. In such circumstances representations would be

made to seek to ensure that the special circumstances of

investment trusts are recognised.

(V) KEY PERSON RISK

The Company depends on the diligence, skill and judgement of the

Investment Manager’s investment professionals and the information

and ideas they generate during the normal course of their activities.

The Company’s future success depends on the continued service

of key personnel. The departure of any of these individuals without

adequate replacement may have a material adverse effect on the

Company’s business prospects and results of operations.

Management of risks

The strength and depth of investment management team

provides comfort that there is not over-reliance on one person

with alternative investment managers available to act if needed.

The Board meets regularly with other members of the wider

team employed by the Investment Manager.

(VI) BUSINESS INTERRUPTION

Failure in services provided by key service providers,

meaning information is not processed correctly or in a timely

manner, resulting in regulatory investigation or financial loss,

failure of trade settlement, or potential loss of investment

trust status.

The failure or breach of information security could potentially

lead to breaches of confidentiality, data records being

compromised and the inability to make investment decisions.

The failure or breach of physical security could lead to damage

or loss of equipment, with consequential negative results.

Management of risks

Each service provider has comprehensive business continuity

policies and procedures in place which facilitate continued

operation of the business in the event of a service disruption or

a major disruption event. Breaches of any nature are reported to

the Board.

The Committee receives the Administrator’s report on internal

controls and the reports by other key third-party providers are

reviewed by the Investment Manager and Company Secretary

on behalf of the Committee. The Depositary reports on

custody matters, including the continued safe custody of the

Company’sassets.

Cyber security risks are considered and continually monitored

by the Investment Manager as these threats evolve and become

increasingly sophisticated. The integrity of the Company’s

information security is closely monitored by the Board, with

each of the key service providers providing a regular report

through its internal audit function which covers information

technology security and provides comfort to the Board that

appropriate safeguards are in place. All physical locations

have security in place and all third-party service providers have

disaster recovery plans.

The failure or breach of information security could potentially

lead to breaches of confidentiality, data records being

compromised and the inability to make investment decisions.

The failure or breach of physical security could lead to damage

or loss of equipment, with consequential negative results.

Bellevue Healthcare Trust plc Annual Report and Accounts 202220

(VII) GEOPOLITICAL RISK

The Russian invasion of Ukraine and the subsequent impact

on global economies and international relations combined with

increasing levels of inflation worldwide and the potential for

rising interest rates has raised investment risk. The extent and

impact of military action, resulting sanctions and further market

disruptions is difficult to predict which increases uncertainty

and challenges confidence in financial markets. This could lead

to a recession if the conflict were to move towards a broader

regional or global conflict.

Management of risks

The Board has considered the impact of the continued

uncertainty on the Company’s investment objectives, portfolio

and stakeholders and, continues to monitor the situation

closely to both assess and mitigate any impact. The Company

does not have any direct or indirect exposure to investments

in Ukraine or Russia. There are also no direct business

relationships with counterparties from these countries.

(VIII) ESG AND CLIMATE CHANGE RISK

The financial risks from climate change are typically classified as

physical or transitional risks. Physical risks are those arising from

specific weather events and transitional risks are those arising

from the changes to regulations, such as the move to net-zero

carbon. The Company could suffer potential reputational

damage from non-compliance with regulations or incorrect

disclosures or as a result of increased investor demand for

products which promote ESG investments.

Management of risks

The portfolio is well diversified to mitigate against physical risks.

Changes in climate change focused regulation, governing

both the Company and investee companies, will create

some uncertainty. In comparison to the broader economy,

the portfolio has a relatively low carbon footprint and the

Investment Manager’s parent company is currently deploying a

reduction strategy. This strategy encompasses measures

such as an independent audit of its CO

footprint according

to ISO14064-1 and GHG protocols, implementation of

corporate CO

reduction and offsetting of excess emissions

with high-quality climate projects. Bellevue Group is targeting a

reduction in CO

emissions per FTE of at least 30% by 2030.

Moreover, the Bellevue Group was certified as carbon neutral by

Swiss Climate in late 2021.

The Board encourages the Investment Manager to consider

ESG factors when selecting and retaining investments and

this has been a major topic of discussion in the past year. The

Investment Manager’s formal ESG guidelines cover areas such

as compliance with global norms (UN Global Compact, Guiding

Principles for Business and Human Rights, ILO standards),

value-based exclusions, controversies, climate change factors

and active ownership (management engagement, voting

policies, etc.).

The Company’s ESG statement is updated annually and is

available on the AIC website and on pages 25 to 31 of this

report. Investment trusts are currently exempt from Task Force

on Climate-Related Financial Disclosures (“TCFD”), but the

Board will continue to monitor the situation.

Risk and Risk Management continued

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 21

Strategic Report

Viability Statement

The Directors have assessed the viability of the Company

for the five years to 30 November 2027 (the “Period”), which

the Directors consider to be an appropriate time horizon,

taking into account the long-term nature of the Company’s

investment objective and recommendation by the Financial

Reporting Council.

In reaching this conclusion, the Directors have considered

each of the principal and emerging risks, including climate

change and the liquidity and solvency of the Company

over the next five years. The Directors have considered the

Company’s income and expenditure projections and the fact

that the Company’s investments comprise readily realisable

securities, which could, if necessary, be sold to meet the

Company’s funding requirements. Portfolio changes and

market developments are discussed at quarterly Board

meetings. The internal control framework of the Company is

subject to a formal review on at least an annual basis.

The Directors do not expect there to be a material increase

in the annual ongoing charges ratio of the Company over the

Period. The Company’s income from investments and cash

realisable from the sale of its investments provide substantial

cover to the Company’s operating expenses under all stress

test scenarios reviewed by the Directors.

The Company has a redemption facility through which

Shareholders are entitled to request the redemption of all or

part of their holding of Ordinary Shares on an annual basis.

The redemption point is the last business day of November.

The Directors’ assessment assumes that the number of

shares redeemed will not affect the Company’s ability to

continue in operational existence. At the last redemption point

of 30 November 2022, redemption requests in respect of

30,577,550 Ordinary Shares were received, all of the Ordinary

Shares were redeemed and cancelled by the Company. All

shareholders who validly applied to have shares redeemed

received a Redemption Price of 164.34 pence per share. The

Company’s redemption facility is subject to approval by the

Board.

Based on their assessment, the Directors have a reasonable

expectation that the Company will be able to continue in

operation and meet its liabilities as they fall due in the Period.

Bellevue Healthcare Trust plc Annual Report and Accounts 202222

Stakeholder Engagement

This section of the Annual Report covers the Board’s

considerations and activities in discharging their duties under

s.172(1) of the Companies Act 2006, in promoting the success

of the Company for the benefit of its members as a whole.

This statement includes consideration of the likely consequences

of the decisions of the Board in the longer term, how the Board

has taken wider stakeholders’ needs into account and the impact

of the Company’s operations on the environment.

The Board is ultimately responsible for all stakeholder

engagement. As an externally managed investment company,

the Company does not have any employees; rather it employs

external suppliers to fulfil a range of functions, including

investment management, secretarial, administration, public

relations, corporate brokering, depositary and banking services.

All of these service providers who are stakeholders in the

Company themselves help the Board to fulfil its responsibility to

engage with the Shareholders and other stakeholders.

The Board has identified the major stakeholders in the Company’s

business. On an ongoing basis the Board monitors both potential

and actual impacts of the decisions it makes in respect of the

Company upon those major stakeholders identified.

Importance of Engagement Examples of Engagement and Key Decisions

Shareholders

The Board’s principal concern is the interests of the

Company’s Shareholders and potential investors. As a public

company listed on the London Stock Exchange, the Company

is subject to the Listing Rules and the Disclosure Guidance

and Transparency Rules. The Listing Rules include a listing

principle that a listed company must ensure that it treats all

Shareholders of the same class of shares that are in the same

position equally in respect of the rights attaching to such

shares.

The investment objective of the Company is to provide

Shareholders with capital growth and income over the long

term, through investment in listed or quoted global healthcare

companies.

The Board maintains open dialogue between Shareholders,

the Investment Manager and other service providers.

The Investment Manager and Chairman, along with the

Company’s corporate broker meets regularly with the

Company’s Shareholders to provide Company updates and to

foster regular dialogue.

Feedback from meetings between the Investment Manager

and Shareholders is communicated with the Board.

With the assistance of regular discussions with and the formal

advice of the Company’s legal counsel, secretary and corporate

broker; the Board abides by the Listing Rules at all times.

The Board recently announced that for the financial year ended

30 November 2023, the target total dividend will be 5.99p per

Ordinary Share, this being 3.5% of the audited net asset value

per Ordinary Share of 171.16p (including current financial year

revenue items) as at 30 November 2022.

The Board encourages Shareholders to attend and participate

in the Company’s AGM and the Investment Manager attends

to answer any questions Shareholders may have. The

Company values any feedback and questions it may receive

from Shareholders ahead of and during the AGM. The Board

recognises that it is not possible for everyone to attend the AGM

and therefore encourage Shareholders to submit any enquiries

or feedback to the dedicated email address:

info@bellevuehealthcaretrust.com

The Company’s Annual and Interim Reports are made

available on the Company’s website and are also circulated to

Shareholders as requested. This information is supplemented

by the daily calculation and publication of the NAV per Ordinary

Share and a monthly factsheet, which are announced via a

Regulatory Information Service feed and are also available on the

Company’s website.

The Board has appointed a professional PR company, Maitland,

and an independent research consultancy, Kepler, to ensure that

information and news about the Company is regularly available

for existing and potential Shareholders.

The Chairman and Directors are available to meet with

Shareholders with or without the Broker or the Investment

Manager present. During the year the Chairman, the Company’s

Broker and Investment Manager held regular discussions with

larger Shareholders. The Board appreciate that Shareholders

vary by size and resources but the Company’s investor relations

team, Investment Manager and Board of Directors are pleased to

engage with Shareholders, whatever their size.

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 23

Strategic Report

Importance of Engagement Examples of Engagement and Key Decisions

Investment Manager

The most significant service provider for the Company’s long

term success is Bellevue Asset Management (UK) Limited,

who have been engaged as the Company’s Investment

Manager. The Investment Manager is responsible for the

management of the Company’s portfolio in accordance

with the Company’s investment policy and the terms of the

Investment Management Agreement.

The Investment Manager has also been appointed as the

Company’s AIFM in accordance with the Alternative Investment

Fund Managers Directive (“AIFMD”), for the purpose of

providing investment advisory services to the Company.

The Investment Manager has placed trust in the investee

companies to respond appropriately to operational challenges

and to ensure that high standards of corporate governance

and regard for Shareholders are at the forefront of managerial

decision-making.

The Board monitors the Company’s investment performance

in relation to its objectives and investment policy and strategy.

The Board regularly assesses the experience and resources

of the Investment Management team and the commitment

of the Investment Manager; to promote the Company and

foster Shareholder relations and to ensure that the Company’s

objective of providing capital growth combined with dividend

income for its investors are met.

The volatile market environment caused by the Ukraine

war, increasing energy prices and rising global inflation was

discussed in detail by the Board at meetings.

The Board receives and reviews regular reports and

presentations from the Investment Manager.

An open and active relationship is maintained with the

Investment Manager at Board meetings and additional meetings

when needed.

The Management Engagement Committee met during the year

and unanimously endorsed the continued appointment of the

Company’s Investment Manager.

Service Providers

As an externally managed investment trust, the Company

conducts all its business through its key service providers.

Before the engagement of a service provider, the Board

ensures that the Company’s business outlook as well as its

values are similar to those of the service provider.

A list of the Company’s key service providers can be found on

page 35 of this Report.

On an annual basis, the Board reviews the continuing

appointment of each service provider to ensure reappointment

is in the best interests of the Company’s Shareholders. The

Board has strong working relationships with the Investment

Manager, Broker, Company Secretary, Administrator and

Depositary and receives reports on the performance of the key

service providers by the Investment Manager and Company

Secretary.

The Board has strong working relationships with the Investment

Manager, Broker, Company Secretary, Administrator and

Depositary. The Board receives internal control reports from the

service providers and the Investment Manager.

The continuance, or otherwise, of the engagement of the

service providers are reviewed by the Board on an annual basis

to ensure that the Company continues to receive high quality

service at a competitive cost.

During the year the Fund Services Division of PraxisIFM, the

Company’s Company Secretary and Administrator was acquired

by Sanne Group plc, which was subsequently acquired by

Apex Group. The Board have worked closely with the Company

Secretary and Administrator to ensure continuity of relationships,

a smooth transition and no interruption to the service.

The Auditor is invited to attend the Audit and Risk Committee

meeting twice a year. The Audit and Risk Committee Chair

maintains regular contact with the Audit partner to ensure the

audit process is undertaken effectively.

Bellevue Healthcare Trust plc Annual Report and Accounts 202224

Importance of Engagement Examples of Engagement and Key Decisions

Wider community and environment

The Company and its appointed professional suppliers keep

abreast of the rules and regulations affecting the investment

company sector.

The Investment Manager, as steward of the Company’s

assets engages with the investee companies to ensure high

standards of governance. The Board, Company Secretary and

AIFM are responsible for ensuring that various regulatory and

statutory obligations are met.

In making investment decisions, the Investment Manager takes

into account qualitative measures such as the environmental and

social impact of a company as well as financial and operational

measures.

The Company Secretary and AIFM regularly report to the Board

any changes in the regulatory environment and as AIC members,

the Board can draw on the resources available detailing any

regulatory changes.

The Company has articulated its ESG statement, outlining

factors involved in the investment decision making and evidence

of constructive engagement with investee companies. See

pages 25 to 31.

The ESG policy is available on both the Company’s website and

the AIC’s website.

The Company has given shareholders the option to receive

electronic copies of annual reports and other information.

The Board reviews the governance engagement reports setting

out the reasons why the Investment Manager has voted against

investee company management recommendations or against the

recommendations of third party proxy advisors.

In summary, the Directors are cognisant of their duties enshrined in Section 172 of the Companies Act 2006 to make decisions

taking into account the long-term consequences of all the Company’s key stakeholders and reflect the Board’s belief that the long-

term sustainable success of the Company is linked directly to its key stakeholders.

Stakeholder Engagement continued

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 25

Strategic Report

Environmental, Social and Governance

(“ESG”) Policy

OVERVIEW

The section that follows summarises the incorporation of ESG

factors from both a company perspective at the Bellevue

Healthcare Trust level (‘the Company’ or ‘the Trust’) and from

the Bellevue Asset Management (‘Bellevue’) perspective, as

the appointed investment manager of the Trust. ‘We’ and ‘Our’

refer to Bellevue Asset Management (UK) Ltd. and its staff.

For a number of years, Bellevue has integrated ESG

considerations into the investment process for all its products

and has been a signatory to the United Nations Principles of

Responsible Investment (UN PRI) since 2019. PRI signatories

must report externally on their ESG approach and the latest PRI

document can be found on the Bellevue Groupwebsite.

At a corporate level, the Bellevue Group has deployed a CO

reduction strategy, encompassing measures such as an

independent audit of its CO

footprint according to ISO14064-1

and GHG protocols, implementation of corporate CO

reduction

and offsetting of excess emissions with high-quality climate

projects. Bellevue Group is targeting a reduction in CO

emissions per FTE of at least 30% by 2030 and has been

certified as carbon neutral by Swiss Climate since late 2021.

At the portfolio management level, Bellevue continues to

refine and adapt its investment processes with respect to

ESG integration and reporting. Our intent is to remain at the

forefront of what is a rapidly developing field, in terms of what

investors consider to be best practice and evolving UK and

European regulations covering implementation and disclosure.

ADDITIONAL DEVELOPMENTS DURING THE

PRIOR YEAR

Since the publication of last year’s Annual Report, two key

pieces of regulation have come into effect that apply to the

Trust: The EU Sustainable Finance Disclosure Regulation

(SFDR) and related amendments to the Commission

Delegated Regulation (EU) to MiFID II (Sustainability

Preferences) in relation to reporting compliance for all funds,

even those that do not have specific sustainability objectives.

The intent of implementing SFDR was to improve transparency

for investors with respect to products marketed as sustainable

investments and qualify any sustainability claims made by fund

managers about their products, to prevent greenwashing.

As well as defining measurable parameters against which

to benchmark any claims, SFDR classifies funds touting

environmental and/or social objectives as either ‘Article9’

(a fund that has sustainable investment or a reduction in

carbon emissions as its objective) or ‘Article 8’ (a fund which

promotes, among other characteristics, environmental or social

characteristics, or a combination of those characteristics,

provided that the companies in which the investments are

made follow good governance practices).

Any fund not classified as Article 8 or 9 defaults to being

‘Article 6’ (Funds that neither have a sustainable investment

objective, nor do they embrace investment in assets with

environmental or social benefits). The Bellevue Healthcare

Trust is thus an Article 8 product since it does not include

any sustainability claims in its investment objectives but does

take ESG factors and thresholds into account when making

investment decisions. All of Bellevue Asset Management’s

equity funds are classified as Article 8. In accordance with

SFDR requirements, Bellevue introduced additional ESG

criteria (“minimum thresholds”) for the Trust and these are

discussed in more detail below.

Both Bellevue Asset Management (UK) Ltd. and the Trust

remain out of the current scope for both the UK Climate

related reporting requirements and the EU Corporate

Sustainability Reporting Directive. These are initially focused

on larger asset managers and listed companies. However,

we expect all asset managers and listed companies to be

required to comply in due time.

MANAGEMENT OF ESG FACTORS WITHIN

THE BELLEVUE HEALTHCARE TRUST

INVESTMENT PORTFOLIO

As noted previously, the consideration of ESG factors is a core

part of the initial stages of the investment process to screen

out companies that would not meet Bellevue’s criteria as early

as possible. These formal ESG guidelines cover areas such as

compliance with global norms (UN Global Compact, Guiding

Principles for Business and Human Rights, ILO standards),

value-based exclusions, controversies, climate change factors

and active ownership (management engagement, voting

policies, etc.). Bellevue’s high-level exclusion criteria can be

summarised in two guiding principles:

Companies that are involved in serious violations

of internationally recognised norms regarding the

environment, human rights and business ethics are

excluded from all portfolios.

Companies with controversial business activities that exceed

Bellevue’s stated revenue thresholds as set forth by norms-

based criteria are excluded from all portfolios (these exclusion

thresholds are detailed at the end of the ESG chapter).

Bellevue Healthcare Trust plc Annual Report and Accounts 202226

Generally speaking, the Trust’s healthcare focus makes it very

unlikely that any excluded companies would ever fall into our

screening processes in the first place. That said, there have

been a number of investment opportunities since the inception

of the Trust where we have decided not to progress into

detailed due diligence because they have failed to meet our

broader ESG hurdles. The most common reasons for negative

screen-outs continue to be governance structure and/or

reporting quality.

The assessment of ESG considerations is often over-simplified

to the level of significant controversies or an aggregated ESG

score provided by third party agencies. We remain firmly of

the view that the process must reflect the pitfalls of an over-

simplified “one size fits all” approach, especially in an industry

as diverse and complex as human healthcare. Bellevue

continues to use MSCI ESG reports for qualitative and

quantitative external data.

The scope and quality of external ESG assessments remain

variable in our view, although the situation continues to improve.

Where the available MSCI data is not comprehensive, we rely

on other third-party data providers and internal evaluations.

In FY2022, 100% of the companies that we were invested

in received a detailed rating from MSCI during the period.

Two of the 29 companies in the portfolio as of 30 November

2022 were not rated at all by MSCI as of 30 November 2021.

Although coverage has improved, it was still not the case that

MSCI met with the management team of all of the companies

reviewed during the period.

Moreover, we continue to come across vexing levels of

incomprehension as to the nature of the business being

assessed. These issues will get better over time, not

least because investors are encouraging companies to

engage with these third party agencies to address such

misunderstandings.

As the disclosure of data regarding ESG factors becomes

more regulated and engagement between rating agencies

and companies improves, we expect the various approaches

taken by reviewing agencies to converge on an approach that

encompasses the current variations in standards between the

US and UK/EU and better meets the needs of investors.

As noted above, MSCI reports are only part of the process; we

have our own internally-generated qualitative criteria as well that

form the basis of decision-making so we are not solely reliant

on third-party data or adherence to a singular industry standard

as the basis of our approach. We do not apply specific scoring

criteria for exclusion from our portfolio because we feel that an

external rating or scoring approach has significant limitations

and we see these more as tools to consider within a much

more comprehensive and holisticapproach.

ABSOLUTE AND RELATIVE DATA METRICS

We have cautioned previously that relative and absolute

assessments of quantitative ESG parameters must be

considered carefully, since there are all manner of numerator

and denominator issues that confound comparisons. We have

reproduced the portfolio level data in Figure 9 below to illustrate

the caution that must be applied when analysing suchdata.

At face value, the relative position of our portfolio compared to

the benchmark looks to have worsened from 2020 to 2022, with

a materially worse overall quality score leading to a much lower

rating (A vs. AAA) when compared to the MSCI World Healthcare

Index, which is our internal comparator.

However, ESG Quality Score and the Governance Score of the

portfolio have risen and the overall sustainable impact (which is

driven by the social impact score on major diseases) remains very

high. We would note that the individual outputs in the table are

outputs from MSCI and we do not target any specific thresholds for

these individual items in our ESG assessment process.

November 30, 2020 November 30, 2021 November 30, 2022

Portfolio MSCI WHC Portfolio MSCI WHC Portfolio MSCI WHC

ESG Rating BBB A A A A AAA

Proportion not rated 12% 1% 0% 0% 0% 0%

ESG Quality Score 5.0 6.3 6.4 6.2 6.5 10.0

Environmental Score 5.7 7.0 5.3 7.1 5.4 7.1

Social Score 4.9 5.0 4.9 5.0 4.5 5.2

Governance Score 5.2 5.2 5.6 5.2 6.1 5.8

Overall Sustainable Impact 33.5% 17.7% 37.0% 16.0% 34.1% 17.3%

Environmental, Social and Governance (“ESG”) Policy continued

Figure 9 Headline ESG metrics

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 27

Strategic Report

Our conclusions thus remain the same as in prior years:

reducing these complex issues to single level datapoints is

unhelpful and confusing, and it remains the case that the

larger companies that dominate benchmark indices are able

to devote more resources to providing data or simply score

better since some of the measurement approaches display

an inherent size bias. This bias is acknowledged by the rating

agencies and we are hopeful that scoring methodologies will

ultimately be adjusted to better aid comparability across the

company size spectrum.

For now though, the rating industry remains immature and

unsophisticated and it will probably take many years for

the structural disadvantages facing smaller and early stage

companies to be fully addressed. Bellevue seeks to interact

with companies that it feels have been misunderstood

during this rating process and offers guidance on how to

communicate more effectively around the issues deemed

contentious by external ESG rating agencies.

In accordance with the implementation of SFDR, Bellevue

introduced a minimum threshold of 50% “Investments with

Sustainable Characteristics” for the Trust portfolio, which is

primarily defined by sufficient ESG research coverage and a

minimum ESG Rating of BB or higher and compliance with

global norms as previously stated.

In addition, the Trust must have a minimum of 25% of the

portfolio qualifying as “Sustainable investments”. SFDR

defines a “Sustainable Investment” as an investment in

an economic activity that contributes to the achievement

of an environmental and/or a social objective while not

significantly harming any of these objectives. Furthermore, the

invested companies must apply practices of good corporate

governance (“Good Governance”).

For an investment to qualify as a “Sustainable Investment”,

Bellevue applies the 17 UN Sustainable Development Goals

(SDGs). These sustainable development goals are general,

universal goals for all UN member states, which were adopted

in September 2015 as the successor to the Millennium Goals.

MSCI measures the target contribution of companies to each

of the SDGs and categorizes them as “strongly aligned”,

“aligned”, “neutral”, “misaligned” and “strongly misaligned”. As

of 30 November 2022, 64% of the investment portfolio met

the definition of “Sustainable investments”, which is well above

the 25% minimum threshold.

Net invested assets

100%

Other investments

100%

Other investments

with sustainable

characteristics

24%

Investments

with sustainable

characteristics

88%

Sustainable investments

(SFDR)

64%

More detailed information on the approach and methodology

applied can be found on our website.

https://www.bellevuehealthcaretrust.com/uk-en/private/investor-relations/legal-documents

Figure 10

Bellevue Healthcare Trust plc Annual Report and Accounts 202228

RESPONSIBLE STEWARDSHIP

Responsible investing does not end with the due diligence

process and portfolio creation; the importance of ongoing

engagement with management teams cannot be overstated.

Active fund management arguably derives a material

proportion of its longer-term alpha generation opportunities

through the ability to proactively consider, debate and

influence (via the exercising of voting powers) potential issues

at investee companies.

Bellevue takes its voting obligations very seriously and there

are multiple structures in place to ensure that we vote in all

shareholder meetings. Whilst we use external proxy agency

reports to consider how we might vote, we do not outsource

our voting to these agencies and are happy to go against their

recommendations and against the wishes of management

when we consider it important to do so. Over the period in

review, we took part at 33 votable meetings (covering 266

resolutions) and the tables below summarise how we voted in

these meetings:

Meeting Overview

Category Number Percentage

Number of votable meetings 33

Number of meetings voted 33 100.00%

Number of meetings with at least 1 vote Against, Withhold or Abstain 12 36.36%

Ballot Overview

Category Number Percentage

Number of votable ballots 33

Number of ballots voted 33 100.00%

Proposal Overview

Category Number Percentage

Number of votable items 266

Number of items voted 266 100.00%

Number of votes FOR 209 78.57%

Number of votes AGAINST 8 3.01%

Number of votes ABSTAIN 0 0.00%

Number of votes WITHHOLD 18 6.77%

Number of votes on MSOP 31 11.65%

Number of votes With Policy 264 99.25%

Number of votes Against Policy 2 0.75%

Number of votes With Management 234 87.97%

Number of votes Against Management 32 12.03%

Number of votes on Shareholder Proposals 7 2.63%

Engagement with voting is only part of the process. One must

recognise that we are but one of many shareholders and that

it may be the case that even after a multi-year engagement

with management and exercising our voting power we have

not been able to elicit change. In such a situation, we would

consider divesting our holding, depending on the materiality

of the issue under discussion. We would argue the fact we

have yet to divest a holding due to ESG factor considerations

stands as evidence that the initial screening approach at the

beginning of the investment process is robust in helping us to

avoid potentially controversialinvestments.

Although we want to be supportive of investee management

teams and their plans to grow their businesses, we are

Environmental, Social and Governance (“ESG”) Policy continued

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 29

Strategic Report

quite happy to exit positions when we lose confidence in

management or strategy and several examples of such

situations can be found in our monthly factsheets, which

remain the best source of up-to-date information on the

evolution of the portfolio and any insights into why changes

may have taken place.

TRUST-SPECIFIC EXCLUSION CRITERIA

AND TOLERANCE THRESHOLDS

It would be very easy to claim that one has a blanket ban on

investing in everything that’s bad or that all one’s investments

are sustainable. However, some points of view are subjective

and some things are what they are: every human healthcare

company is involved in supporting animal testing to some

degree and you cannot rationally penalise an industry for a

regulatory requirement that is designed to save human lives.

Finally, one must recognise that rarely are matters so clear

cut as to be able to definitively state a company has zero

involvement or exposure to a controversial area; one can easily

take exposures off balance sheet via outsourcing (animal

testing is often outsourced, for example).

With these realities in mind, it makes more sense to operate

by a set of guiding principles based on data that can be

simply ascertained from management and that are realistically

achievable for the portfolio overall.

Bellevue selected and agreed an expansive list of thresholds

with the Board of the Company that came into effect from

1 January 2022. These are aligned with, or go further than,

the criteria enshrined by Bellevue Asset Management’s group-

wide policies.

The table below serves as much as a documentary ‘terms

of reference’ for people compiling such reports on behalf of

underlying investors as it does to inform shareholders about

what we are doing in respect of running the portfolio.

The list is largely unchanged from last year save for removing

any quantifiable measurement around the use of embryonic

stem cells since the Board determined this to be impossible to

track in a definitive way, although several investee companies

confirm that they use such material for research purposes.

Potential Issue/controversy Comment

Exclusion Criteria

(max % revenues)

Environmental considerations

Thermal coal The company would not knowingly invest in a holding involved in the

production of any fossil fuels.

Other fossil fuels The company would not knowingly invest in a holding involved in the

exploration for, or production of, any fossil fuels. This encompasses

fracking and other unconventional oil sources.

Nuclear power The company would not knowingly invest in a holding involved in the

production of nuclear energy

Palm oil Palm oil and derivatives such as tocopherol are widely used excipients in

biomedical preparations and unlikely to be avoidable within the investment

mandate. We try to ensure that investee companies are committed

to sustainable sourcing of such products and are thus not promoting

deforestation.

Responsible mineral

sourcing

To the extent that it is relevant, we aim to ensure that investee companies

source raw materials such as minerals from responsible suppliers who

comply with relevant global standards around the environmental and

social impact (e.g. no forced labour, conflict minerals etc.) of mining

activities.

Environmentally damaging

agricultural chemicals

(insecticides, herbicides

etc.)

The investment focus of the Company is on human healthcare and

so we would not intentionally invest into companies manufacturing or

supplying agricultural products that may have an environmental impact.

However, there is a long-standing historical linkage between the chemical,

pharmaceutical and agrochemical industries and it is possible that such

legacy business tie-ups do persist, therefore we apply a higher threshold.

10%

Bellevue Healthcare Trust plc Annual Report and Accounts 202230

Potential Issue/controversy Comment

Exclusion Criteria

(max % revenues)

Social considerations

Alcohol production

(beverages)

The Company would not knowingly invest in a holding involved in the

production of alcoholic beverages, but alcohol is a common constituent of

medicinal products and sterilisation solutions.

Tobacco production The Company would not knowingly invest in a holding involved in the

production of tobacco products.

Tobacco sales Indirect exposure to tobacco sales through retail outlets or peripheral

activities is hard to fully discount, hence we allow for a higher threshold

versus other considerations.

10%

Cannabis-based products The Company can invest, and has invested, into holdings that offer

therapeutic products derived from, or containing cannabinoids. However,

the Company would not knowingly invest into a holding involved in the

production or supply of recreational cannabis products.

n/a

Pornography The Company would not knowingly invest in a holding involved in the

production or sale of pornographic material/content.

Gambling The Company would not knowingly invest in a holding involved in the

provision of gambling services or the operation of gambling venues.

Predatory lending practices

and price gouging

We seek to ensure that, where applicable, investee companies do not

supply products under terms that would constitute unfair, deceptive or

predatory terms to customers or engage intentionally in price gouging

during periods of tight supply.

Animal testing and related

animal welfare issues

The use of animal disease models in pharmaceutical R&D and the

undertaking of pre-clinical testing in animal species are integral parts of

the regulatory pathway for approving new medicines. We therefore limit

our focus to ensuring that investee companies adhere to the highest

standards of welfare in respect of the animals that are used for such

purposes.

n/a

Genetic research Whilst we appreciate that some investors find the manipulation of genetic

material in animals or human cell lines to be controversial, it has the

potential to greatly enhance our understanding of human disease and,

via gene therapy, gene editing and gene silencing to be directly deployed

as a therapeutic intervention, particularly in areas of high unmet need. As

such, we do not consider this to be controversial, as long as research

follows accepted ethical guidelines and is appropriately supervised.

n/a

Use of embryonic stem

cells

Whilst the utilisation of embryonic stem cells (gathered historically from

aborted foetuses, more commonly today from unwanted IVF embryos

that are donated with informed consent or taken from similarly donated

umbilical cord material) is undoubtedly controversial, it also has the

potential to greatly enhance our understanding of human disease and

there are not currently viable alternatives in many cases. There are

ethics guidelines (most notably those of the US National Institutes of

Health, 2009) and our focus is to ensure that, where such research is

undertaken, it is performed in line with these guidelines.

n/a

Environmental, Social and Governance (“ESG”) Policy continued

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 31

Strategic Report

Potential Issue/controversy Comment

Exclusion Criteria

(max % revenues)

Conventional weapons &

military contracts

The Company would not knowingly invest in a holding involved primarily

in the provision of armaments. We would note that, as large employers in

many countries with their own dedicated healthcare infrastructure, many

investee companies will have contracts to supply the military forces of a

country with healthcare products and/or services. Military personnel are

just as entitled to good healthcare as anyone else, so we do not see this

as an issue.

Unconventional weapons Bellevue Group maintains a list of companies connected with the supply

of unconventional weapons and investment into such companies is

prohibited.

Governance considerations

Dealing with oppressive

regimes

Whilst it may be unpalatable to deal with corrupt or oppressive regimes, it

would only compound the misery and suffering of the oppressed people

if they were also denied access to healthcare products and services. As

such, we do not judge our companies on who they chose to supply life-

saving products and services to.

n/a

Bribery & Corruption The managers are committed to investigating serious allegations of bribery

or corruption made against investee companies and discussing these with

management.

n/a

Equitable access to

products for developing

countries

Within the healthcare sector, affordable access to products for less

developed countries is rightly highlighted as a controversial area and

an important topic. We do engage with management teams around this

topic. However, you cannot supply regulated products into markets

where those products have not yet been approved and this point is often

misunderstood in certain external ESG ratings, with smaller companies

unfairly penalised when they only have approvals in a handful of

developed countries.

n/a

Human capital

development and diversity

It is laudable that external rating agencies focus on human capital

development and diversity. However, one must be pragmatic and take

into account the size and geographic focus of a company. A small,

research stage entity based in one location is simply not going to be able

to match the diversity of a broad-based multi-national, nor will it be at a

stage where it is hiring inexperienced people with a view to training them

up. We see inappropriate comparisons being made in these areas all too

frequently.

n/a

Bellevue Healthcare Trust plc Annual Report and Accounts 202232

ENVIRONMENTAL MATTERS

The Company has no greenhouse gas emissions to report

from its operations, nor does it have responsibility for any other

emissions producing sources under the Companies Act 2006

(Strategic Report and Directors’ Reports) Regulations 2013.

Investment trusts are currently exempt from TCFD disclosure,

but the Board will continue to monitor the situation.

EMPLOYEES

The Company has no employees. As at 30 November 2022

the Company had five Directors, three of whom were male

(60%) and two of whom were female (40%). The Board’s policy

on diversity is contained in the Corporate Governance Report

(on page 42).

SOCIAL, COMMUNITY AND HUMAN RIGHTS

ISSUES

Having no employees, the Company, as an investment

company, has no direct impact on social, community,

environmental or human rights matters.

MODERN SLAVERY DISCLOSURE

Due to the nature of the Company’s business, being a company

that does not offer goods or services to consumers, the Board

considers that it is not within the scope of modern slavery.

The Board considers the Company’s supply chains, dealing

predominately with professional advisers and service providers

in the financial service industry, to be low risk in relation to

thismatter.

CONSUMER DUTY

The Company and Investment Manager are fully cognisant of

the rules coming into force on 31 July 2023 and have taken the

necessary steps to ensure compliance.

OUTLOOK

The outlook for the Company is discussed in the Chairman’s

Statement on page 5.

STRATEGIC REPORT

The Strategic Report set out on pages 1 to 32 of this

AnnualReport was approved by the Board of Directors on

3March 2023.

For and on behalf of the Board

Randeep Grewal

Chairman

3 March 2023

Other Information

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 33

Governance

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 33

Bellevue Healthcare Trust plc Annual Report and Accounts 202234

Directors’ Report

The Directors present their annual report and accounts for the

year ended 30 November 2022.

STRATEGIC REPORT

The Directors’ Report should be read in conjunction with the

Strategic Report on pages 1 to 32.

LEGAL AND TAXATION STATUS

The Company is an investment company within the meaning

of Section 833 of the Companies Act 2006. The Company

conducts its affairs in order to meet the requirements for

approval as an investment trust under section 1158 of the

Corporation Tax Act 2010. The Company has received initial

approval as an investment trust and the Company must

meet eligibility conditions and ongoing requirements in order

for investment trust status to be maintained. In the opinion

of the Directors, the Company has met the conditions and

requirements for approval as an investment trust for the year

ended 30 November 2022.

ALTERNATIVE FUND INVESTMENT

MANAGERS (“AIFM”)

Bellevue Asset Management (UK) Ltd (“Bellevue”) is authorised

and regulated by the Financial Conduct Authority (“FCA”) to

undertake the regulated activities as defined in the Alternative

Investment Fund Managers Directive (2011/611/EU) (“AIFMD”).

On 1 April 2020, it was announced that Bellevue had been

appointed as AIFM to the Company, subject to the overall control

and supervision of the Board. Under the terms of the AIFM

agreement, Bellevue performs the activity of portfolio management

in accordance with the investment policy of the Company and

has discretion to buy, sell, retain, exchange or otherwise deal in

investment assets for the account of the Company.

The Investment Manager is entitled to receive a management

fee payable monthly in arrears and calculated at the rate

of one-twelfth of 0.95% per calendar month of market

capitalisation. Market capitalisation means the average of

the mid-market prices for an ordinary share, respectively,

as derived from the daily official list of the London Stock

Exchange on each business day in the relevant calendar

month multiplied by the number of Ordinary Shares,

respectively, in issue on the last business day of the relevant

calendar month excluding any Ordinary Shares held in

treasury. There is no performance fee payable.

As allowed under the AIFMD, Bellevue has delegated the

activity of Risk Management to Bellevue Asset Management

AG (the “Delegated Risk Manager”).

The AIFM agreement may be terminated on 12 months’ written

notice and may be terminated with immediate effect on the

occurrence of certain events, including insolvency, on a

change of control of the Investment Manager or in the event of

a material breach which fails to be remedied within 30 days of

receipt of notice.

As an AIFM, Bellevue must ensure that it, together with the

Company, is fully compliant with the terms of the AIFMD. In

order to accomplish this, the required regulatory obligations

are met through the cooperation of both parties as well as with

significant input from the Delegated Risk Manager.

Bellevue has agreed with the Delegated Risk Manager, and in

full compliance with the AIFMD, a Risk Framework in respect

of the Company. The Risk Framework seeks to govern the

investment and operational risks as well as ensuring that

all risk limits are complied with. All required risk reporting is

completed by the Delegated Risk Manager.

The Delegated Risk Manager monitors the Company on a

daily basis in order to ensure that Bellevue is operating within

the risk limits contained in the risk policy and seeks to identify

breaches. If Bellevue breaches a risk management limit, then

it is required to notify the Delegated Risk Manager of the

breach as soon as possible, and by the day after the infraction

occurred at the latest. In addition to providing details of the

breach, Bellevue confirm how and when the breach was

resolved or when and how it is intended that the breach will be

resolved.

The AIFMD Annex IV reporting requirements are undertaken by

the AIFM, Administrator and other selected service providers.

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 35

Governance

BROKER

The Company’s sole broker is J.P. Morgan Cazenove.

DEPOSITARY

CACEIS Bank, UK Branch has been appointed as the

Company’s depositary.

COMPANY SECRETARY AND

ADMINISTRATOR

Apex Listed Companies Services (UK) Limited provide

company secretarial and administration services to the

Company, including calculation of its daily Net Asset Value.

Sanne Group acquired the PraxisIFM Funds business in

December 2021 and Sanne Group was subsequently

acquired by the Apex Group in August 2022. However, the

personnel servicing the Company’s business remain largely

unchanged including the continuing appointment of the

Company Secretary.

The Board has had continuous direct access to the advice

and services of the Company Secretary who is responsible

for ensuring that the Board and Committee procedures

are followed, and that applicable rules and regulations are

complied with.

The Company Secretary provides full company secretarial

services to the Company, ensuring that it complies with all

legal, regulatory, and corporate governance requirements and

officiating at Board meetings and Shareholders’ meetings.

The Company Secretary is also responsible to the Board for

ensuring timely delivery of information and reports and that

the statutory obligations of the Company are met. Finally, the

Company Secretary is responsible for advising the Board

through the Chairman on all governance matters.

MANAGEMENT ENGAGEMENT

The Directors are satisfied that the AIFM has the suitable skills

and experience to manage the Company’s investments and

believe that the continuing appointment of the AIFM is in the

interests of Shareholders as a whole.

ALTERNATIVE INVESTMENT FUND

PORTFOLIO MANAGERS’ DIRECTIVE

(“AIFMD”)

In accordance with the AIFMD, the AIFM must ensure that an

annual report containing certain information on the Company

is made available to investors for each financial year. The

investment funds sourcebook of the FCA (the “Sourcebook”)

details the requirements of the annual report. All the

information required by those rules are included in this Annual

Report or is or will be made available on the Company’s

website (https://www.bellevuehealthcaretrust.com).

The AIFM is required to make certain disclosures on its

remuneration in respect of the AIFM’s relevant reporting period.

These disclosures are available on request from the AIFM.

LEVERAGE (UNDER AIFMD)

The AIFM is required to set leverage limits as a percentage

of net assets for the Company utilising methods prescribed

under AIFMD. These methods are known as the gross method

and the commitment method.

Under both methods the AIFM has set current maximum limits

of leverage for the Company of 120%.

A leverage percentage of 100% equates to nil leverage. The

Company’s leverage under each of these methods at its year

end is shown below:

Gross

method

Commitment

method

Maximum leverage limit 120% 120%

Actual leverage at 30 November

2022*

104% 108%

* Definitions of this APM together with how these measures have

been calculated can be found on pages 81 and 82.

SHARE ISSUES

During the year ended 30 November 2022, the Company

issued 27,872,179 Ordinary Shares, through the ongoing share

issuance programme. The number of Ordinary Shares in issue

at 30 November 2022 was 586,783,083 Ordinary Shares.

The authority to issue new shares pursuant to the placing

programme, detailed in the Company’s prospectus dated

10 November 2016, expired on 9 November 2017. The

Company published a new prospectus on 5 November

2018, for the issuance of up to 345 million Ordinary Shares

Bellevue Healthcare Trust plc Annual Report and Accounts 202236

Directors’ Report continued

by way of an Initial Placing, Offer for Subscription and

Intermediaries Offer, and pursuant to a new share issuance

programme. A supplementary prospectus was issued on

20February 2019.

At the AGM of the Company held on 22 April 2022, the

Directors were granted authority to allot up to 57,975,236

Ordinary Shares on a non-pre-emptive basis. This authority

will expire at the conclusion of the forthcoming AGM.

The authorities have the following benefits for Shareholders:

Enable the Company to continue to take advantage of

opportunities to make further investments in accordance

with its investment objective and policy;

Increase the market capitalisation of the Company,

helping to make the Company attractive to a wider

investor base;

A greater number of Ordinary Shares in issue should

improve liquidity in the secondary market for the Ordinary

Shares and make the Ordinary Shares more attractive to

a wider range of investors; and

Grow the Company, thereby spreading the Company’s

fixed running costs across a larger equity capital base

which should reduce the level of ongoing expenses per

Ordinary Share.

It must be noted that the price at which any new Ordinary

Shares are issued to satisfy market demand is never less

than the prevailing Net Asset Value (cum-income) per

Ordinary Share at the time of issue plus a premium to cover

the expenses of such issue, therefore Shareholders will not

suffer any dilution to the Net Asset Value (cum-income) per

Ordinary Share as a result of any such issue.

The Board recommends that the Company is granted a new

authority to issue up to a maximum of 55,047,500 Ordinary

Shares (representing 10% of the shares in issue at the date

of this document) and to disapply pre-emption rights when

issuing those Ordinary Shares. Resolutions to this effect will

be put to Shareholders at the AGM to be held on 28 April

2023.

This authority would be used to fulfil demand for the scrip

dividend alternative and to carry out a series of placings or

tap issues, providing the Company with the ability to issue

new Ordinary Shares over a period of time to meet investor

demand and help with managing the premium that the shares

typically trade at.

SCRIP DIVIDEND

At the Company’s AGM in March 2019, a resolution was

passed allowing Shareholders the right to elect to receive

new Ordinary Shares instead of cash in respect of the

whole or part of any dividend (the “Scrip Dividend Scheme”).

Forgood corporate governance purposes, a resolution was

put to Shareholders at the Company’s AGM on 22 April 2022

to renew the Scrip Dividend Scheme, this resolution passed

by 99.96%, renewing the authority for Shareholders to elect

to receive new Ordinary Shares instead of cash in respect of

the whole or part of any dividend.

The Scrip Dividend Scheme may be advantageous to

Shareholders because it enables Shareholders to increase

their shareholding in the Company in a simple manner

without paying dealing costs. The Scrip Dividend Scheme

may be advantageous to the Company (and therefore to the

Shareholders in general) since the relevant cash dividend

amounts payable to Shareholders who have elected to

participate in the Scrip Dividend Scheme are reinvested in

the Company as additional share capital.

On 7 July 2022, the Board declared an interim dividend for

the six months ended 31 May 2022 of 3.235p per Ordinary

Share and offered Shareholders the opportunity to participate

in the Scrip Dividend Scheme. Accordingly, the Company

posted to Shareholders a Circular setting out details of the

Scrip Dividend Scheme.

On 8 August 2022, the Company announced a scrip

dividend reference price of 183.54p for the interim dividend,

payable on 2 September 2022. The scrip dividend reference

price was the unaudited net asset value per Ordinary Share

as at close of business on 5 August 2022.

On 10 August 2022, in line with the Company’s Scrip

Dividend Scheme, 158,894 Ordinary Shares were allotted

and issued to Shareholders who elected for their interim

dividend to be automatically subscribed on their behalf for

new Ordinary Shares. Any Ordinary Shares issued for cash

were issued at a premium to (cum income) net asset value.

Shareholders who do not elect to participate in the Scrip

Dividend Scheme receive their dividends in cash.

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 37

Governance

TREASURY SHARES

The Companies Act allows companies to hold shares

acquired by way of market purchase as treasury shares,

rather than having to cancel them. This would give the

Company the ability to re-issue Ordinary Shares quickly and

cost effectively, thereby improving liquidity and providing the

Company with additional flexibility in the management of its

capital base. Ordinary Shares will not be sold from treasury

at a price less than the (cum income) NAV per existing

Ordinary Share at the time of their sale. No Ordinary Shares

were bought back during the year ended 30 November

2022, however following the year end and as at 1 March

2023, 5,730,528 Ordinary Shares were bought back to be

held in treasury.

DISCOUNT MANAGEMENT

The Company may seek to address any significant discount

to NAV at which its Ordinary Shares may be trading by

purchasing its own Ordinary Shares in the market on an

ad hoc basis. As outlined above, no Ordinary Shares

have bought back by the Company during the year to

30November 2022.

The Directors currently have the authority to make market

purchases of up to 86,904,879 Ordinary Shares. The

maximum price (exclusive of expenses) which may be paid

for an Ordinary Share must not be more than the higher

of: (i) 5% above the average of the mid-market values of

the Ordinary Shares for the five Business Days before the

purchase is made; or (ii) the higher of the price of the last

independent trade and the highest current independent bid

for the Ordinary Shares. Ordinary Shares will be repurchased

only at prices below the prevailing NAV per Ordinary Share,

which should have the effect of increasing the NAV per

Ordinary Share for remaining Shareholders.

It is intended that a renewal of the authority to make market

purchases will be sought from Shareholders at each AGM

of the Company and authority for the Company to purchase

up to 82,516,203 Ordinary Shares (subject to a maximum

of 14.99% of the Ordinary Shares in issue at the date of the

AGM) will be sought at the forthcoming AGM. Purchases of

Ordinary Shares will be made within guidelines established

from time to time by the Board. Any purchase of Ordinary

Shares would be made only out of the available cash

resources of the Company. Ordinary Shares purchased by

the Company may be held in treasury or cancelled.

Purchases of Ordinary Shares may be made only in

accordance with the Companies Act, the Listing Rules, and

the Disclosure Guidance and Transparency Rules.

Investors should note that the repurchase of Ordinary

Shares is entirely at the discretion of the Board and no

expectation or reliance should be placed on such discretion

being exercised on any one or more occasions or as to the

proportion of Ordinary Shares that may be repurchased.

No shares were bought back in the financial year, however

since the year end and as at 1 March 2023, 5,730,528

ordinary shares were repurchased for holding in treasury.

REDEMPTION FACILITY

The Company has a redemption facility through which

Shareholders are entitled to request the redemption of all or

part of their holding of Ordinary Shares on an annual basis.

The redemption facility is entirely at the discretion of the

Directors.

The Company announced on 3 November 2022 that valid

redemption requests in respect of 30,577,550 Ordinary

Shares were received for the 30 November 2022 redemption

point, all of the Ordinary Shares were redeemed and

cancelled by the Company. All shareholders who validly

applied to have shares redeemed received a Redemption

Price of 164.34 pence per share. The Company’s

redemption facility is subject to approval by the Board. The

process for the redemption of Ordinary Shares, including

the calculation of redemption price, is set out in Part 3 of the

Securities Note as part of the prospectus published by the

Company on 5 November 2018.

LIFE OF THE COMPANY

The Company has no fixed life.

MARKET INFORMATION

The Company’s share capital is admitted to the Premium

Segment of the Official List of the FCA and is admitted to

trading on the London Stock Exchange. The NAV per share is

calculated in sterling for each business day that the London

Stock Exchange is open for business. The daily NAV per

Share is published through a regulatory information service.

Bellevue Healthcare Trust plc Annual Report and Accounts 202238

Directors’ Report continued

REVOLVING CREDIT FACILITY (“RCF”)

The Company has a multi-currency revolving credit facility

RCF with The Bank of Nova Scotia, London Branch. On

16June 2022, the Company renewed and amended its

RCF. Under the terms of the amended RCF, the Company

may draw down loans up to an aggregate value of USD

280million. The increased facility will expire in December

2024. The Company’s borrowing policy and the terms of the

facility are unchanged.

As at 30 November 2022, the aggregate of loans draw down

was £83.7 million (2021: £67.8 million).

CAPITAL STRUCTURE AND VOTING RIGHTS

As at 30 November 2022, the Company’s issued share

capital comprised 50,001 Management Shares and

586,783,083 Ordinary Shares of 1p nominal value. Each

Ordinary Share held entitles the holder to one vote and

there are no restrictions on those voting rights. Voting

deadlines are stated in the Notice of Meeting and Form of

Proxy and are in accordance with the Companies Act 2006.

Management Shares shall not carry any right to receive

notice of, nor to attend or vote at any general meeting of the

Company.

There are no restrictions on the transfer of Ordinary Shares,

nor are there any limitations or special rights associated with

the Ordinary Shares.

SIGNIFICANT SHAREHOLDERS

As at 30 November 2022, the Company had been formally

notified of the following shareholdings comprising 3% or more

of the issued share capital of the Company.

Name

Number of

Ordinary

Shares held

% of voting

rights

Brewin Dolphin Wealth Management 27,588,863 5.00

Tilney Smith & Williamson Limited 27,767,503 5.01

Handelsbanken Wealth & Asset

Management Limited

27,609,176 4.97

Quilter plc 20,671,091 4.23

Schroders plc 15,482,819 3.17

Following the year end, the Company has not been formally

notified of any significant shareholdings comprising 3% or

more of the issued share capital of the Company.

SETTLEMENT OF ORDINARY SHARE

TRANSACTIONS

Ordinary Share transactions in the Company are settled by

the CREST share settlement system.

ANTI-BRIBERY AND CORRUPTION

It is the Company’s policy to conduct all of its business

in an honest and ethical manner. The Company takes a

zero-tolerance approach to bribery and corruption and is

committed to acting professionally, fairly and with integrity

in all its business dealings and relationships wherever it

operates. The Company’s policy and the procedures that

implement it are designed to support that commitment.

NOTICE OF GENERAL MEETINGS

At least twenty-one days’ notice shall be given to all the

members and to the auditors of an Annual General Meeting.

All other general meetings shall also be convened by not less

than twenty-one days’ notice to all those members and to the

auditors unless the Company offers members an electronic

voting facility and a special resolution reducing the period of

notice to not less than fourteen days has been passed, in

which case a general meeting may be convened by not less

than fourteen days’ notice in writing. A special resolution will

be proposed at the Annual General Meeting to reduce the

period of notice for general meetings other than the Annual

General Meeting to not less than fourteen days.

GOING CONCERN

The Directors have adopted the going concern basis in

preparing the accounts. The following is a summary of the

Directors’ assessment of the going concern status of the

Company, which should be read in conjunction with the

viability statement on page 21.

The Directors have a reasonable expectation that the

Company has adequate resources to continue in operational

existence for at least twelve months from the date of

this document. In reaching this conclusion, the Directors

have considered the liquidity of the Company’s portfolio

of investments as well as its cash position, income and

expense flows. The Company’s net assets at 30 November

2022 were £1,004.3 million (2021: £1,033.5 million).

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 39

Governance

As at 30 November 2022, the Company held

£1,043.3million (2021: £1,083.6 million) in investments,

cash of £46.4 million (2021: £28.0 million) and bank loans

of £83.7 million (2021: £67.8 million). Further details on

the Company’s Bank loans are detailed in note 12. The

total expenses (excluding finance costs and taxation) for

the year ended 30 November 2022 were £10.5 million

(2021:£10.8 million), which represented approximately

1.04% (2021:1.08%) of average net assets during the year.

The Company also incurred finance costs of £3.1 million

(2021: £0.5 million). At the date of approval of this report,

based on the aggregate of investments and cash held, the

Company has substantial asset cover against its loan facility

and also substantial operating expenses cover.

In reaching this conclusion, the Directors have also taken

account of the war in Ukraine, the ongoing impact of the

Covid-19 pandemic and climate change. These uncertainties

have created supply chain disruption and exacerbated

inflationary pressures worldwide. The Company’s principal

risks are market-related and the current extreme market

conditions have demonstrated the resilience of the Company

and its investment objective and policy. An explanation of the

market, liquidity and credit risks and how they are managed is

contained in note 19 to the financial statements. Accordingly,

the Financial Statements have been prepared on the going

concern basis as it is the Directors’ opinion, having assessed

the principal risks and other matters, that the Company will

continue in operational existence for a period of at least 12

months from the date of approval of this document.

AUDITOR INFORMATION

Each of the Directors at the date of the approval of this report

confirms that:

so far as the Director is aware, there is no relevant audit

information of which the Company’s auditor are unaware; and

the Director has taken all steps that he or she ought to

have taken as Director to make himself/ herself aware

of any relevant information and to establish that the

Company’s auditor is aware of that information.

This confirmation is given and should be interpreted in

accordance with the provisions of Section 418 of the

Companies Act 2006.

In accordance with Section 489 of the Companies Act 2006,

aresolution to re-appoint Ernst & Young LLP as the Company’s

auditor will be put forward at the forthcoming AGM.

By order of the Board

Ciara McKillop

For and on behalf of

Apex Listed Companies Services (UK) Limited

Company Secretary

3 March 2023

Bellevue Healthcare Trust plc Annual Report and Accounts 202240

Corporate Governance

INTRODUCTION

The Board of the Company has considered the Principles and

Provisions of the 2019 Association of Investment Companies

Code of Corporate Governance (the “AIC Code”). The AIC

Code addresses the Principles and Provisions set out in the UK

Corporate Governance Code 2018 (the “UK Code”), as well as

setting out additional Provisions on issues that are of specific

relevance to the Company, as an investment trust. The AIC

Code is available on the AIC website (www.theaic.co.uk).

The Board considers that reporting against the Principles and

Provisions of the AIC Code, which has been endorsed by the

Financial Reporting Council (“FRC”), provides more relevant

information to Shareholders. AIC members who report against

the AIC Code fully meet their obligations under The UK Code

and the related disclosure requirements contained in the

Listing Rules.

During the financial year ended 30 November 2022, the

Company has complied with the recommendations of the AIC

Code and the relevant provisions of the UK Code, except as

set out below.

The UK Code includes provisions relating to:

the role of the chief executive;

executive Directors’ remuneration; and

the need for an internal audit function.

The Board considers that these provisions are not relevant to

this externally managed investment company. The Company

has no employees and the day-to-day management and

administrative functions are outsourced to third parties.

THE BOARD COMPOSITION,

INDEPENDENCE AND SUCCESSION

PLANNING

As at 30 November 2022, the Board consisted of five

non-executive Directors, including the Chairman. All Directors

have served since the Company’s inception, with the

exception of Professor Tony Young and Ms Kate Bolsover,

who were appointed to the Board on 23 September 2020 and

2 July 2021 respectively.

The Board’s current composition comprises 40% female

members and 60% male members and one member of an

ethnic minority. Hence, the Board are compliant with the

recommendations of the Hampton-Alexander review and the

Parker review.

All of the Directors are independent of the Investment

Manager. All of the Directors are able to allocate sufficient time

to the Company to discharge their responsibilities effectively.

The Board believes that during the year ended 30 November

2022 its composition was appropriate for an investment

company of the Company’s nature and size. The Board’s

policy for the appointment of Non-Executive Directors is

based on its belief in the benefits of having a diverse range

of experience, skills, length of service and backgrounds,

including but not limited to gender diversity.

The Directors have a broad range of relevant experience to

meet the Company’s requirements and their biographies are

given below.

RANDEEP GREWAL (CHAIRMAN

AND CHAIR OF THE MANAGEMENT

ENGAGEMENT COMMITTEE)

Randeep is an ex-Fund Manager, with over 20 years of

Healthcare investment experience, including Trium Capital,

F&C Asset Management, ICAP Equities, Hox Therapeutics,

Tissue Regenix and Tudor. Randeep trained as a Vascular

and General Surgeon and read both Medicine and Computer

Science at Cambridge University.

JOSEPHINE DIXON (CHAIR OF THE AUDIT

AND RISK COMMITTEE AND SENIOR

INDEPENDENT DIRECTOR)

Josephine is a chartered accountant who sits on the boards

of Strategic Equity Capital plc, Alliance Trust plc and The

Global Smaller Companies Trust plc. Her executive experience

includes finance, governance and general commercial roles in

a number of sectors.

PAUL SOUTHGATE (NON-EXECUTIVE

DIRECTOR)

Paul is a London-based Portfolio Manager at Pictet Asset

Management, with over 24 years’ investment experience.

Before joining Pictet, he was a Managing Partner at Eisenstat

Capital Partners (ECAP) and managed European Equities for

both Deephaven Capital and Fortress Investments Group.

Hebegan his career with UBS Asset Management.

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 41

Governance

PROFESSOR TONY YOUNG OBE

(NON-EXECUTIVE DIRECTOR)

Tony is a practicing frontline NHS Consultant Urological

Surgeon, Director of Medical Innovation at Anglia Ruskin

University, President of the Institute of Decontamination

Sciences, and National Clinical Director for Innovation for

the NHS. He has founded four Med-Tech start-ups and

also co-founded the £500 million Anglia Ruskin Med-

Tech Campus. Tony was previously a member of the

Royal College of Surgeon’s Commission on the Future of

Surgery (2017 – 2018). In the 2019 New Year’s Honours

list, Professor Young was awarded the OBE for services to

clinicalleadership.

KATE BOLSOVER (NON-EXECUTIVE

DIRECTOR)

Kate Bolsover worked in the City of London for over 25 years,

initially as an analyst and thereafter running the mutual fund

businesses of both Baring Asset Management and Cazenove

Fund Management. Latterly, she was appointed Director of

Corporate Communications for JPMorgan Cazenove. Kate

is Chairman of Fidelity Asian Values and is an independent

director at Invesco Bond Income Plus, TR Property Investment

Trust, and Baillie Gifford & Co Limited.

RESPONSIBILITIES OF THE CHAIRMAN,

THE BOARD, AND ITS COMMITTEES

The Chairman leads the Board and is responsible for its

overall effectiveness in directing the affairs of the Company.

The Company has adopted a document setting out the

responsibilities of the Chairman, which is available on the

website: https://www.bellevuehealthcaretrust.com

DIRECTOR TENURE

The Board recognises the benefits to the Company of having

longer serving Directors together with progressive refreshment

of the Board. The Board does not believe that length of

service in itself necessarily disqualifies a Director from seeking

reappointment but, when making a recommendation, the

Board will take into account the requirements of the AIC Code.

The Board has adopted corporate governance best practice

and has a succession plan in place. No Director of the

Company has served for nine years or more and all Directors

remain independent of the Company’s Investment Manager.

In line with corporate governance best practice, all of the

Directors will offer themselves for election/re-election at the

AGM of the Company to be held on 28 April 2023. The Board

recommends all the Directors stand for re-election for the

reasons highlighted above and in the performance appraisal

section of this report.

The Directors have appointment letters which do not provide

for any specific term. They are subject to re-election by

Shareholders at a maximum interval of three years. Copies

of the Directors’ appointment letters are available on request

from the Company Secretary. Upon joining the Board, any new

Directors receive an induction and relevant training is available

to Directors on an ongoing basis.

A procedure has been adopted for Directors, in the

furtherance of their duties, to take independent professional

advice at the expense of the Company.

A policy of insurance against Directors’ and officers’ liabilities is

maintained by the Company.

BOARD COMMITTEES

The Company has established an Audit and Risk Committee

which is chaired by Josephine Dixon and consists of all the

Directors.

A report of the Audit and Risk Committee is included in this

Annual Report. The Board considers that the members of

the Audit and Risk Committee have the requisite skills and

experience to fulfil the responsibilities of the Audit and Risk

Committee. The Audit and Risk Committee examines the

effectiveness of the Company’s risk management and internal

control systems. It reviews the half-yearly and annual reports

and other financial information. It also reviews the scope,

results, cost effectiveness, independence and objectivity of

the external auditor.

The Company has established a Management Engagement

Committee which is chaired by Randeep Grewal and

consists of all the Directors. The Management Engagement

Committee’s principal duties are to consider the terms

of appointment of the AIFM and it annually reviews those

appointments and the main terms of the AIFM Agreement.

The Board as a whole fulfils the function of the Remuneration

Committee and Nomination Committee.

Bellevue Healthcare Trust plc Annual Report and Accounts 202242

Corporate Governance continued

BOARD DIVERSITY

The Company’s policy is that the Board should have an

appropriate level of diversity in the boardroom, taking into

account relevant skills, experience, gender, social and

ethnic backgrounds, cognitive and personal strengths. Brief

biographies of the Directors are shown on pages 40 and 41.

The policy is to ensure that the Company’s Directors bring

a wide range of knowledge, experience skills, backgrounds

and perspectives to the Board. There will be no discrimination

on the grounds of gender, religion, race, ethnicity, sexual

orientation, age or physical ability. The overriding aim of

the policy is to ensure that the Board is composed of the

best combination of people for ensuring effective oversight

of the Company and constructive support and challenge

to the Investment Manager. Consideration is given to the

recommendations of the AIC Code and the Board supports

the recommendations of the Hampton Alexander Review.

The Board appraises its collective set of cognitive and

personal strengths, independence and diversity on an annual

basis, and especially during the recruitment process, so as

to ensure it is aligned with the Company’s strategic priorities.

The performance appraisal process is described below.

The Board believes its composition is appropriate for the

Company’s circumstances. However, in line with the Board’s

succession planning and tenure policy, or should strategic

priorities change, the Board will review and, if required, adjust

its composition.

As at date of this Report, the Board comprises two female and

three male Board members.

The Board will take account of the targets set out in the FCA’s

Listing Rules, which are set out below. The Board voluntarily

discloses the following information in relation to its diversity.

As an externally managed investment company, the Board

employs no executive staff, and therefore does not have a

chief executive officer (CEO) or a chief financial officer (CFO) –

both of which are deemed senior board positions by the FCA.

However, the Board considers the Chair of the Audit and Risk

Committee and Senior Independent Director (SID) to be senior

board positions and the following disclosure is made on this

basis. Other senior board positions recognised by the FCA are

Chair of the Board. In addition, the Board has resolved that

the Company’s year end date be the most appropriate date

for disclosure purposes. The following information has been

provided by each Director. There have been no changes since

30 November 2022.

BOARD AS AT 30 NOVEMBER 2022

Number of Board

members

Percentage of the

Board

Number of senior

positions on the

Board

Men 3 60% 1

Women 2 40% 1

Prefer not to say - - -

Number of Board

members

Percentage of the

Board

Number of senior

positions on the

Board

White British or Other White (including minority-white groups) 4 80% 1

Asian/Asian British 1 20% 1

Prefer not to say - - -

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 43

Governance

MEETING ATTENDANCE

The actual number of formal meetings of the Board and Committees during the year under review is given below, together with

individual Director’s attendance at those meetings. The first number in the table is the meetings attended by the individual Director.

Quarterly Board

Audit and

Risk Committee

Management

Engagement

Committee

Number held 4 3 1

Randeep Grewal 4 3 1

Josephine Dixon 4 3 1

Paul Southgate 4 3 1

Tony Young 4 3 1

Kate Bolsover 4 3 1

There were several other ad hoc Board and Committee meetings to deal with administrative matters, market updates and approve

documentation.

PERFORMANCE APPRAISAL

The Board recognise the importance of the AIC Code’s

recommendation in respect of evaluating the performance

of the Board as a whole, the Committees of the Board and

individual Directors.

Following the Company’s year end an internal review was

conducted of the Board, its Committees, the Directors

individually and the Investment Manager, through formal

questionnaires and the results of the evaluation were

reviewed by the Chairman and discussed with the Board.

The conclusions of the performance evaluation were positive

and demonstrated that the Board and Investment Manager

were operating effectively and showed the necessary

commitment to the effective fulfilment of their duties. Tonote,

an external valuation was conducted for the year ended

30 November 2020 and is expected to be conducted for the

year ending 30 November 2023.

A formal annual performance appraisal process was performed

on the Company’s main service providers. The results were

reviewed by the Chairman of the Management Engagement

Committee and discussed with the Board. The results of the

service provider performance evaluation were positive and

demonstrated that the service providers were fulfilling their

duties effectively.

INTERNAL CONTROL

Prior to the Company’s listing a detailed review was carried out

on the financial position, prospects and procedures applicable

to the Company.

The AIC Code requires the Board to review the effectiveness

of the Company’s system of internal controls. The Board

recognises its ultimate responsibility for the Company’s system

of internal controls and for monitoring its effectiveness. The

system of internal controls is designed to manage rather than

eliminate the risk of failure to achieve business objectives.

It can provide only reasonable assurance against material

misstatement or loss. The Board has undertaken a review of

the aspects covered by the guidance and has identified risk

management controls in the key areas of business objectives,

accounting, compliance, operations and secretarial as being

matters of particular importance upon which it requires reports.

The Board believes that the existing arrangements, set out

below, represent an appropriate framework to meet the internal

control requirements. By these procedures the Directors have

kept under review the effectiveness of the internal control

system throughout the year and up to the date of this report.

FINANCIAL ASPECTS OF INTERNAL CONTROL

The Directors are responsible for the internal financial control

systems of the Company and for reviewing their effectiveness.

These aim to ensure the maintenance of proper accounting

Bellevue Healthcare Trust plc Annual Report and Accounts 202244

Corporate Governance continued

records, the reliability of the financial information upon which

business decisions are made and which is used for publication

and that the assets of the Company are safeguarded. As

stated above, the Board has contractually delegated to

service providers the services the Company requires. The

Board receives and reviews reports on the internal control

environments of key suppliers, in order to provide reasonable

assurance on the effectiveness of internal financial controls.

The key procedures include review of management accounts

and net asset value and monitoring of performance at

quarterly Board meetings, segregation of the administrative

function from that of securities and cash custody and from

investment management, maintenance of appropriate

insurance, and adherence to physical and computer security

procedures. Inaddition, procedures have been put in place for

authorisation of all expense payments.

The Statement of Directors’ Responsibilities in respect of the

accounts is on page 53 and a Statement of Going Concern is

on pages 38 and 39. The Report of the Independent Auditor is

on pages54 to 61.

OTHER ASPECTS OF INTERNAL CONTROL

The Board holds quarterly meetings, plus additional meetings

as required. Between these meetings there is regular contact

with the Investment Manager, the Company Secretary and the

Administrator.

The Board has agreed policies with the Investment Manager

on key operational issues. The Investment Manager and/or

the AIFM reports in writing to the Board on operational and

compliance issues. The Investment Manager reports directly to

the Audit and Risk Committee concerning the internal controls.

The Directors review detailed management accounts from the

Administrator, including holdings in the portfolio, transactions

and other aspects of the financial position of the Company.

The Depositary provides oversight reports for the quarterly

Board meetings. Additional ad hoc reports are received as

required and Directors have access at all times to the advice

and services of the Company Secretary, which is responsible

to the Board for ensuring that Board procedures are followed,

and that applicable rules and regulations are complied with.

This contact with the AIFM, Administrator and the other key service

providers enables the Board to monitor the Company’s progress

towards its objectives and encompasses an analysis of the risks

involved. The effectiveness of the Company’s risk management

and internal controls systems is monitored and a formal review,

utilising a detailed risk assessment programme has been

completed. This included consideration of the Administrator’s, the

Depositary and the Registrar’s internal controls report. There are no

significant findings to report from the review.

PRINCIPAL RISKS

The Directors confirm that they have carried out a robust

assessment of the principal and emerging risks facing the

Company, including those that would threaten its business

model, future performance, solvency or liquidity. The principal

risks and how they are being managed are set out in the

Strategic Report on pages 17 to 20.

RELATIONS WITH SHAREHOLDERS

The Board places great importance on communication

with Shareholders. The Company’s Investment Manager

meets with larger Shareholders and reports to the Board.

The Chairman also meets with Shareholders both with the

Investment Manager and on his own. Shareholders wishing to

communicate with the Chairman or any other Director may do

so by writing to the Company Secretary at the registered office

of the Company which is shown on page 91 or sending an

email to info@bellevuehealthcaretrust.com.

Information is provided to all Shareholders via the annual and

half-yearly accounts and also by the publication of daily NAVs

and monthly factsheets.

The Company’s Annual General Meeting provides a

forum for communication with all Shareholders. The level

of proxies lodged for each resolution is announced at

the meeting and is published on the Company website,

www.bellevuehealthcaretrust.com, subsequent to the meeting.

Shareholders and potential investors may obtain up-to-date

information on the Company from the website.

In line with governance recommendations, if 20% or more

of votes cast are against any resolution, the Company

would announce what action it intended to take to consult

Shareholders views and would provide a summary of the

outcome and actions it intended to take within six months of

the date at which the vote was held. The Board confirms that

none of the resolutions put to Shareholders at the AGM in

2022 received 20% or more of the votes cast against.

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 45

Governance

ANNUAL GENERAL MEETING

The Company seeks to provide a minimum of twenty-one days’

notice of the AGM and in normal circumstances the Company

would encourage all Shareholders to attend the AGM.

In line with the requirements of the Companies Act 2006, the

Company will hold an Annual General Meeting (“AGM”) of

Shareholders to consider the resolutions laid out in the Notice

of Meeting on page 85. The Board encourages Shareholders

to attend and participate in the Company’s forthcoming AGM

on 28 April 2023 at the offices of Stephenson Harwood LLP,

1Finsbury Circus, London EC2M 7SH.

We recognise it is not possible for everyone to attend the

AGM and I would remind Shareholders that any questions

relating to the business of the AGM can be sent by email to

info@bellevuehealthcaretrust.com.

If Shareholders are unable to attend the meeting in person,

they are strongly encouraged to vote by proxy and to appoint

the “Chairman of the AGM” as their proxy. Details of how to

vote, either electronically, by proxy form or through CREST,

can be found in the Notes to the Notice of AGM on pages 87

to 89. The lodging of a form of proxy (or an appointment of a

proxy through CREST) will not however prevent a Shareholder

from attending the AGM and voting in person if they so wish.

The Notice of Meeting sets out the business of the AGM and

any item not of an entirely routine nature is explained in the

Directors’ Report. Separate resolutions are proposed for each

substantive issue.

All other general meetings shall be convened by not less

than twenty-one days’ notice to all those members and to the

auditors unless the Company offers members an electronic

voting facility and a special resolution reducing the period

of notice to not less than fourteen days prior to the general

meeting, in which case a general meeting may be convened

by not less than fourteen days’ notice in writing. A special

resolution will be proposed at the AGM to reduce the period

of notice for general meetings, other than the AGM, to not less

than fourteen days.

EXERCISE OF VOTING POWERS AND

STEWARDSHIP CODE

The Company and the Investment Manager support the UK

Stewardship Code issued by the Financial Reporting Council.

Bellevue Healthcare Trust plc Annual Report and Accounts 202246

Directors’ Remuneration

Implementation Report

This report has been prepared in accordance with Schedule 8

of the Large and Medium-sized Companies and Groups

(Accounts and Reports) (Amendment) Regulations 2013.

Anordinary resolution for the approval of this report will be put

forward at the forthcoming AGM.

The Directors’ Remuneration Implementation Report is put

forward for approval by Shareholders on an annual basis.

Theresult of the Shareholder resolution on the Implementation

Report is non-binding on the Company, although it gives

Shareholders an opportunity to express their views, which will

be taken into account by the Board.

The Directors’ Remuneration Policy was approved by

Shareholders at the 2021 AGM. In accordance with statute,

the policy must be put to Shareholders for approval every

three years and the Board must only operate in accordance

with the approved policy during the three-year cycle,

unless Shareholder approval is sought to amend the policy.

Accordingly, unless amended, the remuneration policy will next

be put to Shareholders at the AGM to be held in 2024.

The Board has complied with the policy during the year ended

30 November 2022.

The law requires the Company’s auditor to audit certain

disclosures provided. Where disclosures are audited they are

indicated as such. The auditor’s opinion is on page 54.

REMUNERATION

The Company currently has five Non-Executive Directors.

Directors’ fees with effect from 1 December 2021, were

payable at the rate of £65,000 per annum for the Chairman of

the Board; £48,000 per annum for the Chair of the Audit and

Risk Committee and £38,000 per annum for the other Board

members. An additional £1,000 per annum was payable to

the Senior Independent Director and an additional £1,000

per annum was payable to the Chair of the Management

Engagement Committee. Net fees payable to the Directors are

settled in Ordinary Shares.

Following the year end and with effect from 1 December

2022, annual fees were increased, resulting in Directors’

fees of £67,000 per annum for the Chairman of the Board;

£49,550per annum for the Chair of the Audit and Risk

Committee and £39,250 per annum for the other Board

members. An additional £1,000 per annum is payable to

the Senior Independent Director and an additional £1,000

per annum is payable to the Chair of the Management

Engagement Committee. Net fees payable to the Directors are

settled in Ordinary Shares.

The Board believes that the level of increase and resulting

fees appropriately reflects, the level of demands on the

individual Directors that have been developing over the last

number of years, prevailing market rates for an investment

trust of the Company’s size and complexity, the increasing

complexity of regulation and resultant time spent by the

Directors on matters, and it will also enable the Company

to continue to attract appropriately experienced Directors

in the future. The increase in the Chairman and Audit and

Risk Committee Chair’s remuneration reflected the Board’s

recognition of the additional workload undertaken by them as

a result of the increase size of the Company, the increased

regulatory and reporting requirements and the consequent

increased demands on their time. The Board also takes into

consideration RPI, CPI and other inflationary measures and the

impact to the Company’s ongoing charges following a rise in

fees. Board fees are not considered against any performance

measure. The Board agreed Directors’ fees would only

increase by the level of inflation over the next two years.

Due to the size and nature of the Company, it was not

deemed necessary to use a remuneration consultant although

the Board did take into consideration views from external

search consultants on the level of the Company’s fees against

prevailing market rates, and took these into account in its

deliberations.

The Board reviews the fees payable to the Directors on an

annual basis and has agreed to align the review of Board

fees and any related changes to the Company’s year end,

as opposed to reviewing them after the year has already

commenced.

The current aggregate remuneration that can be paid to

Directors under the Company’s Articles of Association is

£500,000 per annum.

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 47

Governance

In accordance with the Shareholder Rights Directive, the

Board confirms there were no variable pay awards made to

the Directors and there were no deferral periods. The annual

percentage change in remuneration in respect of the financial

years prior to the current year in respect of each Director role

is as follows:

Financial year to

30 Nov

2019

30 Nov

2020

30 Nov

2021

30 Nov

2022

Chairman 3.1% 3% 4.5% 48.2%

Non–executive Director 4.5% 3% 4.7% 24.4%

Chair of the Audit and Risk Committee Supplement 3.8% 3% 5.8% 85.2%

Chair of the Management Engagement Committee Supplement 4.1% 3% Nil -60.0%

Senior Independent Director (“SID”) Supplement* - 100% Nil -33.3%

*The Company appointed a Senior Independent Director in 2020.

**The Company reviewed and refreshed the Committee supplement fees for the year ended 30 November 2022.

DIRECTOR SERVICE CONTRACTS

The Directors do not have service contracts with the

Company. The Directors are not entitled to compensation on

loss of office. The Directors have appointment letters which do

not provide for any specific term. However, they are subject

to re-election by Shareholders at a maximum interval of three

years. There are no restrictions on transfers of the Company’s

shares held by the Directors, or any special rights attached to

such shares.

DIRECTORS’ INDEMNITIES

Subject to the provisions of the Companies Act 2006, the

Company may indemnify any person who is a Director,

secretary or other officer (other than an auditor) of the

Company, against (a) any liability whether in connection with

any negligence, default, breach of duty or breach of trust by

him in relation to the Company or any associated company

or (b) any other liability incurred by or attaching to him in the

actual or purported execution and/or discharge of his duties

and/or the exercise or purported exercise of his powers and/

or otherwise in relation to or in connection with his duties,

powers or office; and purchase and maintain insurance for

any person who is a Director, secretary, or other officer (other

than an auditor) of the Company in relation to anything done or

omitted to be done or alleged to have been done or omitted to

be done as Director, secretary or officer.

A policy of insurance against Directors’ and officers’ liabilities is

maintained by the Company.

PERFORMANCE

The following chart shows the performance of the Company’s

share price by comparison to the MSCI World Healthcare

Index (GBP), on a total return basis.

100

120

2 Dec 16 31 May 17 30 Nov 17 31 May 18 30 Nov 18 31 May 19 30 Nov 19 31 May 20 31 May 2130 Nov 20 30 Nov 21

Total Return (%)

Bellevue Healthcare Share Price MSCI World Healthcare Index

Bellevue Healthcare Trust plc Annual Report and Accounts 202248

Directors’ Remuneration Implementation Report continued

DIRECTORS’ EMOLUMENTS FOR THE YEAR ENDED 30 NOVEMBER 2022

Fees and taxable

benefits to

30 November 2022

£’000

Fees and taxable

benefits to

30 November 2021

£’000

Randeep Grewal 66.0 46.4

Josephine Dixon 49.0 37.4

Paul Southgate 38.0 30.5

Tony Young 38.0 30.5

Kate Bolsover 38.0 12.9

Justin Stebbing* 2 30.5

Total 231.0 188.2

*resigned on 21 December 2021.

There are no other taxable benefits payable by the Company

other than certain expenses which may be deemed to be

taxable. None of the above fees were paid to third parties.

A non-binding ordinary resolution to approve the Directors’

Remuneration Implementation Report contained in the Annual

Report for the year ended 30 November 2021 was put forward

at the AGM held on 22 April 2022. The resolution was passed

with 99.91% of the proxy votes cast (including discretionary

votes) being in favour of the resolution.

A non-binding ordinary resolution to approve the Directors’

Remuneration Policy contained in the Annual Report for the

year ended 30 November 2021 was also put forward for

approval at the Company’s AGM held on 23 April 2021. The

resolution was passed with 99.91% of the proxy votes cast

(including discretionary votes) being in favour of the resolution.

The Directors’ Remuneration Policy will next be put forward for

approval at the AGM to be held in 2024.

RELATIVE IMPORTANCE OF SPEND ON PAY

The following table sets out the total level of Directors’ remuneration compared to the distributions to Shareholders by way of

dividends and share buybacks, and the management fees and other expenses incurred by the Company.

Year ended 30 November 2022 2022

£’000

2021

£’000

Income 2,186 4,265

Directors’ fees 231 188

Management fees and other expenses 10,456 10,838

Dividends paid and payable to Shareholders 36,780 33,876

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 49

Governance

DIRECTORS’ HOLDINGS (AUDITED)

The Directors held the following shareholdings at 30 November 2022 and as at the date of this report. Net fees payable to the

Directors, are settled in Ordinary Shares quarterly.

The Directors had the following shareholdings in the Company, all of which are beneficially owned.

Ordinary

Shares as at

30 November

2022

Ordinary

Shares as at

date of this

report

Ordinary

Shares as at

30 November

2021

Randeep Grewal 119,693 125,921 97,247

Josephine Dixon 98,466 102,286 84,489

Paul Southgate 83,084 85,724 73,041

Tony Young 20,018 22,658 9,507

Kate Bolsover 14,232 16,872 3,116

STATEMENT

On behalf of the Board and in accordance with Part 2 of

Schedule 8 of the Large and Medium-sized Companies and

Groups (Accounts and Reports) (Amendment) Regulations

2013, I confirm that the above Report on Remuneration Policy

and Remuneration Implementation summarises, as applicable,

for the financial year to 30 November 2022;

the major decisions on Directors’ remuneration;

any substantial changes relating to Directors’ remuneration

made during the financial year to 30 November 2022; and

the context in which the changes occurred and decisions

have been taken.

Randeep Grewal

Chairman

3 March 2023

Bellevue Healthcare Trust plc Annual Report and Accounts 202250

Report of the Audit and

Risk Committee

ROLE OF THE AUDIT AND RISK

COMMITTEE

The Audit and Risk Committee meets formally at least

twice a year for the purpose, amongst other things, of

considering the appointment, independence and objectivity,

and remuneration of the auditor and to review the annual

accounts and half-yearly financial report. The Audit and Risk

Committee also reviews the Company’s internal financial

controls and its internal control and risk management systems.

Where non-audit services are provided by the auditor, full

consideration of the financial and other implications on

the independence of the auditor arising from any such

engagement are considered before proceeding.

COMPOSITION

All of the Directors of the Company are members of the

Audit and Risk Committee. The Audit and Risk Committee

has formal written terms of reference and copies of these

are available on the Company’s website or on request from

the Company Secretary. The Audit and Risk Committee as

a whole has recent and relevant financial experience. The

UK Code recommends that the Chairman of the Board

should not be a member of the Audit and Risk Committee.

However, as permitted by the AIC Code, the Directors

believe that membership of the Audit and Risk Committee

of the independent Chair of the Board, Randeep Grewal is

appropriate, and welcome his contribution.

INTERNAL AUDIT

The Audit and Risk Committee has considered the need for an

internal audit function and considers that this is not appropriate

given the nature and circumstances of the Company. The

Audit and Risk Committee keeps the needs for an internal

audit function under periodic review.

MEETINGS

There have been three Audit and Risk Committee meetings in

the year to 30 November 2022. Meeting attendance is shown

on page 43 of this Annual Report. Meetings held during the

year have continued to be held via a combination of in-person

and remote means, such as video conferencing. Committee

members have operated effectively and there has been no

break in service from the Company’s service providers.

INTERNAL CONTROLS AND RISK

MANAGEMENT

The Directors have a dynamic risk register in place to help

identify key risks and ensure there are measures in place

to manage and mitigate risk; and oversee the effectiveness

of internal controls and processes. The risk assessment

programme provides a visual reflection of the Company’s

identified principal and emerging risks, including climate

change and the war in Ukraine and their potential impact on

the Company’s future development and prospects. The risk

assessment programme also provides the mitigation measures

which key service providers, including the Investment

Manager, have in place to maintain operational resilience and

business continuity. The Audit and Risk Committee carries

out, at least annually, a robust assessment of the principal and

emerging risks and uncertainties and monitors the risks on an

ongoing basis.

The Board has overall responsibility for the Company’s

risk management and systems of internal controls and

for reviewing their effectiveness. As is the case with most

investment trusts, the investment management, accounting,

company secretarial, registrar and depositary services have

been delegated to third parties. The effectiveness of the

internal controls is assessed on a continuing basis and the

Committee receives regular reports. The Committee is satisfied

that internal controls and processes remained satisfactory, and

that appropriate systems are in place.

FINANCIAL STATEMENTS AND

SIGNIFICANT ACCOUNTING MATTERS

The Audit and Risk Committee reviewed the financial

statements and considered the following significant accounting

issues in relation to the Company’s financial statements for the

year ended 30 November 2022.

VALUATION AND EXISTENCE OF

INVESTMENTS

The Company holds the majority of its assets in quoted

investments. The valuation and existence of these investments

is the most material matter in the production of the financial

statements. Investments are valued using independent

pricing sources and the holding quantities at the year end

were agreed to the Depositary’s records. The Audit and Risk

Committee has reviewed the Administrator’s procedures

in place for ensuring accurate valuation and existence of

investments and is comfortable that these are appropriate.

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 51

Governance

RECOGNITION OF INCOME

The Audit and Risk Committee has reviewed the

Administrator’s procedures for recognition of income and is

comfortable that these are appropriate. The Audit and Risk

Committee reviews the treatment of any special dividends

receivable in the period to ensure that these have been

treated appropriately as revenue or capital. During the year no

special dividends were received by the Company. Revenue

recognition accounting policy are disclosed page 67 of this

Annual Report.

COVID-19 AND GEO-POLITICS

The Russian invasion of Ukraine at the beginning of this year,

and the subsequent hike in global energy prices has further

shaken a fragile investment environment. During the year, the

Board has paid particular attention to the sensitivity of income

received from investee companies to volatility in the Sterling/

USD foreign exchange rate. Committee members have also

sought reassurance that external providers were not in breach

of sanctions implemented against Russia following the invasion

of Ukraine.

EUROPEAN SINGLE ELECTRONIC FORMAT

(“ESEF”)

The ESEF regulations which require the Company to publish

their annual financial statements in a common electronic

format apply to the Company for this accounting year ended

30 November 2022.

MATTERS CONSIDERED IN THE YEAR

The UK Corporate Governance Code requires the Company

to describe any significant issues considered in relation to the

financial statements and how those issues were addressed.

While there were no significant issues, two matters of

particular focus at the balance sheet date were the Company’s

Annual Redemption facility and the implementation of the

Company’s share buyback programme. Both events were

discussed in detail by the Committee, with support from the

Company’s service providers and reporting included in the

year end auditor’s report. No issues were discovered.

GOING CONCERN AND VIABILITY

STATEMENTS

Having reviewed the Company’s financial position, liabilities,

principal/emerging risks and uncertainties, the Committee

recommended to the Directors that it was appropriate for the

Directors to prepare the financial statements on the going

concern basis. The viability and going concern statements can

be found on pages 21 and 38 to 39 respectively.

AUDIT TENURE

Ernst & Young LLP has been appointed as the Company’s

auditor since the Company’s launch in October 2016 following

a competitive process and review of the auditor’s credentials.

The re-appointment of the external auditor will be reviewed

annually by the Audit and Risk Committee and the Board and

is subject to approval by Shareholders. In accordance with the

FRC guidance, the audit will be put out to tender within ten

years of the initial appointment of Ernst & Young LLP.

In accordance with auditor rotation best practice, the previous

Audit Partner, James Beszant was replaced by Ahmer Huda

for the year ended 30 November 2022. The appointment

of the auditor is reviewed annually by the Audit and Risk

Committee and the Board and is subject to approval by

Shareholders.

PROVISION OF NON-AUDIT SERVICES

The Audit and Risk Committee has put a policy in place on

the supply of any non-audit services provided by the external

auditor. Such services are considered on a case-by-case

basis and may only be provided to the Company if the

provision of such services is at a reasonable and competitive

cost and does not constitute a conflict of interest or potential

conflict of interest which would prevent the auditor from

remaining objective and independent.

No non-audit fees were payable to the Auditor in the year

ended 30 November 2022 (2021: Nil).

The audit fees (excluding VAT) incurred during the year

amounted to £50,500 (2021: £45,000). These fees represent

an increase over the prior year. The Committee reviewed

the audit fees being paid by similar comparative companies

and concluded that the increase is in line with audit fee

rises experienced across the investment trust sector. Audit

firms generally have increased the fees that they charge to

investment trusts in order to reflect the increased level of work

that they have been required to perform, in the context of

more rigorous levels of audit scrutiny and regulation.

Bellevue Healthcare Trust plc Annual Report and Accounts 202252

AUDITOR INDEPENDENCE

The Audit and Risk Committee considered the independence

of the auditor and the objectivity of the audit process and is

satisfied that Ernst & Young LLP has fulfilled its obligations to

Shareholders and as independent auditor to the Company

for the year. I spoke to Ahmer Huda and his team during the

year to discuss feedback from the external audit and am

pleased to report that no significant issues arose during the

process. The Committee is satisfied that Ernst & Young LLP

has provided effective independent challenge in carrying out

its responsibilities.

After due consideration, the Audit and Risk Committee

recommends the re-appointment of Ernst & Young LLP and

their re-appointment will be put forward to the Company’s

Shareholders at the 2023 AGM.

CONCLUSION WITH RESPECT TO THE

ANNUAL REPORT AND FINANCIAL

STATEMENTS

The Audit and Risk Committee has concluded that the Annual

Report for the year ended 30 November 2022, taken as a

whole, is fair, balanced and understandable and provides

the information necessary for Shareholders to assess the

Company’s business model, strategy and performance. The

Audit and Risk Committee has reported its conclusions to the

Board of Directors. The Audit and Risk Committee reached

this conclusion through a process of review of the document

and enquiries to the various parties involved in the production

of the annual report.

Josephine Dixon

Audit and Risk Committee Chair

3 March 2023

Report of the Audit and Risk Committee continued

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 53

Governance

Statement of Directors’ Responsibilities

The Directors are responsible for preparing the Annual Report

and the financial statements in accordance with applicable

laws and regulations.

Company law requires the Directors to prepare accounts

for each financial year. Under that law the Directors have

elected to prepare the financial statements under UK adopted

International Accounting Standards. Under company law the

Directors must 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 as at the end of the year and

of the net return for the year. In preparing these accounts, the

Directors are required to:

select suitable accounting policies in accordance with IAS

8 Accounting Policies, Changes in Accounting Estimates

and Errors and then apply them consistently;

present information, including accounting policies, in a

manner that provides relevant, reliable, comparable and

understandable information

make judgements and estimates which are reasonable and

prudent;

state whether UK adopted International Accounting

Standards have been followed, subject to any material

departures disclosed and explained in the accounts; and

prepare the financial statements on a going concern basis

unless it is inappropriate to presume that the Company will

continue in business.

The Directors are responsible for keeping adequate

accounting records that are sufficient to show and explain the

Company’s transactions and which disclose with reasonable

accuracy at any time the financial position of the Company.

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 accounts are published on the Company’s website at

www.bellevuehealthcaretrust.com, which is maintained by

the Company’s Investment Manager. The work carried out by

the auditor does not involve consideration of the maintenance

and integrity of these websites and, accordingly, the auditor

accepts no responsibility for any changes that have occurred

to the accounts since being initially presented on the website.

Legislation in the United Kingdom governing the preparation

and dissemination of financial statements may differ from

legislation in other jurisdictions.

DIRECTORS’ CONFIRMATION STATEMENT

The Directors each confirm to the best of their knowledge that:

the accounts, prepared in accordance with UK adopted

International Accounting Standards, give a true and fair

view of the assets, liabilities, financial position and profit of

the Company; and

this Annual Report includes a fair review of the

development and performance of the business and

position of the Company, together with a description of the

principal risks and uncertainties that it faces.

Having taken advice from the Audit and Risk Committee,

the Directors consider that the Annual Report and

financial statements taken as a whole is fair, balanced and

understandable and provides the information necessary

for Shareholders to assess the Company’s performance,

business model and strategy. For and on behalf of the Board.

Randeep Grewal

Chairman

3 March 2023

Bellevue Healthcare Trust plc Annual Report and Accounts 202254

Independent Auditor’s Report

OPINION

We have audited the financial statements of Bellevue

Healthcare Trust PLC (the ‘Company’) for the year ended

30 November 2022 which comprise the Statement of

Comprehensive Income, the Statement of Financial Position,

the Statement of Changes in Equity, the Statement of Cash

Flows and the related notes 1 to 19, including a summary

of significant accounting policies. The financial reporting

framework that has been applied in their preparation is

applicable law and UK adopted International Accounting

Standards.

In our opinion, the financial statements:

give a true and fair view of the Company’s affairs as at

30November 2022 and of its loss for the year then ended;

have been properly prepared in accordance with UK

adopted International Accounting Standards; and

have been prepared in accordance with the requirements

of the Companies Act 2006.

BASIS FOR OPINION

We conducted our audit in accordance with International

Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our

responsibilities under those standards are further described

in the Auditor’s responsibilities for the audit of the financial

statements section of our report. We believe that the audit

evidence we have obtained is sufficient and appropriate to

provide a basis for our opinion.

INDEPENDENCE

We are independent of the Company in accordance with

the ethical requirements that are relevant to our audit of the

financial statements in the UK, including the FRC’s Ethical

Standard as applied to listed public interest entities, and we

have fulfilled our other ethical responsibilities in accordance

with these requirements.

The non-audit services prohibited by the FRC’s Ethical

Standard were not provided to the Company and we remain

independent of the Company in conducting the audit.

CONCLUSIONS RELATING TO GOING

CONCERN

In auditing the financial statements, we have concluded that

the Directors’ use of the going concern basis of accounting

in the preparation of the financial statements is appropriate.

Our evaluation of the Directors’ assessment of the Company’s

ability to continue to adopt the going concern basis of

accounting included:

Confirmation of our understanding of the Company’s

going concern assessment process and engaging with

the Directors and the Company Secretary to determine if

all key factors were considered in their assessment. We

considered whether the factors taken account of in the

Directors’ assessment addressed those matters which we

considered important.

Inspection of the Directors’ assessment of going concern,

including the revenue and expense forecast, for the period

to 3 March 2024 which is at least twelve months from

the date these financial statements were authorised for

issue. In preparing the revenue and expense forecast, the

Company has concluded that it is able to continue to meet

its ongoing costs as they fall due.

Reviewing of the factors and assumptions, including the

impact of the current economic environment and other

significant events that could give rise to market volatility,

as applied to the revenue and expense forecast. We

considered the appropriateness of the methods used to

calculate the forecast and determined, through testing

of the methodology and calculations, that the methods,

inputs and assumptions utilised were appropriate to be

able to make an assessment of going concern for the

Company.

Consideration of the mitigating factors included in the

revenue and expense forecast that are within the control

of the Company, including a review of the Company’s

assessment of the liquidity of investments held and

evaluating the Company’s ability to sell investments in

order to cover the working capital requirements should its

revenue decline significantly. Reviewing of the Director’s

assessment of the impact on going concern in respect of

the annual redemption facility.

In relation to the Company’s borrowing arrangements,

assessing the risk of breaching the debt covenants as

a result of a reduction in the value of the Company’s

portfolio. We calculated the Company’s compliance with

debt covenants and reviewed reverse stress testing in

order to identify what factors would lead to the Company

breaching the financial covenants. Reviewing the

Company’s going concern disclosures included in the

annual report in order to assess whether the disclosures

were appropriate and in conformity with the reporting

standards.

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 55

Governance

Based on the work we have performed, we have not identified

any material uncertainties relating to events or conditions that,

individually or collectively, may cast significant doubt on the

Company’s ability to continue as a going concern for a period

to 3 March 2024, which is at least twelve months from when

the financial statements are authorised for issue.

In relation to the Company’s reporting on how they have

applied the UK Corporate Governance Code, we have nothing

material to add or draw attention to in relation to the Directors’

statement in the financial statements about whether the

Directors considered it appropriate to adopt the going concern

basis of accounting.

Our responsibilities and the responsibilities of the Directors

with respect to going concern are described in the relevant

sections of this report. However, because not all future

events or conditions can be predicted, this statement is not a

guarantee as to the Company’s ability to continue as a going

concern.

OVERVIEW OF OUR AUDIT APPROACH

Key audit matters • Risk of incomplete or inaccurate revenue recognition, including the classification of special

dividends as revenue or capital items in the Statement of Comprehensive Income

• Risk of incorrect valuation or ownership of the investment portfolio

Materiality • Overall materiality of £10.04m which represents 1% of the Company’s Net Asset Value

AN OVERVIEW OF THE SCOPE OF OUR

AUDIT

Tailoring the scope

Our assessment of audit risk, our evaluation of materiality and

our allocation of performance materiality determine our audit

scope for the Company. This enables us to form an opinion on

the financial statements. We take into account size, risk profile,

the organisation of the Company and effectiveness of controls,

the potential impact of climate change and changes in the

business environment when assessing the level of work to be

performed. All audit work was performed directly by the audit

engagement team.

Climate change

Stakeholders are increasingly interested in how climate change

will impact the Company. The Company has determined that

the impact of climate change could affect the Company’s

investments and their valuations and potentially shareholder

returns. These are explained on page 20 in the principal

and emerging risks section, which form part of the “Other

information,” rather than the audited Financial Statements. Our

procedures on these disclosures therefore consisted solely of

considering whether they are materially inconsistent with the

Financial Statements, or our knowledge obtained in the course

of the audit or otherwise appear to be materially misstated.

Our audit effort in considering climate change was focused on

the adequacy of the Company’s disclosures in the Financial

Statements as set out in Note 2 and the conclusion that

there was no further impact of climate change to be taken

into account. In line with UK adopted International Accounting

Standards investments are valued at fair value, which for the

Company are quoted bid prices for investments in active

markets at the balance sheet date. All investments therefore

reflect the market participants view of climate change risk on

the investments held by the Company. We also challenged

the Directors’ considerations of climate change in their

assessment of viability and going concern and associated

disclosures. Based on our work we have not identified the

impact of climate change on the financial statements to be a

key audit matter or to impact a key audit matter.

Key audit matters

Key audit matters are those matters that, in our professional

judgment, were of most significance in our audit of the

financial statements of the current period and include the

most significant assessed risks of material misstatement

(whether or not due to fraud) that we identified. These matters

included those which had the greatest effect on: the overall

audit strategy, the allocation of resources in the audit; and

directing the efforts of the engagement team. These matters

were addressed in the context of our audit of the financial

statements as a whole, and in our opinion thereon, and we do

not provide a separate opinion on these matters.

Bellevue Healthcare Trust plc Annual Report and Accounts 202256

Risk Our response to the risk

Key observations communicated to

the Audit and Risk Committee

Risk of incomplete or inaccurate

revenue recognition, including the

classification of special dividends

as revenue or capital items in the

Statement of Comprehensive Income

Refer to the Report of the Audit and

Risk Committee (page 51); Accounting

policies (page 67); and note 5 of the

Financial Statements

The Company has reported investment

income for the year ended 30 November

2022 of £1.90m (2021: £4.27m),

consisting of dividend income from

listed equity investments.

There is a risk of incomplete or

inaccurate recognition of revenue

through the failure to recognise proper

income entitlements or to apply an

appropriate accounting treatment.

In addition to the above, the Directors

are required to exercise judgement in

determining whether income receivable

in the form of special dividends should

be classified as ‘revenue’ or ‘capital’

in the Statement of Comprehensive

Income.

The Company did not receive any

special dividends during the year (2021:

none).

We performed the following

procedures:

• Walked through the revenue

recognition and classification of

special dividends processes and

obtained an understanding of the

design and implementation of the

controls.

• For all dividends received and

accrued, we recalculated the

dividend income by multiplying

the investment holdings at the

ex-dividend date, traced from the

accounting records, by the dividend

rate per share, which was agreed

to an independent data vendor. We

agreed amounts received to bank

statements and where applicable,

agreed the exchange rates to an

external source.

• We reviewed the investee company

announcement to assess whether

the dividend obligation arose prior

to 30 November 2022. We did not

identify any dividends which needed

to be accrued as at the year-end.

• To test completeness of recorded

income, for a sample of investee

companies, we verified that

expected dividends during the year

had been recorded as income with

reference to investee company

announcements obtained from an

independent data vendor.

• For a sample of investments held

during the year, we reviewed the

type of dividends paid with reference

to an external data source to identify

those which were special.

• Through enquiry we confirmed

with management that no special

dividends had been received during

the year. Our procedures did not

identify any special dividends.

The results of our procedures identified

no material misstatement in relation

to the risk of incomplete or inaccurate

revenue recognition, including incorrect

classification of special dividends as

revenue or capital in the Statement of

Comprehensive Income.

Independent Auditor’s Report continued

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 57

Governance

Risk Our response to the risk

Key observations communicated to

the Audit and Risk Committee

Risk of incorrect valuation or

ownership of the investment portfolio

Refer to the Report of the Audit and

Risk Committee (page 50); Accounting

policies (page 67); and note 4 of the

Financial Statements.

The Company’s investment portfolio

consists of listed equity investments

valued at £1,043.35m at 30 November

2022 (2021: £1,083.60m).

The valuation of the assets held in the

investment portfolio is the key driver of

the Company’s net asset value and total

return. Incorrect investment pricing or

a failure to maintain proper legal title of

the assets held by the Company could

have a significant impact on the portfolio

valuation and the return generated for

shareholders.

The fair value of listed investments is

determined using quoted market bid

prices at close of business on the

reporting date.

We performed the following

procedures:

• Walked through the investment

valuation and legal title process

to obtain an understanding of the

design and implementation of the

controls.

• For all investments in the portfolio,

we compared the market prices

and exchange rates applied to

an independent pricing vendor

and recalculated the investment

valuations as at the year-end.

• We inspected the stale pricing report

produced by the Administrator to

identify prices that have not changed

and verified whether the listed price

is a valid fair value through review of

trading activity.

• We compared the Company’s

investment holdings at 30 November

2022 to independent confirmation

received directly from the Company’s

Custodian.

The results of our procedures identified

no material misstatement in relation

to the risk of incorrect valuation or

ownership of the investment portfolio.

OUR APPLICATION OF MATERIALITY

We apply the concept of materiality in planning and performing

the audit, in evaluating the effect of identified misstatements

on the audit and in forming our audit opinion.

Materiality

The magnitude of an omission or misstatement that,

individually or in the aggregate, could reasonably be

expected to influence the economic decisions of the users

of the financial statements. Materiality provides a basis for

determining the nature and extent of our audit procedures.

We determined materiality for the Company to be £10.04

million (2021: £10.33 million), which is 1% (2021: 1%) of the

Company’s Net Asset Value. We believe that Net Asset Value

provides us with the most important financial metric on which

shareholders would judge the performance of the Company.

Performance materiality

The application of materiality at the individual account

or balance level. It is set at an amount to reduce to an

appropriately low level the probability that the aggregate

of uncorrected and undetected misstatements exceeds

materiality.

On the basis of our risk assessments, together with our

assessment of the Company’s overall control environment,

our judgement was that performance materiality was 75%

(2021: 75%) of our planning materiality, namely £7.53m

(2021: £7.75m). We have set performance materiality at

this percentage due to our past experience of the audit that

indicates a lower risk of misstatements, both corrected and

uncorrected.

Given the importance of the distinction between revenue and

capital for investment trusts, we have also applied a separate

testing threshold for the revenue column of the Statement of

Comprehensive Income of £0.50m (2021: £0.52m) being the

greater of the reporting threshold and 5% of the net revenue

return on ordinary activities before taxation.

Bellevue Healthcare Trust plc Annual Report and Accounts 202258

Reporting threshold

An amount below which identified misstatements are

considered as being clearly trivial.

We agreed with the Audit and Risk Committee that we would

report to them all uncorrected audit differences in excess

of £0.50m (2021: £0.52m), which is set at 5% of planning

materiality, as well as differences below that threshold that, in

our view, warranted reporting on qualitative grounds.

We evaluate any uncorrected misstatements against both the

quantitative measures of materiality discussed above and in

light of other relevant qualitative considerations in forming our

opinion.

OTHER INFORMATION

The other information comprises the information included in

the annual report set out on pages 1 to 53, other than the

financial statements and our auditor’s report thereon. The

Directors are responsible for the other information contained

within the annual report.

Our opinion on the financial statements does not cover the

other information and, except to the extent otherwise explicitly

stated in this report, we do not express any form of assurance

conclusion thereon.

Our responsibility is to read the other information and, in

doing so, consider whether the other information is materially

inconsistent with the financial statements or our knowledge

obtained in the course of the audit or otherwise appears

to be materially misstated. If we identify such material

inconsistencies or apparent material misstatements, we are

required to determine whether this gives rise to a material

misstatement in the financial statements themselves. If, based

on the work we have performed, we conclude that there is a

material misstatement of the other information, we are required

to report that fact.

We have nothing to report in this regard.

OPINIONS ON OTHER MATTERS

PRESCRIBED BY THE COMPANIES ACT

2006

In our opinion the part of the Directors’ remuneration report to

be audited has been properly prepared in accordance with the

Companies Act 2006.

In our opinion, based on the work undertaken in the course of

the audit:

the information given in the Strategic Report and the

Directors’ Report for the financial year for which the

financial statements are prepared is consistent with the

financial statements; and

the Strategic Report and Directors’ Report have been

prepared in accordance with applicable legal requirements.

MATTERS ON WHICH WE ARE REQUIRED

TO REPORT BY EXCEPTION

In the light of the knowledge and understanding of the

Company and its environment obtained in the course of the

audit, we have not identified material misstatements in the

Strategic Report or Directors’ Report.

We have nothing to report in respect of the following matters

in relation to which the Companies Act 2006 requires us to

report to you if, in our opinion:

adequate accounting records have not been kept, or

returns adequate for our audit have not been received from

branches not visited by us; or

the financial statements and the part of the Directors’

Remuneration Report to be audited are not in agreement

with the accounting records and returns; or

certain disclosures of Directors’ remuneration specified by

law are not made; or

we have not received all the information and explanations

we require for our audit.

Independent Auditor’s Report continued

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 59

Governance

CORPORATE GOVERNANCE STATEMENT

We have reviewed the Directors’ statement in relation to going

concern, longer-term viability and that part of the Corporate

Governance Statement relating to the Company’s compliance

with the provisions of the UK Corporate Governance Code

specified for our review by the Listing Rules.

Based on the work undertaken as part of our audit, we

have concluded that each of the following elements of the

Corporate Governance Statement is materially consistent with

the financial statements or our knowledge obtained during the

audit:

Directors’ statement with regards to the appropriateness of

adopting the going concern basis of accounting and any

material uncertainties identified set out on page 38;

Directors’ explanation as to its assessment of the

Company’s prospects, the period this assessment covers

and why the period is appropriate set out on page 39;

Directors’ statement on whether it has a reasonable

expectation that the Company will be able to continue in

operation and meets its liabilities set out on page 39;

Directors’ statement on fair, balanced and understandable

set out on page 52;

Board’s confirmation that it has carried out a robust

assessment of the emerging and principal risks set out on

page 50;

The section of the annual report that describes the review

of effectiveness of risk management and internal control

systems set out on page 50; and

The section describing the work of the Audit and Risk

Committee set out on page 50.

RESPONSIBILITIES OF DIRECTORS

As explained more fully in the Statement of Directors’

responsibilities set out on page 50, the Directors are

responsible for the preparation of the financial statements and

for being satisfied that they give a true and fair view, and for

such internal control as the Directors determine is necessary

to enable the preparation of financial statements that are free

from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are

responsible for assessing the Company’s ability to continue

as a going concern, disclosing, as applicable, matters

related to going concern and using the going concern basis

of accounting unless the Directors either intend to liquidate

the Company or to cease operations, or have no realistic

alternative but to do so.

AUDITOR’S RESPONSIBILITIES FOR THE

AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about

whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error, and

to issue an auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is

not a guarantee that an audit conducted in accordance with

ISAs (UK) will always detect a material misstatement when it

exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they

could reasonably be expected to influence the economic

decisions of users taken on the basis of these financial

statements.

Explanation as to what extent the audit was

considered capable of detecting irregularities,

including fraud

Irregularities, including fraud, are instances of non-

compliance with laws and regulations. We design procedures

in line with our responsibilities, outlined above, to detect

irregularities, including fraud. The risk of not detecting a

material misstatement due to fraud is higher than the risk of

not detecting one resulting from error, as fraud may involve

deliberate concealment by, for example, forgery or intentional

misrepresentations, or through collusion. The extent to

which our procedures are capable of detecting irregularities,

including fraud is detailed below.

However, the primary responsibility for the prevention and

detection of fraud rests with both those charged with

governance of the Company and management.

We obtained an understanding of the legal and regulatory

frameworks that are applicable to the Company and

determined that the most significant are UK adopted

International accounting standards, the Companies Act

2006, AIC SORP, the Listing Rules, the UK Corporate

Governance Code, Section 1158 of the Corporation Tax

Act 2010 and The Companies (Miscellaneous Reporting)

Regulations 2018.

We understood how the Company is complying with those

frameworks through discussions with the Audit and Risk

Committee and Company Secretary and review of Board

minutes.

Bellevue Healthcare Trust plc Annual Report and Accounts 202260

We assessed the susceptibility of the Company’s financial

statements to material misstatement, including how fraud

might occur by considering the key risks impacting the

financial statements. We identified a fraud risk with respect

to the incomplete or inaccurate revenue recognition

through incorrect classification of special dividends

as revenue or capital items. Further discussion of our

approach is set out in the section on key audit matters

above.

Based on this understanding we designed our audit

procedures to identify non-compliance with such laws

and regulations. Our procedures involved review of the

Company Secretary’s reporting to the Directors with

respect to the application of the documented policies

and procedures and review of the financial statements to

ensure compliance with the reporting requirements of the

Company.

A further description of our responsibilities for the audit

of the financial statements is located on the Financial

Reporting Council’s website at https://www.frc.org.uk/

auditorsresponsibilities. This description forms part of our

auditor’s report.

OTHER MATTERS WE ARE REQUIRED TO

ADDRESS

Following the recommendation from the Audit and Risk

Committee, we were appointed by the Company on

27 November 2017 to audit the financial statements for

the period ended 30 November 2017 and subsequent

financial periods.

The period of total uninterrupted engagement including

previous renewals and reappointments is 6 years, covering

the years ending 30 November 2017 to 30 November

2022.

The audit opinion is consistent with the additional report to

the Audit and Risk Committee.

USE OF OUR REPORT

This report is made solely to the Company’s members, as

a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken so

that we might state to the Company’s members those matters

we are required to state to them in an auditor’s report and for

no other purpose. To the fullest extent permitted by law, we

do not accept or assume responsibility to anyone other than

the Company and the Company’s members as a body, for our

audit work, for this report, or for the opinions we have formed.

Ahmer Huda (Senior statutory auditor)

for and on behalf of Ernst & Young LLP, Statutory Auditor

London

3 March 2023

Independent Auditor’s Report continued

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 61

Strategic Report

Financial Statements

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 61

Bellevue Healthcare Trust plc Annual Report and Accounts 202262

Statement of Comprehensive Income

for the year ended 30 November 2022

Year ended 30 November 2022 Year ended 30 November 2021

Note

Revenue

£’000

Capital

£’000

Total

£’000

Revenue

£’000

Capital

£’000

Total

£’000

(Losses)/gains on investments 4 - (19,980) (19,980) - 98,796 98,796

Losses on currency movements - (9,839) (9,839) - (3,805) (3,805)

Net investment (losses)/gains - (29,819) (29, 819) - 94,991 94,991

Income 5 2,186 - 2,186 4,265 - 4,265

Total income 2,186 (29,819) (27,633) 4,265 94,991 99,256

Investment management fees 6 (1,877) (7,510) (9,387) (1,923) (7,691) (9,614)

Other expenses 7 (1,069) - (1,069) (1,224) - (1,224)

(Loss)/profit before finance costs and taxation (760) (37,329) (38,089) 1,118 87,300 88,418

Finance costs 8 (610) (2,440) (3,050) (102) (407) (509)

Operating (loss)/profit before taxation (1,370) (39,769) (41,139) 1,016 86,893 87,909

Taxation 9 (285) - (285) (659) - (659)

(Loss)/profit for the year (1,655) (39,769) (41,424) 357 86,893 87,250

Return per Ordinary Share 10 (0.28)p (6.84)p (7.12)p 0.07p 16.44p 16.51p

There is no other comprehensive income and therefore the ‘(Loss)/profit for the year’ is the total comprehensive income for the year.

The total column of the above statement is the statement of comprehensive income of the Company. The supplementary revenue and capital

columns, including the earnings per Ordinary Shares, are prepared under guidance from the Association of Investment Companies.

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

The notes on pages 66 to 80 form and integral part of these financial statements.

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 63

Financial Statements

Statement of Financial Position

as at 30 November 2022

Note

30 November 2022

£’000

30 November 2021

£’000

Non-current assets

Investments held at fair value through profit or loss 4 1,043,349 1,083,590

Current assets

Cash and cash equivalents 46,368 27,994

Sales for future settlement 855 -

Other receivables 11 392 167

47,615 28,161

Total assets 1,090,964 1,111,751

Current liabilities

Purchases for future settlement (1,395) (9,326)

Bank loans payable 12 (83,731) (67,850)

Other payables 13 (1,512) (1,108)

Total liabilities (86,638) (78,284)

Net assets 1,004,326 1,033,467

Equity

Share capital 14 5,881 5,602

Share premium account 617,371 568,910

Special distributable reserve 28,347 64,392

Capital reserve 354,017 393,786

Revenue reserve (1,290) 777

Total equity 1,004,326 1,033,467

Net asset value per Ordinary Share 16 171.16p 184.91p

Approved by the Board of Directors on and authorised for issue on 3 March 2023 and signed on their behalf by:

Randeep Grewal

Chairman

Registered in England and Wales with registered number 10415235.

The notes on pages 66 to 80 form and integral part of these financial statements.

Bellevue Healthcare Trust plc Annual Report and Accounts 202264

Statement of Changes in Equity

for the year ended 30 November 2022

Notes

Capital

£’000

premium

account

£’000

Special

distributable

reserve

£’000

Capital

reserve

£’000

Revenue

reserve

£’000

Total

£’000

Opening balance as at 01 December 2021 5,602 568,910 64,804 393,786 365 1,033,467

Loss for the year - - - (39,769) (1,655) (41,424)

Issue of Ordinary Shares 14 279 48,887 - - - 49,166

Ordinary Share issue costs - (426) - - - (426)

Dividend paid 15 - - (36,457) - (36,457)

Closing balance as at 30 November 2022 5,881 617,371 28,347 354,017 (1,290) 1,004,326

for the year ended 30 November 2021

Notes

Capital

£’000

premium

account

£’000

Special

distributable

reserve

£’000

Capital

reserve

£’000

Revenue

reserve

£’000

Total

£’000

Opening balance as at 01 December 2020 4,900 437,213 93,676 306,893 420 843,102

Prior year dividends reallocation - - 412 - (412) -

Profit for the year - - - 86,893 357 87,250

Issue of Ordinary Shares 14 702 132,562 - - - 133,264

Ordinary Share issue costs - (865) - - - (865)

Dividend paid 15 - - (29,284) - - (29,284)

Closing balance as at 30 November 2021 5,602 568,910 64,804 393,786 365 1,033,467

The Company’s distributable reserves consist of the special distributable reserve, capital reserve attributable to realised profit and revenue reserve.

The Company can use its distributable reserves to fund dividends, redemptions of Ordinary Shares and share buy backs.

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 65

Financial Statements

Statement of Cash Flows

for the year ending 30 November 2022

Year ended

30 November 2022

£’000

Year ended

30 November 2021

£’000

Operating activities Cash flows

Income* 2,186 4,425

Management expenses (10,794) (10,649)

Taxation (285) (659)

Net cash flow used in operating activities (8,893) (6,883)

Investing activities Cash flows

Purchase of investments (599,039) (864,728)

Sale of investments 610,527 640,120

Net cash flow from/(used in) investing activities 11,488 (224,608)

Financing activities Cash flows

Bank loans drawn 45,174 65,663

Bank loans repaid (44,885) -

Finance costs paid (2,546) (465)

Dividend paid (36,457) (29,284)

Proceeds from issue of Ordinary Shares 49,166 133,264

Ordinary Share issue costs (426) (865)

Net cash flow from financing activities 10,026 168,313

Increase/(decrease) in cash and cash equivalents 12,621 (63,178)

Cash and cash equivalents at start of year 27,994 92,789

Effect of foreign currency movements 5,753 (1,617)

Cash and cash equivalents at end of year 46,368 27,994

* Cash inflow from dividends for the financial year was £1,618,000 (2021: £3,764,000). Bank deposits interest income received during the year was

£283,000 (2021: £nil).

The table below shows the movement in borrowings during the year.

Year ended

30 November 2022

£’000

Year ended

30 November 2021

£’000

Opening balance 67,850 -

Repayment of bank loans (44,885) -

Proceeds from bank loans drawn 45,174 65,663

Foreign exchange movements 15,592 2,187

Closing balance 83,731 67,850

The notes on pages 66 to 80 form and integral part of these financial statements.

66 Bellevue Healthcare Trust plc Annual Report and Accounts 2022

1. REPORTING ENTITY

Bellevue Healthcare Trust plc, formerly BB Healthcare Trust plc, is a closed-ended investment company, registered in

England and Wales on 7 October 2016. The Company’s registered office is 6th Floor, 125 London Wall, London, EC2Y 5AS.

Business operations commenced on 2 December 2016 when the Company’s Ordinary Shares were admitted to trading on

the London Stock Exchange. The financial statements of the Company are presented for the year from 1 December 2021 to

30November2022.

The Company invests in a concentrated portfolio of listed or quoted equities in the global healthcare industry. The Company

may also invest in American Depositary Receipts (ADRs), or convertible instruments issued by such companies and may invest

in, or underwrite, future equity issues by such companies. The Company may utilise contracts for differences for investment

purposes in certain jurisdictions where taxation or other issues in those jurisdictions may render direct investment in listed or

quoted equities less effective.

2. BASIS OF PREPARATION

Statement of compliance

These financial statements have been prepared in accordance with UK adopted International Accounting Standards.

In preparing these financial statements the directors have considered the impact of climate change as a risk as set out on

page20, and have concluded that there was no further impact of climate change to be taken into account. In line with IAS

investments are valued at fair value, which for the Company is quoted bid prices for investments in active markets at the Statement

of Financial Position date and therefore reflect market participants’ view of climate change risk on the investments we hold.

When presentational guidance set out in the Statement of Recommended Practice (‘SORP’) for Investment Companies issued

by the Association of Investment Companies (‘the AIC’) in July 2022 is consistent with the requirements of UK adopted

International Accounting Standards, the Directors have sought to prepare the financial statements on a basis compliant with the

recommendations of the SORP.

Going concern

The Directors have adopted the going concern basis in preparing the financial statements.

In forming this opinion, the directors have considered the adequacy of the Company’s operational resources, liquidity of the

investment portfolio, debt covenants and any potential impact of the ongoing COVID-19 pandemic as well as the war in Ukraine

may have on the going concern and viability of the Company. In making their assessment, the Directors have reviewed income

and expense projections and the liquidity of the investment portfolio, and considered the mitigation measures which key service

providers, including the Investment Manager, have in place to maintain operational resilience.

The Company’s ability to continue as a going concern for the period assessed by the Directors, being the period to 30 November

2024 which is at least 18 months from the date the financial statements were authorised for issue.

Significant accounting estimates, judgements and assumptions

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect

the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may

differ from these estimates.

Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in

the year in which the estimates are revised and in any future periods affected. Except for the Company’s investment in the Alder

contingent variable right (CVR), there have been no estimates, judgements or assumptions, which have had a significant impact

on the financial statements for the year. The Company had no holdings in the CVR as at the year end.

Notes to the Financial Statements

67 Bellevue Healthcare Trust plc Annual Report and Accounts 2022

Financial Statements

Basis of measurement

The financial statements have been prepared on the historical cost basis except for financial instruments at fair value through

profit or loss, which are measured at fair value.

Functional and presentation currency

The financial statements are presented in sterling, which is the Company’s functional currency. The Company’s investments are

denominated in multiple currencies. However, the Company’s shares are issued in sterling and the majority of its investors are

UK based. In addition, all expenses are paid in GBP as are dividends. All financial information presented in sterling have been

rounded to the nearest thousand pounds.

3. ACCOUNTING POLICIES

(a) Investments

Upon initial recognition investments are classified by the Company “at fair value through profit or loss”. They are accounted

for on the date they are traded and are included initially at fair value which is taken to be their cost. Subsequently, quoted

investments are valued at fair value, which is the bid market price, or if bid price is unavailable, the last traded price on

the relevant exchange. Unquoted investments are valued at fair value by the Board which is established with regard to the

International Private Equity and Venture Capital Valuation Guidelines by using, where appropriate, latest dealing prices,

valuations from reliable sources and other relevant factors.

Changes in the fair value of investments held at fair value through profit or loss and gains or losses on disposal are included in

the capital column of the Statement of Comprehensive Income within “(Losses)/gains on investments”.

Investments are derecognised on the trade date of their disposal, which is the point where the Company transfers substantially

all the risks and rewards of the ownership of the financial asset.

(b) Foreign currency

Transactions denominated in foreign currencies are translated into sterling at actual exchange rates as at the date of the

transaction. Monetary assets and liabilities, and non-monetary assets held at fair value denominated in foreign currencies are

translated into sterling using London closing foreign exchange rates at the year end. Any gain or loss arising from a change

in exchange rates subsequent to the date of the transaction is included as an exchange gain or loss to capital or revenue in

the Statement of Comprehensive Income as appropriate. Foreign exchange movements on investments are included in the

Statement of Comprehensive Income within Gains/Losses on Investments.

Dividend income from shares is recognised on ex-dividend dates. Overseas income is grossed up at the appropriate rate oftax.

Special dividends are assessed on their individual merits and may be credited to the Statement of Comprehensive Income as a

capital item if considered to be closely linked to reconstructions of the investee company or other capital transactions. All other

investment income is credited to the Statement of Comprehensive Income as a revenue item. Interest receivable is accrued on

a time apportionment basis.

68 Bellevue Healthcare Trust plc Annual Report and Accounts 2022

(d) Reserves

Capital reserves

Profits achieved in cash by selling investments and changes in fair value arising upon the revaluation of investments that

remain in the portfolio are all charged to the capital column of the Statement of Comprehensive Income and allocated to the

capitalreserve.

Special distributable reserve

Following admission of the Company’s Ordinary Shares to trading on the London Stock Exchange, the Directors applied to

the Court to cancel the share premium account at the time to create a special distributable reserve which may be treated as

distributable reserves and out of which tender offers and share buybacks may be funded. This reserve may also be used to

fund dividend payments.

The Company’s distributable reserves consist of the special distributable reserve, capital reserve attributable to realised profit

and revenue reserve.

Share premium

The share premium account arose from the net proceeds of sale of new shares. The excess of the issue price of a share over

its nominal value.

Revenue reserves

The revenue reserve reflects all income and expenditure recognised in the revenue column of the income statement and is

distributable by way of dividends.

(e) Expenses

All expenses are accounted for on an accruals basis. Expenses directly related to the acquisition or disposal of an investment

(transaction costs) are taken to the income statement as a capital item.

Expenses are recognised through the Statement of Comprehensive Income as revenue items except as follows:

Investment management fees

In accordance with the Company’s stated policy and the Directors expectation of the split of future returns, 80% of investment

management fees are charged as a capital item in the Statement of Comprehensive Income.

Finance costs

Finance costs include interest payable and direct loan costs. In accordance with Directors’ expectation of the split of future

returns, 80% of finance costs are charged as capital items in the Statement of Comprehensive Income. Loan arrangement

costs are amortised over the term of the loan.

(f) Cash and cash equivalents

Cash comprises cash at hand and on-demand deposits. Cash equivalents are short term, highly liquid investments that are

readily convertible to known amounts of cash, are subject to insignificant risks of changes in value, and are held for the purpose

of meeting short-term cash commitments rather than for investment or other purposes.

NOTES TO THE FINANCIAL STATEMENTS

CONTINUED

69 Bellevue Healthcare Trust plc Annual Report and Accounts 2022

Financial Statements

(g) Taxation

Irrecoverable taxation on dividends is recognised on an accrual basis in the Statement of Comprehensive Income.

Deferred taxation

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and

liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted

for using the statement of financial position liability method. Deferred tax liabilities are recognised for all taxable temporary

differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against

which deductible temporary differences can be utilised. Investment trusts which have approval as such under Section 1158 of

the Corporation Tax Act 2010 are not liable for taxation on capital gains in UK.

(h) Financial liabilities

Bank loans and overdrafts are classified as financial liabilities at amortised cost. They are initially recorded at the proceeds

received, net of direct issue costs, and subsequently recorded at amortised cost using the effective interest method.

(i) Adoption of new IFRS standards

New standards, interpretations and amendments adopted from 1 January 2022

A number of new standards, amendments to standards are effective for the annual periods beginning after 1 January 2022.

None of these have a significant effect on the measurement of the amounts recognised in the financial statements of the

Company.

New standards and amendments issued but not yet effective

The relevant new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance

of the Company’s financial statements are disclosed below. These standards are not expected to have a material impact on the

entity in future reporting periods and on foreseeable future transactions.

Amendments to IAS 1: Classification of Liabilities as Current or Non-current

In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities

as current or non-current. The amendments are effective for annual reporting periods beginning on or after 1January2023.

Definition of Accounting Estimates - Amendments to IAS 8

In February 2021, the IASB issued amendments to IAS 8, in which it introduces a definition of ‘accounting estimates’. The

amendments are effective for annual reporting periods beginning on or after 1 January 2023.

Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2

In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements. The

amendments to IAS 1 are applicable for annual periods beginning on or after 1 January 2023.

(j) Equity shares

The Company has treated the Ordinary Shares and Management Shares as equity in accordance with IAS 32 Financial

Instruments: Presentation, which classifies financial instruments into financial assets, financial liabilities and equity instruments.

Both share classes have an entitlement to the residual interest in the assets of the Company after deducting liabilities, suffice

that the Management Shares have no participation in any surplus beyond their paid up capital. The Management Shares are not

redeemable, but the Ordinary Shares are subject to an annual redemption option at the discretion of the Directors. Redemption

requests are matched with buyers in the market or cancelled by the Company. Ordinary Shares participate in dividends and any

other profits of the Company.

70 Bellevue Healthcare Trust plc Annual Report and Accounts 2022

Segmental reporting

The Board has considered the requirements of IFRS 8 – “Operating Segments”. The Company has entered into an Investment

Management Agreement with the Investment Manager under which the Investment Manager is responsible for the management

of the Company’s investment portfolio, subject to the overall supervision of the Board of Directors. Accordingly, the Board is

deemed to be the “Chief Operating Decision Maker” of the Company.

The Directors are of the opinion that the Company is engaged in a single segment of business being that of an investment trust,

as disclosed in note 1.

4. INVESTMENT HELD AT FAIR VALUE THROUGH PROFIT OR LOSS

As at

30 November

2022

£’000

30 November

2021

£’000

Investments held at fair value through profit or loss

– Quoted overseas 1,043,349 1,083,590

Closing valuation 1,043,349 1,083,590

(b) Movements in valuation

£’000 £’000

Opening valuation 1,083,590 753,375

Opening unrealised losses/(gains) 7,839 (59,570)

Opening book cost 1,091,429 693,805

Additions, at cost 590,922 869,203

Disposals, at cost (507,626) (471,579)

Closing book cost 1,174,725 1,091,429

Revaluation of investments (131,376) (7,839)

Closing valuation 1,043,349 1,083,590

In respect of the investments sold during the year, they have been revalued over time and until they were sold any unrealised

gains/losses were included in the fair value of the investments.

Transaction costs on investment purchases for the year ended 30 November 2022 amounted to £186,000 (30 November

2021: £299,000) and on investment sales for the financial year to 30 November 2022 amounted to £198,000 (30 November

2021: £201,000). The above transaction costs are calculated in line with the AIC SORP.

£’000 £’000

Realised gains on disposal of investments 103,557 166,205

Movement in unrealised losses on investments held (123,537) (67,409)

Total (losses)/gains on investments (19,980) 98,796

Under IFRS 13 ‘Fair Value Measurement’, an entity is required to classify investments using a fair value hierarchy that reflects

the significance of the inputs used in making the measurement decision.

NOTES TO THE FINANCIAL STATEMENTS

CONTINUED

71 Bellevue Healthcare Trust plc Annual Report and Accounts 2022

Financial Statements

The following shows the analysis of financial assets recognised at fair value based on:

Level 1

The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement

date.

Level 2

Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or

liability, either directly or indirectly.

Level 3

Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.

The classification of the Company’s investments held at fair value is detailed in the table below:

30 November 2022

Level 1

£’000

Level 2

£’000

Level 3

£’000

Total

£’000

Investments at fair value through profit and loss – Quoted 1,043,349 - - 1,043,349

30 November 2021

Level 1

£’000

Level 2

£’000

Level 3

£’000

Total

£’000

Investments at fair value through profit and loss – Quoted 1,082,991 - 599 1,083,590

The Company had no Level 3 investment as at the year ended 30 November 2022. The level 3 investment for 2021

comprises a contingent variable right (“CVR”) received as a partial consideration when the Company’s investment in Alder

Biopharmaceuticals was acquired by Lundbeck in 2019, which offered to buy the holdings in Alder Biopharmaceuticals for a

cash bid of $18 and $2 cash contingent value rights.

The movement in the Level 3 unquoted investments during the year is shown below:

30 November

2022

£’000

30 November

2021

£’000

Opening balance 599 595

Foreign exchange gains 66 4

Proceeds on disposal (1,305) -

Realised gains on disposal 640 -

Closing balance - 599

There were no transfers between levels during the year ended 30 November 2022 (2021: nil).

Fair values of financial assets and financial liabilities

All financial assets and liabilities are recognised in the financial statements at fair value, with the exception of short-term

assets and liabilities, which are held at nominal value that approximates to fair value, and loans that are initially recognised at

the fair value of the consideration received, less directly attributable costs, and subsequently recognised at amortised cost.

The carrying value of the loans approximates to the fair value of the loans.

72 Bellevue Healthcare Trust plc Annual Report and Accounts 2022

5. INCOME

Year

ended

30 November

2022

£’000

Year

ended

30 November

2021

£’000

Income from investments

Overseas dividends 1,903 4,265

Bank interest on deposits 283 -

Total income 2,186 4,265

6. PORTFOLIO MANAGEMENT FEE

2022 2021

Revenue

£’000

Capital

£’000

Total

£’000

Revenue

£’000

Capital

£’000

Total

£’000

Management fee 1,877 7,510 9,387 1,923 7,691 9,614

The Company’s Investment Manager is Bellevue Asset Management (UK) Ltd (the ‘Investment Manager’). The Investment

Manager is entitled to receive a management fee payable monthly in arrears and calculated at the rate of one-twelfth of 0.95%

per calendar month of market capitalisation. Market capitalisation means the average of the mid-market prices for an Ordinary

Share, as derived from the daily official list of the London Stock Exchange on each business day in the relevant calendar month

multiplied by the number of Ordinary Shares, in issue on the last business day of the relevant calendar month excluding any

Ordinary Shares held in treasury.

There is no performance fee payable to the Investment Manager.

7. OTHER EXPENSES

2022

£’000

2021

£’000

Administration & secretarial fees 257 250

Auditor’s remuneration – statutory audit 50 45

Broker fees 4 48

Consultancy fees 26 66

Custody services 203 230

Directors’ fees 231 188

Printing 28 18

Public relations 2 48

Registrar fees 72 81

Marketing fees - 46

Other expenses 196 204

Total 1,069 1,224

NOTES TO THE FINANCIAL STATEMENTS

CONTINUED

73 Bellevue Healthcare Trust plc Annual Report and Accounts 2022

Financial Statements

8. FINANCE COSTS

Year ended 30 November 2022

Revenue

£’000

Capital

£’000

Total

£’000

Loan interest 597 2,389 2,986

Other finance costs 13 51 64

Total 610 2,440 3,050

Year ended 30 November 2021

Revenue

£’000

Capital

£’000

Total

£’000

Loan interest 98 391 489

Other finance costs 4 16 20

Total 102 407 509

9. TAXATION

(a) Analysis of charge:

2022 2021

Revenue

£’000

Capital

£’000

Total

£’000

Revenue

£’000

Capital

£’000

Total

£’000

Withholding tax expense 285 - 285 659 - 659

Total tax charge for the year 285 - 285 659 - 659

(b) Factors affecting the tax charge for the year:

The effective UK corporation tax rate for the year is 19% (2021: 19%). The tax charge differs from the charge resulting from

applying the standard rate of UK corporation tax for an investment trust company. The differences are explained below:

2022

Total

£’000

2021

Total

£’000

Operating (loss)/profit before taxation (41,139) 87,909

UK Corporation tax at 19% (2021: 19%) (7,816) 16,703

Effects of:

Losses/(gains) on investments not taxable 5,666 (18,048)

Overseas dividends not taxable (362) (810)

Withholding tax expense 285 659

Unutilised excess expenses 2,512 2,155

Total tax charge 285 659

The Company is not liable to tax on capital gains due to its status as an investment trust. The Company has an unrecognised

deferred tax asset of £11,190,000 (2021: £6,806,000) based on the prospective UK corporation tax rate of 25%. This asset

has accumulated because deductible expenses exceeded taxable income for the year ended 30 November 2022. No asset

has been recognised in the accounts because, given the composition of the Company’s portfolio, it is not likely that this asset

will be utilised in the foreseeable future.

74 Bellevue Healthcare Trust plc Annual Report and Accounts 2022

10. RETURN PER SHARE

Return per share is based on the weighted average number of Ordinary Shares in issue during the year ended 30 November

2022 of 581,357,335 (30 November 2021: 509,593,031). Management Shares do not participate in the profits of the

Company, hence they are not included in the calculation below.

As at 30 November 2022

Revenue Capital Total

Loss for the year (£'000) (1,655) (39,769) (41,424)

Losses per Ordinary Share (basic & diluted) (0.28)p (6.84)p (7.12)p

Year ended 30 November 2021

Revenue Capital Total

Profit for the period (£'000) 357 86,893 87,250

Return per Ordinary Share (basic & diluted) 0.07p 16.44p 16.51p

11. OTHER RECEIVABLES

As at

30 November

2022

£’000

As at

30 November

2021

£’000

Prepayments 124 52

VAT recoverable 231 79

Recoverable tax on dividend 37 36

Total 392 167

12. BANK LOANS

The Company has a multi-currency revolving credit facility RCF with The Bank of Nova Scotia, London Branch. On 16 June

2022, the Company renewed and amended its RCF. Under the terms of the amended RCF, the Company may draw down

loans up to an aggregate value of USD 280 million. The increased facility will expire in December 2024.

As at 30 November 2022, the aggregate of loans draw down was £83,731,000 (2021: £67,850,000).

The table below shows the breakdown of the loans.

As at 30 November 2022

Currency of loans

Local currency

amount

GBP equivalent

£’000

Interest rate

per annum

(%) Maturity date

USD loan $20,000,000 16,746 3.8 28 Dec. 2022

USD loan $20,000,000 16,746 2.26 27 Jan. 2023

USD loan $20,000,000 16,746 2.26 27 Mar. 2023

USD loan $20,000,000 16,746 2.26 30 May. 2023

USD loan $20,000,000 16,747 2.26 27 Jul. 2023

Total loans in GBP 83,731

NOTES TO THE FINANCIAL STATEMENTS

CONTINUED

75 Bellevue Healthcare Trust plc Annual Report and Accounts 2022

Financial Statements

As at 30 November 2021

Currency of loans

Local currency

amount

GBP equivalent

£’000

Interest rate

per annum

(%) Maturity date

USD loan $55,000,000 41,464 1.03088 31 Jan. 2022

USD loan $35,000,000 26,386 1.32060 31 Jan. 2022

Total loans in GBP 67,850

A commitment fee is calculated at 0.35 per cent per annum, if the unutilised amount equals or exceeds 50 per cent of the total

commitment; or 0.45 per cent per annum if the unutilised amount is less than 50 per cent of the total commitment.

In the opinion of the Directors, the fair value of the bank loans is not materially different to their amortised costs.

13. OTHER PAYABLES

As at

30 November

2022

£’000

As at

30 November

2021

£’000

Loan interest payable 528 44

Accrued expenses 984 1,048

Broker commission payable - Alvarium - 16

Total 1,512 1,108

14. SHARE CAPITAL

As at 30 November 2022 As at 30 November 2021

No. of shares £'000 No. of shares £'000

Allotted, issued and fully paid:

Redeemable Ordinary Shares of 1p each (‘Ordinary Shares’) 586,783,083 5,868 558,910,904 5,589

Management Shares of £1 each 50,001 13 50,001 13

Total 586,833,084 5,881 558,960,905 5,602

Share Movement

27,872,179 Ordinary Shares were issued during the year to 30 November 2022 (30 November 2021: 70,191,215) with

aggregate proceeds of £49,167,000 (30 November 2021: £133,264,000). As at 30 November 2022, the total number of

Ordinary Shares in issue is 586,783,083 (30 November 2021: 558,960,905) with a total share capital value of £5,881,000

(30November 2021: 5,602,000).

Since 30 November 2022 no further shares were issued, however as at 1 March 2023, 5,730,528 Ordinary Shares were

bought back into treasury through the Company’s share buyback programme and 30,577,550 Ordinary Shares were redeemed

and cancelled by the Company, in line with the Company’s annual redemption facility.

The redemption point is the last business day of November and redemption price is announced the following day. The

Company announced on 1 December 2022 that 30,577,550 Ordinary Shares would be redeemed, with Shareholders receiving

a Redemption Price of 164.34 pence per share.

76 Bellevue Healthcare Trust plc Annual Report and Accounts 2022

15. DIVIDEND

Year ended 30 November 2022 Year ended 30 November 2021

Pence per

Ordinary

Special

reserve

£’000

Revenue

reserve

£’000

Total

£’000

Pence per

Ordinary

Special

reserve

£’000

Revenue

reserve

£’000

Total

£’000

Final dividend - 2020 - - - 2.500p 12,476 412 12,888

Interim dividend - 2021 - - - 3.015p 16,396 - 16,396

Final dividend - 2021 3.015p 17,480 - 17,480 - - - -

Interim dividend - 2022 3.235p 18,977 - 18,977 - - - -

Total 6.250p 36,457 - 36,457 5.515p 28,872 412 29,284

The dividend relating to the year ending 30 November 2022, which is the basis on which the requirements of Section 1159 of

the Corporation Tax Act 2010 are considered is detailed below:

Year ended 30 November 2022 Year ended 30 November 2021

Pence per

Ordinary

Special

reserve

£’000

Revenue

reserve

£’000

Total

£’000

Pence per

Ordinary

Special

reserve

£’000

Revenue

reserve

£’000

Total

£’000

Interim dividend – paid 3.235p 18,977 - 18,977 3.015p 16,369 - 16,369

Final dividend – payable/paid 3.235p 17,803 - 17,803 3.015p 17,480 - 17,480

Total 6.470p 36,780 - 36,780 6.030p 33,849 - 33,849

The Directors recommend the payment of a final dividend for the year of 3.235p per share. Subject to approval at the

Company’s Annual General Meeting, the dividend will have an ex-dividend date of 16 March 2023 and will be paid on 5 May

2023 to shareholders on the register at 17 March 2023. The dividend will be funded from the Company’s distributable reserves

as per the table above.

16. NET ASSETS PER ORDINARY SHARE

Net assets per Ordinary Share as at 30 November 2022 is based on £1,004,326,000 of net assets of the Company

attributable to the 586,783,083 Ordinary Shares in issue as at 30 November 2022. £12,500 of net assets as at 30 November

2022 is attributable to the Management Shares as they are a quarter paid up.

17. RELATED PARTY TRANSACTIONS

Fees payable to the Investment Manager are shown in the Statement of Comprehensive Income. As at 30 November 2022, the

fee outstanding to the Investment Manager was £744,000 (2021: £858,000).

Directors’ fees paid during the year are disclosed within the Directors Remuneration Report on page 48. Fees payable as at

30 November 2022 were £37,667 (2021: £35,185). The Directors’ fees and shareholdings are disclosed in the Directors’

Remuneration Implementation Report on pages 46 to 49 in this Annual Report and in note 7 to the financial statements.

18. POST BALANCE SHEET EVENTS

On 1 December 2023, the Company announced that 30,577,550 Ordinary Shares would be redeemed, with Shareholders

receiving a Redemption Price of 164.34 pence per share.

On 13 February 2023, Alvarium Securities Limited ceased to be the Company’s joint broker, with J.P. Morgan Securities plc

(which conducts its UK investment banking activities as J.P. Morgan Cazenove) retained as the Company’s sole corporate

broker.

NOTES TO THE FINANCIAL STATEMENTS

CONTINUED

77 Bellevue Healthcare Trust plc Annual Report and Accounts 2022

Financial Statements

19. FINANCIAL INSTRUMENTS AND CAPITAL DISCLOSURE

(i) Market risks

The Company is subject to a number of market risks in relation to economic conditions and healthcare companies. Further

details on these risks and the management of these risks are included in the Directors’ report.

The Company’s financial assets and liabilities at 30 November 2022 comprised:

2022 2021

Investments

Interest

bearing

£’000

Non-interest

bearing

£’000

Total

£’000

Interest

bearing

£’000

Non-interest

bearing

£’000

Total

£’000

Swiss franc - 12,269 12,269 - - -

Hong Kong - 9,724 9,724 - 19,866 19,866

US dollar - 1,021,356 1,021,356 - 1,063,724 1,063,724

Total investment - 1,043,349 1,043,349 - 1,083,590 1,083,590

Cash at bank 46,368 - 46,368 27,994 - 27,994

Short term receivables - 1,247 1,247 - 167 167

Bank loans payable-US dollar (83,731)

(83,731) (67,850) - (67,850)

Short term payables - (2,907) (2,907) - (10,434) (10,434)

Total (37,363) (1,660) (39,023) (39,856) (10,267) (50,123)

Market price risk sensitivity

The effect on the portfolio of a 10.0% increase or decrease in market prices would have resulted in an increase or decrease

of £104,335,000 (2021: £108,359,000) in the investments held at fair value through profit or loss at the period end, which is

equivalent to 10.4% (2021: 10.1%) in the net assets attributable to equity holders. This analysis assumes that all other variables

remain constant.

(ii) Liquidity risks

Liquidity risk is the risk that the Company will not be able to meet its obligations when due. There is a risk that the Company’s

holdings may not be able to be realised at reasonable prices in a reasonable timeframe.

Financial liabilities by maturity at the year-end are shown below:

30 November

2022

£’000

30 November

2021

£’000

Within one month-purchases due for settlement and other payables (2,907) (10,434)

Between one and three months – Bank loans payable (83,731) (67,850)

Total (86,638) (78,284)

Management of liquidity risks

The Company will typically seek to maintain a high degree of liquidity in its portfolio holdings (such that a position could typically

be exited within 1 to 5 trading days, with minimal price impact) and as a consequence of the concentrated approach, it is

unlikely that a position will be taken in an investee company unless a minimum holding of 1.0 per cent of the Company’s assets

at the time of investment can be achieved within an acceptable level of liquidity.

The Company’s Portfolio Manager monitors the liquidity of the Company’s portfolio on a regular basis. See note 12 for the

maturity profiles of the loans. Other payables are typically settled within a month.

78 Bellevue Healthcare Trust plc Annual Report and Accounts 2022

(iii) Currency risks

Although the Company’s performance is measured in sterling, a high proportion of the Company’s assets may be either

denominated in other currencies or be in investments with currency exposure.

Currency sensitivity

The below table shows the strengthening/(weakening) of sterling against the local currencies over the financial year for the

Company’s financial assets and liabilities held at 30 November 2022.

30 November

2022

% change

30 November

2021

% change

Swiss franc (7.0%) 0.9%

Hong Kong Dollar (9.8%) -

US dollar (10.2%) (0.2%)

Foreign currency risk profile

30 November 2022 30 November 2021

Investment

exposure

£’000

Net monetary

exposure

£’000

Total

currency

exposure

£’000

Investment

exposure

£’000

Net monetary

exposure

£’000

Total

currency

exposure

£’000

Swiss franc 12,269 - 12,269 - - -

Hong Kong Dollar 9,724 - 9,724 19,866 - 19,866

US dollar 1,021,356 35,637 1,056,993 1,063,724 18,686 1,082,410

Total 1,043,349 35,637 1,078,986 1,083,590 18,686 1,102,276

Based on the financial assets and liabilities at 30 November 2022 and all other things being equal, if sterling had weakened

against the local currencies by 10%, the impact on the Company’s net assets at 30 November 2022 would have been as

follows:

30 November

2022

£’000

30 November

2021

£’000

Swiss franc 1,227 -

Hong Kong Dollar 972 1,987

US dollar 105,699 108,241

Management of currency risks

The Company’s Investment Manager monitors the currency risk of the Company’s portfolio on a regular basis. Foreign currency

exposure is regularly reported to the Board by the Investment Manager.

Currency risk will not be hedged using any sort of foreign currency transactions, forward transactions or derivative instruments.

NOTES TO THE FINANCIAL STATEMENTS

CONTINUED

79 Bellevue Healthcare Trust plc Annual Report and Accounts 2022

Financial Statements

(iv) Leverage risks

The Company may use borrowings to seek to enhance investment returns. While the use of borrowings should enhance the

total return on the Ordinary Shares where the return on the Company’s underlying assets is rising and exceeds the cost of

borrowing, it will have the opposite effect where the return on the Company’s underlying assets is rising at a lower rate than the

cost of borrowing or falling, further reducing the total return on the Ordinary Shares. As a result, the use of borrowings by the

Company may increase the volatility of the Net Asset Value per Ordinary Share.

Any reduction in the value of the Company’s investments may lead to a correspondingly greater percentage reduction in its Net

Asset Value (which is likely to adversely affect the price of an Ordinary Share). Any reduction in the number of Ordinary Shares

in issue (for example, as a result of buy backs or redemptions) will, in the absence of a corresponding reduction in borrowings,

result in an increase in the Company’s level of gearing.

To the extent that a fall in the value of the Company’s investments causes gearing to rise to a level that is not consistent with

the Company’s gearing policy or borrowing limits, the Company may have to sell investments in order to reduce borrowings,

which may give rise to a significant loss of value compared to the book value of the investments, as well as a reduction in

income from investments.

The Company will pay interest on its borrowings. As such, the Company is exposed to interest rate risk due to fluctuations in

the prevailing market rates.

As at the year end, the Company’s gearing ratio was 4.0% (2021:4.9%), based on the drawn down loans as a percentage of

gross asset value.

As at the year end, the Company did not hold any derivative instruments.

Management of leverage risks

Gearing will be deployed flexibly up to 20 per cent of the Net Asset Value, at the time of borrowing, although the Investment

Manager expects that gearing will, over the longer term, average between 5 and 10 per cent of the Net Asset Value. In the

event the 20 per cent limit is breached as a result of market movements, and the Board considers that borrowing should

be reduced, the Portfolio Manager shall be permitted to realise investments in an orderly manner so as not to prejudice

Shareholders.

Further details of the Company’s bank loans is disclosed in note 12.

(v) Interest rate risks

The Company pays interest on its borrowings. As such, the Company is exposed to interest rate risk due to fluctuations in the

prevailing market rates.

Management of interest rate risks

Prevailing interest rates are taken into account when deciding on borrowings.

The Company had bank loans denominated in GBP and USD in place during the year. The loan interest is based on a variable

rate. Based on the loans outstanding at the year end a change of 1.00% (2021: 0.25%) in interest rates would increase/

(decrease) annual profit or loss by the amounts shown below. 1.00% was used for 2022 given the volatility in rates during

2022. The analysis assumes that all other variables remain constant:

Loans at

30 November

2022

£’000

Profit or loss

1.00%

decrease

£’000

Profit or loss

1.00%

increase

£’000

Loans at

30 November

2021

£’000

Profit or loss

0.25%

decrease

£’000

Profit or loss

0.25%

increase

£’000

USD loan 83,731 837 (837) 67,850 170 (170)

Total 83,731 837 (837) 67,850 170 (170)

80 Bellevue Healthcare Trust plc Annual Report and Accounts 2022

(vi) Credit risks

Cash and other assets that are required to be held in custody will be held by the depositary or its sub-custodians. Where the

Company utilises derivative instruments, it is likely to take a credit risk with regard to the parties with whom it trades and may

also bear the risk of settlement default.

Management of credit risks

The Company has appointed CACEIS Bank as its depositary. The Standard & Poor’s credit rating of CACEIS is A+ (2021: A+).

The credit rating of CACEIS was reviewed at the time of appointment and is reviewed on a regular basis by the Investment

Manager and/or the Board.

The Portfolio Manager monitors the Company’s exposure to its counterparties on a regular basis and trades in equities are

performed on a delivery versus payment basis.

The Company’s assets are segregated from those of the Depositary or any of its sub-custodians.

At 30 November 2022, the Depository held £1,043,349,000 (2021: £1,083,590,000) in respect of quoted investments and

£46,368,000 (2021: £27,994,000) in respect of cash on behalf of the Company.

(vii) Capital management policies and procedures

The Company considers its capital to consist of its share capital of Ordinary Shares of 1p each, Management Shares of

£1 each, and reserves totalling £1,004,326,000 (2021: £1,033,467,000) and bank loans payable £83,731,000 (2021:

£67,850,000).

The Company has a redemption facility through which Shareholders will be entitled to request the redemption of all or part of

their holding of Ordinary Shares on an annual basis. The redemption point for the Ordinary Shares was 30 November 2022 and

will be annual thereafter. The Redemption facility is entirely at the discretion of the Directors.

The Investment Manager and the Company’s broker monitor the demand for the Company’s shares and the Directors review the

position at Board meetings.

The Company’s policy on borrowings is detailed in the Director’s Report on page 14.

Use of distributable reserves is disclosed in the footnote on the Statement of changes in equity on page 64.

The Company regularly monitors, and has complied, with the externally imposed capital requirements arising from the borrowing

facility.

NOTES TO THE FINANCIAL STATEMENTS

CONTINUED

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 81

Other Information

DISCOUNT

The amount, expressed as a percentage, by which the share price is less than the Net Asset Value per Ordinary Share.

As at 30 November 2022 Page £’000

NAV per Ordinary Share (pence) a 1 171.16

Share price (pence) b 1 158.20

Discount (b÷a)-1 -7.6%

The Company’s average discount for the year ended 30 November 2022 was 1.6%.

GEARING

A way to magnify income and capital returns, but which can also magnify losses. A bank loan is a common method of gearing.

As at 30 November 2022 Page £’000

Total assets less cash/cash equivalents a n/a 1,044,596

Net assets b 63 1,004,326

Gearing (net)* (a÷b)-1 4.0%

LEVERAGE

An alternative word for “Gearing”.

(See gearing for calculations).

Under AIFMD, leverage is any method by which the exposure of an AIF is increased through borrowing of cash or securities or

leverage embedded in derivative positions.

Under AIFMD, leverage is broadly similar to gearing, but is expressed as a ratio between the assets (excluding borrowings) and

the net assets (after taking account of borrowing). Under the gross method, exposure represents the sum of the Company’s

positions after deduction of cash balances, without taking account of any hedging or netting arrangements. Under the

commitment method, exposure is calculated without the deduction of cash balances and after certain hedging and netting

positions are offset against each other.

ONGOING CHARGES

A measure, expressed as a percentage of average net assets, of the regular, recurring annual costs of running an investment

company.

Year ended 30 November 2022 (Audited) Page £

Average NAV a n/a 1,005,507,648

Annualised expenses b n/a 10,453,000

Ongoing charges (b÷a) 1.04%

Alternative Performance Measures

Bellevue Healthcare Trust plc Annual Report and Accounts 202282

A measure of performance that includes both income and capital returns. This takes into account capital gains and

reinvestment of dividends paid out by the Company into the Ordinary Shares of the Company on the ex-dividend date.

Year ended 30 November 2022 (Audited) Page Share price NAV

Opening at 1 December 2021 (pence) a n/a 186.20 184.91

Closing at 30 November 2022 (pence) b 1 158.20 171.16

Price movement (b÷a)-1 c n/a -15.0% -7.4%

Dividend reinvestment d n/a 3.1% 3.3%

Total return (c+d)

-11.9% -4.1%

n/a = not applicable.

ALTERNATIVE PERFORMANCE MEASURES CONTINUED

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 83

Other Information

Glossary

AIC Association of Investment Companies.

Alternative Investment Fund or “AIF” An investment vehicle under AIFMD. Under AIFMD (see below) the Company is classified as an AIF.

Alternative Investment Fund

Managers Directive or “AIFMD”

A European Union directive which came into force on 22 July 2013 and has been implemented in

the UK and remains in force post BREXIT.

American Depositary Receipt or

“ADR”

A negotiable certificate issued by a U.S. bank representing a specified number of shares in a foreign

stock traded on a U.S. exchange.

Annual General Meeting or “AGM” A meeting held once a year which Shareholders can attend and where they can vote on resolutions

to be put forward at the meeting and ask Directors questions about the company in which they are

invested.

CFD or Contract for Difference A financial instrument, which provides exposure to an underlying equity with the provider financing

the cost to the buyer with the buyer receiving the difference of any gain or paying for any loss

Custodian An entity that is appointed to safeguard a company’s assets.

Discount The amount, expressed as a percentage, by which the share price is less than the net asset value

per share. The discount is calculated on the closing share price.

Depositary Under AIFMD the depositary is appointed under a strict liability regime to oversee inter alia, those

charged with safekeeping of the Company’s assets and cash monitoring.

Dividend Income receivable from an investment in shares.

ESG Environmental, social and governance.

Ex-dividend date The date from which you are not entitled to receive a dividend which has been declared and is due

to be paid to Shareholders.

Financial Conduct Authority or

“FCA”

The independent body that regulates the financial services industry in the UK.

Gearing A term used to describe the extent that a portfolio has increased in size as a way to magnify income

and capital returns, but which can also magnify losses. A bank loan is a common method of

gearing.

Gross assets The Company’s total assets adjusted for any leverage amount (outstanding bank loan).

Index An independent Market tool which is used to compare performance across different investment

companies and funds. It quantifies performance of a basket of stocks which is considered to

replicate a particular stock market or sector.

Investment company A company formed to invest in a diversified portfolio of assets.

Investment Trust An investment company which is based in the UK and which meets certain tax conditions which

enables it to be exempt from UK corporation tax on its capital gains. The Company is an investment

trust.

Large-Cap A Company with a market capitalisation above $10 billion.

Bellevue Healthcare Trust plc Annual Report and Accounts 202284

Leverage An alternative word for “Gearing”.

Under AIFMD, leverage is any method by which the exposure of an AIF is increased through

borrowing of cash or securities or leverage embedded in derivative positions.

Under AIFMD, leverage is broadly similar to gearing, but is expressed as a ratio between the assets

(excluding borrowings) and the net assets (after taking account of borrowing). Under the gross

method, exposure represents the sum of the Company’s positions after deduction of cash balances,

without taking account of any hedging or netting arrangements. Under the commitment method,

exposure is calculated without the deduction of cash balances and after certain hedging and netting

positions are offset against each other.

Liquidity The extent to which investments can be sold at short notice.

Management Shares Non-redeemable preference shares of £1.00 each in the capital of the Company.

Mega-Cap A Company with a market capitalisation above $50 billion.

Mid-Cap A Company with a market capitalisation between $2 and $10 billion.

Net assets An investment company’s assets less its liabilities.

Net asset value (“NAV”) per Ordinary

Net assets divided by the number of Ordinary Shares in issue (excluding any shares held in treasury).

Ongoing charges ratio A measure, expressed as a percentage of average net assets, of the regular, recurring annual costs

of running an investment company.

Ordinary Shares The Company’s redeemable Ordinary Shares of 1p each.

Portfolio A collection of different investments held in order to deliver returns to Shareholders and to spread

risk.

Premium The amount, expressed as a percentage, by which the share price is more than the net asset value

per share.

Share buyback A purchase of a company’s own shares. Shares can either be bought back for cancellation or held

in treasury.

Share price The price of a share as determined by a relevant stock market.

Small-Cap A Company with a market capitalisation less than $2 billion.

Total return A measure of performance that takes into account both income and capital returns. This may take

into account capital gains, dividends, interests and other realised variables over a given period of

time.

Treasury shares A company’s own shares which are available to be sold by a company to raise funds.

Volatility A measure of how much a share moves up and down in price over a period of time.

GLOSSARY CONTINUED

Designed and Printed by Perivan

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 85

Other Information

Notice of Annual General Meeting

Notice is hereby given that the Annual General Meeting of

Bellevue Healthcare Trust plc will be held on 28 April 2023

at 12 noon at the offices of Stephenson Harwood LLP, at

1Finsbury Circus, London EC2M 7SH, United Kingdom or

the following purposes:

To consider and if thought fit pass the following resolutions

of which resolutions 1 to 12 will be proposed as ordinary

resolutions and resolutions 13 to 15 will be proposed as

special resolutions.

ORDINARY RESOLUTIONS

1. To receive the Company’s Annual Report and Accounts

for the year ended 30 November 2022, with the reports

of the Directors and auditors thereon.

2. To approve the Directors’ Remuneration Implementation

Report included in the Annual Report for the year ended

30 November 2022.

3. To re-elect Randeep Grewal as a Director of the

Company.

5. To re-elect Josephine Dixon as a Director of the

Company.

6. To re-elect Paul Southgate as a Director of the Company.

7. To re-elect Tony Young as a Director of the Company.

8. To re-elect Kate Bolsover as a Director of the Company.

9. To reappoint Ernst & Young LLP as auditors to the

Company.

10. To authorise the Directors to fix the remuneration of the

auditors until the conclusion of the next Annual General

Meeting of the Company.

11. To approve a final dividend of 3.235p per Ordinary

Share of the Company in respect of the year ended

30November2022.

12. That the Directors be and are hereby generally

and unconditionally authorised in accordance with

section551 of the Companies Act 2006 (in substitution

for all subsisting authorities to the extent unused) to

exercise all the powers of the Company to allot up to

55,047,500 Ordinary Shares of 1p each in the capital

of the Company (“Ordinary Shares”), such authority to

expire (unless previously varied, revoked or renewed by

the Company in general meeting) at the conclusion of

the Annual General Meeting of the Company to be held

in 2024 or, if earlier, on the expiry of 15 months from the

passing of this resolution, save that the Company may,

at any time prior to the expiry of such authority, make an

offer or enter into an agreement which would or might

require the allotment of shares in pursuance of such an

offer or agreement as if such authority had not expired;

SPECIAL RESOLUTIONS

13. That, subject to the passing of resolution 12, in

substitution for any existing power under sections570

and 573 of the Companies Act 2006 but without

prejudice to the exercise of any such power prior to the

date hereof, the Directors be and are hereby empowered

(pursuant to sections 570 and 573 of the Companies

Act 2006) to allot Ordinary Shares of 1p each and to

sell Ordinary Shares of 1p each from treasury for cash

pursuant to the authority referred to in Resolution 12

above as if section 561 of the Act did not apply to any

such allotment or sale, such power to expire (unless

previously varied, revoked or renewed by the Company

in general meeting) at the conclusion of the Annual

General Meeting of the Company to be held in 2024 or,

if earlier, on the expiry of 15 months from the passing of

this resolution, save that the Company may, at any time

prior to the expiry of such power, make an offer or enter

into an agreement which would or might require equity

securities to be allotted or sold from treasury after the

expiry of such power, and the Directors may allot or sell

from treasury equity securities in pursuance of such an

offer or an agreement as if such power had not expired;

14. That the Company be and is hereby generally and

unconditionally authorised in accordance with

section701 of the Companies Act 2006 (“the Act”)

to make market purchases (within the meaning of

section693(4) of the Act) of its Ordinary Shares of

1peach, providedthat:

(a) the maximum number of Ordinary Shares hereby

authorised to be purchased shall be 82,516,203

(representing 14.99% of the Company’s issued

Ordinary Share capital (excluding shares held in

Treasury) at the date of the notice of this meeting);

(b) the minimum price (exclusive of any expenses)

which may be paid for an Ordinary Share is 1p;

Bellevue Healthcare Trust plc Annual Report and Accounts 202286

may be paid for an Ordinary Share is not more

than the higher of (i) 5% above the average of the

middle market quotations for the Ordinary Shares

for the five business days immediately before the

day on which it purchases that share and (ii) the

higher of the price of the last independent trade

and the highest current independent bid for the

OrdinaryShares;

(d) the authority hereby conferred shall expire at the

conclusion of the Annual General Meeting of the

Company in 2024 or, if earlier, on the expiry of

15months from the passing of this resolution,

unless such authority is renewed prior to such

time;and

(e) the Company may make a contract to purchase

Ordinary Shares under the authority hereby

conferred prior to the expiry of such authority,

which will or may be executed wholly or partly after

the expiration of such authority and may make

a purchase of Ordinary Shares pursuant to any

suchcontract.

15. That a general meeting of the Company other than an

Annual General Meeting may be called on not less than

14 days’ notice, provided that this authority shall expire

at the conclusion of the Company’s next Annual General

Meeting after the date of the passing of this resolution.

Registered office:

6th Floor, 125 London Wall,

Barbican,

London

EC2Y 5AS

By order of the Board

Ciara McKillop

For and on behalf of

Apex Listed Companies Services (UK) Limited

Company Secretary

3 March 2023

NOTICE OF ANNUAL GENERAL MEETING CONTINUED

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 87

Other Information

Notes to Notice of Annual General

Meeting

WEBSITE ADDRESS

1. Information regarding the meeting, including

the information required by section 311A of

the Companies Act 2006, is available from

https://www.bellevuehealthcaretrust.com

ENTITLEMENT TO ATTEND AND VOTE

2. Only those holders of Ordinary Shares registered on the

Company’s register of members at close of business on

26 April 2023 or, if this meeting is adjourned, at close

of business on the day two days prior to the adjourned

meeting, shall be entitled to vote at the meeting.

Should a shareholder have a question that they would like

to raise at the AGM, either of the Board or the Investment

Manager, the Board would ask that they either ask the

question in advance of the AGM by sending it by email

to shareholder_questions@bbhealthcaretrust.co.uk or

attend the AGM and asking the question at the meeting

at the appropriate time. Answers to all questions will be

published on the Company’s website after the AGM.

In the case of joint holders of a voting right, the vote of

the senior who tenders a vote shall be accepted to the

exclusion of the votes of the other joint holders and, for

this purpose, seniority shall be determined by the order

in which the names stand in the Register of Members in

respect of the joint holding.

APPOINTMENT OF PROXIES

3. Pursuant to Section 324 of the Companies Act 2006,

amember entitled to attend and vote at the meeting may

appoint more than one proxy, provided that each proxy

is appointed to exercise the rights attached to different

shares held by him. A proxy need not be a member of

theCompany.

If Shareholders are not attending the AGM, Shareholders

are strongly urged to appoint the Chairman as their proxy

to vote on their behalf.

Section 324 does not apply to persons nominated to

receive information rights pursuant to Section 146 of the

Companies Act 2006. Persons nominated to receive

information rights under Section 146 of the Companies

Act 2006 have been sent this notice of meeting and are

hereby informed, in accordance with Section 149(2) of

the Companies Act 2006, that they may have the right

under an agreement with the registered member by whom

they are nominated to be appointed, or to have someone

else appointed, as a proxy for this meeting. If they have

such right or do not wish to exercise it, they may have a

right under such an agreement to give instructions to the

member as to the exercise of voting rights.

Nominated persons should contact the registered

member by whom they were nominated in respect

of these arrangements. The statement of rights of

Shareholders in relation to the appointment of proxies

does not apply to nominated persons.

PROXIES’ RIGHTS TO VOTE

4. On a vote on a show of hands, each proxy has one vote.

If a proxy is appointed by more than one member and all

such members have instructed the proxy to vote in the

same way, the proxy will only be entitled, on a show of

hands, to vote “for” or “against” as applicable. If a proxy is

appointed by more than one member, but such members

have given different voting instructions, the proxy may, on

a show of hands, vote both “for” and “against” in order to

reflect the different voting instructions.

VOTING BY CORPORATE REPRESENTATIVES

5. Corporate representatives are entitled to attend and vote

on behalf of the corporate member in accordance with

Section 323 of the Companies Act provided they do not

do so in relation to the same shares.

RECEIPT AND TERMINATION OF PROXIES

6. The Form of Proxy and any power of attorney (or a

notarially certified copy or office copy thereof) under

which it is executed must be received by Link Group at

12 noon on 26 April 2023 in respect of the meeting. Any

Forms of Proxy received before such time will be deemed

to have been received at such time. In the case of an

adjournment, the Form of Proxy must be received by Link

Group no later than 48 hours before the rescheduled

meeting. On completing the Form of Proxy, sign it and

return it to Link Group at the address shown on the Form

of Proxy in the envelope provided. As postage has been

prepaid no stamp is required.

A member may terminate a proxy’s authority at any time

before the commencement of the AGM.

Bellevue Healthcare Trust plc Annual Report and Accounts 202288

NOTES TO NOTICE OF ANNUAL GENERAL MEETING CONTINUED

Termination must be provided in writing and submitted

to the Company’s Registrar. In accordance with the

Company’s Articles of Association, in determining the

time for delivery of proxies, no account shall be taken of

any part of a day that is not a working day.

Alternatively, you may appoint a proxy or proxies

electronically by visiting https://www.signalshares.com/.

You will need to register using your investor code

and follow the instructions on how to vote. Proxies

submitted via www.signalshares.com for the AGM must

be transmitted so as to be received by the Company’s

Registrar, Link Group, no later than 48 hours before the

time appointed for the meeting (excluding weekends

and public holidays) or any adjournment of the meeting.

Proxies received after that date will not be valid.

If you are an institutional investor you may be able to

appoint a proxy electronically via the Proxymity platform,

a process which has been agreed by the Company

and approved by the Registrar. For further information

regarding Proxymity, please go to www.proxymity.io.

Your proxy must be lodged by 12 noon on 26 April

2023 in order to be considered valid. Before you can

appoint a proxy via this process you will need to have

agreed to Proxymity’s associated terms and conditions.

It is important that you read these carefully as you will

be bound by them and they will govern the electronic

appointment of your proxy.

APPOINTMENT OF PROXY THROUGH

CREST

7. CREST members who wish to appoint a proxy or proxies

through the CREST electronic proxy appointment service

may do so for the meeting to be held on the above date

and any adjournment(s) thereof by using the procedures

described in the CREST Manual. CREST Personal

Members or other CREST sponsored members, and

those CREST members who have appointed a voting

service provider(s), should refer to their CREST sponsor

or voting service provider(s), who will be able to take the

appropriate action on their behalf.

In order for a proxy appointment or instruction made using

the CREST service to be valid, the appropriate CREST

message (a “CREST Proxy Instruction”) must be properly

authenticated in accordance with Euroclear UK & Ireland

Limited’s specifications sand must contain the information

required for such instructions, as described in the

CREST Manual. The message, regardless of whether it

constitutes the appointment of a proxy or an amendment

to the instruction given to a previously appointed proxy,

must, in order to be valid, be transmitted so as to be

received by the Company’s agent (ID: RA10) by the

latest time(s) for receipt of proxy appointments specified

din the notice of meeting. For this purpose, the time of

receipt will be taken to be the time (as determined by

the timestamp applied to the message by the CREST

Applications Host) from which the Company’s agent is

able to retrieve the message by enquiry to CREST in the

manner prescribed by CREST. After this time any change

of instructions to a proxy’s appointee through CREST

should be communicated to the appointee through

othermeans.

CREST members and, where applicable, their CREST

sponsors or voting service providers should note

that Euroclear UK & Ireland Limited does not make

available special procedures in CREST for any particular

messages. Normal system timings and limitations will

therefore apply in relation to the input of CREST Proxy

Instructions. It is the responsibility of the CREST member

concerned to take (or, if the CREST member is a

CREST personal member or sponsored member or has

appointed a voting service provider(s), to procure that his

CREST sponsor or voting service provider(s) take(s)) such

action as shall be necessary to ensure that a message

is transmitted by means of the CREST system by any

particular time. In this connection, CREST members and,

where applicable, their CREST sponsors or voting service

providers are referred, in particular, to those sections of

the CREST Manual concerning practical limitations of the

CREST system and timings.

The Company may treat as invalid a CREST

Proxy Instruction in the circumstances set out in

Regulation 35(5) (a) of the Uncertificated Securities

Regulations2001.

All messages relating to the appointment of a proxy or

an instruction to a previously appointed proxy, which

are to be transmitted through CREST, must be lodged

at 12 noon on 26 April 2023 in respect of the meeting.

Any such messages received before such time will be

deemed to have been received at such time. In the

case of an adjournment, all messages must be lodged

with Link Group no later than 48 hours before the

rescheduledmeeting.

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 89

Other Information

NOMINATED PERSONS

8. If you are a person who has been nominated under

section 146 of the Companies Act 2006 to enjoy

information rights:

You may have a right under an agreement between

you and the member of the Company who has

nominated you to have information rights (Relevant

Member) to be appointed or to have someone else

appointed as a proxy for the meeting.

If you either do not have such a right or if you have

such a right but do not wish to exercise it, you may

have a right under an agreement between you and

the Relevant Member to give instructions to the

Relevant Member as to the exercise of voting rights.

Your main point of contact in terms of your

investment in the Company remains the Relevant

Member (or, perhaps, your custodian or broker)

and you should continue to contact them (and not

the Company) regarding any changes or queries

relating to your personal details and your interest in

the Company (including any administrative matters).

The only exception to this is where the Company

expressly requests a response from you.

If you are not a member of the Company but you have

been nominated by a member of the Company to enjoy

information rights, you do not have a right to appoint any

proxies under the procedures set out in the notes to the

form of proxy.

QUESTIONS AT THE MEETING

9. Under section 319A of the Companies Act 2006, the

Company must answer any question you ask relating to

the business being dealt with at the meeting unless:

answering the question would interfere unduly

with the preparation for the meeting or involve the

disclosure of confidential information;

the answer has already been given on a website in

the form of an answer to a question; or

it is undesirable in the interests of the Company

or the good order of the meeting that the question

beanswered.

If Shareholders would like to ask any questions prior

to the meeting, Shareholders are invited to submit

their questions by email to shareholder_questions@

bbhealthcaretrust.co.uk or attend the AGM virtually

and ask the question at the meeting at the appropriate

time. Answers to all questions will be published on

the Company’s website after the AGM. Please note all

questions should be submitted by close of business on

24 April 2023.

ISSUED SHARES AND TOTAL VOTING

RIGHTS

10. As at 1 March 2023, the total number of shares in the

Company in respect of which members are entitled to

exercise voting rights is 550,475,005 Ordinary Shares of

£0.01 each, additionally the Company holds 5,730,528

of its ordinary shares in treasury. The total number of

voting rights in relation to the Ordinary Shares in the

Company is 550,475,005.

COMMUNICATION

11. Members who have general queries about the meeting

should use the following means of communication:

calling Link Group’s Shareholder helpline (lines are

open from 9:00 a.m. to 5:30 p.m. Monday to Friday,

excluding public holidays) +44 371 664 0300 (calls

cost 12p per minute plus network extras); or

in writing to Link Group. You may not use any

electronic address provided either in this notice of

meeting or in any related documents (including the

Form of Proxy for this meeting) to communicate with

the Company for any purposes other than those

expressly stated.

Bellevue Healthcare Trust plc Annual Report and Accounts 202290

THIS PAGE IS INTENTIONALLY LEFT BLANK

Bellevue Healthcare Trust plc Annual Report and Accounts 2022 91

Other Information

Bellevue Healthcare Trust plc

Form of Proxy

I/We ................................................................................................................................................................................

of .....................................................................................................................................................................................

........................................................................................................................................................................................

(BLOCK CAPITALS PLEASE)

being (a) member(s) of Bellevue Healthcare Trust plc appoint the Chairman of the meeting, or ..................................................

(see note 1) ......................................................................................................................................................................

of ....................................................................................................................................................................................

as my/our proxy and, on a poll, to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held

on 28 April 2023 at 12.00 noon and any adjournment thereof.

Please indicate with an ‘X’ in the spaces provided how you wish your votes to be cast on the resolutions specified.

1. To receive and adopt the Annual Report and Accounts for the

year ended 30 November 2022.

2. To approve the Directors’ remuneration implementation report.

3. To re-elect Randeep Grewal as a Director.

4. To re-elect Josephine Dixon as a Director.

5. To re-elect Paul Southgate as a Director.

6. To re-elect Tony Young as a Director.

7. To re-elect Kate Bolsover as a Director.

8. To re-appoint Ernst & Young LLP as auditors to the Company.

9. To authorise the Directors to fix the remuneration of the auditors.

10. To approve a final dividend of 3.235 pence per Ordinary Share.

11. To give authority to allot new shares.

12. To give authority to allot new shares free from pre emption rights.

13. To give authority for the Company to purchase its own shares.

14. To authorise calling general meetings (other than Annual General

Meetings) on 14 clear days’ notice.

Resolution For Against Withheld Discretionary

Subject to any voting instructions so given the proxy will vote, or may abstain from voting, on any resolution as he may think fit.

Signature ........................................................... Dated this..................... day of ...................................................... 2023

Bellevue Healthcare Trust plc Annual Report and Accounts 202292

NOTES

1. If any other proxy is preferred, strike out the words “Chairman of the Meeting” and add the name and address of the proxy

you wish to appoint and initial the alteration. The proxy need not be a member.

2. If the appointer is a corporation this form must be completed under its common seal or under the hand of some officer or

attorney duly authorised in writing.

3. A vote withheld is not a vote in law and will not be counted in the calculation of the proportion of the votes for or against

aresolution.

4. The signature of any one of joint holders will be sufficient, but the names of all the joint holders should be stated.

5. To appoint more than one proxy you may photocopy this form. Please indicate the proxy holder’s name and the number of

shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed the number of

shares held by you). Please also indicate if the proxy instruction is one of multiple instructions being given. All forms must be

signed and should be returned together in the same envelope.

6. To be valid, this form and the power of attorney or other authority (if any) under which it is signed, or a notarially certified

copy of such power, must reach the registrars of the Company, Link Group not less than forty-eight hours before the time

appointed for holding the Annual General Meeting or adjournment as the case may be.

7. The completion of this form will not preclude a member from attending the Meeting and voting in person.

8. Any alteration of this form must be initialled. Your completed and signed proxy form should be posted, in the enclosed reply

paid envelope, to the Company’s Registrars, Link Group, PXS 1, Link Group, Central Square, 29 Wellington Street, Leeds,

LS1 4DL, so as to arrive before 12 noon on 26 April 2023.

FORM OF PROXY CONTINUED

WWW.BELLEVUEHEALTHCARETRUST.COM

CONTENTS

Strategic Report

Investment Objective, Financial Information,

Performance Summary and

Alternative Performance Measures......................... 1

Chairman’s Statement ........................................... 2

Investment Manager’s Report ................................ 6

Investment Policy, Results and

Key Performance Indicators ................................. 14

Risk and risk management .................................. 17

Viability statement ................................................ 21

Stakeholder Engagement .................................... 22

Environmental, Social and

Governance (“ESG”) Policy .................................. 25

Other Information ................................................. 32

Governance

Directors’ Report ................................................. 34

Corporate Governance ........................................ 40

Directors’ Remuneration Implementation Report .. 46

Report of the Audit and Risk Committee .............. 50

Statement of Directors’ Responsibilities ............... 53

Independent Auditor’s Report .............................. 54

Financials

Statement of Comprehensive Income .................. 62

Statement of Financial Position ............................ 63

Statement of Changes in Equity ........................... 64

Statement of Cash Flows ..................................... 65

Notes to the Financial Statements ....................... 66

Other Information

Alternative Performance Measures....................... 81

Glossary .............................................................. 83

Notice of Annual General Meeting ........................ 85

Notes to Notice of Annual General Meeting ......... 87

Form of Proxy ...................................................... 91

Directors, Investment Manager and Advisers ......IBC

Bellevue – one of the largest

healthcare investors

INDEPENDENT - ENTREPRENEURIAL - COMMITTED

Bellevue Healthcare Trust plc is a high conviction,

long-only investment trust invested in listed or quoted

global healthcare equities. It is unconstrained and

able to invest regardless of market cap, sub sector

or region, and the portfolio is concentrated with a

maximum of 35 holdings. Bellevue Healthcare Trust

is managed by Bellevue Asset Management (UK) Ltd,

regulated by the FCA, who have built a successful

track record in this sector.

Excellence in Specialty

Investments

Healthcare Trust plc

This document is printed on Experian Satin,

a paper sourced from well managed,

responsible, FSC

certified forests and

other controlled sources. The pulp used in

this product is bleached using an elemental

chlorine free (ECF) process.

DIRECTORS, INVESTMENT

MANAGER AND ADVISERS

DIRECTORS

Randeep Grewal (Chairman)

Josephine Dixon

Paul Southgate

Professor Tony Young OBE

Kate Bolsover

CORPORATE BROKER

J.P. Morgan Cazenove

25 Bank Street

Canary Wharf

E14 5JP

DEPOSITARY

CACEIS Bank, UK Branch

Broadwalk House

5 Appold Street London

EC2A 2DA

REGISTRAR

Link Group

10th Floor Central Square

29 Wellington Street

Leeds

LS1 4DL

INVESTMENT MANAGER (“AIFM”)

Bellevue Asset Management (UK) Ltd

32 London Bridge Street

24th Floor London

SE1 9SG

SECRETARY & ADMINISTRATOR

Apex Listed Companies Services (UK) Limited (formerly Sanne

Fund Services (UK) Limited)

6th Floor, 125 London Wall

Barbican,

London

EC2Y 5AS

AUDITORS

Ernst & Young LLP

25 Churchill Place

Canary Wharf

London

E14 5EY

REGISTERED OFFICE

6th Floor, 125 London Wall

Barbican,

London

EC2Y 5AS

LEGAL ADVISER

Stephenson Harwood LLP

1 Finsbury Circus

London

EC2M 7SH

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