Schroder British

Opportunities Trust

plc

Report and Accounts for the

year ended 31 March 2023

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:47 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 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.

Why invest in SBO?

• A differentiated public and private investment strategy

investing in high growth small & mid-sized UK

companies.

• Provides access to a far larger universe of high quality,

high growth UK companies than available from purely

public markets.

• Executed by an established team of experienced

investment professionals with strong track records,

proven processes and extensive networks.

• A portfolio that aims to target companies that support

the United Nations Sustainable Development Goals.

The full investment policy can be found on the website.

Scan this QR code on your smartphone camera to sign-up to receive

regular updates on Schroder British Opportunities Trust plc.

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:47 Page b

Report and Accounts

for the year ended 31 March 2023

Strategic Report

Contents

Strategic Report

Financial Highlights 2

Chairman’s Statement 3

Portfolio Managers’ Review 5

Investment Portfolio 20

Business Review 21

Governance

Board of Directors 38

Directors’ Report 39

Audit and Risk Committee Report 43

Management Engagement Committee Report 46

Nomination Committee Report 47

Directors’ Remuneration Report 49

Statement of Directors’ Responsibilities in respect of the

Annual Report and Accounts 52

Financial

Independent Auditor’s Report 53

Income Statement 61

Statement of Changes in Equity 62

Statement of Financial Position 63

Cash Flow Statement 64

Notes to the Accounts 65

Annual General Meeting

Annual General Meeting – Recommendations 82

Notice of Annual General Meeting 83

Explanatory Notes to the Notice of Meeting 84

Definitions of Terms and Performance Measures 86

Shareholder Information 88

Report and Accounts

for the year ended 31 March 2023

1

Strategic Report

Governance Financial

Annual General Meeting

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:47 Page 1

Financial Highlights

2

Schroder British Opportunities Trust plc

Other financial information

31 March 2023 31 March 2022 % Change

Shareholders’ funds (£’000) 79,311 78,103 +1.5

Shares in issue 73,900,000 75,000,000 (1.5)

NAV per share (pence) 107.32 104.14 +3.1

Share price (pence) 68.50 84.00 (18.5)

Share price discount to NAV per share* (%) 36.2 19.3

Net cash* (%)

2

(9.8) (19.8)

Year ended Nine months ended

31 March 2023 31 March 2022

1

Net revenue loss after taxation (£’000) (639) (577)

Net revenue loss per share (pence) (0.86) (0.77)

Dividend per share (pence) – –

Ongoing Charges* (%)

3

1.47 1.39

1

The Company changed its accounting date to 31 March commencing 1 July 2021. The comparative figures cover the nine month period from 30 June

2021 to 31 March 2022.

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 where the financial year is less than a full year, in accordance with Association of Investment companies (“AIC”)

guidance.

Returns for the year ended 31 March 2023

-18.5

%

Share price

(Nine months

ended 31 March

2022:

1

-4.0%)

(Nine months

ended 31 March

2022:

1

-20.0%)

+3.1

%

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 86 together with supporting

calculations where appropriate.

Public 35.2%

Private 64.8%

Equity holdings

(31 March 2022:

57.6%)

(31 March 2022:

42.4%)

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:47 Page 2

I am pleased to present

your Company’s third

report and accounts since

the launch of the Company

in 2020. This report covers

the year ended 31March

2023.

Investment policy

Your Company invests in a

diversified mix of public and

private companies, either

based in the UK or

generating a significant

proportion of their revenue in the UK. We seek to invest in

companies with potential for high growth and with strong

ESG credentials, particularly where we believe these to be

undervalued by the market. Our objective is to deliver long

term and sustainable capital growth for shareholders.

Performance

Shareholders will be fully aware of the significant market

volatility throughout the year under review. The war in

Ukraine, inflation, rising interest rates after a prolonged

period of close to free money, highly priced US technology

stocks falling in value and the contagion from that, have all

been factors. Fast growing companies that need cash to fuel

their growth have generally been out of favour, but this

sentiment has also hit other growth companies that are

profitable already or have cash reserves that will fund them

through to that point.

In certain areas of the private equity market there has been

significant downwards revaluation, although this has

generally not been the case in the part of the market that we

focus on. We are not venture investors. We focus on the

growth and the buyout sector. Of the Company’s portfolio of

nine private businesses, diversified across sectors, eight are

either profitable or on a clear path to profitability. These

companies have an average of c.40% revenue growth and

good margins. Our decision to focus on this area of the

private equity market has proved to be the right one in this

environment. Our private portfolio contributed 10% to the

Company’s NAV during the period under review.

The Company’s public holdings fell slightly in value as UK

small and mid-cap stocks were badly affected by the macro

factors affecting the market.

Despite this difficult environment, it is pleasing to report that

your Company’s NAV increased by 3.1% during the period

(from 104.14p to 107.32p). This positive overall result

highlights the benefit of blending public and private

companies together in one portfolio.

Unfortunately, this robust NAV performance did not produce

a commensurate improvement in our share price, which

suffered a decline of -18.5%. The discount to NAV widened

during the period under review from -19.3% to -36.2% as at

31March 2023. The share price falling to this higher discount

correlates with market sentiment towards growth stocks and

private equity investment companies in particular. It

is

frustrating when our share price does not reflect the

performance or the potential of the Company’s portfolio.

Further comment on performance and portfolio activity can

be found in the Portfolio Managers’ review.

Valuations

The portfolio has a mix of public and private equities. Public

investments are obviously valued at the prevailing market

price. Shareholders in investment companies with a private

portfolio are often sceptical of valuations when they don’t see

them change as much or as rapidly as they do in many public

companies. Your Board considers its governance role in the

private equities valuations process to be of utmost

importance. We are fortunate to have a specialist valuations

team within Schroders, who are independent of the Portfolio

Managers, and who report their findings directly to the

Board. The results we are reporting reflect their in-depth

analysis and a discursive and challenging valuations process.

In all cases, we use public market comparables.

In December 2022, revised international private equity and

venture valuations (IPEV) guidelines were issued, built on

industry best practice. Shareholders will be comforted to

learn that the Company’s valuation process was already fully

compliant with these guidelines.

Discount management

The Board monitors the Company’s discount levels and

regularly reviews its share buyback policy. The Board

instigated a highly accretive buyback, seeking to convey to

the market our confidence in the value of the portfolio.

1,100,000 shares were purchased by the Company and are

being held in treasury. These shares can be reissued when

the share price recovers to a premium to NAV.

Dividend

No dividend has been declared or recommended for the year.

Your Company is focused on providing capital growth and

has a policy to only pay dividends to the extent that it is

necessary to maintain the Company’s investment trust status.

Portfolio Managers

The Company’s portfolio has been co-managed by Rory

Bateman (Schroders’ Co-Head of Investment and Head of

Equities), and Tim Creed (Schroders Capital’s Head of Private

Equity Investments). In view of recognising talent within the

team, Uzo Ekwue and Peraveenan (‘Pav’) Sriharan will

additionally join them as Co-Managers of the portfolio. Uzo is

Report and Accounts

for the year ended 31 March 2023

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.

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:47 Page 3

4

Schroder British Opportunities Trust plc

a Fund Manager within Schroders’ UK Equity team, where she

manages assets across the market cap spectrum. She joined

Schroders in November 2020 and has been working closely

alongside Rory since the Company’s inception. Pav covers

Schroders Capital’s private equity investment activities in

Europe and forms part of the technology and consumer

sector groups. He started at Schroders in September 2012

and joined the private equity team in January 2022, and has

been working closely with Tim on the Company’s private

investments since then.

Board

Chris Keljik, a non-executive Director since our IPO, resigned

in February for personal reasons. We thank him and wish him

well. The Board decided not to replace Chris immediately,

conscious of our relatively small size and expense ratio.

Chris’s role as Chair of the Management Engagement

Committee has been taken by current non-executive Director,

Professor Tim Jenkinson. We believe the Board has adequate

resources to manage workloads at this time but expects to

recruit a replacement in due course. We will seek to add

diversity to the Board when doing so.

The Board completed an evaluation of its performance

during the year, taking input from Directors and related

parties. It was concluded that Board performance was either

at or above the standard in all areas measured.

Presentation from the Portfolio

Managers

Our Portfolio Managers will be presenting at a webinar on

Tuesday, 11 July 2023 from 10-11 am to provide some insight

into their decision making and the current portfolio.

Shareholders are encouraged to register for the event at:

https://registration.duuzra.com/form/SBOAnnualResults23.

Regular news about the Company can be found on the

Company’s website:

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

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

ersinvestment-trusts/never-miss-an-update

AGM

Our AGM will be held on Wednesday, 27September 2023 at

1.00pm at 1 London Wall Place, London EC2Y5AU.

Your Board welcomes shareholders’ comments and

questions for them or for the Portfolio Managers. A short

presentation will be given by the investment management

team at the meeting. Please contact us via our Company

Secretary’s email:

amcompanysecretary@schroders.com or, if

you prefer to write in, to: The Company Secretary, Schroder

British Opportunities Trust plc, at the above address. We will

endeavour to get your questions answered at or prior to the

AGM and will be providing answers to commonly asked

questions on our webpage.

Shareholders are encouraged to cast their votes by proxy to

ensure that they are counted. The Directors consider that all

of the resolutions listed are in the best interests of the

Company and its shareholders and therefore recommend a

vote in favour of each, as the Directors intend to do in respect

of their own holdings.

Why invest in SBO today?

I am often asked by private investors and wealth managers

why they should invest in SBO at this time. If asked that

question today, my response would be:

• 65% of total investments are in private companies.

• Eight of these nine investments are already profitable or

have a clear pathway to profitability, that have in

aggregate grown sales 40% over the past 12 months.

• We have had nine successive quarters of an increase in

the valuation of the private portfolio.

• We also have some interesting positions in UK small to

mid-cap public companies, which we expect to benefit

from a re-rating when markets recover.

Outlook

The current economic environment is challenging and many

company valuations are trading close to historic lows. In a

number of cases there is disconnect between an investment

company’s share price and the value of its portfolio holdings,

and that is certainly the case here. Your Board and the

Portfolio Managers view our current discount as unjustly high

and expect to see this start to close in the coming months.

Having avoided a recession, the UK’s economy is showing

some positive signs with inflation seemingly peaked, which in

turn should limit further interest rate rises. Small and mid-cap

stocks are expected to be early beneficiaries from any

recovery.

The Company had £7.8million in cash as at 31March 2023,

and therefore is well positioned to take advantage of new

attractive investment opportunities.

Our differentiated public-private equity strategy enables us to

continue to invest without boundaries, thus providing access

to a broader investable universe. Our current portfolio of

growing and innovative British companies are expected to

perform well. The patient investor that can look beyond the

recent and current environment should be well rewarded.

Neil England

Chairman

5 July 2023

Chairman’s Statement

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:47 Page 4

Report and Accounts

for the year ended 31 March 2023

5

Strategic Report

Portfolio Managers’ Review

Introduction

Summary

Figures as at 31March 2023. *Based on EBITDA profitability.

!"#$#%"$&'()*+,*-$#%) .,*/+,&",',0)*0")1 23/&,,4

!"#$%&'$()*'&$+,-'&*(&.$/0$1234$56&'$37$85,9)($

95$13$:*'-)$7;71

<9'5,=$*=='&=*9&$%&'>5'8*,-&$5>$%'+6*9&$&?@+90$

*AA5-*9+5,B$C)+-)$,5C$'&%'&(&,9( $DE4 $5>$959*A$

+,6&(98&,9(

F& (+A+&,9 $!"#$%&'>5 ' 8*,-&$(+,-&$+, -&%9 +5,$

*=*+,(9$-)*AA&,=+,=$8*'G&9$/*-G.'5%

!"#$%&'()(*"'$&*"+$),"$#"-+$(./012"23

H:+,9&-

HI&'*

H J*(0K*'G

!"#$."4-)(*"'$&*"+$),"$#"-+$(./012"23

H L'*% ) -5 '&

H ! *9+5, *A$JM% ' &((

HLN$L'5@%

O5- @($5,$?@*A+90B$='5C +,=$*,.$85(9A0$%'5 > +9 */A&$

-58%* ,+&($PQR4$5>$95 9*A$+,6&(98&,9($C&'&$

%'5>+9*/A&STB$9)*9$)*6&$(9'5,=$/*A*,-&$()&&9($*,.$

9)*9$-*,$(@(9*+,*/A0$-58%5@,.$9)&+'$&*',+,=($

56&' $9 ) &$A5,=$'@,

U,?@59&.$*AA5-*9+5,$>5-@(&.$5,$='5C9)$-*%+9*A$

*,.$(8*AAV8+.$8*'G&9$/@05@9W(9*=&$-58%*,+&(B$

*65+.+,=$*'&*($*9$='&*9&'$6*A@*9+5,$'+(G

X+(-5,, & -9$/&9 C&&,$()*' &$%'+-& $* ,.$6*A@ &$5>$

%5'9>5A+5$)5A.+, =(

5"6$(.*"' )7". )'

:+,9&-B$IOIB$K+'@8$P@,?@59&.T$*,.$

N09&($Y&-),5A5=0$P?@59&.T

89()"2 $:(2'

J@'585,&0B$J:Z<$*,.$Z.&*=&,$(5A.$*>9&'$

'&- &+6+,= $/+.(B$+AA@ (9'*9+,=$(@--& (($+,$+. &,9+>0 +,=$

@,.&'6*A@&.$/@(+,&((&(

;(' )+(:1)(&.

O+'(9$-*()$=&,&'*9+5,$P[72R8T$>'58$%'+6*9&$&?@+90$

)5A.+,=( B$> 5AA5C+,=$I@AA+=*,$*,. $\*9 &'A5=+-$

-58/+,*9+5 ,

<%%&+)1.()#$(.$=1&)"2$>!$/&7%-.("'

U]$(8*AA$*,.$8+.$-*%($)*6&$(@/(9*,9+*A$'&W'*9+,=$

%59 &,9+* A$+,$(@( 9*+,& .$&-5,58+-$'&-56& '0

U]$&?@ +9+&($'&8* +,$@,A56&.$-58 %*'&.$95$C5'A.$

8*'G&9($*,.$U]$-5'%5'*9&($%5((&(($(9'5,=$

/*A*,-&$()&&9($5,$*=='&=*9&

5"6$2+(*"+'$&?$@8$7-+A")$+")1+.'

<9'*9&=+&($>5-@(&.$5,$+.&,9+>0+,=$-58%*,+&($9)*9$

&M)+/+9$(9'5,=$@,.&'A0+,=$>+,*,-+*A$%&'>5'8*,-&$

%5+(&.$95$.5$C&AA

N@0$*,.$/@+A.$(9'*9&=+&($*A(5$)*6&$%59&,9+*A$95$

(@--&&.

B1)1+"$(.*"')7". )'

[Q2^8$-*()$%5(+9+5,$P*($*9 13$:*'-)$7;71T$95$

.&%A50$+,$65A*9+A&$8* ' G&9(

:5'&$>A& M+/+A+90$9 5$+,6& (9$+,$K J $ +,6&(9 8&, 9($*($

E;_E;$=@+.*, -&$*,.$9) &$%'+6*9&$&?@+90$A+8+9$

'&85 6&.

The investment case

At present, there are many instances where there is a

disconnect between an investment company’s share price

and the value of its portfolio holdings, and we believe this is

certainly the case with the Company. We believe the

investment case is currently enhanced by two forms of

discount.

Firstly, the UK is among the lowest valued of any regional

stock markets at present, with a notable valuation discount to

global peers (illustrated in the below figure). This provides

investors with the opportunity to invest in UK assets at a

discount to what they would be worth if they were listed, in

say, the US.

UK equities unloved: valuations extremely low relative to global equities in a historical context

Source: Morgan Stanley Research. 1January 1988 to 31 May 2023. MSCI UK versus MSCI World. *Based on blended valuation metric comprised of price-

to-earnings, price to book value and dividend yield.

For illustrative purposes only and should not be viewed as a recommendation to buy or sell.

Average valuation premium/(discount)*: MSCI UK vs MSCI World

IN:

ION

IO:

I8N

I8:

I9N

I9:

I4N

I4:

IN

:

77 77 76 76 6: 6: 64 69 69 68 68 6O 6N 6N 6P 6P 6Q 6Q 67 66 66 :: :: :4 :9 :9 :8 :8 :O :O :N :P :P :Q :Q :7 :6 :6 4: 4: 44 44 49 48 48 4O 4O 4N 4P 4P 4Q 4Q 47 47 46 9: 9: 94 94 99 98

B'1.",

"!#$

%&'()*+,

-.#$

/0%&1+$

%&'()*+,

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 5

6

Schroder British Opportunities Trust plc

Portfolio Managers’ Review

Furthermore, listed UK small and mid-cap companies (the

focus of the portfolio’s public equity allocation) have notably

underperformed UK large caps over the past year, as fast-

growing small and mid-cap businesses in new and emerging

industries were shunned for most of the period in preference

for large companies able to return cash today. We are

confident that UK small and mid-caps are poised to do well

from here, which we discuss in the outlook section.

Secondly, the Company’s shares are priced at a discount to

NAV, which we believe is driven by exogenous factors. To

demonstrate this, in early 2022 the shares reached a modest

premium to NAV until unexpected geopolitical factors and

negative sentiment around the private equity asset class

drove the Company’s shares to trade at a discount. While the

discount grew throughout the course of the year, it has

recently stabilised for several months at the low-to-mid 30%

region. While other private equity-exposed investment trusts

have also slipped to a discount, the operational performance

of the Company’s unlisted holdings has, in aggregate, been

very positive since inception and momentum remains

generally strong, illustrated by the below underlying metrics

and ultimately by continued valuation uplifts.

Key private equity allocation metrics

EBITDA = earnings before interest, taxes, depreciation and amortization. EBITDA margin is a measure of a company’s operating

profit as a percentage of its revenue. Weighted averages using latest last 12 month figures available.

5$&)6'7*,1/8

9&$6/':;'-,#/86<

=>?@AB'-$*7"#

9&$6/':;'-,#/86<

!"#$

!"%$

We believe this operational performance reflects the resilient

characteristics we are seeking to invest in and the maturity of

our portfolio companies, which are already at profitability

(74% as at 31March 2023

1

) or approaching it, while growing

revenues quickly. In short, we believe the combination of

these two discounts provides a window of opportunity for

investors to buy a quality, fast-growing portfolio of

predominantly UK businesses at a wide discount.

Additionally, the winding-up resolution, a feature of the

Company since its inception, should act as a catalyst to the

closing of the discount

2

. While only an illustration, assuming a

recent discount of 33% to net asset value remains, this may

imply that investors could see an approximate 8.5%

annualised return on their investment from now until 31 May

2028 (assuming a hypothetical crystallisation of all

investments on 31 May 2028). While only illustrative, we

believe this is a notable return profile. If the discount

exacerbates, the return increases further. We have modelled

this below for illustrative purposes. While it may be argued

that this annualised return is only achievable if we realise par,

we are confident this is achievable as cash is tradeable at

cash, the public equity portfolio is valued at market and the

private equity portfolio is valued above cost despite turbulent

markets.

Illustrative example: implied annualised return

Source: Schroders. For illustrative purposes only. Readers of this

document should not rely on forward-looking statements due to the

inherent uncertainty. Implied annualised return represents the extended

internal rate of return, taking into account cash flows and discount rates,

as well as the corresponding dates.

!"!#

$"%#

&"'#

!"#$

((")#

('"!#

)#

!#

$#

%#

*#

()#

(!#

($#

(%#

+%)#+')#+$)#+,)#+!)#+()#)#

!"#$%&'()**+)$%,&'(-&.+-*

"#$%&'&()*+&,-,.&)/01*&.!&23+&,-,4

/%,01+*.(.1(234

I22345/651780,,#0=14@.3:5

1

On an EBITDA profitability view

2

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.

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 6

Report and Accounts

for the year ended 31 March 2023

7

Strategic Report

Portfolio Managers’ Review

Market

Over the 12 months to end March 2023, UK small and mid-

cap stocks performed poorly as their valuations were

negatively impacted by rising interest rates, as Russia’s

invasion of Ukraine looked set to prolong the inflation

problem facing developed economies. UK mid-caps and UK

small caps (represented by the FTSE 250 and FTSE Small Cap

indices) saw total returns of –7.9% and –9.0% respectively,

while UK large caps (represented by the FTSE 100) returned

+5.4%.

3

The UK small and mid-cap area of the market has a

larger contingent of fast-growing businesses in new and

emerging industries, which were shunned for most of 2022 in

preference for large companies able to return cash today. At

the same time, higher interest rates threatened to further

squeeze consumers also struggling to cope with soaring

energy and food costs, weighing heavily on quoted retailers,

as well as the travel and leisure and home construction

sectors. These and other domestically focused companies are

well represented in UK small and mid-cap indices. Valuations

reached very depressed levels in the autumn when some ill-

advised policies from the Liz Truss government spooked

markets. A collapse in sterling and soaring market interest

rates threatened to heap further pressure on consumers and

businesses, although a new government was able to restore

confidence and stability to asset prices relatively quickly.

More broadly, hopes built towards the back end of 2022 that

central banks might ‘pivot’ to cutting interest rates in late

2023 also contributed to a recovery in UK small and mid-caps.

Domestically focused companies recovered particularly well

during this phase as the UK economy performed much more

resiliently than feared as European wholesale energy prices

fell back very sharply.

While private equity valuations have held up better than

those of public markets, the asset class has not been immune

to global economic headwinds, inflation and increased

interest rates. Our focus is on the small to mid-market area of

the UK private equity landscape, but we believe the following

provides useful insight into recent activity to contextualise

the period under review. Following a stellar year in 2021, deal

volumes in the UK mid-market private equity segment fell by

19% year-on-year in 2022 (from 843 deals to 680 deals), while

the total deal value fell 6% (from £49.1bn to £46.0bn). Despite

these year-on-year decreases, this was still a relatively strong

year for private equity deals in the context of the last five

years. Additionally, exit volumes fell by nearly 23% year-on-

year in 2022 (from 189 exits to 146 exits), while the total exit

value fell 55% (from £19.1bn to £8.6bn).

4

Conspicuously there

were no IPO exits over the year, which is most likely

explained by uncertainty in markets.

Portfolio performance

Since the Company’s IPO in December 2020, the net asset

value has been resilient despite a volatile market backdrop.

The portfolio’s combined exposure to both public and private

equity markets has provided NAV stability since inception,

with the portfolio’s listed holdings driving returns in the

Company’s first reporting period to 30June 2021, while

strong performance of the unquoted portfolio allocation

provided a substantial cushion to falls in asset prices over the

9month reporting period to the end of March 2022, before

also driving the Company’s positive NAV development over

the past 12months to the end of March 2023. Indeed, eight

out of the nine unquoted holdings are performing well with

uplifts to their original valuations.

Share price and NAV per share performance since inception to 31December 2022

Source: Schroders, Morningstar. NAV per share does not include latest quarterly revaluation of private equity holdings

:3N:

:3P:

:3Q:

:37:

:36:

43::

434:

439:

T&%(9: )+$(94 5#,(94 !&G(94 T&%(94 )+$(99 5#,(99 !&G(99 T&%(99 )+$(98

!2+$&(G$E%& UVW(G &$(12+$&

)+$K&-(A"M,-#$,J(

12EH-(H$"F(*$"M-2(-"(?+.#&

X#D.E%(&Y#E-/(+.."%+-E",(F+E,(%",-$ED#-"$(-"(

UVW(G&$H"$F+,%&(

X$E?+-&(&Y#E-/(+.."%+-E",(F+E,(%",-$ED#-"$(-"(UVW(G&$H"$F+,%&(

3

Source: FTSE Russell, 12 months to 31 March 2023, in GBP.

4

Source for data: KPMG UK Mid-market PE review, February 2023.

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 7

8

Schroder British Opportunities Trust plc

Portfolio Managers’ Review

Below, we focus on the past 12 months and discuss what has driven the increase in the Company’s net asset value.

Attribution analysis (£m) for 12 months to 31March 2023

Quoted Unquoted Net cash Other NAV

Value as at 31March 2022 37.3 27.4 15.5 (2.1) 78.1

+ Investments 4.7 15.1 (19.8) – –

– Realisations at value (11.2) (2.4) 13.6 – –

+/- Fair value gains/(losses) (4.6) 7.8 – – 3.2

+/- Costs and other movements – – (1.5) (0.5) (2.0)

Value as at 31March 2023 26.2 47.9 7.8 (2.6) 79.3

Key positive and negative performers over the 12 months

to 31March 2023

Top 5 contributors Contribution %

Mintec 2.9

Cera 2.6

EasyPark 2.1

CFC 1.9

Culligan (formerly Waterlogic) 1.7

Bottom 5 contributors Contribution %

Graphcore –1.8

National Express –1.0

GB Group –1.0

Ascential –0.9

Genuit –0.7

Source: HSBC, as at 31March 2023. Numbers have been rounded

The net asset value increased 1.5% over the period,

5

which

comprised:

• Quoted holdings: -5.9%

• Unquoted holdings: +10.0%

• Buybacks: -1.0%

• Costs and other movements: -1.6%

In a challenging environment, the portfolio’s private equity

(unquoted) holdings have continued to perform well in

aggregate and the overall resilience of the private equity

holdings has been particularly pleasing. We believe that the

Company’s private equity focus on the ‘growth capital’ and

‘buyout’ areas of the private equity landscape, in contrast to

venture capital and pre-IPO areas, which have been more

negatively impacted by rising inflation and interest rates, has

contributed to the resilience of the NAV. Looking closer at the

past 12 months, transactional activity (e.g. add-on

transactions and financing rounds) and trading gains of the

unquoted holdings in aggregate have driven strong

performance, despite multiple contraction which

demonstrates the prudent valuation approach applied.

Private equity allocation attribution – 12 months to 31March 2023

!"#!$$

%#&$$

'#($$

)(#*+$

),#%+$

,#"$$

)*#%+$

!"#$%%

!"#$$#%&' %()#*+,(-./(+.- 01/23+4#(,(+.- 5637*+8#83*+- '39:3.*1+#/:9.*29( %(.#7(;. <=>1.?(6 @*-.6*;:.*1+#AB3.(6918*CD !"#$E#%&'

Z$+,1+%-E",+.(

+%-E?E-/(+-(G"$-H".E"(

%"FG+,E&1

;"FG+,/(G&$H"$F+,%&(+,A(?+.#+-E",

5("%$$%1*,

6789

The Company’s private equity allocation has seen significant

EBITDA

6

development, driven by strong organic and

inorganic growth, which is illustrated by the figure below.

Transformational add-on acquisitions executed by Waterlogic

(combination with Culligan) and Mintec (with its acquisition of

Agribriefing for example) have enhanced total EBITDA.

5

The net asset value increase of 1.5% differs to the 3.1% increase in NAV

per share over the period due to share buybacks conducted over the

period.

6

EBITDA = earnings before interest, taxes, depreciation and amortisation.

It is used as a measure of a company’s profitability, specifically

representing cash profit generated by a company’s operations.

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 8

Report and Accounts

for the year ended 31 March 2023

9

Strategic Report

Portfolio Managers’ Review

EBITDA development of the Company’s private equity

allocation: 12 months to 31 March 2023

Source: Schroders

We like companies that employ market consolidation

strategies (often referred to as “Buy and Build”) as these often

allow companies to consolidate fragmented markets and

smaller competitors, and complementary business can be

bought, typically at lower multiples, leading to immediate

multiple accretion. Our companies have been very active in

employing this strategy.

Furthermore, organic growth delivered through market

expansion, new product development, cross and upselling

and curating strategic partnerships were some of the levers

employed to deliver strong EBITDA accretion.

The growth seen by our profitable

7

private equity portfolio

companies, in both revenue and profit-based KPIs, is almost

double that of publicly listed comparables. Nonetheless, we

are marking these profitable companies at a c.25% discount

8

to public comparables. This reiterates our valuation

prudence.

Q1-23FX

4

4343.4.43.4443.4

£ millions

16166.46166.4.166.44166.4

307.5

77775.35775.3.775.33775.3

Q1-22

Transformative

add-on

97.7

93.3

52.2

58.2

New

investments

Organic

Inorganic

EBITDA-positive private equity portfolio companies valued at notable discount to public markets

Source Schroders. 1. Peer group specific sector comparables. 2. The Rule of 40 is a principle that states a software company’s combined revenue growth

rate and profit margin should equal or exceed 40% to demand premium valuations

2121%%21%

4

4040%%40%

LTM sales growth (%)

Sales growth outperformed public

comparables

1)

by two-fold...

with a similar profitability outperformance…

Rule of 40 (%)

2

continuing to trade at a ~25% discount to

public markets

EV/EBITDA multiple (x)

4444%%44%

88989%%89%

3131.8x.31.8x831.8xx31.8x

2

2323.1x.23.1x123.1xx23.1x

EBITDA positive PE portfolio companies

Sector-specific public reference markets

Turning to individual private equity portfolio companies, a

key contributor over the year was Mintec, the world’s leading

independent provider of global commodity price data &

market intelligence, which was added to the portfolio in the

first half of 2022 and has seen its fair value almost double

since. Over the period, the company acquired French

business CommoPrices, an independent provider of

commodity price data and analysis, and more recently

Agribriefing, which comprises multiple global brands

specialising in agri-food supply chains through its products

and proprietary data. These acquisitions complemented the

company’s investment in Kairos, a provider of commodity

market intelligence and commodity risk management,

bought in 2021. These acquisitions have established Mintec

as the largest agri-food-focused price reporting agency and

global information provider with a unique portfolio of feed-

to-food commodity prices, forecasts, cost-modelling tools

and fundamental market data, serving over 5,000 customers

in 50 countries.

Cera Care, Europe’s largest provider of digital-first home

healthcare, was a strong contributor over the year following a

further funding round to accelerate its growth in August

2022, in which the Company made an additional investment.

We were pleased to have been able to participate in Cera’s

latest financing and help them empower those in the care

sector. Ageing populations, post-pandemic recovery and

major staff shortages have created a series of issues facing

healthcare providers and governments. Cera’s proposition is

positioned to address these challenges. More recently, the

company has taken further steps to strengthen its offering

through the use of artificial intelligence, launching “Cera

Brain”, a platform that helps to automate and power Cera’s

7

EBITDA-positive.

8

Discount between the average of the respective portfolio Company’s

EBITDA valuation multiple against the respective peer group sector

comparable averages, which has been elected by the independent

valuation team.

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 9

care delivery operations. This is discussed in further detail in

the top 10 holdings section below.

The Company’s holding in EasyPark, the parking tech

company that helps drivers to find, manage and pay for both

parking and electric vehicle charging, saw its valuation

increase over the period. The company continues to grow

and strengthen its position as the parking tech company with

the widest coverage in the world. In 2022, EasyPark grew

both in new and existing markets, adding new cities such as

Paris and Boston, as well as new countries, such as Slovakia.

From an operational perspective, the company continues to

deliver very strong transaction and monthly active user

volumes.

A further contributor was global designer, manufacturer,

distributor and service provider of purified drinking water

dispensers, Waterlogic, which completed its merger with

Culligan International – the innovative brand in consumer-

focused, sustainable water solutions and services. The

merger led to the Company receiving £2.4m in sales

proceeds, which is a key milestone considering the Company

only launched in December 2020. As at 31March 2022, the

Company’s holding in Waterlogic was valued at £6.0m. As at

31March 2023, and following the £2.4m distribution, the

holding was valued at £5.1m.

The Company’s holding in CFC, one of the world’s most

successful technology-led insurance platforms and a global

leader in the cyber market, was another strong contributor

over the year. CFC operates a unique model in the insurance

industry, and benefits from a 20-year track record of

innovative insurance products. Cyber risk is a fast-growing

market and CFC are well positioned from an insurance

perspective in this space to increase market share.

On the more challenging side, Graphcore, which was added

to the portfolio towards the end of 2020 as part of a $222m

SeriesE funding round alongside Ontario Teachers’ Pension

Plan, Fidelity International and existing Graphcore investors,

has been revalued downwards over the year. Graphcore,

which has developed a next generation processor for

machine learning and AI applications, is currently facing a

challenging market environment given the long sales cycles

that surround such revolutionary technologies. Additionally,

the company has not been immune to the US Department of

Commerce’s sweeping set of export controls to restrict China

from certain semi-conductor chips and chip-making

equipment announced in early October 2022. The scale of the

artificial intelligence and machine learning opportunity

longer term remains immense and Graphcore’s technology

continues to set new benchmarks in performance. The

situation is developing, and we continue to monitor it closely.

As mentioned in the market section above, UK small and mid-

caps in the public equity market fared relatively poorly over

the period and, given the focus of the portfolio’s public

allocation of investing in small and medium-sized businesses

listed in the UK, performance was challenging for this part of

the portfolio in absolute terms. In particular, the share price

performance of holdings in National Express, GB Group,

Ascential and Genuit weighed on returns. However, there

were bright spots, with the Company benefitting from M&A

activity in the market, as holdings in Euromoney, Ideagen and

EMIS Group were all subject to takeover bids over the period,

with all three positions subsequently exited. Meanwhile,

shares in Volution Group, a leading supplier of ventilation

products, performed well. In March 2023, the company

reported a strong set of interim results, with half year

revenues and adjusted operating profits up 8.5% and 7.1%

respectively year-on-year, following on from strong annual

results published in October 2022.

Revenue growth and analysis

The public equity element of the portfolio has an aggregate

weighted average revenue growth of 71.5% over the last

financial year.

9

We believe it is useful to contextualise the performance of the

portfolio’s public equity allocation in the wider context of

other UK smaller-company investors. For illustrative

purposes, when comparing the Company's public equity

allocation performance to the IA UK Smaller Companies peer

group, it ranks in the first quartile over the 12 months to

31March 2023.

10

Portfolio positioning & activity

The portfolio is diversified across a number of industry

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

portfolio as at 31March 2023. 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 a

diversified portfolio should better protect investors in the

long run, with more stable investment returns.

Portfolio breakdown by industry as % of total

investments

Source: Schroders, as at 31March 2023.

The portfolio has been constructed from the bottom up, with

a focus on high growth businesses. The result is a portfolio

that is well-exposed to companies with a technology offering

(notably in software & IT services areas of the market), which

reflects the digitalisation age of today as well as our belief

that this is likely to continue. However, the portfolio is well

diversified to include other sectors, such as consumer

Building Products, 2.7

Diversified

Consumer

Services, 10.2

Electrical Equipment, 2.5

Energy Equipment & Services, 0.2

Entertainment, 0.2

Financial Services, 2.7

Ground Transportation, 1.2

Health Care Technology, 9.5

Hotels, Restaurants

& Leisure, 9.5

Insurance,

5.5

,

Interactive Media & Services, 1.1

IT Services, 13.2

Life Sciences Tools & Services, 1.2

Machinery, 1.1

Media, 2.1

Semiconductors &

Semiconductor

Equipment, 2.4

Software, 30.1

Specialty Retail, 3.1

Textiles, Apparel & Luxury Goods, 1.5

10

Schroder British Opportunities Trust plc

Portfolio Managers’ Review

9

Past performance is not a guide to future performance and may not be

repeated. Revenue growth calculated using the last two financial year

revenue figures for each public portfolio company. Weighted averages

calculated using each position as a proportion of total public equity

holdings in the portfolio.

10

Source: Schroders, Morningstar, Aladdin. Rankings are based on the

performance of the public equity portion of the Company (excluding cash).

The IA UK Smaller Companies peer group median average ongoing

charge (0.90%) was applied to the Company’s public equity gross

performance and compared against the IA UK Smaller Companies peer

group (net of fees).

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 10

services, media, hotels, restaurants & leisure and financial

services.

We invest in growing companies that have a number of

attractive characteristics that we believe should allow them to

withstand challenging economic environments and prosper.

Whilst the macroeconomic backdrop is expected to ebb and

flow, our core focus is to invest in quality, growth companies

that have strong balance sheets and that can sustainably

compound their earnings over the long run. These are

typically companies that have considerable pricing power,

market leadership (or an opportunity to gain scale via

consolidation), attractive unit economics and strong

management teams. While there is exposure to the wider

consumer discretionary sector, which continues to face

significant inflationary risk, we believe the characteristics of

our investments mean they are well-positioned to navigate

the current landscape and beyond. Furthermore, our

investments are typically profitable, with profitable

companies

11

making up 74% of total investments as at

31March 2023.

Where we have invested in companies that have not yet

reached profitability, they are well-funded at point of

investment and possess a clear route towards profitability,

and we expect them to deliver substantial value over the long

term.

The portfolio’s private equity allocation is not focused on the

pre IPO or ‘crossover’ area and earlier-stage venture capital

companies that had witnessed notable negative impacts to

valuations during the downturn of late, putting some of them

at funding risk. In contrast, it is focused on growth capital

and small/mid-market buyout-stage companies, where

valuations have contracted in some cases but declines have

been moderate in comparison and notably have been offset

by robust growth in financial performance. The businesses

the Company is investing in have already cleared the higher

risk hurdles, and are now generating revenues, building scale

and either already profitable or close to it. That does not

mean they are risk free but the portfolio has already been

substantially de-risked and the individual businesses within it

are now focused on fulfilling their significant growth

potential.

Report and Accounts

for the year ended 31 March 2023

11

Strategic Report

Portfolio Managers’ Review

Source: Schroders. For illustrative purposes only and should not be viewed as a recommendation to buy or sell. *Where we denote Valuation risk as the

risk around the perceived value of an underlying asset whereas investment risk encompasses a broader set of risks beyond valuation including but not

limited to factors such as market dynamics, economic conditions and industry specific risks.

!"#$%&"

'""()"*&+,

!"#$%&"

+*$")-&"./01

2&34$5

67*++8

9%,3%$

:;(

9%,3%$

<*&=")7"=*

9%,3%$

>%&#*&3%#(

!"#$%&'()*+,-$.)/0#.$)/#)-$1&/$

(/23).#$#452.+$2*3#-.'#*.-

6/#)-$&1$"#20".#*#7$3)85).2&*$/2-9:$

;

)/#)-$<2."$0/#).#-.$)'&5*.$&1$=)(2.)8$3-$*5'>#/$&1$7#)8-

Following the resolutions of the Company’s 2022 AGM in

September 2022, the 50:50 public/private allocation guidance

and the private equity limit of 60% of the Company’s gross

asset value were removed, providing us with greater

flexibility to take advantage of further private equity

opportunities. Since then we have explored a number of

further investments for the portfolio but have rejected a

number, largely as a result of maintaining price discipline.

However, we have a healthy pipeline of potential private

equity investments across a breadth of opportunities. As at

31March 2023, private equity investments represented 65%

of total investments, compared to 42% as at 31March 2022.

Over the year, the Company continued to take advantage of

its broad investment universe, scouring both private and

public markets for the brightest growth prospects in the UK,

focusing on small and mid-sized companies. We added a

number of exciting companies to the portfolio while also

increasing portfolio concentration, demonstrating our

conviction in the portfolio’s investments.

Private equity activity

We announced three new private equity investments over the

12-month period. In May 2022, we announced investments

into Mintec (through Synova), a leading provider of food-

related commodity pricing, and CFC (through Vitruvian

Partners), a technology-driven global insurance business.

These were followed in June by the announced investment

into Pirum (through Bowmark Capital), a leading provider of

post-trade automation and collateral management

technology for the global securities industry. We had been

tracking these businesses for an extended period prior to

investment through our long-term relationships with private

equity firms Synova, Vitruvian Partners and Bowmark Capital,

and were delighted to complete investments in these strong,

UK-based, market leaders.

Additionally, the Company made a follow-on investment in

August 2022 into Cera Care, Europe’s largest provider of

digital-first home healthcare, as part of a new funding round

to accelerate the company’s growth and expand from

servicing 15,000 to 100,000 at-home patients each day.

Furthermore, we were pleased to report the first cash

generation from our private equity holdings. Following the

completion of the merger in November 2022 between

Waterlogic (a global designer, manufacturer, distributor and

service provider of purified drinking water dispensers) and

Culligan International (the innovative brand in consumer-

focused, sustainable water solutions and services), the

Company received £2.4m in sales proceeds. The Company

remains invested as we believe the combined business has

considerable potential for future growth.

11

On an EBITDA profitability view.

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 11

Public equity activity

Three of our public equity holdings received takeover

approaches during the 12-month period to 31March 2023.

Shareholders approved a bid by Becketts Bidco, a consortium

of PE firms that comprised Astorg and Epiris, for Euromoney

Institutional Investor. In addition, shareholders approved a

£1.24bn all-cash takeover by Optum Health Solutions UK Ltd,

a subsidiary of UnitedHealth Group Inc, for Emis Group.

Furthermore, Ideagen was acquired by Rainforest Bidco

Limited, a wholly owned subsidiary of funds managed by Hg.

We are pleased that these bids and the resultant exits of

these positions benefited portfolio performance.

We added Bytes Technology Group, one of the UK’s leading

resellers of software, security and cloud-based products, to

the portfolio in 2023. This is a high quality, cash-generative

company, and we expect it to be resilient across economic

cycles due to its sticky customer base and high renewal rates.

Elsewhere, we used periods of market weakness to increase

existing positions in stocks where we continue to have a high

conviction. These included online women’s clothing retailer,

Sosandar, and business review platform, Trustpilot.

Outlook

The sell-off in UK small and mid-caps in 2022 was

indiscriminate, and not discerning between the “good” and

“less good” companies. We believe that when clearer signs of

a sustained economic recovery materialise and market

sentiment substantially improves, small and mid-caps should

be the first to re-rate in response. Our analysis shows that

such market underperformance in the past by UK small and

mid-caps has usually been followed by outperformance over

three- to five-year periods relative to large cap companies in

the FTSE 100. The below figure illustrates this for UK small

caps.

12

Schroder British Opportunities Trust plc

Portfolio Managers’ Review

UK small cap performance vs. FTSE 100

Buying on weakness had given the best long-term returns

Source: Schroders, returns are shown for the Numis Small Cap plus AIM ex IT index vs FTSE 100 index.

Based on rolling 12 month performance from 30September 1990 to 31December 2022.

-30

-20

-10

0

10

20

30

40

0 to -5% -5 to -10% -10 to -15% -15 to -30%

%

Small Cap

pervious

12 month

performance

vs. FTSE 100

... subsequent

3 year

performance

... subsequent

5 year

performance

Aside from the relative valuation opportunity with UK equities

remaining unloved relative to world markets in an historical

context (as noted in the investment case section), in

aggregate, they are also attractive as a result of their strong

balance sheets, as illustrated in the below figure which shows

UK corporates’ cash as a percentage of total assets, which has

increased considerably since 2000.

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 12

Report and Accounts

for the year ended 31 March 2023

13

Strategic Report

Portfolio Managers’ Review

UK corporates – cash as % of total assets

Source: Office of National Statistics, 31 March 2000 to 31 December 2022.

ATO

CDO

CCO

CUO

CVO

CTO

@DO

DD DC DU DV DT AD AC AU AV AT CD CC

6789:

The valuation opportunity can also be looked at through the

lens of free cash flow yields, with the UK having one of the

highest yields in the world, making the market a compelling

investment opportunity in our view. Free cash flow is the

money a firm has left over after paying its operating and

capital expenses. The yield is calculated as free cash flow

divided by market value. The below figure illustrates how the

forecast (fiscal year 2) free cash flow yield for UK equities

(represented by the FTSE All Share) outstrips that of global

equities (represented by the MSCI AC World) at present:

Forecast free cash flow yield: UK equities ahead of global

equities

Source: Factset Research, 26 June 2023.

In private equity markets, with financial engineering unlikely

to propel returns in the near term due to increased rates,

inflation and macroeconomic uncertainty, we believe

strategies focused on identifying companies that exhibit

strong underlying financial performance are poised to do

well. This may be achieved by the expansion of product lines,

geographic footprint, and professionalising management to

improve profit margins, for example. This is all easier to do

among small and medium-sized companies, and typically

harder to achieve at larger companies, which have often

been through several rounds of private equity or institutional

ownership. Portfolio company EasyPark, for example, has

evolved as a company in terms of product offering, maturity

in the marketplace and thorough geographical expansion.

We believe buy and build strategies are also positioned to do

well, with opportunities to buy smaller companies with the

intention to improve profitability and sell at higher multiples

in the future. Furthermore, despite the economic backdrop,

we are seeing strong significant deal flow across a breadth of

opportunities. Given our private equity team’s established

and formidable network in the UK (as well as globally) with

hard-to-access investment partners, we are well positioned to

seek out the best opportunities for the Company going

forward.

Our differentiated public-private equity strategy enables us to

continue to invest without boundaries, whilst providing

access to a broader investable universe to the benefit of

shareholders. We believe this differentiates the Company

from other investment trusts and provides us with an

advantage when selecting attractive investment

opportunities. While we are pleased with the investments in

the portfolio at present, we continue to seek out high quality,

growth opportunities with the aim of delivering long-term

total returns. The investment team harnesses Schroders

Capital’s strong network of co-investment partners developed

over 25 years, giving them access to unique investment

opportunities. Meanwhile, our extensive resources in both

public and private equities work together to the benefit of the

Company, providing a more comprehensive view of the

landscape in which companies operate, making us more

informed investors that we believe contributes to better

investment decision-making.

We believe that the current cash position (£7.8m as at

31March 2023) and prudent liquidity profile of the public

equity allocation of the portfolio provide us with an excellent

opportunity to make further investments in high growth

companies and/or initiate positions in mispriced growth

$#"'

?#"'

D

A

C

@

U

N

V

W

T

X5=;%J88%=6"(' B=YH%JY%Z*(81

;0(<,+%&$,)%6%;)$$%=,(/%;+">%?0$+@%A:B

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 13

14

Schroder British Opportunities Trust plc

The Company’s top ten holdings as of 31March 2023 are set out below, with overviews of each company and recent updates

regarding their businesses.

Fair value Fair value

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

Top 10 holdings unquoted 31 March 2022 investments 31 March 2023 investments

(£’000) (£’000)

Mintec

1

Unquoted – – 8,614 11.6

Rapyd Financial Network

1

Unquoted 8,565 13.2 8,399 11.3

Cera Unquoted 4,509 7.0 6,986 9.5

Pirum

1

Unquoted – – 6,087 8.2

Culligan

1

Unquoted 6,045 9.3 5,053 6.9

EasyPark

1

Unquoted 2,775 4.3 4,492 6.1

CFC

1

Unquoted – – 4,098 5.5

Learning Curve Unquoted 2,336 3.6 2,455 3.3

Volution Quoted 1,192 1.8 2,012 2.7

Watches of Switzerland Quoted 1,721 2.7 1,908 2.6

Source: Schroders.

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

– Mintec (held via Synova Merlin LP).

– Rapyd Financial Network (held via Target Global Fund).

– Pirum (held via Bowmark Investment Partnership LP).

– Culligan (held via EPIC-1b Fund).

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

– CFC (held via Vitruvian Investment Partnership).

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

Portfolio Managers’ Review

companies. Furthermore, following the approval from

shareholders to remove the 50:50 public/private allocation

guidance and the 60% private equity limit provides us with

greater flexibility to take advantage of further private equity

opportunities, and utilise our healthy pipeline of potential

private equity investments.

Schroder Investment Management Limited

5 July 2023

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 14

Report and Accounts

for the year ended 31 March 2023

15

Strategic Report

Portfolio Managers’ Review

Mintec

(unquotedholding)

The world’s leading independent provider of global

commodity price data, price forecasts & market

intelligence for the food, CPG and capital goods supply

chains

Mintec enables the world’s largest food and

manufacturing brands to implement more efficient and

sustainable procurement strategies. They do this through

their cutting-edge Software as a Service platform, Mintec

Analytics, which delivers market prices and analysis for

thousands of commodities, food ingredients and

associated materials. Their data and tools empower their

customers to understand prices better, analyse their

spend and negotiate with confidence.

Latest updates:

• In May 2022, Mintec launched the latest version of its

multi-award-winning procurement and commodity price

intelligence platform (Mintec Analytics 4.1), including new

features that increase price visibility and improve

efficiency for commodity buying teams.

• In December 2022, the company acquired French

business, CommoPrices, an independent provider of

commodity price data and analysis operating across

similar sectors, to extend its coverage of commodity price

data and intelligence.

• In January 2023, Mintec announced the acquisition of

AgriBriefing, which includes the brands Urner Barry,

Strategie Grains, FeedInfo and Tropical Research Services.

Building on previous acquisitions by Mintec (including

Kairos Commodities in 2021 and the aforementioned

CommoPrices), this established the combined company

as the largest agri-food-focused PRA and global

information provider with a unique portfolio of feed-to-

food commodity prices, forecasts, cost-modelling tools

and fundamental market data, serving over 5,000

customers in 50 countries.

Rapyd

(unquotedholding)

Integrates the world’s many payment networks and

technologies into a single platform

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:

• In May 2022, the company announced the launch of

“Virtual Accounts”, a product that empowers 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 in 40

countries in more than 25 currencies, including the US,

UK, EU, and APAC regions.

• Also in May 2022, Rapyd opened its first office in the

Dubai International Financial Centre. The UAE emerged as

an attractive fintech hub during the pandemic with

increased digital adoption, a booming eCommerce

economy, and transformative digital marketing initiatives.

• In July 2022, it was announced that Rakuten Viber had

partnered with Rapyd to unlock instant cross-border peer-

to-peer payments.

• In 2022, Rapyd was named an EMEA 60 Leader by

PYMNTS, the global leader in payments industry news

and data analytics, as well as being named on Forbes’

Cloud 100 list – the list of the world’s top private cloud

companies.

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 15

Cera

(unquotedholding)

Europe’s largest provider of digital-first home healthcare

Cera is Europe’s largest provider of digital-first home

healthcare. They are transforming healthcare by moving

services such as care, nursing, telehealth and repeat

medications out of hospitals and into people’s own homes

through technology. In combining pioneering technology

with their community of professional carers and nurses,

Cera are empowering people to live longer, better,

healthier lives in their own homes.

Latest updates:

• In August 2022, the company raised c.£260m in an equity

and debt funding round, with the goal of increasing the

number of patients its serves from 15,000 to 100,000. We

were pleased to have been able to participate in this

financing to accelerate the company’s growth and help

Cera empower those in the care sector.

• Subsequently, Cera announced its expansion into nursing

services across its UK network, marking the company’s

first move into additional healthcare services, as part of

its overall ambition to move more aspects of healthcare

out of hospitals and into people’s own homes.

• More recently, Cera launched its latest AI-powered

technology, Cera Brain, a platform that helps to automate

and power the company’s care delivery operations. Using

AI across key features, Cera Brain should enhance the

company’s impact in the sector, utilising technology to

automate administrative tasks, more efficiently match

carers to patients, enable better regulatory compliance

checks, onboard patients faster and drive healthcare

workflow automation. This new technology should enable

Cera to care for more people, allowing carers to see an

estimated 20% more patients per day. It should also

power a more efficient model of care delivery, making the

sector more sustainable by reducing overhead costs,

allowing carers and frontline staff to be paid better.

• Lastly, Cera has recently been ranked the Number 1 UK

HealthTech company in the HealthTech50 list for 2023,

which is testament to the company’s continued

technology-enabled growth.

Pirum

(unquotedholding)

A leading provider of post-trade automation and

collateral management technology for the global

securities industry

Pirum has created a set of award-winning, highly

innovative and flexible services which are tailored to fully

support the complexities of financial institutions around

the world. Pirum provides a secure processing hub which

seamlessly links market participants, allowing them to

electronically process and verify key transaction details.

Through easy integration with their services, Pirum’s

clients have increased processing efficiency, reduced

operational risk and improved profitability by reducing

manual processing.

Latest updates:

• In October 2022, Pirum expanded its Trade Risk Manager

service to provide visibility of the collateral status at a

transaction level.

• Knowing the status of collateral prior to releasing an

instruction to market is a key step in reducing

counterparty risk and preventing fails and CSDR fines.

• This expansion leverages Pirum’s Loan Release service

which provides valuable automation for lenders to release

their market instructions on the back of the borrower

collateralising the lender and provides extensive

prioritisation tools and controls to ensure loans are

released within market cut offs to increase settlement

rates and market efficiency.

16

Schroder British Opportunities Trust plc

Portfolio Managers’ Review

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 16

Report and Accounts

for the year ended 31 March 2023

17

Strategic Report

Portfolio Managers’ Review

Culligan

(formerlyWaterlogic)

(unquotedholding)

The leading provider of drinking water dispensers for

businesses across the globe

Culligan is an innovative brand in consumer-focused,

sustainable water solutions and services. It was

established in 1936 as a provider of water softening

solutions for residences in Northbrook, Illinois, and has

since grown to become a worldwide leader in water

treatment needs, from the simplest filtration system to

complex industrial water solutions.

Latest updates:

• In November 2022, Culligan International – the innovative

brand in consumer-focused, sustainable water solutions

and services – and Waterlogic Group Holdings – a global

designer, manufacturer, distributor and service provider

of purified drinking water dispensers – announced the

completion of their merger, creating a global leader in

clean and sustainable drinking water solutions and

services.

• As result of the merger agreement, the Company

received £2.4million, representing the first cash

generation from the Company’s private equity portfolio.

• The Company remains a shareholder as the combined

business has considerable potential for future growth.

EasyPark

(unquotedholding)

Parking tech company that helps drivers to find, manage

and pay for both parking and electric vehicle charging

EasyPark’s technology supports its users, cities and

parking operators with parking administration, planning

and management. The company has a unique market

coverage with presence in over 20 countries and more

than 3,200 cities.

Latest updates:

• In 2022, EasyPark grew both in new and existing markets,

launching in new cities such as Paris in France and Boston

in the US, as well as in new countries, such as Slovakia.

• The company launched support for the EasyPark app for

Android Auto.

• In a collaboration with French automobile manufacturer,

Renault, EasyPark launched direct in-car integration of the

EasyPark app in the New Renault Megane E-Tech

infotainment system.

• Additionally, the company continued to expand

collaborations with both local and nationwide operators

for electric car charging in Sweden, Denmark, Finland,

Norway and Slovenia.

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 17

CFC

(unquotedholding)

Technology-driven global insurance business

For over 20 years, CFC has built market-leading solutions

to some of the insurance industry’s biggest challenges.

The company uses technology and data science to stay

one step ahead. From developing cutting-edge insurance

products, pioneering autonomous underwriting,

deploying advanced threat intelligence, to offering

unparalleled service to its partners and customers, CFC is

re-imagining the world of specialist insurance.

Latest updates:

• In July 2022, CFC enhanced its UK proposition, partnering

with legal services company, Farillio, to launch a digital

platform for its professional liability and management

liability policyholders. Designed for small business

owners, the platform delivers practical tools and expert

resources to help customers grow and scale their

businesses.

• Also in July 2022, the company announced the expansion

of its market-leading cyber threat analysis capability into

North America and Australia. CFC’s cyber threat analysis, a

critical component of its proactive cyber insurance

offering, focuses solely on identifying new cyber threats

and working with cyber customers to prevent attacks

before they happen.

• In January 2023, CFC established a dedicated team to

meet increasing demand from fintechs, as part of its

financial institutions practice. Since launching its solution,

built specifically to cover the risks faced by organisations

operating in the fintech space in 2020, CFC has seen the

volume of submissions increase by more than 100% year-

on-year over the past two years and has grown its fintech

book by 100% over the past year.

• In March 2023, the company announced the expansion of

its “admitted product” suite with the addition of

professional liability and technology Errors & Omissions

(E&O), having traded its admitted solution for cyber since

2020.

Learning Curve

(unquotedholding)

UK training and education specialist

Learning Curve works with further education providers,

employers and learners to help them achieve success.

Since 2004, the company has grown both organically and

through acquisition to become one of the largest and

most diverse providers in the country.

Latest updates:

• In September 2022, Learning Curve announced the

acquisition of Yorkshire-based White Rose Beauty

Colleges, one of the largest beauty therapy training

providers in the UK, in a move which will complement its

existing academy provision. The acquisition is expected to

see the addition of a further 3,500 learners each year in

nine new locations and 170 employees, confirming

Learning Curve’s position as one of the largest providers

of high-quality beauty training in the country.

• In February 2023, the company announced it is

expanding its successful Hair and Beauty training

academies in the London region with two brand-new,

state-of-the-art salons.

18

Schroder British Opportunities Trust plc

Portfolio Managers’ Review

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 18

Report and Accounts

for the year ended 31 March 2023

19

Strategic Report

Portfolio Managers’ Review

Volution

(quotedholding)

A leading supplier of ventilation products

Volution is a market leader in residential and commercial

ventilation solutions, covering the UK, Continental

Europe and Australasia. They aim for their products to

enhance customers’ experience of ventilation by reducing

energy consumption, improving indoor air quality and

design and making them easier to use. The company has

primary markets in the UK, Continental Europe and

Australasia.

Latest updates:

• Volution published a strong set of interim results (6

months to 31January 2023) in March 2023, driven in

particular by strong UK residential RMI (repair,

maintenance and improvement) demand, with the

company successfully managing inflationary headwinds

and supply chain challenges through pricing discipline

and inventory optimisation.

• The interim results showed that revenue was up 8.5%

(7.3% organic growth and 1.2% inorganic growth), while

adjusted operating margin stood at 21.1% above the

company’s long-term operating margin target.

• Volution has continued to execute on its acquisition

strategy (acquiring Bera in Germany in July 2022 and the

remaining shares of ERI Corporation UK Limited more

recently). The company is optimistic of being able to add

further earnings-accretive acquisitions in the future, given

its strong pipeline of potential candidates and strong

balance sheet.

Watches of

Switzerland

(quotedholding)

The UK’s largest luxury watch retailer

Watches of Switzerland is the leading luxury watch

specialist in the UK, with a significant presence in the US

with a complementary jewellery offering. There are 15

Watches of Switzerland showrooms across the UK,

including dedicated Rolex and Jaeger-LeCoultre

boutiques. The company’s success is based on strong,

long-standing partnerships with the most prestigious

luxury watch brands, supported by impactful marketing

and powered by leading edge technology to provide

clients with a modern, distinctive luxury experience.

Latest updates:

• In December 2022, Watches of Switzerland released its H1

(26weeks to 30October 2022) results, revealing that

group revenue had increased 23% on a constant currency

basis and 31% at reported rates.

• The luxury watches division’s revenue grew 31% year-on-

year on a reported rates basis to £667m, representing

87% of total group sales (unchanged from H1 FY 2022),

with growth driven by increases in average selling price

and volume.

• In terms of geography, its US revenues grew year-on-year

60% and 80% on constant currency and reported rates

bases respectively, with revenue growth excluding

acquisitions at +44% constant currency.

• Meanwhile, UK performance was driven by domestic

clientele, with revenue of £454m up 8% year-on-year.

• The company has continued to expand its retail network,

opening 20 showrooms across the UK, US and Europe in

the first half of FY23.

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 19

20

Schroder British Opportunities Trust plc

Investment Portfolio

at 31 March 2023

Country of

incorporation

(of underlying Total

Quoted/ holding where Industry Fair value investments

Holding unquoted applicable) Sector £'000 %

Mintec

1

Unquoted United Kingdom Software 8,614 11.6

Rapyd Financial Network

1

Unquoted United Kingdom IT Services 8,399 11.3

Cera EHP S à r l Unquoted United Kingdom Health Care Technology 6,986 9.5

Pirum Systems

1

Unquoted United Kingdom Software 6,087 8.2

Culligan

1

(formerly Waterlogic) Unquoted United Kingdom Diversified Consumer Services 5,053 6.9

EasyPark

1

Unquoted Sweden Software 4,492 6.1

CFC Underwriting

1

Unquoted United Kingdom Insurance 4,098 5.5

Learning Curve

1

Unquoted United Kingdom Diversified Consumer Services 2,455 3.3

Volution Quoted United Kingdom Building Products 2,012 2.7

Watches of Switzerland Quoted United Kingdom Specialty Retail 1,908 2.6

Graphcore Unquoted United Kingdom

Semiconductors & 1,778 2.4

Semiconductor Equipment

City Pub Quoted United Kingdom Hotels, Restaurants & Leisure 1,644 2.2

SSP Quoted United Kingdom Hotels, Restaurants & Leisure 1,620 2.2

Dalata Hotel Quoted Ireland Hotels, Restaurants & Leisure 1,588 2.1

Ascential Quoted United Kingdom Media 1,544 2.1

OSB Quoted United Kingdom Financial Services 1,524 2.1

Keywords Studios Quoted United Kingdom IT Services 1,439 1.9

Trainline Quoted United Kingdom Hotels, Restaurants & Leisure 1,408 1.9

Learning Technologies Quoted United Kingdom Software 1,286 1.7

Discoverie Quoted United Kingdom Electrical Equipment 1,206 1.6

Sosandar Quoted United Kingdom Textiles, Apparel & Luxury Goods 1,093 1.5

GB Quoted

United Kingdom Software 1,073 1.4

MaxCyte Quoted United States Life Sciences Tools & Services 907 1.2

National Express Quoted United Kingdom Ground Transportation 903 1.2

Judges Scientific Quoted United Kingdom Machinery 831 1.1

Trustpilot Quoted United Kingdom Interactive Media & Services 830 1.1

Bytes Technology Quoted United Kingdom Software 802 1.1

On the Beach Quoted United Kingdom Hotels, Restaurants & Leisure 798 1.1

Luceco Quoted United Kingdom Electrical Equipment 451 0.6

Lendinvest Quoted United Kingdom Financial Services 437 0.6

Victorian Plumbing Quoted United Kingdom Specialty Retail 363 0.5

Invinity Energy Systems Quoted Jersey Electrical Equipment 200 0.3

TinyBuild Quoted

United States Entertainment 179 0.2

Velocys Quoted United Kingdom Energy Equipment & Services 120 0.2

Total investments

2

74,128 100.0

1

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

Mintec (held via Synova Merlin LP)

Rapid Financial Network (held via Target Global Fund)

Pirum Systems (held via Bowmark Investment Partnership LP)

Culligan (held via Epic-1b Fund)

Easypark (held via Purple Garden Invest (D) AB)

CFC Underwriting (held via Vitruvian Investment Partnership LLP)

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

2

Total investments comprise:

£'000 %

Unquoted 47,962 64.8

Quoted on FTSE 250 12,551 17.0

Quoted on AIM 9,572 12.8

Quoted on FTSE Allshare 2,455 3.3

Listed on a recognised stock exchange overseas 1,588 2.1

Total 74,128 100.0

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 20

Report and Accounts

for the year ended 31 March 2023

21

Strategic Report

Business Review

Why invest in SBO?

• A differentiated public and private investment strategy

investing in high growth small & mid-sized UK

companies.

• Provides access to a far larger universe of high quality,

high growth UK companies than available from purely

public markets.

• Executed by an established team of experienced

investment professionals with strong track records,

proven processes and extensive networks.

• A portfolio that aims to target companies that support

the United Nations Sustainable Development Goals.

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 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 at:

www.schroders.com/sbo.

•

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

• Sets objectives,

strategy and KPIs

• Appoints 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

• Oversees portfolio

management

• Monitors achievement

of KPIs

• Oversee whether

gearing is employed

• 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.

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 21

22

Schroder British Opportunities Trust plc

Investment approach

The Company combines Schroders’ extensive public and

private equity investment experience to access UK company

growth across the life cycle, focusing on small and medium-

sized businesses. The Company is philosophically

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

both public and private companies. Furthermore, the

Company believes that investors are best served by an

offering that considers a comprehensive UK growth equity

universe, as publicly-listed small and mid-caps only represent

a fraction of company growth in the UK economy.

The Company’s portfolio has been constructed from the

bottom up, with investments focused on quality, growing and

predominantly profitable companies, that have strong

balance sheets and that can sustainably compound their

earnings over the long run. Typically, these businesses will

exhibit considerable pricing power (which is particularly

beneficial in these times of high inflation), strong

management teams, and will already be delivering strong

revenue growth. Where portfolio companies have not yet

reached profitability, the investment team seeks out

companies that are well-funded and possess a clear route

towards profitability.

Given the high-growth nature of the opportunities targeted,

the portfolio will have notable exposure to software and IT

services areas of the market. However, the portfolio is well-

diversified to include other sectors, such as consumer

services, healthcare, leisure and financial services.

The Portfolio Managers believe that the price paid is one of

the most important determinants of long-term investment

returns and therefore maintain valuation discipline to ensure

they do not overpay for growth opportunities. On one side of

the portfolio, there is a focus on high-growth names that are

set to benefit from secular tailwinds. These companies will be

at or near profitability and delivering strong growth

characteristics, such as rising customer numbers or increased

market share. On the other side, the team will look for what

they call “mispriced growth” companies, which are growing

companies that have fallen out of favour and are trading on

depressed valuations, but which the team believes have the

ability to recover and thrive in the future.

More generally, the portfolio’s public allocation seeks to invest

in UK small and medium-sized businesses, with the potential

to provide primary capital to support growth. The Company

utilises the significant research capabilities and long track

record of Schroders’ broad listed equities business, which is

particularly well-known for its small and mid-cap expertise.

In terms of the portfolio’s private equity allocation, the

investment team focuses on direct and co-investment

opportunities that span the growth capital and small/mid-

market buyout areas of the market, where they believe

numerous companies exist with considerable transformation

potential, while avoiding areas that the team believe pose

heightened valuation risk (see figure below). The Company’s

private equity allocation leverages Schroders Capital’s more

than 25 years’ experience in private equity investing and 100+

European specialist GP relationships to create strong deal

flow for high selectivity of direct and co-investments.

Schroders Capital has c.£14bn of private equity assets under

management (as at 31 December 2022) and was recently

awarded “Co-investor of the Year” at the RealDeals Private

Equity Awards 2023.

Business Review

!"#$%&"

'""()"*&+,

!"#$%&"

+*$")-&"./01

2&34$5

67*++8

9%,3%$

:;(

9%,3%$

<*&=")7"=*

9%,3%$

>%&#*&3%#(

!"#$%&'()*+,-$.)/0#.$)/#)-$1&/$

(/23).#$#452.+$2*3#-.'#*.-

6/#)-$&1$"#20".#*#7$3)85).2&*$/2-9:$

;

)/#)-$<2."$0/#).#-.$)'&5*.$&1$=)(2.)8$3-$*5'>#/$&1$7#)8-

The Company’s private equity allocation by stage:



Source: Schroders. For illustrative purposes only and should not be viewed as a recommendation to buy or sell. *Where we denote Valuation risk as the

risk around the perceived value of an underlying asset whereas investment risk encompasses a broader set of risks beyond valuation including but not

limited to factors such as market dynamics, economic conditions and industry specific risks.

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 22

Report and Accounts

for the year ended 31 March 2023

23

Strategic Report

Business Review

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 are 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.

Private equity investment process

The private equity investment process is illustrated below.

The investment team believes that high-quality deal sourcing

is fundamental to long-term success and spend considerable

time on this activity by working closely with their extensive

network of European specialist GP relationships. Sourcing

efforts are further enhanced by technology, including

advanced proprietary tools, internal databases and third-

party information services.

An assessment of whether the investment opportunity meets

the key criteria for inclusion in the Company is undertaken

early to ensure a proposal is suitable and conforms to the

investment policy and objectives.

The comprehensive due-diligence process undertaken will

include an assessment of the following for a particular

company:

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 23

24

Schroder British Opportunities Trust plc

Business Review

Public equity investment process

The Portfolio Managers 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 allocation utilises an initial screen to narrow

down the universe into high growth and mispriced growth

opportunities. These companies will then be subject to

detailed due diligence.

The public equity stock selection process is outlined below.

Source: Schroders. For illustrative purposes only and should not be viewed as a recommendation to buy or sell.

Public equity investments may include the following:

Source: Schroders. For illustrative purposes only and should not be viewed as a recommendation to buy or sell.

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 24

Report and Accounts

for the year ended 31 March 2023

25

Strategic Report

Business Review

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 Manager’s 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.

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82.

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

year reports which aim to provide shareholders with a clear

understanding of the Company’s activities and its results.

The engagement and meetings held during the year are

described on page42. The 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86.

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 2023 was 107.32p (31 March 2022: 104.14p).

During the year the Company's NAV per share rose by 3.1%.

Most of this increase was generated by the private equity

investments with a small contribution from the buy back

programme, which offset the performance from the public

equity sleeve. Since IPO the NAV per share has increased by

9.5%.

A full description of performance during the year under

review is contained in the Portfolio Managers’ Review.

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, whilst acknowledging

the challenge this brings to a Company with a substantial

portfolio of unquoted investments. Despite the share buy

backs during the year, in common with many investment

trusts which include private equity investments the share

price discount to NAV per share widened at 31 March 2023 to

36.2% (31March 2022: 19.3%).

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; when market

conditions allow. Shares will only be issued at a premium to

NAV and bought back at a discount to NAV.

Ongoing charges

The Company monitors operating expenses on a regular

basis. The ongoing charges at 31 March 2023 were 1.47%

(31March 2022: 1.93%). The calculation is shown in the

definition of terms and performance measures on page 86.

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.

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. As all of the Directors are shareholders

in the Company, the Directors’ interests are aligned with

those of other shareholders in this regard. The Board is

responsible for promoting strong relationships with the

Manager and other service providers, as well as maintaining

constructive relationships with shareholders, in order to

promote the interests of shareholders. The Board’s focus is

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 25

26

Schroder British Opportunities Trust plc

Business Review

on long-term growth rather than providing shareholders with

dividend income. The Board recognises that sustainability

and ESG matters should be fundamental to the investment

approach and an essential element 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 pages 32 and 33.

Culture

The Board is committed to encouraging and actively creating

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 encourages a

culture of constructive challenge with all key suppliers and

transparency with all stakeholders. The culture is driven by

the Company’s values which are detailed above. The s172

statement provides further details of how the Board has

operated in this regard.

The Board 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 Manager adopts sustainability and impact investing

practices as an integral part of identifying, assessing and

monitoring portfolio companies. They believe that

responsible investment creates long-term value for both

public and private equity investments and benefits all

stakeholders. Please refer to the Sustainability section for

more information on how the Manager incorporates the

assessment of sustainability factors into the investment

process.

The Board expects the Manager to engage with investee

companies on social, environmental, governance and

business ethics issues and to promote best practice. The

Board expects the Manager to consider these issues when

exercising the Company’s voting rights.

Further detail on engagement and stewardship can be found

on pages 32 and 33.

In addition to the description of the Portfolio Managers’

integration of ESG into the investment process, a description

of the Schroders 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 stewardship.

Corporate and Social Responsibility

Diversity

In accordance with the requirements of LR.9.8.6R, for the

year ended 31 March 2023, the Company sets out data on the

diversity of the individuals of the Company’s Board and its

executive management.

Table for reporting on gender identity

Number of

senior Percentage

positions on Number of

Number of Percentage the Board in executive

Board of the (CEO, CFO, executive management

members Board % SID and Chair) management %

Men 2 66.6 1 n/a n/a

Women 1 33.3 1* n/a n/a

Other n/a n/a n/a n/a n/a

Not specified/prefer

not to say n/a n/a n/a n/a n/a

Table for reporting on ethnic background

Number of

senior Percentage

positions on Number of

Number of Percentage the Board in executive

Board of the (CEO, CFO, executive management

members Board % SID and Chair) management %

White British or other

White (including minority

white groups) 3 100 2* n/a n/a

Mixed Multiple Ethnic

Groups n/a n/a n/a n/a n/a

Asian/Asian British n/a n/a n/a n/a n/a

Black/African/Caribbean/

Black British n/a n/a n/a n/a n/a

Other ethnic group,

including Arab n/a n/a n/a n/a n/a

Not specified/prefer not

to say n/a n/a n/a n/a n/a

*The FCA defines senior Board positions as Chairman, Chief Executive

Officer (CEO), Chief Financial Officer (CFO) or Senior Independent Director.

As an investment trust with no executive officers, the Company has no

CEO or CFO.

The Board has resolved that the Company’s year end date is

the most appropriate date for disclosure purposes. Data

collection was done on a self-identifying reporting basis in a

questionnaire which asked individuals to identify their gender

identity and ethnic background categories as set out in the

required table.

The Company is an investment trust and has no employees

or senior management.

As at 31 March 2023, the Company did not meet the expected

targets of 40% of the individuals on the Board being women

or at least one individual on its Board being from an ethnic

minority background. The Board comprised of two 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 did not meet two of the targets set out in LR.9.8.6

due to the Company’s IPO being at the end of 2020, and all

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 26

Report and Accounts

for the year ended 31 March 2023

27

Strategic Report

Business Review

Directors were appointed at that time. The Company has a

small Board and it will take several years to implement a

complete succession plan.

Recognising the benefits of a diverse Board, it is intended

that improving diversity will be a key factor when the Board

makes its next appointment.

However, due to the nature of the Audit Committee’s

responsibilities, the Board considers the Audit and Risk

Chairman, the position for which is held by a woman, to be a

senior position as reflected in the table on the previous page.

Financial crime policy

The Company continues to be committed to carrying out its

business fairly, honestly and openly. The Company has a

financial crime policy, covering bribery and corruption, tax

evasion, money laundering, terrorist financing and sanctions.

The Board seeks 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 year, it consumed no energy and so has no

greenhouse gas emissions, energy consumption or energy

efficiency action to report.

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 27

28

Schroder British Opportunities Trust plc

Business Review

Section 172 of the Companies Act 2006

During the year, 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 Manager, other service providers and the investee companies. The

Board takes a long-term view of the consequences of its decisions, and aims 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 sustainability 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 year and key decisions made during the year

and related engagement activities.

Stakeholder How we engage

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, through the Manager, 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.

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

providers, including the Portfolio Managers.

The Manager The Manager aims to continue to achieve consistent, long-term returns in line with the investment objective and

maintains a close and collaborative working relationship with the Board.

The Board maintains a constructive collaborate relationship with the Manager, encouraging open discussion and

making sure the Manager is acting in the best interests of shareholders. To provide the Manager flexibility to take

advantage of further private equity opportunities, the Board reviewed and recommended for shareholder approval

changes to the investment policy and restrictions.

The Board invites the Manager 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 Manager and the impact of decisions affecting investment performance are

set out in the Portfolio Managers’ Review on pages 5 to 19.

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

discharge of its contractual obligations at least annually.

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 28

Report and Accounts

for the year ended 31 March 2023

29

Strategic Report

Business Review

Examples of Stakeholder Consideration during the Year

The Directors were particularly mindful of stakeholder considerations in reaching the following key decisions during the year

ended 31 March 2023:

• the Board reviewed and recommended for shareholder approval, changes to the investment policy and restrictions, to

provide the Portfolio Managers flexibility to take advantage of further private equity opportunities;

• the Board, having sought authority from shareholders, removed the 50:50 public/private allocation guidance and the

private equity limit given the strong pipeline of investment opportunities identified by the Portfolio Managers. This will

give the Portfolio Managers more flexibility to take advantage of further private equity opportunities;

• the Board is responsible for discount management and is cognisant of the prevailing discount to NAV. During the year

under review, the Board utilised a share buyback programme to seek to reduce the discount 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. A total of 1.1million shares have been bought

back and factors such as the size of the Company, the illiquid nature of the private equity holdings, borrowings and cash

were considered and will continue to be in any further buybacks;

• the Board and management engagement committee undertook 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 audit and risk

committee reviewed externally audited internal controls reports of the Depositary and Registrar; and

• the Board continued to consider Board succession planning following the retirement of Chris Keljik as a non-executive

Director. The Board has adequate resources to manage workloads at this time but expects to recruit a replacement in due

course and will seek to add diversity to the Board when doing so.

Stakeholder How we engage

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. The Board reviews service levels of providers to ensure services are being delivered to

the required standard.

The management engagement 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 engages with the Manager who communicates with investee companies regarding any issues which

might affect the long-term success of those investments and in turn the Company.

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 this continues throughout the life of our investment. Further details on ESG

engagement are set out on pages 32 and 33.

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 pages 32 and 33).

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

taken and voting decisions made.

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 29

30

Schroder British Opportunities Trust plc

Business Review

Approach to sustainability

The Portfolio Managers believe that companies do not operate in a vacuum; rather, their long-term success is in part 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 the

Portfolio Managers 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.

The approach to sustainability as part of the Company’s broader investment process is set out below.

Pre investment process Post investment process

The appraisal process of an investment from a sustainability

perspective is described below:

Following investment, the below are conducted:

Exclusion screening:

From the outset, companies operating in certain areas, such as

chemical and biological weapons for example, are screened out.

Excluded activities are set out in Schroders’ Group exclusions

1

and Schroders Capital’s Sustainability and Impact Policy

2

.

Engagement:

The Portfolio Managers seek to influence corporate behaviour

through direct engagement and/or proxy voting. The Portfolio

Managers engage and vote on any issue affecting the long-term

sustainable value of the Company’s portfolio companies.

Engagements are discussed further below.

United Nations’ Sustainable Development Goals (“UN SDGs”):

The Portfolio Managers seek companies whose business models

are aligned with at least one of the UN SDGs or one of the

subgoals. However, not every investment will meet this criteria.

For such companies, if the Portfolio Managers 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. This is discussed

further below.

Monitoring:

The Portfolio Managers monitor the ESG performance of

investments throughout their time as shareholders, and assess if

companies have responded to their requests for change.

If they feel they do not have enough information, or have

identified gaps in companies’ awareness or management of their

ESG risks and opportunities, they establish dialogue with that

firm.

The Portfolio Managers also undertake reactive engagement as

a result of any negative incident involving one of their

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 the Portfolio Managers consider all

potential ESG concerns, where available, they examine the

external ESG ratings for the 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.

Assessment:

The Portfolio Managers assess companies’ ESG risks and

opportunities, identify gaps in their awareness or management

of ESG factors, and examine their external ratings. In doing so,

the Portfolio Managers are able to determine how they could

add value as 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;

– World-Check is a service that conducts contracting party risk

assessment.

1

https://www.schroders.com/en/global/individual/about-us/what-we-do/sustainable-investing/our-sustainable-investment-policies-disclosures-voting-

reports/group-exclusions/

2

https://mybrand.schroders.com/m/f97b8ea198e1cf2/original/April-2022_SC-SI-Policy-vF-1-4.pdf

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 30

Report and Accounts

for the year ended 31 March 2023

31

Strategic Report

Business Review

The Portfolio Managers believe that investors, big and small,

have a part to play in meeting these global goals. While

originally intended for governments and policymakers, the

SDGs have evolved into a universally recognised framework,

used by both the public and private sectors, with both playing

a key role in developing solutions. The United Nations

Conference on Trade and Development (UNCTAD) estimated

that an annual $2.5 trillion was required to achieve the SDGs

in developing countries, when the goals were adopted in

2015. More recently, it has been estimated that this gap now

stands at c.$4 trillion per year.

3

As investors, the SDGs can help us understand where to

deploy capital and to frame investment decisions. The

Portfolio Managers believe that a number of the long-term

trends that underpin the achievement of these goals, can

provide tailwinds for investments. Businesses which are

aligned to one or more of these could be well positioned for

growth.

United Nations’ Sustainable Development Goals (“SDGs”)

As alluded to earlier, 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.

UN SDGs were adopted by all UN Member States in 2015 as

part of the 2030 Agenda for Sustainable Development to

address global challenges. The global challenges described

by the SDGs have been building up over several decades, and

the goals represent a framework to guide ideas and

innovation towards tackling those challenges. The 17 discrete

goals (shown below), each focus on distinct challenges and

are underpinned by a comprehensive range of metrics

comprising 169 targets.

3

https://unctad.org/news/closing-investment-gap-global-goals-key-

building-better-future

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 31

32

Schroder British Opportunities Trust plc

Business Review

The below table serves to illustrate which UN SDGs the Portfolio Managers have deemed are aligned to a sample of our

investee companies. For the Company’s public equity investments, the Portfolio Managers utilise Schroders’ proprietary tool,

ThemEx, which seeks to align a company’s products and services to the SDGs and sustainable investment themes. For the

Company’s private equity investments, the Portfolio Managers review investments to identify if their business models might

positively contribute to one or more UN SDGs, and where possible the relevant targets.

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

There have been instances where investments have been made where the investment team thought the companies would

benefit from Schroders’ support in helping them incorporate SDGs into their business planning and/or in reporting their

alignment with SDGs. For example, the Portfolio Managers have discussed these points with Graphcore’s management in the

past. As the company navigates a difficult macro environment, the Portfolio Managers look to provide the company with

further support on this matter.

Engagement

As part of the investment process, the Portfolio Managers meet with company management teams and/or GPs (in the case of

private equity co-investments) in advance of investing. This engagement is maintained throughout the life of an investment.

The Portfolio Managers take pride in their level of engagement with companies. Schroders’ brand, as well as extensive

resources across public and private equity investment teams, affords them the ability to regularly engage on all aspects of

corporate strategy, including environmental, social and governance matters.

During the year, the Portfolio Managers engaged portfolio holding SSP Group, a leading operator of food and beverage outlets

in travel locations worldwide, on the topic of human capital management. They also engaged Watches of Switzerland on

Private equity

portfolio company

Select UN SDG*

Public equity

portfolio company

Select UN SDG*

Rapyd National Express

Cera Volution

Leaning Curve SSP

Waterlogic discoverIE

EasyPark Trainline

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 32

Report and Accounts

for the year ended 31 March 2023

33

Strategic Report

Business Review

executive renumeration. Additionally, various options were discussed, including share buybacks, with the management of a

number of the portfolio’s public equity holding companies whose share prices had fallen materially.

Regarding the portfolio’s public equity holdings, Schroders voted at 38 meetings over the 12-month period:

• 29 AGM meetings

• 5 EGM meetings

• 3 court meetings

• 1 warrant holder meeting

• Votes for management proposals: 94.86% (443 out of 467 resolutions)

• Votes against management proposals: 5.14% (24 out of 467 resolutions)

Resolutions Schroders voted against included:

• Director election/re-election

• Strategic transactions

• Remuneration policy and implementation

• Auditor reappointment

• Share allotments/buybacks

Additionally, the investment team seeks to use its expertise and network to provide support to the portfolio’s private

companies’ business development and strategy. The following engagement case study has been anonymized for the best

interest of the portfolio company and shareholders in the company.

Over the past year, the investment team explored options to support an unlisted portfolio company on its strategic

partnerships to advance its digital capabilities, introductions to potential investors and M&A opportunities. Leveraging

Schroders Capital’s extensive network of investors and companies, the team set up five introductory meetings with private

equity investors not acquainted with the company, as well as instigating discussions with the company’s management and

other companies invested in by Schroders Capital. Following discussions with the company’s management on bidding tactics

and key considerations regarding potential acquisitions, the company improved its position with regards to ongoing

acquisition opportunities.

Going forward, we will continue to engage with companies and investment partners to ensure the companies we invest in are

managed with due consideration of sustainability. We will continue to promote the importance of sustainable investment and

business practices, and will provide advice and guidance where possible.

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 33

34

Schroder British Opportunities Trust plc

Business Review

Emerging risks and uncertainties

During the year, the Board continued to discuss and monitor a number of risks which could affect the Company or the

valuations of investee companies. Two emerging risks were considered, geopolitical risks and ESG risks. The Board receives

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

the Company.

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

Board noted that the Russian invasion of Ukraine impacted supply chains, inflation and interest rates both in the UK and

globally. Increases in interest rates lead to increases in the discount rates used to value growth companies. This has led to the

Board determining that the market risks faced by the Company have increased in the last year.

ESG risks are increasing generally owing to greater awareness of the long term cost of the environmental impact of corporate

activities as well as changes in investor requirements. This has led to the Board considering the market risks affecting the

pricing of the Company’s investments as having increased during the last year.

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. The Board has also adopted a risk appetite

statement. 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 March2023.

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 Change trend

The Company’s investment objective may

become out of line with the requirements of

investors, or the Company’s investment strategy

may not be 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

Board monitors the success of the Company in

meeting its stated objectives.

The Company has a fixed life which will only be

extended if the Company continues to meet

investor requirements.



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 ensure that any alternative

proposals to be made to shareholders, are put

forward at an appropriate time.



176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 34

Report and Accounts

for the year ended 31 March 2023

35

Strategic Report

Business Review

Market Risks

Mitigation and management

Change trend

Underlying investee companies within the

Company’s portfolio may experience fluctuations

in their operating results due to fluctuations in

the market or general economic conditions

(including changes to interest rates, inflation,

geopolitical and ESG related regulations). These

would in turn affect the performance of the

Company.

The Portfolio Managers adopt an active

management approach and focus on sustainable

businesses capable of generating long-term

returns for shareholders.

The Board receives quarterly reports from the

Portfolio Managers on the performance of the

Company’s investments and the market outlook.



The increased risk reflects

concerns around general

economic conditions

following the ongoing war in

Ukraine as well as higher

inflation and interest rate

rises.

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 Managers and auditor appraise the

Board of any prospective changes to the legal

and regulatory framework, so that requisite

actions can be planned.



Operational Risks Mitigation and management Change trend

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 NAV and receives

regular updates. The Board has a

discount/premium policy and the Board

consider whether a buyback would be for the

benefit of the Company as a whole, its

shareholders and take into account relevant

factors and circumstances at the time.

The Board monitors marketing and

distribution activity regularly.



The increased risk reflects

heightened market volatility.

The Company’s investment portfolio is

managed by the Portfolio Managers and, in

particular, is led by two key individuals. Loss

of a portfolio manager could affect

performance and market sentiment leading

to a 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 from the

Manager 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 regard to investee

companies in a timely manner, where possible.

The Manager has an extensive track record of

valuing privately held investments.

The audit and risk committee reviews all

valuations of unquoted investments on a

quarterly basis and challenges methodologies

used by the Portfolio Managers.



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 Board receives quarterly

reports from the Manager on the portfolio's

liquidity.



176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 35

36

Schroder British Opportunities Trust plc

Business Review

Operational Risks Mitigation and management Change trend

The Company has no employees and the

Directors have been appointed on a non-

executive basis. The Company is therefore 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.

Failure to price sustainability risks into an

investment by the Portfolio Manager which

could lead to future losses.

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 termination.

The Board receives regular reports from its

service providers and the management

engagement committee reviews the

performance of key service providers at least

annually.

The audit and risk committee reviews reports on

the external audits of the internal controls of

certain key service providers.



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 year 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77 to 80.

Going concern

The Directors have a reasonable expectation that the

Company has adequate resources to continue in operational

existence until 31 July 2024 which is more than twelve

months from the date when this Report and accounts was

signed and the Directors have accordingly adopted the going

concern basis in preparing this Report and accounts.

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. 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.

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.

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 36

Report and Accounts

for the year ended 31 March 2023

37

Strategic Report

Business Review

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34 to 36. In particular, the Directors concluded that the

emerging geopolitical and ESG risks do not materially impact

the viability of the Company. The Directors have also

considered 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.

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

5 July 2023

176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 37

Schroder British Opportunities Trust plc

38

Board of Directors

Neil England

Status: Independent non-executive Chairman

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

Neil has held a number of leadership roles in various sectors including food, FMCG (fast moving

consumer goods), distribution, technology and financial services. Neil was Vice President of Mars

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

Director at Gallaher Group Plc. Neil has been Chairman of a number of companies including ITE

Group Plc, Blackrock Emerging Europe Plc and six private businesses. He is currently the

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

non-executive Director of a private equity backed leisure 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 (Chairman)

Number of shares held: 55,000*

Diana Dyer Bartlett

Status: Independent non-executive Director and Chairman of audit and risk

committee

Length of service: appointed as 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 International 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 (Chairman)**, management engagement and

nominations committees

Number of shares held: 46,345*

Tim Jenkinson

Status: Independent non-executive Director and Chairman of management

engagement committee

Length of service: appointed as 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. He is 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. He has previously held Board

positions in PSource Structured Debt Limited, the US financial services firm DFC Global

Corporation and the German utility comparison firm, Verivox GmbH. Tim was a Specialist

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

Tim is an experienced researcher and lecturer, teaching 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 (Chairman) and

nominations committees

Number of shares held: 6,609*

*Shareholdings are as at 5 July 2023, full details of Directors’ shareholdings are set out in the Remuneration Report on page49.

**A primary responsibility of the committee is oversight of the valuations process. In the coming year, the Board plans to

separate this committee into two, namely an audit and risk committee, and a valuation committee.

176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 38

Report and Accounts

for the year ended 31 March 2023

Governance

39

Directors’ Report

The Directors submit their report and the audited Report and

accounts of the Company for the year from 1April 2022 to 31

March 2023.

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38. 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 three Directors, listed on page 38) 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 Business Review on

pages21 to 37 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 line 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 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 who

commit a substantial amount of their time to the portfolio.

The Schroders Group manages £737.5 billion (as at

31December 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.

176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 39

Schroder British Opportunities Trust plc

40

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 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.

“Listed Value Change” means the aggregate price increase

or decrease attributable to each PE Portfolio Investment in

listed shares that are held at the end of the relevant

Calculation Period.

“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75.

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 Company is committed to high standards of corporate

governance and has implemented a framework for corporate

governance which it considers to be appropriate for an

investment trust.

The Financial Conduct Authority requires all UK listed

companies to disclose how they have applied the principles

and complied with the provisions of the UK Corporate

Governance Code 2018 (the “UK Code”) issued by the

Financial Reporting Council (“FRC”). The UK Code is available

on the FRC’s website:

www.frc.org.uk.

The Company is a member of the AIC, which has published its

own Code of Corporate Governance to recognise the special

circumstances of investment trusts (

www.theaic.co.uk) as

endorsed by the FRC. The Board has considered the

principles and provisions of the AIC Code of Corporate

Governance 2019 (the “AIC Code”), which addresses those set

out in the UK Code, as well as setting out additional

provisions on issues that are of specific relevance to the

Company as an investment trust.

The AIC Code also includes an explanation of how the

principles and provisions set out in the UK Code are adapted

to make them relevant for investment companies.

176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 40

Report and Accounts

for the year ended 31 March 2023

Governance

41

Directors’ Report

The Board considers that reporting against the principles and

provisions of the AIC Code provides more relevant

information to shareholders.

The Board confirms that the Company has complied

throughout the year under review with the relevant principles

and provisions of the AIC Code except as set out below:

– the role of executive Directors and senior management;

– executive Directors’ remuneration;

– the need for an internal audit function; and

– the requirement to establish a remuneration committee.

The Board considers that these provisions, except for the

requirement to establish a remuneration committee, are not

relevant to the Company, as an externally managed

investment company. Furthermore, all of the Company’s day

to day management and administrative functions are

outsourced to third parties and the Company has no

executive Directors, employees or internal operations. The

Company has not therefore reported further in respect of

these provisions.

The nomination committee fulfils the function of the

remuneration committee and considers any change in the

Directors’ remuneration policy. A separate committee has not

therefore been established. As permitted under the AIC Code,

the Chairman is a member of the audit and risk committee.

An explanation as to why this is considered appropriate is set

out in the audit and risk committee Report on page43.

The Board comprises entirely non-executive Directors, the

appointment of a Senior Independent Director 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.

Revenue, final dividend and dividend

policy

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

taxation, was £639,000, equivalent to a revenue loss per

ordinary share of 0.86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.

The Company has adopted a policy of allocating all operating

costs to revenue reserves rather than apportioning any to the

capital reserve. This policy is expected to result in a revenue

loss being reported in most accounting periods.

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 year 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 2023, the Company had 73,900,000 ordinary

shares of 1p in issue. 1,100,000 shares were held in treasury.

Accordingly, the total number of voting rights in the Company

at 31 March 2023 was 73,900,000. Details of changes to the

Company’s share capital during the year are given in note14

to the accounts on page73.

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.

176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 41

Schroder British Opportunities Trust plc

42

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 2023 voting rights

Schroders plc 21,151,996 28.203%

East Riding Of Yorkshire

Council 15,000,000 20.000%

Following the year 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’ attendance at meetings

The number of scheduled meetings of the Board and its

committees held during the year and the attendance of

individual Directors is shown below.

Audit Management

and Risk Engagement Nomination

Director Board Committee Committee Committee

Neil England 4/4 4/4 2/2 2/2

Diana Dyer Bartlett 4/4 4/4 2/2 2/2

Tim Jenkinson 4/4 4/4 2/2 2/2

Chris Keljik* 3/3 3/3 1/1 1/1

*Chris Keljik resigned from the Board on 28 February 2023.

Directors’ and officers’ liability insurance and

indemnities

Directors’ and officers’ liability insurance cover was in place

for the Directors throughout the year. 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 year under review for each Director and to the

date of this report.

By order of the Board

Schroder Investment Management Limited

Company Secretary

5 July 2023

Directors’ Report

176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 42

Report and Accounts

for the year ended 31 March 2023

Governance

43

Audit and Risk Committee Report

The responsibilities and work carried out by the audit and risk committee during the year are set out below. The duties, which

include monitoring the integrity of the Company’s financial reporting and internal controls, may be found in the terms of reference

which are set out on the Company’s webpage: www.schroders.com/sbo.

A primary responsibility of the committee is oversight of the valuations process. In the coming year, the Board plans to separate

this responsibility by forming a valuations committee.

Due to the size of the Board, all Directors are members of the committee. Diana Dyer Bartlett is the Chairman 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

Report and accounts

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.

Report and accounts

To monitor the integrity of the Report and

accounts 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 Report and

accounts.

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 recommend

to the Board their remuneration. To

review the audit plan and engagement

letter.

Ongoing risk review

Audit

planning

Audit

Annual

report

176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 43

Schroder British Opportunities Trust plc

44

Application for the year

Risks Management and Internal

Controls

Financial Reports and Valuation

Audit

Service provider controls

Consideration of the internal 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,

administrator Depositary and Registrar,

including assurance reports and

presentations on these controls.

During the year, the administrator

highlighted an error on one of the daily

NAV announcements. The administrator

confirmed that this was rectified that

day. The committee discussed oversight

of services with the administrator who

confirmed an independent review had

taken place and implemented controls to

ensure it would not be repeated.

Valuation and existence of holdings

Considered reports from the Manager

and Depository, including quarterly

reports and one at the year end. The

committee has reviewed the valuation

methodologies used for both public and

private

investments.

Recognition of investment income

Reviewed consideration of dividends

received against forecast and the

allocation of special dividends.

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

year, 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.

External auditor confirmation of

compliance with s1158.

Calculation of the investment

management fee and performance fee

Confirmed that the management fees

have been calculated in accordance with

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

third 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 third period that the senior

statutory auditor, Caroline Mercer, has

conducted the audit of the Company’s

Report and accounts. 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 internal control 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 year and up until the approval of this

report. The committee met four times during the year. Further details on attendance can be found on page42. An evaluation of the

committee’s effectiveness and review of its terms of reference was performed in March 2023 and the next will be completed as part of

the Board and committee evaluation process in the next reporting year.

Audit and Risk Committee Report

176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 44

Report and Accounts

for the year ended 31 March 2023

Governance

45

Application for the year

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, were taken as a

whole were consistent with the Board’s

view of the operation of the Company.

The committee considered the new IPEV

guidelines had been reviewed and their

implications for the Company’s

valuations.

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 Report

and accounts, 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.

Discussed the additional procedures the

auditor carried out in compliance with

the new fraud auditing standard.

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.

The committee reviewed the forecasts

and sensitivity analysis prepared by the

Manager, the liquidity of the Company’s

portfolio and the key risks which could

affect 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 year end report and

accounts.

The committee recommended that the going concern for the half and full year report 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 year ended 31 March 2023, 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52.

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 Chairman

5 July 2023

Audit and Risk Committee Report

176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 45

Schroder British Opportunities Trust plc

46

Oversight of other service providers

The committee reviews the performance and comp -

etitiveness 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 year 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. Tim Jenkinson is the Chairman of

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

held two scheduled meetings during the year.

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.

The committee conducted their annual review of service

providers which were deemed satisfactory, including a

detailed review of the Depositary & Custodian took

place.

The committee had undertaken an evaluation of the

Manager, Registrar, and Depositary and Custodian’s

internal controls.

Application for the year

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.

176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 46

Report and Accounts

for the year ended 31 March 2023

Governance

47

Selection and induction

• Committee prepares a job

specification for each role, and

an independent recruitment

firm is appointed. For the

Chairman 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 year, 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 Chairman

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

held one scheduled meeting during the year.

Approach

Oversight of Directors

Selection

Induction

Annual

evaluation

Annual review

of succession

policy

Application

of succession

policy

176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 47

Schroder British Opportunities Trust plc

48

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 the Remuneration Report be put to shareholders for approval.

Selection and induction

• No new appointments were

made during the year.

Board evaluation and Directors’ fees

• A Board and committee evaluation process

was undertaken in September 2022 and

reported to the committee in December

2022.

• 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 page 38.

• 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 year

Nomination Committee Report

176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 48

Report and Accounts

for the year ended 31 March 2023

Governance

49

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.

At the AGM held on 5 September 2022, 99.98% 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 0.02% were against and 5,952 were

withheld for the year ended 31 March 2022.

Directors’ remuneration policy

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

by the Board and the nomination committee. The committee

has reviewed the Directors’ fees and agreed that they remain

unchanged as detailed in the remuneration report.

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 year ended 31 March 2023.

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

are set out on page 38. 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.

176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 49

Schroder British Opportunities Trust plc

50

Directors’ Remuneration Report

Fees paid to Directors

The following amounts were paid by the Company to Directors for their services in respect of the year ended 31 March 2023.

Directors’ remuneration is all fixed; they do not receive any variable remuneration.

Remuneration report

Total

Fees Taxable benefits

1

Nine month Nine month Nine month Seven month

Year ended period ended Year ended period ended Year ended period ended period ended

31 March 31 March 31 March 31 March 31 March 31 March 30 June

2023 2022 2023 2022 2023 2022 2021

Directors £ £ £ £ £ £ £

Neil England (Chairman) 42,003 30,110 – 618 42,003 30,728 23,287

Diana Dyer Bartlett

36,753 26,345 – 193 36,753 26,538 19,966

Tim Jenkinson

31,502 22,582 44 43 31,546 22,625 17,536

Chris Keljik

2

28,827 22,582 – – 28,827 22,582 17,877

139,085 101,619 44 854 139,129 102,473 78,666

1

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.

2

Resigned from the Board on 28 February 2023.

The information in the above table has been audited.

Change in annual remuneration payable

Change in annual

Change in annual fee over the nine

fee over the year month period

ended 31 March ended 31 March

2023

1

2022

1

Directors % %

Neil England (Chairman) 2.5 2.6

Diana Dyer Bartlett 3.9 3.4

Tim Jenkinson 4.6 0.3

Chris Keljik

2

n/a (1.8)

1

The changes have been calculated based on annualised fees for the

nine months ended 31 March 2022 and the seven months ended 30 June

2021.

2

Resigned from the Board on 28 February 2023.

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

year under review and the prior period. In considering these

figures, shareholders should take into account the Company’s

investment objective.

Nine

month

Year period

ended ended

31 March 31 March

2023 2022

£’000 £’000 % Change

1

Remuneration payable

to Directors 139 102 2.2

Distributions paid to

shareholders:

share buybacks 808 – –

1

The change has been calculated based on an annualised fee for the

ninemonths ended 31 March 2022.

Performance graph since 1 December

2020 (launch date)

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.

1

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

ex Investment Trusts Index has been selected as an appropriate

comparison as it 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 pages 86 and 87.

30/06/2021

31/03/202201/12/2020 31/03/2023

Share price

FTSE 250 ex Investment Trusts Index

50

60

70

80

90

100

110

120

130

176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 50

Report and Accounts

for the year ended 31 March 2023

Governance

51

Directors’ Remuneration Report

Directors’ share interests

The Company’s articles of association do not require

Directors to own shares in the Company. The interests of

Directors, who held office at the end of the year, including

those of connected persons, at the beginning and end of the

financial year under review, are set out below.

At 31 March At 31 March

2023

1

2022

1

Neil England 55,000 30,000

Diana Dyer Bartlett 46,345 20,000

Tim Jenkinson 6,609 –

1

Ordinary shares of 1p each.

The information in the above table has been audited.

On behalf of the Board

Neil England

Chairman

5 July 2023

176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 51

Schroder British Opportunities Trust plc

52

Statement of Directors’ Responsibilities

The Directors are responsible for preparing the annual

report, and the Report and accounts in accordance with

applicable law and regulations.

Company law requires the Directors to prepare the Report

and accounts for each financial year. Under that law, the

Directors have prepared the Report and accounts 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 Report and accounts

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 year. In preparing these Report and

accounts, 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

Report and accounts;

– notify the Company’s shareholders in writing about the

use of disclosure exemptions in FRS 102, used in the

preparation of the Report and accounts; and

– prepare the Report and accounts 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 Report and accounts 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 Report and accounts may differ from

legislation in other jurisdictions.

Each of the Directors, whose names and functions are listed

on page 38

, confirm that to the best of their knowledge:

– the Report and accounts, 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

5 July 2023

176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 52

Report and Accounts

for the year ended 31 March 2023

53

Financial

Opinion

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

31March 2023 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 2023 and of its profit for the year 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 Financial Reporting Council’s (‘FRC’) 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:

– Confirmation of our understanding of the Company’s going concern assessment process and we engaged with the

Directors and the Company Secretary to determine if all key factors that we have become aware of during our audit were

considered in their assessment.

– Inspection of the Directors’ assessment of going concern, including the revenue forecast, for the period to 31July 2024

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

– Review of the factors and assumptions, including the impact of the current economic environment, as applied to the

revenue forecast and the liquidity assessment of the 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.

– Review of 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 as a result of the Company operating at a forecasted revenue

loss.

– Consideration of 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.

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

were appropriate 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

assessed by the Directors, being the period to 31July 2024, which is at least 12 months from when the financial statements

are authorised for issue.

Independent Auditor’s Report

to the Members of Schroder British Opportunities

Trust plc

176432 British Opportunities Trust plc Annual Report Pt3(A).qxp_176432 British Opportunities Trust plc Annual Report Pt3(A) 05/07/2023 16:57 Page 53

54

Schroder British Opportunities Trust plc

Independent Auditor’s Report

to the Members of Schroder British Opportunities

Trust plc

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 £0.79m (2022: £0.78m) which represents 1% (2022: 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, the potential impact of climate change, and changes in the

business environment when assessing the level of work to be performed.

Climate change

Stakeholders are increasingly interested in how climate change will impact companies. The Company has determined that the

most significant future impacts from climate change on its operations will be from how climate change could affect the

Company’s investments and overall investment process, This is explained on page 34 in the principal risks and uncertainties

section. This disclosure forms part of the “Other information,” rather than the audited financial statements. Our procedures

on these unaudited disclosures therefore consisted solely of considering whether they are materially inconsistent with the

financial statements, or our knowledge obtained in the course of the audit or otherwise appear to be materially misstated, in

line with our responsibilities on “Other information”.

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 quoted investments are valued based on market pricing as required by FRS 102. The Company’s unquoted investments

are 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. 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 judgement, 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.

176432 British Opportunities Trust plc Annual Report Pt3(A).qxp_176432 British Opportunities Trust plc Annual Report Pt3(A) 05/07/2023 16:57 Page 54

Report and Accounts

for the year ended 31 March 2023

55

Financial

Incorrect valuation or ownership of

the investment portfolio (as described

on page 44 in the Audit and Risk

Committee Report and as per the

accounting policy set out on page 65)

The value of the investment portfolio at

31March 2023 was £74.13m (2022:

£64.69m) consisting of quoted

investments with an aggregate value of

£26.17m (2022: £37.28m) and unquoted

investments with an aggregate value of

£47.96m (2022: £27.41m).

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

which are at close of business on the

reporting date.

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60.

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 year end

We confirmed with the Administrator

that there were no investments with

stale prices for the quoted investments

as at the year end and therefore no

stale pricing report produced. We

obtained the market prices, from an

independent pricing vendor, for 5

business days pre and post the year

end date and calculated the day-on-day

movement and confirmed there are no

stale prices.

We compared the Company’s quoted

investment holdings at 31March 2023

to independent confirmations received

directly from the Company’s Custodian

and Depositary.

We recalculated the unrealised

gains/losses on the unquoted

investments as at the year end using

the book-cost reconciliation.

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 year ended 31March 2023

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;

The results of our procedures identified

no material misstatements in relation to

the risk of incorrect valuation or

ownership of the investment portfolio.

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

176432 British Opportunities Trust plc Annual Report Pt3(A).qxp_176432 British Opportunities Trust plc Annual Report Pt3(A) 05/07/2023 16:57 Page 55

56

Schroder British Opportunities Trust plc

Independent Auditor’s Report

to the Members of Schroder British Opportunities

Trust plc

– Assessing and validating the

appropriateness of data inputs and

challenging the assumptions used

to support the valuations;

– Assessing and undertaking our

own analysis of 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

– 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

year along with the overall

movement in the market based on

a portfolio of comparable

companies for each investee

company.

We corroborated a sample of inputs

used by the Portfolio Manager in the

valuation to information which has

been substantively tested as part of our

audit.

Where relevant, we obtained the most

recent reporting produced by the

general partnersand compared these

to the Company’s valuations as at

31March 2023 to ensure consistencies

in the assumptions or data inputs used.

We reviewed the financial statements to

ensure that there are adequate

disclosures regarding valuation

uncertainty and assumptions made in

the valuation, including the fair value

hierarchy.

We obtained confirmations directly

from the underlying portfolio

companies with respect to the

unquoted investments held by the

Company.

Risk Our response to the risk Key observations

communicated to the

Audit and Risk Committee

176432 British Opportunities Trust plc Annual Report Pt3(A).qxp_176432 British Opportunities Trust plc Annual Report Pt3(A) 05/07/2023 16:57 Page 56

Report and Accounts

for the year ended 31 March 2023

57

Financial

Independent Auditor’s Report

to the Members of Schroder British Opportunities

Trust plc

Incorrect calculation of the

performance fee (as described on

page44 in the Audit and Risk Committee

Report and as per the accounting policy

set out on page 66)

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.

The amount of performance fee

accrued as at 31March 2023 was

£1.67m (2022: £1.12m), which

represents the fee payable for the

periods ended 30June 2021 and

31March 2022 and year ended

31March 2023.

The performance fee is only paid on

subsequent realisation of the unquoted

investments and therefore £0.48m

(2022: £nil) has been presented as a

current liability as at 31March 2023

representing a realisation in the year

with respect to the investment in

Waterlogic.

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 resulting in a

higher performance fee due to the

Manager.

We have performed the following

procedures:

We obtained an understanding of the

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.

We reviewed the conditions for

payment of the performance fee and

verified that the realised gain incurred

on the unquoted investment,

Waterlogic, meets the conditions for the

Company to be liable to make a

payment of an equal amount as at

31March 2023.

The results of our procedures identified

no material misstatements in relation to

the risk of incorrect calculation of the

performance fee.

Risk Our response to the risk Key observations

communicated to the

Audit and Risk Committee

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

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 £0.79million (2022: £0.78million), which is 1% (2022: 1%) of shareholders’

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

performance.

176432 British Opportunities Trust plc Annual Report Pt3(A).qxp_176432 British Opportunities Trust plc Annual Report Pt3(A) 05/07/2023 16:57 Page 57

58

Schroder British Opportunities Trust plc

Independent Auditor’s Report

to the Members of Schroder British Opportunities

Trust plc

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% (2022: 75%) of our planning materiality, namely £0.59m (2022:£0.59m).

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 (2022: £0.04m).

Reporting threshold

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

We agreed with the Audit and Risk Committee that we would report to them all uncorrected audit differences in excess of

£0.04m (2022: £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’ report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we

have not identified material misstatements in the strategic report or Directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to

report to you if, in our opinion:

– adequate accounting records have not been kept, or returns adequate for our audit have not been received from

branches not visited by us; or

– the financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the

accounting records and returns; or

– certain disclosures of Directors’ remuneration specified by law are not made; or

– we have not received all the information and explanations we require for our audit.

176432 British Opportunities Trust plc Annual Report Pt3(A).qxp_176432 British Opportunities Trust plc Annual Report Pt3(A) 05/07/2023 16:57 Page 58

Report and Accounts

for the year ended 31 March 2023

59

Financial

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 Association of Investment Companies

(AIC) Code of Corporate Governance 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 36;

– 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 36;

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

and meets its liabilities set out on pages 36 and 37;

– Directors’ statement on fair, balanced and understandable set out on page 52;

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

page34;

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

systems set out on pages 43 and 44; and

– The section describing the work of the audit and risk committee set out on page 43.

Responsibilities of Directors

As explained more fully in the Directors’ responsibilities statement set out on page 52, 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.

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.

Independent Auditor’s Report

to the Members of Schroder British Opportunities

Trust plc

176432 British Opportunities Trust plc Annual Report Pt3(A).qxp_176432 British Opportunities Trust plc Annual Report Pt3(A) 05/07/2023 16:57 Page 59

60

Schroder British Opportunities Trust plc

– 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

reporting requirements of the Company.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’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 & risk 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 3 periods, covering the

periods ending 30June 2021 and 31March 2022 and year to 31March 2023.

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

Use of our report

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies

Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are

required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not

accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit

work, for this report, or for the opinions we have formed.

Caroline Mercer (Senior statutory auditor)

for and on behalf of

Ernst & Young LLP, Statutory Auditor

Edinburgh

5July 2023

Independent Auditor’s Report

to the Members of Schroder British Opportunities

Trust plc

176432 British Opportunities Trust plc Annual Report Pt3(A).qxp_176432 British Opportunities Trust plc Annual Report Pt3(A) 05/07/2023 16:57 Page 60

Report and Accounts

for the year ended 31 March 2023

61

Financial

Income Statement

For the year ended 31 March 2023

For the nine months

2023 ended 31 March 2022

1

Revenue Capital Total Revenue Capital Total

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

Gains/(losses) on investments held at fair

value through profit or loss 3

– 3,198 3,198 – (1,453) (1,453)

Losses on derivative contracts

– – – – (481) (481)

Gains on foreign exchange

– 16 16 – – –

Income from investments 4

392 – 392 296 – 296

Other interest receivable and similar income 4 77 – 77 – – –

Gross return/(loss) 469 3,214 3,683 296 (1,934) (1,638)

Portfolio management fee 5

(458) – (458) (372) – (372)

Performance fee 5

– (555) (555) – (714) (714)

Administrative expenses 6

(650) – (650) (500) – (500)

Transaction costs 11 – (4) (4) – 1 1

Net return/(loss) before finance costs and taxation (639) 2,655 2,016 (576) (2,647) (3,223)

Finance costs 7 – – – (1) – (1)

Net return/(loss) before taxation (639) 2,655 2,016 (577) (2,647) (3,224)

Taxation 8 – – – – – –

Net return/(loss) after taxation (639) 2,655 2,016 (577) (2,647) (3,224)

Return/(loss) per share 10 (0.86)p 3.57p 2.71p (0.77)p (3.53)p (4.30)p

1

The Company changed its accounting date to 31 March commencing 1 July 2021. The comparative figures cover the nine month period from 30 June

2021 to 31 March 2022.

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/(loss) after taxation is also the

total comprehensive income.

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

discontinued in the year, or comparative period.

The notes on pages 65 to 81 form an integral part of these accounts.

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 61

62

Schroder British Opportunities Trust plc

Statement of Changes in Equity

For the year ended 31 March 2023

Called-up

share Special Capital Revenue

capital reserve reserves reserve Total

£’000 £’000 £’000 £’000 £’000

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

Repurchase of the Company’s own shares into treasury – (808) – – (808)

Net return/(loss) after taxation – – 2,655 (639) 2,016

At 31 March 2023 750 71,957 8,253 (1,649) 79,311

For the nine months ended 31 March 2022

1

Called-up

share Special Capital Revenue

capital reserve reserves reserve Total

£’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

1

The Company changed its accounting date to 31 March commencing 1 July 2021. The comparative figures cover the nine month period from 30 June

2021 to 31 March 2022.

The notes on pages 65 to 81 form an integral part of these accounts.

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 62

Report and Accounts

for the year ended 31 March 2023

63

Financial

Statement of Financial Position

at 31 March 2023

31 March 31 March

2023 2022

1

Note £’000 £’000

Fixed assets

Investments held at fair value through profit or loss 11 74,128 64,691

Current assets

Debtors 12 151 115

Cash at bank and in hand 12 7,759 15,452

7,910 15,567

Current liabilities

Creditors: amounts falling due within one year 13 (1,543) (1,039)

Net current assets 6,367 14,528

Total assets less current liabilities 80,495 79,219

Creditors: amounts falling due after more than one year

Performance fee (1,184) (1,116)

Net assets 79,311 78,103

Capital and reserves

Called-up share capital 14 750 750

Capital reserves 15

80,210 78,363

Revenue reserve 15 (1,649) (1,010)

Total equity shareholders’ funds 79,311 78,103

Net asset value per share 16 107.32p 104.14p

1

Restated as detailed in note 13 on page 72.

The accounts were approved and authorised for issue by the Board of Directors on 5 July 2023 and signed on its behalf by:

Neil England

Chairman

The notes on pages 65 to 81 form an integral part of these accounts.

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

Company registration number: 12892325

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 63

64

Schroder British Opportunities Trust plc

Cash Flow Statement

For the nine

Year ended months ended

31 March 2023 31 March 2022

1

Note £’000 £’000

Net cash outflow from operating activities 17 (662) (180)

Investing activities

Purchases of investments (19,840) (7,285)

Sales of investments

13,601 5,650

Cash outflow from derivative instruments – (693)

Net cash outflow from investing activities (6,239) (2,328)

Net cash outflow before financing (6,901) (2,508)

Financing activities

Repurchase of Ordinary shares into treasury (808) –

Net cash outflow from financing activities (808) –

Net cash outflow in the year/period (7,709) (2,508)

Cash at bank and in hand at the beginning of the year/period 15,452 17,960

Net cash outflow in the year/period (7,709) (2,508)

Exchange movements 16 –

Cash at bank and in hand at the end of the year/period 7,759 15,452

Included under operating activities are dividends received during the year amounting to £362,000 (period ended 31March

2022: £230,000) and interest receipts amounting to £62,000 (period ended 31 March 2022: nil).

1

The Company changed its accounting date to 31March commencing 1 July 2021. The comparative figures cover the nine month period from 30 June

2021 to 31 March 2022.

The notes on pages 65 to 81 form an integral part of these accounts.

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 64

Report and Accounts

for the year ended 31 March 2023

65

Financial

1. Accounting period

The Company changed its accounting date to 31 March commencing 1 July 2021. The comparative figures cover the nine

month period from 30 June 2021 to 31 March 2022.

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 July 2022, except for certain financial information required by paragraph 82(c)

regarding unquoted holdings with a value greater than 5% of the portfolio or included in the top 10, where information is not

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

The accounts have been prepared on a going concern basis with investments at fair value through profit or loss. The Directors

believe that the Company has adequate resources to continue operating for the period to 31 July 2024, which is at least 12

months from the date of approval of this report and accounts. In forming this opinion, the Directors have taken into

consideration: the controls and monitoring processes in place, the Company’sother payables, the 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. In forming this opinion, the Directors have also considered the

Company’s principal risks, including climate change. Further details of Directors’ considerations regarding this are given in the

Chairman’s Statement, Investment Managers’ Review, Going Concern Statement, Viability Statement and under the Principal

and Emerging Risks heading on page 34. The accounts have been prepared on the assumption that approval as an

investment trust will continue to be granted.

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

(b) Use of judgements, estimates and assumptions

The preparation of the accounts requires management to make 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 accounts are the determination of the fair values of the unquoted investments by the Investment

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

unquoted 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 estimates and assumptions are described in note 21 on pages75

and 76.

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 inputs.

(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 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.

Notes to the Accounts

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 65

66

Schroder British Opportunities Trust plc

This valuation process is consistent with International Private Equity and Venture Capital (“IPEV”) guidelines issued in

December 2022, which are intended to set out current best practice on the valuation of Private Equity investments.

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

(ii) Investments which are not traded in an active market are valued using the price of a recent investment, where there is

considered to have been no material change in fair 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 multiples, 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 accounting date and therefore reflect market participants view of climate change risk on the investments

held. The Company’s unquoted investments at 31 March 2023 were valued using a variety of techniques consistent with the

recommendations set out in the IPEV guidelines. Valuations of all unquoted investments 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 year 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 year 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 on pages 70 to 72.

(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.

Notes to the Accounts

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 66

Report and Accounts

for the year ended 31 March 2023

67

Financial

(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 are initially measured at fair value and subsequently measured at amortised cost. They are recorded at the

proceeds received net of direct issue costs.

(i) Taxation

The tax charge for the year 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 years in which the timing differences are expected

to reverse, based on tax rates that have been enacted or substantively enacted at the accounting 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 year end are

translated at the rates of exchange prevailing at 1600 hours on the accounting date.

(l) Repurchases of shares into treasury and subsequent reissues

The cost of repurchasing the Company’s own shares into treasury, including the related stamp duty and transaction costs is

dealt with in the Statement of Changes in Equity. Share repurchase transactions are accounted for on a trade date basis.

The sales proceeds of treasury shares reissued are treated as a realised profit up to the amount of the weighted average

purchase price of those shares and is transferred to capital reserves. Any excess of sales proceeds over the purchase price is

transferred to “share premium”.

3. Gains/(losses) on investments held at fair value through profit or loss

Nine

Year months

ended ended

31 March 31 March

2023 2022

£’000 £’000

Gains/(losses) on sales of investments based on historic cost 889 (274)

Amounts recognised in investment holding gains and losses in the previous

period in respect of investments sold in the period 327 (310)

Gains/(losses) on sales of investments based on the carrying value at the

previous balance sheet date

1,216 (584)

Net movement in investment holding gains and losses 1,982 (869)

Gains/(losses) on investments held at fair value through profit and loss 3,198 (1,453)

Notes to the Accounts

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 67

68

Schroder British Opportunities Trust plc

4. Income from investments

Nine

Year months

ended ended

31 March 31 March

2023 2022

£’000 £’000

Income from investments:

UK dividends 374 233

Overseas dividends 18 63

392 296

Other interest receivable and similar income:

Deposit interest 77 –

Other income – –

77 –

Total income 469 296

5. Investment management fee and performance fee

Nine

Year months

ended ended

31 March 31 March

2023 2022

£’000 £’000

Revenue:

Investment management fee 458 372

Capital:

Performance fee 555 714

The bases for calculating the investment management and performance fees are set out in the Directors’ Report on page 40

and details of all amounts payable to the Manager are given in note 19 on page 75.

6. Administrative expenses

Nine

Year months

ended ended

31 March 31 March

2023 2022

£’000 £’000

Other administrative expenses 185 155

Company secretarial and administrative fee payable to Schroders

180 135

Directors’ fees

1

139 102

Auditor’s remuneration for the audit of the Company’s annual accounts

2

146 108

650 500

1

Full details are given in the remuneration report on pages 49 to 51.

2

Includes VAT amounting to £24,000 (2022: £18,000).

Notes to the Accounts

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 68

Report and Accounts

for the year ended 31 March 2023

69

Financial

7. Finance costs

Nine

Year months

ended ended

31 March 31 March

2023 2022

£’000 £’000

Interest paid on futures and overdrafts – 1

8. Taxation

(a) Analysis of tax charge for the period

Year ended Nine months ended

31 March 2023 31 March 2022

Revenue Capital Total Revenue Capital Total

£’000 £’000 £’000 £’000 £’000 £’000

Taxation – – – – – –

The Company has no corporation tax liability for the year ended 31 March 2023 (period ended 31 March 2022: nil).

(b) Factors affecting tax charge for the period

Year ended Nine months ended

31 March 2023 31 March 2022

Revenue Capital Total Revenue Capital Total

£’000 £’000 £’000 £’000 £’000 £’000

Net return/(loss) before taxation (639) 2,655 2,016 (577) (2,647) (3,224)

Net return/(loss) before taxation multiplied by the Company’s

applicable rate of corporation tax for the period of

19.0% (period ended 31 March 2022: 19.0%)

(121) 504 383 (110) (503) (613)

Effects of:

Capital (gains)/losses on investments

– (569) (569) – 368 368

Income not chargeable to corporation tax

(71) – (71) (46) – (46)

Expenses not deductible for corporation tax purposes

– 1 1 – (1) (1)

Unrelieved management expenses 192 64 256 156 136 292

Taxation for the period – – – – – –

(c) Deferred taxation

The Company has an unrecognised deferred tax asset of £983,000 (2022: £646,000) based on a prospective corporation tax

rate of 25% (period ended 31 March 2022: 25%). The main rate of corporation tax has increased 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 £639,000 (period ended 31 March 2022: £577,000) for the year and

accordingly there is no requirement to pay a dividend under Section 1158 of the Corporation Tax Act 2010.

Notes to the Accounts

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 69

70

Schroder British Opportunities Trust plc

10. Return/(loss) per share

Nine

months

Year ended ended

31 March 31 March

2023 2022

£’000 £’000

Revenue loss (639) (577)

Capital return/(loss) 2,655 (2,647)

Total return/(loss) 2,016 (3,224)

Weighted average number of shares in issue during the year

74,376,633 75,000,000

Revenue loss per share (0.86)p (0.77)p

Capital return/(loss) per share 3.57p (3.53)p

Total return/(loss) per share 2.71p (4.30)p

11. Investments held at fair value through profit or loss

(a) Movement in investments

Nine

months

Year ended ended

31 March 31 March

2023 2022

£’000 £’000

Opening book cost 59,200 57,839

Opening investment holding gains 5,491 6,670

Opening fair value

64,691 64,509

Purchases at cost

19,840 7,285

Sales proceeds

(13,601) (5,650)

Gains/(losses) on investments held at fair value through profit or loss 3,198 (1,453)

Closing fair value 74,128 64,691

Closing book cost

66,328 59,200

Closing investment holding gains 7,800 5,491

Closing fair value 74,128 64,691

Notes to the Accounts

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 70

Report and Accounts

for the year ended 31 March 2023

71

Financial

(b) Material revaluations of unquoted investments

Year ended 31 March 2023

Opening Closing

valuation valuation

at 31 March at 31 March

2022 Purchases Sales Revaluation 2023

£’000 £’000 £’000 £’000 £’000

Investment

Rapyd Financial Network 8,565 – – (166) 8,399

Cera EHP S.à r.l. 4,509 407 – 2,070 6,986

Mintec – 6,304 – 2,310 8,614

Pirum Systems – 5,752 – 335 6,087

Culligan (formerly Waterlogic) 6,045 38 (2,384) 1,354 5,053

EasyPark 2,775 30 – 1,687 4,492

CFC Underwriting – 2,610 – 1,488 4,098

Learning Curve 2,336 8 – 111 2,455

Graphcore 3,178 – – (1,400) 1,778

27,408 15,149 (2,384) 7,789 47,962

Nine months ended 31 March 2022

Opening Closing

valuation valuation

at 30 June at 31 March

2022 Purchases Sales Revaluation 2022

£’000 £’000 £’000 £’000 £’00

0

Investment

Rapyd Financial Network 6,667 – – 1,898 8,565

Culligan (formerly 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

(c) Material disposals of unquoted investments

Year ended 31 March 2023

Opening Opening

book cost valuation

at 31 March at 31 March Realised

2022 2022 Sales gain

£’000 £’000 £’000 £’000

Investment

Culligan (formerly Waterlogic) 1,897 2,372 (2,384) 487

The above represents a part disposal, following the Waterlogic/Culligen business combination.

There were no disposals of unquoted investments in the nine months ended 31 March 2022.

Notes to the Accounts

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 71

72

Schroder British Opportunities Trust plc

(d) Transaction costs

The following transaction costs, comprising stamp duty, brokerage commission and legal fees, were incurred in the year:

Nine

months

Year ended ended

31 March 31 March

2023 2022

£’000 £’000

On acquisitions

Stamp duty and brokerage commission

18 15

Legal fees

4 (1)

On disposals

Brokerage commission 5 3

27 17

12. Current assets

Debtors

31 March 31 March

2023 2022

£’000 £’000

Dividends and interest receivable 133 88

Other debtors 18 27

151 115

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 £7,759,000 (2022: £15,452,000), represents its fair value.

13. Current liabilities

Creditors: amounts falling due within one year

31 March 31 March

2023 2022

£’000 £’000

Other creditors and accruals 1,056 1,039

1

Performance fee payable 487 –

1,543 1,039

1

Other creditors and accruals at 31 March 2022 were previously reported as £2,155,000. The 31 March 2022 balance has been restated to £1,039,000

because performance fees of £1,116.000 could not have fallen due within one year, under any circumstances. Therefore they have been r

eclassified as

creditors: amounts falling due after more than one year.

The Directors consider that the carrying amount of creditors falling due within one year approximates to their fair value.

Notes to the Accounts

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 72

Report and Accounts

for the year ended 31 March 2023

73

Financial

14. Called-up share capital

The issued share capital at the accounting date was as follows:

Nine

months

ended

31 March 31 March

2023 2022

£’000 £’000

Ordinary Shares allotted, called up and fully paid:

75,000,000 shares of 1p each:

750 750

Repurchase of 1,100,000 (2022: nil) shares into treasury (11) –

Subtotal of 73,900,000 (2022: 75,000,000) shares

739 750

1,100,000 (2022: nil) shares held in treasury 11 –

Closing balance

1

750 750

1

Represents 75,000,000 (2022: 75,000,000) shares of 1p each, including 1,100,000 (2022: nil) held in treasury.

During the year, the Company repurchased 1,100,000 of its own shares, nominal value £11,000, to hold in treasury,

representing 1.5% of the shares outstanding at the beginning of the year. The total consideration paid for these shares

amounted to £808,000. The reason for these purchases was to seek to manage the volatility of the share price discount to

NAV per share.

15. Reserves

Year ended 31 March 2023

Capital reserves

Gains Investment

and losses holding

Special on sales of gains and Revenue

reserve

1

investments

2

losses

3

reserve

4

£’000 £’000 £’000 £’000

At 31 March 2022 72,765 319 5,279 (1,010)

Gains on sales of investments based on the carrying value at the

previous balance sheet date – 1,216 – –

Net movement in investment holding gains and losses – – 1,982 –

Transfer on disposal of investments – (539) 539 –

Realised gains on foreign exchange balances – 16 – –

Repurchase of the Company’s own shares into treasury (808) – – –

Performance fee allocated to capital – (555) – –

Transaction costs – (4) – –

Retained revenue for the period – – – (639)

At 31 March 2023 71,957 453 7,800 (1,649)

Notes to the Accounts

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 73

74

Schroder British Opportunities Trust plc

Nine months ended 31 March 2023

Capital reserves

Gains Investment

and losses holding

Special on sales of gains and Revenue

reserve

1

investments

2

losses

3

reserve

4

£’000 £’000 £’000 £’000

At 30 June 2021 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)

At 31 March 2022 72,765 319 5,279 (1,010)

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.

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 31 March

2023 2022

£’000 £’000

Net assets attributable to shareholders (£’000) 79,311 78,103

Shares in issue at the year end 73,900,000 75,000,000

Net asset value per share 107.32p 104.14p

17. Reconciliation of total return on ordinary activities before finance costs and

taxation to net cash outflow from operating activities

Nine

months

Year ended ended

31 March 31 March

2023 2022

£’000 £’000

Net return/(loss) before taxation 2,016 (3,224)

Less capital (return)/loss before taxation (

2,655) 2,647

Decrease in prepayments and accrued income

(45) (65)

Decrease/(increase) in other debtors

9 (11)

Increase in creditors and performance fee payable

572 1,186

Performance fee and transaction costs allocated to capital (559) (713)

Net cash outflow from operating activities (662) (180)

18. Uncalled capital commitments

At 31 March 2023, the Company had uncalled capital commitments amounting to £5,476,000 (31 March 2022: £7,869,000) in

respect of follow-on investments, which may be called by investee companies, subject to their achievement of certain

milestones and objectives.

Notes to the Accounts

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 74

Report and Accounts

for the year ended 31 March 2023

75

Financial

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 40.

The management fee payable in respect of the year ended 31 March 2023 amounted to £458,000 (period ended 31 March

2022: £372,000), and £458,000 (31 March 2022: £650,000) was outstanding at the year/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 year (period ended 31 March

2022: nil).

A performance fee provision amounting to £555,000 (period ended 31 March 2022: £714,000) has been included in these

accounts. An amount of £487,000 is immediately payable and has been included in these accounts as a creditor falling due

within one year. The remaining balance of £1,184,000 (31 March 2022: £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 year amounted to £180,000 (period ended 31 March 2022:

£135,000). Company secretarial and administration fees amounting to £420,000 (31 March 2022: £240,000) were outstanding

at the year end.

No Director of the Company served as a Director of any company within the Schroder Group at any time during the year.

20. Related party transactions

Details of the remuneration payable to Directors are given in the Directors’ Remuneration Report on page 49 and details of

Directors’ shareholdings are given in the Directors’ Remuneration Report on page 51. Details of transactions with the Manager

are given in note 19 above. There have been no other transactions with related parties during the year (period ended

31March 2022: 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.

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 are given in note 2(c) on pages 65 and 66. Level 3 investments have

been valued in accordance with note 2(c) (ii) – (v).

The Company’s unquoted investments at 31 March 2023 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 Manager 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 vary in the range of 2.4 times to 33.5 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.

Notes to the Accounts

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 75

76

Schroder British Opportunities Trust plc

Valuation techniques include the following, along with the associated range of inputs where relevant, and the total amount

valued using each method.

Multiple Value

range £’000

Revenue multiple 2.4 to 12.1 19,877

EBITDA multiple 9.0 to 33.5 26,307

Black-Scholes-Merton-Model N/A 1,778

47,962

Valuations are cross-checked for reasonableness to alternative multiples-based, income approaches, option pricing models or

benchmark index movements as appropriate.

At 31 March 2023, the Company’s investment portfolio was categorised as follows:

2023

Level 1 Level 2 Level 3 Total

£’000 £’000 £’000 £’000

Investments in equities – quoted 26,166 – – 26,166

– unquoted – – 47,962 47,962

Total 26,166 – 47,962 74,128

At 31 March 2022, the Company’s investment portfolio was 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

There have been no transfers between Levels 1, 2 or 3 during the year (period ended 31 March 2022: nil).

Movements in fair value measurements included in Level 3 during the year are as follows:

Nine

months

Year ended ended

31 March 31 March

2023 2022

£’000 £’000

Opening fair value of Level 3 Investments 27,408 20,730

Purchases at cost

15,149 226

Sales proceeds

(2,384) –

Net gains on investments 7,789 6,452

Closing fair value of Level 3 investments 47,962 27,408

Closing book cost

30,803 17,551

Closing investment holding gains 17,159 9,857

Closing fair value of Level 3 investments 47,962 27,408

Notes to the Accounts

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 76

Report and Accounts

for the year ended 31 March 2023

77

Financial

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 has oversight of 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 year (2022: nil).

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 31 March

2023 2022

£’000 £’000

Exposure to floating interest rates:

Cash at bank and in hand 7,759 15,452

The floating rate assets comprise cash deposits on call. Sterling cash deposits at call earn interest at floating rates based on

Sterling Overnight Index Average rates (“SONIA”).

The above period end amount may not be representative of the exposure to interest rates during the year, due to fluctuating

cash balances.

Notes to the Accounts

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 77

78

Schroder British Opportunities Trust plc

Interest rate sensitivity

The following table illustrates the sensitivity of the return after taxation for the year 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 2023 31 March 2022

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

19 (19) 39 (39)

Capital return – – – –

Total return after taxation 19 (19) 39 (39)

Net assets 19 (19) 39 (39)

(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 year end comprises the following:

31 March 31 March

2023 2022

£’000 £’000

Investments held at fair value through profit or loss 74,128 64,691

The above data is broadly representative of the exposure to market price risk during the year.

Concentration of exposure to market price risk

A sector and geographical analysis of the Company’s investments is given on page 20. This shows a concentration of exposure

to economic conditions in the United Kingdom. In addition, the Company's holds 9 (31 March 2022: 6) investments amounting

to approximately £45.0 million (31 March 2022: £27.4 million), or 58.8% (31 March 2022: 35.1%) of NAV, whose valuation is

deemed to be potentially volatile, due to the valuation techniques which have sensitive inputs.

Market price risk sensitivity

The following table illustrates the sensitivity of the return after taxation for the year 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 and performance fee, but assumes that all other variables are

held constant.

Notes to the Accounts

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 78

Report and Accounts

for the year ended 31 March 2023

79

Financial

Notes to the Accounts

31 March 2023 31 March 2022

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

(89) 89 (78) 78

Capital return 14,826 (14,826) 12,938 (12,938)

Total return after taxation and net assets 14,737 (14,737) 12,860 (12,860)

Percentage change in net asset value

18.6% (18.6%) 16.5% (16.5%)

(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 year end, the Company’s assets included quoted “public equity investments” amounting to £26,166,000 (31 March 2022:

£37,283,000), which can be sold to meet ongoing funding requirements. Additionally, the Company had less liquid,

“

private

equity investments” amounting to £45,027,000 (31 March 2022: £27,408,000) and cash balances amounting to £7,759,000

(31 March 2022: £15,452,000).

Liquidity risk exposure

Contractual maturities of financial liabilities, based on the earliest date on which payment can be required are as follows:

31 March 2023 31 March 2022

Three More Three More

months than one months than one

or less year Total or less year Total

£’000 £’000 £’000 £’000 £’000 £’000

Creditors: amounts falling due within one year

Other creditors and accruals 1,543 1,184 2,727 1,039 1,116 2,155

(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.

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 A1 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 statement of financial position under debtors and cash at bank and in hand represent the

maximum exposure to credit risk at the year end. No debtors are past their due date and none have been provided for.

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 79

80

Schroder British Opportunities Trust plc

Notes to the Accounts

(d) Fair values of financial assets and financial liabilities

All financial assets and liabilities are either carried in the statement of financial position at fair value, or at 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 31 March

2023 2022

£’000 £’000

Equity

Called-up share capital 750 750

Reserves 78,561 77,353

Total equity 79,311 78,103

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

– any dividend to be paid, in excess of that which is required to be distributed.

24. Events after the accounting date which have not been reflected in the accounts

A performance fee amounting to £487,000 payable to the Manager, in relation to the partial disposal of Waterlogic, is included

in the Statement of Financial Position within creditors falling due within one year. However since the year end, the Board has

accepted Schroders’ offer to disregard the Payment Amount, which would have triggered a performance fee pay-out in the

year ending 31 March 2024. This agreement will have the effect of moving this performance fee into creditors falling due after

more than one year in the Statement of Financial Position. Schroders considers this concession to be appropriate due to the

disappointing performance of the share price versus the net asset value.

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 80

Report and Accounts

for the year ended 31 March 2023

81

Financial

25. Disclosures regarding material unquoted holdings (comprising more than 5% of

the portfolio and/or included in the top ten holdings)

Fair value Fair value Total income

Cost of the at 31 March at 31 March received in

Description of Class of investment 2023 2022 the year

Holding its business shares held £’000 £’000 £’000 £’000

Mintec Provides market Ordinary 6,305 8,614 Not held –

intelligence, commodity

prices and price forecasts

across the agri-food

supply chain

Rapyd Financial Network Global Fintech company Ordinary 3,297 8,399 8,565 –

Cera EHP S à r l Provides home care Ordinary 3,399 6,986 4,509 –

services for elderly

people

Pirum Systems Provides a secure Ordinary 5,752 6,087 Not held –

processing hub which

seamlessly links market

participants together,

allowing them to

electronically process and

verify key transaction details

Culligan (formerly Global provider of Ordinary 2,623 5,053

1

6,045 –

Waterlogic) purified drinking

water dispensers

EasyPark Digital parking, Ordinary 1,996 4,492 2,775 –

electrical vehicle

charging and

mobility services

CFC Underwriting Specialist in insurance Ordinary 2,610 4,098 Not held –

for cyber security and

tech insurance for

IT consultants

Learning Curve Provider of training Ordinary 2,188 2,455 2,336 –

and education

services for adults

1

Net of a £2,384,000 distribution received during the year, following the Waterlogic/Culligan business combination.

The Company has not included certain disclosures required by paragraph 82(c) of the SORP. In particular, turnover, pre-tax

profit and attributable net assets, because it is not publicly available.

Notes to the Accounts

176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 81

Schroder British Opportunities Trust plc

82

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 Wednesday

27September 2023 at 1.00 p.m. The formal Notice of

Meeting is set out on page 83.

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 49 to 51. Resolution3

concerns the authorisation of the Directors to determine that

no final dividend for the year ended 31March 2023 will be

paid. Resolutions 4 to 6 invite shareholders to re-elect each

of the Directors for another financial reporting period,

following the recommendations of the nomination

committee, set out on page 48 (their biographies are set out

on page 38). Resolutions 7 and8 concern the

re-appointment and remuneration of the Company’s auditor,

discussed in the audit and risk committee report on pages43

to 45.

Special business

Resolution 9: Directors’ authority to allot shares

(ordinary resolution) and resolution 10: 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

£73,900 (being 10% of the issued share capital (excluding any

shares held in treasury) as at 5 July 2023).

A special resolution will be proposed to authorise the

Directors to allot shares up to a maximum aggregate

nominal amount of £73,900 (being 10% of the issued share

capital as at 5 July 2023) 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 2024 unless renewed, varied or

revoked earlier.

Resolution 11: authority to make market

purchases of the Company’s own shares (special

resolution)

On 5 September 2022, a special resolution was passed to

give the Company authority to make market purchases of up

to 14.99% of the ordinary shares. 454,892 shares were

bought back under this authority.

The Directors will continue to monitor the level of the

discount and consider the merits of further buybacks, 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 5 July 2023

(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.

If renewed, this authority will lapse at the conclusion of the

AGM in 2024 unless renewed, varied or revoked earlier .

Resolution 12: notice period for general meetings

(special resolution)

Resolution12 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

2024. 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.

176432 British Opportunities Trust plc Annual Report Pt4.qxp_176432 British Opportunities Trust plc Annual Report Pt4 05/07/2023 17:06 Page 82

Report and Accounts

for the year ended 31 March 2023

Annual General Meeting

83

Notice of Annual General Meeting

Notice is hereby given that the Annual General Meeting of

Schroder British Opportunities Trust plc will be held on

Wednesday 27September 2023 at 1.00 p.m. at 1 London Wall

Place, London EC2Y 5AU to consider the following resolutions, of

which resolutions 1 to 9 will be proposed as ordinary resolutions,

and resolutions 10 to 12 will be proposed as special resolutions:

1. To receive the Directors’ Report and the audited accounts for

the year ended 31 March 2023.

2. To approve the Directors’ Report on Remuneration for the

year ended 31 March 2023.

3. To authorise the Directors to determine that no final

dividend for the year ended 31 March 2023 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 re-appoint Ernst & Young LLP as auditor to the Company.

8. To authorise the Directors to determine the remuneration of

Ernst & Young LLP as auditor to the Company.

9. 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 £73,900 (being 10% of the

issued ordinary share capital, excluding treasury shares, at

5July 2023) 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

2024, 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.”

10. To consider and, if thought fit, to pass the following

resolution as a special resolution:

“That, subject to the passing of Resolution 9 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 9 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 £73,900,

(representing 10% of the aggregate nominal amount of the

share capital in issue, excluding treasury shares at 5July

2023); 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.”

11. 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 11,077,610, representing 14.99% of the

Company’s issued ordinary share capital as at 5 July

2023 (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 2024 (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.”

12. 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

5 July 2023

Registered Office:

1 London Wall Place,

London EC2Y 5AU

Registered Number: 12892325

176432 British Opportunities Trust plc Annual Report Pt4.qxp_176432 British Opportunities Trust plc Annual Report Pt4 05/07/2023 17:06 Page 83

Schroder British Opportunities Trust plc

84

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 +44 (0) 800 032 0641. (If calling from outside of

the UK, please ensure the country code is used), 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 1:00 p.m. on 25 September 2023. If

you have any difficulties with online voting, you should

contact the shareholder helpline on +44 (0) 800 032 0641. If

calling from outside of the UK, please ensure the country

code is used.

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 25September 2023, 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

25September 2023 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.

Explanatory Notes to the Notice of Meeting

176432 British Opportunities Trust plc Annual Report Pt4.qxp_176432 British Opportunities Trust plc Annual Report Pt4 05/07/2023 17:06 Page 84

Report and Accounts

for the year ended 31 March 2023

Annual General Meeting

85

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,

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 page 38 of the Company’s report

and accounts for the year ended 31 March 2023.

7. As at 5 July 2023, 75,000,000 ordinary shares of 1 pence

each were in issue (1,100,000 were held in treasury).

Therefore the total number of voting rights of the Company

as at 5 July 2023 was 73,900,000.

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, 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

176432 British Opportunities Trust plc Annual Report Pt4.qxp_176432 British Opportunities Trust plc Annual Report Pt4 05/07/2023 17:06 Page 85

Schroder British Opportunities Trust plc

86

The terms and performance measures below are those

commonly used by investment companies to assess

values, investment performance and operating costs.

Numerical calculations are given where relevant. Some

of the financial measures below are classified Alternative

Performance Measures (“APMs”) as defined by the

European Securities and Markets Authority. Under this

definition, APMs include a financial measure of historical

financial performance or financial position, other than a

financial measure defined or specified in the applicable

financial reporting framework. APMs have been marked

with an asterisk.

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 Manager

considers 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 Manager

considers would benefit from their support in helping them

incorporate SDGs into their business planning and/or in

reporting their alignment with SDGs.

“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 107.32p (31 March 2022: 104.14p)

represents the net assets attributable to equity shareholders

of £79,311,000 (31 March 2022: £78,103,000) divided by the

73,900,000 (31 March 2022: 75,000,000) shares in issue at the

year 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. If shares are trading at a discount, investors would be

paying less than the value attributable to the shares by

reference to the underlying assets. A premium or discount is

generally the consequence of supply and demand for the

shares on the stock market. The discount or premium is

expressed as a percentage of the NAV per share. The

discount at the year end amounted to 36.2% (31March 2022:

19.3%), as the closing share price at 68.5p (31March 2022:

84.0p) was 36.2% (31March 2022: 19.3%) lower than the

closing NAV of 107.32p (31March 2022: 104.14p).

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.

Definitions of Terms and Performance Measures

*The full policy can be found on the Company’s website.

176432 British Opportunities Trust plc Annual Report Pt4.qxp_176432 British Opportunities Trust plc Annual Report Pt4 05/07/2023 17:06 Page 86

Report and Accounts

for the year ended 31 March 2023

Annual General Meeting

87

At the year end, the Company had no loans or overdrafts,

and thus was in a net cash position, calculated as follows:

31 March 31 March

2023 2022

£’000 £’000

Borrowings used for investment

purposes, less cash (7,759) (15,452)

Net assets 79,311 78,103

Net cash (9.8)% (19.8)%

Ongoing Charges**

The Ongoing Charges (“OGC”) figure is a measure of the

ongoing operating cost of the Company. It is 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 year. For the year ended 31 March 2023,

operating expenses amounted to £1,108,000 (period ended

31 March 2022: £872,000, giving £1,126,000 when adjusted

to an annualised figure). This produces an OGC figure of

1.47% (period ended 31 March 2022: 1.39%), when expressed

as a percentage of the average daily net asset values during

the year of £75.3 million (period ended 31March 2022: £80.8

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.

**Alternative performance Measures (“APMs”).

Definitions of Terms and Performance Measures

176432 British Opportunities Trust plc Annual Report Pt4.qxp_176432 British Opportunities Trust plc Annual Report Pt4 05/07/2023 17:06 Page 87

Schroder British Opportunities Trust plc

88

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 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 2023

these were:

Maximum Actual

Leverage exposure ratio ratio

Gross method 250.0% 103.4%

Commitment method 200.0% 93.5%

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.

Report and Accounts

for the year ended 31 March 2023

176432 British Opportunities Trust plc Annual Report Pt4.qxp_176432 British Opportunities Trust plc Annual Report Pt4 05/07/2023 17:06 Page 88

176432 British Opportunities Trust plc Annual Report Pt4.qxp_176432 British Opportunities Trust plc Annual Report Pt4 05/07/2023 17:06 Page 89

Directors

Neil England (Chairman)

Diana Dyer Bartlett

Tim Jenkinson

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: +44 (0) 800 032 0641

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.

176432 British Opportunities Trust plc Annual Report Pt4.qxp_176432 British Opportunities Trust plc Annual Report Pt4 05/07/2023 17:06 Page 90