Schroder British

Opportunities Trust

plc

Report and Accounts for the

period ended 31 March 2022

175996 British Opportunities Trust plc Annual Report Pt1.qxp_175996 British Opportunities Trust plc Annual Report Pt1 14/07/2022 13:40 Page a

Investment objective

The Company’s investment objective is to deliver long-term

total returns throughout the life of the Company by investing

in a diversified public equity and private equity portfolio of

predominantly UK Companies.

Target return

The Company aims to provide a NAV total return of 10per

cent. per annum (once the Company is fully deployed across

the target allocation between public and private equity

investments) over the life of the Company.

Investment policy

The Company will invest in a diversified portfolio of both

public equity investments and private equity investments

consisting predominantly of UK Companies with strong long-

term growth prospects.

It is anticipated that the Company’s portfolio will typically

consist of 30 to 50 holdings and will target companies with

an equity value between approximately £50 million and

£2billion at the time of initial investment.

The Company will focus on companies which the Portfolio

Managers consider to be sustainable from an environmental,

social and governance perspective, supporting at least one

of the goals and/or sub-goals of the United Nations’

Sustainable Development Goals (“SDGs”), or which the

Portfolio Managers consider would benefit from their

support in helping them incorporate SDGs into their

business planning and/or in reporting their alignment with

SDGs.

The Company will aim to achieve a target allocation of

approximately 50 per cent. public equity investments and

approximately 50 per cent. private equity investments. The

Company’s portfolio will predominantly comprise public

equity investments until target deployment into private

equity investments is achieved.

The Company may, from time to time, use borrowings for

investment and efficient portfolio management purposes.

Gearing will not exceed 10 per cent. of Net Asset Value,

calculated at the time of drawdown of the relevant

borrowing.

The full investment policy can be found on the website and on pages38 to

41 of the prospectus dated 10 November 2020. Proposed changes to the

investment policy are summarised in the Chairman’s Statement and can

be found in full on pages 71 to 74 of the Notice of Annual General

Meeting

175996 British Opportunities Trust plc Annual Report Pt1.qxp_175996 British Opportunities Trust plc Annual Report Pt1 14/07/2022 13:40 Page b

Report and Accounts

for the period ended 31 March 2022

Strategic Report

Contents

Strategic Report

Financial Highlights and Key Performance Indicators 2

Chairman’s Statement 3

Portfolio Managers’ Review 5

Investment Portfolio 15

Strategic Review 16

Governance

Board of Directors 30

Directors’ Report 32

Audit and Risk Committee Report 36

Management Engagement Committee Report 39

Nomination Committee Report 40

Directors’ Remuneration Report 42

Statement of Directors’ Responsibilities in respect of the

Annual Report and Accounts 44

Financial

Independent Auditor’s Report 45

Income Statement 52

Statement of Changes in Equity 53

Statement of Financial Position 54

Cash Flow Statement 55

Notes to the Accounts 56

Annual General Meeting

Annual General Meeting – Recommendations 71

Notice of Annual General Meeting 74

Explanatory Notes to the Notice of Meeting 75

Definitions of Terms and Performance Measures 77

Shareholder Information 80

Report and Accounts

for the period ended 31 March 2022

1

Strategic Report

Governance Financial

Annual General Meeting

175996 British Opportunities Trust plc Annual Report Pt1.qxp_175996 British Opportunities Trust plc Annual Report Pt1 14/07/2022 13:40 Page 1

Financial Highlights and Key Performance Indicators

2

Schroder British Opportunities Trust plc

Other financial information

31 March 2022 30 June 2021 % Change

Shareholders’ funds (£’000) 78,103 81,327 (4.0)

Shares in issue 75,000,000 75,000,000 –

NAV per share (pence) 104.14 108.44 (4.0)

Share price (pence) 84.00 105.00 (20.0)

Share price discount to NAV per share* (%) 19.3 3.2

Net cash* (%)

2

(19.8) (22.1)

Nine months

ended Period ended

31 March 2022 30 June 2021

1

Net revenue loss after taxation (£’000) (577) (433)

Net revenue loss per share (pence) (0.77) (0.58)

Dividend per share (pence) – –

Ongoing Charges* (%)

3

1.39 1.40

1

The comparative figures cover the period from the date of incorporation on 21 September 2020, to 30 June 2021. The Company began investing on

1 December 2020 (“launch date”).

2

Borrowings used for investment purposes, less cash, expressed as a percentage of net assets. The Company currently has no borrowings, so this is

shown as a negative, net cash figure.

3

Based on annualised ongoing charges as the financial period is less than a full year, in accordance with AIC guidance.

Returns for the nine months ended 31 March 2022

-20.0

%

Share price

(Period ended

30 June 2021

1

:

+10.6%)

(Period ended

30 June 2021

1

:

+5.0%)

-4.0

%

Net asset value

(“NAV”) per share

Some of the financial measures below are classified as Alternative Performance Measures, as defined by

the European Securities and Markets Authority and are indicated with an asterisk (*). Definitions of

these performance measures, and other terms used in this report, are given on page 77 together with

supporting calculations where appropriate.

Public 57.6%

Private 42.4%

Equity holdings

(30 June 2021:

67.9%)

(30 June 2021:

32.1%)

175996 British Opportunities Trust plc Annual Report Pt1.qxp_175996 British Opportunities Trust plc Annual Report Pt1 14/07/2022 13:40 Page 2

I am pleased to present the

Company’s second Report

and Accounts which covers

the nine month period

ended 31 March 2022. As

set out in our first Report

and Accounts, the

Company has shortened its

second accounting period

to nine months to better

align our reporting with

periodic valuations of

underlying private equity

investments.

Since last reporting to

investors, markets around

the world have come under pressure as the war in Ukraine

and other factors have resulted in higher inflation and

monetary policy tightening in many economies. Public

equities have suffered across the board and our public

portfolio has not been immune to that. The market has

marked down growth companies in particular, due to the

cost of finance rising. The immediate effect of this on the

Company has been for the share price discount to net asset

value (“NAV”) to widen as it has with many investment

companies that hold private equity investments.

Shareholders will read in the performance review below that

this discount change is not driven by the underlying

performance of the private companies we invest in. Quite the

opposite in fact. Unfortunately, we cannot influence the

market dynamics and the ‘group think’ that exists but we can

state that the Company is well placed with its current

portfolio.

Performance

The Company’s NAV produced a negative return of -4.0%

during the period. Whilst our private equity holdings

demonstrated strong resilience, this was offset by weakness

in our public equity holdings. The share price produced a

disappointing negative return of -20.0%, as the discount

significantly widened during the period from 3.2% at the

beginning of the period to 19.3% at 31 March 2022.

Further comment on performance can be found in the

Portfolio Managers’ review. Despite current headwinds, there

are lots of positive developments that support our rationale

for investment.

2

Earnings and final dividend

The Company’s objective is to provide long-term total returns

to shareholders. The Company earnt investment income

from the public equity holdings during the period but after

deducting operating expenses there was a revenue loss. As a

result, the Directors do not propose the payment of a final

dividend. In line with current best practice, we will seek

shareholder approval of this proposal at the forthcoming

Annual General Meeting (“AGM”).

Discount management

Your Board monitors the level of the Company’s discount to

NAV and regularly reviews its share buy back policy. At the

time of the Company’s flotation in 2020, the Board stated

that it would utilise share buy backs to seek to maintain the

price at which the ordinary shares trade relative to their

prevailing NAV at no greater than a 5 per cent discount,

measured over the long term and subject to normal market

conditions. It is fair to say that current market conditions

have seen high, unforeseen levels of volatility which the

Board does not regard as normal. Nevertheless, after the

end of the period, we utilised the authorities provided by

shareholders to purchase 100,000 shares to be held in

treasury to reissue when the Company regains its premium

rating to NAV.

Your Board will seek shareholder approval to renew its

standing authority to repurchase shares at the forthcoming

AGM. We will continue to monitor the level of the discount

and consider the merits of further buy backs, which should

be accretive in nature when discounts are wide. However,

any decision to buy back shares will be influenced by such

factors as: market conditions; the small size of the Company;

the illiquid nature of the private equity holdings; the need to

retain cash for investment opportunities; and the level of the

Company’s borrowing, if any.

Portfolio activity

Further progress was made during the period in deploying

capital into attractive investment opportunities to increase

portfolio diversification. Details of these investments are

available in the Portfolio Managers’ Report. This was limited

to public equities in the period as, despite detailed due

diligence on a number of private equity opportunities, no

new private investments were made. The investment team

remained focused on pricing discipline in a highly

competitive market. Good companies do not make good

investments if the pricing is too high. I am pleased to report

that since the period end, we have announced three new

private equity investments into Mintec, CFC, and Pirum.

Following these investments private equity investment

represented approximately 49%

1

of Company’s Gross Asset

Value. This achieves the target that we set out at Initial Public

Offering (“IPO”). In addition, the Company has made

commitments to support portfolio companies in executing

their growth strategies and has now fully utilised its allowed

exposure to private investments.

Proposed change of investment policy

At IPO in December 2020, your Board indicated in its

investment policy that it would aim to achieve approximately

50% of public equity investments and approximately 50% of

private equity investments, once fully invested. We also set

an investment restriction stating that private equity

investments could account for no more than 60% of the

Company’s Gross Asset Value at the time of commitment.

Report and Accounts

for the period ended 31 March 2022

3

Strategic Report

Chairman’s Statement

1

Allocation % calculated using 6th of June 2022 Gross Asset Value with Private Equity valuations as at 31 December 2021

2

Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as

well as up and investors may not get back the amounts originally invested.

175996 British Opportunities Trust plc Annual Report Pt1.qxp_175996 British Opportunities Trust plc Annual Report Pt1 14/07/2022 14:04 Page 3

4

Schroder British Opportunities Trust plc

Following the commitment to the latest private investment,

and taking into account existing commitments, the allocation

to private equity is now fully utilised.

After careful consideration and consultation with

shareholders, given the strong pipeline of investment

opportunities identified by our Portfolio Managers’, your

Board is proposing to remove the 50:50 allocation guidance

and the private equity limit. This will give our Portfolio

Managers more flexibility to take advantage of further

private equity opportunities should they deem them

attractive when weighed against opportunities available in

public markets and vice versa. The investment restriction

that the Company’s portfolio must contain a minimum of 30

holdings is unchanged and it is the Board and the Portfolio

Managers’ intention that the portfolio will continue to

contain a diverse range of public and private equity

investments.

The amended investment policy is set out in the Notice of

Meeting at the end of this report and accounts and the

changes will be put forward to shareholders for approval at

the AGM.

Webinar from the Portfolio Managers

and shareholder communications

Our Portfolio Managers will be presenting at a webinar on

Tuesday 19 July 2022 from 1.00 – 2.00 p.m. to provide some

insight into their decision making and the current portfolio.

Shareholders are encouraged to visit the website:

https://www.schroders.com/sbo to sign up.

Regular news about the Company can be found on the

website:

https://www.schroders.com/en/uk/private-

investor/fundcentre/funds-in-focus/investment-

trusts/schrodersinvestment-trusts/never-miss-an-update

AGM

Our second AGM will be held on Monday, 5 September 2022

at 12.00 noon at 1 London Wall Place, London EC2Y 5AU. Our

Portfolio Managers will provide a short presentation at this

meeting to investors who attend in person.

Your Board welcomes shareholders’ comments and

questions for us or our Portfolio Managers. Please contact us

via our Company Secretary:

amcompanysecretary@schroders.com or write to us at The

Company Secretary, Schroder British Opportunities Trust plc

at the above address.

We will endeavour to get your questions answered and

published prior to the AGM and will also provide answers to

commonly asked questions on the Company’s webpages.

Shareholders are also encouraged to cast their votes by

proxy to ensure that they are counted. Your Directors

consider that all of the resolutions being proposed are in the

best interests of the Company and its shareholders and

therefore recommend a vote in favour of each, as your

Directors intend to do in respect of their own holdings.

Outlook

Despite the challenging economic environment, your Board

is pleased with the diversified portfolio the Portfolio

Managers have constructed since IPO across a broad range

of leading UK businesses, both listed and privately owned,

spanning a number of sectors. The Company continues to

invest ‘fresh’ equity into small to mid-sized British businesses,

facilitating and driving growth, in line with its IPO mandate.

Equity valuations are seemingly disconnected from fair value

in many sectors and market sentiment is driving pricing

rather than fundamentals. This creates opportunities for a

smart investor and our Portfolio Managers aim to add

attractively valued investments that display characteristics

such as pricing power, business transformation potential and

robust technological enablement. The Company has a strong

pipeline of innovative British companies but will maintain its

pricing discipline when assessing further additions.

Your Board is disappointed by market conditions reducing

shareholder return over the period but remains confident in

the medium term about the strength of the current portfolio

and the further opportunities in consideration at the time of

writing.

Neil England

Chairman

13 July 2022

Chairman’s Statement

175996 British Opportunities Trust plc Annual Report Pt1.qxp_175996 British Opportunities Trust plc Annual Report Pt1 14/07/2022 13:40 Page 4

Report and Accounts

for the period ended 31 March 2022

5

Strategic Report

Portfolio Managers’ Review

Introduction

Summary

• The Company reported a net asset value (“NAV”) of

104.14p per share as of 31 March 2022, a decrease of

4.0% relative to the NAV as of 30 June 2021 (108.44p per

share).

• In a challenging environment, the private equity holdings

have continued to perform strongly throughout the

period. In this regard, the revaluation of our largest

investment, Rapyd, and the overall resilience of the

private equity holdings has been particularly pleasing.

Meanwhile, turbulent markets and a progressively

challenging economic environment largely contributed to

weakness of the public equity holdings, with Victorian

Plumbing and Trustpilot weighing on returns despite

strong share price performance from positions in

Watches of Switzerland and Blue Prism over the

period.

• We continued to seek to invest fresh equity, where

attractive, into small to mid-sized British businesses,

facilitating and driving their growth. We have now made

a total of 15 primary equity investments (IPOs, rights

issues or equity placings) since the Company’s launch.

• We continued to seek out attractive businesses that we

believe exhibit strong growth trajectories and added five

new holdings to the portfolio over the period

(LendInvest, MaxCyte, Velocys, On The Beach Group

and Sosandar), while we exited two, and another was

disposed of following a take-over.

• As at 31 March 2022, 83% of net assets were invested

across public equities and private equities, of which 35%

of net assets were invested in private companies.

• At the period end, the Company held a total of

37holdings (six of which were private investments), all of

which were made from a bottom-up, rather than top-

down approach to investing. With that said, the portfolio

was skewed towards investments in the IT Services and

Commercial Services & Supplies sectors. After the end of

the period, further progress with the portfolio was made,

including three new exciting private equity investments in

CFC, Mintec and Pirum. At the time of writing, the

Company has reached its target allocation of c.50% per

cent private equity investments, while delivering this

within the deployment timeline of 6 to 24 months from

IPO.

• While the current economic environment may be

challenging, we believe this is one of the most opportune

times to be an investor, where falling valuations for many

businesses are removed from their underlying positive

fundamentals.

Market

The period was a game of two halves, especially for small

and mid-cap areas of the market. UK public equities in

aggregate rose over the last six months of 2021, punctuated

by bouts of volatility driven by COVID-19 news. UK large, mid

and small cap equity (FTSE 100, 250 and Smaller Companies

respectively) indices posted positive returns. However, while

UK equities overall were resilient in Q1 2022 as investors

began to price in the additional inflationary shock of Russia’s

invasion of Ukraine, this resilience was driven by large cap

oil, mining, healthcare and banking companies. Meanwhile,

UK small and mid-cap stocks performed poorly; they were

negatively impacted as consumer-focused sectors and a

number of economically sensitive areas of the market

underperformed. Companies offering high future growth

potential lagged as the prospect of rising interest rates

continued to heavily influence the investor mindset in favour

of nearer-term returns. Given the portfolio’s focus on

investing in companies with strong long-term growth

prospects, this was a challenging period.

In private markets, the second half of 2021 saw continued

high levels of activity taking total deal volumes and deal

numbers to record levels for the year in the UK. This

reflected confidence returning to the market following a

disrupted 2020. The final quarter of 2021, however, saw

several headwinds emerge which caused a slight cooling in

sentiment. The Omicron variant of Covid-19, combined with

ongoing issues around supply chains, and the emergence of

inflation, led to the reassessment of transactions. However,

deals continued to complete as demand remained high.

Despite the correction in public equity markets which started

in the first quarter of 2022, private markets, particularly at

the growth and buyout stage where the Company is most

focused, remained buoyant as transactions negotiated over

the preceding 3-9 months continued to come to fruition. The

first signs of the downturn approaching were most evident in

the valuations of venture-stage businesses in the technology

sector, which saw steep mark-to-market corrections.

Throughout this period of irrational exuberance, which

resulted in more capital chasing after transactions, we

continued to remain particularly cautious, maintaining our

price discipline, and no new private investments were made

during the period.

175996 British Opportunities Trust plc Annual Report Pt1.qxp_175996 British Opportunities Trust plc Annual Report Pt1 14/07/2022 13:40 Page 5

6

Schroder British Opportunities Trust plc

Portfolio Managers’ Review

Portfolio performance

Attribution analysis £m Quoted Unquoted Derivatives Net cash Other NAV

Value at 30.06.21 43.8 20.7 (0.2) 18.0 (1.0) 81.3

Investments 7.1 0.2 – (7.3) – –

Realisations at value (5.7) – 0.7 5.0 – –

Fair value (losses)/gains (7.9) 6.5 (0.5) – – (1.9)

Costs and other movements – – – (0.2) (1.1) (1.3)

Value at 31.03.22

37.3 27.4 (0.0) 15.5 (2.1) 78.1

Source: Schroders, as of 31 March 2022. Numbers have been rounded.

The Company reported a net asset value (“NAV”) of 104.14p

per share as of 31 March 2022, a decrease of 4.0% relative to

the NAV as of 30 June 2021 (108.44p per share).

The NAV return of -4.0% comprised:

– Quoted holdings: -9.8%

– Unquoted holdings: 8.2%

– Costs and other movements: -2.4%

Watches of Switzerland performed very well following the

announcement of an ambitious store expansion plan, which

led it being the top performing stock in the FTSE 250 in 2021

and a key positive contributor to the Company’s

performance. However, the stock has weighed on returns in

2022 to date as its shares have been a casualty of the wider

sell-off of the luxury goods sector witnessed this year.

Elsewhere, OSB and Blue Prism also did well, with the

latter’s performance driven by it being sold to SS&C

Technologies.

As mentioned earlier, as 2022 took shape, companies

offering high future growth potential were negatively

impacted in the public markets, as the prospect of rising

interest rates continued to heavily influence the investor

mindset in favour of nearer-term earnings. For example, the

share prices of our holdings in MaxCyte and Trustpilot were

impacted by the sell-off of risk assets. Although these are

presently loss-making companies, upward momentum

continues in the underlying businesses, and this drove us to

use the market weakness as an opportunity to increase the

size of our holdings in Q1 2022. Meanwhile, Victorian

Plumbing has had a disappointing start since becoming a

public company in June 2022, with its shares impacted during

the period by downward revisions in its revenue growth

guidance. After carefully reassessing our investment, we

believe it is well placed relative to its peers to compete in the

current environment, with its strong balance sheet

anchoring our investment thesis. Lastly, our position in

Luceco held performance back due to a combination of

concerns about the resilience of growth in the RMI space, as

well as higher than expected costs.

In a challenging environment, the private equity holdings

have continued to perform strongly and the overall resilience

of the private holdings has been particularly pleasing. The

Company’s unquoted holdings saw an increase in value of

32.4%, offsetting 8.2% of the full year decrease in NAV.

Waterlogic was marked up towards the end of 2021, a

valuation which was retained at the period end, to reflect

substantial progress in its buy and build plan, including the

transformational agreement to combine with Culligan

International, creating a global leader in sustainable drinking

water solutions and services. At the time of writing, the deal

remains subject to receipt of regulatory approvals and the

satisfaction of customary closing conditions, which are

expected in the second half of 2022.

Another key contributor to performance was Rapyd, the

world’s largest local payments network, which increased in

fair value by a total of 28% or £1.9m, reflecting the

company’s strong recent financial performance.

Furthermore, while valuation multiples have been volatile

over the recent past, some of Rapyd’s close comparators

continue to be resilient. One of the principal drivers of the

company’s growth was the self-service on-boarding tool.

Rapyd remains the company’s largest holding representing

13.2% of total investments.

Elsewhere across the portfolio, several other private equity

investments have also seen uplifts thanks to positive

underlying operational progress. London-based technology-

enabled home-care company Cera has been marked up

39.0% in the period, following strong sales growth.

Meanwhile, EasyPark, a leading, fast growing parking tech

company that helps drivers find and manage parking spaces

and charge their electrical vehicles, has also risen in value

due to the company’s positive integration with ParkNow and

its continued geographic expansion.

Graphcore and Learning Curve have also continued to

make good progress but remain broadly held at or near cost

reflecting the relatively short time since the Company’s initial

investments.

Key positive and negative performers over the

9months to end March 2022

Top 5 contributors Contribution %

Waterlogic +2.4

Rapyd Financial Network +2.3

Cera +1.5

Easypark +1.0

Watches of Switzerland +0.9

175996 British Opportunities Trust plc Annual Report Pt1.qxp_175996 British Opportunities Trust plc Annual Report Pt1 14/07/2022 13:40 Page 6

Report and Accounts

for the period ended 31 March 2022

7

Strategic Report

Portfolio Managers’ Review

Bottom 5 contributors Contribution %

Victorian Plumbing (1.4)

Luceco (0.9)

Trustpilot (0.9)

GB Group (0.8)

Ibstock (0.7)

Portfolio activity & review

The portfolio is diversified across a number of industry

sectors, and in the chart below we show the split of the

portfolio at the end of the period. We believe that

diversification is key to the protection of capital. Whilst some

areas of the market may be in favour in certain periods, we

believe that an all-weather portfolio will better protect

investors in the long run, with more stable investment

returns.

Industry group as % of total investments

The portfolio has been constructed from the bottom up, with

a focus on businesses with strong competitive advantages,

large total addressable markets and strong management

teams. The result is a portfolio that is well-exposed to

companies with a technology offering (notably in software &

services and semiconductors & semiconductor equipment

areas of the market), which reflects the digitalisation age of

today as well as our belief that this will continue. While there

is exposure to the wider consumer discretionary sector,

which is facing significant inflationary risk, we believe our

investments are poised to navigate the current landscape

and beyond due to a combination of strong pricing power,

market leadership and/or high barriers to entry. Meanwhile,

the energy sector is a relatively small component of the

portfolio presently, which may or may not change over time.

Over the period, we continued to invest in attractive

businesses which we believe exhibit strong growth

trajectories underpinned by a range of factors including

regulatory tailwinds, the opportunity to increase and benefit

from competitors leaving the market. In the last six months

of 2021, activity included participation in the IPO of buy-to-let

mortgage lender LendInvest, and new investments in

medical device company MaxCyte, sustainable fuels

company Velocys and online travel agent On The Beach

Group. While at the beginning of 2022, we invested in online

clothing retailer Sosandar.

December 2021 saw one of our companies, Blue Prism,

taken private by SS&C Technologies, making it the second

company in our portfolio to have been divested following a

take-over offer.

The end of 2021 also saw us continue to invest in fresh

equity placings, this time in DiscoverIE, Velocys, GB Group,

Invinity Energy Systems and Ideagen, taking the total

number of primary equity investments since the Company’s

launch to 15. It was also the second time since the launch of

the Trust that the latter two firms had raised equity to fund a

pipeline of growth opportunities in their end markets.

Perhaps indicative of its attractiveness, after the period-end

Ideagen received a confirmed bid from Hg Capital, a

European private equity firm, and the firm is now delisted

from the stock market. As active investors, we are always

pleased to see our portfolio companies make positive

changes from an environmental, social and governance

(“ESG”) perspective following our engagements with them,

especially where we are providing fresh equity to facilitate

and drive their future growth. DiscoverIE is a good example.

While we engaged with a number of portfolio companies on

ESG matters over the period, we engaged with DiscoverIE in

August 2021 with a focus on board diversity, remuneration

and climate change. The firm subsequently announced the

appointment of a female ethnic minority member on the

board with effect from January 2022 and has since adopted a

revised diversity policy which includes targeting a minimum

40% female board. Elsewhere it has prioritised reducing

carbon emissions by 50% as a first step towards achieving its

a ‘net zero’ target.

As 2022 gathered pace, public equity markets weakened

from concerns over higher-than-expected inflation caused by

a combination of supply chain disruptions and the war

between Russia and Ukraine. The cash buffer that we held

during such a volatile period served us well to not only

preserve the net asset value of the Company during falling

markets, but also as dry powder to invest in emerging

opportunities.

During the first quarter of 2022, we did not deem there to be

any IPO opportunities attractive enough to participate in for

inclusion in the portfolio. Following a significant fund-raising

cycle in 2020 and 2021, we found that companies seeking to

list on the stock market in the first few months of 2022 were

either low in quality or expected valuations that we believed

were not befitting of the prevailing pricing environment. Our

focus is on finding opportunities for growth and we remain

disciplined in our approach and continued to assess

opportunities across both public and private markets. We did

however see significant dislocations in asset prices of

already-listed companies whose underlying fundamentals

had not changed. Some of these we held, such as Trustpilot

and Watches of Switzerland, in which we modestly

increased our positions. The shares of both companies sold

off for different reasons, but ultimately a ‘risk-off’

environment meant that the market was not willing to pay

for growth.

Elsewhere, we sold out of Breedon, Ibstock and Civitas, the

latter after the period end. Separately, we also reduced

exposure to more cyclically exposed companies Volution

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175996 British Opportunities Trust plc Annual Report Pt1.qxp_175996 British Opportunities Trust plc Annual Report Pt1 14/07/2022 13:40 Page 7

8

Schroder British Opportunities Trust plc

Portfolio Managers’ Review

and Bodycote, as we felt they would be pressured in the

current environment.

Over the period, we conducted a significant amount of due

diligence on a number of new, private equity opportunities

that have been progressing through our investment pipeline.

However, we remained steadfast in our pricing discipline and

ultimately declined several deals on valuation grounds. This

patience was rewarded after the period end with three new

investments, which we believe represent attractive entry

points that remain true to our valuation philosophy.

Developments since 31 March 2022

In May 2022, we announced the investment into Mintec, a

leading provider of food-related commodity pricing. This was

an investment that exemplified the collaborative research

efforts of Schroders’ public and private equity teams who

manage the Company’s portfolio, with the former offering

crucial insights into the attractions of Mintec’s business

model following research carried out on Euromoney

Institutional Investor, one of Europe’s largest business and

financial information companies, and one of the public

equity positions in the portfolio, which owns a similar

business in the same industry. The benefit of this shared

insight demonstrates the unique collaborative research

element in our management of the Company relative to

other wholly private equity or wholly public equity

investment vehicles. In the same month, we also announced

the investment into CFC, a technology-driven global

insurance business that has established itself as a leader in

cyber and provider of cover for a diverse range of emerging

risks that sit at the intersection of technology and business.

In June 2022, we announced the investment into Pirum, a

leading provider of post-trade automation and collateral

management technology for the global securities industry

and the Company’s ninth private equity investment since

launch. Pirum was founded in 2000 to provide advanced,

centralised and secure reconciliation services for financial

market participants and has a market leading position.

We are delighted to have completed these three new private

equity investments in strong, UK-based, market leaders. We

had been tracking these businesses for an extended period

of time through our long-term relationships with private

equity firms Synova, Bowmark and Vitruvian, and

supplemented these efforts with enhanced due diligence

made possible by the close working relationship between

our public and private equity teams, which provided the

widest possible lens for assessment of our new investee

companies. We expect these businesses to be resilient to the

ongoing macroeconomic and market trends and are excited

to be part of the next phase of their growth story.

As at 8 July 2022 the Company holds a cash balance of

£2.5m.

The below figure illustrates the progress made over the 12months to end June 2022.

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175996 British Opportunities Trust plc Annual Report Pt1.qxp_175996 British Opportunities Trust plc Annual Report Pt1 14/07/2022 13:40 Page 8

Outlook

The recent downturn in tech stocks precipitated by rising

inflation and interest rates, as well as the ongoing war in

Ukraine, has principally impacted the venture capital and

pre-IPO landscape, where valuation multiples have

significantly contracted, putting them at a funding risk in the

current environment. In contrast, our portfolio focusses its

private investments on the later ‘growth capital’ and ‘buyout’

areas of the private equity landscape, where valuations have

contracted but the delta has been relatively more resilient.

Whilst we recognise that private equity valuations may

continue to converge towards that of the public markets, we

believe that the business models of our investments, and

their end market fundamentals, differentiate our portfolio.

This was evidenced during the period, where the aggregate

of our private asset portfolio was revalued upwards – a

function of growth in the underlying businesses offsetting

the compression in the valuation multiples applied to them.

A change in the business cycle represents an opportunity for

leading companies to consolidate their advantage by

acquiring smaller players at attractive valuations. We have

seen a number of the private companies in our portfolio

complete acquisitions, and we expect this trend to continue.

Indeed, this is often a key part of our investment case and so

far, Learning Curve, Waterlogic, EasyPark, Rapyd and Cera

have each implemented a targeted and disciplined M&A

approach to grow their revenues. Furthermore, we have

seen some evidence that our private investments are

attractive to third parties via the December 2021

announcement that Waterlogic is to merge with Culligan

International, which is subject to regulatory approval.

On a weighted-average basis, the revenue growth reported

by our current portfolio companies for their respective fiscal

2021 year was approximately 47%. We believe investing in

high quality, high growth businesses such as these alongside

strong management teams and highly regarded investors

will generate strong returns over the long term. Valuations

may ebb and flow but the growth in these businesses will

drive long-term value.

We expect to see more attractive public and private

investment opportunities emerging and will look for factors

such as pricing power, business transformation potential and

robust technological enablement. As ever, we will maintain

price discipline in our investment approach.

We see the pace of the current quantitative tightening cycle

as the greatest risk to equity markets for the rest of 2022,

whilst inflation will continue to weigh on consumer

confidence and impact the demand outlook. The portfolio is

not immune to the forces which are buffeting the full

spectrum of financial assets at the moment but in this

environment, there is opportunity.

While ‘growth’ as an investment style may be challenged in

the current environment, falling valuations for many

businesses are removed from their underlying positive

fundamentals. Our differentiated public-private equity

strategy enables to invest without boundaries, whilst

broadening our investable universe. We are not forced

sellers when an investment crosses from private to public

and vice versa – as such we hope to maximise the value

creation of our investments for longer; and makes us more

informed investors.

Schroder Investment Management Limited

13 July 2022

Report and Accounts

for the period ended 31 March 2022

9

Strategic Report

Portfolio Managers’ Review

The Company’s top ten holdings as of 31 March 2022 are set out below.

Fair value Fair value

Quoted/ as of % of total as of % of total

Top 10 holdings unquoted 30 June 2021 investments 31 March 2022 investments

(£’000) (£’000)

Rapyd Financial Network

1

Unquoted 6,667 10.3 8,565 13.2

Waterlogic

2

Unquoted 3,928 6.1 6,045 9.3

Cera Unquoted 3,245 5.0 4,509 7.0

Graphcore Unquoted 2,896 4.5 3,178 4.9

EasyPark

3

Unquoted 1,962 3.0 2,775 4.3

Learning Curve

4

Unquoted 2,032 3.2 2,336 3.6

Ascential Quoted 2,451 3.8 2,222 3.4

OSB Quoted 1,795 2.8 2,187 3.4

Keyword Studios Quoted 1,722 2.7 1,808 2.8

Genuit Quoted 2,246 3.5 1,800 2.8

1

Held via intermediary vehicle, Target Global Fund.

2

Held via intermediary vehicle, EPIC-1b Fund.

3

Held via intermediary vehicle, Purple Garden Invest (D) AB.

4

Held via intermediary vehicle, Agilitas Boyd 2020 C0-Invest Fund.

Source: Schroders

175996 British Opportunities Trust plc Annual Report Pt1.qxp_175996 British Opportunities Trust plc Annual Report Pt1 14/07/2022 13:40 Page 9

Ten Largest Investments

Rapyd

The world’s largest local payments network

Rapyd is the fastest way to power local payments

anywhere in the world, enabling companies across the

globe to access markets quicker than ever before. By

utilizing Rapyd's payments network and Fintech-as-a-

Service platform, businesses and consumers can engage

in local and cross-border transactions in any market. The

Rapyd platform is unifying fragmented payment systems

worldwide by bringing together 900-plus payment

methods in over 100 countries.

Latest updates:

• Acquired Valitor, a European payments and card issuing

company, and launched Rapyd Ventures. Rapyd also

announced in December that it had agreed to acquire

Hong Kong based Neat, a cross-border trade enabling

platform for small and medium-sized businesses and

start-ups.

• Raised a further $300m in August 2021 to enable the

company to capitalize on emerging opportunities and

accelerate the company’s growth.

• In May 2022, Rapyd announced the launch of Virtual

Accounts, a vital product, empowering businesses to

expand globally while supporting local payments. This

new offering allows organizations anywhere in the world

to securely and reliably accept local bank transfers across

over 40 countries in more than 25 currencies, including

the US, UK, EU, and APAC regions. The launch of Virtual

Accounts comes at a crucial time for businesses

searching for payment support to allow them to tap into

the global marketplace. We continue to be impressed by

the innovation and pipeline roll out at Rapyd.

Source: Pictures shown are the property of their respective entities where

appropriate

Waterlogic

Provider of global workplace hydration solutions

Waterlogic is an innovative designer, manufacturer,

distributor and service provider of drinking water

dispensers and solutions designed for environments such

as offices, factories, hospitals, restaurants, hotels,

schools, and public spaces. From freestanding,

countertop and integrated dispensers to water filling

stations, fountains and boilers, every solution focuses on

delivering high quality water in a safe and sustainable

way.

Latest updates:

• In January 2022, the company agreed to combine with

Culligan International to create a leader in sustainable

drinking water solutions and services. The transaction

brings additional scale and expertise to drive innovation

in the development of new water filtration, purification

and treatment solutions.

• In April 2022, Waterlogic, announced the acquisition of

The Pure Water Company. Located in Norway, The Pure

Water Company is a supplier of water purifier systems for

Office & Horeca in Norway, with recent expansion into

Sweden and Denmark. The acquisition of the business

expands Waterlogic’s reach and foothold in the Nordic

market and gives the Company a strong opportunity to

introduce and offer an even wider range of hydration

solutions.

Source: Pictures shown are the property of their respective entities where

appropriate

Cera

Technology-enabled home care services provider

Cera is a technology-enabled healthcare company which

has grown rapidly to become one of the largest home

care providers in the United Kingdom. Cera has

pioneered digital services, data analytics technologies

10

Schroder British Opportunities Trust plc

Portfolio Managers’ Review

175996 British Opportunities Trust plc Annual Report Pt1.qxp_175996 British Opportunities Trust plc Annual Report Pt1 14/07/2022 13:40 Page 10

and artificial intelligence to improve elderly care,

empowering users to live longer, healthier and better

lives at home.

Latest updates:

• The new financing from the former round was used to

advance the company’s tech platform, as well as further

scale its service platform through the acquisition of small

and mid-sized home care serve providers in the UK.

• In October, Cera announced its plans to develop

15digital healthcare hubs in cities and towns throughout

the UK over the next six months. These hubs, combined

with Cera’s existing network throughout the UK, will see

the company providing healthcare services to a

community equal in size to the capacity of several dozen

NHS hospitals or 1000 care homes every day.

Source: Pictures shown are the property of their respective entities where

appropriate

Graphcore

Developer of new processors for machine intelligence

Graphcore has developed the Intelligence Processing

Unit (IPU), a new type of microprocessor specifically

designed from the ground up to meet the needs of

current and next-generation artificial intelligence (“AI”)

applications. Graphcore's proprietary technology

combines its advanced semiconductor hardware, the

world's most complex processor, with its powerful

software tools, to dramatically outperform legacy

technologies such as graphic processing units.

Latest updates:

• Graphcore has begun shipping its new IPU product – a

powerful compact, affordable system for innovators to

explore new machine intelligence approaches enabled by

Graphcore’s IPU technology.

• In February 2022, Graphcore announced a partnership

with NEC – one of the world’s best known and most

respected technology companies – to accelerate

heterogeneous supercomputing and innovation in

artificial intelligence. The collaboration brings together

their Intelligence Processing Unit (IPU) systems with

NEC’s vector supercomputer SX-Aurora TSUBASA to

deliver AI high-performance solutions to customers

worldwide. Graphcore became part of NEC’s offering to

customers who are building their AI compute capacity

and want the advanced capabilities and performance

advantage made possible by the IPU.

Source: Pictures shown are the property of their respective entities where

appropriate

EasyPark

Fast-growing European mobility company that helps

drivers to find, manage and pay for both parking and

electric vehicle charging

EasyPark Group’s technology supports its users, the

companies they work for, cities and parking operators

with parking administration, planning and management

working seamlessly in over 2,200 cities across

20countries throughout Europe and Australia.

Latest updates:

• Our investment provided part of the financing for

EasyPark’s acquisition of PARK NOW, which offers a broad

portfolio of digital services related to parking. This will

enable EasyPark to grow further and become a global

pacesetter in parking-related mobility services.

Report and Accounts

for the period ended 31 March 2022

11

Strategic Report

Portfolio Managers’ Review

175996 British Opportunities Trust plc Annual Report Pt1.qxp_175996 British Opportunities Trust plc Annual Report Pt1 14/07/2022 13:40 Page 11

• In February 2022 EasyPark Group, announced that PARK

NOW users in Austria are being migrated to the EasyPark

app, followed by Swiss, German and French users in the

upcoming months. The PARK NOW has been a part of

EasyPark Group since June 1, 2021, and the integration of

the two companies is being realized in several steps.

• Additionally, in moving its leading position forward, the

EasyPark Group became the first parking application to

launch Android Auto support. This means that EasyPark

has taken another step towards more accessible and

frictionless car parking for millions of drivers.

• EasyPark announced in March 2022 that after

14successful years as CEO of EasyPark Group, Johan

Birgersson has decided to step down from his position to

enable a leadership transition ahead of the company’s

next phase. Cameron Clayton, previously CEO of The

Weather Company, will take over the role as CEO of

EasyPark Group as of April 19, 2022. Johan Birgersson will

continue as a Senior Advisor to Cameron Clayton and to

the Board of Directors. We see this as a positive

development as EasyPark continues to scale and expand

its international operations in-line with our original

business case.

Source: Pictures shown are the property of their respective entities where

appropriate

Learning

Curve Group

Provider of training and education services for adults

Learning Curve provides life-changing opportunities for

over 120,000 learners and 4,500 employers per year to

help upskill both new and existing staff, enabling

individuals to develop new skills in order to enter

employment or advance their careers. The company,

which has received ‘Good’ or ‘Outstanding’ OFSTED

ratings for its business divisions, works with a range of

businesses, individuals and further education colleges

across the UK, offering a diverse range of over

150courses in a variety of sectors including Health &

Social Care, Education, Business and IT, Hair & Beauty

and Fitness.

Latest updates:

• In December 2021, Learning Curve announced the

acquisition of Cardiff-based Motivational Preparation

College for Training to complement its existing academy.

• The company has been shortlisted for several awards in

2021 and in July 2021 successfully secured funding to

play a key role in a high-profile government initiative to

deliver skills bootcamps in construction, digital and rail

engineering.

• In March 2022, Learning Curve announced that they had

joined forces with recruitment and leadership

development organisation, Breakthrough, who work with

hard-to-reach individuals to support them into

employment. The partnership will provide extensive,

expert training to ex-offenders and match them with

innovative employers, enabling businesses to diversify

their workforce and tap into unique, inspiring talent

through fully supported apprenticeships. Learning Curve

works with over 4,500 employers across the country

every year to support them with training solutions.

Furthermore, 81% of employers who have hired

ex-offenders through the Breakthrough programme have

said it has helped their business. Learning Curve is a

leading example of a company that contributes positively

towards society and supports the UN sustainable

development goals (including 10: reduce inequality within

and among countries).

Source: Pictures shown are the property of their respective entities where

appropriate

Ascential

Marketing for the digital age

Ascential has its origins in 19th century newspapers but

today it is one of the next generation marketing

companies, leading the way in using real-time data

analytics to monitor and adapt pricing and product

strategy for their clients. It works with two thirds of the

world’s 100 most valuable brands and has become

indispensable in understanding key nascent market

trends. They also operate key events and exhibitions

such as Cannes Lion and Money 20/20.

12

Schroder British Opportunities Trust plc

Portfolio Managers’ Review

175996 British Opportunities Trust plc Annual Report Pt1.qxp_175996 British Opportunities Trust plc Annual Report Pt1 14/07/2022 13:40 Page 12

Latest updates:

• For the first time since the COVID 19 outbreak, in 2022

Ascential delivered an in-person Cannes Lion festival with

a good recovery in awards and attendance, albeit still

below 2019. A strong recovery in their other key event,

fintech conference Money20/20, with revenue back to

98% of 2019 levels shows the importance of in-person

meetings and the power of these strong brands. The

continued recovery in these businesses should

complement the ongoing growth in the marketing and e-

commerce parts of their offering.

• The firm has continued to re-shape its business towards

higher growth areas through M&A, having sold

MediaLink in December 2021 and acquired Sellics in April

2022. Sellics provides media execution services to

challenger brands and further increases their exposure

to ecommerce which is the fastest growing area of media

spend globally.

• Ascential is also looking to crystallise some value in its

high growth but underappreciated digital assets by

potentially listing some of those assets in the US where

such companies are awarded higher multiples. We are

agnostic to whether this happens given our long-term

approach but believe it could validate the investment

case sooner than we otherwise expect.

Source: Pictures shown are the property of their respective entities where

appropriate

OSB Group

Leading specialist mortgage lender

OSB Group is a leading specialist mortgage lender,

primarily focused on carefully selected sub-sectors of the

mortgage market. Its specialist lending is supported by a

stable retail savings franchise with 150 years of heritage.

Latest updates:

• In March 2022, the company announced its preliminary

annual results for the year ending 31 December 2021,

which showed that its underlying profit before tax

increased 51%, whilst its underlying and statutory loan

book rose by 10% to £20.9bn and £21.1bn respectively.

The results generally highlighted a high-quality loan book

and a company that is poised to do well as interest rates

rise.

Source: Pictures shown are the property of their respective entities where

appropriate

Keywords

Studios

International technical and creative services provider to

the global video games industry and beyond

Keywords Studios is an international technical and

creative services provider to the global video games

industry. Established in 1998, and now with over

70facilities in 23 countries strategically located in Asia,

Australia, the Americas and Europe, it provides

integrated art creation, marketing services, game

development, testing, localization, audio and player

support services across more than 50 languages and

16games platforms to a blue-chip client base of over

950clients across the globe. Keywords Studios has a

strong market position, providing services to 23 of the

top 25 most prominent games companies. Across the

games and entertainment industry, clients include

Activision Blizzard, Bandai Namco, Bethesda, Electronic

Arts, Epic Games, Konami, Microsoft, Netflix, Riot Games,

Square Enix, Supercell, TakeTwo, Tencent and Ubisoft.

Latest updates:

• The company’s full year results to 31 December 2021

showed strong momentum in revenue growth,

supported by a buoyant video games industry that was

refocused on content creation and a continued trend

towards external service provision.

• The firm has completed many acquisitions over the last

several months and with its strong balance sheet, we

believe there is scope for further deals in the future.

Source: Pictures shown are the property of their respective entities where

appropriate

Report and Accounts

for the period ended 31 March 2022

13

Strategic Report

Portfolio Managers’ Review

175996 British Opportunities Trust plc Annual Report Pt1.qxp_175996 British Opportunities Trust plc Annual Report Pt1 14/07/2022 13:40 Page 13

Genuit

Group

Group of businesses that serve the construction industry

by providing sustainable water, climate and ventilation

management solutions

Genuit has a goal to be the leading provider of

sustainable construction products for heating, plumbing,

drainage, and ventilation. Its purpose is to address the

challenges caused by climate change and urbanisation

by providing water, climate and ventilation management

solutions to the residential, commercial and

infrastructure sectors.

Latest updates:

• Genuit has continued to benefit from COVID induced

spending on home improvement and sustainability

solutions. Even against a strong performance last year,

revenue in the first quarter of this year saw revenue

increase 8%. This performance was helped by robust

pass-through of cost inflation which has been supported

by strong ongoing end market demand.

• Their acquisitions last year, Adey and Nu-heat, continue

to perform well and help with energy transition through

the provision of efficient home heating solutions and

energy sources such as heat pumps. These types of

solutions continue to receive regulatory support and are

likely to be an important source of growth for years to

come. They should also help the UK decarbonise given

the residential sector is responsible for over 20% of the

UK’s total carbon emissions.

• As well as helping homes decarbonise through their

products, they are reducing waste and decarbonising

their own production by increasing the proportion of

recycled materials in their products. In the 12 months to

31 December 2021, they increased the proportion of

recycled materials used in their products to 49% (up from

46% the prior year) and continue to make progress

towards their 62% 2025 target. Additionally, they also

reduced their carbon intensity by 44% through switching

to renewable sources.

Source: Pictures shown are the property of their respective entities where

appropriate

14

Schroder British Opportunities Trust plc

Portfolio Managers’ Review

175996 British Opportunities Trust plc Annual Report Pt1.qxp_175996 British Opportunities Trust plc Annual Report Pt1 14/07/2022 13:40 Page 14

Report and Accounts

for the period ended 31 March 2022

15

Strategic Report

Investment Portfolio

at 31 March 2022

Total

Class Quoted/ Country of Industry Fair value investments

Holding of shares unquoted incorporation Sector £'000 %

Rapyd Financial Network

1

Ordinary Unquoted United Kingdom Technology 8,565 13.2

Waterlogic

1

Ordinary Unquoted United Kingdom Consumer Goods 6,045 9.3

Cera EHP S à r l Ordinary Unquoted Luxembourg Health Care 4,509 7.0

Graphcore Preference Unquoted United Kingdom Technology 3,178 4.9

EasyPark

1

Ordinary Unquoted Norway Technology 2,775 4.3

Learning Curve

1

Ordinary Unquoted United Kingdom Consumer Services 2,336 3.6

Ascential Ordinary Quoted United Kingdom Consumer Services 2,222 3.4

OSB Ordinary

Quoted United Kingdom Financials 2,187 3.4

Keywords Studios Ordinary Quoted United Kingdom Industrials 1,808 2.8

Genuit Ordinary Quoted United Kingdom Industrials 1,800 2.8

Dalata Hotel Ordinary Quoted Ireland Financials 1,778 2.7

National Express Ordinary Quoted United Kingdom Consumer Services 1,726 2.7

Watches of Switzerland Ordinary Quoted United Kingdom Consumer Services 1,721 2.7

Learning Technologies Ordinary Quoted United Kingdom Technology 1,617 2.5

SSP Ordinary Quoted United Kingdom Consumer Goods 1,496 2.3

GB Ordinary Quoted United Kingdom Technology 1,493 2.3

Euromoney Ordinary Quoted United Kingdom Consumer Services 1,449 2.2

Trainline Ordinary Quoted United Kingdom

Technology 1,415 2.2

Discoverie Ordinary Quoted United Kingdom Industrials 1,228 1.9

Volution Ordinary Quoted United Kingdom Oil & Gas 1,192 1.8

The Gym Ordinary Quoted United Kingdom Consumer Services 1,185 1.8

City Pub Ordinary Quoted United Kingdom Consumer Services 1,147 1.8

Bodycote Ordinary Quoted United Kingdom Industrials 1,110 1.8

Civitas Social Housing Ordinary Quoted United Kingdom Financials 1,109 1.7

On the Beach Ordinary Quoted United Kingdom Consumer Services 1,058 1.7

EMIS Group Ordinary Quoted United Kingdom Technology 1,039 1.6

Lendinvest Ordinary Quoted United Kingdom Financials 964 1.5

MaxCyte Ordinary Quoted United States Technology

961 1.5

Ideagen Ordinary Quoted United Kingdom Technology 938 1.5

Sosandar Ordinary Quoted United Kingdom Consumer Services 890 1.4

Trustpilot Ordinary Quoted United Kingdom Technology 852 1.3

Judges Scientific Ordinary Quoted United Kingdom Industrials 843 1.3

Luceco Ordinary Quoted United Kingdom Utilities 754 1.2

tinyBuild Ordinary Quoted United States Technology 603 0.9

Invinity Energy Systems Ordinary Quoted Jersey Technology 284 0.4

Victorian Plumbing Ordinary Quoted United Kingdom Industrials 220 0.3

Velocys Ordinary Quoted United Kingdom Technology 194 0.3

Total investments

2

64,691 100.0

1

The fair value disclosed for the following investments represents the Company’s investment in an intermediary vehicle:

Rapyd Financial Network (held via Target Global Fund).

Waterlogic (held via EPIC-1b Fund).

EasyPark (held via Purple Garden Invest (D) AB).

Learning Curve (held via Agilitas Boyd 2020 Co-Ivest Fund).

2

Total investments comprise:

£'000 %

Unquoted 27,408 42.4

Quoted on FTSE 250 18,279 28.3

Quoted on AIM 13,001 20.0

Quoted on FTSE Allshare 4,225 6.6

Listed on a recognised stock exchange overseas 1,778 2.7

Total 64,691 100.0

175996 British Opportunities Trust plc Annual Report Pt1.qxp_175996 British Opportunities Trust plc Annual Report Pt1 14/07/2022 13:40 Page 15

16

Schroder British Opportunities Trust plc

Strategic Review

Business model

The Company is a listed investment trust, that has

outsourced its operations to third party service providers.

The Company has a fixed life and in the event that no

alternative proposals are put forward to Shareholders and

approved by Shareholders ahead of the winding-up date,

and on or before a general meeting by 31May 2028, a

winding-up resolution will be proposed at the winding-up

date to voluntarily liquidate the Company.

The Board has appointed the Manager, Schroder Unit Trusts

Limited, to implement the investment strategy and to

manage the Company’s assets in line with the appropriate

restrictions placed on it by the Board, including limits on the

type and relative size of holdings which may be held in the

portfolio and on the use of gearing, cash, derivatives and

other financial instruments as appropriate. The terms of the

appointment are described more completely in the Directors’

Report including delegation to the Portfolio Managers. The

Manager also promotes the Company using its sales and

marketing teams. The Board and Manager work together to

deliver the Company’s investment objective, as

demonstrated in the diagram above.

Investment objective

The Company’s investment objective is to deliver long-term

total returns throughout the life of the Company by investing

in a diversified public equity and private equity portfolio of

predominantly UK Companies.

Investment policy

The Company will invest in a diversified portfolio of both

public equity investments and private equity investments

consisting predominantly of UK Companies with strong long-

term growth prospects.

It is anticipated that the Company’s portfolio will typically

consist of 30 to 50 holdings and will target companies with

an equity value between approximately £50million and

£2billion at the time of initial investment.

The Company will focus on companies which the Portfolio

Managers consider to be sustainable from an environmental,

social and governance perspective, supporting at least one

of the goals and/or sub-goals of the United Nations’

Sustainable Development Goals (“SDGs”), or which the

Portfolio Managers consider would benefit from their

support in helping them incorporate SDGs into their

business planning and/or in reporting their alignment with

SDGs. The Company will aim to achieve a target allocation of

approximately 50per cent. public equity investments and

approximately 50per cent. private equity investments. The

Company’s portfolio will predominantly comprise public

equity investments until target deployment into private

equity investments is achieved.

The Company may, from time to time, use borrowings for

investment and efficient portfolio management purposes.

Gearing will not exceed 10per cent. of Net Asset Value,

calculated at the time of drawdown of the relevant

borrowing.

The full investment policy can be found on the website and

on pages38 to 41 of the prospectus dated 10November

2020. Proposed changes to the investment policy and

restrictions set out below are summarised in the Chairman’s

Statement and can be found in full on pages71 to 74 of the

Notice of Annual General Meeting.

Investment restrictions

The Company will invest and manage its assets with the

object of spreading risk through the following investment

restrictions:

• no more than 10 per cent. of Net Asset Value may be

invested in any investee company;

• once fully invested, the Company’s portfolio shall

comprise no fewer than 30 holdings;

•

Responsible for

overall strategy and

oversight including

risk management

• Activities centred

on the creation of

shareholder value

Investor

Value

• Manager implements

the investment strategy

by following an

investment process

• Support by strong

research and risk

environment

• Regular reporting and

interaction with the

Board

• Set objectives,

strategy and KPIs

• Appoint Manager

and other service

providers to achieve

objectives

• Marketing and sales

capability of the

Manager

• Support from the

Corporate Broker with

secondary market

intervention to support

discount/premium

management

Board is focused on

ensuring:

• that the fees

and Ongoing

Charges remain

competitive

• that the vehicle

remains attractive

to investors

Investment

Strategy

Promotion

Competitiveness

Board

• Oversee portfolio

management

• Monitor achievement

of KPIs

• Oversee the use of

gearing

• Oversee discount/

premium management

and the provision of

liquidity through

buybacks and share

issuance

Oversight

The Strategic Report sets out the Company’s strategy for delivering the investment objective (set out on the

inside front cover), the business model, the risks involved and how the Board manages and mitigates those

risks. It also details the Company’s purpose, values and culture, and how it interacts with stakeholders.

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Report and Accounts

for the period ended 31 March 2022

17

Strategic Report

Strategic Review

• private equity investments will be limited to 60 per cent.

of Gross Asset Value;

• no more than 20 per cent. of Net Asset Value may be

invested in investee companies which are not UK

Companies;

• the Company may not take a controlling stake in any

investee company, whether directly or indirectly, and:

– in respect of public equity investments, the

Company may own no more than 10 per cent. of the

total voting rights of any investee company; and

– in respect of private equity investments, the

Company may own no more than 20 per cent. of the

enterprise value of any investee company; and

• the Company will not invest more than 10 per cent. in

aggregate of Gross Assets in other listed closed-ended

investment funds, except that this restriction shall not

apply to investments in listed closed-ended investment

funds which themselves have stated investment policies

to invest no more than 15 per cent. of their gross assets

in other listed closed-ended investment funds.

• Additionally, in any event, the Company will itself not

invest more than 15 per cent. of its Gross Assets in other

investment companies or investment trusts which are

listed on the Official List.

Unless otherwise stated, each of the above restrictions will be

calculated at the time of commitment. Where the Company

makes investments through one or more special purpose

vehicles, owned in whole or in part by the Company or one of

its affiliates (being an affiliate of, or person affiliated with, the

Company, including a person that directly, or indirectly

through one or more intermediate holding companies,

controls or is controlled by, or is under common control with,

the Company), the investment restrictions will be applied on

a look-through basis.

Where the calculation of an investment restriction requires

an analysis of underlying investments held by a fund in which

the Company is invested, such calculation will be based on

the information reasonably available to the Portfolio

Managers at the relevant time.

The Company will not be required to dispose of any

investment or to rebalance the portfolio as a result of a

change in the respective valuations of its assets. However,

the Portfolio Managers will regularly monitor the Company’s

portfolio and make adjustments from time to time in light of

the above restrictions.

The Investment Portfolio on page 15 demonstrates that, as at

31 March 2022, the Company held 37 investments spread

over a range of industry sectors. The largest investment,

Rapyd Financial Network, represented 13.2% of total

investments. The Board therefore believes that the objective

of spreading investment risk has been achieved.

Promotion

The Company promotes its shares to a broad range of

investors including discretionary wealth managers, private

investors, financial advisers and institutions which have the

potential to be long-term supporters of the investment

strategy. The Company seeks to achieve this through its

Manager and corporate broker, which promote the shares of

the Company through regular contact with both current and

potential shareholders, as well as their advisers.

These activities consist of investor lunches, one-on-one

meetings, regional road shows and attendance at

conferences for professional investors. In addition, the

Company’s shares are supported by the Managers’ wider

marketing of investment companies targeted at all types of

investors. This includes maintaining close relationships with

adviser and execution-only platforms, advertising in the trade

press, maintaining relationships with financial journalists and

the provision of digital information on Schroders’ website.

The Board also seeks active engagement with investors, and

meetings with the Chairman are offered to investors when

appropriate.

During the restrictions related to the COVID-19 pandemic,

the Manager instead used virtual meetings, telephone calls

and webinars to engage with shareholders.

Shareholders are encouraged to sign up to the Manager’s

Investment Trusts update, to receive information on the

Company directly

https://www.schroders.com/en/uk/

privateinvestor/fund-centre/funds-in-focus/investment-

trusts/schroders-investment-trusts/never-miss-an-update/

.

Details of the Board’s approach to discount/premium

management and share issuance may be found in the

Chairman’s Statement on page3 and in the Annual General

Meeting – Recommendations on page71.

Relations with shareholders

Shareholder relations are given high priority by both the

Board and the Manager. The Company communicates with

shareholders through its webpages and the annual and half

period reports which aim to provide shareholders with a

clear understanding of the Company’s activities and its

results.

In addition to the engagement and meetings held during the

period described on page35, the chairs of the Board and

committees and the other Directors, attend the AGM and are

available to respond to queries from shareholders.

Key Performance Indicators (“KPI”s)

The Board reviews performance using a number of key

measures, to monitor and assess the Company’s success in

achieving its objective. Further comment on performance can

be found in the Chairman’s statement. The following KPIs are

used:

• NAV performance;

• Share price discount and premium; and

• Ongoing charges ratio.

Some KPIs are Alternative Performance Indicators (“APIs”),

and further details can be found on page2 and definitions of

these terms on page77.

• NAV performance

The Directors regard the Company’s NAV performance as

being the overall measure of value, delivered to shareholders

over the long-term. The Company’s NAV per share at

31March 2022 was 104.14p (30 June 2021: 108.44p).

A full description of performance during the period under

review is contained in the Portfolio Managers’ Review.

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18

Schroder British Opportunities Trust plc

• Share price discount and premium

The Board recognises that it is in the interests of

shareholders to maintain a share price as close as possible to

the net asset value (

“

NAV”) per share.

Further comment on the Board’s discount and premium

control policy can be found in the Chairman’s statement.

The Directors intend to seek renewal at each Annual General

Meeting of their authority to allot shares or to buy back

shares with a view to managing the premium/discount as

well as creating further shareholder value. Shares will only

be issued at a premium to NAV and bought back at a

discount to NAV.

• Ongoing charges

The Board is mindful of the ongoing costs to shareholders of

running the Company and monitors operating expenses on a

regular basis.

Purpose, Values and Culture

Purpose

The Company’s purpose is to provide all investors with

access to high quality public and private equity companies

focused on sustainable growth, resulting in long-term

shareholder value, in line with the investment objective.

The Company will focus on companies which the Portfolio

Managers consider to be sustainable from an environmental,

social and governance (ESG) perspective, supporting at least

one of the goals and/or sub-goals of the United Nations’

Sustainable Development Goals (“SDGs”), or which the

Portfolio Managers consider would benefit from their

support in helping them incorporate SDGs into their business

planning and/or in reporting their alignment with SDGs.

Values

The Company’s culture is driven by its values: excellence,

integrity and transparency, with collegial behaviour and

constructive, robust challenge. The values are all centred on

achieving returns for shareholders in line with the

Company’s investment objective. The Board is responsible

for setting culture and communicating its values to its

stakeholders by demanding high standards from service

providers in order to deliver excellent performance for

shareholders. The Board’s focus is on long-term growth

rather than providing shareholders with dividend income.

The Board’s view is that good ESG management is an

essential element of the sustainability of a company’s

business model and therefore key to generating long-term

shareholder value. Further details on ESG company

engagement can be found on page25.

Culture

Acting with high standards of integrity and transparency, the

Board is committed to encouraging a culture that is

responsive to the views of shareholders and its wider

stakeholders. As the Company has no employees and acts

through its service providers, its culture is represented by the

values and behaviour of the Board and third parties to which

it delegates. The Board aims to fulfill the Company’s

investment objective by encouraging a culture of constructive

challenge with all key suppliers and openness with all

stakeholders.

The Board recognises the Company’s responsibilities with

respect to corporate and social responsibility and engages

with its outsourced service providers to safeguard the

Company’s interests. As part of this ongoing monitoring, the

Board receives reporting from its service providers with

respect to their anti-bribery and corruption policies; Modern

Slavery Act 2015 statements; diversity policies; and

greenhouse gas and energy usage reporting.

Responsible investment

The Company delegates to its Manager the responsibility for

taking ESG issues into account when assessing the selection,

retention and realisation of investments. The Board expects

the Manager to engage with investee companies on social,

environmental and business ethics issues and to promote

best practice. The Board expects the Manager to exercise the

Company’s voting rights in consideration of these issues.

Further detail on engagement and stewardship can be found

on page25.

In addition to the description of the Portfolio Managers’

integration of ESG into the investment process and the

details in the Portfolio Managers’ Review, a description of the

Portfolio Managers’ policy on these matters can be found on

Schroders’ website at

www.schroders.com.

The Board notes that Schroders believes that companies with

good ESG management often perform better and deliver

superior returns over time. Engaging with companies to

understand how they approach ESG management is an

integral part of the investment process. Schroders is

compliant with the UK Stewardship Code and its application

with the principles therein is reported on its website

www.schroders.com/en/about-us/corporate-

responsibility/sustainability/interpret/.

The Board receives reporting from the Manager on the

application of its ESG investment process.

Corporate and Social Responsibility

Diversity

As at 31 March 2022, the Board comprised three men and

one woman. The Board fully supports all forms of diversity,

including gender and ethnic diversity, and has adopted a

diversity and inclusion policy. Whilst the Directors are all

independent and have a diverse range of views and

experiences, the Board is conscious that its composition is

not as diverse as the Directors would like. The Board is

however also cognisant of the current size of the Company

and the short tenure of the existing Directors given the

Company's recent formation, as well as the impact of the

Company's fixed operating costs. Therefore at present the

Board does not consider it to be in the best interests of the

Company to increase the size of the Board. This will be kept

under review, and as and when further appointments are

made, the Board will encourage any recruitment agencies it

engages to find a diverse range of candidates that meet the

objective criteria agreed for each appointment.

Financial crime policy

The Company continues to be committed to carrying out its

business fairly, honestly and openly operates a financial

crime policy, covering bribery and corruption, tax evasion,

Strategic Review

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Report and Accounts

for the period ended 31 March 2022

19

Strategic Report

Section 172 of the Companies Act 2006

During the period, the Board discharged its duty under section 172 of the Companies Act 2006 to promote the success of the

Company for the benefit of its members as a whole, having regard to the interests of its stakeholders. The Board has

identified its key stakeholders as the Company’s shareholders, the Portfolio Managers, other service providers and the

investee companies. The Board take a long-term view of the consequences of their decisions, as well as aim to maintain a

reputation for high standards of business conduct and fair treatment among the Company’s shareholders. The Board notes

that the Company has no employees and the impact of its own operations on the environment and local community is

through the impact its service providers or investee companies have.

Fulfilling this duty naturally supports the Company in achieving its investment objective and helps to ensure that all decisions

are made in a responsible way, taking sustainabilty into account. In accordance with the requirements of the Companies

(Miscellaneous Reporting) Regulations 2018, the Directors explain below how they have individually and collectively discharged

their duties under section 172 of the Companies Act 2006 over the course of the reporting period and key decisions made

during the period and related engagement activities.

Strategic Review

Stakeholder Stakeholder considerations, engagement and key decisions

Shareholders The Company welcomes attendance and participation from shareholders at the AGM. If attending, shareholders

have the opportunity to meet the Directors and ask questions at the AGM. The Board values the feedback and

questions which it receives from shareholders.

The annual and half year results presentations, as well as monthly updates are available on the Company’s

webpage with results announced via a regulatory news service. Feedback and/or questions received from

shareholders enable the Company to evolve its reporting which, in turn, helps to deliver transparent and

understandable updates.

The Portfolio Managers communicate with shareholders periodically. All investors are offered the opportunity to

meet the Chairman and other Board members without using the Portfolio Managers or Company Secretary as a

conduit, by writing to the Company’s registered office.

At Board meetings, the Directors receive updates on the share trading activity, share price performance and any

shareholders’ feedback, as well as any publications or comments in the press.

The Board also engages some external providers, such as investor communications advisors, to obtain a more

detailed view on specific aspects of shareholder communications, such as developing more effective ways to

communicate with investors.

The Board is responsible for discount and premium management and is cognisant of the prevailing discount to

NAV. Subsequent to the period end the Board utilised a share buy back to seek to maintain the price at which the

ordinary shares trade relative to their prevailing NAV and determined that current market conditions had seen

high, unforeseen levels of volatility which the Board does not regard as normal market conditions. Factors such as

the size of the Company; illiquid nature of the private equity holdings; borrowings and cash were and would be

considered in any further buy backs.

For key decisions the Board took into account feedback from shareholders either directly or through service

providers, including the Portfolio Managers.

The Portfolio

Managers

The Portfolio Managers aim to continue to achieve consistent, long-term returns in line with the investment

objective and maintain a close and collaborative working relationship with the Board.

The Board maintains a constructive collaborate relationship with the Portfolio Managers, encouraging open

discussion and recognising that the interests of shareholders and the Portfolio Managers are well aligned.

The Board invites the Portfolio Managers to attend all Board and certain committee meetings and receives regular

reports on the performance of the investments and the implementation of the investment strategy, policy and

objective. The portfolio activities undertaken by the Portfolio Managers and the impact of decisions affecting

investment performance are set out in the Portfolio Managers’ Review on pages 5 to 14.

The management engagement committee reviews the performance of the Manager, its remuneration and the

discharge of its contractual obligations at least annually.

money laundering, terrorist financing and sanctions, as well as seeking confirmations that the Company’s service providers’

policies are operating soundly.

Greenhouse gas emissions and energy usage

As the Company outsources its operations to third parties, during the period, it consumed no energy and so has no

greenhouse gas emissions, energy consumption or energy efficiency action to report.

175996 British Opportunities Trust plc Annual Report Pt1.qxp_175996 British Opportunities Trust plc Annual Report Pt1 14/07/2022 13:40 Page 19

Investment approach

The Company’s investment objective and policy are set out in

the inside front cover. The Company is philosophically

ownership-agnostic in the sense that its strategy is to invest

in both public and private companies. The Company, having

been advised by the Portfolio Managers, believes the best UK

Companies, regardless of their ownership structure, can

benefit from equity investment to facilitate and drive growth

through the pandemic and beyond.

The chart below highlights the current two key areas of focus

of the Company’s investment approach, namely (i) high

growth and (ii) mispriced growth.

In this way, the Company will focus on investing in high

quality, sustainable businesses. These companies may either

require additional equity to maximise their growth potential

or to return them to their previous growth trajectory. Based

on the Portfolio Managers’ analysis the Company believes

that some of these high quality companies are trading at

attractive valuations and believes, having been advised by

the Portfolio Managers, that they would benefit from equity

financing. Through the Portfolio Managers, the Company will

engage with investee companies on these issues with the

overall objective of delivering shareholder value both for

those businesses and the Company.

Investment process

The Company’s portfolio is managed by the Portfolio

Managers, who employ a collaborative, team-based

approach, creating a combination of Schroders’ public and

private equity capabilities with oversight in place. The

Company believes that it is appropriate for the Portfolio

Managers to separate the investment process between

private and public equity investments to reflect the clear

differences in executing individual investments in the private

versus public equity markets. However, portfolio

construction and first-line risk management is the joint

responsibility of the private equity and public equity

investment teams within the Portfolio Managers, alongside

the AIFM, who has responsibility for the risk management of

the Company, delegated from the Board.

20

Schroder British Opportunities Trust plc

Strategic Review

Stakeholder Stakeholder Considerations, Engagement and key decisions

Service

Providers

The Board maintains regular contact with its key external providers, both through the Board and committee

meetings, as well as outside of the regular meeting cycle. Their advice, as well as their needs and views, are

routinely taken into account.

During the period, the management engagement committee continued to undertake reviews of the third-party

service providers and agreed that their continued appointment remained in the best interests of the Company

and its shareholders. The committee periodically reviews the market rates for services received, to ensure that the

Company continues to receive high quality service at a competitive cost.

The Board regularly considers how it meets various regulatory and statutory obligations and follows voluntary and

best-practice guidance, while being mindful of how any decisions which it makes can affect its shareholders and

wider stakeholders, in the short and the long-term. The Board receives reports from the Manager, Corporate

Broker and Company Secretary on recent and proposed changes in regulation and market practice, as well as any

likely reputational threats which, in turn, influence the Board’s decision-making process.

Investee

companies

The Board believes that it is in the interests of all stakeholders to consider environmental, social and governance

ESG factors. The Portfolio Managers take these issues into account when selecting and retaining investments with

our investee companies and is continuous throughout the life of our investment. Further details on ESG

engagement are set out on page 25.

The Portfolio Managers have discretionary powers to exercise voting rights on behalf of the Company on all

resolutions proposed by the investee companies, when the Company’s rights permit voting.

In respect of the year under review, the Portfolio Managers engaged with many of the Company’s investee

companies and voted at all the annual general meetings and extraordinary meetings held during the year by the

Company’s investee companies (further details can be found on page 25).

The Board monitors investments made and divested and questions the Portfolio Managers’ rationale for

exposures taken and voting decisions made.

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Report and Accounts

for the period ended 31 March 2022

21

Strategic Report

Private equity investment process

The private equity investment process will begin with high

quality deal sourcing, a vital ingredient which is fundamental

to long-term success. Identifying the most attractive private

equity investments through proactive deal sourcing is

essential to successful private equity investing. The

investment team will therefore spend considerable time on

this activity by working closely with Schroders’ extensive

network of investment professionals and industry experts.

Sourcing efforts are further enhanced by technology,

including advanced proprietary tools, internal databases and

third-party information services.

Each potential investment will be logged in Schroder Capital’s

IT system and recorded. An assessment of whether the

investment opportunity meets the key criteria for inclusion in

the Company will be undertaken early on to ensure a

proposal is suitable and conforms to the investment policy

and objectives. A project team will be formed and tasked

with undertaking initial due diligence allowing an established

and systematic assessment of the opportunity before

presenting its findings in a standardised and structured

form.

If it is deemed a suitable investment, within the scope of the

Company, the wider team will then debate the pros and cons

of the specific transaction and provide further challenge or

support before a collective decision is made on whether an

investment opportunity is compelling enough to enter the

prequalification stage and be submitted to the Schroders

Private Equity Investment Committee for consideration.

Investment opportunities that enter the pre-qualification

stage are assessed and vetted through a rigorous due

diligence process. This comprehensive process will include

an assessment of a company’s:

• Positioning in the market.

• Technology differentiation.

• Scale of market opportunity.

• Competitive landscape.

• Management breadth, depth and experience.

• Strength of the existing financing syndicate.

• Prospective financing needs.

• Underlying modelling assumptions.

• Exit route, options and plan.

• Proposed terms and valuation.

A selection of the Private Equity Investment Committee

members will undertake a one-to-one focused review of each

opportunity with the project team. This will enable members

of the investment committee to be able to fully interrogate

the quality of the underlying proposal. This process will allow

more detailed questions to be raised, considered and

debated such that the project team can identify outstanding

concerns. Any focus areas raised can then be investigated

and evidenced. On completion of this phase a further debate

by the team will take place on the merits of the underlying

company and the opportunity.

This comprehensive and inclusive process will determine

whether the team elects to present an investment

recommendation to the Private Equity Investment

Committee or if instead the team decides to reject the

opportunity.

Investment projects brought to the Private Equity Investment

Committee for approval will need unanimous approval by

the investment committee to proceed to the legal and formal

investment closing process.

A high-level overview of the private equity investment

process is outlined in the diagram on the previous page.

The private equity investments will have the following

characteristics:

• Growth and buyout investments.

• Combination of direct and co-investments.

• Significant buy-and-build and rollout strategies within

the private portfolio.

• Opportunities sourced through Schroders’ and Schroder

Capital’s networks.

Strategic Review

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Schroder British Opportunities Trust plc

Strategic Review

• Investing alongside general partners/co-investors

ensuring alignment.

It is possible that the Company may enter into a warehouse

transaction, whereby it may agree to acquire a larger stake in

a private equity investment than it plans to acquire for the

purpose of holding it as an investment in the Company’s

portfolio in the long term, and instead, sell off or syndicate a

part of such acquired investment onto other third party

investors during the initial few months of its ownership of

that investment.

The entering into of any warehouse transaction would be

subject to the investment restrictions and limits contained in

the Company’s investment policy. The Company, having been

advised by Schroder Capital, envisages that a warehouse

transaction would only be entered into by the Company in

the circumstances where Schroder Capital considers this to

be beneficial to the Company in order to be able to access a

particular private equity investment which it would otherwise

not have been able to access due to a minimum initial

investment size required in order to gain access to it.

Public equity investment process

The Portfolio Managers will select public equity stocks for the

Company based principally on ideas generated by Schroders’

in-house research capability, but also by making selective use

of Schroders’ network of contacts, and of sell-side research.

The public equity portion will adopt an initial screen to

narrow down the universe into high growth and mispriced

opportunities. These companies will then be subject to

detailed due diligence. The public equity stock selection

process is outlined below:

Ideas that are successful after detailed due diligence will be

brought to the Public Equity Investment Committee for

review. The Public Equity Investment Committee has been

specifically established for the purpose of considering public

equity investments proposed to be made by the Company.

Members are required to bring their investment ideas to the

committee, which will be challenged for inclusion in the

portfolio.

Public equity investments will include the following:

• Primary equity through placings, rights issues or initial

public offerings.

• Secondary equity utilising Schroders existing

relationships and power of the brand.

• Cornerstone equity investments through direct

corporate engagement and primary investment.

• Partial underwriting of equity placings.

• Working with Schroders’ credit team to identify

potentially attractive convertible opportunities.

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Report and Accounts

for the period ended 31 March 2022

23

Strategic Report

Strategic Review

Sustainability at Schroders

A continually evolving approach

Source: Schroders, December 2021.

1

Carbon Disclosure Project.

2

UN Principles for Responsible Investing.

3

UN Global Compact.

4

Strategy and Governance module.

5

For certain businesses acquired during the course of 2020 we have not yet

integrated ESG factors into investment decision-making. There are also a small number of strategies for which ESG integration is not practicable or now possible, for example passive index tracking or legacy

businesses or investments in the process of or soon to be liquidated, and certain joint venture businesses are excluded.

'Issues such as climate change, resource scarcity, population growth and corporate failure have put responsible investment at the forefront of investors’

minds. We believe that companies with a strong environmental, social and governance ethos tend to deliver better results for our clients.'

Peter Harrison, Group Chief Executive, Schroders plc

1998 2001 2006 2007 2008 2011 2016 2017 2019 2020 2021

Published corporate

governance policy

Published first socially

responsible policy

Became a CDP

1

signatory

Became a UNPRI

2

signatory

Top 5 in 2017

AODP Global

Climate 50 Asset

Manager Index

Developed responsible

fixed income policy

6 years of A+

UNPRI

rating

4

Became a

UNGC

3

signatory

Developed

responsible real

estate investment

policy

Acquired

majority stake in

BlueOrchard

Launched first

sustainable

strategy

Launched

SustainEx &

Climate Progress

Dashboard

Linked ESG to

revolving credit

facility

Business

operating on

a carbon-

neutral basis

+

Achieved full

ESG

integration

5

Set science

based target

Launched

CONTEXT

Natural Capital

Research

partnership

#1 in ShareAction

European RI asset

management survey

CEO letter to

FTSE350

companies on

climate change

First dedicated

ESG resource

Founding Signatory

to Net Zero Asset

Managers Initiative

Became a

member of the

UN Race to Net

Zero Initiative

Became a

Natural Capital

Investment

Alliance

member

Acquired 75%

shareholding

in Greencoat

Capital

Sustainability at Schroders

Issues like climate change are quickly becoming defining

drivers of the global economy, society and financial markets,

and will become increasingly important in coming years.

Investors no longer have a choice over whether to seek

exposure to ESG risks or opportunities; all companies and

portfolios will be impacted. Initiatives like the United Nations’

Sustainable Development Goals (“SDGs”), and the focus this

has attracted across the investment industry, reflect the

widening intersection between social priorities and

investment goals.

Schroders has long recognised both the importance of

examining the impacts of social and environmental trends on

the companies that it invests in, and the role investors can

play in helping to address those challenges. In 2020,

Schroders committed to integrating ESG analysis into all

investment processes and provide the information its clients

need to assess portfolio exposures.

The timeline below details how Schroders has evolved its

approach to sustainability over time and its experience and

expertise.

Sustainability Report

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24

Schroder British Opportunities Trust plc

Strategic Review

The Company’s approach to sustainability

We believe that companies do not operate in a vacuum;

rather, their long-term success is directly tied to their ability

to adapt to social and environmental trends shaping their

industries. For instance, the ability to attract and retain

talent, to build strong customer relationships or to adapt to

changing regulations are vital to their competitiveness. All

are complicated by workers’ growing expectations that their

employers’ values match their own, the growing importance

consumers attach to environmental features or product

sustainability and the growing pressures governments face

to reign back corporate excesses. The challenges vary from

company to company and industry to industry, as do the

features we look for in companies, but the principles and the

importance they attach to them are consistent. The same

structural trends are also reshaping industries, driving

growth in some markets and shrinking others, as capital

moves to industries and technologies that will help solve

social and environmental challenges.

We focus on companies that are considered to be

sustainable in terms of both the longevity and durability of

their businesses, as well as their environmental, social and

governance behaviours. We achieve this through SDG

alignment and adoption of best ESG practices.

Post investment process

Following investment, we carry out the below as shareholders

of the business:

1. Active stewardship

• We seek to influence corporate behaviour through direct

engagement and/or proxy voting. We will engage and vote

on any issue affecting the long-term sustainable value of

our portfolio companies. See ‘Engagement and

Stewardship’ below to see how we voted during the period.

2. Monitoring

• We monitor the ESG performance of our investments

throughout our time as shareholders, and assess if

companies have responded to our requests for change.

• If we feel we do not have enough information, or have

identified gaps in companies’ awareness or management of

their ESG risks and opportunities, we establish dialogue

with that firm.

• We also undertake reactive engagement as a result of any

negative incident involving one of our investments, in order

to understand why it may have occurred, the actions the

company is taking as a result, and what the current and

future risks may be.

• Finally, to ensure that we consider all potential ESG

concerns, where available, we examine the external ESG

ratings for our portfolio companies on an annual basis.

Companies with a downward trend in ratings may indicate

potentially higher ESG risk and therefore be flagged up for

further engagement.

Pre investment process

We use a three step process when appraising a potential

investment along ESG lines. This is described below:

1. Ethical screening

• From the outset we immediately screen out companies

operating in ‘sin’ industries such as fossil fuels, tobacco,

alcohol, weapons and gambling.

2. Sustainable investing

• We intend to seek companies whose business models are

aligned with at least one of the UN SDGs or one of the sub-

goals. However not every attractive investment will meet

this criteria. For such companies in particular, if we believe

the fundamental and structural drivers of the business are

sound, we would then invest with the intention to

contribute to the development of the firm’s ESG credentials.

For example we may believe there is scope to encourage

management teams to improve reporting on areas such as

diversity or greenhouse gas emissions.

3. ESG integration

• Following this, we assess companies’ ESG risks and

opportunities, identify gaps in their awareness or

management of ESG factors, and examine their external

ratings. In doing so, we are able to determine how we could

add value were we to be shareholders.

• The core of our ESG evaluation stems from a number of

Schroders’ proprietary quantitative research tools, such as

CONTEXT, SustainEx and World-Check:

– CONTEXT provides a systematic framework for

analysing a company’s relationship with its key

stakeholders, thus assessing the sustainability of its

business model;

– SustainEx quantifies the positive and negative impacts

on the environment and society; and

– World-Check is a service that conducts contracting party

risk assessment.

How ESG is integrated in the Company’s investment process

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Report and Accounts

for the period ended 31 March 2022

25

Strategic Report

Strategic Review

Engagement & Stewardship

Extensive engagement with portfolio companies

As part of our process, we meet with company management

teams in advance of investing. We maintain this engagement

throughout the life of our investment. Our work here is

aided by our extensive internal resource of dedicated

sustainability analysts. We take pride in our level of

engagement with companies. Our brand, as well as

extensive analytical resource affords us the ability to

regularly engage with companies on all aspects of corporate

strategy, including ESG matters.

From an engagement standpoint, as Portfolio Managers, we

have written to a number of our public equity portfolio

companies, covering a variety of topics involving

environmental, social and governance matters. Three

engagement topics for each category were then focused on.

For environmental matters, the focus areas were disclosure

of environmental data, commitment to net-zero emissions

and setting science-based emissions targets. For social, this

has included diversity and inclusion, organizational policies

and practices and employee engagement. For governance,

focuses have been on board diversity, executive

remuneration and ESG accountability.

We were pleased to see a number of our investments make

progress with their ESG efforts during the fiscal period.

These included:

• In December 2021, SSP Group announced their

intention to pursue net-zero carbon emissions. More

specifically, the company has targeted achieving net zero

carbon emissions (scopes 1, 2 and 3) by 2040. In support

of this, the company is setting science-based targets in

line with a 1.5-degree scenario within the next year. Also,

with effect from 1 January 2022, the Company appointed

two female independent non-executive directors,

increasing board gender and ethnic diversity. Further

key sustainability targets for the company include: at

least one third of Board members to be female, have at

least one person of colour and have diversity in

geographic representation by 2022; and by 2025, at least

one third of their Executive Committee and direct

reports to be female.

• Our portfolio companies have continued to make

progress on board diversity: Invinity Energy, EMIS

Group, SSP Group, Dalata Hotel Group, Learning

Technology Group and LendInvest all appointed a

female member to the board of directors and GB Group

and SSP Group appointed an ethnic minority member.

We aim to continue engaging with our portfolio companies

on all matters regarding ESG to ensure that the

management teams are committed to responsible business

practices. We use our power as shareholders to vote and

register our approval or disapproval of management’s

actions. During the fiscal period, the Company:

• voted at 12 AGM meetings, 2 warrant holder meetings

and 1 EGM meeting.

• voted with management on 166 out of 177 resolutions,

or c.94% of all resolutions

• voted against management on 11 out of 177 resolutions,

or c.6% of all resolutions. Topics that we ruled against

included lack of gender diversity on the board as well as

poor remuneration practices.

As we manage the portfolio, we aim to continue with the

good progress made so far on ESG matters. Specifically, we

intend to:

• actively encourage companies to become more

environmentally responsible;

• determine how management teams are creating diverse,

inclusive and equitable organisations;

• understand how our investee companies are impacting

society positively; and

• hold the boards of companies in our portfolio to high

corporate governance standards.

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26

Schroder British Opportunities Trust plc

Strategic Review

ESG at work in the portfolio

United Nations’ Sustainable Development Goals (“SDG‘s”)

As mentioned above, in line with the Company’s investment policy, we target companies that support at least one of the

UNSDGs. The below table serves to illustrate which SDGs are aligned to a sample of our investee companies:

*The list of relevant SDGs may not be exhaustive for each holding.

Private

Company

Select SDGs*

Public

Company

Select SDGs*

Rapyd National

Express Group

Cera Volution Group

Learning Curve

Group

SSP Group

Waterlogic discoverIE

Group

Easypark The Gym Group

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Report and Accounts

for the period ended 31 March 2022

27

Strategic Report

Strategic Review

Emerging risks and uncertainties

During the period, the Board also discussed and monitored a number of risks which could affect the valuations of investee

companies. Two emerging market risks were considered, political risk and climate change risk. The Board receives updates

from the Portfolio Managers, Company Secretary and other service providers on other potential risks that could affect the

Company.

Political risk includes the impact of geopolitical risk, regional tensions, trade wars and sanctions against companies. During

the period, the Board noted that the invasion of Ukraine impacted political tensions, supply chains, interest rates and in

particular higher inflation in the UK and globally. The Board is also mindful that changes to public policy could impact the

Company in the future.

Climate change risk includes how climate change could affect the Company’s investments, and potentially shareholder

returns. The Board notes the Manager has integrated ESG considerations, including climate change, into the investment

process. The Board will continue to monitor this.

The Board considers that both political risks and climate risks referred to above are covered in the risk matrix under market

risks.

Principal risks and uncertainties

The Board is responsible for the Company’s system of risk management and internal control and for reviewing its

effectiveness. The Board has adopted a detailed matrix of principal risks affecting the Company’s business as an investment

trust and has established associated policies and processes designed to manage and, where possible, mitigate those risks,

which are monitored by the audit and risk committee on an ongoing basis. This system assists the Board in determining

the nature and extent of the risks it is willing to take in achieving the Company’s strategic objectives. Both the principal risks

and the monitoring system are also subject to regular, robust review. The last review took place in July2022.

Although the Board believes that it has a robust framework of internal controls in place this can provide only reasonable,

and not absolute, assurance against material financial misstatement or loss and is designed to manage, not eliminate, risk.

Actions taken by the Board and, where appropriate, its committees, to manage and mitigate the Company’s principal risks

and uncertainties are set out in the table below.

Strategic Risks Mitigation and management

The Company’s investment objectives may become out of line

with the requirements of investors, or the Company’s investment

strategy is not sufficiently differentiated from other products

resulting in the Company being subscale and shares trading at a

discount.

The appropriateness of the Company’s investment remit is

regularly reviewed and the success of the Company in meeting

its stated objectives is monitored.

The share price relative to NAV per share is monitored and the

Board has approved a buyback programme post period end.

The Board will be seeking shareholder approval at the AGM to

renew these authorities

The Company has a fixed life. In the event that no alternative

proposals are put forward to shareholders, or such proposals are

not approved by shareholders, the Company will commence

winding up in 2028. It could take several years until all of the

Company's private equity investments are disposed of and any

final distribution of proceeds made to shareholders.

The private equity portfolio managers have extensive experience

and a track record in accurately timing the exits of private equity

investments.

The Board will regularly monitor the position to ensure that any

alternative proposals to be made to shareholders are put

forward at an appropriate time.

Market Risks

Mitigation and management

Underlying investee companies within the Company’s portfolio

may experience fluctuations in their operating results due to

fluctuations in market or general economic conditions (including

changes to interest rates, inflation, political and climate related

regulations). These would in turn affect the performance of the

Company.

The Portfolio Manager’s adopt an active management approach

and focuses on sustainable businesses capable of generating

long- term returns for shareholders.

During the period the Portfolio Manager’s used futures contracts

to ensure the Company was fully invested despite some cash

being retained to invest in private equity companies. At the

period end no futures were held.

At each Board meeting the Board reviews a report from the

Portfolio Managers on the performance of the Company’s

investments and market outlook.

Changes to the framework of regulation and legislation

(including rules relating to listed closed-end investment

companies or loss of the exemption for investment trusts from

UK tax on chargeable gains) within which the Company operates

could have a material adverse impact on the Company.

The Company Secretary, Corporate Broker, Portfolio Manager’s

and auditor appraise the Board of any prospective changes to

the legal and regulatory framework so that requisite actions can

be planned.

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Schroder British Opportunities Trust plc

Strategic Review

Operational Risks Mitigation and management

The Company's shares may not trade in line with NAV,

depending on factors such as supply and demand for the

Company's shares, market conditions and general investor

sentiment. The operation of the Company's policy to manage

any discount could result in the Company's operating

charges ratio becoming excessive.

The Board monitors the discount and premium receiving

regular updates with a buyback policy in place. The Directors

consider whether the purchase would be for the benefit of

the Company as a whole and its shareholders, taking into

account relevant factors and circumstances at the time.

The marketing and distribution activity is regularly

monitored by the Board.

The Company’s investment portfolio is managed by the

Portfolio Manager’s and, in particular, is led by two key

individuals. Loss of a portfolio manager could affect

performance and market sentiment leading to further

widening discount of the share price compared with the NAV.

The Board regularly considers key man risk and seeks

assurances concerning the depth of expertise of the

investment management teams which manage the

Company’s portfolio.

The Board receives assurances regarding the Portfolio

Manager’s incentive arrangements and succession planning.

Private equity investments are generally less liquid and more

difficult to value than publicly traded companies. A lack of open

market data and reliance on investee company projections may

also make it more difficult to estimate fair value on a timely basis.

Contracts are drafted to include obligations to provide

information with investee companies in a timely manner, where

possible.

The Portfolio Managers have an extensive track record of valuing

privately held investments.

The audit and risk committee reviews all valuations of unlisted

investments on a quarterly basis and challenges methodologies

used by the Portfolio Manager.

Liquidity risks include those risks resulting from holding private

equity investments as well as not being able to participate in

follow-on fundraises through lack of available capital which could

result in dilution of an investment.

Concentration limits are imposed on single investments to

minimise the size of positions.

The Portfolio Managers consider liquidity risk when selecting

investments.

The Portfolio Managers will seek to manage cashflow such that

the Company will be able to participate in follow up fundraisings

where appropriate.

The Company has no employees and the Directors have been

appointed on a non-executive basis and the Company is reliant

upon the performance of third-party service providers.

Failure of any of the Company’s service providers to perform in

accordance with the terms of its appointment, to protect against

breaches of the Company’s legal and regulatory obligations such

as data protection, or to perform its obligations at all as a result

of insolvency, fraud, breaches of cyber security, failures in

business continuity plans or other causes, could have a material

detrimental impact on the operation of the Company.

The AIFM, the Portfolio Managers, the Depositary, the Company

Secretary and the Administrator perform services that are

integral to the operation of the Company and any of the

Company’s service providers could terminate their contract.

Experienced third party service providers are employed by the

Company under appropriate terms and conditions and with

agreed service level specifications. Service level agreements

include clauses which set out the notice periods for terminations.

The Board receives regular reports from its service providers and

the management engagement committee will review the

performance of key service providers at least annually.

The audit and risk committee reviews reports on the external

audits of the internal controls operated by certain of the key

service providers.

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Report and Accounts

for the period ended 31 March 2022

29

Strategic Report

Strategic Review

Going concern

The Directors have a reasonable expectation that the

Company has adequate resources to continue in operational

existence until 31July 2023, which is more than twelve

months from the date when these financial statements were

signed and the Directors have accordingly adopted the going

concern basis in preparing the financial statements.

In reaching this assessment the Directors have considered

the principal risks, the impact of the emerging risks and

uncertainties and the matters referred to in the viability

statement. They have additionally considered the liquidity of

the Company’s portfolio of listed investments, the Company’s

cash balances and the forecast income and expenditure

flows as well as commitments to provide further funding to

the Company’s private equity investee companies; the

Company currently has no borrowings. A substantial

proportion of the Company’s expenditure varies with the

value of the investment portfolio. In the event that there is

insufficient cash to meet the Company’s liabilities, the listed

investments in the portfolio may be realised and the

Directors have reviewed the average days to liquidate the

listed investments. The Company is a closed-end investment

trust and there is no requirement to redeem or buy back

shares. The Company has additionally performed stress tests

which confirm that a 50% fall in the market prices of the

portfolio would not affect the Board’s conclusions in respect

of going concern.

Viability statement

In accordance with the AIC Code the Board has considered

the longer term prospects for the Company beyond the

twelve months required to assess the Company’s ability to

continue as a going concern. The Board believes that a

period of five years reflects a suitable time horizon for

strategic planning, the investment cycle of private equity and

the longer term view taken by the Portfolio Managers and

investors; this period is in line with the Company’s Key

Information Document.

As an investment trust, the Company is entitled to beneficial

treatment with regard to chargeable gains. Any change to

such taxation arrangements could affect the Company’s

viability as an effective investment vehicle.

In their assessment of the prospects for the Company over

the next five years, the Directors have assumed that the

Company will continue to adopt the same investment

objective, that the Company’s performance will continue to

be attractive to shareholders and that the Company will

continue to meet the requirements so as to retain its status

as an investment trust.

The Directors have considered each of the Company’s

principal and emerging risks and uncertainties detailed on

pages27 and 28 and, in particular, the impact of a significant

fall in equity markets on the value of the Company’s

investment portfolio. The Directors have, furthermore,

considered the Company’s projections of income and

expenditure as well as any commitments to provide funding

to investee companies. They have noted that the Company’s

investment portfolio will continue to comprise a significant

proportion of highly liquid listed equities which can be

readily realised and that a substantial proportion of the

Company’s operating expenses vary with the value of the

investment portfolio. As stated in Going Concern above, the

Company is a closed-end investment trust and there is no

requirement to redeem or buy back shares. A stress test to

evaluate the consequences of a 50% reduction in the market

value of the Company’s investments over the five year period

has also been evaluated.

In preparing these financial statements the Directors have

considered the impact of political risk and climate change

risk as emerging risks as set out on page 27. Following this

assessment, the Directors have concluded that climate

change risk and political risk did not materially impact the

viability of the Company.

The conclusion of this review is that the Board has a

reasonable expectation that the Company will be able to

continue in operation and meet its liabilities as they fall due

over the next five years.

By order of the Board

Schroder Investment Management Limited

Company Secretary

13 July 2022

Risk assessment and internal controls review by the Board

Risk assessment includes consideration of the scope and quality of the systems of internal control operating within key

service providers, and ensures regular communication of the results of monitoring by such providers to the audit and risk

committee, including the incidence of significant control failings or weaknesses that have been identified at any time and

the extent to which they have resulted in unforeseen outcomes or contingencies that may have a material impact on the

Company’s performance or condition.

No significant control failings or weaknesses were identified from the audit and risk committee’s ongoing risk assessment

which has been in place throughout the reporting period and up to the date of this report. The Board is satisfied that it has

undertaken a detailed review of the risks facing the Company.

An analysis of the financial risks facing the Company is set out in note 22 to the accounts on pages66 to 67.

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Schroder British Opportunities Trust plc

30

Board of Directors

Neil England

Status: Independent non-executive Chairman

Length of service: appointed a Director and Chairman in November 2020.

Neil has held a number of leadership roles in manufacturing, sales, marketing and

general management across sectors including food, FMCG (fast moving consumer

goods), distribution and technology. Neil was Vice President of Mars Incorporated;

Group Chief Executive at The Albert Fisher Group Plc and Group Commercial

Director at Gallaher Group Plc. Additionally he started two technology businesses

and has advised on others. Neil has been Chairman of a number of companies and

in the past three years these have included ITE Group Plc, Blackrock Emerging

Europe Plc and four private businesses. He is currently the chairman of

Augmentum Fintech plc (a specialist venture capital investment company) and a

private equity backed software business.

Neil has extensive international business expertise in public and private companies

varying in size from start-ups to global corporations. He is an experienced

Chairman. Neil remained free from conflict and had sufficient time available to

discharge his duties effectively.

Committee membership: audit and risk, management engagement and

nominations committees (Chair)

Current remuneration: £42,000 per annum (effective from 1 April 2022)

Number of shares held: 30,000*

Diana Dyer Bartlett

Status: Independent non-executive Director and Chair of audit and

risk committee

Length of service: appointed a Director in November 2020

After qualifying as a chartered accountant with Deloitte Haskins & Sells, Diana

spent five years in investment banking with Hill Samuel. Since then she has held a

number of executive roles including as finance director of various venture capital

and private equity backed businesses and listed companies involved in software,

financial services, renewable energy and coal mining. She was also company

secretary of Tullett Prebon plc and Collins Stewart Tullett plc. Diana is currently

Chairman of Smithson Investment Trust plc and Audit Committee Chairman of Mid

Wynd Investment Trust plc.

Diana has a strong financial background and her listed company experience makes

her a valuable member of the Board. Diana remained free from conflict and had

sufficient time available to discharge her duties effectively.

Committee membership: audit and risk (Chair), management engagement and

nominations committees

Current remuneration: £36,750 per annum (effective from 1 April 2022)

Number of shares held: 20,000*

175996 British Opportunities Trust plc Annual Report Pt2_175996 British Opportunities Trust plc Annual Report Pt2 14/07/2022 13:43 Page 30

Report and Accounts

for the period 31 March 2022

Governance

31

Tim Jenkinson

Status: Independent non-executive Director

Length of service: appointed a Director in November 2020

Tim is Professor of Finance at the Saïd Business School, University of Oxford,

Director of the Oxford Private Equity Institute and one of the founders of the

Private Equity Research Consortium. Tim’s research has won many awards,

including the 2016 Harry Markowitz Prize (from the Journal of Investment

Management for his work on private equity), the 2015 Commonfund Prize (for the

paper with the most relevance to institutional investors) and a 2014 Brattle Group

Prize (awarded by the American Finance Association for the best research on

corporate finance). He is also a Professorial Fellow at Keble College, University of

Oxford and a Research Associate of the European Corporate Governance Institute.

Tim is a partner at the European economic consulting firm Oxera, through which

he has consulted for a large number of companies, regulators, government

agencies and industry associations. He has previously held board positions in

several funds and companies, including PSource Structured Debt Limited, the US

financial services firm DFC Global Corporation and the German utility comparison

firm Verivox GmbH. In 2016 Tim was appointed as a Specialist Advisor to the

Culture, Media and Sport Select Committee of the UK Parliament.

Tim is an experienced researcher, teacher and presenter, and teaches executive

courses on private equity, entrepreneurial finance, and valuation. Tim remained

free from conflict and had sufficient time available to discharge his duties

effectively.

Committee membership: audit and risk, management engagement and

nominations committees

Current remuneration: £31,500 per annum (effective from 1 April 2022)

Number of shares held: none.

Christopher Keljik, OBE

Status: Independent non-executive Director and Chair of the

management engagement committee

Length of service: appointed a Director in November 2020

Christopher was with Standard Chartered plc for most of his executive career

serving in Singapore, New York, Hong Kong and London. At retirement he was the

Group Executive Director with responsibilities for Africa, the Middle East, South

Asia, Europe and the Americas. Christopher was senior independent director of

F&C Investment Trust plc, Millennium and Copthorne Hotels plc and Schroder

Asian Total Return Investment Company plc (formerly Henderson Asian Growth

Trust plc). Christopher has also held non-executive director positions on a number

of other companies including Sanditon Investment Trust plc, Waverton Investment

Management Limited and Jardine Lloyd Thompson Group plc. He is a Fellow of the

Institute of Chartered Accountants in England and Wales.

Christopher’s background in finance, and experience through a variety of executive

and non-executive roles makes him a valuable member of the Board. Christopher

remained free from conflict and had sufficient time available to discharge his duties

effectively.

Committee membership: audit and risk, management engagement (Chair) and

nominations committees

Current remuneration: £31,500 per annum (effective from 1 April 2022)

Number of shares held: 138,468*

*Shareholdings are as at 13 July 2022, full details of Directors’ shareholdings are set out in the Remuneration Report on

page42.

Board of Directors

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Schroder British Opportunities Trust plc

32

Directors’ Report

The Directors submit their report and the audited financial

statements of the Company for the period from 1July 2021 to

31 March 2022.

Directors and officers

Chairman

The Chairman is an independent non-executive Director who

is responsible for leadership of the Board and ensuring its

effectiveness in all aspects of its role. The Chairman’s other

significant commitments are detailed on page30. He has no

conflicting relationships.

Company Secretary

Schroder Investment Management Limited provides

company secretarial support to the Board and is responsible

for assisting the Chairman with Board meetings and advising

the Board with respect to governance. The Company

Secretary also manages the relationship with the Company’s

service providers, except for the Manager. Shareholders

wishing to lodge questions in advance of the AGM are invited

to do so by writing to the Company Secretary at the address

given on the outside back cover or by email to:

amcompanysecretary@schroders.com.

Role and operation of the Board

The Board (of four Directors, listed on pages30 and 31) is the

Company’s governing body; it sets the Company’s strategy

and is collectively responsible to shareholders for its long-

term success. The Board is responsible for appointing and

subsequently monitoring the activities of the Manager and

other service providers to ensure that the investment

objective of the Company continues to be met. The Board also

ensures that the Manager adheres to the investment

restrictions set by the Board and acts within the parameters

set by it in respect of any gearing. The Strategic Report on

pages16 to 29 sets out further detail of how the Board

reviews the Company’s strategy, risk management and

internal controls and also includes other information required

for the Directors’ Report, and is incorporated by reference.

A formal schedule of matters specifically reserved for decision

by the Board has been defined and a procedure adopted for

Directors, in the furtherance of their duties, to take

independent professional advice at the expense of the

Company.

The Chairman ensures that all Directors receive relevant

management, regulatory and financial information in a timely

manner and that they are provided, on a regular basis, with

key information on the Company’s policies, regulatory

requirements and internal controls. The Board meets at least

quarterly and receives and considers reports regularly from

the Manager and other key advisers and ad hoc reports and

information are supplied to the Board as required.

Four Board meetings are usually scheduled each year to deal

with matters including: the setting and monitoring of

investment strategy; approval of borrowings and/or cash

positions; review of investment performance; the level of

premium or discount of the Company’s shares to NAV per

share and promotion of the Company; and services provided

by third parties. Additional meetings of the Board are

arranged as required.

The Board has approved a policy on Directors’ conflicts of

interest. Under this policy, Directors are required to disclose

all actual and potential conflicts of interest to the Board as

they arise for consideration and approval. The Board may

impose restrictions or refuse to authorise such conflicts if

deemed appropriate. No Directors have any connections with

the Manager, shared directorships with other Directors or

material interests in any contract which is significant to the

Company’s business.

Key service providers

The Board has adopted an outsourced business model and

has appointed the following key service providers:

Manager

The Company is an Alternative Investment Fund as defined by

the AIFM Directive and has appointed Schroder Unit Trusts

Limited (“SUTL”) as the Manager in accordance with the terms

of an Alternative Investment Fund Manager (“AIFM”)

agreement. The AIFM agreement, which is governed by the

laws of England and Wales, can be terminated by either party

on sixmonths’ notice or on immediate notice in the event of

certain breaches or the insolvency of either party. As at the

date of this report no such notice had been given by either

party.

SUTL is authorised and regulated by the FCA and provides

portfolio management, risk management, accounting and

company secretarial services to the Company under the AIFM

agreement. The Manager also provides general marketing

support for the Company and manages relationships with key

investors, in conjunction with the Chairman, other Board

members or the Corporate Broker as appropriate. The

Manager has delegated investment management,

accounting, administration and company secretarial services

to another wholly owned subsidiary of Schroders plc,

Schroder Investment Management Limited (“SIM”). The

Company Secretary has an independent reporting line to the

Manager and distribution functions within Schroders. The

Manager has in place appropriate professional indemnity

cover.

Private investments are managed by Schroders’ specialist

private equity team, Schroders Capital. Schroders Capital has

over 20 years’ experience successfully investing in companies,

both directly via direct co-investment and through funds.

They manage over £12.9 billion of assets under management

across several specialist strategies. The private portion of the

Company’s portfolio is managed by Tim Creed, Schroders

Capital’s Head of European Private Equity. Tim is a member of

the firm’s Global Investment Committee and he is supported

by a sizable team of private equity investment professionals

that are committing a substantial amount of their time to the

portfolio.

The Schroders Group manages £752.7 billion (as at 31 March

2022) on behalf of institutional and retail investors, financial

institutions and high net worth clients from around the world,

invested in a broad range of asset classes across equities,

fixed income, multi-asset and alternatives.

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Report and Accounts

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Governance

33

Directors’ Report

Management and performance fees

The AIFM is entitled to receive from the Company a

management fee calculated and paid quarterly in arrears, on

the last Business Day of March, June, September and

December, at an annual rate of 0.6 per cent. per annum of

the quarterly cum income Net Asset Value. The AIFM will also

be entitled to receive a performance fee, the sum of which

will be equal to 15per cent. of the amount by which the “PE

Portfolio Total Return” at the end of a “Calculation Period”

exceeds a hurdle of 10% per annum.

“PE Portfolio” shall mean the Company’s private equity

investments and any public equity investments which, at the

time of investment, constituted private equity investments.

“PE Portfolio Total Return” shall mean realised and

unrealised gains and losses on the PE portfolio during the

Calculation Period, plus any dividends paid during the

Calculation Period, minus any management fee or dealing

costs payable in respect of the PE Portfolio during the

Calculation Period, expressed as a percentage of the time

weighted invested capital of the PE Portfolio.

If a performance fee shall be payable in accordance with the

above, it shall only be paid in full if the “Payment Amount” is

greater than the performance fee.

“Payment Amount” means the sum of: (i) aggregate net

realised profits on PE Portfolio Investments since the start of

the relevant Calculation Period; (ii) plus an amount equal to

each IPO Unrealised Gain where the IPO of the relevant PE

Portfolio Investment takes place during the relevant

Calculation Period; (iii) if Listed Value Change is positive in

respect of the Calculation Period, then plus an amount equal

to the Listed Value Change or, if Listed Value Change is

negative in respect of that Calculation Period, minus an

amount equal to the Listed Value Change; and (iv) plus the

aggregate amount of all dividends or other income received

from PE Portfolio Investments of the Company in that

Calculation Period. If the NAV has decreased any accrued

performance fee is carried forward and becomes payable in

the next period in which the NAV increases.

“Calculation Period” means each financial period ending on

the Company’s accounting reference date, except that (i) the

first Calculation Period shall be the period commencing on

Initial Admission and ending on 30June 2021; and (ii) the final

Calculation Period shall be the period commencing on the

day after the Company’s then accounting reference date and

ending on the Winding-Up Date.

The accrued performance fee shall only be payable by the

Company in respect of a Calculation Period if the Company’s

net asset value per share has increased over that Calculation

Period.

The Company may make private equity investments through

underlying investment vehicles in respect of which the AIFM

or other members of the Schroders group may receive fees.

In such circumstances, the AIFM will not charge any fees to

the Company in respect of such investment. In addition, the

AIFM will take all reasonable steps to ensure that any fee

charged by an underlying investment vehicle does not exceed

a fee that is approximately 15 per cent. on gains over a hurdle

that is, as far as reasonably practicable, commensurate with

the Performance Hurdle. The AIFM shall also be entitled to a

company secretarial and administrative fee from the

Company, equal to the lower of: (i) 0.2 per cent. per annum of

the quarterly cum income Net Asset Value; and (ii) £250,000

per annum, paid quarterly in arrears on the last Business Day

of March, June, September and December.

Details of all amounts payable to the Manager are set out in

note19 to the accounts on page64.

Depositary

HSBC Bank plc, which is authorised by the Prudential

Regulation Authority and regulated by the Financial Conduct

Authority and the Prudential Regulation Authority, carries out

certain duties of a depositary specified in the AIFM Directive

including, in relation to the Company:

– safekeeping of the assets of the Company which are

entrusted to it;

– cash monitoring and verifying the Company’s cash flows;

and

– oversight of the Company and the Manager.

The Company, the Manager and the Depositary may

terminate the depositary agreement at any time by giving

90days’ notice in writing. The Depositary may only be

removed from office when a new Depositary is appointed by

the Company.

Compliance with the Association of

Investment Companies (

“

AIC”) Code of

Corporate Governance

The Board of the Company has considered the principles and

provisions of the AIC Code of Corporate Governance (the “AIC

Code”). The AIC Code addresses the Principles and Provisions

set out in the Financial Reporting Councils UK Corporate

Governance Code (the “UK Code”), as well as setting out

additional Provisions on issues that are of specific relevance

to the Company. The Board considers that reporting against

the Principles and Provisions of the AIC Code, provides more

relevant information to shareholders. The AIC Code is

available on the AIC website (

www.theaic.co.uk). It includes an

explanation of how the AIC Code adopts the Principles and

Provisions set out in the UK Code to make them relevant for

investment companies. The FCA requires all UK listed

companies to disclose how they have complied with the

provisions of the UK Code. This statement, together with the

Statement of Directors’ Responsibilities, viability statement

and going concern statement set out on page29,

respectively, indicates how the Company has complied with

the principles of good governance of the AIC Code and its

requirements on internal control. The Strategic Report and

Directors’ Report provide further details on the Company’s

internal controls (including risk management), governance

and diversity policy.

The Board is satisfied that the Company’s current governance

framework is compliant with the AIC Code except in respect of

the appointment of a Senior Independent Director, where

departure from the Code is considered appropriate given the

Company’s position as an investment trust. The Board has

considered whether a Senior Independent Director should be

appointed. As the Board comprises entirely non-executive

directors, the appointment of a Senior Independent Director

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Schroder British Opportunities Trust plc

34

is not considered necessary. However, the chairman of the

audit and risk committee effectively acts as the Senior

Independent Director, leads the evaluation of the

performance of the Chairman and is available to Directors

and/or shareholders if they have concerns which cannot be

resolved through discussion with the Chairman.

Also, the nomination committee is responsible for reviewing

Directors' remuneration and as such there is no separate

remuneration committee.

Revenue, final dividend and dividend

policy

The net revenue loss for the period, after finance costs and

taxation, was £577,000, equivalent to a revenue loss per

ordinary share of 0.77pence.

The Company’s intention is to look for overall return rather

than seeking any particular level of dividend income. Subject

to the requirement to make distributions to maintain

investment trust status, any dividends and other distributions

paid by the Company will be made at the discretion of the

Board. The payment of any such dividends or other

distributions (if any) will depend on the Company’s ability to

generate realised profits and to acquire investments which

pay dividends, its financial condition, its current and

anticipated cash needs, its costs and net proceeds on sale of

its investments, legal and regulatory restrictions and such

other factors as the Board may deem relevant from time to

time. As such, investors should have no expectation that

dividends or distributions will be paid at all.

Committees

In order to assist the Board in fulfilling its governance

responsibilities, it has delegated certain functions to

committees. The roles and responsibilities of these

committees, together with details of work undertaken during

the period under review, are outlined in the next few pages.

The reports of the audit and risk committee, management

engagement committee and nomination committee are

incorporated into and form part of the Directors’ Report.

Company Status

The Company carries on business as an investment trust. Its

shares are listed and admitted to trading on the premium

segment of the main market of the London Stock Exchange. It

has been approved by HM Revenue & Customs as an

investment trust in accordance with section 1158 of the

Corporation Tax Act 2010, by way of a one-off application and

it is intended that the Company will continue to conduct its

affairs in a manner which will enable it to retain this status.

The Company is domiciled in the UK and is an investment

company within the meaning of section 833 of the Companies

Act 2006. The Company is not a “close” company for taxation

purposes.

The Articles require the Directors to put forward, at a general

meeting of the Company to be held in the year 2028 but in

any event no later than 31 May 2028, a Winding-Up

Resolution to place the Company into voluntary liquidation.

The Articles provide that voting on the Winding-Up Resolution

will be enhanced such that, provided any single vote is cast in

favour, the Winding-Up Resolution will be passed, unless

alternative proposals have been approved by shareholders.

Share capital and substantial share

interests

As at 31 March 2022, the Company had 75,000,000 ordinary

shares of 1p in issue. No shares were held in treasury.

Accordingly, the total number of voting rights in the Company

at 31 March 2022 was 75,000,000. Details of changes to the

Company’s share capital during the reporting period under

review are given in note14 to the accounts on page63.

The Board will be seeking approval from shareholders to buy

back shares, reissue shares held in treasury and issue new

shares, as more particularly described in the AGM notice and

Annual General Meeting – Recommendations section.

All shares in issue rank equally with respect to voting,

dividends and any distribution on winding up.

The Company has received notifications in accordance with

the FCA’s Disclosure Guidance and Transparency Rule 5.1.2R

of the below interests in 3% or more of the voting rights

attaching to the Company’s issued share capital.

As at 31 % of total

March 2022 voting rights

Schroders plc 21,151,996 28.203%

East Riding Of Yorkshire

Council 15,000,000 20%

Following the period end and at the date of this report, there

have been no changes.

Provision of information to the auditor

The Directors at the date of approval of this report confirm

that, so far as each of them is aware, there is no relevant

audit information of which the Company’s auditor is unaware;

and each Director has taken all the steps that he or she ought

to have taken as a Director in order to make himself or herself

aware of any relevant audit information and to establish that

the Company’s auditor is aware of that information.

Directors’ Report

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Report and Accounts

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Governance

35

Directors’ Report

Directors’ attendance at meetings

The number of scheduled meetings of the Board and its

committees held during the reporting period and the

attendance of individual Directors is shown below. No

management engagement or nomination committee

meetings were held during the period, but both committees

met after the period end.

Audit Management

and Risk Engagement Nomination

Director Board Committee Committee Committee

Neil England 3/3 3/3 2/2 1/1

Diana Dyer Bartlett 3/3 3/3 2/2 1/1

Tim Jenkinson 3/3 3/3 2/2 1/1

Christopher Keljik 3/3 3/3 2/2 1/1

Directors’ and officers’ liability insurance and

indemnities

Directors’ and officers’ liability insurance cover was in place

for the Directors throughout the period. The Company’s

articles of association provide, subject to the provisions of UK

legislation, an indemnity for Directors in respect of costs

which they may incur relating to the defence of any

proceedings brought against them arising out of their

positions as Directors, in which they are acquitted or

judgment is given in their favour by the court. This indemnity

is a qualifying third party indemnity policy and was in place

throughout the period under review for each Director and to

the date of this report.

By order of the Board

Schroder Investment Management Limited

Company Secretary

13 July 2022

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Schroder British Opportunities Trust plc

36

Audit and Risk Committee Report

The responsibilities and work carried out by the audit and risk committee during the reporting period under review are set out in

the following report. The duties and responsibilities of the committee, which include monitoring the integrity of the Company’s

financial reporting and internal controls, are set out in further detail below, and may be found in the terms of reference which are

set out on the Company’s webpages, www.schroders.com/sbo.

All Directors are members of the committee. Diana Dyer Bartlett is the chair of the committee. The Board has satisfied itself that at

least one of the committee’s members has recent and relevant financial experience and that the committee as a whole has

competence relevant to the sector in which the Company operates. The Chairman of the Board is a member of the committee, and

was independent on appointment.

Approach

The committee’s key roles and responsibilities are set out below.

Risk Management and Internal

Controls

Financial Reports and Valuation Audit

Principal risks

To establish a process for identifying,

assessing, managing and monitoring

emerging and principal risks of the

Company.

The committee is responsible for

reviewing the adequacy and effectiveness

of the Company's internal controls and

the whistleblowing procedures operated

by the AIFM and other services providers.

Financial statements

To monitor the integrity of the financial

statements of the Company and any formal

announcements relating to the Company’s

financial performance and valuation.

Audit results

To discuss any matters arising from the

audit and recommendations made by the

auditor.

Emerging risks and uncertainties

To ensure a robust assessment of the

Company’s emerging and principal risks

and procedures is in place to identify

emerging risks, and an explanation of

how these are being managed or

mitigated.

Going concern and viability

To review the position and make

recommendations to the Board in

relation to whether it considers it

appropriate to adopt the going concern

basis of accounting in preparing its

annual and half-yearly financial

statements.

The committee is also responsible for

reviewing the disclosures made by the

Company in the viability statement.

Auditor appointment, independence

and performance

To make recommendations to the Board,

in relation to the appointment,

re-appointment, effectiveness, and any

non-audit services by the auditor and

removal of the external auditor. To review

their independence, and to approve their

remuneration and terms of engagement.

To review the audit plan and engagement

letter.

Ongoing risk review

Audit

planning

Audit

Annual

report

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Governance

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Application for the reporting period

Risks Management and Internal

Controls

Financial Reports and Valuation Audit

Service provider controls

Consideration of the operational controls

maintained by the Manager, Depositary

and Registrar.

Internal controls and risk

management

Consideration of several key aspects of

internal control and risk management

operating within the Manager,

Depositary and Registrar, including

assurance reports and presentations on

these controls.

Valuation and existence of holdings

Considered reports from the Manager

and Depository, including a quarterly

report and one at the period end. The

committee has reviewed the valuation

methodologies used for both listed and

each of the unlisted investments.

Recognition of investment income

Reviewed consideration of dividends

received against forecast and the

allocation of special dividends of which

there are none to income or capital.

The committee took steps to gain an

understanding of the processes to

record investment income so that

dividends paid by any investee

companies held at any time during the

period, had been recorded and, where

appropriate, collected.

Meetings with the auditor

The auditor attended meetings to

present their audit plan and the findings

of the audit.

The committee met the auditor without

representatives of the Manager present.

Effectiveness of the independent audit

process and auditor performance

Evaluated the effectiveness of the

independent audit firm and process prior

to making a recommendation that it

should be re-appointed at the forthcoming

AGM. Evaluated the auditor’s performance

against agreed criteria including:

qualification; knowledge, expertise and

resources; independence policies;

effectiveness of audit planning; adherence

to auditing standards; and overall

competence was considered, alongside

feedback from the Manager on the audit

process. Professional scepticism of the

auditor was questioned and the committee

was satisfied with the auditor’s replies.

Compliance with the investment trust

qualifying rules in S1158 of the

Corporation Tax Act 2010

Consideration of the Manager’s report

confirming compliance.

Calculation of the investment

management fee and performance fee

Consideration of methodology used to

calculate the fees, matched against the

criteria set out in the AIFM agreement.

Auditor independence

Ernst & Young LLP has provided audit

services to the Company since it was

appointed on 19 May 2021. This is the

second period that Ernst & Young LLP

will be undertaking the Company’s audit.

The auditors are required to rotate the

senior statutory auditor every five years.

This is the second period that the senior

statutory auditor, Caroline Mercer, has

conducted the audit of the Company’s

financial statements. The auditors were

appointed due to their experience.

There are no contractual obligations

restricting the choice of external

auditors.

Overall accuracy of the report and

accounts

Consideration of the draft report and

accounts and the letter from the

Manager in support of the letter of

representation to the auditor.

Audit results

Met with and reviewed a comprehensive

report from the auditor which detailed

the results of the audit, compliance with

regulatory requirements, safeguards

that have been established, and on their

own internal quality control procedures.

The committee identified no

significant issues during the committee’s review of the Company’s principal risks and uncertainties.

The below table sets out how the committee discharged its duties during the period and up until the approval of this report. The

committee met three times during the reporting period. Further details on attendance can be found on page35. An evaluation of

the committee’s effectiveness and review of its terms of reference was done in June 2021 and the next will be completed as part of the

Board and committee evaluation process in the next reporting period.

Audit and Risk Committee Report

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38

Application for the reporting period

Risks Management and Internal

Controls

Financial Reports and Valuation Audit

Principal risks

Reviewed the principal and emerging

risks together with key risk mitigations.

The committee additionally adopted a

risk appetite statement.

Fair, balanced and understandable

Reviewed the report and accounts to

advise the Board whether it was fair,

balanced and understandable.

Reviewed whether performance

measures were reflective of the

business, whether there was adequate

commentary on the Company’s

strengths and weaknesses and that the

report and accounts, taken and a whole

were consistent with the Board’s view of

the operation of the Company.

Provision of non-audit services by the

auditor

The committee has reviewed the FRC’s

Guidance on Audit Committees and has

formulated a policy on the provision of

non-audit services by the Company’s

auditor. The committee has determined

that the Company’s appointed auditor

will not be considered for the provision of

certain non-audit services, such as

accounting and preparation of the

financial statements, internal audit and

custody. The auditor may, if required,

provide other non-audit services which

will be judged on a case-by-case basis.

The committee was satisfied that this did

not affect the independence or objectivity

of the auditor.

Going concern and viability

Reviewing the impact of risks on going

concern and longer-term viability.

The committee reviewed the disclosures

in the report and accounts on going

concern and viability.

Consent to continue as auditor

Ernst & Young LLP indicated to the

committee their willingness to continue

to act as auditor.

Recommendations made to, and approved by, the Board:

The committee recommended that the Board approve the quarterly valuations, the half year report and period end report and

accounts.

The committee recommended that the going concern presumption be adopted in the report and accounts and the explanations

set out in the viability statement.

As a result of the work performed, the committee has concluded that the report for the period ended 31 March 2022, taken as a

whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s

position, performance, business model and strategy, and has reported on these findings to the Board. The Board’s conclusions

in this respect are set out in the Statement of Directors’ Responsibilities on page44.

Having reviewed the performance of the auditors as described above, the committee considered it appropriate to recommend

the firm’s re-appointment. Resolutions to re-appoint Ernst & Young LLP as auditor to the Company, and to authorise the

Directors to determine their remuneration will be proposed at the AGM.

Diana Dyer Bartlett

Audit and risk committee chair

13 July 2022

Audit and Risk Committee Report

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Report and Accounts

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Governance

39

Oversight of other service providers

The committee reviews the performance and

competitiveness of the following service providers on at

least an annual basis:

• Depositary and custodian

• Corporate broker

• Registrar

The committee receives a report from the Company

Secretary on ancillary service providers, and considers

any recommendations.

The committee notes the audit and risk committee’s

review of the auditor.

Oversight of the Manager

The committee:

• reviews the Manager’s performance, over the short

and long term, against a peer group and the market.

• considers the reporting it has received from the

Manager throughout the reporting period, and the

reporting from the Manager to the shareholders.

• assesses management fees including the

performance fee on an absolute and relative basis,

receiving input from the Company’s broker, including

peer group and industry figures, as well as the

structure of the fees.

• reviews the appropriateness of the Manager’s

contract, including terms such as notice period.

• assesses whether the Company receives appropriate

administrative, accounting, company secretarial and

marketing support from the Manager.

Management Engagement Committee Report

• The management engagement committee is responsible for (1) the monitoring and oversight of the Manager’s performance

and fees, and confirming the Manager’s ongoing suitability, and (2) reviewing and assessing the Company’s other service

providers, including reviewing their fees. All Directors are members of the committee. Christopher Keljik is the chair of the

committee. Its terms of reference are available on the Company’s webpages, www.schroders.com/sbo. The committee held

two scheduled meetings during the reporting period.

Approach

The committee undertook a detailed review of the

Manager’s performance and agreed that it has the

appropriate depth and quality of resource to deliver

superior returns over the longer term.

The committee also reviewed the terms of the AIFM

agreement, including the fee structure.

The committee reviewed the other services provided by

the Manager and agreed they were satisfactory.

Although this was a short reporting period, a detailed

review of the Depositary & Custodian took place.

The committee noted that the audit and risk committee

had undertaken an evaluation of the Manager,

Registrar, and Depositary and Custodian’s internal

controls.

Application for the reporting period

Recommendations made to, and approved by, the Board:

• That the ongoing appointment of the Manager on the terms of the AIFM agreement, including the fee, was in the best

interests of shareholders as a whole.

• That the Company’s service providers’ performance remained satisfactory.

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Schroder British Opportunities Trust plc

40

Selection and induction

• Committee prepares a job

specification for each role, and

an independent recruitment

firm is appointed. For the

Chairman and the chairs of

committees, the committee

considers current Board

members too.

• Job specification outlines the

knowledge, professional skills,

personal qualities and

experience requirements.

• Potential candidates assessed

against the Company’s diversity

policy.

• Committee discusses the long

list, invites a number of

candidates for interview and

makes a recommendation to

the Board.

• Committee reviews the

induction and training of new

Directors.

Board evaluation and Directors’ fees

• Committee assesses each Director

annually, and considers if an external

evaluation is appropriate.

• Evaluation focuses on whether each

Director continues to demonstrate

commitment to their role and provides a

valuable contribution to the Board during

the reporting period, taking into account

time commitment, independence, conflicts

and training needs.

• Following the evaluation, the committee

provides a recommendation to

shareholders with respect to the annual

re-election of Directors at the AGM.

• All Directors retire at the AGM and their

re-election is subject to shareholder

approval.

• Committee reviews Directors’ fees, taking

into account comparative data and reports

to shareholders.

• Any proposed changes to the

remuneration policy for Directors

discussed and reported to shareholders.

Succession

• The Board’s succession policy is

that Directors’ tenure will be for

no longer than nine years,

except in exceptional

circumstances, and that each

Director will be subject to

annual re-election at the AGM.

• Committee reviews the Board’s

current and future needs at

least annually. Should any need

be identified the committee will

initiate the selection process.

• Committee oversees the

handover process for retiring

Directors.

Nomination Committee Report

The nomination committee is responsible for (1) the recruitment, selection and induction of Directors, (2) their assessment

during their tenure, and (3) the Board’s succession. All Directors are members of the committee. Neil England is the chair of

the committee. Its terms of reference are available on the Company’s webpages, www.schroders.com/sbo. The committee

held one scheduled meeting during the reporting period.

Approach

Oversight of Directors

Selection

Induction

Annual

evaluation

Annual review

of succession

policy

Application

of succession

policy

For application see page 41.

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Report and Accounts

for the period 31 March 2022

Governance

41

Recommendations made to, and approved by, the Board:

• That all Directors continue to demonstrate commitment to their roles, provide a valuable contribution to the deliberations

of the Board, remuneration of the Directors remains appropriate and Directors remain free from conflicts with the Company

and its Directors contribute to the long-term sustainable success of the Company, so should all be recommended for

re-election by shareholders at the AGM.

• That Directors’ fees be increased by an additional 5% per annum.

• That the Remuneration Report be put to shareholders for approval.

Selection and induction

policy

• No new appointments were

made during the period.

Board evaluation and Directors’ fees

• A Board and committee evaluation process

was undertaken in June 2021 and reported

to the committee in September.

• The committee also reviewed each

Director’s time commitment and

independence by reviewing a complete list

of appointments, including pro bono not

for profit roles, to ensure that each

Director remained free from conflict and

had sufficient time available to discharge

each of their duties effectively. All Directors

were considered to be independent in

character and judgement.

• The committee also considered each

Director’s contributions, and noted that in

addition to extensive experience as

professionals and non-executive Directors,

each Director had valuable skills and

experience, as detailed in their biographies

on pages 30 and 31.

• Based on its assessment, the committee

provided individual recommendations for

each Director’s re-election.

• The committee reviewed Directors’ fees,

using external benchmarking, and

recommended that Directors’ fees, remain

unchanged as detailed in the

remuneration report.

Succession

• The committee believes it is

important for the Board to have

the appropriate skills and

diversity and will continue to

review composition and

succession plans with these in

mind.

Application for the reporting period

Nomination Committee Report

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Schroder British Opportunities Trust plc

42

Directors’ Remuneration Report

Introduction

The following remuneration policy is currently in force and is

subject to a binding vote every three years. The next vote will

take place at the 2024 AGM and the current policy provisions

will apply until that date. The below Directors’ report on

remuneration is subject to an annual advisory vote. An

ordinary resolution to approve this report will be put to

shareholders at the forthcoming AGM.

At the AGM held on 30 November 2021, 99.99% of the votes

cast (including votes cast at the Chairman’s discretion) in

respect of approval of the Directors’ Remuneration Policy

were in favour, while 0.01% were against and 10,000 were

withheld.

Also at the AGM held on 30 November 2021, 99.99% of the

votes cast (including votes cast at the Chairman’s discretion)

in respect of approval of the Directors’ Remuneration Report

were in favour, while 0.01% were against and 10,000 were

withheld for the reporting period ended 30 June 2021.

Directors’ remuneration policy

The determination of the Directors’ fees is a matter dealt with

by the Board and the nomination committee.

It is the Board’s policy to determine the level of Directors’

remuneration having regard to amounts payable to

non-executive Directors in the industry generally, the role

that individual Directors fulfil in respect of Board and

committee responsibilities, and time committed to the

Company’s affairs, taking into account the aggregate limit of

fees set out in the Company’s articles of association. This

aggregate level of Directors’ fees is currently set at £500,000

per financial year and any increase in this level requires

approval by the Board and the Company’s shareholders.

The Chairman of the Board and the chair of the audit and risk

committee each receive fees at a higher rate than the other

Directors to reflect their additional responsibilities. Directors’

fees are set at a level to recruit and retain individuals of

sufficient calibre, with the level of knowledge, experience and

expertise necessary, and to promote the success of the

Company in reaching its short and long-term strategic

objectives.

Any Director who performs services which in the opinion of

the directors are outside the scope of the ordinary duties of a

Director, may be paid additional remuneration to be

determined by the directors, subject to the previously

mentioned fee cap.

The Board and its committees comprise non-executive

Directors. No Director past or present has an entitlement to a

pension from the Company and the Company has not, and

does not intend, to operate a share scheme for Directors or

to award any share options or long-term performance

incentives to any Director. No Director has a service contract

with the Company; however Directors have a letter of

appointment. Directors do not receive exit payments and are

not provided with any compensation for loss of office. No

other payments are made to Directors other than the

reimbursement of reasonable out-of-pocket expenses

incurred in attending to the Company’s business.

The Directors’ letters of appointment are available for

inspection at the Company’s registered office address during

normal business hours and during the AGM at the location of

such meeting.

Implementation of policy

The Board did not seek the views of shareholders in setting

this remuneration policy. Any comments on the policy

received from shareholders would be considered on a case

by case basis.

As the Company does not have any employees, no employee

pay and employment conditions were taken into account

when setting this remuneration policy and no employees

were consulted in its construction.

Directors’ fees are reviewed annually and take into account

research from third parties on the fee levels of Directors of

peer group companies, inflation, as well as industry norms

and factors affecting the time commitment expected of the

Directors. New Directors are subject to the provisions set out

in this remuneration policy.

Directors’ report on remuneration

This report sets out how the remuneration policy was

implemented during the period ended 31 March 2022.

Consideration of matters relating to Directors’

remuneration

Directors’ remuneration was last reviewed by the nomination

committee and the Board in July 2022. The members of the

Board at the time that remuneration levels were considered

were as set out on pages30 and 31. Although no external

advice was sought in considering the levels of Directors’ fees,

information on fees paid to Directors of other investment

companies managed by Schroders and peer group

companies provided by the Manager and Corporate Broker

was taken into consideration as was independent third party

research.

Following the review of Directors’ fees by the nomination

committee it was proposed that a fee increase of 5% per

annum, effective from 1 April 2022 be recommended. The

Board approved this recommendation.

175996 British Opportunities Trust plc Annual Report Pt2_175996 British Opportunities Trust plc Annual Report Pt2 14/07/2022 13:43 Page 42

Report and Accounts

for the period 31 March 2022

Governance

43

Directors’ Remuneration Report

Fees paid to directors

The following amounts were paid by the Company to directors for their services in respect of the nine months ended 31March

2022. Directors’ remuneration is all fixed; they do not receive any variable remuneration. The performance of the Company

over the period is presented on page2, under the heading “Financial highlights”.

Change in

annual fee

over period

ended

Fees

1

Taxable benefits

2

Total 31 March

2022 2021 2022 2021 2022 2021 2022

Directors £ £ £ £ £ £ %

Neil England (Chairman) 30,110 23,287 618 – 30,728 23,287 0.0

Diana Dyer Bartlett

26,345 19,966 193 – 26,538 19,966 0.0

Tim Jenkinson

22,582 17,466 43 70 22,625 17,536 0.0

Christopher Keljik 22,582 17,877 – – 22,582 17,877 0.0

101,619 78,596 854 70 102,473 78,666

1

The Directors, were appointed on 4 November 2020. Directors fees were payable from 1 December 2020. The fees payable shown above are in respect of

the nine month period ended 31March 2022. The comparative figures are in respect of the period from 1December 2020 to 30June 2021.

2

Comprise amounts reimbursed for expenses incurred in carrying out business for the Company, and which have been grossed up to include PAYE and NI

contributions.

The information in the above table has been audited.

The table below compares the remuneration payable to

directors, to distributions made to shareholders during the

period under review and the prior period. In considering

these figures, shareholders should take into account the

Company’s investment objective.

Period Period

ended ended

31 March 30 June

2022 2021

£’000 £’000 % Change

Remuneration payable

to directors 102 79 29.1

Distributions paid to

shareholders – – –

Performance graph

A graph showing the Company’s share price total return

versus the FTSE 250 ex Investment Trusts Index

1

total return

is set out below. This has been selected as an appropriate

comparison based on the composition of the Company’s

investment portfolio.

Share price total return versus FTSE 250

ex Investment Trusts Index

1

total return

for the period from launch date on

1December 2020, to 31March 2022

1

Source: Morningstar. Rebased to 100 at 1 December 2020. The FTSE 250

ex Investment Trusts Index best represents the companies that the

Manager uses to select investment opportunities. Companies within this

index represent the growth characteristics that the Manager seeks to meet

the long-term investment objective of delivering returns to shareholders.

Definitions of terms and performance measures are provided

on page77.

Directors’ share interests

The Company’s articles of association do not require

Directors to own shares in the Company. The interests of

Directors, including those of connected persons, at the

beginning and end of the financial period under review, are

set out below.

At 31 March At 30 June

2022

1

2021

1

Neil England 30,000 10,000

Diana Dyer Bartlett 20,000 20,000

Tim Jenkinson – –

Christopher Keljik 124,070 98,109

1

Ordinary shares of 1p each.

Since the reporting period end, Christopher Keljik has purchased an

additional 14,398 shares through his pre-authorised share purchase plan.

The information in the above table has been audited.

On behalf of the Board

Neil England

Chairman

13 July 2022

01/12/2020 30/06/2021 31/03/2022

NAV Total Return

80

82

84

86

88

90

92

94

96

98

100

102

104

106

108

110

112

114

116

118

FTSE 250 ex Investment Trusts Index

175996 British Opportunities Trust plc Annual Report Pt2_175996 British Opportunities Trust plc Annual Report Pt2 14/07/2022 13:43 Page 43

Schroder British Opportunities Trust plc

44

Statement of Directors’ Responsibilities

The Directors are responsible for preparing the annual

report, and the financial statements in accordance with

applicable law and regulations.

Company law requires the Directors to prepare financial

statements for each financial year. Under that law the

Directors have prepared the financial statements in

accordance with United Kingdom Generally Accepted

Accounting Practice (United Kingdom Accounting Standards,

comprising Financial Reporting Standard (FRS) 102 “The

Financial Reporting Standard applicable in the UK and

Republic of Ireland” and applicable law). 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 and of the return or loss

of the Company for that period. In preparing these financial

statements, the Directors are required to:

– select suitable accounting policies and then apply them

consistently;

– make judgements and accounting estimates that are

reasonable and prudent;

– state whether applicable UK Accounting Standards,

comprising FRS 102, have been followed, subject to any

material departures disclosed and explained in the

financial statements;

– notify the Company’s shareholders in writing about the

use of disclosure exemptions in FRS 102, used in the

preparation of the financial statements; 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 disclose with reasonable

accuracy at any time the financial position of the Company

and enable them to ensure that the financial statements and

the Directors’ Remuneration Report comply with the

Companies Act 2006. They are also responsible for

safeguarding the assets of the Company and hence for taking

reasonable steps for the prevention and detection of fraud

and other irregularities.

The Manager is responsible for the maintenance and

integrity of the webpage dedicated to the Company.

Legislation in the United Kingdom governing the preparation

and dissemination of financial statements may differ from

legislation in other jurisdictions.

Each of the Directors, whose names and functions are listed

on pages30 and 31, confirm that to the best of their

knowledge:

– the financial statements, which have been prepared in

accordance with United Kingdom Generally Accepted

Accounting Practice (United Kingdom Accounting

Standards and applicable law), give a true and fair view

of the assets, liabilities, financial position and net return

of the Company;

– the Strategic Report contained in the report and

accounts includes a fair review of the development and

performance of the business and the position of the

Company, together with a description of the principal

risks and uncertainties that it faces; and

– the annual report and accounts, taken as a whole, is fair,

balanced and understandable and provides the

information necessary for shareholders to assess the

Company’s position and performance, business model

and strategy.

On behalf of the Board

Neil England

Chairman

13 July 2022

175996 British Opportunities Trust plc Annual Report Pt2_175996 British Opportunities Trust plc Annual Report Pt2 14/07/2022 13:43 Page 44

Report and Accounts

for the period ended 31 March 2022

45

Financial

Opinion

We have audited the financial statements of Schroder British Opportunities Trust plc (the “Company”) for the period ended

31March 2022 which comprise the Income Statement, the Statement of Changes in Equity, the Statement of Financial

Position, the Cash Flow Statement and the related notes 1 to 25, including a summary of significant accounting policies. The

financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting

Standards including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom

Generally Accepted Accounting Practice).

In our opinion, the financial statements:

– give a true and fair view of the Company’s affairs as at 31 March 2022 and of its loss for the period then ended;

– have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; 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 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 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:

– Confirming our understanding of the Company’s going concern assessment process and discussed with the Directors and

the Company Secretary those factors they considered important in their assessment. We considered whether the factors

taken account of in the Directors’ assessment addressed those matters which we considered important.

– Inspecting the Directors’ assessment of going concern, including the revenue forecast, for the period to 31 July 2023

which is at least twelve months from the date the financial statements were authorised for issue. In preparing the

revenue forecast, the Company has concluded that it is able to continue to meet its ongoing costs as they fall due.

– Reviewing the factors and assumptions, including the impact of the COVID-19 pandemic and other significant events that

could give rise to market volatility, as applied to the revenue forecast and the liquidity assessment in relation to the

quoted investments. We considered the appropriateness of the methods used to calculate the revenue forecast and the

liquidity assessment 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 for the Company.

– Considered the mitigating factors included in the revenue forecast that are within the control of the Company. We

reviewed the Company’s assessment of the liquidity of investments held and evaluated the Company’s ability to sell those

investments in order to cover working capital requirements should revenue decline significantly.

– Considered the commitments that have been made with respect to the purchase of unquoted investments and made

sure that these have been appropriately taken account of when preparing the forecast.

– We reviewed the Company’s going concern disclosures included in the annual report in order to assess that the

disclosures were consistent with the financial statements and our understanding of the Company and in conformity with

the reporting standards.

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

Independent Auditor’s Report

to the Members of Schroder British Opportunities

Trust plc

175996 British Opportunities Trust plc Annual Report Pt3.qxp_175996 British Opportunities Trust plc Annual Report Pt3 14/07/2022 13:45 Page 45

46

Schroder British Opportunities Trust plc

Independent Auditor’s Report

to the Members of Schroder British Opportunities

Trust plc

assessed by the Directors, being the period to 31 July 2023, which is at least 12 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 incorrect valuation or ownership of the investment portfolio

– Risk of incorrect calculation of the performance fee

Materiality – Overall materiality of £0.78m which represents 1% of Shareholders’ funds.

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, including controls and changes in the business environment

when assessing the level of work to be performed.

Climate change

There has been increasing interest from stakeholders as to how climate change will impact companies. The Company has

determined that the impact of climate change could affect the Company’s investments and potentially shareholder returns.

This is explained on page 27 in the emerging risks and uncertainties 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 consistent 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 2c and conclusion that there was no further impact of climate change to be taken into account

as the investments are valued based on market pricing as required by FRS 102. In line with FRS 102, investments are valued at

fair value, which for the Company are quoted bid prices for investments in active markets. Investments which are unquoted

are priced using market-based valuation approaches. 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 associated disclosures.

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.

175996 British Opportunities Trust plc Annual Report Pt3.qxp_175996 British Opportunities Trust plc Annual Report Pt3 14/07/2022 13:45 Page 46

Report and Accounts

for the period ended 31 March 2022

47

Financial

Independent Auditor’s Report

to the Members of Schroder British Opportunities

Trust plc

Risk Our response to the risk Key observations

communicated to the

audit and risk committee

Incorrect valuation or ownership of

the investment portfolio (as described

on page 36 in the audit and risk

committee Report and as per the

accounting policy set out on page 56)

The value of the investment portfolio at

31 March 2022 was £64.69m (30 June

2021: £64.51m) consisting of quoted

investments with an aggregate value of

£37.28m (30 June 2021: £43.78m) and

unquoted investments with an

aggregate value of £27.41m (30 June

2021: £20.73m).

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 to

the investments held by the Company

could have a significant impact on the

portfolio valuation and the return

generated for shareholders.

The fair value of quoted investments is

determined by reference to bid prices

and there is a risk that the prices have

been incorrectly extracted from the

source data.

Unquoted investments are valued at

fair value by the Directors following a

detailed review and appropriate

challenge of the valuations proposed by

Schroder Capital (the “Portfolio

Manager” for unquoted investments).

The unquoted investment policy applies

methodologies consistent with the

International Private Equity and Venture

Capital Valuation guidelines (‘IPEV’).

The valuation of the unquoted

investments, and the resultant impact

on the unrealised gains/(losses), is the

area requiring the most significant

judgement and estimation in the

preparation of the financial statements

and has been classified as an area of

fraud risk as highlighted below on

page51.

We have performed the following

procedures:

We obtained an understanding of the

Portfolio Manager’s and the

Administrator’s processes and controls

surrounding legal title and valuation of

quoted and unquoted investments by

performing walkthrough procedures.

For all quoted 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 period end.

We reviewed daily prices for a sample

of investments for a week before and

after year end to confirm that prices

were not stale, ensuring the fair value

of the investments was based on a

traded price. We confirmed with the

Administrator that no stale prices had

been identified for any investments in

the portfolio.

We compared the Company’s quoted

investment holdings at 31 March 2022

to independent confirmations received

directly from the Company’s Custodian.

We engaged our team of valuation

specialists to review the valuations of all

unquoted investments and this

included completing the following

procedures:

– Reviewing the valuation papers

prepared by the Portfolio Manager

for the period ended 31 March

2022 to gain an understanding of

the valuation methodologies and

assumptions used;

– Assessing whether the valuations

have been performed in line with

general valuation approaches as

set out in UK GAAP and the

International Private Equity and

Venture capital (‘IPEV’) guidelines;

– Assessing and validating the

appropriateness of data inputs and

challenging the assumptions used

to support the valuations;

– Assessing and undertaking our

own analysis other facts and

circumstances, such as market

movement and comparative

company information, that have an

impact on the fair market value of

the investments; and

The results of our procedures identified

no material misstatements in relation to

the risk of incorrect valuation or

ownership of the investment portfolio.

175996 British Opportunities Trust plc Annual Report Pt3.qxp_175996 British Opportunities Trust plc Annual Report Pt3 14/07/2022 13:45 Page 47

48

Schroder British Opportunities Trust plc

Independent Auditor’s Report

to the Members of Schroder British Opportunities

Trust plc

Risk Our response to the risk Key observations

communicated to the

audit and risk committee

– Assessing whether Management’s

valuations are reasonable and

within an independently calculated

acceptable valuation range taking

into consideration the growth of

the investee companies during the

period along with the overall

movement in the market based on

a portfolio of comparable

companies for each investee

company.

We recalculated the unrealised

gains/losses on the unquoted

investments as at the period-end using

the book-cost reconciliation.

We reviewed the fair value hierarchy

disclosures for the level 3 investments.

We obtained confirmations directly

from the underlying portfolio

companies with respect to the

unquoted investments held by the

Company.

Incorrect calculation of the

performance fee (as described on page

36 in the audit and risk committee Report

and as per the accounting policy set out

on page 56)

The Manager is entitled to a

performance fee, the sum of which will

be equal to 15% of the amount by

which the Private Equity Portfolio Total

Return at the end of the calculation

period exceeds the performance

hurdle. This is only paid on subsequent

realisation of the unquoted

investments,

The amount of performance fee

accrued as at 31 March 2022 was

£1.12m, which represents the fee

payable for the periods ended 30 June

2021 and 31 March 2022.The

performance fee is only paid on the

subsequent realisation of the unquoted

investments.

As the inputs to the performance fee

are dependent on the valuations of the

unquoted investments, there is a risk

that the valuation of unquoted

investments is overstated to indicate a

higher performance fee due to the

Portfolio Manager.

We have performed the following

procedures:

We obtained an understanding of the

Portfolio Manager’s and the

Administrator’s processes surrounding

the calculation of performance fees by

performing walkthrough procedures.

We tested the mathematical accuracy of

the calculation, verified that the

calculation was in accordance with the

Investment Management Agreement

and verified the inputs used to

appropriate support including the

audited valuations data.

Our procedures in connection with the

risk of overstatement of the unquoted

investments are set out above.

The results of our procedures identified

no material misstatements in relation to

the risk of incorrect calculation of the

performance fee.

There have been no changes to the areas of audit focus raised in the above risk table from the prior year.

175996 British Opportunities Trust plc Annual Report Pt3.qxp_175996 British Opportunities Trust plc Annual Report Pt3 14/07/2022 13:45 Page 48

Report and Accounts

for the period ended 31 March 2022

49

Financial

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 £0.78 million (2021: £0.81 million), which is 1% (2021: 1%) of shareholders’

funds. We believe that shareholders’ funds provides us with materiality aligned to the key measure of the Company’s

performance.

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: 50%) of our planning materiality, namely £0.59m (2021: £0.41m).

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. A lower threshold was set for performance materiality in the prior period due

it being our first audit of the Company.

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 Income Statement which is usually calculated as 5% of net revenue before

tax. In the case of the Company, as there is a net loss before tax, we have set our revenue testing threshold in line with the

reporting threshold which is calculated as 5% of planning materiality and is £0.04m (2021: £0.04m).

Reporting threshold

An amount below which identified misstatements are considered as being clearly trivial.

We agreed with the audit committee that we would report to them all uncorrected audit differences in excess of £0.04m

(2021: £0.04m), 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 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 period for which the financial

statements are prepared is consistent with the financial statements; and

– the strategic report and Directors’ reports have been prepared in accordance with applicable legal requirements.

Independent Auditor’s Report

to the Members of Schroder British Opportunities

Trust plc

175996 British Opportunities Trust plc Annual Report Pt3.qxp_175996 British Opportunities Trust plc Annual Report Pt3 14/07/2022 13:45 Page 49

50

Schroder British Opportunities Trust plc

Independent Auditor’s Report

to the Members of Schroder British Opportunities

Trust plc

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.

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 29;

– 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 29;

– Director’s statement on whether it has a reasonable expectation that the group will be able to continue in operation and

meets its liabilities set out on page 29;

– Directors’ statement on fair, balanced and understandable set out on page 44;

– Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 27;

– The section of the annual report that describes the review of effectiveness of risk management and internal control

systems set out on page 36; and;

– The section describing the work of the audit committee set out on page 36.

Responsibilities of Directors

As explained more fully in the Directors’ responsibilities statement set out on page 44, 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 contro

l

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.

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Report and Accounts

for the period ended 31 March 2022

51

Financial

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 United Kingdom Generally Accepted Accounting Practice , the Companies Act

2006, the Listing Rules, the UK Corporate Governance Code, the Association of Investment Companies’ (the ‘AIC’) Code of

Corporate Governance, the AIC’s Statement of Recommended Practice, 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 and the Company’s documented policies and

procedures.

– 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 fraud risks with respect to the

incorrect valuation of the unquoted investments and the resulting impact on unrealised gains/(losses) and incorrect

calculation of the performance fee. Further discussion of our approach is set out in the section on key audit matters

above which include our response to the fraud risks and other areas of audit focus.

– 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

United Kingdom Generally Accepted Accounting Practice.

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 committee, we were appointed by the Company on 19May 2021 to audit

the financial statements for the period ending 30 June 2021 and subsequent financial periods.

The period of total uninterrupted engagement including previous renewals and reappointments is 2periods, covering the

periods ending 30 June 2021 and 31 March 2022.

– The audit opinion is consistent with the additional report to the audit 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.

Caroline Mercer (Senior statutory auditor)

for and on behalf of

Ernst & Young LLP, Statutory Auditor

Edinburgh

13 July 2022

Independent Auditor’s Report

to the Members of Schroder British Opportunities

Trust plc

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52

Schroder British Opportunities Trust plc

Income Statement

For the nine months ended 31 March 2022

For the nine months For the period

ended 31 March 2022 ended 30 June 2021

1

Revenue Capital Total Revenue Capital Total

Note £’000 £’000 £’000 £’000 £’000 £’000

(Losses)/gains on investments held at fair

value through profit or loss 3

– (1,453) (1,453) – 6,853 6,853

(Losses)/gains on derivative contracts

– (481) (481) – 1,839 1,839

Gains on foreign exchange

– – – – 71 71

Income from investments 4 296 – 296 250 – 250

Gross return/(loss) 296 (1,934) (1,638) 250 8,763 9,013

Portfolio management fee 5

(372) – (372) (278) – (278)

Performance fee 5

– (714) (714) – (402) (402)

Administrative expenses 6

(500) – (500) (404) – (404)

Transaction costs 11 – 1 1 – (116) (116)

Net (loss)/return before finance costs and

taxation

(576) (2,647) (3,223) (432) 8,245 7,813

Finance costs 7 (1) – (1) (1) – (1)

Net (loss)/return before taxation (577) (2,647) (3,224) (433) 8,245 7,812

Taxation 8 – – – – – –

Net (loss)/return after taxation (577) (2,647) (3,224) (433) 8,245 7,812

(Loss)/return per share 10 (0.77)p (3.53)p (4.30)p (0.58)p 10.99p 10.41p

1

The comparative figures cover the period from the date of incorporation on 21 September 2020, to 30 June 2021. The Company began investing on

1December 2020 (launch date).

The “Total” column of this statement is the profit and loss account of the Company. The “Revenue” and “Capital” columns

represent supplementary information prepared under guidance issued by The Association of Investment Companies. The

Company has no other items of other comprehensive income, and therefore the net return after taxation is also the total

comprehensive income for the period.

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or

discontinued in the period.

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Report and Accounts

for the period ended 31 March 2022

53

Financial

Statement of Changes in Equity

For the nine months ended 31 March 2022

Called-up

share Share Special Capital Revenue

capital premium reserve reserve reserve Total

£’000 £’000 £’000 £’000 £’000 £’000

At 30 June 2021 750 – 72,765 8,245 (433) 81,327

Net loss after taxation – – – (2,647) (577) (3,224)

At 31 March 2022 750 – 72,765 5,598 (1,010) 78,103

For the period ended 30 June 2021

1

Called-up

share Share Special Capital Revenue

capital premium reserve reserve reserve Total

£’000 £’000 £’000 £’000 £’000 £’000

Issue of Management Shares 50 – – – – 50

Redemption of Management Shares (50) – – – – (50)

Issue of Ordinary Shares 750 74,250 – – – 75,000

Share issue costs – (1,521) 36 – – (1,485)

Cancellation of share premium – (72,729) 72,729 – – –

Net return/(loss) after taxation – – – 8,245 (433) 7,812

At 30 June 2021 750 – 72,765 8,245 (433) 81,327

1

The comparative figures cover the period from the date of incorporation on 21 September 2020, to 30 June 2021. The Company began investing on

1December 2020 (launch date).

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54

Schroder British Opportunities Trust plc

Statement of Financial Position

at 31 March 2022

31 March 30 June

2022 2021

Note £’000 £’000

Fixed assets

Investments held at fair value through profit or loss 11 64,691 64,509

Current assets 12

Debtors

115 39

Cash at bank and in hand 15,452 17,960

15,567 17,999

Current liabilities 13

Creditors: amounts falling due within one year

(2,155) (969)

Derivative financial instruments held at fair value through profit or loss – (212)

(2,155) (1,181)

Net current assets 13,412 16,818

Total assets less current liabilities 78,103 81,327

Net assets 78,103 81,327

Capital and reserves

Called-up share capital 14 750 750

Capital reserves 15

78,363 81,010

Revenue reserve 15 (1,010) (433)

Total equity shareholders’ funds 78,103 81,327

Net asset value per share 16 104.14p 108.44p

The accounts were approved and authorised for issue by the Board of directors on 13 July 2022 and signed on its behalf by:

Neil England

Chairman

The notes on pages 56 to 70 form an integral part of these accounts.

Registered in England and Wales as a public company limited by shares

Company registration number: 12892325

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Report and Accounts

for the period ended 31 March 2022

55

Financial

Cash Flow Statement

For the nine For the

months ended period ended

31 March 2022 30 June 2021

1

Note £’000 £’000

Net cash outflow from operating activities 17 (180) (21)

Investing activities

Purchases of investments (7,285) (61,109)

Sales of investments

5,650 3,453

Cash (outflow)/inflow from derivative instruments (693) 2,051

Net cash outflow from investing activities (2,328) (55,605)

Net cash outflow before financing (2,508) (55,626)

Financing activities

Issue of Management Shares – 13

Redemption of Management Shares

– (13)

Issue of Ordinary Shares

– 75,000

Share issue costs – (1,485)

Net cash inflow from financing activities – 73,515

Net cash (outflow)/inflow in the period (2,508) 17,889

Cash at bank and in hand at the beginning of the period 17,960 –

Net cash (outflow)/inflow in the period (2,508) 17,889

Exchange movements – 71

Cash at bank and in hand at the end of the period 15,452 17,960

Included under operating activities are dividends received during the period amounting to £230,000 (period ended 30 June

2021: £227,000).

The notes on pages 56 to 70 form an integral part of these accounts.

1

The comparative figures cover the period from the date of incorporation on 21 September 2020, to 30 June 2021. The Company began investing on

1December 2020 (launch date).

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56

Schroder British Opportunities Trust plc

1. Accounting period

The accounts cover the nine months ended 31 March 2022. The comparative figures cover the period from the date of

incorporation on 21 September 2020, to 30 June 2021. The Company began investing on 1 December 2020 (launch date).

2. Accounting policies

(a) Basis of accounting

Schroder British Opportunities Trust plc (“the Company”) is registered in England and Wales as a public company limited by

shares. The Company’s registered office is 1 London Wall Place, London EC2Y 5AU, United Kingdom.

The accounts are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting

Practice (“UK GAAP”), in particular in accordance with Financial Reporting Standard (FRS) 102 “The Financial Reporting

Standard applicable in the UK and Republic of Ireland”. The accounts are prepared in accordance with Statement of

Recommended Practice “Financial Statements of Investment Trust Companies and Venture Capital Trusts” (the “SORP”) issued

by the Association of Investment Companies in April 2021, except for certain financial information required by paragraph 30

regarding the disclosure of percentage holdings where the Company holds 3% or more of any class of capital, and by

paragraph82(c) regarding unquoted holdings with a value greater than 5% of the portfolio included in the top 10. This

information has not been disclosed either because it is not publicly available, or because investees would prefer it to remain

confidential. All of the Company’s operations are of a continuing nature.

The accounts have been prepared on a going concern basis under the historical cost convention, as modified by the

revaluation of investments and derivative financial instruments held at fair value through profit or loss. The directors believe

that the Company has adequate resources to continue operating until 31 July 2023, which is at least 12 months from the date

of approval of these accounts. In forming this opinion, the directors have taken into consideration: the controls and

monitoring processes in place; the Company’s level of debt and other payables; the low level of operating expenses,

comprising largely variable costs which would reduce pro rata in the event of a market downturn; the Company’s cash flow

forecasts and the liquidity of the Company’s investments.

The accounts are presented in sterling and amounts have been rounded to the nearest thousand.

The accounting policies applied to these accounts are consistent with those applied in the accounts for the period ended

30June 2021.

(b) Use of judgements, estimates 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. The resulting accounting estimates and assumptions will, by definition, seldom equal

the related actual results.

Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised

in the period in which the estimates are revised and in any future periods affected.

The key estimates in the financial statements are the determination of the fair values of the unlisted investments by the

Investment Manager for consideration by the Directors. These estimates are key as they significantly impact the valuation of

the unlisted investments at the year end. The fair valuation process involves estimation using subjective inputs that are

unobservable (for which market data is unavailable). The key judgements, estimates and assumptions are described in

note21 on page65.

Fair value estimates are cross-checked to alternative estimation methods where possible to improve the robustness of the

estimates. The risk of an over or under estimation of fair values is greater when methodologies are applied using more

subjective imputs.

(c) Valuation of investments

The Company’s business is investing in financial assets with a view to profiting from their total return in the form of income

and capital growth. This portfolio of financial assets is managed and its performance evaluated on a fair value basis, in

accordance with a documented investment objective and information is provided internally on that basis to the Company’s

Board of Directors. Accordingly, upon initial recognition the investments are recognised by the Company as “held at fair value

through profit or loss”. Investments are included initially at fair value which is taken to be their cost, excluding expenses

incidental to purchase which are written off to capital at the time of acquisition. Subsequently the investments are valued at

fair value, using the methodology below. This valuation process is consistent with International Private Equity and Venture

Capital guidelines issued in December 2018, which are intended to set out current best practice on the valuation of Private

Capital investments.

(i) Investments traded in active markets are valued using quoted bid prices.

Notes to the Accounts

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Report and Accounts

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Financial

(ii) Investments which are not traded in an active market, including unquoted investments, are valued using the price of a

recent investment as an indicator of value and then assessed to consider whether there has been any material change

in value.

(iii) Where (ii) is no longer considered appropriate, investments are valued at the price used in a material arm’s length

transaction by an independent third party, and where there is no impact on the rights of existing shareholders.

(iv) In the absence of (iii), one of the following methods may be used:

– Revenue or EBITDA, based on listed investments in the relevant sector but adjusted for lack of marketability.

– Recent transaction prices adjusted for the company’s performance against key milestones.

– Option price modelling.

(v) Investments in funds are valued using the NAV per unit with an appropriate discount or premium applied to arrive at a

unit price.

Purchases and sales of quoted investments are accounted for on a trade date basis. Purchases and sales of unquoted

investments are recognised when the related contract becomes unconditional.

In line with FRS102 the Company’s listed investments are valued at fair value, which are 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 held. The Company’s unlisted investments at 31 March 2022 were valued using a variety of techniques

consistent with the recommendations set out in the International Private Equity and Venture Capital (IPEV) guidelines.

Valuations are cross-checked for reasonableness using alternative methods such as: prices of recent transactions, earnings

multiples, probability weighted expected returns or option pricing models as appropriate, and are therefore deemed to reflect

market participants view of climate change risk on the investments held.

(d) Accounting for reserves

Gains and losses on sales of investments are included in the Income Statement and in capital reserves within “Gains and

losses on sales of investments”. Increases and decreases in the valuation of investments held at the period end are included in

the Income Statement and in capital reserves within “Holding gains and losses on investments”.

Foreign exchange gains and losses on cash and deposit balances are included in the Income Statement and in capital

reserves.

(e) Income

Dividends receivable are included in revenue on an ex-dividend basis except where, in the opinion of the Board, the dividend

is capital in nature, in which case it is included in capital.

Overseas dividends are included gross of any withholding tax.

Deposit interest outstanding at the period end is calculated and accrued on a time apportionment basis using market rates of

interest.

(f) Expenses

All expenses are accounted for on an accruals basis. Expenses are allocated wholly to revenue, except that:

– Any performance fee is charged wholly to capital.

– Expenses incidental to the purchase or sale of an investment are charged to capital. These expenses are commonly

referred to as transaction costs and mainly comprise brokerage commission. Details of transaction costs are given are

given in note 11(c) on page 62.

(g) Cash and cash equivalents

Cash at bank and in hand may comprise cash and demand deposits which are readily convertible to a known amount of cash

and are subject to insignificant risk of changes in value.

(h) Financial instruments

Other debtors and creditors do not carry any interest, are short-term in nature and are accordingly stated at nominal value,

with debtors reduced by appropriate allowances for estimated irrecoverable amounts.

Bank loans and overdrafts are initially measured at fair value and subsequently measured at amortised cost. They are

recorded at the proceeds received net of direct issue costs.

Any derivative financial instruments held at the period end, are included in current assets or current liabilities in the

Statement of Financial Position at fair value, using market prices.

Notes to the Accounts

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Schroder British Opportunities Trust plc

Gains or losses on derivative financial instruments are treated as capital or revenue depending on the motive and

circumstances of the transaction. Where positions are undertaken to protect or enhance capital, the returns are capital and

where they are generating or protecting revenue, the returns are revenue.

(i) Taxation

The tax charge for the period includes a provision for all amounts expected to be received or paid.

Deferred tax is provided on all timing differences that have originated but not reversed by the accounting date.

Deferred tax liabilities are recognised for all taxable timing differences but deferred tax assets are only recognised to the

extent that it is probable that taxable profits will be available against which those timing differences can be utilised.

Deferred tax is measured at the tax rate which is expected to apply in the periods in which the timing differences are expected

to reverse, based on tax rates that have been enacted or substantively enacted at the balance sheet date and is measured on

an undiscounted basis.

(j) Value added tax (“VAT”)

Expenses are disclosed inclusive of the related irrecoverable VAT.

(k) Foreign currency

In accordance with FRS 102, the Company is required to determine a functional currency, being the currency in which the

Company predominantly operates. The Board, having regard to the currency of the Company’s share capital and the

predominant currency in which its shareholders operate, has determined that sterling is the functional currency and the

currency in which the accounts are presented.

Transactions denominated in foreign currencies are converted at actual exchange rates as at the date of the transaction.

Monetary assets, liabilities and equity investments held at fair value, denominated in foreign currencies at the period end are

translated at the rates of exchange prevailing at 1600 hours on the accounting date.

3. (Losses)/gains on investments held at fair value through profit or loss

Nine months Period

ended ended

31 March 30 June

2022 2021

£’000 £’000

(Losses)/gains on sales of investments based on historic cost in the period (274) 183

Amounts recognised in investment holding gains and losses in the

previous period in respect of investments sold in the period (310) –

(Losses)/gains on sales of investments based on the carrying value at the

previous balance sheet date

(584) 183

Net movement in investment holding gains and losses (869) 6,670

(Losses)/gains on investments held at fair value through profit and loss (1,453) 6,853

4. Income from investments

Nine months Period

ended ended

31 March 30 June

2022 2021

£’000 £’000

Income from investments:

UK dividends 233 216

Overseas dividends 63 34

296 250

Notes to the Accounts

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Report and Accounts

for the period ended 31 March 2022

59

Financial

5. Investment management fee and performance fee

Nine months Period

ended ended

31 March 30 June

2022 2021

£’000 £’000

Revenue:

Investment management fee 372 278

Capital:

Performance fee 714 402

The bases for calculating the investment management and performance fees are set out in the Report of the Directors on

page 33 and details of all amounts payable to the Manager are given in note 19 on page 64.

6. Administrative expenses

Nine months Period

ended ended

31 March 30 June

2022 2021

£’000 £’000

Other administrative expenses 155 112

Company secretarial and administrative fee payable to Schroders

135 105

Directors’ fees

1

102 79

Auditor’s remuneration for the audit of the Company’s annual accounts

2

108 108

500 404

1

Full details are given in the remuneration report on pages 42 to 43.

2

Includes VAT amounting to £18,000 (2021: £18,000).

7. Finance costs

Nine months Period

ended ended

31 March 30 June

2022 2021

£’000 £’000

Interest paid on futures and overdrafts 1 1

8. Taxation

(a) Analysis of tax charge for the period

Nine months ended Period ended

31 March 2022 30 June 2021

Revenue Capital Total Revenue Capital Total

£’000 £’000 £’000 £’000 £’000 £’000

Taxation – – – – – –

The Company has no corporation tax liability for the period ended 31 March 2022 (period ended 30 June 2021: nil).

Notes to the Accounts

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Schroder British Opportunities Trust plc

(b) Factors affecting tax charge for the period

Nine months ended Period ended

31 March 2022 30 June 2021

Revenue Capital Total Revenue Capital Total

£’000 £’000 £’000 £’000 £’000 £’000

Net (loss)/return before taxation (577) (2,647) (3,224) (433) 8,245 7,812

Net (loss)/return before taxation multiplied by the

Company’s applicable rate of corporation tax for the

period of 19.0%

(110) (503) (613) (82) 1,567 1,485

Effects of:

Capital losses/(gains) on investments

– 368 368 – (1,665) (1,665)

Income not chargeable to corporation tax

(46) – (46) (41) – (41)

Expenses not deductible for corporation tax purposes

– (1) (1) – 22 22

Unrelieved management expenses 156 136 292 123 76 199

Taxation for the period – – – – – –

(c) Deferred taxation

The Company has an unrecognised deferred tax asset of £646,000 (2021: £199,000) based on a prospective corporation tax

rate of 25.0% (2021: 19%). In its 2021 budget, the government announced that the main rate of corporation tax would increase

to 25% for the fiscal year beginning on 1 April 2023. This deferred tax asset has arisen due to the cumulative excess of

deductible expenses over taxable income. Given the composition of the Company’s portfolio, it is not likely that this asset will

be utilised in the foreseeable future and therefore no asset has been recognised in the accounts.

Given the Company’s intention to meet the conditions required to retain its status as an Investment Trust Company, no

provision has been made for deferred tax on any capital gains or losses arising on the revaluation or disposal of investments.

9. Dividends

The Company has reported a revenue loss after taxation of £577,000 (2021: £433,000) for the period and accordingly there is

no requirement to pay a dividend under Section 1158 of the Corporation Tax Act 2010.

10. Return per share

Nine months Period

ended ended

31 March 30 June

2022 2021

£’000 £’000

Revenue loss (577) (433)

Capital (loss)/return (2,647) 8,245

Total (loss)/return (3,224) 7,812

Weighted average number of shares in issue during the year

75,000,000 75,000,000

Revenue loss per share

(0.77)p (0.58)p

Capital (loss)/return per share (3.53)p 10.99p

Total (loss)/return per share (4.30)p 10.41p

Notes to the Accounts

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Report and Accounts

for the period ended 31 March 2022

61

Financial

11. Investments held at fair value through profit or loss

(a) Movement in investments

Nine months Period

ended ended

31 March 30 June

2022 2021

£’000 £’000

Opening book cost 57,839 –

Opening investment holding gains 6,670 –

Opening fair value

64,509 –

Purchases at cost

7,285 61,109

Sales proceeds

(5,650) (3,453)

(Losses)/gains on investments held at fair value through profit or loss (1,453) 6,853

Closing fair value 64,691 64,509

Closing book cost

59,200 57,839

Closing investment holding gains 5,491 6,670

Closing fair value 64,691 64,509

(b) Unquoted investments, including investments quoted in inactive markets

Material revaluations of unquoted investments:

Nine months ended 31 March 2022

Opening Closing

valuation valuation

at 30 June at 31 March

2021 Purchases Revaluation 2022

£’000 £’000 £’000 £’000

Investment

Rapyd Financial Network 6,667 – 1,898 8,565

Waterlogic 3,928 180 1,937 6,045

Cera EHP S.à r.l. 3,245 36 1,228 4,509

Graphcore 2,896 – 282 3,178

EasyPark 1,962 4 809 2,775

Learning Curve 2,032 6 298 2,336

20,730 226 6,452 27,408

There were no disposals of unquoted investments during the period.

Period ended 30 June 2021

Closing

valuation

Purchases Revaluation 30 June 2021

£’000 £’000 £’000

Investment

Rapyd Financial Network 3,297 3,370 6,667

Cera EHP S.à r.l. 2,954 291 3,245

EasyPark 1,966 (4) 1,962

Waterlogic 3,961 (33) 3,928

Graphcore 2,975 (79) 2,896

Learning Curve 2,173 (141) 2,032

17,326 3,404 20,730

There were no significant disposals of unquoted investments during the period.

Notes to the Accounts

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Schroder British Opportunities Trust plc

(c) Transaction costs

The following transaction costs were incurred in the period:

Nine months Period

ended ended

31 March 30 June

2022 2021

£’000 £’000

On acquisitions

Stamp duty and brokerage commission

15 151

Legal fees

(1) 116

On disposals

Brokerage commission 3 2

17 269

12. Current assets

Debtors

31 March 30 June

2022 2021

£’000 £’000

Dividends and interest receivable 88 23

Other debtors 27 16

115 39

The directors consider that the carrying amount of debtors approximates to their fair value.

Cash at bank and in hand

The carrying amount of cash, amounting to £15,452,000 (2021: £17,960,000), represents its fair value.

13. Current liabilities

Creditors: amounts falling due within one year

31 March 30 June

2022 2021

£’000 £’000

Other creditors and accruals 2,155 969

The directors consider that the carrying amount of creditors falling due within one year approximates to their fair value.

Derivative financial instrument held at fair value through profit or loss

31 March 30 June

2022 2021

£’000 £’000

ICF FTSE 250 Index Futures – 212

Notes to the Accounts

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Report and Accounts

for the period ended 31 March 2022

63

Financial

14. Called-up share capital

The issued share capital at the accounting date was as follows:

31 March 30 June

2022 2021

£’000 £’000

Ordinary Shares allotted, called up and fully paid:

75,000,000 shares of 1p each: 750 750

15. Reserves

Nine months ended 31 March 2022

Capital reserves

Special Gains Investment

distributable and losses holding

capital on sales of gains and Revenue

reserve

1

investments

2

losses

3

reserve

4

£’000 £’000 £’000 £’000

Opening balance 72,765 1,787 6,458 (433)

Losses on sales of investments based on the

carrying value at the previous balance sheet date – (584) – –

Net movement in investment holding gains and losses – – (869) –

Transfer on disposal of investments – 310 (310) –

Realised losses on derivatives – (481) – –

Performance fee allocated to capital – (714) – –

Transaction costs – 1 – –

Retained revenue for the period – – – (577)

Closing balance 72,765 319 5,279 (1,010)

Period ended 30 June 2021

Capital reserves

Special Gains Investment

distributable and losses holding

Share capital on sales of gains and Revenue

premium

1

reserve

2

investments

3

losses

4

reserve

5

£’000 £’000 £’000 £’000 £’000

Proceeds of share issue 74,250 – – – –

Share issue expenses (1,521) 36 – – –

Cancellation of share premium (72,729) 72,729 – – –

Gains on sales of investments – – 183 – –

Net movement in investment holding gains and losses – – – 6,670 –

Realised gains on derivatives – – 2,051 – –

Unrealised losses on open derivative contracts – – – (212) –

Exchange gains – – 71 – –

Performance fee allocated to capital – – (402) – –

Transaction costs – – (116) – –

Retained revenue for the year – – – – (433)

Closing balance – 72,765 1,787 6,458 (433)

The Company’s Articles of Association permit dividend distributions out of realised capital profits.

1

This is a distributable capital reserve arising from the cancellation of the share premium, and may be distributed as dividends or used to repurchase the

Company’s own shares.

2

This is a realised (distributable) capital reserve and may be distributed as dividends or used to repurchase the Company’s own shares.

Notes to the Accounts

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Schroder British Opportunities Trust plc

3

This reserve may include some holding gains/(losses) on liquid investments (which may be deemed to be realised) and other amounts which are

unrealised. An analysis has not been made between those amounts that are realised (and may be distributed as dividends or used to r

epurchase the

Company’s own shares) and those that are unrealised.

4

A credit balance on the revenue reserve may be distributed as dividends or used to repurchase the Company’s own shares.

16. Net asset value per share

31 March 30 June

2022 2021

£’000 £’000

Net assets attributable to shareholders (£’000) 78,103 81,327

Shares in issue at the period end 75,000,000 75,000,000

Net asset value per share 104.14p 108.44p

17. Reconciliation of total return on ordinary activities before finance costs and

taxation to net cash inflow from operating activities

Nine months Period

ended ended

31 March 30 June

2022 2021

£’000 £’000

Total (loss)/return before taxation (3,224) 7,812

Less capital loss/(return) before taxation

2,647 (8,245)

Increase in prepayments and accrued income

(65) (23)

Increase in other debtors

(11) (16)

Increase in other creditors

1,186 969

Performance fee and transaction costs allocated to capital (713) (518)

Net cash outflow from operating activities (180) (21)

18. Uncalled capital commitments

At 31 March 2022, the Company had uncalled capital commitments amounting to £7,869,000 (30 June 2021: £2,259,000),

which may be called by investee companies and is not subject to time frames or the achievement of milestones or objectives.

19. Transactions with the Manager

Under the terms of the Alternative Investment Fund Manager Agreement, the Manager is entitled to receive a management

fee, a company secretarial and administrative fee, and a performance fee. Details of the bases of these calculations are given

in the Directors’ Report on page 33.

The management fee payable in respect of the period ended 31 March 2022 amounted to £372,000 (period ended 30 June

2021: £278,000), and the whole of this amount of £650,000 (30 June 2021: £278,000) was outstanding at the period end. Any

investments in funds managed or advised by the Manager or any of its associated companies, are excluded from the assets

used for the purpose of the calculation and therefore incur no fee. There have been no such investments during the period or

comparative period.

A performance fee accrual amounting to £714,000 (period ended 30 June 2021: £402,000) has been included in these

accounts. No performance fee has been paid to date and the cumulative amount of £1,116,000 is carried forward until such

time as it may be paid under the terms of the AIFM Agreement.

The company secretarial and administrative fee payable for the period amounted to £135,000 (period ended 30 June 2021:

£105,000) and the whole of this amount of £240,000 (30 June 2021: £105,000) was outstanding at the period end.

No director of the Company served as a director of any company within the Schroder Group at any time during the period or

comparative period.

Notes to the AccountsNotes to the Accounts

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Report and Accounts

for the period ended 31 March 2022

65

Financial

20. Related party transactions

Details of the remuneration payable to directors are given in the Directors’ Remuneration Report on page 42 and details of

directors’ shareholdings are given in the Directors’ Remuneration Report on page 42. Details of transactions with the Manager

are given in note 19 above. There have been no other transactions with related parties during the period (period ended

30June 2021: nil).

21. Disclosures regarding financial instruments measured at fair value

The Company’s financial instruments within the scope of FRS 102 that are held at fair value comprise its investment portfolio

and any derivative financial instruments.

FRS 102 requires that financial instruments held at fair value are categorised into a hierarchy consisting of the three levels

below. A fair value measurement is categorised in its entirety on the basis of the lowest level input that is significant to the fair

value measurement.

Level 1 – valued using unadjusted quoted prices in active markets for identical assets.

Level 2 – valued using observable inputs other than quoted prices included within Level 1.

Level 3 – valued using inputs that are unobservable.

Details of the Company’s policy for valuing investments and derivative instruments are given in note 2(b) on page 56 and 2(f)

on page 57. Level 3 investments have been valued in accordance with note 2(b) (ii) - (v).

The Company’s unlisted investments at 31 March 2022 were valued using a variety of techniques consistent with the

recommendations set out in the International Private Equity and Venture Capital guidelines (IPEV). For investments held

directly or via an intermediary vehicle, the Company has established its own estimate utilising widely accepted valuation

methods.

The determination of fair value by the Managers involves key assumptions dependent upon the valuation technique used. The

Company uses the following techniques, which are all consistent with the IPEV Guidelines. The primary technique is the

Multiples approach. This involves subjective inputs and therefore presents a greater risk of over or under estimation,

particularly in the absence of a recent transaction. The key assumption in the Multiples approach is that the selection of

comparable companies provides a reasonable basis for identifying the relationship between enterprise value and revenue to

apply in the determination of fair value. Typically between 5 and 10 comparable companies will be selected for each

investment depending on how many relevant comparable companies are identified. The resultant revenue or earnings

multiples derived will vary depending on how many relevant comparable companies are identified and the industries they

operate in and can vary in the range of 1.5 times to 20 times (based on various enterprise valuation metrics).

The price of a recent investment may also be used as an appropriate calibration for estimating fair value. Other judgements

and assumptions may include: discounts applied due to reduced liquidity; probabilities assigned to potential exit via sale or

IPO; and judgements relating to the achievement of performance targets and milestones.

Valuations are cross-checked for reasonableness to alternative multiples-based, income approaches, option pricing models or

benchmark index movements as appropriate.

At 31 March 2022, the Company’s investment portfolio were categorised as follows:

2022

Level 1 Level 2 Level 3 Total

£’000 £’000 £’000 £’000

Investments in equities – quoted 37,283 – – 37,283

– unquoted – – 27,408 27,408

Total 37,283 – 27,408 64,691

At 30 June 2021, the Company’s investment portfolio and derivative financial instruments were categorised as follows:

2021

Level 1 Level 2 Level 3 Total

£’000 £’000 £’000 £’000

Investments in equities – quoted 43,779 – – 43,779

– unquoted – – 20,730 20,730

Derivative financial instruments – index futures (212) – – (212)

Total 43,567 – 20,730 64,297

Notes to the AccountsNotes to the Accounts

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Schroder British Opportunities Trust plc

There have been no transfers between Levels 1, 2 or 3 during the period (period ended 30 June 2021: nil).

Movements in fair value measurements included in Level 3 during the period are as follows:

Nine months Period

ended ended

31 March 30 June

2022 2021

£’000 £’000

Opening fair value of Level 3 Investments 20,730 –

Purchases at cost

226 17,339

Sales proceeds

– (14)

Net gains on investments 6,452 3,405

Closing fair value of Level 3 investments 27,408 20,730

Closing book cost

17,551 17,325

Closing investment holding gains 9,857 3,405

Closing fair value of Level 3 investments 27,408 20,730

22. Financial instruments’ exposure to risk and risk management policies

The Company’s objectives are set out on the inside front cover of this report. In pursuing these objectives, the Company is

exposed to a variety of financial risks that could result in a reduction in the Company’s net assets or a reduction in the profits

available for dividends.

These financial risks include market risk (comprising interest rate risk and other price risk), liquidity risk and credit risk. The

directors’ policy for managing these risks is set out below. The Board coordinates the Company’s risk management policy. The

Company has no significant exposure to foreign exchange risk on monetary items.

The Company’s classes of financial instruments may comprise the following:

– investments in shares of quoted and unquoted companies which are held in accordance with the Company’s

investment objective;

– short-term debtors, creditors and cash arising directly from its operations;

– bank loans or overdrafts for investment purposes and for efficient portfolio management; and

– derivatives used for investment purposes, efficient portfolio management or currency hedging.

(a) Market risk

The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market

prices. This market risk comprises two elements: interest rate risk and other price risk. Information to enable an evaluation of

the nature and extent of these two elements of market risk is given in parts (i) and (ii) of this note, together with sensitivity

analyses where appropriate. The Board reviews and agrees policies for managing these risks. The Manager assesses the

exposure to market risk when making each investment decision and monitors the overall level of market risk on the whole of

the investment portfolio on an ongoing basis.

(i) Interest rate risk

Interest rate movements may affect the level of income receivable on cash balances and the interest payable on any loans or

overdrafts when interest rates are re-set.

Management of interest rate risk

Liquidity and borrowings are managed with the aim of increasing returns to shareholders. The Company may borrow from

time to time, but gearing will not exceed 10 per cent of net asset value at the time of drawing. Gearing is defined as

borrowings less cash, expressed as a percentage of net assets. However, the Company has not used any loans or overdrafts

during the period.

Notes to the Accounts

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Report and Accounts

for the period ended 31 March 2022

67

Financial

Interest rate exposure

The exposure of financial assets and financial liabilities to floating interest rates, giving cash flow interest rate risk when rates

are re-set, is shown below:

31 March 30 June

2022 2021

£’000 £’000

Exposure to floating interest rates:

Cash at bank and in hand 15,452 17,960

The floating rate assets consist of cash deposits on call. Sterling cash deposits at call earn interest at floating rates based on

Sterling Overnight Index Average rates (“SONIA”), (period ended 30 June 2021: LIBOR).

The above period end amount is broadly representative of the exposure to interest rates during the period.

Interest rate sensitivity

The following table illustrates the sensitivity of the return after taxation for the period and net assets to a 0.25% increase or

decrease in interest rates in regards to the Company’s monetary financial assets and financial liabilities. This level of change is

considered to be a reasonable illustration based on observation of current market conditions. The sensitivity analysis is based

on the Company’s monetary financial instruments held at the accounting date with all other variables held constant.

31 March 2022 30 June 2021

0.25% 0.25% 0.25% 0.25%

increase decrease increase decrease

in rate in rate in rate in rate

£’000 £’000 £’000 £’000

Income statement – return after taxation

Revenue return

39 (39) 45 (45)

Capital return – – – –

Total return after taxation 39 (39) 45 (45)

Net assets 39 (39) 45 (45)

(ii) Other price risk

Other price risk includes changes in market prices which may affect the value of investments.

Management of other price risk

The Board meets on at least four occasions each year to consider the asset allocation of the portfolio and the risk associated

with particular industry sectors. The investment management team has responsibility for monitoring the portfolio, which is

selected in accordance with the Company’s investment objective and seeks to ensure that individual stocks meet an

acceptable risk/reward profile. The Board may authorise the Manager to enter derivative transactions for efficient portfolio

management.

Market price risk exposure

The Company’s total exposure to changes in market prices at the period end comprises the following:

31 March 30 June

2022 2021

£’000 £’000

Investments held at fair value through profit or loss 64,691 64,509

Derivative financial instruments held at fair value through profit or loss – index futures – (212)

64,691 64,297

The above data is broadly representative of the exposure to market price risk during the period.

Concentration of exposure to market price risk

A sector and geographical analysis of the Company’s investments is given on page 15. This shows a concentration of exposure

to economic condition in the United Kingdom. In addition, the Company’s holds 6 (30 June 2021: 6) investments amounting to

approximately £27.4 million (30 June 2021: £20.7 million), or 35.1% (30 June 2021: 25.5%) of NAV, whose valuation is potentially

volatile, due to the valuation techniques which have sensitive inputs.

Notes to the Accounts

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Market price risk sensitivity

The following table illustrates the sensitivity of the return after taxation for the period and net assets to an increase or

decrease of 20% in the fair values of the Company’s investments. This level of change is considered to be a reasonable

illustration based on observation of current market conditions. The sensitivity analysis is based on the Company’s exposure

through equity investments and includes the impact on the management fee. The current period includes an adjustment for

the performance fee on the capital return and this method will be applied henceforth. The comparative has not been restated.

It is assumed that all other variables are held constant.

31 March 2022 30 June 2021

20% 20% 20% 20%

increase in decrease in increase in decrease in

fair value fair value fair value fair value

£’000 £’000 £’000 £’000

Income statement – return after taxation

Revenue return

(78) 78 (77) 77

Capital return 12,532 (12,938) 12,859 (12,859)

Total return after taxation and net assets 12,454 (12,860) 12,782 (12,782)

Percentage change in net asset value

15.9% (16.5%) 15.7% (15.7%)

(b) Liquidity risk

This is the risk that the Company will encounter difficulty in meeting its obligations associated with financial liabilities that are

settled by delivering cash or another financial asset.

Management of the risk

At the period end, the Company’s assets included quoted “public equity investments” amounting to £37,283,000 (30 June 2021:

£43,779,000), which can be sold to meet ongoing funding requirements. Additionally, the Company had less liquid, “private

equity investments” amounting to £27,408,000 (30 June 2021: £20,730,000). It is the Board’s intention that the portfolio will

contain a diverse range of public and private asset investments.

Liquidity risk exposure

Contractual maturities of financial liabilities, based on the earliest date on which payment can be required are as follows:

31 March 2022 30 June 2021

Three Three

months months

or less Total or less Total

£’000 £’000 £’000 £’000

Creditors: amounts falling due within one year

Other creditors and accruals 2,155 2,155 969 969

2,155 2,155 969 969

(c) Credit risk

Credit risk is the risk that the failure of the counterparty to a transaction to discharge its obligations under that transaction

could result in loss to the Company.

Management of credit risk

This risk is not significant and is managed as follows:

Portfolio dealing

The credit ratings of broker counterparties is monitored by the AIFM and limits are set on exposure to any one broker.

Cash

Counterparties are subject to daily credit analysis by the Manager. Cash balances will only be deposited with reputable banks

with high quality credit ratings.

68

Schroder British Opportunities Trust plc

Notes to the Accounts

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Exposure to the Custodian

The custodian of the Company’s assets is HSBC Bank plc which has long-term Credit Ratings of AA- with Fitch and Aa3 with

Moody’s. The Company’s investments are held in accounts which are segregated from the custodian’s own trading assets. If

the custodian were to become insolvent, the Company’s right of ownership of its investments is clear and they are therefore

protected. However the Company’s cash balances are all deposited with the custodian as banker and held on the custodian’s

balance sheet. Accordingly, in accordance with usual banking practice, the Company will rank as a general creditor to the

custodian in respect of cash balances.

Credit risk exposure

The amounts shown in the balance sheet under debtors and cash at bank and in hand represent the maximum exposure to

credit risk at the period end. No debtors are past their due date and none have been provided for.

(d) Fair values of financial assets and financial liabilities

All financial assets and liabilities are either carried in the balance sheet at fair value, or the balance sheet amount is a

reasonable approximation of fair value.

23. Capital management policies and procedures

The Company’s capital management objectives are to ensure that it will be able to continue as a going concern, and to

maximise the income and capital return to its equity shareholders.

The Company’s capital structure comprises the following:

31 March 30 June

2022 2021

£’000 £’000

Equity

Called-up share capital 750 750

Reserves 77,353 80,577

Total equity 78,103 81,327

The Board, with the assistance of the Manager, monitors and reviews the broad structure of the Company’s capital on an

ongoing basis. This review will include:

– the possible use of gearing, which will take into account the Manager’s views on the market;

– the potential benefit of repurchasing the Company’s own shares for cancellation or holding in treasury, which will take

into account the share price discount;

– the opportunity for issue of new shares; and

– the amount of dividend to be paid, in excess of that which is required to be distributed.

24. Events after the accounting date that have not been reflected in the accounting

statements

In May 2022, the Company announced an investment into Mintec (a leading provider of food-related commodity pricing) and

CFC (a leading technology-driven global insurance business). In June 2022, the Company announced an investment into

Pirum, a leading provider of post-trade automation and collateral management technology for the global securities industry.

Pirum is the Company’s ninth private asset investment since launch.

On Wednesday, 18th May, the Company purchased 100,000 of its ordinary shares, nominal value £1,000, to hold in treasury

for a total consideration of £84,000 representing 0.13% of the shares outstanding at the beginning of the period. The reason

for this purchase was to seek to manage the volatility of the share price discount to net asset value per share.

Report and Accounts

for the period ended 31 March 2022

69

Financial

Notes to the Accounts

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25. Disclosures regarding material unquoted holdings (comprising more than 5% of

the portfolio and/or included in the top ten)

31 March 30 June Total income

Cost of the 2022 2021 received in

Description of Class of investment Fair value Fair value the period

Holding its business shares held £’000 £’000 £’000 £’000

Rapyd Financial Network Global Fintech company Ordinary 3,297 8,565 6,667 –

Waterlogic Global provider of purified Ordinary 4,141 6,045 3,928 –

drinking water dispensers

Cera EHP S à r l Provides home care services Ordinary 2,992 4,509 3,245 –

for elderly people

Graphcore Machine intelligence Preference 2,975 3,178 2,896 –

semiconductor business

EasyPark Digital parking, electrical Ordinary 1,966 2,775 1,962 –

vehicle charging and

mobility services

Learning Curve UK training and education Ordinary 2,180 2,336 2,032 –

specialist

The Company has not included certain disclosures required by paragraph 82(c) of the SORP. In particular, turnover, pre-tax

profit, attributable net assets, and the proportion of share classes held. This information has not been disclosed, either

because it is not publicly available or investees would prefer it to remain confidential.

70

Schroder British Opportunities Trust plc

Notes to the Accounts

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Report and Accounts

for the period ended 31 March 2022

Annual General Meeting

71

Annual General Meeting – Recommendations

The following information is important and requires your

immediate attention. If you are in any doubt about the

action you should take, you should consult an

independent financial adviser, authorised under the

Financial Services and Markets Act 2000. If you have sold

or transferred all of your ordinary shares in the

Company, please forward this document with its

accompanying form of proxy at once to the purchaser or

transferee, or to the stockbroker, bank or other agent

through whom the sale or transfer was effected, for

onward transmission to the purchaser or transferee.

Notice of Annual General Meeting (AGM)

Notice is hereby given that the Annual General Meeting

(“AGM”) of the Company will be held on Monday 5 September

2022 at 12.00 p.m. The formal Notice of Meeting is set out on

page 74.

Shareholders are encouraged to vote by proxy, appointing

the chair of the meeting as their proxy.

Ordinary business

Resolutions 1 to 9 are all ordinary resolutions. Resolution 1 is

a required resolution. Resolution 2 concerns the Directors’

Report on Remuneration, on pages 42 to 43. Resolution3

concerns the authorisation of the Directors to determine that

no final dividend for the period ended 31March 2022 will be

paid. Resolutions 4 to 7 invite shareholders to re-elect each

of the Directors for another financial reporting period,

following the recommendations of the nomination

committee, set out on pages40 and 41 (their biographies are

set out on pages30 and 31). Resolutions 8 and9 concern the

re-appointment and remuneration of the Company’s auditor,

discussed in the audit and risk committee report on pages36

to 38.

Resolution 10: change of investment policy and

restrictions

Resolution 10 set out in the Notice of AGM is an ordinary

resolution. The Directors are seeking approval of a change to

the Company’s investment policy and restrictions to allow the

Company more flexibility to invest in private equity

investments. Further detail is discussed in the Chairman’s

statement. The revised investment policy and restrictions,

with the proposed changes marked up, are set out below.

Investment policy

The Company will invest in a diversified portfolio of both

public equity investments and private equity investments

consisting predominantly of UK Companies with strong long-

term growth prospects.

“Public equity investments” mean any investments in any of

the following categories (a), (b) and (c) below (although it is

envisaged that the Company will predominantly focus on

those of an equity and/or quasi-equity nature as set out

under categories (a) and (b) below):

(a) ordinary shares or similar securities issued by an issuer

which are traded on any of the following:

(i) any “regulated market” as defined in MiFIDII and as

listed in the register of regulated markets within the

EEA maintained by the European Securities and

Markets Authority from time to time; or

(ii) any “recognised investment exchange” as recognised

by the FCA under Part XVIII of FSMA; or

(iii) any “recognised overseas investment exchange” as

recognised by the FCA under PartXVIII of FSMA;

(b) securities or other instruments giving the right to acquire

or sell any of the securities referred to in (a) above,

including without limitation warrants, options, futures,

convertible bonds and convertible loan notes; and

(c) preference shares issued by an issuer referred to in (a)

above.

“Private equity investments” mean any investments in any of

the following categories (w), (x), (y) and (z) below (although it

is envisaged that the Company will predominantly focus on

those of an equity and/or quasi-equity nature as set out

under categories (w) and (x) below):

(w) shares in companies and other securities/units/interests

equivalent to shares in companies, partnerships

(including limited partnership interests) or other entities,

provided that they are not already captured under the

definition of “public equity investments” above;

(x) securities, derivatives or other instruments giving the

right to acquire or sell any of the

shares/securities/units/interests referred to in (w) above,

including without limitation warrants, options, futures,

contingent value rights, convertible bonds, convertible

loan notes, convertible loan stocks or convertible

preferred equity;

(y) preference shares issued by an issuer referred to in (w)

above; and

(z) debt-based investments not otherwise covered above,

including loan stock, payment-in-kind instruments and

shareholder loans.

It is anticipated that the Company’s portfolio will typically

consist of 30 to 50 holdings and will target companies with

an equity value between approximately £50million and

£2billion at the time of initial investment.

The Company will focus on companies which the Portfolio

Managers consider to be sustainable from an environmental,

social and governance perspective, supporting at least one

of the goals and/or sub-goals of the United Nations’

Sustainable Development Goals (“SDGs”), or which the

Portfolio Managers consider would benefit from their

support in helping them incorporate SDGs into their

business planning and/or in reporting their alignment with

SDGs.

The Company will aim to achieve a target allocation of

approximately 50 per cent. public equity investments and

approximately 50 per cent. private equity investments. It is

anticipated that in the period immediately following Initial

Admission, the Company’s portfolio will predominantly

comprise public equity investments until target deployment

into private equity investments is achieved.

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Schroder British Opportunities Trust plc

72

Investment restrictions

The company is subject to the following investment restrictions:

• no more than 10 per cent. of Net Asset Value may be

invested in any investee company;

• once fully invested, the Company’s portfolio shall comprise

no fewer than 30 holdings;

• private equity investments will be limited to 60 per cent. of

Gross Asset Value;

• no more than 20 per cent. of Net Asset Value may be

invested in investee companies which are not UK Companies;

• the Company may not take a controlling stake in any

investee company, whether directly or indirectly, and:

– in respect of public equity investments, the Company

may own no more than 10 per cent. of the total voting

rights of any investee company; and

– in respect of private equity investments, the Company

may own no more than 20 per cent. of the enterprise

value of any investee company; and

• the Company will not invest more than 10 per cent. In

aggregate of Gross Assets in other listed closed-ended

investment funds, except that this restriction shall not apply

to investments in listed closed-ended investment funds which

themselves have stated investment policies to invest no more

than 15 per cent. of their gross assets in other listed closed-

ended investment funds.

• Additionally, in any event, the Company will itself not invest

more than 15 per cent. of its Gross Assets in other

investment companies or investment trusts which are listed

on the Official List.

Unless otherwise stated, each of the above restrictions will be

calculated at the time of commitment. Where the Company

makes investments through one or more special purpose

vehicles, owned in whole or in part by the Company or one of its

affiliates (being an affiliate of, or person affiliated with, the

Company, including a person that directly, or indirectly through

one or more intermediate holding companies, controls or is

controlled by, or is under common control with, the Company),

the investment restrictions will be applied on a look-through

basis.

Where the calculation of an investment restriction requires an

analysis of underlying investments held by a fund in which the

Company is invested, such calculation will be based on the

information reasonably available to the Portfolio Managers at

the relevant time.

The Company will not be required to dispose of any investment

or to rebalance the portfolio as a result of a change in the

respective valuations of its assets. However, the Portfolio

Managers will regularly monitor the Company’s portfolio and

make adjustments from time to time in light of the above

restrictions.

Special business

Resolution 11: Directors’ authority to allot shares

(ordinary resolution) and resolution 12: power to

disapply pre-emption rights (special resolution)

The Directors are seeking authority to allot a limited number

of treasury shares and unissued ordinary shares for cash

without first offering them to existing shareholders in

accordance with statutory pre-emption procedures.

Appropriate resolutions will be proposed at the forthcoming

AGM and are set out in full in the Notice of AGM. An ordinary

resolution will be proposed to authorise the Directors to allot

shares up to a maximum aggregate nominal amount of

£74,900 (being 10% of the issued share capital (excluding any

shares held in treasury) as at 13 July 2022).

A special resolution will be proposed to authorise the

Directors to allot shares up to a maximum aggregate

nominal amount of £74,900 (being 10% of the issued share

capital as at 13 July 2022) on a non pre-emptive basis. This

authority includes shares that the Company sells or transfers

that have been held in treasury. The Directors do not intend

to allot ordinary shares or sell treasury shares, on a non

preemptive basis, pursuant to this authority other than to

take advantage of opportunities in the market as they arise

and only if they believe it to be advantageous to the

Company as a whole. Shares issued or treasury shares

reissued, under this authority, will be at a price that is equal

to or greater than the Company’s NAV per share, plus any

applicable costs, as at the latest practicable date before the

allotment of such shares.

If approved, both of these authorities will expire at the

conclusion of the AGM in 2023 unless renewed, varied or

revoked earlier.

Resolution 13: authority to make market

purchases of the Company’s own shares (special

resolution)

On 30 November 2021, a special resolution was passed to

give the Company authority to make market purchases of up

to 14.99% of the ordinary shares. 100,000 shares were

bought back under this authority on 18May 2022.

The Directors will continue to monitor the level of the

discount and consider the merits of further buy backs, which

should be accretive in nature when discounts are wide.

However, any decision to buy back shares will be influenced

by such factors as: market conditions; the small size of the

Company; the illiquid nature of the private equity holdings;

the need to retain cash for investment opportunities; and the

level of the Company’s borrowing, if any. A special resolution

will be proposed at the forthcoming AGM to give the

Company authority to make market purchases of up to

14.99% of the ordinary shares in issue as at 13 July 2022

(excluding treasury shares). The Directors will continue to

monitor the level. The Directors consider that any purchase

would be for the benefit of the Company and its

shareholders. Any shares so purchased would be cancelled

or held in treasury for potential reissue.

Annual General Meeting – Recommendations

Report and Accounts

for the period ended 31 March 2022

Annual General Meeting

73

Annual General Meeting – Recommendations

If renewed, this authority will lapse at the conclusion of the

AGM in 2023 unless renewed, varied or revoked earlier .

Resolution 14: notice period for general meetings

(special resolution)

Resolution14 set out in the Notice of AGM is a special

resolution and will, if passed, allow the Company to hold

general meetings (other than annual general meetings) on a

minimum notice period of 14 clear days, rather than 21clear

days as required by the Companies Act 2006. The approval

will be effective until the Company’s next AGM to be held in

2023. The Directors will only call general meetings on

14clear days’ notice when they consider it to be in the best

interests of the Company’s shareholders and will only do so if

the Company offers facilities for all shareholders to vote by

electronic means and when the matter needs to be dealt

with expediently.

Schroder British Opportunities Trust plc

74

Notice of Annual General Meeting

Notice is hereby given that the Annual General Meeting of

Schroder British Opportunities Trust plc will be held on Monday

5September 2022 at 12.00 p.m. at 1 London Wall Place, London

EC2Y 5AU to consider the following resolutions, of which

resolutions 1 to 11 will be proposed as ordinary resolutions, and

resolutions 12 to 14 will be proposed as special resolutions:

1. To receive the Directors’ Report and the audited accounts for

the reporting period ended 31 March 2022.

2. To approve the Directors’ Report on Remuneration for the

reporting period ended 31 March 2022.

3. To authorise the Directors to determine that no final

dividend for the period ended 31 March 2022 will be paid.

4. To approve the re-election of Neil England as a Director of

the Company.

5. To approve the re-election of Diana Dyer Bartlett as a

Director of the Company.

6. To approve the re-election of Tim Jenkinson as a Director of

the Company.

7. To approve the re-election of Christopher Keljik as a Director

of the Company.

8. To re-appoint Ernst & Young LLP as auditor to the Company.

9. To authorise the Directors to determine the remuneration of

Ernst & Young LLP as auditor to the Company.

10. To consider, and if thought fit, pass the following resolution

as an ordinary resolution:

“THAT the amended investment policy and restrictions, as

set out on pages 71 to 73 of the Company’s Report and

Accounts for the period ended 31 March 2022 and produced

to the meeting, be and are hereby approved in substitution

for the Company’s existing investment policy and

restrictions”.

11. To consider, and if thought fit, pass the following resolution

as an ordinary resolution:

“THAT in addition to all existing authorities, the Directors be

generally and unconditionally authorised pursuant to

section 551 of the Companies Act 2006 (the “Act”) to exercise

all the powers of the Company to allot relevant securities

(within the meaning of section 551 of the Act) up to an

aggregate nominal amount of £74,900 (being 10% of the

issued ordinary share capital, excluding treasury shares, at

13 July 2022) for a period expiring (unless previously

renewed, varied or revoked by the Company in general

meeting) at the conclusion of the Annual General Meeting of

the Company in 2023, but that the Company may make an

offer or agreement which would or might require relevant

securities to be allotted after expiry of this authority and the

Board may allot relevant securities in pursuance of that offer

or agreement.”

12. To consider and, if thought fit, to pass the following

resolution as a special resolution:

“That, subject to the passing of Resolution 11 set out above,

the Directors be and are hereby empowered, pursuant to

Section 571 of the Act, to allot equity securities (including

any shares held in treasury) (as defined in section 560(1) of

the Act) pursuant to the authority given in accordance with

section 551 of the Act by the said Resolution 11 and/or

where such allotment constitutes an allotment of equity

securities by virtue of section 560(2) of the Act as if Section

561(1) of the Act did not apply to any such allotment,

provided that this power shall be limited to the allotment of

equity securities up to an aggregate nominal amount of

£74,900, (representing 10% of the aggregate nominal

amount of the share capital in issue, excluding treasury

shares at 13July 2022); and where equity securities are

issued pursuant to this power they will only be issued at a

price which is equal or greater than the Company’s NAV per

share as at the latest practicable date before the allotment;

and provided that this power shall expire at the conclusion

of the next Annual General Meeting of the Company but so

that this power shall enable the Company to make offers or

agreements before such expiry which would or might

require equity securities to be allotted after such expiry.”

13. To consider and, if thought fit, to pass the following

resolution as a special resolution:

“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 of the Act) of

ordinary shares of 1p each in the capital of the Company

(“Share”) at whatever discount the prevailing market price

represents to the prevailing net asset value per Share

provided that:

(a) the maximum number of Shares which may be

purchased is 11,227,510, representing 14.99% of the

Company’s issued ordinary share capital as at 13 July

2022 (excluding treasury shares);

(b) the maximum price (exclusive of expenses) which may

be paid for a Share shall not exceed the higher of;

i) 105% of the average of the middle market

quotations for the Shares as taken from the London

Stock Exchange Daily Official List for the five

business days preceding the date of purchase; and

ii) the higher of the last independent bid and the

highest current independent bid on the London

Stock Exchange;

(c) the minimum price (exclusive of expenses) which may

be paid for a Share shall be 1p, being the nominal value

per Share;

(d) this authority hereby conferred shall expire at the

conclusion of the next Annual General Meeting of the

Company in 2023 (unless previously renewed, varied or

revoked by the Company prior to such date);

(e) the Company may make a contract to purchase Shares

under the authority hereby conferred which will or may

be executed wholly or partly after the expiration of such

authority and may make a purchase of Shares pursuant

to any such contract; and

(f) any Shares so purchased will be cancelled or held in

treasury.”

14. To consider and, if thought fit, to pass the following

resolution as a special resolution:

THAT a general meeting, other than an annual general

meeting, may be called on not less than 14 clear days’ notice.

By order of the Board

Schroder Investment Management Limited

Company Secretary

13 July 2022

Registered Office:

1 London Wall Place,

London EC2Y 5AU

Registered Number: 12892325

175996 British Opportunities Trust plc Annual Report Pt4_175996 British Opportunities Trust plc Annual Report Pt4 14/07/2022 17:22 Page 74

Report and Accounts

for the period ended 31 March 2022

Annual General Meeting

75

1. Ordinary shareholders are entitled to attend, ask questions

and vote at the meeting and to appoint one or more

proxies, who need not be a shareholder, as their proxy to

exercise all or any of their rights to attend, speak and vote

on their behalf at the meeting.

A proxy form is attached. Shareholders are encouraged to

appoint the Chairman as proxy. If you wish to appoint a

person other than the Chairman as your proxy, please insert

the name of your chosen proxy holder in the space provided

at the top of the form. If the proxy is being appointed in

relation to less than your full voting entitlement, please

enter in the box next to the proxy holder’s name the

number of shares in relation to which they are authorised to

act as your proxy. If left blank your proxy will be deemed to

be authorised in respect of your full voting entitlement (or if

this proxy form has been issued in respect of a designated

account for a shareholder, the full voting entitlement for

that designated account). Additional proxy forms can be

obtained by contacting the Company’s Registrars, Equiniti

Limited, on 0800 389 0306 or +44(0) 121 415 0179 for

overseas callers, or you may photocopy the attached proxy

form. Please indicate in the box next to the proxy holder’s

name the number of shares in relation to which they are

authorised to act as your proxy. Please also indicate by

ticking the box provided if the proxy instruction is one of

multiple instructions being given. Completion and return of

a form of proxy will not preclude a member from attending

the Annual General Meeting and voting in person.

On a vote by show of hands, every ordinary shareholder

who is present in person has one vote and every duly

appointed proxy who is present has one vote. On a poll

vote, every ordinary shareholder who is present in person

or by way of a proxy has one vote for every share of which

he/she is a holder. Voting will be by poll.

The “Vote Withheld” option on the proxy form is provided to

enable you to abstain on any particular resolution. However

it should be noted that a “Vote Withheld” is not a vote in law

and will not be counted in the calculation of the proportion

of the votes ‘For’ and ‘Against’ a resolution. A proxy form

must be signed and dated by the shareholder or his or her

attorney duly authorised in writing. In the case of joint

holdings, any one holder may sign this form. The vote of the

senior joint holder who tenders a vote, whether in person or

by proxy, will be accepted to the exclusion of the votes of

the other joint holder and for this purpose seniority will be

determined by the order in which the names appear on the

Register of Members in respect of the joint holding. To be

valid, proxy form(s) must be completed and returned to the

Company’s Registrars, Equiniti Limited, Aspect House,

Spencer Road, Lancing, West Sussex BN99 6DA, in the

enclosed envelope together with any power of attorney or

other authority under which it is signed or a copy of such

authority certified notarially, to arrive no later than 48 hours

before the time fixed for the meeting, or an adjourned

meeting. Shareholders may also appoint a proxy to vote on

the resolutions being put to the meeting electronically at

www.sharevote.co.uk. Shareholders who are not registered

to vote electronically, will need to enter the Voting ID, Task

ID and Shareholder Reference ID set out in their

personalised proxy form. Alternatively, shareholders who

have already registered with Equiniti’s Shareview service can

appoint a proxy by logging onto their portfolio at

www.shareview.co.uk using their user ID and password.

Once logged in simply click “View” on the “My Investments”

page, click on the link to vote then follow the on-screen

instructions. The on-screen instructions give details on how

to complete the appointment process. Please note that to

be valid, your proxy instructions must be received by

Equiniti no later than 6.30 p.m. on 1 September 2022. If you

have any difficulties with online voting, you should contact

the shareholder helpline on 0800 389 0306 (or +44(0) 121

415 0179 for overseas callers).

If an ordinary shareholder submits more than one valid

proxy appointment, the appointment received last before

the latest time for receipt of proxies will take precedence.

Shareholders may not use any electronic address provided

either in this Notice of Annual General Meeting or any

related documents to communicate with the Company for

any purposes other than expressly stated.

Representatives of shareholders that are corporations will

have to produce evidence of their proper appointment

when attending the Annual General Meeting.

2. Any person to whom this notice is sent who is a person

nominated under section 146 of the Companies Act 2006 to

enjoy information rights (a “Nominated Person”) may, under

an agreement between him or her and the shareholder by

whom he or she was nominated, have a right to be

appointed (or to have someone else appointed) as a proxy

for the Annual General Meeting. If a Nominated Person has

no such proxy appointment right or does not wish to

exercise it, he or she may, under any such agreement, have

a right to give instructions to the shareholder as to the

exercise of voting rights.

The statement of the rights of ordinary shareholders in

relation to the appointment of proxies in note 1 above does

not apply to Nominated Persons. The rights described in that

note can only be exercised by ordinary shareholders of the

Company.

3. Pursuant to Regulation 41 of the Uncertificated Securities

Regulations 2001, the Company has specified that only those

shareholders registered in the Register of members of the

Company at 6.30 p.m. on 1September 2022, or 6.30 p.m.

two days prior to the date of an adjourned meeting, shall be

entitled to attend and vote at the meeting in respect of the

number of shares registered in their name at that time.

Changes to the Register of Members after 6.30 p.m. on

1September 2022 shall be disregarded in determining the

right of any person to attend and vote at the meeting.

4. CREST members who wish to appoint a proxy or proxies

through the CREST electronic proxy appointment service

may do so by using the procedures described in the CREST

manual. The CREST manual can be viewed at

www.euroclear.com. A CREST message appointing a proxy (a

“CREST proxy instruction”) regardless of whether it

constitutes the appointment of a proxy or an amendment to

the instruction previously given to a previously appointed

proxy must, in order to be valid, be transmitted so as to be

received by the issuer’s agent (ID RA19) by the latest time for

receipt of proxy appointments.

5. Copies of the terms of appointment of the non-executive

Directors and a statement of all transactions of each Director

and of their family interests in the shares of the Company,

Explanatory Notes to the Notice of Meeting

175996 British Opportunities Trust plc Annual Report Pt4_175996 British Opportunities Trust plc Annual Report Pt4 14/07/2022 13:47 Page 75

Schroder British Opportunities Trust plc

76

will be available for inspection by any member of the

Company at the registered office of the Company during

normal business hours on any weekday (English public

holidays excepted) and at the Annual General Meeting by

any attendee, for at least 15 minutes prior to, and during,

the Annual General Meeting. None of the Directors has a

contract of service with the Company.

6. The biographies of the Directors offering themselves for

election and are set out on pages30 and 31 of the

Company’s report and accounts for the period ended 31

March 2022.

7. As at 13 July 2022, 75,000,000 ordinary shares of 1 pence

each were in issue (100,000 were held in treasury). Therefore

the total number of voting rights of the Company as at

13 July 2022 was 74,900,000.

8. A copy of this Notice of meeting, which includes details of

shareholder voting rights, together with any other

information as required under Section 311A of the

Companies Act 2006, is available from the Company’s

webpage,

www.schroders.co.uk/sbo.

9. Pursuant to Section 319A of the Companies Act 2006, the

Company must cause to be answered at the Annual

General Meeting any question relating to the business

being dealt with at the AGM which is put by a member

attending the meeting, except in certain circumstances,

including if it is undesirable in the interests of the

Company or the good order of the meeting that the

question be answered or if to do so would involve the

disclosure of confidential information. Shareholders are

asked to send their questions by post or by email

(amcompanysecretary@schroders.com).

10. Members satisfying the thresholds in section 527 of the

Companies Act 2006 can require the Company to publish a

statement on its website setting out any matter relating to:

(a) the audit of the Company’s Accounts (including the

auditor’s report and the conduct of the audit) that are to

be laid before the Meeting; or

(b) any circumstance connected with an auditor of the

Company ceasing to hold office since the last AGM, that

the members propose to raise at the Meeting. The

Company cannot require the members requesting the

publication to pay its expenses. Any statement placed

on the website must also be sent to the Company’s

auditors no later than the time it makes its statement

available on the website. The business which may be

dealt with at the meeting includes any statement that

the Company has been required to publish on its

website.

11. The Company’s privacy policy is available on its webpages.

www.schroders.com/SBO. Shareholders can contact

Equiniti for details of how Equiniti processes their personal

information as part of the AGM.

Explanatory Notes to the Notice of Meeting

175996 British Opportunities Trust plc Annual Report Pt4_175996 British Opportunities Trust plc Annual Report Pt4 14/07/2022 13:47 Page 76

Report and Accounts

for the period ended 31 March 2022

Annual General Meeting

77

The terms and performance measures below are those

commonly used by investment companies to assess

values, investment performance and operating costs.

Some of the financial measures below are classified as

Alternative Performance Measures as defined by the

European Securities and Markets Authority, and some

numerical calculations are given for those.

Investment policy

The Company will invest in a diversified portfolio of both

public equity investments and private equity investments

consisting predominantly of UK Companies with strong long-

term growth prospects.

“Public equity investments” mean any investments in any

of the following categories (a), (b) and (c) below (although it

is envisaged that the Company will predominantly focus on

those of an equity and/or quasi-equity nature as set out

under categories (a) and (b) below):

(a) ordinary shares or similar securities issued by an issuer

which are traded on any of the following:

(i) any “regulated market” as defined in MiFID II and as

listed in the register of regulated markets within the

EEA maintained by the European Securities and

Markets Authority from time to time; or

(ii) any “recognised investment exchange” as

recognised by the FCA under Part XVIII of FSMA; or

(iii) any “recognised overseas investment exchange” as

recognised by the FCA under Part XVIII of FSMA;

(b) securities or other instruments giving the right to

acquire or sell any of the securities referred to in (a)

above, including without limitation warrants, options,

futures, convertible bonds and convertible loan notes;

and

(c) preference shares issued by an issuer referred to in (a)

above.

“Private equity investments” mean any investments in any

of the following categories (w), (x), (y) and (z) below (although

it is envisaged that the Company will predominantly focus on

those of an equity and/or quasi-equity nature as set out

under categories (w) and (x) below): (w) shares in companies

and other securities/units/interests equivalent to shares in

companies, partnerships (including limited partnership

interests) or other entities, provided that they are not already

captured under the definition of “public equity investments”

above; (x) securities, derivatives or other instruments giving

the right to acquire or sell any of the

shares/securities/units/interests referred to in (w) above,

including without limitation warrants, options, futures,

contingent value rights, convertible bonds, convertible loan

notes, convertible loan stocks or convertible preferred equity;

(y) preference shares issued by an issuer referred to in (w)

above; and (z) debt-based investments not otherwise covered

above, including loan stock, payment-in-kind instruments

and shareholder loans.

It is anticipated that the Company’s portfolio will typically

consist of 30 to 50 holdings and will target companies with

an equity value between approximately £50 million and

£2billion at the time of initial investment.

The Company will focus on companies which the Portfolio

Managers consider to be sustainable from an environmental,

social and governance perspective, supporting at least one of

the goals and/or sub-goals of the United Nations’ Sustainable

Development Goals (“SDGs”), or which the Portfolio

Managers consider would benefit from their support in

helping them incorporate SDGs into their business planning

and/or in reporting their alignment with SDGs.

The Company will aim to achieve a target allocation of

approximately 50 per cent. public equity investments and

approximately 50 per cent. private equity investments. It is

anticipated that in the period immediately following Initial

Admission, the Company’s portfolio will predominantly

comprise public equity investments until target deployment

into private equity investments is achieved.

“UK Companies” means companies which are incorporated,

headquartered or have their principal business activities in

the United Kingdom, and companies headquartered outside

the United Kingdom which derive, or are expected to derive,

a significant proportion of their revenues or profits from the

United Kingdom.

Net asset value (“NAV”) per share

The NAV per share of 104.14p (30 June 2021: 108.44p)

represents the net assets attributable to equity shareholders

of £78,103,000 (30 June 2021: £81,327,000) divided by the

75,000,000 (30 June 2021: same) shares in issue at the period

end.

Discount/premium

The amount by which the share price of an investment trust

is lower (discount) or higher (premium) than the NAV per

share. The discount or premium is expressed as a

percentage of the NAV per share. The discount at the period

end amounted to 19.3% (30 June 2021: 3.2%), as the closing

share price at 84.0p (30 June 2021: 105.0p) was 19.3%

(30June 2021: 3.2%) lower than the closing NAV of 104.14p

(30 June 2021: 108.44p).

Gearing/(net cash)

The gearing percentage reflects the amount of borrowings

(that is, bank loans or overdrafts) that the Company has used

to invest in the market. This figure is indicative of the extra

amount by which shareholders’ funds would move if the

Company’s investments were to rise or fall. Gearing is

defined as: borrowings used for investment purposes, less

cash, expressed as a percentage of net assets. A negative

figure so calculated is termed a “net cash” position.

At the period end, the Company had no loans or overdrafts,

and thus was in a net cash position, calculated as follows:

Definitions of Terms and Performance Measures

175996 British Opportunities Trust plc Annual Report Pt4_175996 British Opportunities Trust plc Annual Report Pt4 14/07/2022 13:47 Page 77

Schroder British Opportunities Trust plc

78

31 March 30 June

2022 2021

£’000 £’000

Borrowings used for investment

purposes, less cash (15,452) (17,960)

Net assets 78,103 81,327

Net cash (19.8)% (22.1)%

Ongoing Charges

Ongoing Charges (OGC) are calculated in accordance with

the AIC’s recommended methodology, and represents total

annualised operating expenses payable including any

management fee, but excluding any finance costs

transaction costs and performance fee provision, expressed

as a percentage of the average daily net asset values during

the period. For the period ended 31 March 2022, operating

expenses amounted to £872,000 (period ended 30 June 2021:

£682,000), giving £1,126,000 (period ended 30 June 2021:

£1,080,000) when adjusted to an annualised figure. This

produces an OGC figure of 1.39% (period ended 30 June

2021: 1.40%), when expressed as a percentage of the

average daily net asset values during the period of

£80.8million (period ended 30 June 2021: £77.4 million).

Leverage

For the purpose of the Alternative Investment Fund

Managers (AIFM) Directive, leverage is any method which

increases the Company’s exposure, including the borrowing

of cash and the use of derivatives. It is expressed as the ratio

of the Company’s exposure to its net asset value and is

required to be calculated both on a “Gross” and a

“Commitment” method. Under the Gross method, exposure

represents the sum of the absolute values of all positions, so

as to give an indication of overall exposure. Under the

Commitment method, exposure is calculated in a similar

way, but after netting off hedges which satisfy certain strict

criteria.

Definitions of Terms and Performance Measures

175996 British Opportunities Trust plc Annual Report Pt4_175996 British Opportunities Trust plc Annual Report Pt4 14/07/2022 13:47 Page 78

Report and Accounts

for the period ended 31 March 2022

Annual General Meeting

79

Notes

175996 British Opportunities Trust plc Annual Report Pt4_175996 British Opportunities Trust plc Annual Report Pt4 14/07/2022 13:47 Page 79

Schroder British Opportunities Trust plc

80

Shareholder Information

Webpages and share price information

The Company has dedicated webpages, which may be found

at

www.schroders.com/sbo. The webpages have been

designed to be used as the Company’s primary method of

electronic communication with shareholders. They contain

details of the Company’s share price and copies of annual

reports and other documents published by the Company as

well as information on the Directors, terms of reference of

committees and other governance arrangements. In

addition, the webpages contain links to announcements

made by the Company to the market, Equiniti’s shareview

service and Schroders’ website. There is also a section

entitled “How to Invest”.

The Company releases its NAV per share on both a cum and

ex-income basis, diluted where applicable, to the market on

a daily basis.

Share price information may also be found in the Financial

Times and at the Company’s webpages.

Association of Investment Companies

The Company is a member of the Association of Investment

Companies. Further information on the Association can be

found on its website,

www.theaic.co.uk.

ISA status

The Company’s shares are eligible for stocks and shares ISAs.

Non-Mainstream Pooled

Investments Status

The Company currently conducts its affairs so that its

shares can be recommended by IFAs to ordinary retail

investors in accordance with the FCA’s rules in relation to

non-mainstream investment products and intends to

continue to do so for the foreseeable future. The Company’s

shares are excluded from the FCA’s restrictions which apply

to non-mainstream investment products because they are

shares in an investment trust.

Financial calendar

Results announced July

Annual General Meeting September

Half year results announced December

Financial year end March

Alternative Investment Fund Managers

Directive (“AIFMD”) disclosures

The AIFMD, as transposed into the FCA Handbook in the UK,

requires that certain pre-investment information be made

available to investors in Alternative Investment Funds (such

as the Company) and also that certain regular and periodic

disclosures are made. This information and these disclosures

may be found either below, elsewhere in this annual report,

or in the Company’s AIFMD information disclosure document

published on the Company’s webpages.

Leverage

The Company’s leverage policy and details of its leverage

ratio calculation and exposure limits as required by the

AIFMD are published on the Company’s webpages. The

Company is also required to periodically publish its actual

leverage exposures. As at 31March 2022 these were:

Leverage exposure Maximum ratio Actual ratio

Gross method 250.0% 80.1%

Commitment method 200.0% 67.9%

Illiquid assets

As at the date of this report, none of the Company’s assets

are subject to special arrangements arising from their illiquid

nature.

Remuneration disclosures

Quantitative remuneration disclosures to be made in this

annual report in accordance with FCA Handbook rule

FUND3.3.5 may also be found in the Company’s AIFMD

information disclosure document published on the

Company’s webpages.

Publication of Key Information Document

(“KID”) by the AIFM

Pursuant to the Packaged Retail and Insurance-based

Products (“PRIIPs”) Regulation, the Manager, as the

Company’s AIFM, is required to publish a short KID on the

Company. KIDs are designed to provide certain prescribed

information to retail investors, including details of potential

returns under different performance scenarios and a

risk/reward indicator. The Company’s KID is available on its

webpages.

Complaints

The Company has adopted a policy on complaints and other

shareholder communications which ensures that

shareholder complaints and communications addressed to

the Company Secretary, the Chairman or the Board are, in

each case, considered by the Chairman and the Board.

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175996 British Opportunities Trust plc Annual Report Pt4_175996 British Opportunities Trust plc Annual Report Pt4 14/07/2022 13:47 Page 81

Directors

Neil England (Chairman)

Diana Dyer Bartlett

Tim Jenkinson

Christopher Keljik, OBE

Advisers

Alternative Investment Fund Manager

(the “Manager”)

Schroder Unit Trusts Limited

1 London Wall Place

London EC2Y 5AU

Portfolio Managers

Schroder Investment Management Limited

1 London Wall Place

London EC2Y 5AU

Schroders Capital Management (Switzerland) AG

Affolternstrasse 56

8050 Zurich

Switzerland

Company Secretary

Schroder Investment Management Limited

1 London Wall Place

London EC2Y 5AU

Telephone: 020 7658 3847

Registered Office

1 London Wall Place

London EC2Y 5AU

Depositary and Custodian

HSBC Bank plc

8 Canada Square

London E14 5HQ

Corporate Broker

Peel Hunt LLP

100 Liverpool Street

London EC2MY 2AT

Independent Auditors

Ernst & Young LLP

Atria One

144 Morrison Street

Edinburgh

EH3 8EX

Registrars

Equiniti Limited

Aspect House

Spencer Road

Lancing

West Sussex BN99 6DA

Shareholder helpline: 0800 389 0306

1

Website:

www.shareview.co.uk

1

Calls to this number are free of charge from UK landlines.

Communications with shareholders are mailed to the

address held on the register. Any notifications and enquiries

relating to shareholdings, including a change of address or

other amendment should be directed to Equiniti Limited at

the above address and telephone number above.

Shareholder enquiries

General enquiries about the Company should be addressed

to the Company Secretary at the Company’s Registered

Office.

Dealing Codes

ISIN: GB00BN7JZR28

SEDOL: BN7JZR2

Ticker: SBO

Global Intermediary Identification Number (GIIN)

QML9TQ.99999.SL.826

Legal Entity Identifier (LEI)

5493003UY8LIHFW6HM02

www.schroders.com/sbo

The Company’s privacy notice is

available on its webpages.

175996 British Opportunities Trust plc Annual Report Pt4_175996 British Opportunities Trust plc Annual Report Pt4 14/07/2022 13:47 Page 82