Schroder British Opportunities Trust plc
Annual Report and Financial Statements
for the year ended 31 March 2024
Annual Report and Financial Statements
for the year ended 31 March 2024
Schroder
British Opportunities Trust plc
Some of the financial measures are classified as Alternative Performance Measures (“APMs”), 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
pages 80 and 81 together with supporting calculations, where appropriate.
Performance Summary
Net asset value (“NAV”) per
share return
2.5%
Year ended 31 March 2023: 3.1%
Share price return
16.1%
Year ended 31 March 2023: –18.5%
Share price discount
to NAV per share*
27.8%
Year ended 31 March 2023: 36.2%
Investment objective
Schroder British Opportunities Trust plc (the “Company”) seeks 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
Manager considers 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% of Net Asset Value, calculated at the time of drawdown of the relevant borrowing.
Why invest in the Company?
A best of British portfolio
With high corporate governance standards and an entrepreneurial heritage, there are a wealth of innovative opportunities among British
businesses, which can offer strong long-term growth potential.
Highly experienced managers
Combining Schroder’s public equity and private equity investment expertise in a uniquely compelling investment proposition.
A broader UK opportunity set
Taking full advantage of both public and private equity markets means access to an enhanced UK investment universe of high quality, high
growth companies, maximising the opportunity for value creation.
Some of the financial measures are classified as Alternative Performance Measures (“APMs”), 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
pages 80 and 81 together with supporting calculations, where appropriate.
Performance Summary
Net asset value (“NAV”) per
share return
2.5%
Year ended 31 March 2023: 3.1%
Share price return
16.1%
Year ended 31 March 2023: –18.5%
Share price discount
to NAV per share*
27.8%
Year ended 31 March 2023: 36.2%
Investment objective
Schroder British Opportunities Trust plc (the “Company”) seeks 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
Manager considers 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% of Net Asset Value, calculated at the time of drawdown of the relevant borrowing.
Why invest in the Company?
A best of British portfolio
With high corporate governance standards and an entrepreneurial heritage, there are a wealth of innovative opportunities among British
businesses, which can offer strong long-term growth potential.
Highly experienced managers
Combining Schroder’s public equity and private equity investment expertise in a uniquely compelling investment proposition.
A broader UK opportunity set
Taking full advantage of both public and private equity markets means access to an enhanced UK investment universe of high quality, high
growth companies, maximising the opportunity for value creation.
Schroder
British Opportunities Trust plc
1
Strategic Report
Chairman’s Statement 4
Investment Manager’s Review 6
Investment Approach and Process 13
Top 10 Equity Investments 16
Investment Portfolio 22
Business Review 23
Governance
Board of Directors 34
Directors’ Report 36
Audit and Risk Committee Report 39
Management Engagement
Committee Report 42
Nomination Committee Report 43
Valuations Committee Report 45
Directors’ Remuneration Report 46
Statement of Directors’
Responsibilities 49
Financial
Independent Auditors Report 52
Statement of Comprehensive Income 58
Statement of Changes in Equity 59
Statement of Financial Position 60
Cash Flow Statement 61
Notes to the Financial Statements 62
Other Information
(Unaudited)
Annual General Meeting –
Recommendations 76
Notice of Annual General Meeting 77
Explanatory Notes to the
Notice of Meeting 78
Definitions of Terms and Alternative
Performance Measures 80
Shareholder Information 82
Information about the Company 84
Shares in issue
73,900,000
Year ended 31 March 2023: 73,900,000
Ongoing charges ratio*
1.40%
Year ended 31 March 2023: 1.47%
^includes investment in liquidity fund.
Share price
79.50p
Year ended 31 March 2023: 68.50p
Net Cash*^
11,585,000
Year ended 31 March 2023: 7,759,000
Financial Other Information (unaudited) Governance Introduction Strategic Report
Scan this QR code on your
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to receive regular updates on
Schroder British Opportunities
Trust plc
This is not a sustainable product for the purposes of the Financial Conduct Authority
(“FCA”) rules. References to the consideration of sustainability factors and ESG integration
should not be construed as a representation that the Company seeks to achieve any particular
sustainability outcome.
Strategic Report
Chairman’s Statement 4
Investment Manager’s Review 6
Investment Approach and Process 13
Top 10 Equity Investments 16
Investment Portfolio 22
Business Review 23
Governance
Board of Directors 34
Directors’ Report 36
Audit and Risk Committee Report 39
Management Engagement
Committee Report 42
Nomination Committee Report 43
Valuations Committee Report 45
Directors’ Remuneration Report 46
Statement of Directors’
Responsibilities 49
Financial
Independent Auditors Report 52
Statement of Comprehensive Income 58
Statement of Changes in Equity 59
Statement of Financial Position 60
Cash Flow Statement 61
Notes to the Financial Statements 62
Other Information
(Unaudited)
Annual General Meeting –
Recommendations 76
Notice of Annual General Meeting 77
Explanatory Notes to the
Notice of Meeting 78
Definitions of Terms and Alternative
Performance Measures 80
Shareholder Information 82
Information about the Company 84
Shares in issue
73,900,000
Year ended 31 March 2023: 73,900,000
Ongoing charges ratio*
1.40%
Year ended 31 March 2023: 1.47%
^includes investment in liquidity fund.
Share price
79.50p
Year ended 31 March 2023: 68.50p
Net Cash*^
11,585,000
Year ended 31 March 2023: 7,759,000
Financial Other Information (unaudited) Governance Introduction Strategic Report
Scan this QR code on your
smartphone camera to sign-up
to receive regular updates on
Schroder British Opportunities
Trust plc
This is not a sustainable product for the purposes of the Financial Conduct Authority
(“FCA”) rules. References to the consideration of sustainability factors and ESG integration
should not be construed as a representation that the Company seeks to achieve any particular
sustainability outcome.
2
Schroder
Asian Total Return Investment Company plc
3
Strategic Report
Strategic Report
Chairman’s Statement 4
Investment Manager’s Review 6
Investment Approach and Process 13
Top 10 Equity Investments 16
Investment Portfolio 22
Business Review 23
Strategic Report
Strategic Report
Chairman’s Statement 4
Investment Manager’s Review 6
Investment Approach and Process 13
Top 10 Equity Investments 16
Investment Portfolio 22
Business Review 23
4
Schroder British Opportunities Trust plc
Chairman’s Statement
The current portfolio of
innovative, predominantly UK
companies are growing
strongly, the majority in line or
ahead of expectations. The
patient investor that can look
beyond the recent market
environment should be well
rewarded.
I am pleased to present your Company’s fourth annual report and
financial statements since the launch of the Company in 2020. This
report covers the year ended 31 March 2024.
Investment strategy
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. Our objective is to deliver long-term and
sustainable capital growth for shareholders. We are not venture
investors. We focus on the growth and later stage buyout sector where
earnings are more predictable but strong growth is still available.
On 28 November 2023, the FCA published its final policy statement
(PS23/16) on Sustainability Disclosure Requirements and investment
labels and, as a result, the Board is reviewing both the Company's
investment policy and the disclosures it makes in its reporting.
Market
The UK equity market, and investment companies in particular,
remains largely out of favour with investors and UK pension funds.
Growth companies who require cash to fuel that growth saw their
ratings suffer as interest rates increased and that has sustained in
many cases, despite forecasts of lower rates as UK inflation falls back
into a lower and more normal range. The market appears not to
discriminate effectively between companies that need cash and those
that don’t. The majority of the companies in your Company’s private
portfolio are already profitable with positive operating cash flows or
are funded through to that point.
Many commentators predict a market recovery but differ in their
opinion on the likely timing of this. Macro-economic factors such as
the Federal Reserve’s approach to managing the US economy, where
growth is stronger than Europe and there is less reason to reduce
rates, and the conflicts in Europe and the Middle East, may well be
influential.
Performance
I am pleased to report that your Company’s NAV per share increased
2.5% from 107.32p to 110.05p during the year under review. This
follows an increase in the previous year of 3.1% and 12.3% since
inception. This steady growth is despite portfolio valuations being
affected by market sentiment towards growth companies and, in the
case of the private portfolio, lower multiples in the comparator
groups used.
Private portfolio
The Company’s private equity portfolio has continued to perform well,
in part due to our focus on growth capital and buyout areas of the
market in contrast to venture capital and pre-IPO areas, which have
been more negatively impacted by rising inflation and interest rates.
Of the Company’s portfolio of nine private businesses as at 31 March
2024, seven are exceeding or in line with performance expectations.
In aggregate, the companies are demonstrating strong sales growth
(24% LTM sale growth)
1
and robust margins (46% EBITDA margin)
2
,
whilst being valued at a discount to public comparables.
The private portfolio represented 65% of the Company’s NAV as at
31 March 2024 and produced a fair value gain of 6.3% over the year.
Public portfolio
Unfortunately the Company’s public equity holdings detracted from
performance despite being helped by a take-over bid for City Pub
Group by Young & Co’s Brewery, which represents the sixth quoted
portfolio company to be bid for since the Company’s inception. Not
only does this endorse the strength and potential of some of our
portfolio holdings but it also demonstrates external interest in
growing UK companies.
The public portfolio represented 23.9% of the Company’s NAV as at
31 March 2024 and produced a fair value loss of 2.3% over the year.
Further comment on performance and investment activity can be
found in the Investment Managers’ Review.
Valuations
Your Board considers its governance role in the valuations process
to be of utmost importance. Public investments are valued at the
prevailing market price and the private portfolio is subject to
a valuations process led by independent non-executive Director
Professor Tim Jenkinson, an acknowledged expert of private equities
valuation metrics. Your Board understands that shareholders are
often sceptical of private equity valuations when they can’t be readily
verified. The Company is fortunate to have a specialist valuations
team within Schroders, which is independent of the Investment
1
Weighted average sales growth of all of the Company’s private equity portfolio companies (except Graphcore) for the last twelve months (LTM).
2
Weighted average EBITDA (earnings before interest, taxes, depreciation and amortization) margin of all of the Company’s private equity portfolio companies valued
on an EBITDA basis (CFC, Culligan, Learning Curve, Mintec and Pirum).
Chairman’s Statement
The current portfolio of
innovative, predominantly UK
companies are growing
strongly, the majority in line or
ahead of expectations. The
patient investor that can look
beyond the recent market
environment should be well
rewarded.
I am pleased to present your Company’s fourth annual report and
financial statements since the launch of the Company in 2020. This
report covers the year ended 31 March 2024.
Investment strategy
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. Our objective is to deliver long-term and
sustainable capital growth for shareholders. We are not venture
investors. We focus on the growth and later stage buyout sector where
earnings are more predictable but strong growth is still available.
On 28 November 2023, the FCA published its final policy statement
(PS23/16) on Sustainability Disclosure Requirements and investment
labels and, as a result, the Board is reviewing both the Company's
investment policy and the disclosures it makes in its reporting.
Market
The UK equity market, and investment companies in particular,
remains largely out of favour with investors and UK pension funds.
Growth companies who require cash to fuel that growth saw their
ratings suffer as interest rates increased and that has sustained in
many cases, despite forecasts of lower rates as UK inflation falls back
into a lower and more normal range. The market appears not to
discriminate effectively between companies that need cash and those
that don’t. The majority of the companies in your Company’s private
portfolio are already profitable with positive operating cash flows or
are funded through to that point.
Many commentators predict a market recovery but differ in their
opinion on the likely timing of this. Macro-economic factors such as
the Federal Reserve’s approach to managing the US economy, where
growth is stronger than Europe and there is less reason to reduce
rates, and the conflicts in Europe and the Middle East, may well be
influential.
Performance
I am pleased to report that your Company’s NAV per share increased
2.5% from 107.32p to 110.05p during the year under review. This
follows an increase in the previous year of 3.1% and 12.3% since
inception. This steady growth is despite portfolio valuations being
affected by market sentiment towards growth companies and, in the
case of the private portfolio, lower multiples in the comparator
groups used.
Private portfolio
The Company’s private equity portfolio has continued to perform well,
in part due to our focus on growth capital and buyout areas of the
market in contrast to venture capital and pre-IPO areas, which have
been more negatively impacted by rising inflation and interest rates.
Of the Company’s portfolio of nine private businesses as at 31 March
2024, seven are exceeding or in line with performance expectations.
In aggregate, the companies are demonstrating strong sales growth
(24% LTM sale growth)
1
and robust margins (46% EBITDA margin)
2
,
whilst being valued at a discount to public comparables.
The private portfolio represented 65% of the Company’s NAV as at
31 March 2024 and produced a fair value gain of 6.3% over the year.
Public portfolio
Unfortunately the Company’s public equity holdings detracted from
performance despite being helped by a take-over bid for City Pub
Group by Young & Co’s Brewery, which represents the sixth quoted
portfolio company to be bid for since the Company’s inception. Not
only does this endorse the strength and potential of some of our
portfolio holdings but it also demonstrates external interest in
growing UK companies.
The public portfolio represented 23.9% of the Company’s NAV as at
31 March 2024 and produced a fair value loss of 2.3% over the year.
Further comment on performance and investment activity can be
found in the Investment Managers’ Review.
Valuations
Your Board considers its governance role in the valuations process
to be of utmost importance. Public investments are valued at the
prevailing market price and the private portfolio is subject to
a valuations process led by independent non-executive Director
Professor Tim Jenkinson, an acknowledged expert of private equities
valuation metrics. Your Board understands that shareholders are
often sceptical of private equity valuations when they can’t be readily
verified. The Company is fortunate to have a specialist valuations
team within Schroders, which is independent of the Investment
1
Weighted average sales growth of all of the Company’s private equity portfolio companies (except Graphcore) for the last twelve months (LTM).
2
Weighted average EBITDA (earnings before interest, taxes, depreciation and amortization) margin of all of the Company’s private equity portfolio companies valued
on an EBITDA basis (CFC, Culligan, Learning Curve, Mintec and Pirum).
Introduction
Strategic Report
Governance
Financial
Other Information (unaudited)
Schroder British Opportunities Trust plc 5
Managers, and who report their findings directly to the Board. The
results reported reflect their in-depth analysis and a discursive and
challenging valuations process. In all cases, public market
comparables are used.
Discount management
The discount to NAV narrowed during the year under review from
36.2% to 27.8%. Given your Board’s confidence in the valuations
process, there is little logic to this discount applying to your Company
other than to cite market sentiment to private equity investment
companies generally. It certainly does not reflect the aggregate
operational performance of the Company’s unquoted holdings since
inception.
Buy-backs are one of several mechanisms your Board actively
considers to reduce this discount. The use of cash reserves is
a matter of regular review. We aim to balance the benefits of highly
accretive buy-backs when discounts are high against ensuring that
we hold appropriate reserves to fund potential follow-on investments
in the private portfolio and capture the best of the new investment
opportunities that we continue to see. Given the current pipeline,
particularly from companies that want to stay private for longer and
taking into consideration the current size of the Company, we have
chosen not to buy back throughout the year.
Company size
Your Company successfully launched in 2020 when the IPO market
was very challenging. Indeed, two other investment company IPOs
were withdrawn from the market shortly before the Company was
launched. This impacted the amount raised and your Board is
considering several options to increase the size of the Company to
increase its appeal to wealth managers and to improve its liquidity.
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.
Board
There have been no changes to the Board during the year. For cost
reasons, we have operated with just three Directors since losing
Christopher Keljik last year, but this was not optimal. Additionally,
I have decided to retire and will not be offering myself for re-election
at the forthcoming AGM. We have therefore recently completed an
extensive recruitment process using a specialist Board recruitment
firm to bring Board strength back to four following my retirement.
I am pleased to welcome Justin Ward and Jemma Bruton to the Board
as independent non-executive Directors. Justin will replace me as
Chairman after the AGM on 18 September 2024, following a handover
period.
Justin is a Director and active investment professional with extensive
private equity experience. He is currently a non-executive Director and
Committee Chairman at Hargreave Hale AIM VCT and at The Income &
Growth VCT; following a career at CVC Capital Partners and as a
partner at Hermes Private Equity and Bridgepoint Development
Capital.
Jemma is currently co-managing director of Salica Investments
Advisory LLP (formerly Hambro Perks Advisory LLP) and formerly an
executive Director at Goldman Sachs. She also has extensive
experience in the private equity segments targeted by our Company.
It has been my pleasure to Chair your Company since its IPO in 2020
and I extend my grateful thanks to shareholders for their support and
to my Board colleagues for their diligence and hard work, particularly
over the period where we were such a small team.
Biographical details for each of the Directors can be found on
pages 34 and 35.
Presentation from the Investment Managers
The Investment Managers will be presenting at a webinar on Tuesday,
16 July 2024 from 09:00am – 10:00am to provide some insight into
their decision making and the current portfolio. Shareholders are
encouraged to register for the event at:
https://www.schroders.com/sbot.
Regular news about the Company can be found on the Company’s
website: https://www.schroders.com/sbot.
Annual General Meeting (“AGM”)
The AGM will be held on Wednesday, 18 September 2024 at 1.00pm
at 1 London Wall Place, London EC2Y 5AU.
Your Board welcomes shareholders’ comments and questions for it or
for the Investment Managers. A short presentation will be given by the
investment management team at the AGM. 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.
Please note that all voting will be on a poll and we encourage all
shareholders to exercise their votes by means of registering them with
the Company’s Registrar ahead of the meeting, online or by completing
paper proxy forms, and to appoint the Chairman of the meeting as
their proxy. Information on voting can be found in the Notice of Annual
General Meeting on page 77. 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.
Outlook
The current economic environment continues to be challenging with
many company valuations trading at close to historic lows. The UK
stock market represents one of the cheapest equity markets in the
world and the UK mid-cap sector looks particularly attractive. Interest
rates remain stubbornly high for now but UK inflation numbers are
better which suggests a more positive medium-term outlook for
growth companies. Your Board and the Investment Managers view
the Company’s current discount as unjustly high and at some point
we expect this to start to close. The Bank of England may well provide
the trigger for this event in the coming months.
The Schroders Capital team has an extensive general partner (“GP”)
network providing an unrivalled access to a range of private company
investments. Your Company offers the public market investor a unique
opportunity to gain exposure to these companies during their growth
phase. As at year end, the total for the Company’s cash and liquidity
fund investment was £11.6 million. This financial position enables the
Company to be well positioned to take advantage of opportunities in
the pipeline. The number of companies listed on the London Stock
Exchange has steadily fallen in recent years as an increasing number
of businesses have been taken private or have sought private equity
finance in preference to a UK listing. The Company has full access to
the rich universe of UK public and private investment opportunities
and is not limited to the shrinking investment pool faced by
investment companies focusing solely on UK listed companies.
The current portfolio of innovative, predominantly UK companies are
growing strongly, the majority in line or ahead of expectations. The
patient investor that can look beyond the recent market environment
should be well rewarded.
Neil England
Chairman
10 July 2024
Schroder British Opportunities Trust plc 5
Managers, and who report their findings directly to the Board. The
results reported reflect their in-depth analysis and a discursive and
challenging valuations process. In all cases, public market
comparables are used.
Discount management
The discount to NAV narrowed during the year under review from
36.2% to 27.8%. Given your Board’s confidence in the valuations
process, there is little logic to this discount applying to your Company
other than to cite market sentiment to private equity investment
companies generally. It certainly does not reflect the aggregate
operational performance of the Company’s unquoted holdings since
inception.
Buy-backs are one of several mechanisms your Board actively
considers to reduce this discount. The use of cash reserves is
a matter of regular review. We aim to balance the benefits of highly
accretive buy-backs when discounts are high against ensuring that
we hold appropriate reserves to fund potential follow-on investments
in the private portfolio and capture the best of the new investment
opportunities that we continue to see. Given the current pipeline,
particularly from companies that want to stay private for longer and
taking into consideration the current size of the Company, we have
chosen not to buy back throughout the year.
Company size
Your Company successfully launched in 2020 when the IPO market
was very challenging. Indeed, two other investment company IPOs
were withdrawn from the market shortly before the Company was
launched. This impacted the amount raised and your Board is
considering several options to increase the size of the Company to
increase its appeal to wealth managers and to improve its liquidity.
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.
Board
There have been no changes to the Board during the year. For cost
reasons, we have operated with just three Directors since losing
Christopher Keljik last year, but this was not optimal. Additionally,
I have decided to retire and will not be offering myself for re-election
at the forthcoming AGM. We have therefore recently completed an
extensive recruitment process using a specialist Board recruitment
firm to bring Board strength back to four following my retirement.
I am pleased to welcome Justin Ward and Jemma Bruton to the Board
as independent non-executive Directors. Justin will replace me as
Chairman after the AGM on 18 September 2024, following a handover
period.
Justin is a Director and active investment professional with extensive
private equity experience. He is currently a non-executive Director and
Committee Chairman at Hargreave Hale AIM VCT and at The Income &
Growth VCT; following a career at CVC Capital Partners and as a
partner at Hermes Private Equity and Bridgepoint Development
Capital.
Jemma is currently co-managing director of Salica Investments
Advisory LLP (formerly Hambro Perks Advisory LLP) and formerly an
executive Director at Goldman Sachs. She also has extensive
experience in the private equity segments targeted by our Company.
It has been my pleasure to Chair your Company since its IPO in 2020
and I extend my grateful thanks to shareholders for their support and
to my Board colleagues for their diligence and hard work, particularly
over the period where we were such a small team.
Biographical details for each of the Directors can be found on
pages 34 and 35.
Presentation from the Investment Managers
The Investment Managers will be presenting at a webinar on Tuesday,
16 July 2024 from 09:00am – 10:00am to provide some insight into
their decision making and the current portfolio. Shareholders are
encouraged to register for the event at:
https://www.schroders.com/sbot.
Regular news about the Company can be found on the Company’s
website: https://www.schroders.com/sbot.
Annual General Meeting (“AGM”)
The AGM will be held on Wednesday, 18 September 2024 at 1.00pm
at 1 London Wall Place, London EC2Y 5AU.
Your Board welcomes shareholders’ comments and questions for it or
for the Investment Managers. A short presentation will be given by the
investment management team at the AGM. 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.
Please note that all voting will be on a poll and we encourage all
shareholders to exercise their votes by means of registering them with
the Company’s Registrar ahead of the meeting, online or by completing
paper proxy forms, and to appoint the Chairman of the meeting as
their proxy. Information on voting can be found in the Notice of Annual
General Meeting on page 77. 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.
Outlook
The current economic environment continues to be challenging with
many company valuations trading at close to historic lows. The UK
stock market represents one of the cheapest equity markets in the
world and the UK mid-cap sector looks particularly attractive. Interest
rates remain stubbornly high for now but UK inflation numbers are
better which suggests a more positive medium-term outlook for
growth companies. Your Board and the Investment Managers view
the Company’s current discount as unjustly high and at some point
we expect this to start to close. The Bank of England may well provide
the trigger for this event in the coming months.
The Schroders Capital team has an extensive general partner (“GP”)
network providing an unrivalled access to a range of private company
investments. Your Company offers the public market investor a unique
opportunity to gain exposure to these companies during their growth
phase. As at year end, the total for the Company’s cash and liquidity
fund investment was £11.6 million. This financial position enables the
Company to be well positioned to take advantage of opportunities in
the pipeline. The number of companies listed on the London Stock
Exchange has steadily fallen in recent years as an increasing number
of businesses have been taken private or have sought private equity
finance in preference to a UK listing. The Company has full access to
the rich universe of UK public and private investment opportunities
and is not limited to the shrinking investment pool faced by
investment companies focusing solely on UK listed companies.
The current portfolio of innovative, predominantly UK companies are
growing strongly, the majority in line or ahead of expectations. The
patient investor that can look beyond the recent market environment
should be well rewarded.
Neil England
Chairman
10 July 2024
6
Schroder British Opportunities Trust plc
Investment Managers’ Review
Summary
Market
In the summer months of 2023, the US Federal Reserve and the Bank of England both concluded their interest rate hiking cycles. Since then,
central banks have maintained a tight monetary policy without the need for further interest rate increases. This is due to easing inflationary
pressures, with goods and energy prices moderating while services and wage inflation have remained relatively stable. However, initial
expectations of early and significant interest rate cuts in 2024 have been pushed further into the future and are expected to be more modest
in scale.
!"#$#%"$&'()*+,*-$#%) .,*/+,&",',0)*0")1 23/&,,4
Rory Bateman Tim Creed
Uzo Ekwue Peraveenan Sriharan
The Company’s differentiated
public-private equity strategy
enables us to continue to
invest without
boundaries.
Net asset value increased by 2.5%, from
£79.3 million as at 31 March 2023 to
£81.3 million as at 31 March 2024.
– Main positive performers over the
12 months:
– EasyPark (unquoted)
– Cera (unquoted)
– Culligan (unquoted)
– Main negative performers over the
12 months:
– Learning Curve (unquoted)
– Rapyd (unquoted)
– Watches of Switzerland (quoted)
Focus on growing and mostly profitable
companies that have strong balance sheets
and that can sustainably compound their
earnings over the long run.
Unquoted allocation focused on growth
capital and small/mid-market buyout-stage
companies, avoiding areas at greatest
valuation risk.
Main activity over the 12 months
included:
– Follow-on investments made in private
equity holdings CFC and Learning Curve
to support growth.
– We exited three publicly listed holdings;
Keywords Studios, City Pub Group and
Velocys.
Opportunity in quoted UK companies
UK small and mid-caps, and consumer
areas of market, have substantial re-rating
potential in sustained economic recovery.
Unloved UK equities may represent notable
valuation opportunity.
New drivers of PE market returns
Strategies focused on identifying
companies that exhibit strong underlying
financial performance poised to do well in
current environment.
Potentially easier to achieve in
small/medium size companies.
Future opportunities
New investment in HeadFirst recently
announced, while considerable portfolio
liquidity to make further investments.
Investment Managers’ Review
Summary
Market
In the summer months of 2023, the US Federal Reserve and the Bank of England both concluded their interest rate hiking cycles. Since then,
central banks have maintained a tight monetary policy without the need for further interest rate increases. This is due to easing inflationary
pressures, with goods and energy prices moderating while services and wage inflation have remained relatively stable. However, initial
expectations of early and significant interest rate cuts in 2024 have been pushed further into the future and are expected to be more modest
in scale.
!"#$#%"$&'()*+,*-$#%) .,*/+,&",',0)*0")1 23/&,,4
Rory Bateman Tim Creed
Uzo Ekwue Peraveenan Sriharan
The Company’s differentiated
public-private equity strategy
enables us to continue to
invest without
boundaries.
Net asset value increased by 2.5%, from
£79.3 million as at 31 March 2023 to
£81.3 million as at 31 March 2024.
– Main positive performers over the
12 months:
– EasyPark (unquoted)
– Cera (unquoted)
– Culligan (unquoted)
– Main negative performers over the
12 months:
– Learning Curve (unquoted)
– Rapyd (unquoted)
– Watches of Switzerland (quoted)
Focus on growing and mostly profitable
companies that have strong balance sheets
and that can sustainably compound their
earnings over the long run.
Unquoted allocation focused on growth
capital and small/mid-market buyout-stage
companies, avoiding areas at greatest
valuation risk.
Main activity over the 12 months
included:
– Follow-on investments made in private
equity holdings CFC and Learning Curve
to support growth.
– We exited three publicly listed holdings;
Keywords Studios, City Pub Group and
Velocys.
Opportunity in quoted UK companies
UK small and mid-caps, and consumer
areas of market, have substantial re-rating
potential in sustained economic recovery.
Unloved UK equities may represent notable
valuation opportunity.
New drivers of PE market returns
Strategies focused on identifying
companies that exhibit strong underlying
financial performance poised to do well in
current environment.
Potentially easier to achieve in
small/medium size companies.
Future opportunities
New investment in HeadFirst recently
announced, while considerable portfolio
liquidity to make further investments.
Introduction
Strategic Report
Governance
Financial
Other Information (unaudited)
Schroder British Opportunities Trust plc 7
After exceeding expectations of weak economic growth in the first half of 2023, the UK economy experienced a slowdown in the second half,
entering a shallow recession with two consecutive quarters of economic contraction. However, recent data for the early months of 2024
suggests a return to economic growth, indicating that the recession may be relatively short-lived. While forecasts anticipate improved UK
economic activity, the level of growth is expected to remain modest. Furthermore, UK inflation moderated in the second half of the year, aligning
the country more closely with other developed markets.
While the Company’s private equity portfolio has continued to perform well in aggregate, private equity markets have not been immune to
economic headwinds over the past year. As a reminder, our focus is on the small to mid-market area of the UK private equity landscape, and
we hope the following provides useful insight into recent activity to contextualise the period under review. According to KPMG’s UK mid-market
PE snapshot for 2023, deal volumes in this area declined by 10%, with only 675 transactions completed in 2023, compared to the 748
completed in 2022. However, the UK private equity market as a whole saw a greater decline of nearly 20%, with total deals falling from 1,802 in
2022 to 1,451 in 2023. Additionally, UK mid-market exit volumes remained depressed, with 2023’s 181 exits representing the lowest annual
amount for six years. However, 2024 has already brought some optimism, with stabilised rates and tamed inflation bringing increased certainty,
giving dealmakers more reason to increase activities.
Portfolio performance
Since the Company’s IPO in December 2020, the NAV 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. Over the past 12 months, positive NAV growth has been
driven by fair value gains in the portfolio’s private equity (unquoted) allocation, which is illustrated below.
Attribution analysis (£m) for 12 months to 31 March 2024
Money
Quoted Unquoted Market Funds Net cash Other NAV
Value as at 31 March 2023 26.2 47.9 0.0 7.8 (2.6) 79.3
+ Investments 1.1 2.0 11.6 (14.7) – 0.0
– Realisations at value (7.3) 0.0 (1.1) 8.4 – 0.0
+/– Fair value (losses)/gains (0.6) 3.0 0.3 – – 2.7
+/– Costs and other movements – – – (0.7) 0.0 (0.7)
Value as at 31 March 2024 19.4 52.9 10.8 0.8 (2.6) 81.3
Key positive and negative performers over the 12 months to 31 March 2024
Top 5 contributors Contribution %
EasyPark 2.0
Cera 1.2
Culligan 1.2
Mintec 1.2
City Pub Group 1.2
Bottom 5 contributors Contribution %
Learning Curve –1.9
Rapyd –1.9
Watches of Switzerland –1.5
Sosandar –0.6
Learning Technologies –0.5
The net asset value increased 2.5% from £79.3 million to £81.3 million over the period, which comprised:
• Quoted holdings: –0.8%
• Unquoted holdings: 3.8%
• Money Market Funds 0.4%
• Costs and other movements: –0.9%
Private equity holdings
The portfolio’s private equity (unquoted) holdings have continued to perform well in aggregate, with 7 out of the 9 private equity holdings
exceeding or in line with performance expectations. 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, have contributed to the resilience of the NAV. Looking closer at the past 12 months, trading gains and transactional
activity (company events, such as add-on transactions and financing rounds) at the portfolio companies have driven gains, despite noticeable
valuation multiple contraction that demonstrates the prudence of the valuation approach applied.
Schroder British Opportunities Trust plc 7
After exceeding expectations of weak economic growth in the first half of 2023, the UK economy experienced a slowdown in the second half,
entering a shallow recession with two consecutive quarters of economic contraction. However, recent data for the early months of 2024
suggests a return to economic growth, indicating that the recession may be relatively short-lived. While forecasts anticipate improved UK
economic activity, the level of growth is expected to remain modest. Furthermore, UK inflation moderated in the second half of the year, aligning
the country more closely with other developed markets.
While the Company’s private equity portfolio has continued to perform well in aggregate, private equity markets have not been immune to
economic headwinds over the past year. As a reminder, our focus is on the small to mid-market area of the UK private equity landscape, and
we hope the following provides useful insight into recent activity to contextualise the period under review. According to KPMG’s UK mid-market
PE snapshot for 2023, deal volumes in this area declined by 10%, with only 675 transactions completed in 2023, compared to the 748
completed in 2022. However, the UK private equity market as a whole saw a greater decline of nearly 20%, with total deals falling from 1,802 in
2022 to 1,451 in 2023. Additionally, UK mid-market exit volumes remained depressed, with 2023’s 181 exits representing the lowest annual
amount for six years. However, 2024 has already brought some optimism, with stabilised rates and tamed inflation bringing increased certainty,
giving dealmakers more reason to increase activities.
Portfolio performance
Since the Company’s IPO in December 2020, the NAV 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. Over the past 12 months, positive NAV growth has been
driven by fair value gains in the portfolio’s private equity (unquoted) allocation, which is illustrated below.
Attribution analysis (£m) for 12 months to 31 March 2024
Money
Quoted Unquoted Market Funds Net cash Other NAV
Value as at 31 March 2023 26.2 47.9 0.0 7.8 (2.6) 79.3
+ Investments 1.1 2.0 11.6 (14.7) – 0.0
– Realisations at value (7.3) 0.0 (1.1) 8.4 – 0.0
+/– Fair value (losses)/gains (0.6) 3.0 0.3 – – 2.7
+/– Costs and other movements – – – (0.7) 0.0 (0.7)
Value as at 31 March 2024 19.4 52.9 10.8 0.8 (2.6) 81.3
Key positive and negative performers over the 12 months to 31 March 2024
Top 5 contributors Contribution %
EasyPark 2.0
Cera 1.2
Culligan 1.2
Mintec 1.2
City Pub Group 1.2
Bottom 5 contributors Contribution %
Learning Curve –1.9
Rapyd –1.9
Watches of Switzerland –1.5
Sosandar –0.6
Learning Technologies –0.5
The net asset value increased 2.5% from £79.3 million to £81.3 million over the period, which comprised:
• Quoted holdings: –0.8%
• Unquoted holdings: 3.8%
• Money Market Funds 0.4%
• Costs and other movements: –0.9%
Private equity holdings
The portfolio’s private equity (unquoted) holdings have continued to perform well in aggregate, with 7 out of the 9 private equity holdings
exceeding or in line with performance expectations. 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, have contributed to the resilience of the NAV. Looking closer at the past 12 months, trading gains and transactional
activity (company events, such as add-on transactions and financing rounds) at the portfolio companies have driven gains, despite noticeable
valuation multiple contraction that demonstrates the prudence of the valuation approach applied.
8
Schroder British Opportunities Trust plc
Private equity allocation attribution – 12 months to 31 March 2024
Trading gains and transaction activity have driven performance
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.
Source: Schroders Capital, 2024.
The portfolio’s private equity companies (excluding Graphcore) have seen >1.3x greater sales growth than publicly listed comparable
companies, delivering 24% sales growth vs 18% for public comparables over the past 12 months. At the same time, the portfolio’s private equity
companies valued on an EBITDA basis are demonstrating stronger profitability from operations than public comparables (46% vs 22%). Despite
these favourable metrics, these portfolio companies are being valued at a discount to public comparators, as illustrated below.
Strong sales growth with strong profitability from operations…
…while valued at a discount to public comparables
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.
Source: Schroders Capital, using latest available data as at 31 March 2024.
1
For all SBO private equity portfolio companies, except Graphcore, and their relevant peer group sector-specific public comparables.
2
For SBO private equity portfolio companies valued on an EBITDA basis (CFC, Culligan, Learning Curve, Mintec and Pirum) and their relevant peer group
sector-specific public comparables. EBITDA margin is a measure of a company’s operating profit as a percentage of its revenue.
3
For SBO private equity portfolio companies valued on an EBITDA basis (CFC, Culligan, Learning Curve, Mintec and Pirum) and their relevant peer group
sector-specific public comparables. EV/EBITDA = Enterprise Value/Earnings Before Interest, Tax, Depreciation, and Amortisation. EBITDA is a measure of core
corporate profitability. EV/EBITDA is a valuation metric used to compare relative value of different businesses.
Turning to individual private equity portfolio companies, the most significant contributor over the year was parking tech company, EasyPark ,
which has continued its impressive global growth strategy focused on acquisitions, strategic partnerships and organic growth. One considerable
milestone was EasyPark’s announcement of its intention to acquire Flowbird Group, a deal that will be highly complementary to its existing
business, while extending the group’s global reach.
Digital-first healthcare-at-home company, Cera , has continued to make substantial progress over the past year. The company completed the
successful delivery of 7.5 million home care visits over the 2023 winter period. This was underpinned by Cera’s AI-powered care model, in which
patient symptoms and health data are used to predict deterioration of patient condition 30 times quicker than typical methods, enabling Cera to
deliver more effective care in the home and reduce hospitalisation rates by up to 70%, alleviating further burden on already-overstretched
NHS services.
Q1 24 NAV Net debt, FX and
other
Valuation multiple Trading gains Company events New investments Q1 23 NAV
47.9
52.9
2.0 2.6
5.1 (2.6) (2.1)
Transactional
activity at
portfolio
companies
Company performance and valuation
Investment Managers’ Review
continued
Private equity allocation attribution – 12 months to 31 March 2024
Trading gains and transaction activity have driven performance
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.
Source: Schroders Capital, 2024.
The portfolio’s private equity companies (excluding Graphcore) have seen >1.3x greater sales growth than publicly listed comparable
companies, delivering 24% sales growth vs 18% for public comparables over the past 12 months. At the same time, the portfolio’s private equity
companies valued on an EBITDA basis are demonstrating stronger profitability from operations than public comparables (46% vs 22%). Despite
these favourable metrics, these portfolio companies are being valued at a discount to public comparators, as illustrated below.
Strong sales growth with strong profitability from operations…
…while valued at a discount to public comparables
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.
Source: Schroders Capital, using latest available data as at 31 March 2024.
1
For all SBO private equity portfolio companies, except Graphcore, and their relevant peer group sector-specific public comparables.
2
For SBO private equity portfolio companies valued on an EBITDA basis (CFC, Culligan, Learning Curve, Mintec and Pirum) and their relevant peer group
sector-specific public comparables. EBITDA margin is a measure of a company’s operating profit as a percentage of its revenue.
3
For SBO private equity portfolio companies valued on an EBITDA basis (CFC, Culligan, Learning Curve, Mintec and Pirum) and their relevant peer group
sector-specific public comparables. EV/EBITDA = Enterprise Value/Earnings Before Interest, Tax, Depreciation, and Amortisation. EBITDA is a measure of core
corporate profitability. EV/EBITDA is a valuation metric used to compare relative value of different businesses.
Turning to individual private equity portfolio companies, the most significant contributor over the year was parking tech company, EasyPark ,
which has continued its impressive global growth strategy focused on acquisitions, strategic partnerships and organic growth. One considerable
milestone was EasyPark’s announcement of its intention to acquire Flowbird Group, a deal that will be highly complementary to its existing
business, while extending the group’s global reach.
Digital-first healthcare-at-home company, Cera , has continued to make substantial progress over the past year. The company completed the
successful delivery of 7.5 million home care visits over the 2023 winter period. This was underpinned by Cera’s AI-powered care model, in which
patient symptoms and health data are used to predict deterioration of patient condition 30 times quicker than typical methods, enabling Cera to
deliver more effective care in the home and reduce hospitalisation rates by up to 70%, alleviating further burden on already-overstretched
NHS services.
Q1 24 NAV Net debt, FX and
other
Valuation multiple Trading gains Company events New investments Q1 23 NAV
47.9
52.9
2.0 2.6
5.1 (2.6) (2.1)
Transactional
activity at
portfolio
companies
Company performance and valuation
Investment Managers’ Review
continued
Another important contributor was hydration solutions business,
Culligan
. Culligan’s vision is to create a global player in water and, in
combination with Waterlogic , is present globally across point-of-use water coolers, bottle water coolers, conditioning and filters, supported by
a sophisticated suite of technology. The company is focused on driving organic growth in household and commercial sectors globally through
investment in strong premium branding, leveraging experience and expertise across the group, while expanding retail channels to drive
penetration in homes. As most transformative acquisitions have now been completed, the ongoing buy and build strategy will be focused on
accretive add ons to strengthen market position.
Independent provider of global commodity price data and market intelligence, Mintec , has focused on the development of technological
capabilities with regards to forecasting. This includes more than 500 new price forecasts for commodities, which will enable their clients to
better understand future prices and inform their buying and investment decisions. Additionally, the company has released version 4.5 of Mintec
Analytics, which includes cost model forecasts. In addition to technological capabilities, the company has progressed with new hires, including
the appointment of a Chief Product Officer and Chief Revenue Officer, which will strengthen product innovation and growth.
On the more challenging side, the valuations for both holdings in Learning Curve and Rapyd have come down over the past year. The
valuation of private UK training and education specialist, Learning Curve Group, was reduced due to some short-term demand weakness. We
believe the longer-term outlook remains positive. Meanwhile, Rapyd continues to grow its customer base, principally fuelled by its small and
medium-sized customers, while in July 2023, it announced the acquisition of a substantial part of PayU Global Payment Organisation, enabling
further global expansion across Central and Eastern Europe and Latin America. While the company continues to perform, the investment
landscape in the payments sector remains challenging, with comparable listed businesses amending their long-term growth outlooks. As a
result, the valuation multiple applied as at 31 March 2024 has been reduced, offsetting the company’s positive financial performance, leading to
a reduction in valuation over the period.
Public equity (quoted) holdings
Performance was held back by a disappointing calendar Q1 2024 thanks to a combination of extended rate expectations and some stock
specific events. Regarding the former, short-term volatility is expected due to the portfolio’s concentration in economically/rate sensitive parts of
the market, such as consumer discretionary, industrial, and technology sectors.
Looking closer at the performers over the past 12 months, City Pub Group was a standout contributor, as shares were boosted after the
company received a take-over bid from Young & Co’s Brewery. This represents the sixth quoted portfolio company to be bid for since the
Company’s inception. Not only does this endorse the strength and potential of some of our portfolio holdings but it also demonstrates external
interest in growing UK companies. Meanwhile, shares of value-added reseller Bytes Technology , online review platform Trustpilot and train
and coach app Trainline did well, following strong financial results.
Detractors to performance included Watches of Switzerland , whose shares were initially impacted by the news of Rolex’s acquisition of luxury
watch retailer Bucherer and then by a profit warning in early 2024. We continue to monitor the investment closely. Meanwhile, shares in
women’s fashion brand Sosandar fell after the company announced that revenues would be lower than expected due to its new focus on
reducing the level of discounting of its products. While the share price reaction was disappointing, we support the move to a multi-channel
concept focussed on higher margin customers.
Portfolio diversification
While having notable exposure to software, the portfolio is well-diversified across a number of growing industry sectors.
Portfolio breakdown by industry as % of total equity investments (as at 31 March 2024)
Ground Transportation
Financial Services
Electrical Equipment
Diversified Consumer Services
Building Products
Health Care Technolog
Hotels, Restaurants & Leisure
Machinery
Life Sciences Tools & Services
IT Services
Interactive Media & Services
Insurance
Media
Professional Servics
1.9%
9.9%
2.5%
1.7%
0.7%
11.1%
8.3%
0.8%
1.2%
1.1%
1.2%
0.9%
3.5%
7.8%
1.9%
9.5%
2.3%
33.7%
Textiles, Apparel & Luxury Goods
Specialty Retail
Software
Semiconductors & Semiconductor Equipment
Schroder British Opportunities Trust plc 9
Introduction Strategic Report Governance Financial Other Information (unaudited)
combination with Waterlogic , is present globally across point-of-use water coolers, bottle water coolers, conditioning and filters, supported by
a sophisticated suite of technology. The company is focused on driving organic growth in household and commercial sectors globally through
investment in strong premium branding, leveraging experience and expertise across the group, while expanding retail channels to drive
penetration in homes. As most transformative acquisitions have now been completed, the ongoing buy and build strategy will be focused on
accretive add ons to strengthen market position.
Independent provider of global commodity price data and market intelligence, Mintec , has focused on the development of technological
capabilities with regards to forecasting. This includes more than 500 new price forecasts for commodities, which will enable their clients to
better understand future prices and inform their buying and investment decisions. Additionally, the company has released version 4.5 of Mintec
Analytics, which includes cost model forecasts. In addition to technological capabilities, the company has progressed with new hires, including
the appointment of a Chief Product Officer and Chief Revenue Officer, which will strengthen product innovation and growth.
On the more challenging side, the valuations for both holdings in Learning Curve and Rapyd have come down over the past year. The
valuation of private UK training and education specialist, Learning Curve Group, was reduced due to some short-term demand weakness. We
believe the longer-term outlook remains positive. Meanwhile, Rapyd continues to grow its customer base, principally fuelled by its small and
medium-sized customers, while in July 2023, it announced the acquisition of a substantial part of PayU Global Payment Organisation, enabling
further global expansion across Central and Eastern Europe and Latin America. While the company continues to perform, the investment
landscape in the payments sector remains challenging, with comparable listed businesses amending their long-term growth outlooks. As a
result, the valuation multiple applied as at 31 March 2024 has been reduced, offsetting the company’s positive financial performance, leading to
a reduction in valuation over the period.
Public equity (quoted) holdings
Performance was held back by a disappointing calendar Q1 2024 thanks to a combination of extended rate expectations and some stock
specific events. Regarding the former, short-term volatility is expected due to the portfolio’s concentration in economically/rate sensitive parts of
the market, such as consumer discretionary, industrial, and technology sectors.
Looking closer at the performers over the past 12 months, City Pub Group was a standout contributor, as shares were boosted after the
company received a take-over bid from Young & Co’s Brewery. This represents the sixth quoted portfolio company to be bid for since the
Company’s inception. Not only does this endorse the strength and potential of some of our portfolio holdings but it also demonstrates external
interest in growing UK companies. Meanwhile, shares of value-added reseller Bytes Technology , online review platform Trustpilot and train
and coach app Trainline did well, following strong financial results.
Detractors to performance included Watches of Switzerland , whose shares were initially impacted by the news of Rolex’s acquisition of luxury
watch retailer Bucherer and then by a profit warning in early 2024. We continue to monitor the investment closely. Meanwhile, shares in
women’s fashion brand Sosandar fell after the company announced that revenues would be lower than expected due to its new focus on
reducing the level of discounting of its products. While the share price reaction was disappointing, we support the move to a multi-channel
concept focussed on higher margin customers.
Portfolio diversification
While having notable exposure to software, the portfolio is well-diversified across a number of growing industry sectors.
Portfolio breakdown by industry as % of total equity investments (as at 31 March 2024)
Ground Transportation
Financial Services
Electrical Equipment
Diversified Consumer Services
Building Products
Health Care Technolog
Hotels, Restaurants & Leisure
Machinery
Life Sciences Tools & Services
IT Services
Interactive Media & Services
Insurance
Media
Professional Servics
1.9%
9.9%
2.5%
1.7%
0.7%
11.1%
8.3%
0.8%
1.2%
1.1%
1.2%
0.9%
3.5%
7.8%
1.9%
9.5%
2.3%
33.7%
Textiles, Apparel & Luxury Goods
Specialty Retail
Software
Semiconductors & Semiconductor Equipment
Schroder British Opportunities Trust plc 9
Introduction Strategic Report Governance Financial Other Information (unaudited)
10
Schroder British Opportunities Trust plc
Portfolio changes
Over the year, we continued to scour both private and public markets for the brightest growth prospects, focusing on small and mid-sized
companies.
Private equity activity
A core focus of our portfolio companies has been executing business transformation through robust organic growth and acquisitions. To this
end, we made a £1.0 million follow-on investment in CFC to help support the acquisition of Solution Underwriting (an Australian managing
general agent) and aid continued organic growth efforts, including product innovation. We also made a £0.7 million follow-on in Learning
Curve to bolster its balance sheet.
Public equity activity
We exited our small holding in Velocys in September due to concerns over its balance sheet. As mentioned earlier, we also sold our position in
City Pub Group in October following its bid by competitor Young & Co’s Brewery Plc.
Post period end
In June 2024, we announced a new private equity investment in HeadFirst , an international HR tech service provider, operating in 15 European
countries. This represents the tenth private equity investment made by the Company since inception. The capital invested will be used to finance
HeadFirst’s acquisition of managed services and specialist staffing provider Impellam Group (previously UK AIM listed), to create a world leader
in workforce solutions for STEM (science, technology, engineering, and mathematics) talent. The Company gained exposure to HeadFirst via
Schroders’ long-standing investment partner IceLake. We are pleased to be investing at this important development milestone for HeadFirst as
we believe the combined business has the potential for significant growth over the coming years.
Outlook
Expectations of the timing of Bank of England interest rates have been pushed further out, which has likely contributed to the
underperformance of listed UK small and mid-caps relative to large caps so far in 2024. This is important to note as the Company’s public equity
portfolio is focused in this area of the UK market while also having notable exposure to the consumer discretionary sector, which is sensitive not
only to interest rate sentiment but also consumer confidence. However, we believe that when clearer signs of a sustained economic recovery
materialise and market sentiment substantially improves, both small and mid-caps, and the consumer sectors of the market, should be
amongst the first areas of the UK market to re-rate. Additionally, we believe that the UK Chancellor’s recent Spring Budget and the
announcement of the creation of a tax-free British ISA, represents a positive development and could help to narrow the discount at which
UK listed companies trade in aggregate.
Aside from the relative valuation opportunity, with UK equities remaining unloved relative to world markets in an historical context, they are also
attractive due to their strong balance sheets in aggregate. The valuation opportunity can also be looked at through the lens of free cash flow
yields, with the UK having a higher yield than many other developed markets, making investing in the UK a compelling opportunity (illustrated
below).
UK attractively valued versus other developed markets
FY2 Free Cash Flow Yield
Source: Schroders, Fact set. FY2 Free Cash Flow Yield of the FTSE All-Share Index and MSCI All Country World Index as at 31 March 2024.
0
1
2
3
4
5
6
7
FTSE All Share
6.6
MSCI AC World
5.1
Investment Managers’ Review
continued
Portfolio changes
Over the year, we continued to scour both private and public markets for the brightest growth prospects, focusing on small and mid-sized
companies.
Private equity activity
A core focus of our portfolio companies has been executing business transformation through robust organic growth and acquisitions. To this
end, we made a £1.0 million follow-on investment in CFC to help support the acquisition of Solution Underwriting (an Australian managing
general agent) and aid continued organic growth efforts, including product innovation. We also made a £0.7 million follow-on in Learning
Curve to bolster its balance sheet.
Public equity activity
We exited our small holding in Velocys in September due to concerns over its balance sheet. As mentioned earlier, we also sold our position in
City Pub Group in October following its bid by competitor Young & Co’s Brewery Plc.
Post period end
In June 2024, we announced a new private equity investment in HeadFirst , an international HR tech service provider, operating in 15 European
countries. This represents the tenth private equity investment made by the Company since inception. The capital invested will be used to finance
HeadFirst’s acquisition of managed services and specialist staffing provider Impellam Group (previously UK AIM listed), to create a world leader
in workforce solutions for STEM (science, technology, engineering, and mathematics) talent. The Company gained exposure to HeadFirst via
Schroders’ long-standing investment partner IceLake. We are pleased to be investing at this important development milestone for HeadFirst as
we believe the combined business has the potential for significant growth over the coming years.
Outlook
Expectations of the timing of Bank of England interest rates have been pushed further out, which has likely contributed to the
underperformance of listed UK small and mid-caps relative to large caps so far in 2024. This is important to note as the Company’s public equity
portfolio is focused in this area of the UK market while also having notable exposure to the consumer discretionary sector, which is sensitive not
only to interest rate sentiment but also consumer confidence. However, we believe that when clearer signs of a sustained economic recovery
materialise and market sentiment substantially improves, both small and mid-caps, and the consumer sectors of the market, should be
amongst the first areas of the UK market to re-rate. Additionally, we believe that the UK Chancellor’s recent Spring Budget and the
announcement of the creation of a tax-free British ISA, represents a positive development and could help to narrow the discount at which
UK listed companies trade in aggregate.
Aside from the relative valuation opportunity, with UK equities remaining unloved relative to world markets in an historical context, they are also
attractive due to their strong balance sheets in aggregate. The valuation opportunity can also be looked at through the lens of free cash flow
yields, with the UK having a higher yield than many other developed markets, making investing in the UK a compelling opportunity (illustrated
below).
UK attractively valued versus other developed markets
FY2 Free Cash Flow Yield
Source: Schroders, Fact set. FY2 Free Cash Flow Yield of the FTSE All-Share Index and MSCI All Country World Index as at 31 March 2024.
0
1
2
3
4
5
6
7
FTSE All Share
6.6
MSCI AC World
5.1
Investment Managers’ Review
continued
Schroder
British Opportunities Trust plc
11
Introduction Strategic Report Governance Financial Other Information (unaudited)
As reported in last year’s annual report and financial statements, our analysis shows that 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 Index:
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 31 March 1991
to 31 March 2024.
Our public equity holdings could be well poised to take advantage of the subsequent outperformance observed in the past. Furthermore, with
these holdings valued at a 27% discount to their 5-year historic averages, as measured by their forward price to earnings, they are also
attractively valued on a relative basis (illustrated below).
SBO’s public equity valuations, 31 March 2024
Forward Price to Earnings (P/E) of SBO public equity sleeve vs historic average
Source: Schroders, LSEG Workspace. Analysis reflects 17 of the 22 public equity holdings that have a positive P/E ratio. ‘Historic average’ means either 5 years or the
duration the stock has been a listed company, if shorter.
In terms of market activity, we are currently witnessing small-cap companies being acquired for large premiums, with some of those premiums
perhaps undervaluing a company’s long-term grown prospects. Meanwhile, the demand for regional equities has been waning and UK
small-cap chief executives have grown frustrated with their depressed share prices, leading to an increase in share buy-backs. As Investment
Managers, we encourage these actions, particularly when rates remain elevated, and the market appears to respond positively to such
behaviours. We also believe that a significant aspect of the issue lies in perception, where there may be some simplistic views regarding the
UK equity market or UK capital markets as a whole that tend to dominate the conversation. It is worth noting that the UK is home to a diverse
range of over 1000 listed companies. However, it is often the top 10 or 20 companies that receive the most attention and heavily influence the
commentary on the market as a whole.
12.5
1.1
8.2
20.1
16.2
11.5
20.6
27.9
-35
-25
-15
-5
5
15
25
35
% 5 3 - o t 5 1 - % 5 1 - o t 0 1 - % 0 1 - o t 5 - % 5 - o t 0
%
Small Cap
previous
12 month
performance
vs. FTSE 100
… subsequent
5 year
performance
… subsequent
3 year
performance
0
5
10
15
20
25
22.1
16.1
Historic average Current
Forward P / E vs historic
average
SBO public equity sleeve –27.1%
Introduction Strategic Report Governance Financial Other Information (unaudited)
As reported in last year’s annual report and financial statements, our analysis shows that 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 Index:
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 31 March 1991
to 31 March 2024.
Our public equity holdings could be well poised to take advantage of the subsequent outperformance observed in the past. Furthermore, with
these holdings valued at a 27% discount to their 5-year historic averages, as measured by their forward price to earnings, they are also
attractively valued on a relative basis (illustrated below).
SBO’s public equity valuations, 31 March 2024
Forward Price to Earnings (P/E) of SBO public equity sleeve vs historic average
Source: Schroders, LSEG Workspace. Analysis reflects 17 of the 22 public equity holdings that have a positive P/E ratio. ‘Historic average’ means either 5 years or the
duration the stock has been a listed company, if shorter.
In terms of market activity, we are currently witnessing small-cap companies being acquired for large premiums, with some of those premiums
perhaps undervaluing a company’s long-term grown prospects. Meanwhile, the demand for regional equities has been waning and UK
small-cap chief executives have grown frustrated with their depressed share prices, leading to an increase in share buy-backs. As Investment
Managers, we encourage these actions, particularly when rates remain elevated, and the market appears to respond positively to such
behaviours. We also believe that a significant aspect of the issue lies in perception, where there may be some simplistic views regarding the
UK equity market or UK capital markets as a whole that tend to dominate the conversation. It is worth noting that the UK is home to a diverse
range of over 1000 listed companies. However, it is often the top 10 or 20 companies that receive the most attention and heavily influence the
commentary on the market as a whole.
12.5
1.1
8.2
20.1
16.2
11.5
20.6
27.9
-35
-25
-15
-5
5
15
25
35
% 5 3 - o t 5 1 - % 5 1 - o t 0 1 - % 0 1 - o t 5 - % 5 - o t 0
%
Small Cap
previous
12 month
performance
vs. FTSE 100
… subsequent
5 year
performance
… subsequent
3 year
performance
0
5
10
15
20
25
22.1
16.1
Historic average Current
Forward P / E vs historic
average
SBO public equity sleeve –27.1%
12
Schroder British Opportunities Trust plc
Investment Managers’ Review
continued
In private equity markets, with financial engineering unlikely to propel returns in the near term due to increased interest rates, inflation and
macroeconomic uncertainty, we continue to believe that 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
companies to improve profit margins, for example. This is all easier to do in 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. An example from the portfolio is
Mintec, a highly profitable software price reporting agency business. In recent years, acquisitions (e.g. AgriBriefing) have significantly expanded
Mintec’s profits while accelerating international growth prospects. Meanwhile, recent additional C-suite hires have further strengthened the
company’s senior workforce.
Despite the economic backdrop, we are seeing significant deal flow across a breadth of opportunities. We have established a formidable
network in the UK (as well as globally) with hard-to-access investment partners, and strongly believe we are well positioned to seek out the best
opportunities for the Company going forward. We believe the recently announced investment in HeadFirst, alongside our long-standing
investment partner IceLake Capital, is a good example of this.
The Company’s differentiated public-private equity strategy enables us to continue to invest without boundaries, providing access to a broader
investable universe which differentiates us from other investment trusts.
Schroder Investment Management Limited
10 July 2024
Investment Managers’ Review
continued
In private equity markets, with financial engineering unlikely to propel returns in the near term due to increased interest rates, inflation and
macroeconomic uncertainty, we continue to believe that 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
companies to improve profit margins, for example. This is all easier to do in 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. An example from the portfolio is
Mintec, a highly profitable software price reporting agency business. In recent years, acquisitions (e.g. AgriBriefing) have significantly expanded
Mintec’s profits while accelerating international growth prospects. Meanwhile, recent additional C-suite hires have further strengthened the
company’s senior workforce.
Despite the economic backdrop, we are seeing significant deal flow across a breadth of opportunities. We have established a formidable
network in the UK (as well as globally) with hard-to-access investment partners, and strongly believe we are well positioned to seek out the best
opportunities for the Company going forward. We believe the recently announced investment in HeadFirst, alongside our long-standing
investment partner IceLake Capital, is a good example of this.
The Company’s differentiated public-private equity strategy enables us to continue to invest without boundaries, providing access to a broader
investable universe which differentiates us from other investment trusts.
Schroder Investment Management Limited
10 July 2024
Schroder
British Opportunities Trust plc
13
Introduction Strategic Report Governance Financial Other Information (unaudited)
Investment approach
The Company was launched in December 2020 to invest, initially, in companies impacted by the Covid-19 pandemic. The focus was on investing
in (i) high growth UK companies looking to maximise their potential as well as in (ii) mispriced growth opportunities where equity was required
to return businesses to their previous growth trajectory following the disruption caused by the pandemic. Although the impact of Covid-19 is
substantially diminished, there continues to be no shortage of British companies which fit into the categories of high or mispriced growth
investment opportunities and the Company's business model continues to be appropriate. 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 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 times of higher inflation), strong management teams,
and will already be delivering strong revenue growth. Where portfolio companies have not yet reached profitability, the investment team
seek 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 Investment Managers place a high priority on the price paid as a crucial factor in determining long-term investment returns. To ensure
they do not overpay for growth opportunities, they maintain discipline in the valuation process. The portfolio focuses on high-growth names
that have robust business models and are well-positioned to benefit from secular tailwinds. These companies are expected to be either at or
near profitability and exhibit strong growth characteristics, such as increasing customer numbers or expanding market share.
The team is also aware that market inefficiencies often result in significant disparities between underlying public equity company
fundamentals and market estimates, which is referred to as the ‘growth gap’. Consequently, the team actively seeks opportunities to exploit
this growth gap. They believe that markets tend to overlook future prospects, rely too heavily on extrapolating historical growth trends, and
overreact to short-term news. When evaluating potential investments, the team looks for companies that demonstrate a positive growth gap
compared to consensus estimates, along with catalysts that could lead to a re-rating of the shares, strong valuation support, attractive
risk-reward profiles, and good governance.
In terms of the portfolio’s investment strategy, the team aims to invest in UK small and medium-sized businesses with a market capitalisation
range between £50 million and £2 billion. These companies have the potential to provide primary capital to support growth. Leveraging
Schroders’ extensive research capabilities and long track record in listed equities, particularly in the small and mid-cap space, the Company is
well-positioned to identify and capitalise on these opportunities.
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, where it believes 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+ specialist General Partner relationships to
create strong deal flow for high selectivity of direct and co-investments. Schroders Capital has c.£14 billion of private equity assets under
management (as at 31 December 2023) and was awarded “Co-investor of the Year” at the RealDeals Private Equity Awards 2023.
The Company does not invest in venture, large/mega buyout or turnaround companies as it believes such companies involve too much risk;
in particular, late-stage venture and large/mega buyout companies have experienced the greatest volatility. One example was the increase in
late-stage venture valuations in the dotcom boom which was followed by a significant drop (or bust) in 2003. A further example was seen in
large/mega buyouts between 2006 and 2010, where an increase in valuations prior to the global financial crisis of 2008 was followed by
a significant drop.
Source: Schroders. *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.
Venture
seed/early
Venture
late/pre-IPO Growth Small
buyout
Mid
buyout
Large/mega
buyout Turnaround
The Company’s target areas for
private equity investments
Areas of heightened valuation risk* – areas with greatest amount of capital vs number of deals
Investment Approach and Process
Introduction Strategic Report Governance Financial Other Information (unaudited)
Investment approach
The Company was launched in December 2020 to invest, initially, in companies impacted by the Covid-19 pandemic. The focus was on investing
in (i) high growth UK companies looking to maximise their potential as well as in (ii) mispriced growth opportunities where equity was required
to return businesses to their previous growth trajectory following the disruption caused by the pandemic. Although the impact of Covid-19 is
substantially diminished, there continues to be no shortage of British companies which fit into the categories of high or mispriced growth
investment opportunities and the Company's business model continues to be appropriate. 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 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 times of higher inflation), strong management teams,
and will already be delivering strong revenue growth. Where portfolio companies have not yet reached profitability, the investment team
seek 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 Investment Managers place a high priority on the price paid as a crucial factor in determining long-term investment returns. To ensure
they do not overpay for growth opportunities, they maintain discipline in the valuation process. The portfolio focuses on high-growth names
that have robust business models and are well-positioned to benefit from secular tailwinds. These companies are expected to be either at or
near profitability and exhibit strong growth characteristics, such as increasing customer numbers or expanding market share.
The team is also aware that market inefficiencies often result in significant disparities between underlying public equity company
fundamentals and market estimates, which is referred to as the ‘growth gap’. Consequently, the team actively seeks opportunities to exploit
this growth gap. They believe that markets tend to overlook future prospects, rely too heavily on extrapolating historical growth trends, and
overreact to short-term news. When evaluating potential investments, the team looks for companies that demonstrate a positive growth gap
compared to consensus estimates, along with catalysts that could lead to a re-rating of the shares, strong valuation support, attractive
risk-reward profiles, and good governance.
In terms of the portfolio’s investment strategy, the team aims to invest in UK small and medium-sized businesses with a market capitalisation
range between £50 million and £2 billion. These companies have the potential to provide primary capital to support growth. Leveraging
Schroders’ extensive research capabilities and long track record in listed equities, particularly in the small and mid-cap space, the Company is
well-positioned to identify and capitalise on these opportunities.
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, where it believes 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+ specialist General Partner relationships to
create strong deal flow for high selectivity of direct and co-investments. Schroders Capital has c.£14 billion of private equity assets under
management (as at 31 December 2023) and was awarded “Co-investor of the Year” at the RealDeals Private Equity Awards 2023.
The Company does not invest in venture, large/mega buyout or turnaround companies as it believes such companies involve too much risk;
in particular, late-stage venture and large/mega buyout companies have experienced the greatest volatility. One example was the increase in
late-stage venture valuations in the dotcom boom which was followed by a significant drop (or bust) in 2003. A further example was seen in
large/mega buyouts between 2006 and 2010, where an increase in valuations prior to the global financial crisis of 2008 was followed by
a significant drop.
Source: Schroders. *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.
Venture
seed/early
Venture
late/pre-IPO Growth Small
buyout
Mid
buyout
Large/mega
buyout Turnaround
The Company’s target areas for
private equity investments
Areas of heightened valuation risk* – areas with greatest amount of capital vs number of deals
Investment Approach and Process
14
Schroder British Opportunities Trust plc
Investment Approach and Process
continued
The Company’s private equity allocation by stage:
Source: Schroders.
Investment process
The Company’s portfolio is managed by the Investment 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 Investment Managers, alongside the Alternative Investment
Fund Manager, 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 spends considerable time on this activity
by working closely with its extensive network of 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:
Deal ow Prequali ca on Quali ca on Execu on Monitoring
Core rela onship
Management /
access top deals
Outbound sourcing
Assessment
Review investment
opportunity
Due diligence of
target company
GP t assessment
Prequali ca on
Team visits/calls
with management
ESG assessment
One-on-one mee ngs
with IC
Legal and tax
due diligence
Investment
recommenda on
Manager and
company
monitoring
Company visits
and AGM
Follow-on
nancing needs
Finalisa on of legal
documenta on
Structuring
Closing
Programme
Team
Discussion
Investment
Commi ee
discussion
Investment
Commi ee
discussion
Teaser
from GP
Financial and management reports, GP
Investment Commi ee paper,
External due diligence reports
Valua on model,
Final GP investment memo,
References with management and experts
S&P, shareholders
and op ons agreements
Board packs,
management repor ng,
GP quarterly repor ng
Board monitoring
Growth
- Emerging companies
- Technology and/or market risk
- Early revenue generating
- High growth
- Unpro table
Small/mid Buyout
- Mature companies
- Valuation and execution risk
- Moderate growth
- Pro table
- Transformational and M&A value
creation
Growth/Buyout
- Established companies
- Valuation and execution risk
- High growth
- Pro table or near-pro table
- Organic and M&A value creation
Positioning in
the market
Technology
differentiation
Scale of market
opportunity
Competitive
landscape
Management
breadth,
depth & experience
Strength of existing
nancing syndicate
Prospective
nancing needs
Underlying
modelling
assumptions
Exit route,
options & plan
Proposed terms &
valuation
Investment Approach and Process
continued
The Company’s private equity allocation by stage:
Source: Schroders.
Investment process
The Company’s portfolio is managed by the Investment 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 Investment Managers, alongside the Alternative Investment
Fund Manager, 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 spends considerable time on this activity
by working closely with its extensive network of 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:
Deal ow Prequali ca on Quali ca on Execu on Monitoring
Core rela onship
Management /
access top deals
Outbound sourcing
Assessment
Review investment
opportunity
Due diligence of
target company
GP t assessment
Prequali ca on
Team visits/calls
with management
ESG assessment
One-on-one mee ngs
with IC
Legal and tax
due diligence
Investment
recommenda on
Manager and
company
monitoring
Company visits
and AGM
Follow-on
nancing needs
Finalisa on of legal
documenta on
Structuring
Closing
Programme
Team
Discussion
Investment
Commi ee
discussion
Investment
Commi ee
discussion
Teaser
from GP
Financial and management reports, GP
Investment Commi ee paper,
External due diligence reports
Valua on model,
Final GP investment memo,
References with management and experts
S&P, shareholders
and op ons agreements
Board packs,
management repor ng,
GP quarterly repor ng
Board monitoring
Growth
- Emerging companies
- Technology and/or market risk
- Early revenue generating
- High growth
- Unpro table
Small/mid Buyout
- Mature companies
- Valuation and execution risk
- Moderate growth
- Pro table
- Transformational and M&A value
creation
Growth/Buyout
- Established companies
- Valuation and execution risk
- High growth
- Pro table or near-pro table
- Organic and M&A value creation
Positioning in
the market
Technology
differentiation
Scale of market
opportunity
Competitive
landscape
Management
breadth,
depth & experience
Strength of existing
nancing syndicate
Prospective
nancing needs
Underlying
modelling
assumptions
Exit route,
options & plan
Proposed terms &
valuation
Schroder
British Opportunities Trust plc
15
Introduction Strategic Report Governance Financial Other Information (unaudited)
Public equity investment process
The Investment 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 Investment Managers conduct an initial screen to narrow down the universe into high-growth names that have robust business models and
are well-positioned to benefit from secular tailwinds. These companies are expected to be either at or near profitability and exhibit strong
growth characteristics, such as increasing customer numbers or expanding market share. The universe is typically characterised by small and
medium-sized businesses with a market capitalisation range between £50 million and £2 billion.
The management team actively seeks opportunities to exploit the ‘growth gap’ created by market inefficiencies that create significant disparities
between underlying company fundamentals and market estimates. Inefficient markets tend to overlook future prospects, rely too heavily on
extrapolating historical growth trends, and overreact to short-term news. This allows the team to invest in companies that demonstrate a
positive growth gap along with catalysts that could lead to a re-rating of the shares, strong valuation support, attractive risk-reward profiles, and
good governance.
The public equity stock selection process is outlined in the image below.
Source: Schroders. 1
UK listed and/or UK domiciled companies. The ‘company earnings’ line in the graph represents the investment team’s forecast (as opposed to
the consensus estimates). The team base forecasts on expectations and beliefs and on reasonable assumptions within the bounds of what information is available at
the time. However, there is no guarantee that any forecasts or opinions will be realised.
Public equity investments may include the following:
Public equity strategy
We screen for growth companies in the UK 1 that are listed on the FTSE AIM, FTSE Small Cap and FTSE 250 indices with a market cap range between £50m and £2bn.
2 – Identifying a Growth Gap
1 – Opportunity set
What we look for
A robust business model with secular
tailwinds driving growth
A positive growth gap vs. consensus
estimates
An in ection point/catalyst that will lead to
a re-rating of the shares
Strong valuation support and an attractive
risk-reward
Good governance
Market ine ciencies often drive material differences between underlying company fundamentals and market
estimates (the ‘ Growth Gap ’)
Markets fail to look far enough ahead when appraising the earnings power of companies
Markets extrapolate historic growth and fail to correctly interpret catalysts that change the trajectory of growth
Markets over-react to short term news ow
3 – Exploi ng 3 persistent ine ciencies
Primary equity
through placings, rights
issues or initial public
offerings
Secondary equity
utilising Schroders
existing relationships
and power of the brand
Cornerstone equity
investments
through direct
corporate engagement
and primary investment
Partial underwriting
of equity placings
Working with
Schroders’ credit team
to identify potentially
attractive convertible
opportunities
Introduction Strategic Report Governance Financial Other Information (unaudited)
Public equity investment process
The Investment 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 Investment Managers conduct an initial screen to narrow down the universe into high-growth names that have robust business models and
are well-positioned to benefit from secular tailwinds. These companies are expected to be either at or near profitability and exhibit strong
growth characteristics, such as increasing customer numbers or expanding market share. The universe is typically characterised by small and
medium-sized businesses with a market capitalisation range between £50 million and £2 billion.
The management team actively seeks opportunities to exploit the ‘growth gap’ created by market inefficiencies that create significant disparities
between underlying company fundamentals and market estimates. Inefficient markets tend to overlook future prospects, rely too heavily on
extrapolating historical growth trends, and overreact to short-term news. This allows the team to invest in companies that demonstrate a
positive growth gap along with catalysts that could lead to a re-rating of the shares, strong valuation support, attractive risk-reward profiles, and
good governance.
The public equity stock selection process is outlined in the image below.
Source: Schroders. 1
UK listed and/or UK domiciled companies. The ‘company earnings’ line in the graph represents the investment team’s forecast (as opposed to
the consensus estimates). The team base forecasts on expectations and beliefs and on reasonable assumptions within the bounds of what information is available at
the time. However, there is no guarantee that any forecasts or opinions will be realised.
Public equity investments may include the following:
Public equity strategy
We screen for growth companies in the UK 1 that are listed on the FTSE AIM, FTSE Small Cap and FTSE 250 indices with a market cap range between £50m and £2bn.
2 – Identifying a Growth Gap
1 – Opportunity set
What we look for
A robust business model with secular
tailwinds driving growth
A positive growth gap vs. consensus
estimates
An in ection point/catalyst that will lead to
a re-rating of the shares
Strong valuation support and an attractive
risk-reward
Good governance
Market ine ciencies often drive material differences between underlying company fundamentals and market
estimates (the ‘ Growth Gap ’)
Markets fail to look far enough ahead when appraising the earnings power of companies
Markets extrapolate historic growth and fail to correctly interpret catalysts that change the trajectory of growth
Markets over-react to short term news ow
3 – Exploi ng 3 persistent ine ciencies
Primary equity
through placings, rights
issues or initial public
offerings
Secondary equity
utilising Schroders
existing relationships
and power of the brand
Cornerstone equity
investments
through direct
corporate engagement
and primary investment
Partial underwriting
of equity placings
Working with
Schroders’ credit team
to identify potentially
attractive convertible
opportunities
16
Schroder British Opportunities Trust plc
Top 10 Equity Investments
The Company’s top 10 equity investment holdings as of 31 March 2024 are set out below, with overviews of each company and recent updates
regarding their businesses set out on the subsequent pages.
Top 10 equity investments
Fair value as of % of total Fair value as of % of total
Quoted/ 31 March 2023 equity 31 March 2024 equity
Holding unquoted (£’000) investments (£’000) investments
Mintec 1
Unquoted 8,614 11.6 9,591 13.3
Cera EHP Unquoted 6,986 9.5 8,046 11.1
Pirum Systems
1
Unquoted 6,087 8.2 6,884 9.5
Rapyd Financial Network
1
Unquoted 8,399 11.3 6,837 9.5
EasyPark 1
Unquoted 4,492 6.1 6,171 8.5
CFC Underwriting
1
Unquoted 4,098 5.5 5,661 7.8
Culligan 1
Unquoted 5,053 6.9 5,585 7.7
Graphcore Unquoted 1,778 2.4 2,533 3.5
Trainline Quoted 1,408 1.9 2,097 2.9
Learning Curve
1
Unquoted 2,455 3.3 1,556 2.2
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.
– Pirum Systems held via Bowmark Investment Partnership LP.
– Rapyd Financial Network held via Target Global Fund.
– EasyPark held via Purple Garden Invest (D) AB).
– CFC Underwriting held via Vitruvian Investment Partnership.
– Culligan held via EPIC-1b Fund.
– Learning Curve held via Agilitas Boyd 2020 Co-Invest Fund.
Top 10 Equity Investments
The Company’s top 10 equity investment holdings as of 31 March 2024 are set out below, with overviews of each company and recent updates
regarding their businesses set out on the subsequent pages.
Top 10 equity investments
Fair value as of % of total Fair value as of % of total
Quoted/ 31 March 2023 equity 31 March 2024 equity
Holding unquoted (£’000) investments (£’000) investments
Mintec 1
Unquoted 8,614 11.6 9,591 13.3
Cera EHP Unquoted 6,986 9.5 8,046 11.1
Pirum Systems
1
Unquoted 6,087 8.2 6,884 9.5
Rapyd Financial Network
1
Unquoted 8,399 11.3 6,837 9.5
EasyPark 1
Unquoted 4,492 6.1 6,171 8.5
CFC Underwriting
1
Unquoted 4,098 5.5 5,661 7.8
Culligan 1
Unquoted 5,053 6.9 5,585 7.7
Graphcore Unquoted 1,778 2.4 2,533 3.5
Trainline Quoted 1,408 1.9 2,097 2.9
Learning Curve
1
Unquoted 2,455 3.3 1,556 2.2
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.
– Pirum Systems held via Bowmark Investment Partnership LP.
– Rapyd Financial Network held via Target Global Fund.
– EasyPark held via Purple Garden Invest (D) AB).
– CFC Underwriting held via Vitruvian Investment Partnership.
– Culligan held via EPIC-1b Fund.
– Learning Curve held via Agilitas Boyd 2020 Co-Invest Fund.
Schroder
British Opportunities Trust plc
17
Introduction Strategic Report Governance Financial Other Information (unaudited)
Mintec (unquoted holding)
Leading provider of food-related commodity pricing
and analytics, serving the global supply chain through
its SaaS platform
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:
• The integration of Agribriefing, which Mintec acquired in 2023 to
create a leading global provider of data on agricultural and food
markets, has progressed well with the combination of their
extensive, proprietary range of unique data and market
intelligence.
• In terms of product development, Mintec has launched
new algorithmic commodity price forecasts that cover
533 commodities, expanding clients’ capabilities to understand
future prices and inform their buying and investment decisions,
while also enhancing Mintec’s credentials as a leading data
software business with growing capability in cutting-edge data
science.
• Furthermore, the company has released version 4.5 of Mintec
Analytics, its commodity price data and insights platform, which
now provides clients with precise cost model forecasts to
enhance their cost management strategies. The addition of this
capability revolutionises how businesses navigate the impact of
future market volatility on their costs, offering unparalleled
precision in predicting and adapting their strategy to raw
material price fluctuations.
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:
• During the 2023 winter period, Cera delivered 7.5 million home
care visits (an important metric of progress), saving the NHS an
estimated £100 million. In just seven years, the company has
now delivered 50 million at-home patient visits.
• The company has continued to make product developments
utilising artificial intelligence. A pilot of its fall prediction AI
platform, which takes information about patients logged by
carers on a smartphone app and assesses their risk of having
a fall, demonstrated a 20% reduction in falls.
• Furthermore, Cera launched an AI scheduler platform that
matches patients to community care up to 5x faster. The
technology also pairs patients with carers to better suit their
needs and reduces average carer travel time between patients
by up to 50%.
Introduction Strategic Report Governance Financial Other Information (unaudited)
Mintec (unquoted holding)
Leading provider of food-related commodity pricing
and analytics, serving the global supply chain through
its SaaS platform
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:
• The integration of Agribriefing, which Mintec acquired in 2023 to
create a leading global provider of data on agricultural and food
markets, has progressed well with the combination of their
extensive, proprietary range of unique data and market
intelligence.
• In terms of product development, Mintec has launched
new algorithmic commodity price forecasts that cover
533 commodities, expanding clients’ capabilities to understand
future prices and inform their buying and investment decisions,
while also enhancing Mintec’s credentials as a leading data
software business with growing capability in cutting-edge data
science.
• Furthermore, the company has released version 4.5 of Mintec
Analytics, its commodity price data and insights platform, which
now provides clients with precise cost model forecasts to
enhance their cost management strategies. The addition of this
capability revolutionises how businesses navigate the impact of
future market volatility on their costs, offering unparalleled
precision in predicting and adapting their strategy to raw
material price fluctuations.
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:
• During the 2023 winter period, Cera delivered 7.5 million home
care visits (an important metric of progress), saving the NHS an
estimated £100 million. In just seven years, the company has
now delivered 50 million at-home patient visits.
• The company has continued to make product developments
utilising artificial intelligence. A pilot of its fall prediction AI
platform, which takes information about patients logged by
carers on a smartphone app and assesses their risk of having
a fall, demonstrated a 20% reduction in falls.
• Furthermore, Cera launched an AI scheduler platform that
matches patients to community care up to 5x faster. The
technology also pairs patients with carers to better suit their
needs and reduces average carer travel time between patients
by up to 50%.
18
Schroder British Opportunities Trust plc
Top 10 Equity Investments
continued
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:
• Pirum has continued to make considerable strides with product
development. A key milestone was the introduction of their
Securities Financing Transactions Regulation (SFTR) solution, in
collaboration with S&P Global Market Intelligence Cappitech. This
service ensures compliance with SEC reporting requirements
and enhances operational transparency. The new reporting
solution, which has been adopted by over 150 institutions
worldwide, leverages Pirum’s existing connectivity with the
securities finance, repo and collateral management ecosystems.
• Furthermore, Pirum launched a borrower automation solution,
enabling full automation of the recall lifecycle with its first clients
well ahead of the May 2024 deadline of T+1 settlement in the US,
Canada and Mexico.
• Pirum also successfully tested a distributed ledger technology
(DLT) extension of their securities lending and repo post-trade
solution. This DLT innovation would aim to provide clients with
a distributable golden-record of their trades.
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 utilising 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 July 2023, Rapyd announced the acquisition of a substantial
part of PayU Global Payment Organisation for $610 million. The
company expects the acquisition to provide a richer technology
stack, expanded geographic licensing and broader market reach.
• The combined business is expected to deliver transactions
in over 100 countries, service over 250,000 merchant clients
globally and expand Rapyd’s payments network to over
1,200 payment methods.
Top 10 Equity Investments
continued
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:
• Pirum has continued to make considerable strides with product
development. A key milestone was the introduction of their
Securities Financing Transactions Regulation (SFTR) solution, in
collaboration with S&P Global Market Intelligence Cappitech. This
service ensures compliance with SEC reporting requirements
and enhances operational transparency. The new reporting
solution, which has been adopted by over 150 institutions
worldwide, leverages Pirum’s existing connectivity with the
securities finance, repo and collateral management ecosystems.
• Furthermore, Pirum launched a borrower automation solution,
enabling full automation of the recall lifecycle with its first clients
well ahead of the May 2024 deadline of T+1 settlement in the US,
Canada and Mexico.
• Pirum also successfully tested a distributed ledger technology
(DLT) extension of their securities lending and repo post-trade
solution. This DLT innovation would aim to provide clients with
a distributable golden-record of their trades.
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 utilising 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 July 2023, Rapyd announced the acquisition of a substantial
part of PayU Global Payment Organisation for $610 million. The
company expects the acquisition to provide a richer technology
stack, expanded geographic licensing and broader market reach.
• The combined business is expected to deliver transactions
in over 100 countries, service over 250,000 merchant clients
globally and expand Rapyd’s payments network to over
1,200 payment methods.
Schroder
British Opportunities Trust plc
19
Introduction Strategic Report Governance Financial Other Information (unaudited)
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 November 2023, EasyPark announced its intention to acquire
Flowbird Group, a global mobility player providing integrated
parking and transportation solutions, as it continues its global
growth strategy. The deal will extend EasyPark’s global reach and
be highly complementary to its existing business.
• Flowbird Group operates under the brands Flowbird,
YourParkingSpace, TPARK, Extenso Cloud, and Yellowbrick and
offers multiple mobility solutions, covering equipment and
services such as pay and display machines, software, and park &
charge. Flowbird Group also offers transportation solutions, both
within ticketing and open payments for debit and credit cards, as
well as mobile wallets.
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 April 2024, CFC announced the acquisition of Australian
managing general agent, Solution Underwriting, expanding its
footprint in Australia. Solution is a specialist insurance
underwriter with a focus on financial lines insurance products.
• In terms of product innovations, recent highlights have included
the first ever embedded transaction liability insurance product
and a groundbreaking carbon delivery insurance policy.
• CFC also announced a significant upgrade to its packed
insurance policies for professional services businesses. With
many SMEs buying a professional liability policy for the first time
due to contractual obligations with their business partners, CFC’s
cyber add-on makes it easy for SMEs to also benefit from market-
leading cyber protection at a price they can afford.
Introduction Strategic Report Governance Financial Other Information (unaudited)
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 November 2023, EasyPark announced its intention to acquire
Flowbird Group, a global mobility player providing integrated
parking and transportation solutions, as it continues its global
growth strategy. The deal will extend EasyPark’s global reach and
be highly complementary to its existing business.
• Flowbird Group operates under the brands Flowbird,
YourParkingSpace, TPARK, Extenso Cloud, and Yellowbrick and
offers multiple mobility solutions, covering equipment and
services such as pay and display machines, software, and park &
charge. Flowbird Group also offers transportation solutions, both
within ticketing and open payments for debit and credit cards, as
well as mobile wallets.
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 April 2024, CFC announced the acquisition of Australian
managing general agent, Solution Underwriting, expanding its
footprint in Australia. Solution is a specialist insurance
underwriter with a focus on financial lines insurance products.
• In terms of product innovations, recent highlights have included
the first ever embedded transaction liability insurance product
and a groundbreaking carbon delivery insurance policy.
• CFC also announced a significant upgrade to its packed
insurance policies for professional services businesses. With
many SMEs buying a professional liability policy for the first time
due to contractual obligations with their business partners, CFC’s
cyber add-on makes it easy for SMEs to also benefit from market-
leading cyber protection at a price they can afford.
20
Schroder British Opportunities Trust plc
Top 10 Equity Investments
continued
Culligan
(unquoted holding)
Water systems treatment company for homes and
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:
• Since its combination with UK-headquartered Waterlogic in 2022
to create a leader in clean and sustainable drinking water
solutions and services, Culligan has made progress both
operationally and through further acquisitions.
• In January 2024, Culligan announced the acquisition of the
majority of Primo Water’s businesses in EMEA, excluding those
in the UK, Portugal and Israel. This transaction enhances the
company’s scale and capacity within the EMEA region,
broadening its footprint in 12 countries where it already
operates, while entering markets in Poland, Latvia, Lithuania
and Estonia.
Graphcore (unquoted holding)
Developer of new processors for machine intelligence
Graphcore has developed the Intelligence Processing Unit (IPU),
a new type of microprocessor specifically designed from the ground
up to meet the needs of current and next-generation artificial
intelligence (“AI”) applications. Graphcore’s proprietary technology
combines its advanced semiconductor hardware, the world’s most
complex processor, with its powerful software tools, to dramatically
outperform legacy technologies such as graphic processing units.
Latest updates:
• Graphcore has continued to focus on developing its proprietary
technology and expanding its partnerships.
• In July 2023, the company announced a partnership with cloud
computing provider, Gcore, to open a new AI cloud cluster in
Newport, Wales. Gcore is an international leader in public cloud
and edge computing, content delivery, hosting, and security
solutions. The cluster will increase the number of Graphcore
Intelligent Processing Units (IPUs) available to Gcore customers.
Since then, the offering has been extended into the US.
Top 10 Equity Investments
continued
Culligan
(unquoted holding)
Water systems treatment company for homes and
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:
• Since its combination with UK-headquartered Waterlogic in 2022
to create a leader in clean and sustainable drinking water
solutions and services, Culligan has made progress both
operationally and through further acquisitions.
• In January 2024, Culligan announced the acquisition of the
majority of Primo Water’s businesses in EMEA, excluding those
in the UK, Portugal and Israel. This transaction enhances the
company’s scale and capacity within the EMEA region,
broadening its footprint in 12 countries where it already
operates, while entering markets in Poland, Latvia, Lithuania
and Estonia.
Graphcore (unquoted holding)
Developer of new processors for machine intelligence
Graphcore has developed the Intelligence Processing Unit (IPU),
a new type of microprocessor specifically designed from the ground
up to meet the needs of current and next-generation artificial
intelligence (“AI”) applications. Graphcore’s proprietary technology
combines its advanced semiconductor hardware, the world’s most
complex processor, with its powerful software tools, to dramatically
outperform legacy technologies such as graphic processing units.
Latest updates:
• Graphcore has continued to focus on developing its proprietary
technology and expanding its partnerships.
• In July 2023, the company announced a partnership with cloud
computing provider, Gcore, to open a new AI cloud cluster in
Newport, Wales. Gcore is an international leader in public cloud
and edge computing, content delivery, hosting, and security
solutions. The cluster will increase the number of Graphcore
Intelligent Processing Units (IPUs) available to Gcore customers.
Since then, the offering has been extended into the US.
Schroder
British Opportunities Trust plc
21
Introduction Strategic Report Governance Financial Other Information (unaudited)
Trainline (quoted holding)
Europe’s leading independent rail platform
Trainline enable millions of travellers to seamlessly search, book and
manage their journeys through their highly rated Trainline website,
mobile app and B2B partner channels.
Latest updates:
• Trainline is a home-grown British tech success that has scaled
beyond domestic borders to become Europe’s most downloaded
rail app.
• The company is growing strongly in the UK and across the
continent, with international consumer net ticket sales of more
than £1 billion (FY 2024).
• Growth is fastest in Spanish domestic travel, with market share
continuing to rise on key routes like Madrid-Barcelona, which is
the company’s third most popular route across all countries,
including the UK.
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:
• Learning Curve has made progress with product development in
launching an AI-powered career planning platform (CareersPro)
to support careers guidance, complementing the growth of the
company’s existing Ed-Tech solutions. CareersPro is designed to
provide individuals, young or old, with the tools and resources to
make informed choices about their education and career paths.
Introduction Strategic Report Governance Financial Other Information (unaudited)
Trainline (quoted holding)
Europe’s leading independent rail platform
Trainline enable millions of travellers to seamlessly search, book and
manage their journeys through their highly rated Trainline website,
mobile app and B2B partner channels.
Latest updates:
• Trainline is a home-grown British tech success that has scaled
beyond domestic borders to become Europe’s most downloaded
rail app.
• The company is growing strongly in the UK and across the
continent, with international consumer net ticket sales of more
than £1 billion (FY 2024).
• Growth is fastest in Spanish domestic travel, with market share
continuing to rise on key routes like Madrid-Barcelona, which is
the company’s third most popular route across all countries,
including the UK.
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:
• Learning Curve has made progress with product development in
launching an AI-powered career planning platform (CareersPro)
to support careers guidance, complementing the growth of the
company’s existing Ed-Tech solutions. CareersPro is designed to
provide individuals, young or old, with the tools and resources to
make informed choices about their education and career paths.
22
Schroder British Opportunities Trust plc
Investment Portfolio
as at 31 March 2024
Country of
incorporation
(of underlying Total
Quoted/ holding where Industry Fair value investments
Holding unquoted applicable) Sector £’000 %
Schroder Special Situations Fund
Sterling Liquidity Plus Quoted Luxembourg Collective – SICAV 10,795 13.0
Mintec 1
Unquoted United Kingdom Software 9,591 11.6
Cera EHP S.à r.l. Unquoted United Kingdom Health Care Technology 8,046 9.7
Pirum Systems 1
Unquoted United Kingdom Software 6,884 8.3
Rapyd Financial Network 1
Unquoted United Kingdom IT Services 6,837 8.2
EasyPark 1
Unquoted Sweden Software 6,171 7.4
CFC Underwriting 1
Unquoted United Kingdom Insurance 5,661 6.8
Culligan (formerly Waterlogic) 1
Unquoted United Kingdom Diversified Consumer Services 5,585 6.7
Graphcore Unquoted United Kingdom Semi-conductors & Equipment 2,533 3.0
Trainline Quoted United Kingdom Hotels, Restaurants & Leisure 2,097 2.5
Learning Curve 1
Unquoted United Kingdom Diversified Consumer Services 1,556 1.9
Dalata Hotel Quoted Ireland Hotels, Restaurants & Leisure 1,501 1.8
SSP Quoted United Kingdom Hotels, Restaurants & Leisure 1,443 1.7
Trustpilot Quoted United Kingdom Interactive Media & Services 1,378 1.7
Volution Quoted United Kingdom Building products 1,376 1.7
Watches of Switzerland Quoted United Kingdom Specialty Retail 1,326 1.6
Discoverie Quoted United Kingdom Electrical Equipment 1,183 1.4
GB Quoted United Kingdom Software 1,058 1.3
OSB Quoted United Kingdom Financial Services 1,053 1.3
On the Beach Quoted United Kingdom Hotels, Restaurants & Leisure 919 1.1
Judges Scientific Quoted United Kingdom Machinery 899 1.1
Ascential Quoted United Kingdom Media 849 1.0
MaxCyte Quoted United States Life Sciences Tools & Services 799 1.0
Learning Technologies Quoted United Kingdom Professional Services 655 0.8
Bytes Technology Quoted United Kingdom Software 641 0.8
Sosandar Quoted United Kingdom Textiles, Apparel & Luxury Goods 594 0.7
Mobico Quoted United Kingdom Ground Transportation 516 0.6
Luceco Quoted United Kingdom Electrical Equipment 513 0.6
Victorian Plumbing Quoted United Kingdom Specialty Retail 362 0.4
Invinity Energy Systems Quoted Jersey Electrical Equipment 147 0.2
Lendinvest Quoted United Kingdom Financial Services 124 0.1
Total investments
2
83,092 100.0
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 52,864 63.6
Quoted on FTSE 250 11,862 14.3
Collective investment scheme – money market instruments 10,795 13.0
Listed on AIM 4,638 5.6
Quoted on FTSE Allshare 1,432 1.7
Listed on a recognised stock exchange overseas 1,501 1.8
Total 83,092 100.0
Investment Portfolio
as at 31 March 2024
Country of
incorporation
(of underlying Total
Quoted/ holding where Industry Fair value investments
Holding unquoted applicable) Sector £’000 %
Schroder Special Situations Fund
Sterling Liquidity Plus Quoted Luxembourg Collective – SICAV 10,795 13.0
Mintec 1
Unquoted United Kingdom Software 9,591 11.6
Cera EHP S.à r.l. Unquoted United Kingdom Health Care Technology 8,046 9.7
Pirum Systems 1
Unquoted United Kingdom Software 6,884 8.3
Rapyd Financial Network 1
Unquoted United Kingdom IT Services 6,837 8.2
EasyPark 1
Unquoted Sweden Software 6,171 7.4
CFC Underwriting 1
Unquoted United Kingdom Insurance 5,661 6.8
Culligan (formerly Waterlogic) 1
Unquoted United Kingdom Diversified Consumer Services 5,585 6.7
Graphcore Unquoted United Kingdom Semi-conductors & Equipment 2,533 3.0
Trainline Quoted United Kingdom Hotels, Restaurants & Leisure 2,097 2.5
Learning Curve 1
Unquoted United Kingdom Diversified Consumer Services 1,556 1.9
Dalata Hotel Quoted Ireland Hotels, Restaurants & Leisure 1,501 1.8
SSP Quoted United Kingdom Hotels, Restaurants & Leisure 1,443 1.7
Trustpilot Quoted United Kingdom Interactive Media & Services 1,378 1.7
Volution Quoted United Kingdom Building products 1,376 1.7
Watches of Switzerland Quoted United Kingdom Specialty Retail 1,326 1.6
Discoverie Quoted United Kingdom Electrical Equipment 1,183 1.4
GB Quoted United Kingdom Software 1,058 1.3
OSB Quoted United Kingdom Financial Services 1,053 1.3
On the Beach Quoted United Kingdom Hotels, Restaurants & Leisure 919 1.1
Judges Scientific Quoted United Kingdom Machinery 899 1.1
Ascential Quoted United Kingdom Media 849 1.0
MaxCyte Quoted United States Life Sciences Tools & Services 799 1.0
Learning Technologies Quoted United Kingdom Professional Services 655 0.8
Bytes Technology Quoted United Kingdom Software 641 0.8
Sosandar Quoted United Kingdom Textiles, Apparel & Luxury Goods 594 0.7
Mobico Quoted United Kingdom Ground Transportation 516 0.6
Luceco Quoted United Kingdom Electrical Equipment 513 0.6
Victorian Plumbing Quoted United Kingdom Specialty Retail 362 0.4
Invinity Energy Systems Quoted Jersey Electrical Equipment 147 0.2
Lendinvest Quoted United Kingdom Financial Services 124 0.1
Total investments
2
83,092 100.0
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 52,864 63.6
Quoted on FTSE 250 11,862 14.3
Collective investment scheme – money market instruments 10,795 13.0
Listed on AIM 4,638 5.6
Quoted on FTSE Allshare 1,432 1.7
Listed on a recognised stock exchange overseas 1,501 1.8
Total 83,092 100.0
Schroder
British Opportunities Trust plc
23
Introduction Strategic Report Governance Financial Other Information (unaudited)
Business Review
Purpose, values and culture
Purpose
The Company’s purpose is to provide all investors with access to high quality public and private equity companies focused on sustainable
growth, resulting in long-term shareholder value, in line with the investment objective. The Board’s focus is on long-term growth rather than
providing shareholders with dividend income.
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 the majority 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 their best interests.
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 Board is responsible for embedding the Company’s culture in its operations.
The Board engages with its outsourced service providers to safeguard the Company’s interests and ensure our service providers meet the
standards expected by the Company. 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, to ensure they are in line with expectations.
Business model
The Company is a listed investment trust, that has outsourced its operations to third party service providers. The Company’s strategy is to meet
its investment objective to deliver long-term returns throughout the life of the Company by investing in a diversified public equity and private
equity portfolio of predominantly UK companies. The Articles of Association of the Company 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, unless alternative proposals have been approved by shareholders.
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 Investment 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 below.
Investment trust 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.
Investor
value
Strategy Board
Appoints the Manager and
other service providers
to achieve objectives
Responsible for the
overall strategy and
oversight including
risk management
Activities centred
on the creation of
shareholder value
–
–
–
Sets objectives, strategy and key
performance indicators (“KPIs”)
–
Oversight
Oversees portfolio
management
Monitors the achievement
of KPIs
Oversees the use of gearing
Oversees discount/premium
management and the
provision of liquidity
through share issuance
and repurchase
–
–
–
–
Investment
Investment Manager
implements the investment
strategy by following an
investment process
Supported by strong
research and
risk environment
Regular reporting and
interaction with the Board
–
–
–
Promotion
Marketing and sales
capability of the Manager
Support from the Corporate
Broker with secondary
market intervention to
support discount/
premium management
–
–
Competitiveness
Board is focused on ensuring:
– that the Company remains
attractive to investors
– that the fees and ongoing
charges remain competitive
Introduction Strategic Report Governance Financial Other Information (unaudited)
Business Review
Purpose, values and culture
Purpose
The Company’s purpose is to provide all investors with access to high quality public and private equity companies focused on sustainable
growth, resulting in long-term shareholder value, in line with the investment objective. The Board’s focus is on long-term growth rather than
providing shareholders with dividend income.
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 the majority 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 their best interests.
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 Board is responsible for embedding the Company’s culture in its operations.
The Board engages with its outsourced service providers to safeguard the Company’s interests and ensure our service providers meet the
standards expected by the Company. 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, to ensure they are in line with expectations.
Business model
The Company is a listed investment trust, that has outsourced its operations to third party service providers. The Company’s strategy is to meet
its investment objective to deliver long-term returns throughout the life of the Company by investing in a diversified public equity and private
equity portfolio of predominantly UK companies. The Articles of Association of the Company 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, unless alternative proposals have been approved by shareholders.
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 Investment 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 below.
Investment trust 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.
Investor
value
Strategy Board
Appoints the Manager and
other service providers
to achieve objectives
Responsible for the
overall strategy and
oversight including
risk management
Activities centred
on the creation of
shareholder value
–
–
–
Sets objectives, strategy and key
performance indicators (“KPIs”)
–
Oversight
Oversees portfolio
management
Monitors the achievement
of KPIs
Oversees the use of gearing
Oversees discount/premium
management and the
provision of liquidity
through share issuance
and repurchase
–
–
–
–
Investment
Investment Manager
implements the investment
strategy by following an
investment process
Supported by strong
research and
risk environment
Regular reporting and
interaction with the Board
–
–
–
Promotion
Marketing and sales
capability of the Manager
Support from the Corporate
Broker with secondary
market intervention to
support discount/
premium management
–
–
Competitiveness
Board is focused on ensuring:
– that the Company remains
attractive to investors
– that the fees and ongoing
charges remain competitive
24
Schroder British Opportunities Trust plc
Business Review
continued
Investment model
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’ 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% of Net Asset Value, calculated at the time of drawdown of the
relevant borrowing.
In accordance with its investment objective, the Company invests in
a diversified portfolio with the aim of spreading investment risk, which
is monitored by the Board and the Manager.
The key restrictions imposed on the Manager, at the time of
committment, are that:
(a) no more than 10% of NAV may be invested in any investee
company;
(b) the Company’s portfolio shall comprise no fewer than
30 holdings;
(c) no more than 20% of NAV may be invested in investee
companies which are not UK Companies;
(d) the Company may not take a controlling stake in any investee
company, whether directly or indirectly, and:
– in respect of public equity investments, the Company may
own no more than 10% of the total voting rights of any
investee company;
– in respect of private equity investments, the Company may
own no more than 20% of the enterprise value of any
investee company; and
(e) the Company will not invest more than 10% in aggregate of
gross assets in other listed closed-ended investment funds,
except that this restriction shall not apply to investments in listed
closed-ended investment funds which themselves have stated
investment policies to invest no more than 15% of their gross
assets in other listed closed-ended investment funds.
Additionally, the Company will itself not invest more than 15% of
its gross assets in other investment companies or investment
trusts which are listed on the Official List.
As set out on page 22, the investment portfolio comprised 31 holdings
at 31 March 2024. The largest holding in an investee company was
Mintec at 11.6%. The Company currently holds most of its liquid assets
in the Schroder Special Situation Fund Sterling Liquidity Plus, which
represented 13% of total investments at 31 March 2024.
Key Performance Indicators (“KPIs”)
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;
• Share price total return; and
• Ongoing charges ratio.
Some KPIs are Alternative Performance Measures.
Further details can be found on the inside cover and page 1 and
definitions of these terms on pages 80 and 81.
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 2024 was
110.05p (31 March 2023:107.32p). During the year the Company’s
NAV per share rose by 2.5%. Since IPO the NAV per share has
increased by 12.3%. A full description of performance during the year
under review is contained in the Investment 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 NAV per share, whilst
acknowledging the challenge this brings to a Company with
a substantial portfolio of unquoted investments. The Board regularly
reviews the level of discount/premium of the Company’s share price to
the net asset value per share and considers ways in which share price
performance may be enhanced, including the effectiveness of share
buy-backs, where appropriate. The discount at which the Company's
shares traded to NAV improved by 8.4 percentage points during the
year from 36.2% at 31 March 2023 to 27.8% at 31 March 2024.
Share price total return
The Directors also regard the Company’s share price total return to
be a key indicator of performance. This reflects share price growth of
the Company which the Board recognises is important to investors.
During the year the Company's share price increased by 16.1% from
68.50p at 31 March 2023 to 79.50p at 31 March 2024.
Ongoing charges
The Company monitors operating expenses on a regular basis. The
ongoing charges at 31 March 2024 were 1.40% (31 March 2023:
1.47%). The calculation is shown in the definition of terms and
performance measures on page 81. The Board seeks to manage and
where possible to improve the ongoing charges ratio and to this end
the Management Engagement Committee regularly reviews its
service provider fee rates.
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.
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-gb/uk/individual/never-miss-an-update/.
Business Review
continued
Investment model
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’ 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% of Net Asset Value, calculated at the time of drawdown of the
relevant borrowing.
In accordance with its investment objective, the Company invests in
a diversified portfolio with the aim of spreading investment risk, which
is monitored by the Board and the Manager.
The key restrictions imposed on the Manager, at the time of
committment, are that:
(a) no more than 10% of NAV may be invested in any investee
company;
(b) the Company’s portfolio shall comprise no fewer than
30 holdings;
(c) no more than 20% of NAV may be invested in investee
companies which are not UK Companies;
(d) the Company may not take a controlling stake in any investee
company, whether directly or indirectly, and:
– in respect of public equity investments, the Company may
own no more than 10% of the total voting rights of any
investee company;
– in respect of private equity investments, the Company may
own no more than 20% of the enterprise value of any
investee company; and
(e) the Company will not invest more than 10% in aggregate of
gross assets in other listed closed-ended investment funds,
except that this restriction shall not apply to investments in listed
closed-ended investment funds which themselves have stated
investment policies to invest no more than 15% of their gross
assets in other listed closed-ended investment funds.
Additionally, the Company will itself not invest more than 15% of
its gross assets in other investment companies or investment
trusts which are listed on the Official List.
As set out on page 22, the investment portfolio comprised 31 holdings
at 31 March 2024. The largest holding in an investee company was
Mintec at 11.6%. The Company currently holds most of its liquid assets
in the Schroder Special Situation Fund Sterling Liquidity Plus, which
represented 13% of total investments at 31 March 2024.
Key Performance Indicators (“KPIs”)
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;
• Share price total return; and
• Ongoing charges ratio.
Some KPIs are Alternative Performance Measures.
Further details can be found on the inside cover and page 1 and
definitions of these terms on pages 80 and 81.
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 2024 was
110.05p (31 March 2023:107.32p). During the year the Company’s
NAV per share rose by 2.5%. Since IPO the NAV per share has
increased by 12.3%. A full description of performance during the year
under review is contained in the Investment 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 NAV per share, whilst
acknowledging the challenge this brings to a Company with
a substantial portfolio of unquoted investments. The Board regularly
reviews the level of discount/premium of the Company’s share price to
the net asset value per share and considers ways in which share price
performance may be enhanced, including the effectiveness of share
buy-backs, where appropriate. The discount at which the Company's
shares traded to NAV improved by 8.4 percentage points during the
year from 36.2% at 31 March 2023 to 27.8% at 31 March 2024.
Share price total return
The Directors also regard the Company’s share price total return to
be a key indicator of performance. This reflects share price growth of
the Company which the Board recognises is important to investors.
During the year the Company's share price increased by 16.1% from
68.50p at 31 March 2023 to 79.50p at 31 March 2024.
Ongoing charges
The Company monitors operating expenses on a regular basis. The
ongoing charges at 31 March 2024 were 1.40% (31 March 2023:
1.47%). The calculation is shown in the definition of terms and
performance measures on page 81. The Board seeks to manage and
where possible to improve the ongoing charges ratio and to this end
the Management Engagement Committee regularly reviews its
service provider fee rates.
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.
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-gb/uk/individual/never-miss-an-update/.
Schroder
British Opportunities Trust plc
25
Introduction Strategic Report Governance Financial Other Information (unaudited)
Stakeholder engagement
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 Investment 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. 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 Significance Engagement 2023/ 24 application
The AGM was held in person in 2023 and
the Board, along with the Investment
Manager, look forward to meeting and
interacting with shareholders at the
forthcoming AGM in September 2024.
The Company’s web pages host the
annual and half year reports. The
Company publishes quarterly fact sheets
which are available on the Company’s
web pages along with the opportunity to
view past webinars and sign up to receive
a newsletter to receive regular updates
on the Company.
The Chairman of the Board met with its
major shareholders during the year and
since the year end. Their views were
taken into consideration as part of the
Board’s duty to ensure their interests
were taken into account.
The Investment Manager engaged with
a number of its investors during the year
and regular feedback was provided to
the Board. A number of promotional
activities were undertaken during the
year including Investment Manager
interviews, a capital markets event,
webinars and coverage in key
publications.
The Board continued to work with Kepler
on promoting the Company through its
research notes which are published twice
a year (following the publication of the
Company’s half year and annual results).
– AGM: The Company welcomes
attendance and participation from
shareholders at the AGM.
Shareholders have the opportunity to
meet the Directors and the
Investment Manager and ask
questions at the AGM. The Board
values the feedback it receives from
shareholders which is incorporated
into Board discussions.
– Publications: The annual and half
year results presentations are
available on the Company’s web
pages with their availability
announced via the London Stock
Exchange. Daily and quarterly NAV
updates are issued to provide
shareholders with transparent
information on the Company’s
portfolio. Feedback and/or questions
received from shareholders enable
the Company to evolve its reporting
which, in turn, helps to deliver
transparent and understandable
updates.
– Shareholder communication: The
Manager communicates with
shareholders periodically. All investors
are offered the opportunity to meet
the Chairman, Senior Independent
Director, or other Board members
without using the Manager or
Company Secretary as a conduit, by
writing to the Company’s registered
office. The Board also corresponds
with shareholders by letter and email.
The Board receives regular feedback
from its Broker on investor
engagement and sentiment.
– Investor Relations updates: At
every Board meeting, the Directors
receive updates on share trading
activity, share price performance and
any shareholders’ feedback, as well as
any publications or comments in the
press. To gain a deeper
understanding of the views of its
shareholders and potential investors,
the Investment Manager also
undertakes investor roadshows
throughout the year.
Regular communication
with existing and
prospective shareholders
ensures that the Board is
cognisant of investor
priorities and addresses any
concerns raised.
Clear communication of the
Company’s strategy and
performance against its
investment objective can
help maintain demand for
the Company’s shares and
promote an investor base
that is interested in a
long-term holding in the
Company.
Shareholders
Introduction Strategic Report Governance Financial Other Information (unaudited)
Stakeholder engagement
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 Investment 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. 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 Significance Engagement 2023/ 24 application
The AGM was held in person in 2023 and
the Board, along with the Investment
Manager, look forward to meeting and
interacting with shareholders at the
forthcoming AGM in September 2024.
The Company’s web pages host the
annual and half year reports. The
Company publishes quarterly fact sheets
which are available on the Company’s
web pages along with the opportunity to
view past webinars and sign up to receive
a newsletter to receive regular updates
on the Company.
The Chairman of the Board met with its
major shareholders during the year and
since the year end. Their views were
taken into consideration as part of the
Board’s duty to ensure their interests
were taken into account.
The Investment Manager engaged with
a number of its investors during the year
and regular feedback was provided to
the Board. A number of promotional
activities were undertaken during the
year including Investment Manager
interviews, a capital markets event,
webinars and coverage in key
publications.
The Board continued to work with Kepler
on promoting the Company through its
research notes which are published twice
a year (following the publication of the
Company’s half year and annual results).
– AGM: The Company welcomes
attendance and participation from
shareholders at the AGM.
Shareholders have the opportunity to
meet the Directors and the
Investment Manager and ask
questions at the AGM. The Board
values the feedback it receives from
shareholders which is incorporated
into Board discussions.
– Publications: The annual and half
year results presentations are
available on the Company’s web
pages with their availability
announced via the London Stock
Exchange. Daily and quarterly NAV
updates are issued to provide
shareholders with transparent
information on the Company’s
portfolio. Feedback and/or questions
received from shareholders enable
the Company to evolve its reporting
which, in turn, helps to deliver
transparent and understandable
updates.
– Shareholder communication: The
Manager communicates with
shareholders periodically. All investors
are offered the opportunity to meet
the Chairman, Senior Independent
Director, or other Board members
without using the Manager or
Company Secretary as a conduit, by
writing to the Company’s registered
office. The Board also corresponds
with shareholders by letter and email.
The Board receives regular feedback
from its Broker on investor
engagement and sentiment.
– Investor Relations updates: At
every Board meeting, the Directors
receive updates on share trading
activity, share price performance and
any shareholders’ feedback, as well as
any publications or comments in the
press. To gain a deeper
understanding of the views of its
shareholders and potential investors,
the Investment Manager also
undertakes investor roadshows
throughout the year.
Regular communication
with existing and
prospective shareholders
ensures that the Board is
cognisant of investor
priorities and addresses any
concerns raised.
Clear communication of the
Company’s strategy and
performance against its
investment objective can
help maintain demand for
the Company’s shares and
promote an investor base
that is interested in a
long-term holding in the
Company.
Shareholders
26
Schroder British Opportunities Trust plc
Business Review
continued
Stakeholder Significance Engagement 2023/ 24 application
Representatives of the Portfolio Manager,
including at least one of the portfolio
managers, attended each Board meeting
to provide an update on the investment
portfolio along with presenting on
macro-economic issues.
The Board held a strategy session at
which the Board and Investment
Manager discussed key issues outside
the normal Board reporting framework.
The Management Engagement
Committee reviewed the performance of
the Manager, its remuneration and the
discharge of its contractual obligations.
The Investment Manager attends all
Board and certain Committee meetings
in order to update the Directors on the
performance of the investments and the
implementation of the investment
strategy and objective.
Important components in the Board’s
collaboration with the Investment
Manager are:
– Encouraging open discussion with the
Investment Manager;
– Recognising that the interests of
shareholders and the Investment
Manager (as well as of its other
clients) are, for the most part aligned,
adopting a tone of constructive
challenge, balanced when those
interests are not fully congruent by
robust negotiation of the Investment
Manager’s terms of engagement; and
– Drawing on Directors’ individual
experience to support the Investment
Manager by holding it to account
regarding investment strategy, and
challenging where necessary.
The Investment Manager is
the most significant service
provider of the Company,
and a description of its role
can be found in the
Investment Manager’s
Review on pages 6 to 12.
The Investment Manager’s
performance is critical for
the Company to deliver its
investment strategy
successfully and meet its
objective to achieve
long-term capital growth
through investing in a
diversified global portfolio of
private and public equity
companies.
Engagement with the
Company’s Investment
Manager is necessary to
review whether it is
achieving the Company’s
objectives and adhering to
the Company’s policies and
to understand the risks and
opportunities.
The Investment
Manager
Other service
providers
In order to operate as an
investment trust with a
premium listing on the
London Stock Exchange, the
Company relies on a diverse
range of advisers and
outsourced service
providers. To ensure the
smooth operation of the
Company, the Board
engages with key service
providers to ensure they are
delivering their services in
line with their contractual
obligations.
The Board maintains regular contact with
its key external providers, both through
the Board and Committee meetings,
where service providers are periodically
invited to attend, as well as outside of the
regular meeting cycle. Their advice, as
well as their needs and views, are
routinely taken into account and the
need to foster business relationships
with key service providers is central to
Directors’ decision-making as the Board
of an externally managed investment
trust.
The Board engaged regularly with service
providers as well as carrying out a review
of the service providers’ business
continuity plans and additional cyber
security provisions.
Under delegated authority from the
Board, the Management Engagement
Committee reviewed all material third
party service providers and their fees.
The Board considered the ongoing
appointments and fees of its service
providers to be in the best interests of
the Company and its shareholders as
a whole and will continue to monitor
their progress in the year ahead.
The Directors were invited to attend an
internal controls briefing session which
assessed the internal controls of certain
key service providers including the
Company’s Depositary and Custodian,
HSBC, the Company’s Registrar, Equiniti,
and Schroders Group Internal Audit.
Business Review
continued
Stakeholder Significance Engagement 2023/ 24 application
Representatives of the Portfolio Manager,
including at least one of the portfolio
managers, attended each Board meeting
to provide an update on the investment
portfolio along with presenting on
macro-economic issues.
The Board held a strategy session at
which the Board and Investment
Manager discussed key issues outside
the normal Board reporting framework.
The Management Engagement
Committee reviewed the performance of
the Manager, its remuneration and the
discharge of its contractual obligations.
The Investment Manager attends all
Board and certain Committee meetings
in order to update the Directors on the
performance of the investments and the
implementation of the investment
strategy and objective.
Important components in the Board’s
collaboration with the Investment
Manager are:
– Encouraging open discussion with the
Investment Manager;
– Recognising that the interests of
shareholders and the Investment
Manager (as well as of its other
clients) are, for the most part aligned,
adopting a tone of constructive
challenge, balanced when those
interests are not fully congruent by
robust negotiation of the Investment
Manager’s terms of engagement; and
– Drawing on Directors’ individual
experience to support the Investment
Manager by holding it to account
regarding investment strategy, and
challenging where necessary.
The Investment Manager is
the most significant service
provider of the Company,
and a description of its role
can be found in the
Investment Manager’s
Review on pages 6 to 12.
The Investment Manager’s
performance is critical for
the Company to deliver its
investment strategy
successfully and meet its
objective to achieve
long-term capital growth
through investing in a
diversified global portfolio of
private and public equity
companies.
Engagement with the
Company’s Investment
Manager is necessary to
review whether it is
achieving the Company’s
objectives and adhering to
the Company’s policies and
to understand the risks and
opportunities.
The Investment
Manager
Other service
providers
In order to operate as an
investment trust with a
premium listing on the
London Stock Exchange, the
Company relies on a diverse
range of advisers and
outsourced service
providers. To ensure the
smooth operation of the
Company, the Board
engages with key service
providers to ensure they are
delivering their services in
line with their contractual
obligations.
The Board maintains regular contact with
its key external providers, both through
the Board and Committee meetings,
where service providers are periodically
invited to attend, as well as outside of the
regular meeting cycle. Their advice, as
well as their needs and views, are
routinely taken into account and the
need to foster business relationships
with key service providers is central to
Directors’ decision-making as the Board
of an externally managed investment
trust.
The Board engaged regularly with service
providers as well as carrying out a review
of the service providers’ business
continuity plans and additional cyber
security provisions.
Under delegated authority from the
Board, the Management Engagement
Committee reviewed all material third
party service providers and their fees.
The Board considered the ongoing
appointments and fees of its service
providers to be in the best interests of
the Company and its shareholders as
a whole and will continue to monitor
their progress in the year ahead.
The Directors were invited to attend an
internal controls briefing session which
assessed the internal controls of certain
key service providers including the
Company’s Depositary and Custodian,
HSBC, the Company’s Registrar, Equiniti,
and Schroders Group Internal Audit.
Schroder
British Opportunities Trust plc
27
Introduction Strategic Report Governance Financial Other Information (unaudited)
Stakeholder Significance Engagement 2023/ 24 application
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
2024:
• the Board and Management Engagement Committee undertook reviews of the Investment Manager and the Company’s third-party service
providers and agreed that their continued appointment and fees remained in the best interests of the Company and its shareholders.
• the Board continued to consider Board succession planning and undertook a recruitment process, subsequent to year-end. Since the
retirement of Christopher Keljik, the Board has operated with three Directors. However, as set out in the Chairman’s statement,
Neil England intends to step down at the AGM and the Board agreed that it would like to build Board strength back up to four. Two
Directors were appointed in July 2024 and are being put forward for election at the upcoming AGM. The appointments broaden the Board’s
composition and it is intended that Justin Ward will replace Neil England as Chairman.
• The Board decided to form a new Valuations Committee. This decision recognised the importance of the Board's oversight role on
valuations and the need for shareholders to have confidence in the outcomes.
Responsible investment
The Manager 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/.
Corporate and social responsibility
The Board recognises the Company’s duty with respect to corporate and social responsibility and engages with its outsourced service providers
and other stakeholders to safeguard the Company’s interests. As part of this ongoing monitoring, the Board receives reports from its service
providers with respect to their diversity policies; anti-bribery and corruption policies; Modern Slavery Act 2015 statements; financial crime
policies; and greenhouse gas and energy usage reporting.
Diversity policy
The Board has adopted a diversity and inclusion policy which seeks to promote diversity of gender, social and ethnic backgrounds, cognitive and
personal strengths. The Board recognises the value of diversity and when considering new appointments, the Board endeavours to ensure that
it has the capabilities required to be effective and oversee the Company’s strategic priorities. This includes an appropriate range, balance and
diversity of skills, experience and knowledge. The Company is committed to ensuring that any vacancies arising are filled by the best qualified
candidates and appointments will always be made on merit alone.
Statement on Board diversity – gender and ethnic background
The Board has made a commitment to consider diversity when reviewing the composition of the Board and notes the Listing Rules
requirements (LR 9.8.6R(9) and (11)) regarding the targets on Board diversity:
• at least 40% of individuals on the Board are women;
• at least one senior Board position is held by a woman; and
• at least one individual on the Board is from a minority ethnic background.
The Board received regular updates on
engagement with investee companies
from the Investment Manager at its
Board meetings.
During the year, the Investment Manager
engaged with many of its investee
companies and voted at shareholder
meetings.
The Investment Management team
conducts face-to-face and/or virtual
meetings with the management teams of
all investee companies to understand
current trading and prospects for their
businesses, and to ensure that their
investment principles and approach are
understood.
The Investment Manager has
discretionary powers to exercise the
Company’s voting rights on resolutions
proposed by the investee companies
within the Company’s portfolio. The
Investment Manager report to the Board
on stewardship (including voting) issues
and the Board will question the rationale
for voting decisions made.
By active engagement and exercising
voting rights, the Investment Manager
actively works with companies to improve
corporate standards, transparency and
accountability.
The Investment Manager
focuses on investing in
those companies it believes
can compound in value over
the long term.
As an investment trust with
no trading activity and an
outsourced business model,
the Company has no direct
social, community or
environmental
responsibilities, however,
the Board monitors activities
of investee companies
through its delegation to
the Investment Manager.
Investee
companies
Introduction Strategic Report Governance Financial Other Information (unaudited)
Stakeholder Significance Engagement 2023/ 24 application
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
2024:
• the Board and Management Engagement Committee undertook reviews of the Investment Manager and the Company’s third-party service
providers and agreed that their continued appointment and fees remained in the best interests of the Company and its shareholders.
• the Board continued to consider Board succession planning and undertook a recruitment process, subsequent to year-end. Since the
retirement of Christopher Keljik, the Board has operated with three Directors. However, as set out in the Chairman’s statement,
Neil England intends to step down at the AGM and the Board agreed that it would like to build Board strength back up to four. Two
Directors were appointed in July 2024 and are being put forward for election at the upcoming AGM. The appointments broaden the Board’s
composition and it is intended that Justin Ward will replace Neil England as Chairman.
• The Board decided to form a new Valuations Committee. This decision recognised the importance of the Board's oversight role on
valuations and the need for shareholders to have confidence in the outcomes.
Responsible investment
The Manager 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/.
Corporate and social responsibility
The Board recognises the Company’s duty with respect to corporate and social responsibility and engages with its outsourced service providers
and other stakeholders to safeguard the Company’s interests. As part of this ongoing monitoring, the Board receives reports from its service
providers with respect to their diversity policies; anti-bribery and corruption policies; Modern Slavery Act 2015 statements; financial crime
policies; and greenhouse gas and energy usage reporting.
Diversity policy
The Board has adopted a diversity and inclusion policy which seeks to promote diversity of gender, social and ethnic backgrounds, cognitive and
personal strengths. The Board recognises the value of diversity and when considering new appointments, the Board endeavours to ensure that
it has the capabilities required to be effective and oversee the Company’s strategic priorities. This includes an appropriate range, balance and
diversity of skills, experience and knowledge. The Company is committed to ensuring that any vacancies arising are filled by the best qualified
candidates and appointments will always be made on merit alone.
Statement on Board diversity – gender and ethnic background
The Board has made a commitment to consider diversity when reviewing the composition of the Board and notes the Listing Rules
requirements (LR 9.8.6R(9) and (11)) regarding the targets on Board diversity:
• at least 40% of individuals on the Board are women;
• at least one senior Board position is held by a woman; and
• at least one individual on the Board is from a minority ethnic background.
The Board received regular updates on
engagement with investee companies
from the Investment Manager at its
Board meetings.
During the year, the Investment Manager
engaged with many of its investee
companies and voted at shareholder
meetings.
The Investment Management team
conducts face-to-face and/or virtual
meetings with the management teams of
all investee companies to understand
current trading and prospects for their
businesses, and to ensure that their
investment principles and approach are
understood.
The Investment Manager has
discretionary powers to exercise the
Company’s voting rights on resolutions
proposed by the investee companies
within the Company’s portfolio. The
Investment Manager report to the Board
on stewardship (including voting) issues
and the Board will question the rationale
for voting decisions made.
By active engagement and exercising
voting rights, the Investment Manager
actively works with companies to improve
corporate standards, transparency and
accountability.
The Investment Manager
focuses on investing in
those companies it believes
can compound in value over
the long term.
As an investment trust with
no trading activity and an
outsourced business model,
the Company has no direct
social, community or
environmental
responsibilities, however,
the Board monitors activities
of investee companies
through its delegation to
the Investment Manager.
Investee
companies
28
Schroder British Opportunities Trust plc
Business Review
continued
The FCA defines senior Board positions as Chairman, Chief Executive
Officer (“CEO”), Chief Financial Officer (“CFO”) or Senior Independent
Director (“SID”). As an investment trust with no executive officers, the
Company has no CEO or CFO. The Board has reflected the senior
positions of the Chairman of the Board and the SID in its diversity
tables below.
The Board has chosen to align its diversity reporting reference date
with the Company’s financial year end and proposes to maintain this
alignment for future reporting periods. The following information has
been provided by each Director through the completion of
a questionnaire.
As at 31 March 2024, the Company met one of the three criteria for at
least one senior Board position to be held by a woman. The target in
relation to the number of women on the Board has now been
addressed with the appointment of Jemma Bruton. The target for at
least one individual on the Board to be from a minority ethnic
background was not met and the Board is conscious that while the
Directors are all independent and have a diverse range of views and
experience, its small composition will make these targets challenging
to fully implement.
The below tables set out the gender and ethnic diversity composition
of the Board as at 31 March 2024.
Gender identity
Number of
Number of Percentage senior
Board of the positions on
members Board the Board
Men 2 66.66 1
Women 1 33.33 1
Not specified/prefer not
to say – – –
Ethnic background
Number of
Number of Percentage senior
Board of the positions on
members Board the Board
White British or other White
(including minority-white
groups) 3 100 2
Mixed/Multiple Ethnic Groups – – –
Asian/Asian British – – –
Black/African/Caribbean/Black
British – – –
Other ethnic group, including
Arab – – –
Not specified/prefer not to say – – –
Since the end of the period two Directors have been appointed and
information on their gender and ethnic diversity will be included in
the next annual report and financial statements.
Financial crime policy
The Company continues to be committed to carrying out its business
fairly, honestly and openly operates a financial crime policy covering
bribery and corruption, tax evasion, money laundering, terrorist
financing and sanctions, as well as seeking confirmations that the
Company’s service providers’ policies are operating soundly.
Modern Slavery Act 2015
As an investment trust, the Company does not provide goods or
services in the normal course of business and does not have
customers. Accordingly, the Directors consider that the Company is
not required to make any slavery or human trafficking statement
under the Modern Slavery Act 2015.
Climate
Greenhouse gas emissions and energy usage
As the Company outsources its operations to third parties, it
consumed less than 40,000 kWh during the year and so has no
greenhouse gas emissions, energy consumption or energy efficiency
action to report.
Taskforce for Climate-Related Financial Disclosures
(“TCFD”)
The Company, as an investment trust, is exempt from the
requirement to report against TCFD regulation. However, the
Company’s Investment Manager produces an annual product level
disclosure consistent with the TCFD. This can be found here:
https://mybrand.schroders.com/m/44863c680e83c467/original/TCFD-
GB97406M-Schroder-British-Opportunities-Trust-20231231.pdf.
Business Review
continued
The FCA defines senior Board positions as Chairman, Chief Executive
Officer (“CEO”), Chief Financial Officer (“CFO”) or Senior Independent
Director (“SID”). As an investment trust with no executive officers, the
Company has no CEO or CFO. The Board has reflected the senior
positions of the Chairman of the Board and the SID in its diversity
tables below.
The Board has chosen to align its diversity reporting reference date
with the Company’s financial year end and proposes to maintain this
alignment for future reporting periods. The following information has
been provided by each Director through the completion of
a questionnaire.
As at 31 March 2024, the Company met one of the three criteria for at
least one senior Board position to be held by a woman. The target in
relation to the number of women on the Board has now been
addressed with the appointment of Jemma Bruton. The target for at
least one individual on the Board to be from a minority ethnic
background was not met and the Board is conscious that while the
Directors are all independent and have a diverse range of views and
experience, its small composition will make these targets challenging
to fully implement.
The below tables set out the gender and ethnic diversity composition
of the Board as at 31 March 2024.
Gender identity
Number of
Number of Percentage senior
Board of the positions on
members Board the Board
Men 2 66.66 1
Women 1 33.33 1
Not specified/prefer not
to say – – –
Ethnic background
Number of
Number of Percentage senior
Board of the positions on
members Board the Board
White British or other White
(including minority-white
groups) 3 100 2
Mixed/Multiple Ethnic Groups – – –
Asian/Asian British – – –
Black/African/Caribbean/Black
British – – –
Other ethnic group, including
Arab – – –
Not specified/prefer not to say – – –
Since the end of the period two Directors have been appointed and
information on their gender and ethnic diversity will be included in
the next annual report and financial statements.
Financial crime policy
The Company continues to be committed to carrying out its business
fairly, honestly and openly operates a financial crime policy covering
bribery and corruption, tax evasion, money laundering, terrorist
financing and sanctions, as well as seeking confirmations that the
Company’s service providers’ policies are operating soundly.
Modern Slavery Act 2015
As an investment trust, the Company does not provide goods or
services in the normal course of business and does not have
customers. Accordingly, the Directors consider that the Company is
not required to make any slavery or human trafficking statement
under the Modern Slavery Act 2015.
Climate
Greenhouse gas emissions and energy usage
As the Company outsources its operations to third parties, it
consumed less than 40,000 kWh during the year and so has no
greenhouse gas emissions, energy consumption or energy efficiency
action to report.
Taskforce for Climate-Related Financial Disclosures
(“TCFD”)
The Company, as an investment trust, is exempt from the
requirement to report against TCFD regulation. However, the
Company’s Investment Manager produces an annual product level
disclosure consistent with the TCFD. This can be found here:
https://mybrand.schroders.com/m/44863c680e83c467/original/TCFD-
GB97406M-Schroder-British-Opportunities-Trust-20231231.pdf.
Schroder
British Opportunities Trust plc
29
Introduction Strategic Report Governance Financial Other Information (unaudited)
Principal and emerging risks and uncertainties
The Board, through its delegation to the Audit and Risk Committee, is responsible for establishing a process for identifying, managing and
monitoring emerging and principal risks of the Company and monitoring the Company’s financial internal control systems. The Board has
adopted a detailed matrix of principal risks affecting the Company’s business as an investment trust and has established associated policies and
processes designed to manage and, where possible, mitigate those risks, which are monitored by the Audit and Risk Committee on an ongoing
basis. This system assists the Board in determining the nature and extent of the risks it is willing to take in achieving the Company’s strategic
objectives. The above is considered noting that the Company has no employees and has delegated all operations to third party 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. The internal control environment of the Manager,
the Depositary and the Registrar are tested annually by independent external auditors. The reports are reviewed by the Audit and Risk Committee.
Although the Board believes that it has a robust framework of internal control 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 and emerging risks and uncertainties are set out in the table below.
Both the principal and emerging risks and uncertainties and the monitoring system are subject to assessment at least annually. The last
assessment took place in February 2024.
During the year, the Board discussed and monitored a number of risks that could potentially impact the Company’s ability to meet its strategic
objectives. The Board receives updates from the Investment Manager, Company Secretary and other service providers on emerging risks that
could affect the Company. The Board was mindful of the evolving global environment during the year; and the risks posed by volatile markets;
geopolitical uncertainty; and inflation and interest rates levels which could affect the asset class. However, these are not factors which explicitly
impacted the Company’s performance.
No significant control failings or weaknesses were identified from the Audit and Risk Committee’s ongoing risk assessment throughout the
financial year and up to the date of this report. Having received the relevant reports, the Board is satisfied that the internal controls operated by
the Company’s service providers are operating effectively.
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. The “Change” column on the right highlights at a glance the Board’s assessment of any increases or decreases in risk
during the year after mitigation and management. The arrows show the risks as increased, decreased, or unchanged.
Risk Mitigation and management Change
Strategic
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.
Investment objective and promotion
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 private equity Investment Managers have extensive
experience and a track record of 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.
Company lifespan
The Articles of Association of the Company 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, unless alternative
proposals have been approved by shareholders.
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.
Introduction Strategic Report Governance Financial Other Information (unaudited)
Principal and emerging risks and uncertainties
The Board, through its delegation to the Audit and Risk Committee, is responsible for establishing a process for identifying, managing and
monitoring emerging and principal risks of the Company and monitoring the Company’s financial internal control systems. The Board has
adopted a detailed matrix of principal risks affecting the Company’s business as an investment trust and has established associated policies and
processes designed to manage and, where possible, mitigate those risks, which are monitored by the Audit and Risk Committee on an ongoing
basis. This system assists the Board in determining the nature and extent of the risks it is willing to take in achieving the Company’s strategic
objectives. The above is considered noting that the Company has no employees and has delegated all operations to third party 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. The internal control environment of the Manager,
the Depositary and the Registrar are tested annually by independent external auditors. The reports are reviewed by the Audit and Risk Committee.
Although the Board believes that it has a robust framework of internal control 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 and emerging risks and uncertainties are set out in the table below.
Both the principal and emerging risks and uncertainties and the monitoring system are subject to assessment at least annually. The last
assessment took place in February 2024.
During the year, the Board discussed and monitored a number of risks that could potentially impact the Company’s ability to meet its strategic
objectives. The Board receives updates from the Investment Manager, Company Secretary and other service providers on emerging risks that
could affect the Company. The Board was mindful of the evolving global environment during the year; and the risks posed by volatile markets;
geopolitical uncertainty; and inflation and interest rates levels which could affect the asset class. However, these are not factors which explicitly
impacted the Company’s performance.
No significant control failings or weaknesses were identified from the Audit and Risk Committee’s ongoing risk assessment throughout the
financial year and up to the date of this report. Having received the relevant reports, the Board is satisfied that the internal controls operated by
the Company’s service providers are operating effectively.
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. The “Change” column on the right highlights at a glance the Board’s assessment of any increases or decreases in risk
during the year after mitigation and management. The arrows show the risks as increased, decreased, or unchanged.
Risk Mitigation and management Change
Strategic
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.
Investment objective and promotion
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 private equity Investment Managers have extensive
experience and a track record of 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.
Company lifespan
The Articles of Association of the Company 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, unless alternative
proposals have been approved by shareholders.
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.
30
Schroder British Opportunities Trust plc
Business Review
continued
Risk Mitigation and management Change
Market
Regulatory
Investment
The Investment 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 Investment
Managers on the performance of the Company’s
investments and the market outlook.
Market volatility
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,
including those related to climate change). These would
in turn affect the performance of the Company.
In addition, market pricing risk can affect the valuation of
both the Company and investee company share prices.
Change of regulation
The Company benefits from the current exemption for
investment trusts from UK tax on chargeable gains. Any
change to HMRC’s rules or taxation of investee
companies could affect the Company’s ability to provide
returns to shareholders.
The Board and Manager monitor proposed changes to
tax rules and report to the Board thereon.
The Board monitors the NAV and receives regular
updates. Although the Company has not bought-back any
shares during the period the Board does have a
discount/premium policy and considers whether share
buy-backs would be for the benefit of the Company as
a whole including its shareholders. In order to consider
a buy-back the Board would need to take into account
relevant factors and circumstances at the time.
The Board monitors marketing and distribution activity
regularly.
NAV discount
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.
Valuation
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. Failure by the
Company to disclose how the investment process
integrates consideration of ESG factors (including climate
change) could lead to potential valuation issues in the
underlying investee companies.
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 Valuations Committee reviews all valuations of
unquoted investments on a quarterly basis and the Audit
and Risk Committee challenges methodologies used by
the Investment Managers.
The consideration of ESG factors (including climate
change) is integrated into the investment process and
reported at Board meetings.
Liquidity
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 Investment Managers consider liquidity risk when
selecting investments.
The Investment 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.
Business Review
continued
Risk Mitigation and management Change
Market
Regulatory
Investment
The Investment 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 Investment
Managers on the performance of the Company’s
investments and the market outlook.
Market volatility
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,
including those related to climate change). These would
in turn affect the performance of the Company.
In addition, market pricing risk can affect the valuation of
both the Company and investee company share prices.
Change of regulation
The Company benefits from the current exemption for
investment trusts from UK tax on chargeable gains. Any
change to HMRC’s rules or taxation of investee
companies could affect the Company’s ability to provide
returns to shareholders.
The Board and Manager monitor proposed changes to
tax rules and report to the Board thereon.
The Board monitors the NAV and receives regular
updates. Although the Company has not bought-back any
shares during the period the Board does have a
discount/premium policy and considers whether share
buy-backs would be for the benefit of the Company as
a whole including its shareholders. In order to consider
a buy-back the Board would need to take into account
relevant factors and circumstances at the time.
The Board monitors marketing and distribution activity
regularly.
NAV discount
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.
Valuation
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. Failure by the
Company to disclose how the investment process
integrates consideration of ESG factors (including climate
change) could lead to potential valuation issues in the
underlying investee companies.
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 Valuations Committee reviews all valuations of
unquoted investments on a quarterly basis and the Audit
and Risk Committee challenges methodologies used by
the Investment Managers.
The consideration of ESG factors (including climate
change) is integrated into the investment process and
reported at Board meetings.
Liquidity
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 Investment Managers consider liquidity risk when
selecting investments.
The Investment 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.
Schroder
British Opportunities Trust plc
31
Introduction Strategic Report Governance Financial Other Information (unaudited)
Risk Mitigation and management Change
Investment
Operational
Reliance on service providers
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.
The AIFM, the Investment 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.
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 Investment Manager’s incentive
arrangements and succession planning.
Key person
The Company’s investment portfolio is managed by the
Portfolio Managers and, in particular, is led by four key
individuals. Loss of an Investment Manager could affect
performance and market sentiment leading to a widening
discount of the share price compared with the NAV.
Introduction Strategic Report Governance Financial Other Information (unaudited)
Risk Mitigation and management Change
Investment
Operational
Reliance on service providers
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.
The AIFM, the Investment 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.
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 Investment Manager’s incentive
arrangements and succession planning.
Key person
The Company’s investment portfolio is managed by the
Portfolio Managers and, in particular, is led by four key
individuals. Loss of an Investment Manager could affect
performance and market sentiment leading to a widening
discount of the share price compared with the NAV.
32
Schroder British Opportunities Trust plc
Business Review
continued
Viability statement
The Directors have assessed the viability of the Company over the
five year period ending 31 March 2029, taking into account the
Company’s position at 31 March 2024 and the potential impact of the
principal risks and uncertainties it faces for the review period. This is
further detailed in the Chairman’s Statement, Investment Manager’s
Review and principal risks and uncertainties sections of this report.
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 Investment Managers and
investors; this period is in line with the Company’s Key Information
Document. If no alternatives are proposed a resolution to wind up the
Company is required to be put to shareholders before 31 May 2028.
However, there is no expectation that alternative proposals regarding
the continuation of the Company will not be put forward to
shareholders, or such proposals will not be approved by shareholders
in 2028.
In line with FRS102, investments are valued at fair value, which for the
Company are quoted bid prices for investments in active markets at
the statement of financial position date and therefore reflect market
participants’ views of emerging risks on the investments held. For
private equity valuations, market comparables are used which take
into account the risks affecting similar investments.
As an investment trust, the Company is entitled to beneficial
treatment with regard to chargeable gains. Any change to such
taxation arrangements could affect the Company’s viability as an
effective investment vehicle. In their assessment of the prospects for
the Company over the next five years, the Directors have assumed
that the Company will continue to adopt the same investment
objective, that the Company’s performance will continue to be
attractive to shareholders and that the Company will continue to
meet the requirements so as to retain its status as an investment
trust.
The Directors have considered each of the Company’s principal risks
and uncertainties detailed on pages 29 to 31. 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 the Going Concern
statement, 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.
Having considered all the Company’s resources, strategy, risks and
probabilities, the Board has a reasonable expectation that the
Company will continue to operate and meet its liabilities as they fall
due, over the next five years.
Going concern
The Directors have assessed the principal risks and uncertainties
(including whether there were any emerging risks) and the matters
referred to in the viability statement. The Directors have 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,
one option would be to liquidate the listed investments in the
portfolio and the Directors have reviewed the average days to
liquidate the listed investments.
Based on the work the Directors have performed, they 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 the period
assessed by the Directors, being the period to 31 July 2025 which is at
least 12 months from the date the financial statements are
authorised for issue.
By order of the Board
Schroder Investment Management Limited
Company Secretary
10 July 2024
Business Review
continued
Viability statement
The Directors have assessed the viability of the Company over the
five year period ending 31 March 2029, taking into account the
Company’s position at 31 March 2024 and the potential impact of the
principal risks and uncertainties it faces for the review period. This is
further detailed in the Chairman’s Statement, Investment Manager’s
Review and principal risks and uncertainties sections of this report.
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 Investment Managers and
investors; this period is in line with the Company’s Key Information
Document. If no alternatives are proposed a resolution to wind up the
Company is required to be put to shareholders before 31 May 2028.
However, there is no expectation that alternative proposals regarding
the continuation of the Company will not be put forward to
shareholders, or such proposals will not be approved by shareholders
in 2028.
In line with FRS102, investments are valued at fair value, which for the
Company are quoted bid prices for investments in active markets at
the statement of financial position date and therefore reflect market
participants’ views of emerging risks on the investments held. For
private equity valuations, market comparables are used which take
into account the risks affecting similar investments.
As an investment trust, the Company is entitled to beneficial
treatment with regard to chargeable gains. Any change to such
taxation arrangements could affect the Company’s viability as an
effective investment vehicle. In their assessment of the prospects for
the Company over the next five years, the Directors have assumed
that the Company will continue to adopt the same investment
objective, that the Company’s performance will continue to be
attractive to shareholders and that the Company will continue to
meet the requirements so as to retain its status as an investment
trust.
The Directors have considered each of the Company’s principal risks
and uncertainties detailed on pages 29 to 31. 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 the Going Concern
statement, 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.
Having considered all the Company’s resources, strategy, risks and
probabilities, the Board has a reasonable expectation that the
Company will continue to operate and meet its liabilities as they fall
due, over the next five years.
Going concern
The Directors have assessed the principal risks and uncertainties
(including whether there were any emerging risks) and the matters
referred to in the viability statement. The Directors have 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,
one option would be to liquidate the listed investments in the
portfolio and the Directors have reviewed the average days to
liquidate the listed investments.
Based on the work the Directors have performed, they 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 the period
assessed by the Directors, being the period to 31 July 2025 which is at
least 12 months from the date the financial statements are
authorised for issue.
By order of the Board
Schroder Investment Management Limited
Company Secretary
10 July 2024
Governance
Schroder Asian Total Return Investment Company plc 33
Governance
Board of Directors 34
Directors’ Report 36
Audit and Risk Committee Report 39
Management Engagement Committee Report 42
Nomination Committee Report 43
Valuation Committee Report 45
Directors’ Remuneration Report 46
Statement of Directors’ Responsibilities 49
Schroder Asian Total Return Investment Company plc 33
Governance
Board of Directors 34
Directors’ Report 36
Audit and Risk Committee Report 39
Management Engagement Committee Report 42
Nomination Committee Report 43
Valuation Committee Report 45
Directors’ Remuneration Report 46
Statement of Directors’ Responsibilities 49
34
Schroder British Opportunities Trust plc
Board of Directors
*Shareholdings are as at July 2024, full details of Directors’ shareholdings are set out in the Directors’ Remuneration Report on page 48.
Neil England
Status: Independent
non-executive
Chairman and Chairman of the
Nomination Committee
Length of service: appointed as a Director
and Chairman in November 2020.
Experience: 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, Valuations, and
Nomination (Chairman) Committees.
Current remuneration: £44,500 per
annum.
Number of shares held: 55,000
Diana Dyer Bartlett
Status: Senior Independent
non-executive Director and
Chairman of the Audit and Risk
Committee
Length of service: appointed as a Director
in November 2020.
Experience: 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 experience with both listed and unlisted
companies 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,
Valuations, and Nomination Committees.
Current remuneration: £39,000 per
annum.
Number of shares held: 46,345
Tim Jenkinson
Status: Independent non-executive
Director and Chairman of the
Management Engagement
Committee and Valuations
Committee
Length of service: appointed as a Director
in November 2020.
Experience: 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),
Valuations (Chairman), and Nomination
Committees.
Current remuneration: £39,000 per
annum.
Number of shares held: 6,609
Board of Directors
*Shareholdings are as at July 2024, full details of Directors’ shareholdings are set out in the Directors’ Remuneration Report on page 48.
Neil England
Status: Independent
non-executive
Chairman and Chairman of the
Nomination Committee
Length of service: appointed as a Director
and Chairman in November 2020.
Experience: 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, Valuations, and
Nomination (Chairman) Committees.
Current remuneration: £44,500 per
annum.
Number of shares held: 55,000
Diana Dyer Bartlett
Status: Senior Independent
non-executive Director and
Chairman of the Audit and Risk
Committee
Length of service: appointed as a Director
in November 2020.
Experience: 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 experience with both listed and unlisted
companies 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,
Valuations, and Nomination Committees.
Current remuneration: £39,000 per
annum.
Number of shares held: 46,345
Tim Jenkinson
Status: Independent non-executive
Director and Chairman of the
Management Engagement
Committee and Valuations
Committee
Length of service: appointed as a Director
in November 2020.
Experience: 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),
Valuations (Chairman), and Nomination
Committees.
Current remuneration: £39,000 per
annum.
Number of shares held: 6,609
Schroder
British Opportunities Trust plc
35
Other Information (unaudited) Introduction Strategic Report Governance Financial
Jemma Bruton
Status: Independent non-executive
Director
Length of service: appointed as a Director
in July 2024.
Experience: Jemma, an economics graduate
from Cambridge and an INSEAD MBA, held
a number of senior positions at Goldman
Sachs, latterly as Executive Director,
Leveraged Finance. She is currently
co-managing director at Salica Investments
Advisory LLP (formerly Hambro Perks
Advisory LLP), and leads their activities on
origination, execution and portfolio
management. She has extensive experience
in venture investing and financing and works
closely with a number of high growth private
companies in the UK and Europe.
Committee membership: Audit and Risk,
Management Engagement, Valuations, and
Nomination Committees.
Current remuneration: £33,000 per
annum.
Number of shares held: Nil
Justin Ward
Status: Independent non-executive
Director
Length of service: appointed as a Director
in July 2024.
Experience: Justin is a Chartered
Accountant with considerable investment
experience and is a private equity specialist.
He led and managed growth equity and
private equity buyout transactions at CVC
Capital Partners and as a partner at Hermes
Private Equity and Bridgepoint Development
Capital. He is an active angel investor and
has served on the Board of a number of
private companies as a non-executive
Director. Justin is currently a non-executive
Director and Chairman of the Investment
Committee at The Income & Growth VCT plc
and a non-executive Director and Chairman
of the Audit Committee at Hargreave Hale
AIM VCT plc.
Committee membership: Audit and Risk,
Management Engagement, Valuations, and
Nomination Committees.
Current remuneration: £33,000 per
annum.
Number of shares held: Nil
Other Information (unaudited) Introduction Strategic Report Governance Financial
Jemma Bruton
Status: Independent non-executive
Director
Length of service: appointed as a Director
in July 2024.
Experience: Jemma, an economics graduate
from Cambridge and an INSEAD MBA, held
a number of senior positions at Goldman
Sachs, latterly as Executive Director,
Leveraged Finance. She is currently
co-managing director at Salica Investments
Advisory LLP (formerly Hambro Perks
Advisory LLP), and leads their activities on
origination, execution and portfolio
management. She has extensive experience
in venture investing and financing and works
closely with a number of high growth private
companies in the UK and Europe.
Committee membership: Audit and Risk,
Management Engagement, Valuations, and
Nomination Committees.
Current remuneration: £33,000 per
annum.
Number of shares held: Nil
Justin Ward
Status: Independent non-executive
Director
Length of service: appointed as a Director
in July 2024.
Experience: Justin is a Chartered
Accountant with considerable investment
experience and is a private equity specialist.
He led and managed growth equity and
private equity buyout transactions at CVC
Capital Partners and as a partner at Hermes
Private Equity and Bridgepoint Development
Capital. He is an active angel investor and
has served on the Board of a number of
private companies as a non-executive
Director. Justin is currently a non-executive
Director and Chairman of the Investment
Committee at The Income & Growth VCT plc
and a non-executive Director and Chairman
of the Audit Committee at Hargreave Hale
AIM VCT plc.
Committee membership: Audit and Risk,
Management Engagement, Valuations, and
Nomination Committees.
Current remuneration: £33,000 per
annum.
Number of shares held: Nil
36
Schroder British Opportunities Trust plc
Directors’ Report
The Directors submit their annual report and financial statements of
the Company for the year ended 31 March 2024.
Corporate governance statement
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 Association of Investment
Companies (“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.
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.
The UK Code includes provisions relating to:
– the role of executive Directors and senior management;
– executive Directors’ remuneration;
– the need for an internal audit function;
– the requirement to establish a Remuneration Committee.
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. As the Company does not have any executive Directors it was
not deemed appropriate to establish a separate Committee. 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 39.
Directors and officers
Chairman
The Chairman is an independent non-executive Director who is
responsible for the leadership of the Board and ensuring its
effectiveness in all aspects of its role. The Chairman’s other significant
commitments are detailed on page 34. Neil England will be stepping
down at the forthcoming AGM and Justin Ward will be appointed to
replace him as Chairman. He has no conflicting relationships.
Senior Independent Director (“SID”)
The SID acts as a sounding board for the Chairman, meets with major
shareholders as appropriate, provides a channel for any shareholder
concerns regarding the Chairman and takes the lead in the annual
evaluation of the Chairman by the independent Directors.
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 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 monitors that the Manager
is adhering to the investment restrictions set by the Board and acting
within the parameters set by it in respect of any gearing. The Business
Review on pages 23 and 24 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.
Matters considered by the Board include: 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.
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
Directors’ Report
The Directors submit their annual report and financial statements of
the Company for the year ended 31 March 2024.
Corporate governance statement
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 Association of Investment
Companies (“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.
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.
The UK Code includes provisions relating to:
– the role of executive Directors and senior management;
– executive Directors’ remuneration;
– the need for an internal audit function;
– the requirement to establish a Remuneration Committee.
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. As the Company does not have any executive Directors it was
not deemed appropriate to establish a separate Committee. 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 39.
Directors and officers
Chairman
The Chairman is an independent non-executive Director who is
responsible for the leadership of the Board and ensuring its
effectiveness in all aspects of its role. The Chairman’s other significant
commitments are detailed on page 34. Neil England will be stepping
down at the forthcoming AGM and Justin Ward will be appointed to
replace him as Chairman. He has no conflicting relationships.
Senior Independent Director (“SID”)
The SID acts as a sounding board for the Chairman, meets with major
shareholders as appropriate, provides a channel for any shareholder
concerns regarding the Chairman and takes the lead in the annual
evaluation of the Chairman by the independent Directors.
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 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 monitors that the Manager
is adhering to the investment restrictions set by the Board and acting
within the parameters set by it in respect of any gearing. The Business
Review on pages 23 and 24 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.
Matters considered by the Board include: 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.
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
Schroder
British Opportunities Trust plc
37
Other Information (unaudited) Introduction Strategic Report Governance Financial
undertaken during the year under review, are outlined in the
following pages.
The reports of the Audit and Risk Committee, Valuations Committee,
Management Engagement Committee and Nomination Committee
are incorporated into and form part of the Directors’ Report. Each
Committee’s effectiveness was assessed, and judged to be
satisfactory, as part of the Board’s annual review of the Board and its
Committees (apart from the Valuations Committee which was
established in September 2023).
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 £94 billion of
assets across several specialist strategies.
The Schroders Group manages £760.4 billion (as at 31 March 2024)
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.
Fees payable to the Manager
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 NAV. The AIFM will also be
entitled to receive a performance fee, the sum of which will be equal
to 15% 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%
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 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 18
to the accounts on page 69.
Depositary
HSBC Bank plc, which is authorised by the Prudential Regulation
Authority and regulated by the Financial Conduct Authority (‘FCA’) 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.
Other Information (unaudited) Introduction Strategic Report Governance Financial
undertaken during the year under review, are outlined in the
following pages.
The reports of the Audit and Risk Committee, Valuations Committee,
Management Engagement Committee and Nomination Committee
are incorporated into and form part of the Directors’ Report. Each
Committee’s effectiveness was assessed, and judged to be
satisfactory, as part of the Board’s annual review of the Board and its
Committees (apart from the Valuations Committee which was
established in September 2023).
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 £94 billion of
assets across several specialist strategies.
The Schroders Group manages £760.4 billion (as at 31 March 2024)
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.
Fees payable to the Manager
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 NAV. The AIFM will also be
entitled to receive a performance fee, the sum of which will be equal
to 15% 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%
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 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 18
to the accounts on page 69.
Depositary
HSBC Bank plc, which is authorised by the Prudential Regulation
Authority and regulated by the Financial Conduct Authority (‘FCA’) 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.
38
Schroder British Opportunities Trust plc
Directors’ Report
continued
The Depositary may only be removed from office when a new
Depositary is appointed by the Company.
Registrar
Equiniti Limited (“Equiniti”) has been appointed as the Company’s
Registrar. Equiniti’s services to the Company include share register
maintenance (including the issuance, transfer and cancellation of
shares as necessary), acting as agent for the payment of any
dividends, management of company meetings (including the
registering of proxy votes and scrutineer services as necessary),
handling shareholder queries and correspondence and processing
corporate actions.
Share capital and substantial share interests
As at 31 March 2024, 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 2024 was
73,900,000. Details of changes to the Company’s share capital during
the year are given in note 13 to the accounts on page 67.
The Board will be seeking approval from shareholders to buy-back
shares, reissue shares held in treasury and issue new shares, as more
particularly described in the AGM notice and Annual General Meeting
– Recommendations section.
All shares in issue rank equally with respect to voting, dividends and
any distribution on winding up.
The Company has received notifications in accordance with the FCA’s
Disclosure Guidance and Transparency Rule 5.1.2R of the below
interests in 3% or more of the voting rights attaching to the
Company’s issued share capital.
The Company is reliant on investors to comply with these regulations,
and certain investors may be exempted from providing these. As
such, this should not be relied on as an exhaustive list of shareholders
holding above 3% of the Company’s voting rights.
%
As at of total
31 March voting
2024 rights
Schroders plc 21,151,994 28.62%
East Riding Of Yorkshire Council 15,000,000 20.30%
Following the year end and at the date of this report, there have been
no changes.
Revenue, final dividend and dividend policy
The net revenue loss for the year, after finance costs and taxation,
was £722,000, equivalent to a revenue loss per ordinary share of
0.98 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.
The Directors do not propose the payment of a dividend in respect of
the year ended 31 March 2024 (2023: nil).
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 Valuation
Director Board Committee Committee Committee Committee
Neil England 4/4 3/3 1/1 2/2 2/2
Diana Dyer
Bartlett 4/4 3/3 1/1 2/2 2/2
Tim Jenkinson 4/4 3/3 1/1 2/2 2/2
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.
Company status
The Articles of Association 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, unless alternative proposals
have been approved by shareholders.
Post balance sheet event
In June 2024 the Company announced the completion of a new
private equity investment in HeadFirst, an international HR tech
service provider. The invested capital will be utilised to finance
HeadFirst’s acquisition of Impellam Group, a managed services and
specialist staffing provider.
By order of the Board
Schroder Investment Management Limited
Company Secretary
10 July 2024
Directors’ Report
continued
The Depositary may only be removed from office when a new
Depositary is appointed by the Company.
Registrar
Equiniti Limited (“Equiniti”) has been appointed as the Company’s
Registrar. Equiniti’s services to the Company include share register
maintenance (including the issuance, transfer and cancellation of
shares as necessary), acting as agent for the payment of any
dividends, management of company meetings (including the
registering of proxy votes and scrutineer services as necessary),
handling shareholder queries and correspondence and processing
corporate actions.
Share capital and substantial share interests
As at 31 March 2024, 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 2024 was
73,900,000. Details of changes to the Company’s share capital during
the year are given in note 13 to the accounts on page 67.
The Board will be seeking approval from shareholders to buy-back
shares, reissue shares held in treasury and issue new shares, as more
particularly described in the AGM notice and Annual General Meeting
– Recommendations section.
All shares in issue rank equally with respect to voting, dividends and
any distribution on winding up.
The Company has received notifications in accordance with the FCA’s
Disclosure Guidance and Transparency Rule 5.1.2R of the below
interests in 3% or more of the voting rights attaching to the
Company’s issued share capital.
The Company is reliant on investors to comply with these regulations,
and certain investors may be exempted from providing these. As
such, this should not be relied on as an exhaustive list of shareholders
holding above 3% of the Company’s voting rights.
%
As at of total
31 March voting
2024 rights
Schroders plc 21,151,994 28.62%
East Riding Of Yorkshire Council 15,000,000 20.30%
Following the year end and at the date of this report, there have been
no changes.
Revenue, final dividend and dividend policy
The net revenue loss for the year, after finance costs and taxation,
was £722,000, equivalent to a revenue loss per ordinary share of
0.98 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.
The Directors do not propose the payment of a dividend in respect of
the year ended 31 March 2024 (2023: nil).
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 Valuation
Director Board Committee Committee Committee Committee
Neil England 4/4 3/3 1/1 2/2 2/2
Diana Dyer
Bartlett 4/4 3/3 1/1 2/2 2/2
Tim Jenkinson 4/4 3/3 1/1 2/2 2/2
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.
Company status
The Articles of Association 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, unless alternative proposals
have been approved by shareholders.
Post balance sheet event
In June 2024 the Company announced the completion of a new
private equity investment in HeadFirst, an international HR tech
service provider. The invested capital will be utilised to finance
HeadFirst’s acquisition of Impellam Group, a managed services and
specialist staffing provider.
By order of the Board
Schroder Investment Management Limited
Company Secretary
10 July 2024
Schroder
British Opportunities Trust plc
39
Other Information (unaudited) Introduction Strategic Report Governance Financial
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 webpages: https://www.schroders.com/sbot.
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 AIC Code permits the Chairman of the Board to be a member of the
Audit Committee of an investment trust. As the Board is small, having consisted, until July 2024, of only three members and recognising
Neil England’s significant experience, it is considered appropriate for the Chairman of the Board, who was independent on appointment, to be
a member of the Committee.
Approach
Risk management and internal
controls Financial reports and valuation Audit
Principal and emerging risks and
uncertainties
To establish a process for identifying,
assessing, managing and monitoring the
principal and emerging risks of the
Company and to explain how these are
managed or mitigated.
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 financial statements
To monitor the integrity of the report and
financial statements of the Company and
any formal announcements relating to the
Company’s financial performance and
valuation.
Audit results
To discuss any matters arising from the
audit and recommendations made by the
auditor.
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 financial statements.
The Committee is also responsible for
reviewing the disclosures made by the
Company in the viability statement.
Auditor appointment, independence
and performance
To make recommendations to the Board,
in relation to the appointment,
re-appointment, effectiveness, and any
non-audit services by the auditor and
removal of the external auditor. To review
their independence, and to recommend
to the Board their remuneration. To
review the audit plan and engagement
letter.
Risk
management
Internal
controls
Review of
external
auditors and
their work
Half year
and annual
report
Accounting
policies and
judgements
Audit and Risk Committee Report
Other Information (unaudited) Introduction Strategic Report Governance Financial
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 webpages: https://www.schroders.com/sbot.
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 AIC Code permits the Chairman of the Board to be a member of the
Audit Committee of an investment trust. As the Board is small, having consisted, until July 2024, of only three members and recognising
Neil England’s significant experience, it is considered appropriate for the Chairman of the Board, who was independent on appointment, to be
a member of the Committee.
Approach
Risk management and internal
controls Financial reports and valuation Audit
Principal and emerging risks and
uncertainties
To establish a process for identifying,
assessing, managing and monitoring the
principal and emerging risks of the
Company and to explain how these are
managed or mitigated.
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 financial statements
To monitor the integrity of the report and
financial statements of the Company and
any formal announcements relating to the
Company’s financial performance and
valuation.
Audit results
To discuss any matters arising from the
audit and recommendations made by the
auditor.
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 financial statements.
The Committee is also responsible for
reviewing the disclosures made by the
Company in the viability statement.
Auditor appointment, independence
and performance
To make recommendations to the Board,
in relation to the appointment,
re-appointment, effectiveness, and any
non-audit services by the auditor and
removal of the external auditor. To review
their independence, and to recommend
to the Board their remuneration. To
review the audit plan and engagement
letter.
Risk
management
Internal
controls
Review of
external
auditors and
their work
Half year
and annual
report
Accounting
policies and
judgements
Audit and Risk Committee Report
40
Schroder British Opportunities Trust plc
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
three times during the year. Further details on attendance can be found on page 38. An evaluation of the Committee’s effectiveness and review
of its terms of reference was performed in March 2024 and the next will be completed as part of the Board and Committee evaluation process
in the next reporting year.
Application during the year
Risk management and internal
controls Financial reports Audit
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.
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 which supports the
work undertaken by the Valuations
Committee to review and report on the
revaluations undertaken on the unquoted
holdings during the period and challenge
the considerations and key assumptions
made where appropriate, to ensure that
the valuations are reliable.
The Committee continued to consider the
IPEV guidelines and their implications for
the Company’s valuations.
Service provider controls
The operational controls maintained by
the Manager, Administrator, Depositary
and Registrar were reviewed and included
consideration of:
– a summary, prepared by the AIFM,
following review, of the internal
controls reports prepared bi-annually
by HSBC in respect of its European
Traditional Fund Services, Global
Custody Services and Information
Technology Services operations;
– a summary, prepared by the AIFM
following review, of the internal
controls reports prepared annually by
SIM; and
– the Assurance Report on internal
controls of Equiniti Share Registration
Services.
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.
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.
Internal controls and risk
management
Consideration of internal controls at
a briefing session which assessed the
internal controls of certain key service
providers including the Company’s
Depositary and Custodian, HSBC, the
Company’s Registrar, Equiniti, and
Schroders Group Internal Audit.
Auditor independence
Ernst & Young LLP has provided audit
services to the Company since it was
appointed on 19 May 2021. This is the
fourth 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 fourth period that the senior
statutory auditor, Caroline Mercer, has
conducted the audit of the Company’s
report and financial statements. The
auditors were appointed due to their
experience.
There are no contractual obligations
restricting the choice of external auditors.
Calculation of the investment
management fee and performance fee
Confirmed that the performance and
management fees have been calculated in
accordance with the AIFM agreement.
Consideration of methodology used to
calculate the fees, matched against the
criteria set out in the AIFM agreement.
Compliance with the investment trust
qualifying rules in S1158 of the
Corporation Tax Act 2010
Consideration of the Manager’s report
confirming compliance.
Audit and Risk Committee Report
continued
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
three times during the year. Further details on attendance can be found on page 38. An evaluation of the Committee’s effectiveness and review
of its terms of reference was performed in March 2024 and the next will be completed as part of the Board and Committee evaluation process
in the next reporting year.
Application during the year
Risk management and internal
controls Financial reports Audit
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.
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 which supports the
work undertaken by the Valuations
Committee to review and report on the
revaluations undertaken on the unquoted
holdings during the period and challenge
the considerations and key assumptions
made where appropriate, to ensure that
the valuations are reliable.
The Committee continued to consider the
IPEV guidelines and their implications for
the Company’s valuations.
Service provider controls
The operational controls maintained by
the Manager, Administrator, Depositary
and Registrar were reviewed and included
consideration of:
– a summary, prepared by the AIFM,
following review, of the internal
controls reports prepared bi-annually
by HSBC in respect of its European
Traditional Fund Services, Global
Custody Services and Information
Technology Services operations;
– a summary, prepared by the AIFM
following review, of the internal
controls reports prepared annually by
SIM; and
– the Assurance Report on internal
controls of Equiniti Share Registration
Services.
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.
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.
Internal controls and risk
management
Consideration of internal controls at
a briefing session which assessed the
internal controls of certain key service
providers including the Company’s
Depositary and Custodian, HSBC, the
Company’s Registrar, Equiniti, and
Schroders Group Internal Audit.
Auditor independence
Ernst & Young LLP has provided audit
services to the Company since it was
appointed on 19 May 2021. This is the
fourth 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 fourth period that the senior
statutory auditor, Caroline Mercer, has
conducted the audit of the Company’s
report and financial statements. The
auditors were appointed due to their
experience.
There are no contractual obligations
restricting the choice of external auditors.
Calculation of the investment
management fee and performance fee
Confirmed that the performance and
management fees have been calculated in
accordance with the AIFM agreement.
Consideration of methodology used to
calculate the fees, matched against the
criteria set out in the AIFM agreement.
Compliance with the investment trust
qualifying rules in S1158 of the
Corporation Tax Act 2010
Consideration of the Manager’s report
confirming compliance.
Audit and Risk Committee Report
continued
Schroder
British Opportunities Trust plc
41
Other Information (unaudited) Introduction Strategic Report Governance Financial
Application during the year
Risk management and internal
controls Financial reports Audit
Diana Dyer Bartlett
Audit and Risk Committee Chairman
10 July 2024
Principal risks
Reviewed the principal and emerging risks
together with key risk mitigations. The
Committee considered the Company’s risk
appetite statement.
Fair, balanced and understandable
Reviewed the report and financial
statements 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 financial
statements, were taken as a whole and
consistent with the Board’s view of the
operation of the Company.
Provision of non-audit services by the
auditor
The Committee has reviewed the FRC’s
Guidance on Audit Committees and has
formulated a policy on the provision of
non-audit services by the Company’s
auditor. The Committee has determined
that the Company’s appointed auditor will
not be considered for the provision of
certain non-audit services, such as
accounting and preparation of the report
and financial statements, internal audit
and custody. The auditor may, if required,
provide other non-audit services which will
be judged on a case-by-case basis
however, they did not do so during the
reporting period.
The Committee was satisfied that this did
not affect the independence or objectivity
of the auditor.
Going concern and viability
Reviewing the impact of risks on going
concern and longer-term viability.
The Committee reviewed the disclosures
in the report and financial statements 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 half year report and the annual report and financial statements. The
Committee recommended that the going concern presumption be adopted in the report and financial statements 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 2024, 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 49.
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.
The Committee considered and reviewed the Company’s compliance with the investment trust qualifying rules in s1158 of the Corporation
Tax Act 2010 noting that there was no requirement to pay a dividend under this section.
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.
Overall accuracy of the report and
financial statements
Consideration of the draft report and
financial statements and the letter from
the Manager in support of the letter of
representation to the auditor.
Other Information (unaudited) Introduction Strategic Report Governance Financial
Application during the year
Risk management and internal
controls Financial reports Audit
Diana Dyer Bartlett
Audit and Risk Committee Chairman
10 July 2024
Principal risks
Reviewed the principal and emerging risks
together with key risk mitigations. The
Committee considered the Company’s risk
appetite statement.
Fair, balanced and understandable
Reviewed the report and financial
statements 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 financial
statements, were taken as a whole and
consistent with the Board’s view of the
operation of the Company.
Provision of non-audit services by the
auditor
The Committee has reviewed the FRC’s
Guidance on Audit Committees and has
formulated a policy on the provision of
non-audit services by the Company’s
auditor. The Committee has determined
that the Company’s appointed auditor will
not be considered for the provision of
certain non-audit services, such as
accounting and preparation of the report
and financial statements, internal audit
and custody. The auditor may, if required,
provide other non-audit services which will
be judged on a case-by-case basis
however, they did not do so during the
reporting period.
The Committee was satisfied that this did
not affect the independence or objectivity
of the auditor.
Going concern and viability
Reviewing the impact of risks on going
concern and longer-term viability.
The Committee reviewed the disclosures
in the report and financial statements 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 half year report and the annual report and financial statements. The
Committee recommended that the going concern presumption be adopted in the report and financial statements 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 2024, 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 49.
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.
The Committee considered and reviewed the Company’s compliance with the investment trust qualifying rules in s1158 of the Corporation
Tax Act 2010 noting that there was no requirement to pay a dividend under this section.
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.
Overall accuracy of the report and
financial statements
Consideration of the draft report and
financial statements and the letter from
the Manager in support of the letter of
representation to the auditor.
42
Schroder British Opportunities Trust plc
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: https://www.schroders.com/sbot. The Committee held one scheduled meeting during the year.
Approach
Oversight of the Manager Oversight of other service providers
Application during the year
The Committee:
• reviews the Manager’s performance, over the short and long
term.
• 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.
The Committee reviews the performance of the following service
providers on at least an annual basis:
• Depositary and Custodian;
• Corporate Broker; and
• Registrar.
The Committee receives a report from the Company Secretary
on ancillary service providers, and considers any
recommendations.
The Committee reviews all key service providers other than the
external auditor, whose performance is reviewed by the Audit
and Risk Committee.
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 its annual review of service providers
who were deemed satisfactory. A detailed review of the
Depositary and Custodian took place.
The Committee undertook an evaluation of the Manager,
Registrar, and Depositary and Custodian’s internal controls.
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 and fees remained satisfactory.
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: https://www.schroders.com/sbot. The Committee held one scheduled meeting during the year.
Approach
Oversight of the Manager Oversight of other service providers
Application during the year
The Committee:
• reviews the Manager’s performance, over the short and long
term.
• 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.
The Committee reviews the performance of the following service
providers on at least an annual basis:
• Depositary and Custodian;
• Corporate Broker; and
• Registrar.
The Committee receives a report from the Company Secretary
on ancillary service providers, and considers any
recommendations.
The Committee reviews all key service providers other than the
external auditor, whose performance is reviewed by the Audit
and Risk Committee.
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 its annual review of service providers
who were deemed satisfactory. A detailed review of the
Depositary and Custodian took place.
The Committee undertook an evaluation of the Manager,
Registrar, and Depositary and Custodian’s internal controls.
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 and fees remained satisfactory.
Schroder
British Opportunities Trust plc
43
Other Information (unaudited) Introduction Strategic Report Governance Financial
Nomination Committee Report
The Nomination Committee is responsible for: (1) the recruitment, selection and induction of Directors; (2) their assessment during their tenure;
(3) the Board’s succession planning; and (4) Directors’ fee. 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: https://www.schroders.com/sbot. The Committee held two
scheduled meetings during the year.
Oversight of Directors
Approach
Selection and induction Board evaluation and Directors’ fees Succession
Selection Induction
Application
of succession
policy
Annual
review of
succession
policy
Annual
evaluation
• 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.
• 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.
• 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.
Other Information (unaudited) Introduction Strategic Report Governance Financial
Nomination Committee Report
The Nomination Committee is responsible for: (1) the recruitment, selection and induction of Directors; (2) their assessment during their tenure;
(3) the Board’s succession planning; and (4) Directors’ fee. 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: https://www.schroders.com/sbot. The Committee held two
scheduled meetings during the year.
Oversight of Directors
Approach
Selection and induction Board evaluation and Directors’ fees Succession
Selection Induction
Application
of succession
policy
Annual
review of
succession
policy
Annual
evaluation
• 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.
• 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.
• 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.
44
Schroder British Opportunities Trust plc
Application for the year
Selection and induction Board evaluation and Directors’ fees Succession
• Following a rigorous selection
process using an independent
external recruitment agency,
Nurole, Justin Ward and Jemma
Bruton were appointed to the
Board with effect from 1 July 2024.
Nurole has no connection with the
Company or any of the Directors.
• The Committee noted that, as part
of the appointment process, the
new Directors would engage in an
induction programme with the
Manager and its various operating
functions as well as other key
service providers.
• Justin Ward and Jemma Bruton will
stand for election as Directors at
the forthcoming AGM, as set out in
resolutions five and six of the
Notice of Annual General Meeting.
• Other independent external
recruitment agencies were also
approached to provide proposals.
The Committee assesses each Director annually,
and considers if an external evaluation is
appropriate.
• Evaluation focuses on whether each Director
continues to demonstrate commitment to their
role and provides a valuable contribution to the
Board during the reporting period, taking into
account time commitment, independence,
conflicts and training needs.
• Following the evaluation, the Committee
provides a recommendation to shareholders
with respect to the annual re-election of
Directors at the AGM.
• All Directors retire at the AGM and their
re-election is subject to shareholder approval.
• Committee reviews Directors’ fees, taking into
account comparative data and reports to
shareholders.
• Any proposed changes to the remuneration
policy for Directors discussed and reported to
shareholders.
• In anticipation of Neil England’s
retirement at the forthcoming AGM,
the Committee discussed appointing
a suitable replacement having
regard to the current Board’s
composition, diversity and efficacy.
Following consideration, it was
agreed that Justin Ward would be
a suitable candidate to act as
Chairman upon Neil’s retirement.
• Following consideration the Board
agreed that it was required to
strengthen numbers by increasing
its number back to four Directors.
• 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.
• Jemma’s appointment will aid in
strengthening the Board and will
enable the Board to meet its gender
diversity target.
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, and should all be recommended for election or re-election by
shareholders at the AGM. Neil England will step down at the forthcoming AGM and will not be standing for re-election.
• That Directors’ fees be increased by 5% per annum (rounded to the nearest £500).
• The Director's Remuneration Report and Remuneration Policy be put to shareholders as ordinary resolutions at the forthcoming AGM.
• That Nurole be engaged to assist in the search for the new non-executive Director positions.
• That in order to strengthen the Board numbers to four and in light of Neil England’s imminent departure as Chairman, that Justin Ward
and Jemma Bruton be appointed as a non-executive Directors with effect from 1 July 2024 and that their election as non-executive
Directors be proposed, and recommended to shareholders for approval at the forthcoming AGM.
Nomination Committee Report
continued
Application for the year
Selection and induction Board evaluation and Directors’ fees Succession
• Following a rigorous selection
process using an independent
external recruitment agency,
Nurole, Justin Ward and Jemma
Bruton were appointed to the
Board with effect from 1 July 2024.
Nurole has no connection with the
Company or any of the Directors.
• The Committee noted that, as part
of the appointment process, the
new Directors would engage in an
induction programme with the
Manager and its various operating
functions as well as other key
service providers.
• Justin Ward and Jemma Bruton will
stand for election as Directors at
the forthcoming AGM, as set out in
resolutions five and six of the
Notice of Annual General Meeting.
• Other independent external
recruitment agencies were also
approached to provide proposals.
The Committee assesses each Director annually,
and considers if an external evaluation is
appropriate.
• Evaluation focuses on whether each Director
continues to demonstrate commitment to their
role and provides a valuable contribution to the
Board during the reporting period, taking into
account time commitment, independence,
conflicts and training needs.
• Following the evaluation, the Committee
provides a recommendation to shareholders
with respect to the annual re-election of
Directors at the AGM.
• All Directors retire at the AGM and their
re-election is subject to shareholder approval.
• Committee reviews Directors’ fees, taking into
account comparative data and reports to
shareholders.
• Any proposed changes to the remuneration
policy for Directors discussed and reported to
shareholders.
• In anticipation of Neil England’s
retirement at the forthcoming AGM,
the Committee discussed appointing
a suitable replacement having
regard to the current Board’s
composition, diversity and efficacy.
Following consideration, it was
agreed that Justin Ward would be
a suitable candidate to act as
Chairman upon Neil’s retirement.
• Following consideration the Board
agreed that it was required to
strengthen numbers by increasing
its number back to four Directors.
• 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.
• Jemma’s appointment will aid in
strengthening the Board and will
enable the Board to meet its gender
diversity target.
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, and should all be recommended for election or re-election by
shareholders at the AGM. Neil England will step down at the forthcoming AGM and will not be standing for re-election.
• That Directors’ fees be increased by 5% per annum (rounded to the nearest £500).
• The Director's Remuneration Report and Remuneration Policy be put to shareholders as ordinary resolutions at the forthcoming AGM.
• That Nurole be engaged to assist in the search for the new non-executive Director positions.
• That in order to strengthen the Board numbers to four and in light of Neil England’s imminent departure as Chairman, that Justin Ward
and Jemma Bruton be appointed as a non-executive Directors with effect from 1 July 2024 and that their election as non-executive
Directors be proposed, and recommended to shareholders for approval at the forthcoming AGM.
Nomination Committee Report
continued
Schroder
British Opportunities Trust plc
45
Other Information (unaudited) Introduction Strategic Report Governance Financial
Valuations Committee Report
During the financial year the Board decided to form a Valuations Committee to take on some of the valuation responsibilities previously
undertaken by the Audit and Risk Committee. This decision recognised the importance of the Board’s oversight role on valuations and the need
for shareholders to have confidence in the outcomes determined by the Committee. The Committee was established in September 2023 and
held two meetings during the remaining period of the year.
The Valuations Committee is responsible for reviewing, and where necessary, challenging the valuations carried out by out by the specialist
in-house valuations team. This team operates independently to the Investment Management team. Tim Jenkinson is the Chairman and the
other Directors are members of the Committee. Its terms of reference are available on the Company’s webpage:
https://www.schroders.com/sbot.
Approach
Application for the year
Recommendations made to, and approved by, the Board:
The Committee recommended that the Board approve the quarterly and half year valuations. Post the period end the Committee also
provided recommendations in respect of the year end valuation to support the annual report and financial statements.
The Committee met with the Manager’s valuation team at each
meeting and reviewed the basis on which each investment had been
valued.
The Committee reviewed and recommended valuation inputs for
quarterly NAV calculations.
The Committee challenged the multiples that had been used and
reviewed the usage of market comparables.
The Committee discussed the ongoing progress of investee
companies to understand how this would have an effect on valuations.
Valuation and existence of holdings
The Committee:
meets at least four times a year to consider the private equity
quarterly NAV revaluations. The Committee also considers the
public equity holdings (where necessary) to ensure complete
oversight of the entire portfolio;
formulates valuation policies for investments of the Company,
considers whether independent valuation of the portfolio is
required and approves the valuations for both public and private
investments; and
considered reports from the Manager at each meeting.
Other Information (unaudited) Introduction Strategic Report Governance Financial
Valuations Committee Report
During the financial year the Board decided to form a Valuations Committee to take on some of the valuation responsibilities previously
undertaken by the Audit and Risk Committee. This decision recognised the importance of the Board’s oversight role on valuations and the need
for shareholders to have confidence in the outcomes determined by the Committee. The Committee was established in September 2023 and
held two meetings during the remaining period of the year.
The Valuations Committee is responsible for reviewing, and where necessary, challenging the valuations carried out by out by the specialist
in-house valuations team. This team operates independently to the Investment Management team. Tim Jenkinson is the Chairman and the
other Directors are members of the Committee. Its terms of reference are available on the Company’s webpage:
https://www.schroders.com/sbot.
Approach
Application for the year
Recommendations made to, and approved by, the Board:
The Committee recommended that the Board approve the quarterly and half year valuations. Post the period end the Committee also
provided recommendations in respect of the year end valuation to support the annual report and financial statements.
The Committee met with the Manager’s valuation team at each
meeting and reviewed the basis on which each investment had been
valued.
The Committee reviewed and recommended valuation inputs for
quarterly NAV calculations.
The Committee challenged the multiples that had been used and
reviewed the usage of market comparables.
The Committee discussed the ongoing progress of investee
companies to understand how this would have an effect on valuations.
Valuation and existence of holdings
The Committee:
meets at least four times a year to consider the private equity
quarterly NAV revaluations. The Committee also considers the
public equity holdings (where necessary) to ensure complete
oversight of the entire portfolio;
formulates valuation policies for investments of the Company,
considers whether independent valuation of the portfolio is
required and approves the valuations for both public and private
investments; and
considered reports from the Manager at each meeting.
46
Schroder British Opportunities Trust plc
Introduction
The remuneration policy below is currently in force and is subject to
a binding vote every three years. The next vote will take place at the
forthcoming AGM and the current policy provisions will apply until
that date. An ordinary resolution to approve the Directors’
remuneration policy will be put to shareholders at the AGM (no
changes are proposed). The 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 votes were withheld.
At the AGM held on 27 September 2023, 99.71% of the votes cast
(including votes at the Chairman’s discretion) in respect of approval of
the Director’s Remuneration Report were in favour, while 0.29% were
against.
Directors’ remuneration policy
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, the Chair of the Audit and Risk
Committee and the Chairman of the Valuations Committee each
receive fees 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.
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.
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.
Implementation of policy
The terms of 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.
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’ Remuneration Report
Introduction
The remuneration policy below is currently in force and is subject to
a binding vote every three years. The next vote will take place at the
forthcoming AGM and the current policy provisions will apply until
that date. An ordinary resolution to approve the Directors’
remuneration policy will be put to shareholders at the AGM (no
changes are proposed). The 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 votes were withheld.
At the AGM held on 27 September 2023, 99.71% of the votes cast
(including votes at the Chairman’s discretion) in respect of approval of
the Director’s Remuneration Report were in favour, while 0.29% were
against.
Directors’ remuneration policy
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, the Chair of the Audit and Risk
Committee and the Chairman of the Valuations Committee each
receive fees 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.
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.
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.
Implementation of policy
The terms of 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.
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’ Remuneration Report
Schroder
British Opportunities Trust plc
47
Other Information (unaudited) Introduction Strategic Report Governance Financial
Directors’ report on remuneration
This report sets out how the remuneration policy was implemented during the year ended 31 March 2024.
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 2024. Directors’
remuneration is all fixed; they do not receive any variable remuneration.
Fees Taxable benefits 1
Total
Year ended Year ended Year ended Year ended Year ended Year ended
31 March 31 March 31 March 31 March 31 March 31 March
2024 2023 2024 2023 2024 2023
Directors £ £ £ £ £ £
Neil England (Chairman) 43,250 42,003 – – 43,250 42,003
Diana Dyer Bartlett 37,875 36,753 – – 37,875 36,753
Tim Jenkinson 35,250 31,502 – 44 35,250 31,546
Christopher Keljik
2
– 28,827 – – – 28,827
116,375 139,085 – 44 116,375 139,129
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.
Consideration of matters relating to Directors’ remuneration
The determination of the Directors’ fees is considered by the Nomination Committee who make recommendations to the Board and during the
period recommended a 5% increase (rounded to the nearest £500) to commence from 1 October 2023.
Directors’ remuneration was last reviewed by the Nomination Committee and the Board in September 2023. The members of the Board at the
time that remuneration levels were considered are set out on page 47. 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.
Change in annual remuneration payable
Change in fee
Change in annual Change in annual over the
fee over the year fee over the year nine month period
ended 31 March ended 31 March ended 31 March
2024 2023 2022
Directors % % %
1
Neil England (Chairman) 3.0 2.5 2.6
Diana Dyer Bartlett 3.1 3.9 3.4
Tim Jenkinson 11.7 4.6 0.3
Christopher Keljik
2
– – (1.8)
1
Calculated based on annualised fees for the nine months ended 31 March 2022 and seven months ended 30 June 2021.
2
Resigned from the Board on 28 February 2023.
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.
Distributions to shareholders (share buy-backs) vs Directors’ remuneration
Year ended Year ended
31 March 31 March
2024 2023
£’000 £’000 % Change
Remuneration payable to Directors 116 139 (16.5)
Distributions paid to shareholders (share buy-backs) – 808 (100.0)
Other Information (unaudited) Introduction Strategic Report Governance Financial
Directors’ report on remuneration
This report sets out how the remuneration policy was implemented during the year ended 31 March 2024.
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 2024. Directors’
remuneration is all fixed; they do not receive any variable remuneration.
Fees Taxable benefits 1
Total
Year ended Year ended Year ended Year ended Year ended Year ended
31 March 31 March 31 March 31 March 31 March 31 March
2024 2023 2024 2023 2024 2023
Directors £ £ £ £ £ £
Neil England (Chairman) 43,250 42,003 – – 43,250 42,003
Diana Dyer Bartlett 37,875 36,753 – – 37,875 36,753
Tim Jenkinson 35,250 31,502 – 44 35,250 31,546
Christopher Keljik
2
– 28,827 – – – 28,827
116,375 139,085 – 44 116,375 139,129
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.
Consideration of matters relating to Directors’ remuneration
The determination of the Directors’ fees is considered by the Nomination Committee who make recommendations to the Board and during the
period recommended a 5% increase (rounded to the nearest £500) to commence from 1 October 2023.
Directors’ remuneration was last reviewed by the Nomination Committee and the Board in September 2023. The members of the Board at the
time that remuneration levels were considered are set out on page 47. 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.
Change in annual remuneration payable
Change in fee
Change in annual Change in annual over the
fee over the year fee over the year nine month period
ended 31 March ended 31 March ended 31 March
2024 2023 2022
Directors % % %
1
Neil England (Chairman) 3.0 2.5 2.6
Diana Dyer Bartlett 3.1 3.9 3.4
Tim Jenkinson 11.7 4.6 0.3
Christopher Keljik
2
– – (1.8)
1
Calculated based on annualised fees for the nine months ended 31 March 2022 and seven months ended 30 June 2021.
2
Resigned from the Board on 28 February 2023.
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.
Distributions to shareholders (share buy-backs) vs Directors’ remuneration
Year ended Year ended
31 March 31 March
2024 2023
£’000 £’000 % Change
Remuneration payable to Directors 116 139 (16.5)
Distributions paid to shareholders (share buy-backs) – 808 (100.0)
48
Schroder British Opportunities Trust plc
Directors’ Remuneration Report
continued
Performance graph since 1 December 2020 (launch date)
Share price return versus FTSE 250 ex-Investment Trusts Index
1
total return for the period from launch date on 1 December 2020, to 31 March
2024.
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.
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
2024
1
2023
1
Neil England 55,000 55,000
Diana Dyer Bartlett 46,345 46,345
Tim Jenkinson 6,609 6,609
Christopher Keljik 2
– 172,601
1
Ordinary shares of 1p each.
2
Resigned from the Board on 28 February 2023.
The information in the above table has been audited.
On behalf of the Board
Neil England
Chairman
10 July 2024
FTSE 250 ex-Investment Trust Index Share price
60
7 0
80
90
100
110
120
31/ 03 / 24 31/ 03 / 23 31/ 03 / 22 30/ 0 6/ 21 01/ 12 / 20
Directors’ Remuneration Report
continued
Performance graph since 1 December 2020 (launch date)
Share price return versus FTSE 250 ex-Investment Trusts Index
1
total return for the period from launch date on 1 December 2020, to 31 March
2024.
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.
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
2024
1
2023
1
Neil England 55,000 55,000
Diana Dyer Bartlett 46,345 46,345
Tim Jenkinson 6,609 6,609
Christopher Keljik 2
– 172,601
1
Ordinary shares of 1p each.
2
Resigned from the Board on 28 February 2023.
The information in the above table has been audited.
On behalf of the Board
Neil England
Chairman
10 July 2024
FTSE 250 ex-Investment Trust Index Share price
60
7 0
80
90
100
110
120
31/ 03 / 24 31/ 03 / 23 31/ 03 / 22 30/ 0 6/ 21 01/ 12 / 20
Schroder
British Opportunities Trust plc
49
Other Information (unaudited) Introduction Strategic Report Governance Financial
Statement of Directors’ Responsibilities
Directors’ Responsibilities
The Directors are responsible for preparing the annual report and
financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial statements
for each financial year. Under that law, the Directors have prepared
the report and financial statements in accordance with United
Kingdom Generally Accepted Accounting Practice (United Kingdom
Accounting Standards, comprising Financial Reporting Standard (FRS)
102 “The Financial Reporting Standard applicable in the UK and
Republic of Ireland” and applicable law). Under company law, the
Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the
Company and of the return or loss of the Company for that period. In
preparing these financial statements, the Directors are required to:
– select suitable accounting policies and then apply them
consistently;
– make judgements and accounting estimates that are reasonable
and prudent;
– state whether applicable UK Accounting Standards, comprising
FRS 102, have been followed, subject to any material departures
disclosed and explained in the financial statements;
– notify the Company’s shareholders in writing about the use of
disclosure exemptions in FRS 102, used in the preparation of the
financial statements; and
– prepare the financial statements on a going concern basis unless
it is inappropriate to presume that the Company will continue in
business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that the
financial statements and the Directors’ Remuneration Report comply
with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and other
irregularities.
The Manager is responsible for the maintenance and integrity of the
webpage dedicated to the Company. Legislation in the United
Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Directors’ Statement
Each of the Directors, whose names and functions are listed on
pages 34 and 35, confirm that to the best of their knowledge:
– the financial statements, which have been prepared in
accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards and applicable
law), give a true and fair view of the assets, liabilities, financial
position and net return of the Company;
– the Strategic Report contained in the report and financial
statements 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 financial statements, 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
10 July 2024
Other Information (unaudited) Introduction Strategic Report Governance Financial
Statement of Directors’ Responsibilities
Directors’ Responsibilities
The Directors are responsible for preparing the annual report and
financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial statements
for each financial year. Under that law, the Directors have prepared
the report and financial statements in accordance with United
Kingdom Generally Accepted Accounting Practice (United Kingdom
Accounting Standards, comprising Financial Reporting Standard (FRS)
102 “The Financial Reporting Standard applicable in the UK and
Republic of Ireland” and applicable law). Under company law, the
Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the
Company and of the return or loss of the Company for that period. In
preparing these financial statements, the Directors are required to:
– select suitable accounting policies and then apply them
consistently;
– make judgements and accounting estimates that are reasonable
and prudent;
– state whether applicable UK Accounting Standards, comprising
FRS 102, have been followed, subject to any material departures
disclosed and explained in the financial statements;
– notify the Company’s shareholders in writing about the use of
disclosure exemptions in FRS 102, used in the preparation of the
financial statements; and
– prepare the financial statements on a going concern basis unless
it is inappropriate to presume that the Company will continue in
business.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that the
financial statements and the Directors’ Remuneration Report comply
with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and other
irregularities.
The Manager is responsible for the maintenance and integrity of the
webpage dedicated to the Company. Legislation in the United
Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Directors’ Statement
Each of the Directors, whose names and functions are listed on
pages 34 and 35, confirm that to the best of their knowledge:
– the financial statements, which have been prepared in
accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards and applicable
law), give a true and fair view of the assets, liabilities, financial
position and net return of the Company;
– the Strategic Report contained in the report and financial
statements 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 financial statements, 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
10 July 2024
50
Financial
Financial
Independent Auditors Report 52
Statement of Comprehensive Income 58
Statement of Changes in Equity 59
Statement of Financial Position 60
Cash Flow Statement 61
Notes to the Financial Statements 62
Schroder Asian Total Return Investment Company plc 51
Financial
Independent Auditors Report 52
Statement of Comprehensive Income 58
Statement of Changes in Equity 59
Statement of Financial Position 60
Cash Flow Statement 61
Notes to the Financial Statements 62
Schroder Asian Total Return Investment Company plc 51
52
Schroder British Opportunities Trust plc
Independent Auditors Report
to the Members of Schroder British Opportunities Trust plc
Opinion
We have audited the financial statements of Schroder British
Opportunities Trust plc for the year ended 31 March 2024 which
comprise the Statement of Comprehensive Income, the Statement of
Changes in Equity, the Statement of Financial Position, the Cash Flow
Statement and the related notes 1 to 24 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
2024 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 FRC’s Ethical Standard as applied to public
interest entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were
not provided to the Company and we remain independent of
Company in conducting the audit.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation
of the directors’ assessment of the Company’s ability to continue to
adopt the going concern basis of accounting included:
– Confirming our understanding of the Company’s going concern
assessment process and engaging 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.
– Inspecting the directors’ assessment of going concern, including
the revenue forecast, for the period to 31 July 2025 which is at
least twelve months from the date the financial statements were
authorised for issue.
– Reviewing the factors and assumptions, including the impact of
the current economic environment and other significant events
that could give risk to market volatility, 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.
– Considering the mitigating factors included in the revenue
forecasts that are within the control of the Company. We
reviewed the Company’s assessment of the liquidity of
investments held and evaluated the Company’s ability to sell
those investments in order to cover working capital
requirements as a result of the Company operating at a revenue
loss.
– Considering the commitments that have been made with respect
to the purchase of unquoted investments to ensure that these
have been appropriately taken account of when preparing the
forecast.
– Reviewing 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 to
31 July 2025, which is at least 12 months from when the financial
statements are authorised for issue.
In relation to the Company’ 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
– Risk of incorrect valuation or ownership of the investment portfolio
– Risk of incorrect calculation of the performance fee
Key audit matters
– Overall materiality of £0.81m (2023: £0.79m) which represents 1% (2023:1%) of shareholders’ funds. Materiality
Independent Auditors Report
to the Members of Schroder British Opportunities Trust plc
Opinion
We have audited the financial statements of Schroder British
Opportunities Trust plc for the year ended 31 March 2024 which
comprise the Statement of Comprehensive Income, the Statement of
Changes in Equity, the Statement of Financial Position, the Cash Flow
Statement and the related notes 1 to 24 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
2024 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 FRC’s Ethical Standard as applied to public
interest entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were
not provided to the Company and we remain independent of
Company in conducting the audit.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation
of the directors’ assessment of the Company’s ability to continue to
adopt the going concern basis of accounting included:
– Confirming our understanding of the Company’s going concern
assessment process and engaging 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.
– Inspecting the directors’ assessment of going concern, including
the revenue forecast, for the period to 31 July 2025 which is at
least twelve months from the date the financial statements were
authorised for issue.
– Reviewing the factors and assumptions, including the impact of
the current economic environment and other significant events
that could give risk to market volatility, 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.
– Considering the mitigating factors included in the revenue
forecasts that are within the control of the Company. We
reviewed the Company’s assessment of the liquidity of
investments held and evaluated the Company’s ability to sell
those investments in order to cover working capital
requirements as a result of the Company operating at a revenue
loss.
– Considering the commitments that have been made with respect
to the purchase of unquoted investments to ensure that these
have been appropriately taken account of when preparing the
forecast.
– Reviewing 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 to
31 July 2025, which is at least 12 months from when the financial
statements are authorised for issue.
In relation to the Company’ 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
– Risk of incorrect valuation or ownership of the investment portfolio
– Risk of incorrect calculation of the performance fee
Key audit matters
– Overall materiality of £0.81m (2023: £0.79m) which represents 1% (2023:1%) of shareholders’ funds. Materiality
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
There has been increasing interest from stakeholders as to how
climate change will impact Companies. The Company has determined
that the impact from climate change could affect the Company’s
investment valuations and overall investment process. This is
explained in the principal risks and uncertainties section on page 30
which 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.
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 1c and conclusion that there was no further impact of
climate change to be taken into account. The quoted investments are
valued based on market pricing as required by FRS 102 and the
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 which also reflect
each investment’s exposure to climate change risk. We also
challenged the directors’ considerations of climate change in their
assessment of viability and associated disclosures.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to fraud)
that we identified. These matters included those which had the
greatest effect on: the overall audit strategy, the allocation of
resources in the audit; and directing the efforts of the engagement
team. These matters were addressed in the context of our audit of
the financial statements as a whole, and in our opinion thereon, and
we do not provide a separate opinion on these matters.
Key observations communicated to
Risk Our response to the risk the Audit and Risk Committee
The results of our procedures identified no
material misstatements in relation to the risk
of incorrect valuation or ownership of the
investment portfolio.
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 and
unquoted investment holdings at 31 March
2024 to independent confirmations received
directly from the Company’s Custodian and
Depositary.
We obtained confirmations directly from
independent third parties with respect to the
unquoted investments held by the Company.
Incorrect valuation or ownership of the
investment portfolio (as described on
page 40 in the Audit and Risk Committee
Report and as per the accounting policy set
out on page 62)
The value of the investment portfolio at
31 March 2024 was £83.09 million (2023:
£74.13 million) consisting of quoted
investments with an aggregate value of
£30.23 million (2023: £26.17 million) and
unquoted investments with an aggregate
value of £52.86 million (2023:
£47.96 million).
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”). The unquoted
investment policy applies methodologies
consistent with the International Private
Equity and Venture Capital Valuation
guidelines (‘IPEV’).
Schroder British Opportunities Trust plc 53
Introduction Strategic Report Governance Financial Other Information (unaudited)
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
There has been increasing interest from stakeholders as to how
climate change will impact Companies. The Company has determined
that the impact from climate change could affect the Company’s
investment valuations and overall investment process. This is
explained in the principal risks and uncertainties section on page 30
which 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.
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 1c and conclusion that there was no further impact of
climate change to be taken into account. The quoted investments are
valued based on market pricing as required by FRS 102 and the
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 which also reflect
each investment’s exposure to climate change risk. We also
challenged the directors’ considerations of climate change in their
assessment of viability and associated disclosures.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to fraud)
that we identified. These matters included those which had the
greatest effect on: the overall audit strategy, the allocation of
resources in the audit; and directing the efforts of the engagement
team. These matters were addressed in the context of our audit of
the financial statements as a whole, and in our opinion thereon, and
we do not provide a separate opinion on these matters.
Key observations communicated to
Risk Our response to the risk the Audit and Risk Committee
The results of our procedures identified no
material misstatements in relation to the risk
of incorrect valuation or ownership of the
investment portfolio.
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 and
unquoted investment holdings at 31 March
2024 to independent confirmations received
directly from the Company’s Custodian and
Depositary.
We obtained confirmations directly from
independent third parties with respect to the
unquoted investments held by the Company.
Incorrect valuation or ownership of the
investment portfolio (as described on
page 40 in the Audit and Risk Committee
Report and as per the accounting policy set
out on page 62)
The value of the investment portfolio at
31 March 2024 was £83.09 million (2023:
£74.13 million) consisting of quoted
investments with an aggregate value of
£30.23 million (2023: £26.17 million) and
unquoted investments with an aggregate
value of £52.86 million (2023:
£47.96 million).
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”). The unquoted
investment policy applies methodologies
consistent with the International Private
Equity and Venture Capital Valuation
guidelines (‘IPEV’).
Schroder British Opportunities Trust plc 53
Introduction Strategic Report Governance Financial Other Information (unaudited)
54
Schroder British Opportunities Trust plc
Independent Auditors Report
to the Members of Schroder British Opportunities Trust plc
continued
Key observations communicated to
Risk Our response to the risk the Audit and Risk Committee
We engaged our team of valuation
specialists to review the valuations of all
unquoted investments which included
completing the following procedures:
– Reviewing the valuation papers for the
year ended 31 March 2024 to gain an
understanding of, and comment on, the
valuation methodologies and
assumptions used;
– Assessing whether the valuations have
been performed in line with general
valuation approaches as set out in UK
GAAP and the International Private
Equity and Venture capital (‘IPEV’)
guidelines;
– Assessing the appropriateness of data
inputs and challenging the assumptions
used to support the valuations;
– Assessing other facts and
circumstances, such as market
movements and comparative company
information, that have an impact on the
fair market value of the investments;
and
– Performing comparative calculations to
assess whether the valuation
conclusions are reasonable and within
an independently calculated acceptable
valuation range.
We recalculated the unrealised gains/losses
on unquoted investments as at the year-end
using the book-cost reconciliation and
reviewed the fair value hierarchy disclosure
for consistency with our understanding of
the investments held.
For purchases of unquoted investments
made during the period, we obtained
supporting documents from the Portfolio
Manager and agreed these to the purchase
cost per the accounting records and to bank
statements.
We corroborated a sample of inputs used in
the valuation to underlying supporting
information.
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 2024 to ensure
consistencies in the assumptions or data
inputs used.
Incorrect valuation or ownership of the
investment portfolio (continued).
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 57.
Independent Auditors Report
to the Members of Schroder British Opportunities Trust plc
continued
Key observations communicated to
Risk Our response to the risk the Audit and Risk Committee
We engaged our team of valuation
specialists to review the valuations of all
unquoted investments which included
completing the following procedures:
– Reviewing the valuation papers for the
year ended 31 March 2024 to gain an
understanding of, and comment on, the
valuation methodologies and
assumptions used;
– Assessing whether the valuations have
been performed in line with general
valuation approaches as set out in UK
GAAP and the International Private
Equity and Venture capital (‘IPEV’)
guidelines;
– Assessing the appropriateness of data
inputs and challenging the assumptions
used to support the valuations;
– Assessing other facts and
circumstances, such as market
movements and comparative company
information, that have an impact on the
fair market value of the investments;
and
– Performing comparative calculations to
assess whether the valuation
conclusions are reasonable and within
an independently calculated acceptable
valuation range.
We recalculated the unrealised gains/losses
on unquoted investments as at the year-end
using the book-cost reconciliation and
reviewed the fair value hierarchy disclosure
for consistency with our understanding of
the investments held.
For purchases of unquoted investments
made during the period, we obtained
supporting documents from the Portfolio
Manager and agreed these to the purchase
cost per the accounting records and to bank
statements.
We corroborated a sample of inputs used in
the valuation to underlying supporting
information.
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 2024 to ensure
consistencies in the assumptions or data
inputs used.
Incorrect valuation or ownership of the
investment portfolio (continued).
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 57.
Key observations communicated to
Risk Our response to the risk 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 £0.81 million (2023:
£0.79 million), which is 1% (2023: 1%) of shareholders’ fund. We
believe that Shareholders’ funds provides us with materiality aligned
to key measure of the Company’s performance.
Performance materiality
The application of materiality at the individual account or balance level.
It is set at an amount to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment
of the Company’s overall control environment, our judgement was
that performance materiality was 75% (2023: 75%) of our planning
materiality, namely £0.61 million (2023: £0.59 million).
Given the importance of the distinction between revenue and capital
for investment trusts, we have also applied a separate testing
threshold for the revenue column of the Statement of Comprehensive
Income 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 £0.04 million
(2023: £0.04 million).
Reporting threshold
An amount below which identified misstatements are considered as
being clearly trivial.
We agreed with the Audit Committee that we would report to them all
uncorrected audit differences in excess of £0.04 million (2023:
£0.04 million), 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.
The results of our procedures identified no
material misstatements in relation to the risk
of incorrect calculation of the performance
fee.
We have performed the following
procedures:
We obtained an understanding of the
Portfolio Manager’s and the Administrator’s
processes surrounding the calculation of
performance fees by performing
walkthrough procedures.
We tested the mathematical accuracy of the
calculation and verified that the calculation
was in accordance with the Investment
Management Agreement.
We verified the inputs used to external
support and audited valuations data.
We reviewed the payment conditions of the
performance fee and verified that no
conditions were met during the year. As
such, there is no performance fee charge for
the current period.
Incorrect calculation of the
performance fee (as described on page 40
in the Audit and Risk Committee Report and as
per the accounting policy set out on page 63)
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 2024 was £1.67 million (2024:
£1.67 million).
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 Portfolio
Manager.
Schroder British Opportunities Trust plc 55
Introduction Strategic Report Governance Financial Other Information (unaudited)
Risk Our response to the risk 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 £0.81 million (2023:
£0.79 million), which is 1% (2023: 1%) of shareholders’ fund. We
believe that Shareholders’ funds provides us with materiality aligned
to key measure of the Company’s performance.
Performance materiality
The application of materiality at the individual account or balance level.
It is set at an amount to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected
misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment
of the Company’s overall control environment, our judgement was
that performance materiality was 75% (2023: 75%) of our planning
materiality, namely £0.61 million (2023: £0.59 million).
Given the importance of the distinction between revenue and capital
for investment trusts, we have also applied a separate testing
threshold for the revenue column of the Statement of Comprehensive
Income 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 £0.04 million
(2023: £0.04 million).
Reporting threshold
An amount below which identified misstatements are considered as
being clearly trivial.
We agreed with the Audit Committee that we would report to them all
uncorrected audit differences in excess of £0.04 million (2023:
£0.04 million), 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.
The results of our procedures identified no
material misstatements in relation to the risk
of incorrect calculation of the performance
fee.
We have performed the following
procedures:
We obtained an understanding of the
Portfolio Manager’s and the Administrator’s
processes surrounding the calculation of
performance fees by performing
walkthrough procedures.
We tested the mathematical accuracy of the
calculation and verified that the calculation
was in accordance with the Investment
Management Agreement.
We verified the inputs used to external
support and audited valuations data.
We reviewed the payment conditions of the
performance fee and verified that no
conditions were met during the year. As
such, there is no performance fee charge for
the current period.
Incorrect calculation of the
performance fee (as described on page 40
in the Audit and Risk Committee Report and as
per the accounting policy set out on page 63)
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 2024 was £1.67 million (2024:
£1.67 million).
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 Portfolio
Manager.
Schroder British Opportunities Trust plc 55
Introduction Strategic Report Governance Financial Other Information (unaudited)
56
Schroder British Opportunities Trust plc
Independent Auditors Report
to the Members of Schroder British Opportunities Trust plc
continued
Opinions on other matters prescribed by the
Companies Act 2006
In our opinion the part of the directors’ remuneration report to be
audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the
audit:
– the information given in the strategic report and the directors’
report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
– the strategic report and directors’ reports 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.
Corporate Governance Statement
We have reviewed the directors’ statement in relation to going
concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Company’s compliance with the
provisions of the UK Corporate Governance Code specified for our
review by the Listing Rules.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements or our knowledge obtained during the audit:
– Directors’ statement with regards to the appropriateness of
adopting the going concern basis of accounting and any
material uncertainties identified set out on page 32.
– 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 32.
– 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 page 32.
– Directors’ statement on fair, balanced and understandable set
out on page 49.
– Board’s confirmation that it has carried out a robust assessment
of the emerging and principal risks set out on page 29.
– The section of the annual report that describes the review of
effectiveness of risk management and internal control systems
set out on page 40; and
– The section describing the work of the Audit and Risk Committee
set out on page 39.
Responsibilities of Directors
As explained more fully in the directors’ responsibilities statement set
out on page 49, the directors are responsible for the preparation of
the financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the directors determine
is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible
for assessing the Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either
intend to liquidate the Company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
Explanation as to what extent the audit was
considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with
laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect irregularities, including
fraud. The risk of not detecting a material misstatement due to fraud
is higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery or
intentional misrepresentations, or through collusion. The extent to
which our procedures are capable of detecting irregularities,
including fraud is detailed below.
However, the primary responsibility for the prevention and detection
of fraud rests with both those charged with governance of the
Company and management.
– We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Company and determined
that the most significant are 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,
Independent Auditors Report
to the Members of Schroder British Opportunities Trust plc
continued
Opinions on other matters prescribed by the
Companies Act 2006
In our opinion the part of the directors’ remuneration report to be
audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of the
audit:
– the information given in the strategic report and the directors’
report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
– the strategic report and directors’ reports 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.
Corporate Governance Statement
We have reviewed the directors’ statement in relation to going
concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Company’s compliance with the
provisions of the UK Corporate Governance Code specified for our
review by the Listing Rules.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements or our knowledge obtained during the audit:
– Directors’ statement with regards to the appropriateness of
adopting the going concern basis of accounting and any
material uncertainties identified set out on page 32.
– 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 32.
– 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 page 32.
– Directors’ statement on fair, balanced and understandable set
out on page 49.
– Board’s confirmation that it has carried out a robust assessment
of the emerging and principal risks set out on page 29.
– The section of the annual report that describes the review of
effectiveness of risk management and internal control systems
set out on page 40; and
– The section describing the work of the Audit and Risk Committee
set out on page 39.
Responsibilities of Directors
As explained more fully in the directors’ responsibilities statement set
out on page 49, the directors are responsible for the preparation of
the financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the directors determine
is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible
for assessing the Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either
intend to liquidate the Company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
Explanation as to what extent the audit was
considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with
laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect irregularities, including
fraud. The risk of not detecting a material misstatement due to fraud
is higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery or
intentional misrepresentations, or through collusion. The extent to
which our procedures are capable of detecting irregularities,
including fraud is detailed below.
However, the primary responsibility for the prevention and detection
of fraud rests with both those charged with governance of the
Company and management.
– We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Company and determined
that the most significant are 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,
Schroder
British Opportunities Trust plc
57
Introduction Strategic Report Governance Financial Other Information (unaudited)
Section 1158 of the Corporation Tax Act 2010 and The
Companies (Miscellaneous Reporting) Regulations 2018.
– We understood how the Company is complying with those
frameworks through discussions with the Audit and Risk
Committee and Company Secretary and review of board and
committee minutes and review of papers provided to the Audit
and Risk Committee.
– 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.
– Based on this understanding we designed our audit procedures
to identify non-compliance with such laws and regulations. Our
procedures involved review of the 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 Financial Reporting Council’s
website at https://www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
Other matters we are required to address
– Following the recommendation from the Audit and Risk
Committee, we were appointed by the Company on 19 May 2021
to audit the financial statements for the year ending 30 June
2021 and subsequent financial periods.
The period of total uninterrupted engagement including previous
renewals and reappointments is 4 years, covering the periods ending
30 June 2021 and 31 March 2022 to the year ending 31 March 2024.
– 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
10 July 2024
Introduction Strategic Report Governance Financial Other Information (unaudited)
Section 1158 of the Corporation Tax Act 2010 and The
Companies (Miscellaneous Reporting) Regulations 2018.
– We understood how the Company is complying with those
frameworks through discussions with the Audit and Risk
Committee and Company Secretary and review of board and
committee minutes and review of papers provided to the Audit
and Risk Committee.
– 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.
– Based on this understanding we designed our audit procedures
to identify non-compliance with such laws and regulations. Our
procedures involved review of the 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 Financial Reporting Council’s
website at https://www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
Other matters we are required to address
– Following the recommendation from the Audit and Risk
Committee, we were appointed by the Company on 19 May 2021
to audit the financial statements for the year ending 30 June
2021 and subsequent financial periods.
The period of total uninterrupted engagement including previous
renewals and reappointments is 4 years, covering the periods ending
30 June 2021 and 31 March 2022 to the year ending 31 March 2024.
– 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
10 July 2024
58
Schroder British Opportunities Trust plc
Statement of Comprehensive Income
for the year ended 31 March 2024
2024 2023
Revenue Capital Total Revenue Capital Total
Note £’000 £’000 £’000 £’000 £’000 £’000
Gains on investments held at fair value through profit or loss 3 – 2,738 2,738 – 3,198 3,198
Gains on foreign exchange – – – – 16 16
Income from investments 4 267 – 267 392 – 392
Other interest receivable and similar income 4 98 – 98 77 – 77
Gross return 365 2,738 3,103 469 3,214 3,683
Investment management fee 5 (432) – (432) (458) – (458)
Performance fee 5 – – – – (555) (555)
Administrative expenses 6 (655) – (655) (650) – (650)
Transaction costs 10 – – – – (4) (4)
Net (loss)/return before finance costs and taxation (722) 2,738 2,016 (639) 2,655 2,016
Finance costs – – – – – –
Net (loss)/return before taxation (722) 2,738 2,016 (639) 2,655 2,016
Taxation 7 – – – – – –
Net (loss)/return after taxation (722) 2,738 2,016 (639) 2,655 2,016
(Loss)/return per share 9 (0.98)p 3.71p 2.73p (0.86)p 3.57p 2.71p
The “Total” column of this statement is the profit and loss account of the Company. The “Revenue” and “Capital” columns represent
supplementary information prepared under guidance issued by The Association of Investment Companies. The Company has no other items of
other comprehensive income, and therefore the net return after taxation is also the total comprehensive income for the year.
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the
period.
The notes on pages 62 to 73 form an integral part of these accounts.
Statement of Comprehensive Income
for the year ended 31 March 2024
2024 2023
Revenue Capital Total Revenue Capital Total
Note £’000 £’000 £’000 £’000 £’000 £’000
Gains on investments held at fair value through profit or loss 3 – 2,738 2,738 – 3,198 3,198
Gains on foreign exchange – – – – 16 16
Income from investments 4 267 – 267 392 – 392
Other interest receivable and similar income 4 98 – 98 77 – 77
Gross return 365 2,738 3,103 469 3,214 3,683
Investment management fee 5 (432) – (432) (458) – (458)
Performance fee 5 – – – – (555) (555)
Administrative expenses 6 (655) – (655) (650) – (650)
Transaction costs 10 – – – – (4) (4)
Net (loss)/return before finance costs and taxation (722) 2,738 2,016 (639) 2,655 2,016
Finance costs – – – – – –
Net (loss)/return before taxation (722) 2,738 2,016 (639) 2,655 2,016
Taxation 7 – – – – – –
Net (loss)/return after taxation (722) 2,738 2,016 (639) 2,655 2,016
(Loss)/return per share 9 (0.98)p 3.71p 2.73p (0.86)p 3.57p 2.71p
The “Total” column of this statement is the profit and loss account of the Company. The “Revenue” and “Capital” columns represent
supplementary information prepared under guidance issued by The Association of Investment Companies. The Company has no other items of
other comprehensive income, and therefore the net return after taxation is also the total comprehensive income for the year.
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the
period.
The notes on pages 62 to 73 form an integral part of these accounts.
Schroder
British Opportunities Trust plc
59
Introduction Strategic Report Governance Financial Other Information (unaudited)
Statement of Changes in Equity
for the year ended 31 March 2024
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
Net return/(loss) after taxation – – 2,738 (722) 2,016
At 31 March 2024 750 71,957 10,991 (2,371) 81,327
The notes on pages 62 to 73 form an integral part of these accounts.
Introduction Strategic Report Governance Financial Other Information (unaudited)
Statement of Changes in Equity
for the year ended 31 March 2024
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
Net return/(loss) after taxation – – 2,738 (722) 2,016
At 31 March 2024 750 71,957 10,991 (2,371) 81,327
The notes on pages 62 to 73 form an integral part of these accounts.
60
Schroder British Opportunities Trust plc
Statement of Financial Position
at 31 March 2024
2024 2023
Note £’000 £’000
Fixed assets
Investments held at fair value through profit or loss 10 83,092 74,128
Current assets
Debtors 11 15 151
Cash and cash equivalents 11 790 7,759
805 7,910
Current liabilities
Creditors: amounts falling due within one year 12 (900) (1,543)
Net current liabilities (95) 6,367
Total assets less current liabilities 82,997 80,495
Creditors: amounts falling due after more than one year
Performance fee (1,670) (1,184)
Net assets 81,327 79,311
Capital and reserves
Called-up share capital 13 750 750
Capital reserves 14 82,948 80,210
Revenue reserve 14 (2,371) (1,649)
Total equity shareholders’ funds 81,327 79,311
Net asset value per share 15 110.05p 107.32p
The accounts were approved and authorised for issue by the Board of Directors on 10 July 2024 and signed on its behalf by:
Neil England
Chairman
The notes on pages 62 to 73 form an integral part of these accounts.
Registered in England and Wales as a public company limited by shares
Company registration number: 12892325
Statement of Financial Position
at 31 March 2024
2024 2023
Note £’000 £’000
Fixed assets
Investments held at fair value through profit or loss 10 83,092 74,128
Current assets
Debtors 11 15 151
Cash and cash equivalents 11 790 7,759
805 7,910
Current liabilities
Creditors: amounts falling due within one year 12 (900) (1,543)
Net current liabilities (95) 6,367
Total assets less current liabilities 82,997 80,495
Creditors: amounts falling due after more than one year
Performance fee (1,670) (1,184)
Net assets 81,327 79,311
Capital and reserves
Called-up share capital 13 750 750
Capital reserves 14 82,948 80,210
Revenue reserve 14 (2,371) (1,649)
Total equity shareholders’ funds 81,327 79,311
Net asset value per share 15 110.05p 107.32p
The accounts were approved and authorised for issue by the Board of Directors on 10 July 2024 and signed on its behalf by:
Neil England
Chairman
The notes on pages 62 to 73 form an integral part of these accounts.
Registered in England and Wales as a public company limited by shares
Company registration number: 12892325
Schroder
British Opportunities Trust plc
61
Introduction Strategic Report Governance Financial Other Information (unaudited)
Cash Flow Statement
for the year ended 31 March 2024
2024 2023
Note £’000 £’000
Net cash outflow from operating activities 16 (743) (662)
Investing activities
Purchases of investments (14,658) (19,840)
Sales of investments 8,432 13,601
Net cash outflow from investing activities (6,226) (6,239)
Net cash outflow before financing (6,969) (6,901)
Financing activities
Repurchase of Ordinary shares into treasury – (808)
Net cash outflow from financing activities – (808)
Net cash outflow in the year (6,969) (7,709)
Cash at bank and in hand at the beginning of the year 7,759 15,452
Net cash outflow in the year (6,969) (7,709)
Exchange movements – 16
Cash at bank and in hand at the end of the year 790 7,759
Included under operating activities are dividends received during the period amounting to £376,000 (year ended 31 March 2023: £362,000) and
interest receipts amounting to £111,000 (year ended 31 March 2023 : £62,000).
The notes on pages 62 to 73 form an integral part of these accounts.
Introduction Strategic Report Governance Financial Other Information (unaudited)
Cash Flow Statement
for the year ended 31 March 2024
2024 2023
Note £’000 £’000
Net cash outflow from operating activities 16 (743) (662)
Investing activities
Purchases of investments (14,658) (19,840)
Sales of investments 8,432 13,601
Net cash outflow from investing activities (6,226) (6,239)
Net cash outflow before financing (6,969) (6,901)
Financing activities
Repurchase of Ordinary shares into treasury – (808)
Net cash outflow from financing activities – (808)
Net cash outflow in the year (6,969) (7,709)
Cash at bank and in hand at the beginning of the year 7,759 15,452
Net cash outflow in the year (6,969) (7,709)
Exchange movements – 16
Cash at bank and in hand at the end of the year 790 7,759
Included under operating activities are dividends received during the period amounting to £376,000 (year ended 31 March 2023: £362,000) and
interest receipts amounting to £111,000 (year ended 31 March 2023 : £62,000).
The notes on pages 62 to 73 form an integral part of these accounts.
62
Schroder British Opportunities Trust plc
Notes to the Financial Statements
1. Accounting period
The Company changed its accounting date to 31 March, commencing 1 July 2021. Comparative figures are provided for the full year, with
reference to the previous accounting period. References may be made to 2022, which comparatives will only cover a nine-month period.
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 financial statements 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 financial statements 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 financial statements have been prepared on a going concern basis under the historical cost convention, with the exception of investments
and derivative financial instruments measured 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 2025, which is at least 12 months from the date of approval of these financial
statements. 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 revenue 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 are given in the Going Concern
Statement, Viability Statement and under the Principal and Emerging Risks heading on page 39. The financial statements have been prepared
on the assumption that approval as an investment trust will continue to be granted.
The financial statements are presented in sterling and amounts have been rounded to the nearest thousand.
The accounting policies applied to these financial statements are consistent with those applied in the financial statements for the year ended
31 March 2023.
(b) Use of judgements, estimates and assumptions
The preparation of the financial statements 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.
Judgements, 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 judgements, estimates and assumptions 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 judgements, estimates and assumptions are described in note 21 on page 72.
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 transaction price,
excluding expenses incidental to purchase which are written off to capital at the time of acquisition. Subsequently the investments are valued at
fair value, using the methodology below. This valuation process is consistent with International Private Equity and Venture Capital (“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.
Notes to the Financial Statements
1. Accounting period
The Company changed its accounting date to 31 March, commencing 1 July 2021. Comparative figures are provided for the full year, with
reference to the previous accounting period. References may be made to 2022, which comparatives will only cover a nine-month period.
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 financial statements 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 financial statements 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 financial statements have been prepared on a going concern basis under the historical cost convention, with the exception of investments
and derivative financial instruments measured 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 2025, which is at least 12 months from the date of approval of these financial
statements. 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 revenue 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 are given in the Going Concern
Statement, Viability Statement and under the Principal and Emerging Risks heading on page 39. The financial statements have been prepared
on the assumption that approval as an investment trust will continue to be granted.
The financial statements are presented in sterling and amounts have been rounded to the nearest thousand.
The accounting policies applied to these financial statements are consistent with those applied in the financial statements for the year ended
31 March 2023.
(b) Use of judgements, estimates and assumptions
The preparation of the financial statements 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.
Judgements, 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 judgements, estimates and assumptions 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 judgements, estimates and assumptions are described in note 21 on page 72.
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 transaction price,
excluding expenses incidental to purchase which are written off to capital at the time of acquisition. Subsequently the investments are valued at
fair value, using the methodology below. This valuation process is consistent with International Private Equity and Venture Capital (“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.
Schroder
British Opportunities Trust plc
63
Introduction Strategic Report Governance Financial Other Information (unaudited)
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 2024 were valued using a variety of techniques consistent with the recommendations set out in 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 Statement of Comprehensive Income 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 Statement of
Comprehensive Income 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 Statement of Comprehensive Income and in capital
reserves.
(e) Income
Dividends receivable are included in revenue on an ex-dividend basis except where, in the opinion of the Board, the dividend is capital in nature,
in which case it is included in capital.
Overseas dividends are included gross of any withholding tax.
Deposit interest outstanding at the period end is calculated and accrued on a time apportionment basis using market rates of interest.
(f) Expenses
All expenses are accounted for on an accruals basis. Expenses are allocated wholly to revenue column of the Statement of Comprehensive
Income with the following exceptions:
– Any performance fee is allocated 100% 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 in note 10 on page 66.
(g) Cash and cash equivalents
Cash at bank and in hand may comprise cash and demand deposits which are readily convertible to a known amount of cash and are subject to
insignificant risk of changes in value.
(h) Financial instruments
Other debtors and creditors do not carry any interest, are short-term in nature and are accordingly stated at nominal value, with debtors
reduced by appropriate allowances for estimated irrecoverable amounts.
Bank loans and overdrafts are measured at transaction price, which is the proceeds received net of direct issue costs. After initial recognition,
subsequent measurement is based on amortised cost.
(i) Taxation
The tax charge for the period includes a provision for all amounts expected to be received or paid.
Deferred tax is provided on all timing differences that have originated but not reversed by the accounting date.
Deferred tax liabilities are recognised for all taxable timing differences but deferred tax assets are only recognised to the extent that it is
probable that taxable profits will be available against which those timing differences can be utilised.
Deferred tax is measured at the tax rate which is expected to apply in the periods in which the timing differences are expected to reverse, based
on tax rates that have been enacted or substantively enacted at the balance sheet date and is measured on an undiscounted basis.
(j) Value added tax (“VAT”)
Expenses are disclosed inclusive of the related irrecoverable VAT.
(k) Foreign currency
In accordance with FRS 102, the Company is required to determine a functional currency, being the currency in which the Company
predominantly operates. The Board, having regard to the currency of the Company’s share capital and the predominant currency in which its
shareholders operate, has determined that sterling is the functional currency and the currency in which the financial statements 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, denominated in foreign currencies at the year end are translated at the rates of exchange prevailing at
4.00 p.m. 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 cost 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 price of those shares
and is transfered to capital reserves. Any excess of sales proceeds over the purchase price transferred to “share premium”.
Introduction Strategic Report Governance Financial Other Information (unaudited)
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 2024 were valued using a variety of techniques consistent with the recommendations set out in 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 Statement of Comprehensive Income 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 Statement of
Comprehensive Income 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 Statement of Comprehensive Income and in capital
reserves.
(e) Income
Dividends receivable are included in revenue on an ex-dividend basis except where, in the opinion of the Board, the dividend is capital in nature,
in which case it is included in capital.
Overseas dividends are included gross of any withholding tax.
Deposit interest outstanding at the period end is calculated and accrued on a time apportionment basis using market rates of interest.
(f) Expenses
All expenses are accounted for on an accruals basis. Expenses are allocated wholly to revenue column of the Statement of Comprehensive
Income with the following exceptions:
– Any performance fee is allocated 100% 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 in note 10 on page 66.
(g) Cash and cash equivalents
Cash at bank and in hand may comprise cash and demand deposits which are readily convertible to a known amount of cash and are subject to
insignificant risk of changes in value.
(h) Financial instruments
Other debtors and creditors do not carry any interest, are short-term in nature and are accordingly stated at nominal value, with debtors
reduced by appropriate allowances for estimated irrecoverable amounts.
Bank loans and overdrafts are measured at transaction price, which is the proceeds received net of direct issue costs. After initial recognition,
subsequent measurement is based on amortised cost.
(i) Taxation
The tax charge for the period includes a provision for all amounts expected to be received or paid.
Deferred tax is provided on all timing differences that have originated but not reversed by the accounting date.
Deferred tax liabilities are recognised for all taxable timing differences but deferred tax assets are only recognised to the extent that it is
probable that taxable profits will be available against which those timing differences can be utilised.
Deferred tax is measured at the tax rate which is expected to apply in the periods in which the timing differences are expected to reverse, based
on tax rates that have been enacted or substantively enacted at the balance sheet date and is measured on an undiscounted basis.
(j) Value added tax (“VAT”)
Expenses are disclosed inclusive of the related irrecoverable VAT.
(k) Foreign currency
In accordance with FRS 102, the Company is required to determine a functional currency, being the currency in which the Company
predominantly operates. The Board, having regard to the currency of the Company’s share capital and the predominant currency in which its
shareholders operate, has determined that sterling is the functional currency and the currency in which the financial statements 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, denominated in foreign currencies at the year end are translated at the rates of exchange prevailing at
4.00 p.m. 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 cost 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 price of those shares
and is transfered to capital reserves. Any excess of sales proceeds over the purchase price transferred to “share premium”.
3.
Gains/(losses) on investments held at fair value through profit or loss
2024
2023
£’000 £’000
(Losses)/gains on sales of investments based on historic cost (1,282) 889
Amounts recognised in investment holding gains and losses in the previous year in respect of investments
sold in the year 1,641 327
Gains on sales of investments based on the carrying value at the previous balance sheet date 359 1,216
Unrealised gain recognised in respect of investments continuing to be held 2,379 1,982
Gains on investments held at fair value through profit and loss 2,738 3,198
4. Income from investments 2024 2023
£’000 £’000
Income from investments
UK dividends 252 374
Overseas dividends 15 18
267 392
Other interest receivable and similar income:
Deposit interest 98 77
98 77
Total income 365 469
5. Investment management fee and performance fee 2024 2023
£’000 £’000
Revenue:
Investment management fee 432 458
Capital:
Performance fee – 555
The bases for calculating the investment management and performance fees are set out in the Directors’ Report on page 37 and details of all
amounts payable to the Manager are given in note 18 on page 69.
6. Administrative expenses 2024 2023
£’000 £’000
Other administrative expenses 233 185
Company secretarial and administrative fee payable to Schroders 158 180
Directors’ fees
1
116 139
Auditor’s remuneration for the audit of the Company’s annual accounts
2
148 146
655 650
1
Full details are given in the remuneration report on pages 46 to 48.
2
Includes VAT amounting to £24,000 (2023: £24,000).
7. Taxation
(a) Analysis of tax charge for the period
2024 2023
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 2024 (period ended 31 March 2023: nil).
64 Schroder British Opportunities Trust plc
Notes to the Financial Statements
continued
£’000 £’000
(Losses)/gains on sales of investments based on historic cost (1,282) 889
Amounts recognised in investment holding gains and losses in the previous year in respect of investments
sold in the year 1,641 327
Gains on sales of investments based on the carrying value at the previous balance sheet date 359 1,216
Unrealised gain recognised in respect of investments continuing to be held 2,379 1,982
Gains on investments held at fair value through profit and loss 2,738 3,198
4. Income from investments 2024 2023
£’000 £’000
Income from investments
UK dividends 252 374
Overseas dividends 15 18
267 392
Other interest receivable and similar income:
Deposit interest 98 77
98 77
Total income 365 469
5. Investment management fee and performance fee 2024 2023
£’000 £’000
Revenue:
Investment management fee 432 458
Capital:
Performance fee – 555
The bases for calculating the investment management and performance fees are set out in the Directors’ Report on page 37 and details of all
amounts payable to the Manager are given in note 18 on page 69.
6. Administrative expenses 2024 2023
£’000 £’000
Other administrative expenses 233 185
Company secretarial and administrative fee payable to Schroders 158 180
Directors’ fees
1
116 139
Auditor’s remuneration for the audit of the Company’s annual accounts
2
148 146
655 650
1
Full details are given in the remuneration report on pages 46 to 48.
2
Includes VAT amounting to £24,000 (2023: £24,000).
7. Taxation
(a) Analysis of tax charge for the period
2024 2023
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 2024 (period ended 31 March 2023: nil).
64 Schroder British Opportunities Trust plc
Notes to the Financial Statements
continued
Schroder
British Opportunities Trust plc
65
Introduction Strategic Report Governance Financial Other Information (unaudited)
(b) Factors affecting tax charge for the period
2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Net return before taxation (722) 2,738 2,016 (639) 2,655 2,016
Net return before taxation multiplied by the Company’s applicable
rate of corporation tax for the year of 25.0% (year ended
31 March 2023: 19.0%) (181) 685 504 (121) 504 383
Effects of:
Capital gains on investments – (685) (685) – (569) (569)
Income not chargeable to corporation tax (67) – (67) (71) – (71)
Expenses not deductible for corporation tax purposes – – – – 1 1
Unrelieved management expenses 248 – 248 192 64 256
Taxation for the year – – – – – –
(c) Deferred taxation
The Company has an unrecognised deferred tax asset of £1,285,000 (2023: £983,000) based on a prospective corporation tax rate of 25%
(year ended 31 March 2023: 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.
8. Dividends
The Company has reported a revenue loss after taxation of £722,000 (year ended 31 March 2023: £639,000) for the year and accordingly there
is no requirement to pay a dividend under Section 1158 of the Corporation Tax Act 2010.
9. Return/(loss) per share 2024 2023
£’000 £’000
Revenue loss (722) (639)
Capital gain 2,738 2,655
Total return 2,016 2,016
Weighted average number of shares in issue during the year 73,900,000 74,376,633
Revenue loss per share (0.98)p (0.86)p
Capital return per share 3.71p 3.57p
Total return per share 2.73p 2.71p
10. Investments held at fair value through profit or loss
(a) Movement in investments
2024 2023
£’000 £’000
Opening book cost 66,328 59,200
Opening investment holding gains 7,800 5,491
Opening fair value 74,128 64,691
Purchases at cost 14,658 19,840
Sales proceeds (8,432) (13,601)
Gains on investments held at fair value through profit or loss 2,738 3,198
Closing fair value 83,092 74,128
Closing book cost 71,272 66,328
Closing investment holding gains 11,820 7,800
Closing fair value 83,092 74,128
Introduction Strategic Report Governance Financial Other Information (unaudited)
(b) Factors affecting tax charge for the period
2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Net return before taxation (722) 2,738 2,016 (639) 2,655 2,016
Net return before taxation multiplied by the Company’s applicable
rate of corporation tax for the year of 25.0% (year ended
31 March 2023: 19.0%) (181) 685 504 (121) 504 383
Effects of:
Capital gains on investments – (685) (685) – (569) (569)
Income not chargeable to corporation tax (67) – (67) (71) – (71)
Expenses not deductible for corporation tax purposes – – – – 1 1
Unrelieved management expenses 248 – 248 192 64 256
Taxation for the year – – – – – –
(c) Deferred taxation
The Company has an unrecognised deferred tax asset of £1,285,000 (2023: £983,000) based on a prospective corporation tax rate of 25%
(year ended 31 March 2023: 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.
8. Dividends
The Company has reported a revenue loss after taxation of £722,000 (year ended 31 March 2023: £639,000) for the year and accordingly there
is no requirement to pay a dividend under Section 1158 of the Corporation Tax Act 2010.
9. Return/(loss) per share 2024 2023
£’000 £’000
Revenue loss (722) (639)
Capital gain 2,738 2,655
Total return 2,016 2,016
Weighted average number of shares in issue during the year 73,900,000 74,376,633
Revenue loss per share (0.98)p (0.86)p
Capital return per share 3.71p 3.57p
Total return per share 2.73p 2.71p
10. Investments held at fair value through profit or loss
(a) Movement in investments
2024 2023
£’000 £’000
Opening book cost 66,328 59,200
Opening investment holding gains 7,800 5,491
Opening fair value 74,128 64,691
Purchases at cost 14,658 19,840
Sales proceeds (8,432) (13,601)
Gains on investments held at fair value through profit or loss 2,738 3,198
Closing fair value 83,092 74,128
Closing book cost 71,272 66,328
Closing investment holding gains 11,820 7,800
Closing fair value 83,092 74,128
10.
Investments held at fair value through profit or loss continued
(b) Material revaluations of unquoted investments
Year ended 31 March 2024
Opening Closing
valuation valuation
2023 Purchases Sales Revaluation 2024
£’000 £’000 £’000 £’000 £’000
Investment
Rapyd Financial Network 8,399 – – (1,562) 6,837
Cera EHP S.à r.l. 6,986 51 – 1,009 8,046
Mintec 8,614 – – 977 9,591
Pirum Systems 6,087 – – 797 6,884
Culligan 5,053 26 – 506 5,585
EasyPark 4,492 50 – 1,629 6,171
CFC Underwriting 4,098 1,170 – 393 5,661
Learning Curve 2,455 675 – (1,574) 1,556
Graphcore 1,778 – – 755 2,533
47,962 1,972 – 2,930 52,864
Year ended 31 March 2023
Opening Closing
valuation valuation
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 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
(c) Material disposals of unquoted investments
There were no disposals of unquoted investments in the year ended 31 March 2024 (31 March 2023: £2,384,000).
(d) Transaction costs
The following transaction costs, comprising stamp duty and brokerage commission and legal fees, were incurred in the year:
2024 2023
£’000 £’000
On acquisitions
Stamp duty and brokerage commission 5 18
Legal fees – 4
On disposals
Brokerage commission 4 5
9 27
66 Schroder British Opportunities Trust plc
Notes to the Financial Statements
continued
(b) Material revaluations of unquoted investments
Year ended 31 March 2024
Opening Closing
valuation valuation
2023 Purchases Sales Revaluation 2024
£’000 £’000 £’000 £’000 £’000
Investment
Rapyd Financial Network 8,399 – – (1,562) 6,837
Cera EHP S.à r.l. 6,986 51 – 1,009 8,046
Mintec 8,614 – – 977 9,591
Pirum Systems 6,087 – – 797 6,884
Culligan 5,053 26 – 506 5,585
EasyPark 4,492 50 – 1,629 6,171
CFC Underwriting 4,098 1,170 – 393 5,661
Learning Curve 2,455 675 – (1,574) 1,556
Graphcore 1,778 – – 755 2,533
47,962 1,972 – 2,930 52,864
Year ended 31 March 2023
Opening Closing
valuation valuation
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 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
(c) Material disposals of unquoted investments
There were no disposals of unquoted investments in the year ended 31 March 2024 (31 March 2023: £2,384,000).
(d) Transaction costs
The following transaction costs, comprising stamp duty and brokerage commission and legal fees, were incurred in the year:
2024 2023
£’000 £’000
On acquisitions
Stamp duty and brokerage commission 5 18
Legal fees – 4
On disposals
Brokerage commission 4 5
9 27
66 Schroder British Opportunities Trust plc
Notes to the Financial Statements
continued
Schroder
British Opportunities Trust plc
67
Introduction Strategic Report Governance Financial Other Information (unaudited)
11. Current assets
Debtors
2024 2023
£’000 £’000
Dividends and interest receivable 11 133
Other debtors 4 18
15 151
The Directors consider that the carrying amount of debtors approximates to their fair value.
Cash and cash equivalents
The carrying amount of cash, amounting to £790,000 (2023: £7,759,000), represents its fair value.
12. Current liabilities
Creditors: amounts falling due within one year
2024 2023
£’000 £’000
Other creditors and accruals 900 1,056
Performance fee payable – 487
1
900 1,543
1
The performance fee payable at 31 March 2023 was included in Creditors: amounts falling due within one year. This £487,000 has been reclassified in the current
year as Creditors: amounts falling due after more than one year as there is a conditional deferment for payment on these fees.
The Directors consider that the carrying amount of creditors falling due within one year approximates to their fair value.
13. Called-up share capital 0
2024 2023
£’000 £’000
Ordinary Shares allotted, called up and fully paid:
73,900,000 (2023: 75,000,000) shares of 1p each: 739 750
Repurchase of nil (2023: 1,100,000) shares into treasury – (11)
Subtotal of 73,900,000 (2023: 73,900,000) shares 739 739
1,100,000 (2023: 1,100,000) shares held in treasury 11 11
Closing balance
1
750 750
1
Represents 75,000,000 (2023: 75,000,000) shares of 1p each, including 1,100,000 (2023: 1,100,000) held in treasury.
14. Reserves Capital reserves
Special Gains and Investment
distributable losses holding
capital on sales of gains and Revenue
reserve
1
investments
2
losses 3
reserve
4
£'000 £'000 £'000 £'000
At 31 March 2023 71,957 453 7,800 (1,649)
Gains on sales of investments based on the carrying value at the previous
balance sheet date – 359 – –
Unrealised gain recognised in respect of investments continuing to be held – – 2,379 –
Transfer on disposal of investments – (1,641) 1,641 –
Performance fee allocated to capital – – – –
Retained revenue for the year – – – (722)
At 31 March 2024 71,957 (829) 11,820 (2,371)
Introduction Strategic Report Governance Financial Other Information (unaudited)
11. Current assets
Debtors
2024 2023
£’000 £’000
Dividends and interest receivable 11 133
Other debtors 4 18
15 151
The Directors consider that the carrying amount of debtors approximates to their fair value.
Cash and cash equivalents
The carrying amount of cash, amounting to £790,000 (2023: £7,759,000), represents its fair value.
12. Current liabilities
Creditors: amounts falling due within one year
2024 2023
£’000 £’000
Other creditors and accruals 900 1,056
Performance fee payable – 487
1
900 1,543
1
The performance fee payable at 31 March 2023 was included in Creditors: amounts falling due within one year. This £487,000 has been reclassified in the current
year as Creditors: amounts falling due after more than one year as there is a conditional deferment for payment on these fees.
The Directors consider that the carrying amount of creditors falling due within one year approximates to their fair value.
13. Called-up share capital 0
2024 2023
£’000 £’000
Ordinary Shares allotted, called up and fully paid:
73,900,000 (2023: 75,000,000) shares of 1p each: 739 750
Repurchase of nil (2023: 1,100,000) shares into treasury – (11)
Subtotal of 73,900,000 (2023: 73,900,000) shares 739 739
1,100,000 (2023: 1,100,000) shares held in treasury 11 11
Closing balance
1
750 750
1
Represents 75,000,000 (2023: 75,000,000) shares of 1p each, including 1,100,000 (2023: 1,100,000) held in treasury.
14. Reserves Capital reserves
Special Gains and Investment
distributable losses holding
capital on sales of gains and Revenue
reserve
1
investments
2
losses 3
reserve
4
£'000 £'000 £'000 £'000
At 31 March 2023 71,957 453 7,800 (1,649)
Gains on sales of investments based on the carrying value at the previous
balance sheet date – 359 – –
Unrealised gain recognised in respect of investments continuing to be held – – 2,379 –
Transfer on disposal of investments – (1,641) 1,641 –
Performance fee allocated to capital – – – –
Retained revenue for the year – – – (722)
At 31 March 2024 71,957 (829) 11,820 (2,371)
14.
Reserves continued
Capital reserves
Special Gains and Investment
distributable losses holding
capital 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 loss for the period – – – (639)
At 31 March 2023 71,957 453 7,800 (1,649)
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 repurchase 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.
15. Net asset value per share 2024 2023
Net assets attributable to shareholders (£’000) 81,327 79,311
Shares in issue at the year end 73,900,000 73,900,000
Net asset value per share 110.05p 107.32p
16. Reconciliation of total return on ordinary activities before finance costs and taxation
to net cash outflow from operating activities 2024 2023
£’000 £’000
Net loss before taxation 2,016 2,016
Less capital return before taxation (2,738) (2,655)
Increase/(decrease) in prepayments and accrued income 122 (45)
Increase in other debtors 14 9
(Decrease)/increase in creditors and performance fee payable (157) 572
Performance fee and transaction costs allocated to capital – (559)
Net cash outflow from operating activities (743) (662)
17. Uncalled capital commitments
At 31 March 2024, the Company had uncalled capital commitments amounting to £3,726,000 (31 March 2023: £5,476,000) in respect of
follow-on investments, which may be called by investee companies, subject to their achievement of certain milestones and objectives.
68 Schroder British Opportunities Trust plc
Notes to the Financial Statements
continued
Special Gains and Investment
distributable losses holding
capital 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 loss for the period – – – (639)
At 31 March 2023 71,957 453 7,800 (1,649)
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 repurchase 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.
15. Net asset value per share 2024 2023
Net assets attributable to shareholders (£’000) 81,327 79,311
Shares in issue at the year end 73,900,000 73,900,000
Net asset value per share 110.05p 107.32p
16. Reconciliation of total return on ordinary activities before finance costs and taxation
to net cash outflow from operating activities 2024 2023
£’000 £’000
Net loss before taxation 2,016 2,016
Less capital return before taxation (2,738) (2,655)
Increase/(decrease) in prepayments and accrued income 122 (45)
Increase in other debtors 14 9
(Decrease)/increase in creditors and performance fee payable (157) 572
Performance fee and transaction costs allocated to capital – (559)
Net cash outflow from operating activities (743) (662)
17. Uncalled capital commitments
At 31 March 2024, the Company had uncalled capital commitments amounting to £3,726,000 (31 March 2023: £5,476,000) in respect of
follow-on investments, which may be called by investee companies, subject to their achievement of certain milestones and objectives.
68 Schroder British Opportunities Trust plc
Notes to the Financial Statements
continued
Schroder
British Opportunities Trust plc
69
Introduction Strategic Report Governance Financial Other Information (unaudited)
18. 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 37.
The management fee paid in respect of the year ended 31 March 2024 amounted to £432,000 (year ended 31 March 2023: £458,000), and the
whole of this amount was outstanding at the year 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 were £10,795,000 held in
such investments at the year end (year ended 31 March 2023 : nil).
A performance fee provision amounting to nil (year ended 31 March 2023: £555,000) has been included in these accounts. No performance fee
has been paid to date and the whole amount of £1,670,000 (31 March 2023: £1,184,000) 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 £158,000 (year ended 31 March 2023: £180,000). Company
secretarial and administration fees amounting to £181,000 (31 March 2023: £420,000) were outstanding at the year end.
No Director of the Company served as a Director of any company within the Schroders Group at any time during the year.
19. Related party transactions
Details of the remuneration payable to Directors are given in the Directors’ Remuneration Report on page 47 and details of Directors’
shareholdings are given in the Directors’ Remuneration Report on page 48. Details of transactions with the Manager are given in note 18 above.
There have been no other transactions with related parties during the year (period ended 31 March 2023: nil).
20. 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 and derivative instruments are given in note 2(b) on page 62 and 2(c) on pages 62
and 63. Level 3 investments have been valued in accordance with note 2(c) (i) – (v).
The Company’s unquoted investments at 31 March 2024 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 2.5 times to 32.5 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.
Valuation techniques include the following, along with the associated range of inputs where relevant, and the total amount valued using each
method.
2024 2023
Multiple Value Multiple Value
range £’000 range £’000
Revenue multiple 2.5 to 10.8 21,054 2.4 to 12.1 19,877
EBITDA multiple 9.8 to 32.5 29,277 9.0 to 33.5 26,307
Probability Weighted Expected Return Method (“PWERM”) n/a 2,533
Black-Scholes-Merton-Model n/a 1,778
Total 52,864 47,962
Valuations are cross-checked for reasonableness to alternative multiples-based, income approaches, option pricing models or benchmark index
movements as appropriate.
Introduction Strategic Report Governance Financial Other Information (unaudited)
18. 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 37.
The management fee paid in respect of the year ended 31 March 2024 amounted to £432,000 (year ended 31 March 2023: £458,000), and the
whole of this amount was outstanding at the year 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 were £10,795,000 held in
such investments at the year end (year ended 31 March 2023 : nil).
A performance fee provision amounting to nil (year ended 31 March 2023: £555,000) has been included in these accounts. No performance fee
has been paid to date and the whole amount of £1,670,000 (31 March 2023: £1,184,000) 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 £158,000 (year ended 31 March 2023: £180,000). Company
secretarial and administration fees amounting to £181,000 (31 March 2023: £420,000) were outstanding at the year end.
No Director of the Company served as a Director of any company within the Schroders Group at any time during the year.
19. Related party transactions
Details of the remuneration payable to Directors are given in the Directors’ Remuneration Report on page 47 and details of Directors’
shareholdings are given in the Directors’ Remuneration Report on page 48. Details of transactions with the Manager are given in note 18 above.
There have been no other transactions with related parties during the year (period ended 31 March 2023: nil).
20. 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 and derivative instruments are given in note 2(b) on page 62 and 2(c) on pages 62
and 63. Level 3 investments have been valued in accordance with note 2(c) (i) – (v).
The Company’s unquoted investments at 31 March 2024 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 2.5 times to 32.5 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.
Valuation techniques include the following, along with the associated range of inputs where relevant, and the total amount valued using each
method.
2024 2023
Multiple Value Multiple Value
range £’000 range £’000
Revenue multiple 2.5 to 10.8 21,054 2.4 to 12.1 19,877
EBITDA multiple 9.8 to 32.5 29,277 9.0 to 33.5 26,307
Probability Weighted Expected Return Method (“PWERM”) n/a 2,533
Black-Scholes-Merton-Model n/a 1,778
Total 52,864 47,962
Valuations are cross-checked for reasonableness to alternative multiples-based, income approaches, option pricing models or benchmark index
movements as appropriate.
20.
Disclosures regarding financial instruments measured at fair value continued
At 31 March 2024, the Company’s investment portfolio and derivative financial instruments were categorised as follows:
2024
Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Investments in equities – quoted 19,433 10,795 – 30,228
– unquoted – – 52,864 52,864
Total 19,433 10,795 52,864 83,092
The Level 2 asset relates to the holding in Schroders Special Situations – Sterling Liquidity Plus Fund.
At 31 March 2023, the Company’s investment portfolio and derivative financial instruments were 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
There have been no transfers between Levels 1, 2 or 3 during the year (period ended 31 March 2023: nil).
Movements in fair value measurements included in Level 3 during the period are as follows:
2024 2023
£’000 £’000
Opening fair value of Level 3 Investments 47,962 27,408
Purchases at cost 1,972 15,149
Sales proceeds – (2,384)
Net gains on investments 2,930 7,789
Closing fair value of Level 3 investments 52,864 47,962
Closing book cost 32,288 30,803
Closing investment holding gains 20,576 17,159
Closing fair value of Level 3 investments 52,864 47,962
21. 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.
70 Schroder British Opportunities Trust plc
Notes to the Financial Statements
continued
At 31 March 2024, the Company’s investment portfolio and derivative financial instruments were categorised as follows:
2024
Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000
Investments in equities – quoted 19,433 10,795 – 30,228
– unquoted – – 52,864 52,864
Total 19,433 10,795 52,864 83,092
The Level 2 asset relates to the holding in Schroders Special Situations – Sterling Liquidity Plus Fund.
At 31 March 2023, the Company’s investment portfolio and derivative financial instruments were 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
There have been no transfers between Levels 1, 2 or 3 during the year (period ended 31 March 2023: nil).
Movements in fair value measurements included in Level 3 during the period are as follows:
2024 2023
£’000 £’000
Opening fair value of Level 3 Investments 47,962 27,408
Purchases at cost 1,972 15,149
Sales proceeds – (2,384)
Net gains on investments 2,930 7,789
Closing fair value of Level 3 investments 52,864 47,962
Closing book cost 32,288 30,803
Closing investment holding gains 20,576 17,159
Closing fair value of Level 3 investments 52,864 47,962
21. 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.
70 Schroder British Opportunities Trust plc
Notes to the Financial Statements
continued
Schroder
British Opportunities Trust plc
71
Introduction Strategic Report Governance Financial Other Information (unaudited)
(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% 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 (2023: 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:
2024 2023
£’000 £’000
Exposure to floating interest rates:
Cash at bank and in hand 790 7,759
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 year end amount is broadly representative of the exposure to interest rates during the year.
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.
2024 2023
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 2 (2) 19 (19)
Capital return – – – –
Total return after taxation 2 (2) 19 (19)
Net assets 2 (2) 19 (19)
(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:
2024 2023
£’000 £’000
Investments held at fair value through profit or loss 83,092 74,128
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 22. This shows a concentration of exposure to economic
conditions in the United Kingdom. In addition, the Company’s holds 9 investments (31 March 2023: 9) investments amounting to approximately
£52.9 million (31 March 2023: £48.0 million), or 63.6% (31 March 2023: 58.8%) of NAV, whose valuation is deemed to be potentially volatile, due
to the valuation techniques which have sensitive inputs.
Introduction Strategic Report Governance Financial Other Information (unaudited)
(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% 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 (2023: 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:
2024 2023
£’000 £’000
Exposure to floating interest rates:
Cash at bank and in hand 790 7,759
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 year end amount is broadly representative of the exposure to interest rates during the year.
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.
2024 2023
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 2 (2) 19 (19)
Capital return – – – –
Total return after taxation 2 (2) 19 (19)
Net assets 2 (2) 19 (19)
(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:
2024 2023
£’000 £’000
Investments held at fair value through profit or loss 83,092 74,128
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 22. This shows a concentration of exposure to economic
conditions in the United Kingdom. In addition, the Company’s holds 9 investments (31 March 2023: 9) investments amounting to approximately
£52.9 million (31 March 2023: £48.0 million), or 63.6% (31 March 2023: 58.8%) of NAV, whose valuation is deemed to be potentially volatile, due
to the valuation techniques which have sensitive inputs.
21.
Financial instruments’ exposure to risk and risk management policies (continued)
(a) Market risk continued
(ii) Other price risk continued
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.
2024 2023
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 (100) 100 (89) 89
Capital return 16,698 (16,698) 14,826 (14,826)
Total return after taxation and net assets 16,598 (16,598) 14,737 (14,737)
Percentage change in net asset value 20.3% (20.3%) 18.6% (18.6%)
(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 £30,228,000 (31 March 2023: £26,166,000),
which can be sold to meet ongoing funding requirements. Additionally, the Company had less liquid, “private equity investments” amounting to
£53,262,000 (31 March 2023: £45,047,000) and cash balances amounting to £790,000 (31 March 2023 : £7,759,000).
Liquidity risk exposure
Contractual maturities of financial liabilities, based on the earliest date on which payment can be required are as follows:
2024 2023
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
Other creditors and accruals 900 1,670
1
2,570 1,543 1,184 2,727
900 1,670 2,570 1,543 1,184 2,727
1
As above note 12, the performance fee payable in the prior year of £487,000 has been reclassified in the current year as Creditors: amounts falling due after more
than one year as there is a conditional deferment for payment on these fees.
(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.
(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.
72 Schroder British Opportunities Trust plc
Notes to the Financial Statements
continued
(a) Market risk continued
(ii) Other price risk continued
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.
2024 2023
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 (100) 100 (89) 89
Capital return 16,698 (16,698) 14,826 (14,826)
Total return after taxation and net assets 16,598 (16,598) 14,737 (14,737)
Percentage change in net asset value 20.3% (20.3%) 18.6% (18.6%)
(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 £30,228,000 (31 March 2023: £26,166,000),
which can be sold to meet ongoing funding requirements. Additionally, the Company had less liquid, “private equity investments” amounting to
£53,262,000 (31 March 2023: £45,047,000) and cash balances amounting to £790,000 (31 March 2023 : £7,759,000).
Liquidity risk exposure
Contractual maturities of financial liabilities, based on the earliest date on which payment can be required are as follows:
2024 2023
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
Other creditors and accruals 900 1,670
1
2,570 1,543 1,184 2,727
900 1,670 2,570 1,543 1,184 2,727
1
As above note 12, the performance fee payable in the prior year of £487,000 has been reclassified in the current year as Creditors: amounts falling due after more
than one year as there is a conditional deferment for payment on these fees.
(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.
(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.
72 Schroder British Opportunities Trust plc
Notes to the Financial Statements
continued
Schroder
British Opportunities Trust plc
73
Introduction Strategic Report Governance Financial Other Information (unaudited)
22. 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:
2024 2023
£’000 £’000
Equity
Called-up share capital 750 750
Reserves 80,577 78,561
Total equity 81,327 79,311
The Board, with the assistance of the Manager, monitors and reviews the broad structure of the Company’s capital on an ongoing basis. This
review will include:
– the possible use of gearing, which will take into account the Manager’s views on the market;
– the potential benefit of repurchasing the Company’s own shares for cancellation or holding in treasury, which will take into account the
share price discount;
– the opportunity for issue of new shares; and
– the amount of dividend to be paid, in excess of that which is required to be distributed.
23. Post balance sheet events
In June 2024 the Company announced the completion of a new private equity investment in HeadFirst, an international HR tech service provider.
The invested capital will be utilised to finance HeadFirst’s acquisition of Impellam Group, a managed services and specialist staffing provider.
24. Disclosures regarding material unquoted holdings (comprising more than 5% of the
portfolio and/or included in the top ten holdings)
Total income
Cost of the Fair value Fair value received in
Description of Class of investment 2024 2023 the year
Holding its business shares held £’000 £’000 £’000 £’000
Mintec Provides market intelligence, Ordinary 6,304 9,591 8614 –
commodity prices and price
forecasts across the agri-food
supply chain
Cera EHP S à r l Provides home care Ordinary 3,450 8,046 8,046 –
services for elderly
people
Rapyd Financial Network Global Fintech company Ordinary 3,297 6,837 8,399 –
Pirum Systems Provides a secure Ordinary 5,752 6,884 6087 –
processing hub which
seamlessly links market
participants together,
allowing them to
electronically process and
verify key transaction details
EasyPark Digital parking, Ordinary 2,047 6,171 4,492 –
electrical vehicle
charging and
mobility services
CFC Underwriting Specialist in insurance Ordinary 3,780 5,661 4098 –
for cyber security and
tech insurance for
IT consultants
Culligan Global provider of Ordinary 1,820 5,585 5,053 –
purified drinking
water dispensers
Graphcore Provider of training Ordinary 4,000 2,533 1,778 –
and education
services for adults
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.
Introduction Strategic Report Governance Financial Other Information (unaudited)
22. 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:
2024 2023
£’000 £’000
Equity
Called-up share capital 750 750
Reserves 80,577 78,561
Total equity 81,327 79,311
The Board, with the assistance of the Manager, monitors and reviews the broad structure of the Company’s capital on an ongoing basis. This
review will include:
– the possible use of gearing, which will take into account the Manager’s views on the market;
– the potential benefit of repurchasing the Company’s own shares for cancellation or holding in treasury, which will take into account the
share price discount;
– the opportunity for issue of new shares; and
– the amount of dividend to be paid, in excess of that which is required to be distributed.
23. Post balance sheet events
In June 2024 the Company announced the completion of a new private equity investment in HeadFirst, an international HR tech service provider.
The invested capital will be utilised to finance HeadFirst’s acquisition of Impellam Group, a managed services and specialist staffing provider.
24. Disclosures regarding material unquoted holdings (comprising more than 5% of the
portfolio and/or included in the top ten holdings)
Total income
Cost of the Fair value Fair value received in
Description of Class of investment 2024 2023 the year
Holding its business shares held £’000 £’000 £’000 £’000
Mintec Provides market intelligence, Ordinary 6,304 9,591 8614 –
commodity prices and price
forecasts across the agri-food
supply chain
Cera EHP S à r l Provides home care Ordinary 3,450 8,046 8,046 –
services for elderly
people
Rapyd Financial Network Global Fintech company Ordinary 3,297 6,837 8,399 –
Pirum Systems Provides a secure Ordinary 5,752 6,884 6087 –
processing hub which
seamlessly links market
participants together,
allowing them to
electronically process and
verify key transaction details
EasyPark Digital parking, Ordinary 2,047 6,171 4,492 –
electrical vehicle
charging and
mobility services
CFC Underwriting Specialist in insurance Ordinary 3,780 5,661 4098 –
for cyber security and
tech insurance for
IT consultants
Culligan Global provider of Ordinary 1,820 5,585 5,053 –
purified drinking
water dispensers
Graphcore Provider of training Ordinary 4,000 2,533 1,778 –
and education
services for adults
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.
74
Schroder
Asian Total Return Investment Company plc
75
Other
information-
(Unaudited)
Other Information (Unaudited)
Annual General Meeting – Recommendations 76
Notice of Annual General Meeting 77
Explanatory Notes to the Notice of Meeting 78
Definitions of Terms and Alternative
Performance Measures 80
Shareholder Information 82
Information about the Company 84
Other
information-
(Unaudited)
Other Information (Unaudited)
Annual General Meeting – Recommendations 76
Notice of Annual General Meeting 77
Explanatory Notes to the Notice of Meeting 78
Definitions of Terms and Alternative
Performance Measures 80
Shareholder Information 82
Information about the Company 84
76
Schroder British Opportunities Trust plc
The following information relates to the notice of Annual
General Meeting (“AGM”) of the Company which is convened
for 18 September 2024 at 1.00 p.m. The formal Notice of
Meeting is set out on page 77.
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 proxy form 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.
Ordinary business
Resolutions 1 to 11 are all ordinary resolutions. Resolution 1 is
a required resolution. Resolution 2 relates to the Directors’
Remuneration Policy. Resolution 3 concerns the Directors’ Report on
Remuneration, on pages 46 to 48. Resolution 4 concerns the
authorisation of the Directors to determine that no final dividend for
the year ended 31 March 2024 will be paid. Resolutions 5 and 6 invite
shareholders to elect Jemma Bruton and Justin Ward as Directors of
the Company for the first time. Resolutions 7 and 8 invite
shareholders to re-elect Diana Dyer Bartlett and Tim Jenkinson as
Directors until the next AGM, following the recommendations of the
Nomination Committee, set out on page 44 (their biographies are set
out on pages 34 and 35). Neil England will not be standing for
re-election so no resolution has been proposed in this regard.
Resolutions 9 and 10 concern the re-appointment and remuneration
of the Company’s auditor, discussed in the Audit and Risk Committee
report on pages 39 to 41.
Special business
Resolution 11: Directors’ authority to allot shares
(ordinary resolution) and resolution 12: power to
disapply pre-emption rights (special resolution)
The Directors are seeking authority to allot a limited number of
treasury shares and unissued ordinary shares for cash without first
offering them to existing shareholders in accordance with statutory
pre-emption procedures.
Appropriate resolutions will be proposed at the forthcoming AGM and
are set out in full in the Notice of AGM. An ordinary resolution will be
proposed to authorise the Directors to allot shares up to a maximum
aggregate nominal amount of £73,900 (being 10% of the issued
share capital (excluding any shares held in treasury) as at 10 July
2024).
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 10 July 2024) 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
pre-emptive 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 2025 unless renewed, varied or revoked earlier.
Resolution 13: authority to make market purchases of
the Company’s own shares (special resolution)
On 27 September 2023, a special resolution was passed to give the
Company authority to make market purchases of up to 14.99% of the
ordinary shares. So far, no shares have been bought back under this
authority.
The Directors will continue to monitor the level of the discount and
consider the merits of further buy-backs, which should be accretive in
nature when discounts are wide.
However, any decision to buy back shares will be influenced by such
factors as: market conditions; the small size of the Company; the
illiquid nature of the private equity holdings; the need to retain cash
for investment opportunities; and the level of the Company’s
borrowing, if any. A special resolution will be proposed at the
forthcoming AGM to give the Company authority to make market
purchases of up to 14.99% of the ordinary shares in issue as at 10 July
2024 (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
2025 unless renewed, varied or revoked earlier.
Resolution 14: notice period for general meetings
(special resolution)
Resolution 14 set out in the Notice of AGM is a special resolution and
will, if passed, allow the Company to hold general meetings (other
than annual general meetings) on a minimum notice period of
14 clear days, rather than 21 clear days as required by the Companies
Act 2006. The approval will be effective until the Company’s next AGM
to be held in 2025. 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.
Recommendations
The Board considers that the resolutions relating to the above items
of business are in the best interests of shareholders as a whole.
Accordingly, the Board unanimously recommends to shareholders
that they vote in favour of the resolutions to be proposed at the
forthcoming AGM, as they intend to do in respect of their own
beneficial holdings.
Annual General Meeting – Recommendations
The following information relates to the notice of Annual
General Meeting (“AGM”) of the Company which is convened
for 18 September 2024 at 1.00 p.m. The formal Notice of
Meeting is set out on page 77.
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 proxy form 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.
Ordinary business
Resolutions 1 to 11 are all ordinary resolutions. Resolution 1 is
a required resolution. Resolution 2 relates to the Directors’
Remuneration Policy. Resolution 3 concerns the Directors’ Report on
Remuneration, on pages 46 to 48. Resolution 4 concerns the
authorisation of the Directors to determine that no final dividend for
the year ended 31 March 2024 will be paid. Resolutions 5 and 6 invite
shareholders to elect Jemma Bruton and Justin Ward as Directors of
the Company for the first time. Resolutions 7 and 8 invite
shareholders to re-elect Diana Dyer Bartlett and Tim Jenkinson as
Directors until the next AGM, following the recommendations of the
Nomination Committee, set out on page 44 (their biographies are set
out on pages 34 and 35). Neil England will not be standing for
re-election so no resolution has been proposed in this regard.
Resolutions 9 and 10 concern the re-appointment and remuneration
of the Company’s auditor, discussed in the Audit and Risk Committee
report on pages 39 to 41.
Special business
Resolution 11: Directors’ authority to allot shares
(ordinary resolution) and resolution 12: power to
disapply pre-emption rights (special resolution)
The Directors are seeking authority to allot a limited number of
treasury shares and unissued ordinary shares for cash without first
offering them to existing shareholders in accordance with statutory
pre-emption procedures.
Appropriate resolutions will be proposed at the forthcoming AGM and
are set out in full in the Notice of AGM. An ordinary resolution will be
proposed to authorise the Directors to allot shares up to a maximum
aggregate nominal amount of £73,900 (being 10% of the issued
share capital (excluding any shares held in treasury) as at 10 July
2024).
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 10 July 2024) 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
pre-emptive 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 2025 unless renewed, varied or revoked earlier.
Resolution 13: authority to make market purchases of
the Company’s own shares (special resolution)
On 27 September 2023, a special resolution was passed to give the
Company authority to make market purchases of up to 14.99% of the
ordinary shares. So far, no shares have been bought back under this
authority.
The Directors will continue to monitor the level of the discount and
consider the merits of further buy-backs, which should be accretive in
nature when discounts are wide.
However, any decision to buy back shares will be influenced by such
factors as: market conditions; the small size of the Company; the
illiquid nature of the private equity holdings; the need to retain cash
for investment opportunities; and the level of the Company’s
borrowing, if any. A special resolution will be proposed at the
forthcoming AGM to give the Company authority to make market
purchases of up to 14.99% of the ordinary shares in issue as at 10 July
2024 (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
2025 unless renewed, varied or revoked earlier.
Resolution 14: notice period for general meetings
(special resolution)
Resolution 14 set out in the Notice of AGM is a special resolution and
will, if passed, allow the Company to hold general meetings (other
than annual general meetings) on a minimum notice period of
14 clear days, rather than 21 clear days as required by the Companies
Act 2006. The approval will be effective until the Company’s next AGM
to be held in 2025. 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.
Recommendations
The Board considers that the resolutions relating to the above items
of business are in the best interests of shareholders as a whole.
Accordingly, the Board unanimously recommends to shareholders
that they vote in favour of the resolutions to be proposed at the
forthcoming AGM, as they intend to do in respect of their own
beneficial holdings.
Annual General Meeting – Recommendations
Notice is hereby given that the Annual General Meeting of Schroder
British Opportunities Trust plc will be held on 18 September 2024 at
1.00 p.m. at 1 London Wall Place, London EC2Y 5AU to consider the
following resolutions, of which resolutions 1 to 11 will be proposed as
ordinary resolutions, and resolutions 12 to 14 will be proposed as
special resolutions:
1. To receive the Directors’ Report and the audited accounts for the
year ended 31 March 2024.
2. To approve the Directors’ Remuneration Policy.
3. To approve the Directors’ Report on Remuneration for the year
ended 31 March 2024.
4. To authorise the Directors to determine that no final dividend for
the year ended 31 March 2024 will be paid.
5. To approve the election of Jemma Bruton as a Director of the
Company.
6. To approve the election of Justin Ward as a Director of the
Company.
7. To approve the re-election of Diana Dyer Bartlett as a Director of
the Company.
8. To approve the re-election of Tim Jenkinson as a Director of the
Company.
9. To re-appoint Ernst & Young LLP as auditor to the Company.
10. To authorise the Directors to determine the remuneration of
Ernst & Young LLP as auditor to the Company.
11. To consider, and if thought fit, pass the following resolution as an
ordinary resolution:
“THAT in addition to all existing authorities, the Directors be
generally and unconditionally authorised pursuant to section 551
of the Companies Act 2006 (the “Act”) to exercise all the powers
of the Company to allot relevant securities (within the meaning of
section 551 of the Act) up to an aggregate nominal amount of
£73,900 (being 10% of the issued ordinary share capital,
excluding treasury shares, at 10 July 2024) 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 2025, but that the Company may
make an offer or agreement which would or might require
relevant securities to be allotted after expiry of this authority and
the Board may allot relevant securities in pursuance of that offer
or agreement.”
12. To consider and, if thought fit, to pass the following resolution as
a special resolution:
“That, subject to the passing of Resolution 11 set out above, the
Directors be and are hereby empowered, pursuant to
Section 571 of the Act, to allot equity securities (including any
shares held in treasury) (as defined in section 560(1) of the Act)
pursuant to the authority given in accordance with section 551 of
the Act by the said Resolution 11 and/or where such allotment
constitutes an allotment of equity securities by virtue of section
560(2) of the Act as if Section 561(1) of the Act did not apply to
any such allotment, provided that this power shall be limited to
the allotment of equity securities up to an aggregate nominal
amount of £73,900, (representing 10% of the aggregate nominal
amount of the share capital in issue, excluding treasury shares at
10 July 2024); and where equity securities are issued pursuant to
this power they will only be issued at a price which is equal or
greater than the Company’s NAV per share as at the latest
practicable date before the allotment; and provided that this
power shall expire at the conclusion of the next Annual General
Meeting of the Company but so that this power shall enable the
Company to make offers or agreements before such expiry
which would or might require equity securities to be allotted
after such expiry.”
13. To consider and, if thought fit, to pass the following resolution as
a special resolution:
“THAT the Company be and is hereby generally and
unconditionally authorised in accordance with Section 701 of the
Companies Act 2006 (the “Act”) to make market purchases (within
the meaning of Section 693 of the Act) of ordinary shares of 1p
each in the capital of the Company (“Share”) at whatever discount
the prevailing market price represents to the prevailing net asset
value per Share provided that:
(a) the maximum number of Shares which may be purchased is
11,077,610, representing 14.99% of the Company’s issued
ordinary share capital as at 10 July 2024 (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 2025 (unless previously renewed, varied or
revoked by the Company prior to such date);
(e) the Company may make a contract to purchase Shares
under the authority hereby conferred which will or may be
executed wholly or partly after the expiration of such
authority and may make a purchase of Shares pursuant to
any such contract; and
(f) any Shares so purchased will be cancelled or held in
treasury.”
14. To consider and, if thought fit, to pass the following resolution as
a special resolution:
“THAT a general meeting, other than an annual general meeting,
may be called on not less than 14 clear days’ notice.”
Schroder British Opportunities Trust plc 77
Introduction Strategic Report Governance Financial Other Information (unaudited)
Notice of Annual General Meeting
By order of the Board Registered Office:
Schroder Investment Management Limited 1 London Wall Place,
Company Secretary London EC2Y 5AU
10 July 2024 Registered Number: 12892325
British Opportunities Trust plc will be held on 18 September 2024 at
1.00 p.m. at 1 London Wall Place, London EC2Y 5AU to consider the
following resolutions, of which resolutions 1 to 11 will be proposed as
ordinary resolutions, and resolutions 12 to 14 will be proposed as
special resolutions:
1. To receive the Directors’ Report and the audited accounts for the
year ended 31 March 2024.
2. To approve the Directors’ Remuneration Policy.
3. To approve the Directors’ Report on Remuneration for the year
ended 31 March 2024.
4. To authorise the Directors to determine that no final dividend for
the year ended 31 March 2024 will be paid.
5. To approve the election of Jemma Bruton as a Director of the
Company.
6. To approve the election of Justin Ward as a Director of the
Company.
7. To approve the re-election of Diana Dyer Bartlett as a Director of
the Company.
8. To approve the re-election of Tim Jenkinson as a Director of the
Company.
9. To re-appoint Ernst & Young LLP as auditor to the Company.
10. To authorise the Directors to determine the remuneration of
Ernst & Young LLP as auditor to the Company.
11. To consider, and if thought fit, pass the following resolution as an
ordinary resolution:
“THAT in addition to all existing authorities, the Directors be
generally and unconditionally authorised pursuant to section 551
of the Companies Act 2006 (the “Act”) to exercise all the powers
of the Company to allot relevant securities (within the meaning of
section 551 of the Act) up to an aggregate nominal amount of
£73,900 (being 10% of the issued ordinary share capital,
excluding treasury shares, at 10 July 2024) 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 2025, but that the Company may
make an offer or agreement which would or might require
relevant securities to be allotted after expiry of this authority and
the Board may allot relevant securities in pursuance of that offer
or agreement.”
12. To consider and, if thought fit, to pass the following resolution as
a special resolution:
“That, subject to the passing of Resolution 11 set out above, the
Directors be and are hereby empowered, pursuant to
Section 571 of the Act, to allot equity securities (including any
shares held in treasury) (as defined in section 560(1) of the Act)
pursuant to the authority given in accordance with section 551 of
the Act by the said Resolution 11 and/or where such allotment
constitutes an allotment of equity securities by virtue of section
560(2) of the Act as if Section 561(1) of the Act did not apply to
any such allotment, provided that this power shall be limited to
the allotment of equity securities up to an aggregate nominal
amount of £73,900, (representing 10% of the aggregate nominal
amount of the share capital in issue, excluding treasury shares at
10 July 2024); and where equity securities are issued pursuant to
this power they will only be issued at a price which is equal or
greater than the Company’s NAV per share as at the latest
practicable date before the allotment; and provided that this
power shall expire at the conclusion of the next Annual General
Meeting of the Company but so that this power shall enable the
Company to make offers or agreements before such expiry
which would or might require equity securities to be allotted
after such expiry.”
13. To consider and, if thought fit, to pass the following resolution as
a special resolution:
“THAT the Company be and is hereby generally and
unconditionally authorised in accordance with Section 701 of the
Companies Act 2006 (the “Act”) to make market purchases (within
the meaning of Section 693 of the Act) of ordinary shares of 1p
each in the capital of the Company (“Share”) at whatever discount
the prevailing market price represents to the prevailing net asset
value per Share provided that:
(a) the maximum number of Shares which may be purchased is
11,077,610, representing 14.99% of the Company’s issued
ordinary share capital as at 10 July 2024 (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 2025 (unless previously renewed, varied or
revoked by the Company prior to such date);
(e) the Company may make a contract to purchase Shares
under the authority hereby conferred which will or may be
executed wholly or partly after the expiration of such
authority and may make a purchase of Shares pursuant to
any such contract; and
(f) any Shares so purchased will be cancelled or held in
treasury.”
14. To consider and, if thought fit, to pass the following resolution as
a special resolution:
“THAT a general meeting, other than an annual general meeting,
may be called on not less than 14 clear days’ notice.”
Schroder British Opportunities Trust plc 77
Introduction Strategic Report Governance Financial Other Information (unaudited)
Notice of Annual General Meeting
By order of the Board Registered Office:
Schroder Investment Management Limited 1 London Wall Place,
Company Secretary London EC2Y 5AU
10 July 2024 Registered Number: 12892325
78
Schroder British Opportunities Trust plc
1. Ordinary shareholders are entitled to attend, speak 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 enclosed. 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 forms of
proxy 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 proxy form will not preclude
a shareholder 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.
It is possible for you to submit your proxy votes online by going
to Equiniti’s Shareview website, www.shareview.co.uk, and
logging in to your Shareview Portfolio. Once you have logged in,
simply click ‘View’ on the ‘My Investments’ page and then click on
the link to vote and follow the on-screen instructions. If you have
not yet registered for a Shareview Portfolio, go to
www.shareview.co.uk and enter the requested information. It is
important that you register for a Shareview Portfolio with
enough time to complete the registration and authentication
processes. Please note that to be valid, your proxy instructions
must be received by Equiniti no later than 1.00 p.m. on
16 September 2024. 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 16 September 2024, 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 16 September
2024 shall be disregarded in determining the right of any person
to attend and vote at the meeting.
4. CREST members who wish to appoint a proxy or proxies through
the CREST electronic proxy appointment service may do so by
using the procedures described in the CREST manual. The CREST
manual can be viewed at www.euroclear.com. A CREST message
appointing a proxy (a “CREST proxy instruction”) regardless of
whether it constitutes the appointment of a proxy or an
amendment to the instruction previously given to a previously
appointed proxy must, in order to be valid, be transmitted so as
to be received by the issuer’s agent (ID RA19) by the latest time
for receipt of proxy appointments.
5. If you are an institutional investor, you may be able to appoint
a proxy electronically via the Proxymity platform, a process which
has been agreed by the Company and approved by the Registrar.
For further information regarding Proxymity, please go to
www.proxymity.io. Your proxy must be lodged by 1.00 p.m. on
16 September 2024 in order to be considered valid. Before you
can appoint a proxy via this process you will need to have agreed
to Proxymity’s associated terms and conditions. It is important
that you read these carefully as you will be bound by them, and
they will govern the electronic appointment of your proxy.
Explanatory Notes to the Notice of Meeting
1. Ordinary shareholders are entitled to attend, speak 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 enclosed. 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 forms of
proxy 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 proxy form will not preclude
a shareholder 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.
It is possible for you to submit your proxy votes online by going
to Equiniti’s Shareview website, www.shareview.co.uk, and
logging in to your Shareview Portfolio. Once you have logged in,
simply click ‘View’ on the ‘My Investments’ page and then click on
the link to vote and follow the on-screen instructions. If you have
not yet registered for a Shareview Portfolio, go to
www.shareview.co.uk and enter the requested information. It is
important that you register for a Shareview Portfolio with
enough time to complete the registration and authentication
processes. Please note that to be valid, your proxy instructions
must be received by Equiniti no later than 1.00 p.m. on
16 September 2024. 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 16 September 2024, 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 16 September
2024 shall be disregarded in determining the right of any person
to attend and vote at the meeting.
4. CREST members who wish to appoint a proxy or proxies through
the CREST electronic proxy appointment service may do so by
using the procedures described in the CREST manual. The CREST
manual can be viewed at www.euroclear.com. A CREST message
appointing a proxy (a “CREST proxy instruction”) regardless of
whether it constitutes the appointment of a proxy or an
amendment to the instruction previously given to a previously
appointed proxy must, in order to be valid, be transmitted so as
to be received by the issuer’s agent (ID RA19) by the latest time
for receipt of proxy appointments.
5. If you are an institutional investor, you may be able to appoint
a proxy electronically via the Proxymity platform, a process which
has been agreed by the Company and approved by the Registrar.
For further information regarding Proxymity, please go to
www.proxymity.io. Your proxy must be lodged by 1.00 p.m. on
16 September 2024 in order to be considered valid. Before you
can appoint a proxy via this process you will need to have agreed
to Proxymity’s associated terms and conditions. It is important
that you read these carefully as you will be bound by them, and
they will govern the electronic appointment of your proxy.
Explanatory Notes to the Notice of Meeting
6.
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.
7. The biographies of the Directors offering themselves for election
and re-election and are set out on pages 34 and 35 of the
Company’s report and financial statements for the year ended
31 March 2024.
8. As at 10 July 2024, 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 10 July 2024
was 73,900,000.
9. 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,
https://www.schroders.com/sbot.
10. 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).
11. 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 auditors
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.
12. The Company’s privacy policy is available on its webpages.
https://www.schroders.com/sbot. Shareholders can contact
Equiniti for details of how Equiniti processes their personal
information as part of the AGM.
Schroder British Opportunities Trust plc 79
Introduction Strategic Report Governance Financial Other Information (unaudited)
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.
7. The biographies of the Directors offering themselves for election
and re-election and are set out on pages 34 and 35 of the
Company’s report and financial statements for the year ended
31 March 2024.
8. As at 10 July 2024, 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 10 July 2024
was 73,900,000.
9. 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,
https://www.schroders.com/sbot.
10. 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).
11. 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 auditors
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.
12. The Company’s privacy policy is available on its webpages.
https://www.schroders.com/sbot. Shareholders can contact
Equiniti for details of how Equiniti processes their personal
information as part of the AGM.
Schroder British Opportunities Trust plc 79
Introduction Strategic Report Governance Financial Other Information (unaudited)
80
Schroder British Opportunities Trust plc
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 *.
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 110.05p (31 March 2023: 107.32p) represents
the net assets attributable to equity shareholders of £81,327,000
(31 March 2023: £79,311,000) divided by the 73,900,000 (31 March
2023: 73,900,000) 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 27.8% (31 March 2023: 36.2%), as the
closing share price at 79.5p (31 March 2023: 68.5p) was 27.8%
(31 March 2023: 36.2%) lower than the closing NAV of 110.05p
(31 March 2023: 107.32p).
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 and investment in liquidity fund, expressed as a
percentage of net assets. A negative figure so calculated is termed a
“Net cash” position.
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
2024 2023
£’000 £’000
Borrowings used for investment
purposes, less cash (11,585) (7,759)
Net assets 81,327 79,311
Net cash (14.2)% (9.8)%
Definitions of Terms and Alternative Performance Measures
^The full policy can be found on the Company’s website.
*Alternative performance Measures (“APMs”).
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 *.
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 110.05p (31 March 2023: 107.32p) represents
the net assets attributable to equity shareholders of £81,327,000
(31 March 2023: £79,311,000) divided by the 73,900,000 (31 March
2023: 73,900,000) 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 27.8% (31 March 2023: 36.2%), as the
closing share price at 79.5p (31 March 2023: 68.5p) was 27.8%
(31 March 2023: 36.2%) lower than the closing NAV of 110.05p
(31 March 2023: 107.32p).
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 and investment in liquidity fund, expressed as a
percentage of net assets. A negative figure so calculated is termed a
“Net cash” position.
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
2024 2023
£’000 £’000
Borrowings used for investment
purposes, less cash (11,585) (7,759)
Net assets 81,327 79,311
Net cash (14.2)% (9.8)%
Definitions of Terms and Alternative Performance Measures
^The full policy can be found on the Company’s website.
*Alternative performance Measures (“APMs”).
Schroder
British Opportunities Trust plc
81
Introduction Strategic Report Governance Financial Other Information (unaudited)
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 2024, operating
expenses amounted to £1,087,000 (year ended 31 March 2023:
£1,108,000). This produces an OGC figure of 1.40% (year ended
31 March 2023: 1.47%), when expressed as a percentage of the
average daily net asset values during the year of £77.5 million (year
ended 31 March 2023: £75.3 million).
Leverage*
For the purpose of the UK 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.
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 2024 these were:
Maximum Actual
Leverage exposure ratio ratio
Gross method 2.50% 0.99%
Commitment method 2.00% 1.00%
Introduction Strategic Report Governance Financial Other Information (unaudited)
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 2024, operating
expenses amounted to £1,087,000 (year ended 31 March 2023:
£1,108,000). This produces an OGC figure of 1.40% (year ended
31 March 2023: 1.47%), when expressed as a percentage of the
average daily net asset values during the year of £77.5 million (year
ended 31 March 2023: £75.3 million).
Leverage*
For the purpose of the UK 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.
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 2024 these were:
Maximum Actual
Leverage exposure ratio ratio
Gross method 2.50% 0.99%
Commitment method 2.00% 1.00%
82
Schroder British Opportunities Trust plc
Webpages and share price information
The Company has dedicated webpages, which may be found at
https://www.schroders.com/sbot. 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.
Individual Savings Account (“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.
Remuneration disclosures
Quantitative remuneration disclosures to be made in this annual
report in accordance with FCA Handbook rule FUND3.3.5 may also be
found in the Company’s AIFMD information disclosure document
published on the Company’s web pages.
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.
How to invest
There are a number of ways to easily invest in the Company. The
Manager has set these out at www.schroders.com/invest-in-a-trust/.
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.
Shareholder Information
Webpages and share price information
The Company has dedicated webpages, which may be found at
https://www.schroders.com/sbot. 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.
Individual Savings Account (“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.
Remuneration disclosures
Quantitative remuneration disclosures to be made in this annual
report in accordance with FCA Handbook rule FUND3.3.5 may also be
found in the Company’s AIFMD information disclosure document
published on the Company’s web pages.
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.
How to invest
There are a number of ways to easily invest in the Company. The
Manager has set these out at www.schroders.com/invest-in-a-trust/.
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.
Shareholder Information
Schroder
British Opportunities Trust plc
83
Introduction Strategic Report Governance Financial Other Information (unaudited)
Warning to shareholders
Companies are aware that their shareholders have received
unsolicited telephone calls or correspondence concerning investment
matters. These are typically from overseas-based ‘brokers’ who target
UK shareholders, offering to sell them what often turn out to be
worthless or high risk shares or investments.
These operations are commonly known as ‘boiler rooms’. These
‘brokers’ can be very persistent and extremely persuasive.
Shareholders are advised to be wary of any unsolicited advice, offers
to buy shares at a discount or offers of free company reports. If you
receive any unsolicited investment advice:
• Make sure you get the correct name of the person and
organisation
• Check that they are properly authorised by the FCA before getting
involved by visiting https://register.fca.org.uk
• Report the matter to the FCA by calling 0800 111 6768 or visiting
https://fca.org.uk/consumers/report-scam-unauthorised-firm
• Do not deal with any firm that you are unsure about
If you deal with an unauthorised firm, you will not be eligible to
receive payment under the Financial Services Compensation Scheme.
The FCA provides a list of unauthorised firms of which it is aware,
which can be accessed at
https://www.fca.org.uk/consumers/unauthorised-firms-
individuals#list.
More detailed information on this or similar activity can be found on
the FCA website at https://www.fca.org.uk/consumers/protect-
yourself-scams.
Introduction Strategic Report Governance Financial Other Information (unaudited)
Warning to shareholders
Companies are aware that their shareholders have received
unsolicited telephone calls or correspondence concerning investment
matters. These are typically from overseas-based ‘brokers’ who target
UK shareholders, offering to sell them what often turn out to be
worthless or high risk shares or investments.
These operations are commonly known as ‘boiler rooms’. These
‘brokers’ can be very persistent and extremely persuasive.
Shareholders are advised to be wary of any unsolicited advice, offers
to buy shares at a discount or offers of free company reports. If you
receive any unsolicited investment advice:
• Make sure you get the correct name of the person and
organisation
• Check that they are properly authorised by the FCA before getting
involved by visiting https://register.fca.org.uk
• Report the matter to the FCA by calling 0800 111 6768 or visiting
https://fca.org.uk/consumers/report-scam-unauthorised-firm
• Do not deal with any firm that you are unsure about
If you deal with an unauthorised firm, you will not be eligible to
receive payment under the Financial Services Compensation Scheme.
The FCA provides a list of unauthorised firms of which it is aware,
which can be accessed at
https://www.fca.org.uk/consumers/unauthorised-firms-
individuals#list.
More detailed information on this or similar activity can be found on
the FCA website at https://www.fca.org.uk/consumers/protect-
yourself-scams.
84
Schroder British Opportunities Trust plc
https:/ /www.schroders.com/sbot
Directors
Neil England (Chairman)
Diana Dyer Bartlett
Jemma Bruton
Tim Jenkinson
Justin Ward
Registered Office
1 London Wall Place
London EC2Y 5AU
Advisers
Alternative Investment Fund Manager (the “AIFM” or
“Manager”)
Schroder Unit Trusts Limited
1 London Wall Place
London EC2Y 5AU
Investment Managers
Schroder Investment Management Limited
1 London Wall Place
London EC2Y 5AU
Schroders Capital Management (Switzerland) AG
Affolternstrausse 56, CH-8050
Zurich, Switzerland
Company Secretary
Schroder Investment Management Limited
1 London Wall Place
London EC2Y 5AU
Email: amcompanysecretary@schroders.com
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
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Shareholder helpline: 0800 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.
Other information
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
Privacy notice
The Company’s privacy notice is available on its web pages.
Information about the Company
https:/ /www.schroders.com/sbot
Directors
Neil England (Chairman)
Diana Dyer Bartlett
Jemma Bruton
Tim Jenkinson
Justin Ward
Registered Office
1 London Wall Place
London EC2Y 5AU
Advisers
Alternative Investment Fund Manager (the “AIFM” or
“Manager”)
Schroder Unit Trusts Limited
1 London Wall Place
London EC2Y 5AU
Investment Managers
Schroder Investment Management Limited
1 London Wall Place
London EC2Y 5AU
Schroders Capital Management (Switzerland) AG
Affolternstrausse 56, CH-8050
Zurich, Switzerland
Company Secretary
Schroder Investment Management Limited
1 London Wall Place
London EC2Y 5AU
Email: amcompanysecretary@schroders.com
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
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Shareholder helpline: 0800 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.
Other information
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
Privacy notice
The Company’s privacy notice is available on its web pages.
Information about the Company
Schroder Investment Management Limited
1 London Wall Place, London EC2Y 5AU, United Kingdom
T +44 (0) 20 7658 6000
Important information: This document is intended to be for information purposes
only and it is not intended as promotional material in any respect. The material is not
intended as an offer or solicitation for the purchase or sale of any financial
instrument. The material is not intended to provide, and should not be relied on for,
accounting, legal or tax advice, or investment recommendations. Information herein
is believed to be reliable but Schroders does not warrant its completeness or accuracy.
No responsibility can be accepted for errors of fact or opinion. Reliance should not be
placed on the views and information in the document when taking individual
investment and/ or strategic decisions. Past performance is not a reliable indicator of
future results, prices of shares and the income from them may fall as well as rise and
investors may not get back the amount originally invested. Schroders has expressed
its own views in this document and these may change. Issued by Schroder Investment
Management Limited, 1 London Wall Place, London EC2Y 5AU, which is authorised
and regulated by the Financial Conduct Authority. For your security, communications
may be taped or monitored.
@schroders
schroders.com
1 London Wall Place, London EC2Y 5AU, United Kingdom
T +44 (0) 20 7658 6000
Important information: This document is intended to be for information purposes
only and it is not intended as promotional material in any respect. The material is not
intended as an offer or solicitation for the purchase or sale of any financial
instrument. The material is not intended to provide, and should not be relied on for,
accounting, legal or tax advice, or investment recommendations. Information herein
is believed to be reliable but Schroders does not warrant its completeness or accuracy.
No responsibility can be accepted for errors of fact or opinion. Reliance should not be
placed on the views and information in the document when taking individual
investment and/ or strategic decisions. Past performance is not a reliable indicator of
future results, prices of shares and the income from them may fall as well as rise and
investors may not get back the amount originally invested. Schroders has expressed
its own views in this document and these may change. Issued by Schroder Investment
Management Limited, 1 London Wall Place, London EC2Y 5AU, which is authorised
and regulated by the Financial Conduct Authority. For your security, communications
may be taped or monitored.
@schroders
schroders.com