Report and Accounts for the year ended
30 June 2023
A unique investment opportunity
to address social challenges
Schroder BSC Social
Impact Trust plc
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Investment objective
The Company’s investment objective is to deliver measurable
positive social impact as well as long term capital growth and
income, through investing in a diversified portfolio of private
market impact funds, co-investments alongside impact investors
and direct investments in order to gain exposure to private market
Social Impact Investments.
The Company aims to provide a Net Asset Value total return of CPI
plus 2 per cent. per annum (once the portfolio is fully invested and
averaged over a rolling three- to five- year period, net of fees) with
low correlation to traditional quoted markets while helping to
address significant social issues in the UK.
Investment policy
The Company will invest in a diversified portfolio of private market
Impact Funds and Co-Investments alongside such funds or other
impact investors (including the Portfolio Manager), which in turn
support charities and social enterprises, with a focus on the United
Kingdom. The Company may also make Direct Investments.
The Company will make Social Impact Investments that seek to
deliver a positive social outcome together with a financial return,
including but not limited to investments in:
• High Impact Housing – Including property funds that either
acquire or develop high quality affordable housing, from more
specialist housing for vulnerable groups (for example, transition
accommodation for people who were formerly homeless or
fleeing domestic violence) to housing for low income renters
currently living in poor quality or insecure accommodation.
• Debt and Equity for Social Enterprises – Including charity
bonds, portfolios of secured loans and funds that invest in
established social enterprises via mezzanine debt and/or equity.
• Social Outcomes Contracts – Contracts between a public sector
or government body and a delivery organisation whereby an
external investor provides upfront capital to the delivery
organisation and is repaid by the income stream from the public
sector body based upon social outcomes delivered rather than
on a fee for service basis.
The market for Social Impact Investments in the United Kingdom is a
rapidly evolving market and the Company retains the flexibility to
invest in Social Impact Investments other than those in the three
categories set out above.
The Company will typically obtain exposure to Social Impact
Investments through investing in Impact Funds and Co-Investments.
The Company will usually make investments on a commitment basis,
expected to be called over a period of time. The Company will
generally hold minority interests in Impact Funds, but may hold
majority interests where appropriate including, for example, where
the Company may be a cornerstone investor alongside the Portfolio
Manager. Co-Investments would be made alongside third party
impact investors, including the Portfolio Manager. It is expected that
the Company will invest in Impact Funds and Co-Investments
alongside the Portfolio Manager, benefitting from the broad range of
opportunities sourced by the Portfolio Manager. Direct Investments
are not expected to comprise a material proportion of the Company’s
portfolio.
The portfolio composition at any one time will reflect the
opportunities available to the Portfolio Manager, based on the
performance, social impact and maturity of the Impact Funds,
Co-Investments and Direct Investments.
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Report and Accounts
for the year ended 30 June 2023
Strategic Report
Contents
Strategic Report
Financial Highlights 2
Key Performance Indicators 3
Impact Highlights 4
Our Approach and Impact Thesis 6
Chair’s Statement 8
Portfolio Manager’s Report 12
Impact Report 29
Investment Portfolio 34
Environmental, Social and Governance Risk Management 36
Strategic Report 39
Governance
Board of Directors 51
Directors’ Report 53
Audit and Risk Committee Report 57
Management Engagement Committee Report 60
Nomination Committee Report 61
Directors’ Remuneration Report 63
Statement of Directors’ Responsibilities 66
Financial
Independent Auditor’s Report 67
Income Statement 74
Statement of Changes in Equity 75
Statement of Financial Position 76
Cash Flow Statement 77
Notes to the Accounts 78
Annual General Meeting
Annual General Meeting – Recommendations 91
Notice of Annual General Meeting 92
Explanatory Notes to the Notice of Meeting 93
Definitions of Terms and Performance Measures 95
Methodological Notes 97
Shareholder Information IBC
1
Strategic Report
Governance Financial
Annual General Meeting
Report and Accounts
for the year ended 30 June 2023
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Financial Highlights
1
Other financial information
30 June 2023 30 June 2022 % Change
Shareholders’ funds (£’000) 88,753 89,916 -1.3
Shares in issue 84,604,866 85,316,586 -0.8
NAV per share (pence) 104.90 105.39 -0.5
Share price (pence) 93.50 106.50 -12.2
Share price (discount)/premium to NAV per share (%)* (10.9) 1.1
Gearing/(net cash) (%)*
3
(2.4) (1.5)
Year ended Year ended
30 June 2023 30 June 2022 % Change
Net revenue return after taxation (£’000) 1,974 1,119 +76.4
Revenue return per share (pence) 2.32 1.37 +69.3
Dividend per share (pence) 2.30 1.30 +76.9
Ongoing Charges (%)* 1.27 1.22 +4.1
1
Some of the financial measures below are classified as Alternative Performance Measures, as defined by the European Securities and Markets Authority
and are indicated with an asterisk (*). Definitions of these performance measures, and other terms used in this report, are given on page 95 together
with supporting calculations where appropriate.
2
Total returns include the impact of dividends paid.
3
Borrowings used for investment purposes, less cash, expressed as a percentage of net assets. The Company had no borrowings at the year end, or prior
year end, so this is shown as a negative, net cash figure.
Total returns
2
+8.6
%
+0.8
%
-4.7
%
-11.0
%
Net Asset Value ("NAV")
total return per share*
Share price total return*
Year ended
30 June 2023
Since inception on
22 December 2020 to
30 June 2023
2
Schroder BSC Social Impact Trust plc
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Report and Accounts
for the year ended 30 June 2023
3
Strategic Report
Key Performance Indicators
In order to track the Company’s progress the following key performance
indicators are monitored.
Net Asset Value (“NAV”) total
return per share
4
NAV per share reflects the value
attributable to our equity
shareholders including dividends
paid.
Discussion of this can be found in Financial Highlights at page 2 of
this report and within the Strategic Report between pages 39 to 50.
Annualised
since inception
2021
8
2022
3.41%
6.09%
1.60%
2023
0.78%
Number of people benefitted
Measures the number of people
directly benefitting from the Company’s
investees’ activities.
Discussion of this can be found within the Portfolio Manager's Report
between pages 12 to 28 and the Impact Report between pages 29 to 33.
2021
2022
148,000
160,000
2023
168,000
Share Price correlation
5,6,7
with
FTSE All Share
Share price correlation describes the
relationship between the respective
price movement of the Company’s
share price and equity markets.
Discussion of this can be found within the Portfolio Manager's Report
between pages 12 to 28.
Since
inception
2021
2022 0.23
0.33
2023 (0.62)
(0.53)
Disadvantaged and vulnerable
people served
8
Measures the proportion of these
people who are from more
disadvantaged and vulnerable groups.
Discussion of this can be found within the Portfolio Manager's Report
between pages 12 to 28 and the Impact Report between pages 29 to 33.
2021
2022
Not reported
90%
2023
94%
4
The Company aims to provide a NAV total return of CPI plus 2 per cent per annum (once the portfolio is fully invested and averaged over a rolling three-
to five-year period).
5
The comparative figures for 2021 cover the period from the date of incorporation on 24 September 2020 to 30 June 2021. The Company began investing
on 22 December 2020 (“launch date”).
6
Share Price correlation with FTSE All Share is classified as an alternative performance measure. Correlation is calculated by obtaining the daily closing
prices in each time period for both the Company and FTSE All Share Index, sourced from Morningstar.
7
Low correlation to traditional equity markets tends to reflect a useful diversifier. Correlation of less than 0.5 indicates a low correlation to the quoted
markets. Negative correlation means the Company’s share price moves in the opposite direction to the FTSE All Share index.
8
Definition of ‘Disadvantaged and vulnerable’ is given on page 97.
Impact
Financial
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4
Schroder BSC Social Impact Trust plc
Impact Highlights
How the Company supports positive social im
Impact investments must have a clear, measurable rationale for how investment is intended to contr
a “Theory of Change”, which forms the basis of the UK’s emerging criteria for Sustainable Impact Inve
co-investments, in partnership with fund managers, to frontline organisations with strong track reco
deliver solutions for vulnerable, disadvantaged and underserved people across the UK.
We engages with
investors of all types
to raise capital
Capital is deployed
through funds and
co-investments
To strengthen
frontline organisations
We work to expand
access to impact
investment for retail and
institutional investors
£87m raised
and fully committed
£8.3m in Social
Outcomes Contracts
10 Funds with deep
knowledge and networks
We oversee fund manager
engagement to support
bestpractice
£41m in Debt
and Equity for
Social Lending
£35m in Housing
Big Society Capital support
and networks for social
organisations and investors
168
frontline organisations,
with
30 year
average
track record
Supporting growth and
resilience for
Organisations draw on
deep local knowledge
and networks
Underpinned by robust management of impact an
Knowledge and financial returns enables the Company to deliver
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Report and Accounts
for the year ended 30 June 2023
5
Strategic Report
Impact Highlights
impact
ontribute towards positive social change. In the social investment market this is often referred to a
s
Investments. The Company’s Theory of Change sets out how capital is deployed through funds and
ecords of working on critical social challenges, enabling them to grow and become more resilient, to
Addressing critical
social challenges with
investable models and
major funding gaps
To deliver solutions
for vulnerable and
disadvantaged people
across the UK
Most deprived
Least deprived
Map Key
Portfolio Investments
AJust Transition
to Net Zero
Education, Training
and Decent Work
Good health
and wellbeing
Reducing poverty,
inequality and
homelessness
£98m in social outcomes
and savings
27,000 people housed
in affordable,
decent homes
94% of people
are disadvantaged,
vulnerable or underserved
276,000 people reached
since Company launch
tand risk
ver more and better impact investment and crowd in more capital
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The Schroder BSC Social Impact Trust plc (‘the Company’) is a quoted investment company accessible to any investor,
providing capital for high quality and high impact social investment to support resilient, equitable, flourishing communities in
the UK.
The UK faces entrenched social issues that require targeted investment at scale.
Local social organisations are often best placed to tackle these challenges in their communities, by partnering with
government and investors to develop new cost-effective solutions that are tailored to disadvantaged groups.
Many of these solutions are ready to scale with the right investment, but struggle to find it. Options are generally limited to
mainstream retail finance that is often a poor fit, or very small private markets that are inaccessible or costly to manage for
most investors.
The Company opens up access for investors in the public markets, by providing a listed asset structure, alongside deep
knowledge and networks across social organisations and fund managers.
Our intention is to grow the Company over time to serve both our impact and financial objectives. Expanding the Company’s
shareholder base and increasing in scale will enable more deployment of capital to an attractive pipeline of social investment
opportunities while also supporting liquidity in the shares and reducing cost ratios. We believe this is important in creating a
virtuous cycle of lowering the barriers for investors and creating a demonstration effect to ‘crowd in’ more investors.
Impact as a driver of value
The Company starts with the social issue, then identifies investment and enterprise models that can provide sustainable
solutions. We then find and support fund managers who can channel investment to those enterprises. We help these fund
managers balance the needs of investors with those of social enterprises, charities and social purpose organisations, to build
a track record of success that can attract more capital over time.
Financial drivers and risk mitigation Impact return and risk mitigation
Historical revenue stability with a high
weighting of government sources
Targeting areas that deliver significant
savings for government and society
Asset backing on lower risk/
return investments
Majority weighting to investments with
inflation linkage or correlation
What: Significant need such as housing
and health and social care
Who: Targeting more vulnerable and
disadvantaged groups.
How much: High social impact that
also delivers significant public savings
Contribution: Significant change in life
chances versus the status quo
Risk: Mitigated through proven delivery
track records alongside local knowledge
Sweet
Spot
£7.7bn needed annually to meet the growing demand for care
£16.9bn needed annually to tackle the housing crisis
1
2
3
£65bn needed to insulate UK homes by 2035
Our Approach and Impact Thesis
6
Schroder BSC Social Impact Trust plc
1
Social Care: Funding and Workforce (parliament.uk)
2
Big Society Capital: Mapping the Market
3
Green Finance Institute
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Report and Accounts
for the year ended 30 June 2023
7
Strategic Report
The Company’s objective is delivered by an experienced
partnership in both sustainability and impact investing.
Schroders Unit Trusts Limited (Schroders) is the Company’s
Alternative Investment Fund Manager (AIFM) whilst Big
Society Capital is the Company’s delegated Portfolio Manager
and has responsibility for investment sourcing, selection, and
management.
Big Society Capital was established in 2012 by Sir Ronald
Cohen, the co-founder and former chair of global
private-equity firm Apax Partners, and is the leading financial
institution dedicated to social impact investment in the UK.
Since inception Big Society Capital has made over
100investments in funds, managers and social banks
reaching 2,000+ social enterprises and charities. The
Company’s dedicated portfolio management team is backed
by a team of social impact investment professionals at Big
Society Capital, which has current assets under management
of £695m.
Big Society Capital’s broader activities further benefit the
Company’s performance. As examples, Big Society Capital
has specialists in government policy which help to drive
engagement with relevant stakeholders and has a dedicated
social sector engagement team which works to understand
the enterprise models of the social enterprises and charities
in which the Company invests.
Big Society Capital’s dual role in growing the social impact
investment market by making investments, and through
engagement with investors and recipients of capital, makes
them uniquely qualified to manage the Company. Teamed
with the experienced risk and financial oversight from
Schroders, the Company is governed by an Independent
Board of highly experienced professionals from impact
investment and other financial backgrounds.
An experienced partnership with deep impact
investment expertise
Deal sourcing
Active co-development
with partners and impact
fund managers
Rigorous and tested
investment process
Building the capacity and
capability of impact fund managers
Contribute to portfolio board and investment
committees
Investor and partner engagement
Robust impact
management and reporting
Social sector engagement
Policy and influencing
work
Independent Board
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8
Schroder BSC Social Impact Trust plc
I am pleased to present
the third annual report of
Schroder BSC Social
Impact Trust plc (“the
Company”), covering the
year ended 30June 2023.
Following a period of high
market volatility, the Bank
of England’s monetary
tightening policy appears
to have been successful in
bringing inflation back in
single-digit territory in
2023. The “worst-case” recessionary concerns of late 2022
appear to have been (narrowly) averted, and we start seeing
early signs of interest rate stabilisation, alongside hopes of
reducing inflation.
However, the full impact of the higher inflation and interest
rates environment are only beginning to be felt and will have
long-term consequences for the cost of living in the UK,
putting pressure on the affordability of essential items like
food, energy, and housing.
It is estimated that UK households are facing the largest fall
in living standards since records began in the 1950s, and
low-income households are the most affected. In this
challenging environment, the social impact created by the
Company’s investments is needed more than ever, with
many investments providing solutions to the cost-of-living
crisis, such as increasing the supply of affordable housing
and helping households manage energy costs through
retrofit businesses and community renewables. In a time of
constrained government spending, the Company’s
investments targeting innovation in public service
commissioning through Social Outcomes Contracts generate
significant savings for the Government
1
.
The Board believes the Company offers investors a valuable
source of portfolio diversification, through access to a unique
mix of private market investments, with the dual objectives
of providing long term capital growth and income and
serving as a source of permanent funding for organisations
dedicated to positive social impact.
Furthermore, the Board, AIFM and Portfolio Manager are
committed to advancing impact investing in the UK, through
events and publications aimed at increasing investors’
understanding of best practices and supporting them in
making impact allocations in their portfolios. We build
relationships and maintain an active dialogue with the
investment community, actively seeking to understand how
the Company can best serve investors’ requirements in
committing capital to high quality, high impact investments.
We understand that our investors want the Company to
grow, both through NAV asset growth and fresh capital
raises, and it is a stated high priority for the Board to take
actions to make this possible. We welcome conversations
with investors interested in helping us to achieve this goal of
growing the Company.
Financial performance
The Company has delivered resilient NAV total returns since
inception on 22December 2020, in a highly volatile market.
Net asset value (“NAV”) total return for the year ended
30June 2023 was 0.8% (2022: 1.6%), resulting in a NAV total
return since inception of 8.6% (3.4% annualised).
Overall, the Company’s NAV per share fell from 105.4p to
104.9p during the year ended 30June 2023, after fees which
included an interim dividend payment of 1.30p per share
paid on 6December 2022 (2021: 0.57p).
The total share price return during the year ended 30June
2023 was -11.0% (2022: +3.5%) as the Company’s shares were
not immune to negative investor sentiment towards equities
resulting in a wider discount to NAV. The Company moved
from trading at a premium to NAV to a discount after the
mini budget of September 2022, and traded at an average
discount of 7.3% in the twelve months to 30June 2023,
narrower than the average investment trust discount of
13.2% over the same period.
A more detailed analysis of performance and additional
information on investments in the period under review are
included in the Portfolio Manager’s Report. I would
particularly like to highlight that our Portfolio Manager has
demonstrated the benefits of extensive experience and an
impact-led approach to investing in social housing this year.
Our portfolio has shown resilience within a turbulent market,
and should the Company raise more capital, we are well
positioned to deploy it responsibly in this important sector.
Social impact performance
The Company published its second Impact Report on 29June
2023, showcasing the meaningful roles our investees have
played in communities across the UK during the year, the
engagement of our Portfolio Manager to support their
success, and our impact management methodology.
As of the date of the Impact Report the Company had
committed £87m, financing 168 organisations and reaching
276,000 people, of whom at least 94% were from
disadvantaged and vulnerable backgrounds. The Company’s
investments helped fund over 27,000 affordable homes
through the High Impact Housing asset class and generated
over £98m of near-term value as savings for government
and households. The full report is available on the
Company’s website.
The Company’s investments are also contributing to
addressing the specific social challenges created by rising
energy costs. For example, Agility Eco (in the Bridges
Evergreen portfolio) is a leading installer of energy efficiency
improvements for low-income households. Man Community
Housing Fund received planning permission for a
development of 226 zero carbon, 100% affordable homes.
Heart of England Community Energy (backed by Triodos UK
and the Community Investment Fund) generates enough
power for 4,500 homes as well as providing wider
community benefits.
Chair’s Statement
1
Outcomes for All: Ten Years of Social Outcomes Contracts, Big Society
Capital, June 2022
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Report and Accounts
for the year ended 30 June 2023
9
Strategic Report
More detail can be found in the Impact Report section on
pages29 to 30. We continue to welcome your feedback on
the report, to help guide our communications with
shareholders about the frontline work of our investees and
our impact management methodology.
The Board was privileged in May 2023 to see first hand the
valuable work that our investees are undertaking in Hull and
together with representatives from the Portfolio
Management team visited Hull Women’s Network, an
organisation helping women and their children escape
domestic abuse, and Hull and East Yorkshire Mind, providing
support services to individuals and families experiencing
poor mental health. Both organisations also provide safe and
appropriate housing for people who need it most as part of
their wrap-around support services and have used social
investment from the Social and Sustainable Housing fund (in
the Company’s High Impact Housing portfolio) to purchase
and refurbish homes to a high standard for their
beneficiaries.
The Board is keen to help our investors meet their own
developing needs in relation to impact reporting, and we
welcome feedback.
Discount management
During the year to 30June 2023 the Company’s share rating
ranged between a discount to NAV of 15.3% and a premium
to NAV of 1.5%. The 12-month average discount on 30June
2023 was 7.3% (average discount 2022: 0.5%).
The Company’s share price moved to a discount to NAV in
October 2022, during a period of turbulence for UK equities.
Following consultation with the Manager and the Company’s
corporate broker in late 2022 the Board agreed that it was in
shareholders’ best interests to commence buying back a
limited number of shares with the aim of narrowing the
discount at which the shares were trading to NAV. The Board
also considers the shares an attractive investment and the
buybacks have been accretive to existing shareholders.
While the Board is conscious that buybacks shrink the size of
the Company marginally in the short-term it remains our
ambition to grow the Company through share issuance in
the longer term. Addressing the discount to NAV is
considered critical to achieving this goal and the Board
believes buy backs are one of the tools to use in pursuit of
this. During the year ended 30June 2023 the Company
bought back 711,720 ordinary shares for a total
consideration of £674,000. All shares were bought back at a
discount to the prevailing NAV, and were placed into
Treasury for future re-issue. Should the Company’s shares
reach a sufficient rating to its NAV, the Board will seek to use
these shares to issue to new and existing investors. Our
Portfolio Manager has an attractive pipeline of high impact
investments, and it is the Board’s ambition to raise funds to
take advantage of these opportunities for our shareholders
and to deploy further capital to create more equal life
chances and build resilient communities in the UK.
Since 30June 2023 and up to 26 October 2023, a further
449,924 shares have been bought back for a total
consideration of £411,130.84 and placed in Treasury.
At the forthcoming Annual General Meeting (“AGM”) the
Board will seek to renew the authorities previously granted
by shareholders to issue or buy back shares. We encourage
shareholders to vote in favour of these resolutions which are
described in more detail in the on pages 91 to 94.
Investor engagement
Another important plank in the strategy of closing the
discount and ultimately growing the Company, is active
engagement with current and prospective shareholders,
which the Board and the Managers take very seriously.
Webinars and forums have been held during the year under
review to shed light on the investment approach and
portfolio holdings, and to help educate and inform investors
newer to social impact investing. In particular, excellent
feedback was received about the event convened in March
2023 that focused on the UK social housing market and the
way that a high impact focus has successfully been used to
manage risk and deliver resilient returns.
I am personally keen to meet with investors who may have a
desire or mandate to allocate to social impact, as the
Company aspires to be an attractive, diversified and reliable
‘go-to’ partner for such portfolios. It has been useful to hear
the issues being faced by investors in this regard, and I am
grateful for the ideas shared in the meetings I have had
during the year under review and subsequently.
The Board recognises the size of the Company is a hurdle for
some investors, but we also hear from many that our
strategy answers a need across a range of investor types.
Therefore, the Board is thinking creatively and proactively
about our outreach in the year ahead. I hope our events,
reports, and activities will be valuable to you, and will help
broaden and deepen our shareholder base. I look forward to
more dialogue with new investors to increase our own
investor impact and accelerate the much-needed
deployment of capital into high quality, high impact
investments in communities across the UK.
Dividend
The Board has considered the amount available to distribute
to investors and, as in previous years, has declared that the
Company will pay out substantially all of its income as a
dividend, resulting in a dividend of 2.30p per share (2022:
1.30p), payable on 20December 2023 to shareholders on the
Company’s share register on 10November 2023. This is
above the target dividend of 1-2% of net asset value
communicated to investors at the initial public offering
(“IPO”) and the Portfolio Manager is increasing its guidance
for future dividends to yield 2-3%. The dividend of 2.30p is
split between a 2.16p interest distribution and a 0.14p equity
dividend.
Chair’s Statement
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Continuation vote
In the Prospectus, published at the time of the IPO, the
Company undertook to provide shareholders with the
opportunity to vote on the Company’s continuation should
the Company’s shares trade, on average, at a discount in
excess of 10% to NAV for the two-year period ending
31December 2023 and in any subsequent two-year period.
In the event that a vote was triggered shareholders would be
provided with the opportunity to vote on whether the
Company should continue in its present form.
The Board believes that since launch the Company has
established a clearly differentiated and unique position
relative to other investment companies. The Company
provides shareholders with exposure to hard to access high
impact assets and managers whilst its investments support
partnerships between UK fund managers, social
organisations and the communities they serve. The Board
also believes that social impact investments should continue
to provide attractive long term investment opportunities and
that the prospects for private market social impact
investments remains positive. In addition, your Board notes
that if the discount on 26 October 2023 of 13.13% were to
continue until the end of this year, then the Company’s
shares will have traded for the two years ending
31December 2023 on average at a discount of 6.79%.
Quarterly valuations
In the Half Year Report, I advised that the Company intended
to increase the frequency of its valuation points from bi-
annually to quarterly to provide increased transparency for
existing and potential shareholders. Subsequently, the
quarterly NAVs in respect of 31March and 30June 2023 were
published and the Company will continue to publish the
NAVs on a quarterly basis.
Online presentation
There will be a presentation by the Portfolio Manager at
2.00p.m. on Tuesday, 31October 2023 which will be
available to watch online. To sign up to watch the
presentation please click on this link:
https://registration.duuzra.com/form/SBSI23
Details on how to watch the presentation are also available
on the Company’s webpage:
www.schroders.com/sbsi
By using a webinar, I hope more shareholders, and
interested parties will be able to listen to and ask questions
of the Portfolio Manager.
AGM
The AGM will be held on Friday, 15December 2023 at
12.00noon at the offices of Schroders at 1London Wall
Place, London, EC2Y5AU. A presentation from the Portfolio
Manager will be given at the AGM, and attendees will also be
able to ask questions in person. The presentation will be
made available on the Company’s website following the
meeting. Details of the formal business of the meeting are
set out in the Notice of Meeting on pages 92 to 94 of this
Annual Report.
All shareholders are encouraged to vote by proxy in advance
of the AGM and to appoint the Chair of the meeting as their
proxy. This will ensure that shareholders’ votes will be
counted even if they (or any appointed proxy) are not able to
attend.
If shareholders have any questions for the Board, please
write to the Company’s registered office address: Company
Secretary, Schroder BSC Social Impact Trust plc, 1London
Wall Place, London, EC2Y 5AU, or email:
amcompanysecretary@schroders.com.
For regular news about the Company, shareholders are also
encouraged to sign up to the Manager’s investment trusts
update by visiting the Company’s website:
https://www.schroders.com/en/uk/private-investor/fund-
centre/funds-in-focus/investment-trusts/schroders-
investment-trusts/never-miss-an-update/
Outlook
Following the volatile environment in global and UK markets,
a higher inflation, higher interest rate environment is
expected to have a long-term impact on the real economy,
and the standards of living of UK households. Most
vulnerable and disadvantaged households are the most
affected, at a time when government spending is also
constrained.
In this context, the services provided by the organisations
funded by the Company’s investments are needed more than
ever. While some of these organisations themselves will be
affected by rising cost pressures, the organisations in the
Company’s portfolio have an average 30-years’ track record,
having demonstrated their resilience through multiple
economic cycles.
An expected election in the UK in the next twelve months
introduces further uncertainty around the policy risk. A
significant portion of the Company’s portfolio is invested in
organisations with government-backed revenue sources. The
Portfolio Manager mitigates policy risk by diversifying the
portfolio across policy areas, and targeting areas with broad
cross-party support, such as housing, health and social care,
and energy resilience.
Despite the challenging market environment, the social
investment market in the UK grew by 18% to £9.4bn in 2022,
according to the most recent annual market sizing exercise
published by Big Society Capital
2
. The Board believes that the
Company remains well positioned to lead and benefit from
further market growth, as the Portfolio Manager continues
to see an expanding and maturing pipeline of investment
opportunities.
One of these opportunities is in very advanced stages, and
we expect the Portfolio Manager to fully commit the capital
available (following partial exits and capital repayments from
the existing portfolio) by early 2024. This opportunity would
increase the portfolio exposure to the “just transition to net
zero” impact theme and is expected to provide attractive
returns to investors.
10
Schroder BSC Social Impact Trust plc
Chair’s Statement
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In September 2023, the Company was Highly Commended in
the Best Newcomer Sustainable Fund category of Investment
Week’s Sustainable Investment Awards 2023. We are pleased
that the Company’s contribution as a key player in the
sustainable investing space is being recognised by the
investor community.
We are encouraged to see growing appetite for sustainable
investment products, and an increased focus both from
regulators and investors on ensuring quality and clear
standards. In the UK, the Company engaged with the
Financial Conduct Authority’s Sustainable Disclosure
Requirement (“SDR”) consultation through Schroders and Big
Society Capital, and we were pleased to see extensive
engagement from the broader financial sector. The
proposed SDR framework signals the regulator’s
commitment to supporting the integrity and growth of the
impact and wider sustainability investment markets in the
UK. We believe transparent labelling and disclosure of impact
products are essential for the impact investment market to
grow healthily. We also welcome the EU’s Sustainable
Finance Disclosure Requirements (“SFDR”) consultation,
launched this year to review SFDR’s implementation and
explore new classifications that offer greater clarity on
investment product impact credentials.
Through engagement with key stakeholders in the
investment and regulatory space, as well as showcasing best
practice in making successful impact investments, the
Managers aspire to position the Company as a trusted leader
and attractive partner for investors making allocations to this
emerging asset class.
We have been gratified to hear the interest in, and support
for, the Company’s approach and purpose, but realise
successful growth depends on converting more of this latent
demand and widening the shareholder base. We look
forward to speaking with you during the year.
Susannah Nicklin
Chair
27 October 2023
Report and Accounts
for the year ended 30 June 2023
11
Strategic Report
2
https://bigsocietycapital.com/latest/investment-into-uk-social-impact-
exceeds-9-billion-despite-economic-gloom/
Chair’s Statement
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12
Schroder BSC Social Impact Trust plc
Portfolio Manager’s Report
Market developments
The twelve months to 30 June 2023 were a particularly
challenging one for the UK economy with inflation at a
40year high, led by large increases in energy and food prices
and contending with recessionary concerns. The “mini-
budget” of September 2022 further exacerbated the
instability in financial markets, and negative investor
sentiment, despite its subsequent reversal.
The Bank of England’s (“BoE”) response to market conditions
was to raise interest rates eight times in a 12-month period,
to 5% on 30 June 2023, with a further rise to 5.25% voted for
in August 2023. The new interest rate environment has
broad implications on the investment community as well as
the broader population, in particular, the most vulnerable
and disadvantaged people that the Company’s investments
are aiming to support.
Inflation started to reduce during 2023, returning to single
digits; however, the full effects of the higher inflationary and
interest rate environment are only just beginning to be felt,
and are expected to have long term consequences in areas
such as housing affordability, and continued pressures on
cost-of-living.
A House of Commons research briefing published in
September 2023 highlights some of the starkest data
illustrating the impact on the cost of living of the last 2years
of rising inflation:
• Food prices:
Over the two years from August 2021 to
August 2023 food prices rose by 28.4%. It previously took
over 13 years, from April 2008 to August 2021, for
average food prices to rise by the same amount.
• Energy prices: household energy tariffs and road fuel
costs increased sharply in 2022; in an effort to mitigate
the impact of rising gas and electricity prices, the
Government introduced an Energy Price Guarantee (EPG)
in October 2022, capping typical consumption at £2,500 a
year. This limited increases in typical bills to 27% in
October 2022.
• Housing affordability: base interest rates rose from
0.1% in December 2021 to 5.25% in September 2023,
which led to higher borrowing rates for households
(specifically higher mortgage rates), and higher rental
costs – significantly impacting housing affordability.
Low-income households are most affected by rising prices,
mostly due to being more affected by high food and energy
prices.
“Food bank charities are reporting an increase in demand: the
Trussell Trust reported that in the year to March 2023 they
provided nearly 3 million emergency food parcels, a record
number, more than during the pandemic and more than double
the number in the same period five years before.”
– House of Commons Library Research –
Rising Cost of Living in UK – Sep 23.
The new environment creates both risk and opportunities for
the Company on both social impact and financial returns.
Looking first at the social impact risk, many of the charities
and social enterprises supported by the Company’s
investments, and the vulnerable people who benefit from
their services, will be negatively affected by the current
environment. Whilst increasing the need for the positive
impact of our investments it means that in some cases
impact will be outweighed in overall terms by the rising cost
of living. On financial returns, we have aimed to build a
portfolio with a degree of inflation correlation. However, in a
very volatile inflation environment some of those
correlations will be only partial and some operate with a
time-lag. In particular, as the portfolio relies to a significant
extent on government backed revenues, government
restrictions on how fast inflation flows through into social
housing rents and contract payments will be important.
Looking at the opportunities for our investment strategy, the
social impact created by our investments is needed more
than ever. Many of our investments are directly tackling the
cost of living crisis, such as increasing the supply of
affordable housing and our retrofit and community
renewable investments tackling fuel poverty. In a time of
constrained government finances our investments are
targeting service innovation that create significant savings –
for example our recent review of Social Outcomes Contracts
showed that every £1 spent has generated £10 in public
value.
On the financial side, we expect the Company will continue
to provide a valuable source of diversification in a
challenging investment environment. High and volatile
inflation is strongly negative for traditional public market
equity and bond portfolios. We have aimed for a unique mix
of impact-focused private assets with diverse and resilient
revenue streams that has thus far protected capital and
should continue to do so in the event of further sharp
market downturns.
Across our portfolios we are seeing the wider move to invest
in impact continuing. Our latest market sizing report values
the social impact investment market at £9.4bn as of the end
of 2022, an 18% increase from 2021. This represents an
almost 11-fold increase in the social impact investment
market in the last 11 years. As a result, we are seeing an
expanding and maturing pipeline of investment
opportunities, primarily in private markets that are difficult
for many investors to access. We believe the Company
remains well positioned to offer investor access to a mature
portfolio of high quality impact investments within this
expanding opportunity set.
Performance update
The NAV total return per share for the twelve-month period
to 30 June 2023 was 0.8%. Overall, the Company’s total NAV
reduced slightly from £89.92m to £88.75m over the period
due to share buy-backs reducing the number of shares in
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Report and Accounts
for the year ended 30 June 2023
13
Strategic Report
Portfolio Manager’s Report
In the 12 months to 30 June 2023 the Company recorded
gross revenue of £2.77m (2022 – £1.86m) and net revenue
after fees, costs and expenses of £1.97m (2022 –£1.12m),
providing a net revenue return per share of 2.32 pence
(2022–1.37pence). The Company recorded losses on the
fair value of investments of £1.02m (2022 – gains of £0.63m)
and capitalised expenses of £0.33m (2022 – £0.29m),
resulting in a total gross return of £1.75m (2022 – £2.49m),
and total net return of £0.62m (2022 – £1.44m), or 0.73
pence per share (2022 – 1.77 pence).
As shown in the table below, portfolio returns since inception
have been driven by the performance of investments in their
mature phase, contributing 10.67% to NAV total return.
However, in the 12 months to 30 June 2023, the mature
phase investments underperformed plan contributing 0.17%
due to a significant write down in the Bridges Evergreen
portfolio and the headwinds of rising rates.
Assets in their investment phase, which are earlier in their
lifecycles and J-curves, made a 1.58% contribution to NAV
total return during the year to 30 June 2023, which is in line
with expectations.
Liquidity Assets made a positive contribution of 0.16% to
performance during a challenging year for markets through
allocations to shorter duration and floating rate credit.
issue from 85.32 million to 84.60 million. The shares bought
back were held in Treasury at the end of the financial year.
The Company’s NAV per share declined from 105.39p to
104.90p after an 1.30p dividend payment – with a full
performance bridge in the chart below.
105.39
-1.2
3.21
-0.71
-0.58
-1.3
0.09 104.9
Opening NAV per share Valuation losses Investment income Company-level investment
management fees
Other expenses Dividends paid Share buybacks Closing NAV per share
100
101
102
103
104
105
106
107
108
NAV per share progression
Increase Decrease Total
30 Jun 2023 30 Jun 2023 NAV total return NAV total return
% NAV % NAV contribution contribution
committed invested 12m to 30 June 2023 since launch
Mature 65.04% 63.89% 0.17% 10.67%
Investment phase 32.33% 23.62% 1.58% 1.74%
Liquidity Assets – 10.53% 0.16% -0.57%
Cash and cash equivalents – 1.97% -1.14% -3.23%
Total* 97.37% 100.00% 0.78% 8.61%
*Please note totals might not sum due to rounding
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14
Schroder BSC Social Impact Trust plc
Portfolio Manager’s Report
The key drivers of financial performance in the twelve-month
period to 30 June 2023 were:
• A ramp-up of returns in the High Impact Housing
portfolio, in particular valuation gains in the CBRE
Affordable Housing Fund, contributing 0.58p to NAV per
share, and the Man Community Housing Fund
contributing 0.48p to NAV per share, mostly driven by
developments reaching completion.
• A mix of income and capital gains in the Social Outcomes
Contracts portfolio driven by strong performance of the
underlying projects, with Bridges Social Outcomes Fund II
contributing 0.48p to NAV per share.
• A notable negative development in the Bridges Evergreen
portfolio was the write-down to zero of their investment
in Skills Training UK. Bridges Evergreen contributed a
negative 1.66p to NAV per share.
• With the exception of the Bridges Evergreen investment,
all other holdings in the Company’s High Impact Portfolio
made a positive contribution to returns and are
performing to plan.
The Social Impact performance of the portfolio was reported
in the Company’s second Impact report published in June
2023. The report highlighted that since launch, the
Company’s investments have reached 276,000 people, 94% of
whom are from disadvantaged, vulnerable or underserved
backgrounds; generated £98m in social outcomes and
savings; and funded 27,000 affordable, decent homes. The
Impact Section of this report contains the key highlights from
the Social Impact report, as well as details of our evolving
approach to impact management and reporting.
Portfolio cash flows and balance sheet
Overall, in the period £7.61m was deployed into existing and
new investments in the High Impact Portfolio:
• The majority of the amount invested (£6.27m) was
deployed towards delivering new affordable homes in the
High Impact Housing allocation: Man Community
Housing Fund drew down £2.55m and the Social and
Sustainable Housing fund drew down £3.72m over the
year.
• In Debt and Equity for Social Enterprises, £1.03m was
drawn for further investment into the secured co-
investments made with Charity Bank, and the Charity
Bond portfolio, delivering high social impact in Health and
Social Care.
• Within Social Outcomes Contracts, further investment
was made into existing projects helping children on the
edge of care and homelessness. The Social Outcomes
Contracts investments made in the year to 30 June 2023
totaled £419,000.
Some of the Company’s higher impact investments involve
the staged deployment of capital over multiple years; we aim
to mitigate any cash drag on returns through our Liquidity
Assets allocation. This is invested in assets with similar
financial risk and return characteristics as the core asset
allocation, though has a lower direct social impact given the
lack of availability of social impact-focused assets in publicly
listed markets. During the period, we fully redeemed our
positions in two investments to fulfil drawdowns in our High
Impact Portfolio. The Liquidity Assets portfolio experienced
some volatility over the year due to market turbulence but
had a small net positive contribution to the total return for
the year of 0.16%.
High Impact Exposure* as a % of NAV
30 June 2023
*Exposure: NAV of High Impact Investments + undrawn commitments
Invested as a % of NAV 30 June 2023*
*Please note totals might not sum due to rounding
Mature
Investment phase
Uncommitted
32%
65%
3%
23%
Cash and cash
equivalents
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Report and Accounts
for the year ended 30 June 2023
15
Strategic Report
Portfolio Manager’s Report
Portfolio Allocation
The Company’s investment objective is defined as:
• Delivering measurable positive social impact as well as
long term capital growth and income, through investing
in a diversified portfolio of private market impact funds,
co-investments alongside impact investors and direct
investments in order to gain exposure to private market
social impact investments.
• Aiming to provide NAV total return of CPI plus 2 per cent.
per annum (once the portfolio is fully invested and
averaged over a rolling three- to five-year period, net of
fees).
• With low correlation to traditional quoted markets whilst
offering to address significant social issues in the UK.
A diversified asset allocation delivering
local UK social impact
The Company delivers its investment objective through
allocating to best-in-class social impact managers in private
markets – with proven track records delivering high quality
financial returns alongside measurable social impact for
more disadvantaged groups in the UK. Investments that are
committed but not yet drawn by private market funds are
held in listed Liquidity Assets investments to mitigate cash
drag during longer drawdown periods.
As of 30 June 2023, the portfolio was 97% committed and
88% invested in the Company’s High Impact Portfolio. The
Company has approximately £2.5m of uncommitted capital,
following the cancellation of an unused follow-on
commitment to the Charity Bond portfolio, a partial exit from
the Real Lettings Property Fund in the third quarter of 2023,
scheduled capital repayments from the portfolio, and share
buybacks. Furthermore 10% of NAV was held in our Liquidity
Assets portfolio and will in the longer term be invested in
higher impact private investments. In response to the higher
interest rate environment, the Company is balancing use of
Liquidity Assets with greater use of cash and cash
equivalents in money market funds, earning interest in line
with base rates.
High Impact Exposure as a % of NAV
Exposure: NAV of High Impact Investments + undrawn commitments
Invested as a % of NAV
*see asset class description on pages 19 to 24
Data as of 30 June 2023
Source: Big Society Capital
Providing access to a seasoned high
impact portfolio
The Company has built a seasoned high impact portfolio that
would be difficult for shareholders to access directly –
through a combination of a seed portfolio and secondary
investments from the Portfolio Manager’s relationships and
knowledge of the sector. This provides a greater allocation to
more mature assets that will help drive future financial and
impact performance. The Portfolio Manager’s broader
portfolio relationships offer additional fee benefits to
Company shareholders – with 41% of the Company’s
portfolio with no or discounted management fees – from
co-investments or fee discounts that the Portfolio Manager
has negotiated, often through their role as initial
cornerstone investor in funds.
High Impact Exposure as a % of NAV 30 June 2023
– asset class breakdown
Vintage
Vintage is defined as year of the fund establishment:
3%
High Impact Housing
Debt and Equity for Social
Enterprises
Social Outcomes Contracts
UncommiƩed
10%
40%
47%
2%
37%
5%
10%
46%
High Impact Housing
Debt and Equity for Social
Enterprises
Social Outcomes
Contracts
Liquidity Assets
Cash and cash
equivalents
32%
47%
18%
3%
2013-2016
2017-2019
2020-2022
Uncommitted
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16
Schroder BSC Social Impact Trust plc
Portfolio Manager’s Report
Access – Ease of access for other investors*
*Please note totals might not sum due to rounding
Fees
Targeting inflation resilient returns
The Company aims to deliver an asset allocation that is
resilient through periods of rising prices through targeting
two-thirds of its asset allocation to assets that will benefit
from inflation. These assets are:
• Property and renewables – with a mix of long dated
inflation linked leases, shorter property leases where
value is more driven by property prices, and smaller
investments in community renewables in our Debt and
Equity for Social Enterprises asset class; we also hold
renewables investments in our Liquidity Assets portfolio
• Mezzanine and equity investments – where the value is
driven by government contracts that have historically
moved with inflation
• Floating rate instruments which will benefit from
increases in the base rate
As of 30 June 2023, the Company had committed 62% of its
capital to inflation sensitive assets. The remaining capital
committed to high impact investments was allocated to fixed
income securities such as charity bonds and social outcomes
contracts; the Company aims to minimise the duration of
these fixed income assets, to allow reinvestment over time
into a potentially higher interest rate environment. Including
the investments in Liquidity Assets and cash and cash
equivalents held in money market funds, the Company’s
invested amount in assets that will benefit from inflation is
66% of its capital. The Portfolio Manager is seeking to
optimise its liquidity management, by investing its cash
reserves in money market funds benefitting from increases
in the base rate.
Asset Types*
*Please note totals might not sum due to rounding
As previously indicated, the Company sees significant risk in
achieving target returns to match recent elevated inflation
levels. As a result, the Company is underperforming its
CPI+2% aim. This is due to:
• Property and renewables: The presence of caps and
collars in property index linked leases, caps in housing
benefit increases and expected real falls in property
prices.
• Mezzanine and equity investments: Delays in the pass
through of inflation to government contracts in the
current environment
• Floating rate instruments: Expected path of floating rates
to continue to lag inflation
• A portion of the investment allocation (34% of invested
capital) in fixed income securities and social outcome
contracts where Company revenue will only benefit over
time from inflation at higher interest rates as capital is
re-invested.
Targeting low correlation to mainstream
markets
The Company’s asset allocation aims to achieve low
correlation to mainstream markets by backing business
models that are underpinned by government expenditure
and have been historically resilient through economic cycles.
As at 30 June 2023, 70% of the committed portfolio (61%
invested) is underpinned by government backed revenue
streams. The proportion of government-backed revenues in
the portfolio is slightly below our long-term target of 75% (on
a committed basis) due to the partial exit from The Real
Lettings Property Fund (“RLPP1”), the cancellation of the
charity bond top-up commitment, capital repayments in the
period and the write-down in the BEH portfolio; however, the
advanced pipeline opportunities which are being considered
for the re-deployment of available capital have a high
proportion of government-backed revenues, which we
expect to bring our capital allocation in line with the target.
These revenue streams are themselves diversified across
policy areas, such as housing, clean energy and fuel poverty,
education, redressing inequalities/levelling up. This
diversification reduces exposure to individual policy risk,
such as the risk that government or budgetary changes
would significantly reduce or withdraw payments. The
Company targets areas with a track record of delivering
41%
14%
10%
34%
1%
Cash and cash
equivalents
16%
16%
49%
17%
3%
Co-investments/Secondaries
Private funds closed to new
investors
Private funds with irregular
fundraises
Charity Bonds
Uncommitted
59%
41%
Market rate fees
No manager fees or
discounted
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Report and Accounts
for the year ended 30 June 2023
17
Strategic Report
impact for more disadvantaged groups and generating
savings for the public purse which provides additional
revenue resilience. Reflecting the uncorrelated nature of the
portfolio relative to mainstream markets, the Company’s
share price had a negative correlation with the FTSE ALL
Share Index in the twelve months to 30 June 2023 (-0.62), and
since inception (-0.53).
Recent Events
Following the realisation of capital from RLPF1 and the
cancellation of unused commitments, and net of capital used
for share buybacks to date, the Company has c. £2.5m of
uncommitted capital, held to invest in further High Impact
Investment opportunities or provide flexibility for further
share buybacks. We are actively reviewing an active pipeline
of investments in the High Impact Portfolio, which we think
will provide further diversification and exposure to the four
key impact themes identified in our latest Impact Report
(reducing poverty and inequalities; good health and
wellbeing; education, training and decent work; and just
transition to net zero), while also enhancing returns. In
particular, we are in an advanced stage with a new
investment in an opportunity that will increase the
Company’s exposure to the “just transition to net zero”
theme (currently with the lowest weight in our investment
portfolio), while providing an attractive returns profile. We
expect to be in a position to complete and announce the
transaction by the first quarter of next year, which would
bring us back to being fully committed.
We are confident that the Company remains well positioned
to lead and benefit from further market growth, as we
continue to see an expanding and maturing pipeline of
investment opportunities.
In September, the Company was Highly Commended in the
Best Newcomer Sustainable Fund category of Investment
Week’s Sustainable Investment Awards 2023. Entries were
judged by a panel of experts from across the investment
industry considering factors such as strong performance
record; strength of the team; meeting the fund’s sustainable
objectives; excellence in sustainable investing within the
investment process; strong engagement record; effective
client communication; wider fund impact; and key
developments on the strategy in the past year. We are
pleased that the Company’s contribution is being recognised
as playing a key role in the evolution of sustainable investing.
Outlook
Following a year of monetary tightening, inflation continued
on a downward trend over the summer, and in October UK
food prices dropped slightly for the first time in two years.
The Bank of England slowed its rate increases, and guides
towards inflation reaching mid-single digits by the end of the
year, returning to the long-term 2% target by 2025. HM
Treasury has set 22 November 2023 for this year’s Autumn
Statement, to be accompanied by an Office for Budget
Responsibility forecast. This is expected to be the chancellor’s
last fiscal update before a general election, and it is expected
that one of the areas of scrutiny will be the government’s
performance against the economic pledges from earlier this
year, in particular the pledge to halve inflation by year end.
While the Prime Minister made comments about prioritising
curbing inflation and easing cost of living, there is an
expectation that we will see real-term cuts to benefits and
public spending while the UK is trying to contain high levels
of national debt.
Despite the “bright spots”, the outlook for the UK economy
remains uncertain, with some market commentators
suggesting a recession remains “unavoidable”
1
, as higher
rates will have a lagged effect on the economy.
It is estimated that UK households are facing the largest fall
in living standards since records began in the 1950s
2
, and
this fall in living standards disproportionately affects those
who are already most vulnerable in society
3
. UK households
are seeing their real incomes fall, while struggling to meet
significantly higher costs for essential items like food, energy
and housing
4
.
With continued pressures on government spending, the
scaling of proven solutions tackling social issues – such as
the organisations that the Company supports – remains as
essential as ever.
This uncertain environment provides opportunities and risks
for the Company. While the solutions provided by the
organisations that the Company supports are needed more
than ever, these organisations need to manage higher cost
bases themselves in order to remain viable. We work with
organisations with long track records (30 years on average
5
),
who have demonstrated their resilience over multiple
economic cycles. Two thirds of our capital is invested in
models with revenues rising with inflation; while our
historical returns to date are lagging the CPI+2% target, as
explained in the Performance Update section, we are
maintaining our target for the medium-to-long term, as we
expect some of the benefits to flow through with a lagged
effect, and the inflation and interest rate environment to
stabilise. What we have seen in the last year was an increase
in the income generated by the portfolio, as a result of
increases in the interest rate on floating-rate loans, and
higher income generated by maturing investments. This
increased income is being passed on to our investors as a
dividend exceeding our previous guidance of 1-2% yield on
net asset value. We expect the income generated by our
investments to continue to improve in the future and have
increased our future guidance on dividend yield to 2-3%.
With a general election expected in the next 12 months, we
acknowledge our portfolio is subject to policy risk. At the
time of writing, 70% of our committed capital is underpinned
by government-backed revenues. During the year, we have
seen a negative impact from policy risk in our portfolio,
following a change in government policy regarding
traineeships, leading to a write-down in the Bridges
Evergreen portfolio. While this development was
disappointing, we believe this to be an isolated case in our
Portfolio Manager’s Report
1
https://www.investmentweek.co.uk/opinion/4130808/recession-probably-
coming
2
Institute for Government, 2023
3
Joseph Rowntree Foundation, 2023
4
House of Commons Library, Rising Cost of Living in the UK report, 2023
5
SBSI Impact Report
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portfolio, which is diversified across multiple policy areas,
mostly targeting the most vulnerable and disadvantaged
groups. Successful interventions in these areas typically
generate savings for the government that are multiples of
the cost, and therefore these areas benefit from cross-party
support. We further mitigate policy risk by working with
organisations that have been successfully operating for
several decades, navigating different policy environments,
and making investments that benefit from some element of
asset backing.
We are encouraged to see growing appetite for sustainable
investment products, and an increased focus both from
regulators and investors on ensuring quality and clear
standards.
In this uncertain environment the goals of the Company
remain the same: to deliver for shareholders high quality
returns with a low correlation to traditional quoted markets
alongside significant social impact for more disadvantaged
groups across the UK.
Hermina Popa, Jeremy Rogers
Big Society Capital
27 October 2023
18
Schroder BSC Social Impact Trust plc
Portfolio Manager’s Report
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Report and Accounts
for the year ended 30 June 2023
19
Portfolio Manager’s Report
Debt and Equity for Social
Enterprises
Lending and some preference shares to typically large and
well-established charities and social enterprises to help
fund expansion projects to scale operations and impact
including:
– Health and Social Care
– Community Facilities and Services
– Fuel Poverty
High Impact Housing
Investment to increase the number of safe, secure and
genuinely affordable homes for more disadvantaged
groups, diversified across:
– Transitional Supported Housing
– General Needs Social and Affordable Housing
– Specialist Supported Housing
Social Outcome Contracts
Outcomes Contracts, where private capital enables a
consortium of expert charities and social enterprises to
deliver outcomes for Government commissioned contracts
across:
– Family Therapy and Children’s Services
– Homelessness
– Adult Health and Social Care
Portfolio developments
The Company invests primarily in three asset classes that were selected to give a diversified set of opportunities with low
correlation, both with one another and with mainstream financial markets. We have been pleased to see positive
developments across all three in the year under review.
Strategic Report
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20
Schroder BSC Social Impact Trust plc
Asset class: Debt and Equity for Social
Enterprises
Many impact-led social enterprises need capital to grow and
increase their impact, as well as to satisfy their existing
working capital requirements. The Company’s portfolio is
designed to include a diversified set of investments,
including charity bonds, asset-backed lending and portfolios
of secured loans, and funds that invest in established social
enterprises via mezzanine debt and/or equity. The
underlying charities and social enterprises deliver
interventions to support the most disadvantaged or
vulnerable members of society, in areas such as health and
social care, and often benefit from government backed
revenue streams.
As of 30 June 2023, the value of investments in this asset
class is £40.99m (46% of 30 June 2023 NAV). The Company
has committed £42.01m (47% of NAV) to investments in this
asset class, £1.02m (1% of NAV) of which remains undrawn at
the year end.
Bridges Evergreen Holdings, run by Bridges Fund
Management, is a long-term capital vehicle that makes
subordinated debt, mezzanine and equity investments into
highly impactful businesses. The fund targets a
combination of capital growth and a 3-5% income yield on
cost.
As of 30 June 2023, the Company’s investment was valued
at £12.75m (14% of NAV) and was 100% drawn, funding
investments into Agility Eco, the Ethical Housing Company,
New Reflexions, and Skills Training UK. Bridges Evergreen
financial performance was below plan for the period with
gains from Agility Eco and New Reflexions offset by the
write down to nil of Skills Training UK in March 2023,
following a government policy change and contract losses,
delivering a 1.66p detraction to Company NAV per share
growth in the period. While the write-down was
disappointing and dampened performance in 2023, the
other companies in the fund’s portfolio performed well
despite the challenging macroeconomic environment.
Fund Impact performance remains strong. The portfolio
provides a range of essential services, including energy
efficiency support for 45,000 households at risk of fuel
poverty annually, 181 affordable homes for people moving
from insecure tenancy agreements, 18,969 days of care,
education and therapy per year for young people, and
quality training provided to 6,570 learners, including 30%
with no prior qualifications.
The Charity Bond Portfolio managed by Rathbones
supports larger UK charities seeking to raise capital via the
public and private bond markets, providing an alternative
source of funding to bank finance. As of 30 June 2023, the
Company’s investment was valued at £14.85m (17% of
NAV). The portfolio is invested in nine bonds (both listed
and unlisted) issued by charities and social enterprises
through the Allia C&C and Triodos Bank UK fundraising
platforms, predominantly delivering care and housing
services with government revenue. The portfolio delivered
a 4% yield for the period delivering a 0.74p contribution to
Company NAV per share. All borrowers are expected to
repay interest and capital in line with schedules. Impact
performance of portfolio companies in the year included
over 16,000 tenants housed at affordable rents, intensive
support including care, education, training, employability
and housing provision to more than 7,000 people with
health conditions or special educational needs, as well as
7,000 rural properties connected with broadband.
The Community Investment Fund (CIF) managed by Social
and Sustainable Capital provides secured loans to charities
and social enterprises focused on community renewable
energy, social housing, and family support in the
community. A high proportion of revenue comes from
government mandated sources. As of 30 June 2023, the
Company’s investment was valued at £5.47m (6% of NAV).
The Company is targeting a 5% net return on the fund with
the benefit of a mature fully deployed fund immediately
Portfolio Manager’s Report
Child Dynamix, Community Investment Fund
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Campbell Wharf, Man Community Housing Fund
Report and Accounts
for the year ended 30 June 2023
21
1
Tier 1 common equity ratio is a measurement of a bank’s core equity capital compared with its total risk-weighted assets, that signifies a bank’s financial
strength.
2
Triodos Bank reports to the Company on social impact for its entire loan book, however the Company calculation for total beneficiaries reached by the
Bank Bond is based only on the share of loans made possible by the Bond.
contributing to returns. During the period the Fund
contributed 0.18p to Company NAV per share from income
and capital gains. Impact performance in the period
included 1,234 people reached by 10 social organisations
providing essential services, including housing, care and
training.
The Charity Bank Co-investment Portfolio comprises
foursecured loans with a total value as of 30 June 2023 of
£5.42m (6% of NAV). Working with Charity Bank, the
portfolio invests in housing and care related low loan to
value ratio (average 41%) loans to Sue Ryder, Abbeyfield
South Downs, Uxbridge and Abbeyfield York. The portfolio
delivered a 6% net income yield for the period and a 0.37p
contribution to Company NAV per share. Overall, the four
facilities are performing in line with plan and income is
benefiting from recent increases in base rates. Impact
performance in the year includes the provision of care to
44 people suffering from serious injury in a purpose-built
facility funded by one of the loans and the development of
48housing units for the elderly.
The Company’s investment in a private bond issued by
Triodos Bank UK Ltd was valued as of 30 June 23 at £2.52m
(3% of NAV). Triodos Bank is a leading lender to sustainability
and social impact focused organisations. This includes social
housing, healthcare, education, renewable energy, arts and
culture, and community projects. The bond issue enables
Triodos Bank to continue to grow its loan book and
contribute to the resilience and growth of charities and social
enterprises. Triodos Bank UK is well capitalised (Tier 1
Common Equity Ratio of 21.6% and a total capital ratio of
22.2% as of 31December 2022
1
) and has a track record of
continued profitability through cycles including the financial
crisis. The bond has a ten-year duration, callable by Triodos
Bank at year five. It pays a fixed 4% coupon, which will reset
to base rate +3.9% in 2025, if not called. The bond delivered
a 4% yield during the period and contributed 0.11p to
Company NAV per share. In year impact performance
included 1,900 children provided with education or childcare,
161 older people housed and supported in care homes and
558tenants housed in social and community housing
2
.
Asset class: High Impact Housing
The portfolio is invested in affordable and social housing,
which is intended to address the housing needs of a wide
spectrum of people, who are often those on the lowest
incomes and the most vulnerable. We invest across a range
of asset types, from long-term inflation-linked lease contracts
with high-quality counterparties to shorter leases to address
specific issues, such as homelessness or the housing needs
of survivors of domestic abuse. Counterparties include
Registered Providers of social housing (such as housing
associations) and charities with long-standing track records,
deep expertise in addressing specific issues, and strong local
relationships with authorities and beneficiaries.
In addressing these needs, we seek to deliver returns that
are often supported by the government-backed housing
benefit system. This has led to a lower historical correlation
to mainstream markets and insulation from the sharper
price movements in the private housing market. Historically
housing benefit has moved in line with inflation though it is
not expected rents will fully benefit from the current elevated
inflation levels.
The portfolio has a diversified exposure to rental streams
and is experiencing a mix of increases in the current
environment. The UK Affordable Housing and the Man
Community Housing funds have mainly seen rents increase
driven by caps in index-linked leases and a government 7%
cap on social rent. The Social and Sustainable Housing (SASH)
portfolio is primarily “Exempt Accommodation” for high need
groups which has been increasing in line with inflation. The
Real Lettings Portfolio is primarily Local Housing Allowance
which is currently frozen after previous large increases.
Furthermore, we note some of the challenges being
experienced by listed Social Property REITs – often linked to
the short operating history and limited delivery experience of
property counterparties. We are not seeing any comparable
issues in our High Impact Housing investments – with 100%
of rent due by June 2023 collected.
As of 30 June 2023, the value of investments in this asset
class is £32.41m (37% of 30 June 2023 NAV). The Company
has committed £35.81m (40% of NAV) to investments in this
asset class, £3.41m (4% of NAV) of which remains undrawn at
the year end.
Strategic Report
Portfolio Manager’s Report
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22
Schroder BSC Social Impact Trust plc
The UK Affordable Housing Fund, managed by CBRE
Investment Management, aims to increase the supply of
sustainable and affordable homes for people unable to
purchase or rent in the open market. The fund targets a total
return greater than 6% (with an annual target income
distribution yield of 4% from income producing assets) net of
all costs over the long term. The Company’s investment is
fully deployed and valued at £10.24m (12% of NAV). The fund
contributed 0.58p to Company NAV per share growth due to
completed assets becoming income producing, as well as
property valuations increasing through rent review uplifts.
On impact performance the fund has so far delivered
1,800homes, housing 2,258 people.
The Real Lettings Property Fund (RLPF1), managed by
Resonance Impact Investments Limited, was set up in 2013
in partnership with leading homelessness charity St Mungo’s.
RLPF1 houses people in London who are homeless or at risk
of homelessness in stable, private tenancies without
deposits. After buying each of the 259 properties the fund
refurbished all of them to a high standard. The fund leases
the properties to housing partners who manage the
tenancies and support tenants, helping them access support
services and become part of local communities. After a
decade-long partnership with St.Mungo’s, in 2023
Resonance expanded its partner network, entering into 15-
year leases with Notting Hill Genesis (NHG) and Capital
Letters. As of 30 June 2023, over 60% of the fund’s property
portfolio was managed by the new partners (with NHG
managing over 150 properties); the intention is that the new
partners will replace St Mungo's, with a majority of the
property portfolio transferred to NHG and the remaining to
Capital Letters. The fund has an overall target return of 6%
and a 3.5% annual cash yield. As of 30June, the Company’s
investment was valued at £5.48m (6% of NAV), following the
£1m capital repayment from the Company’s partial exit
earlier this year (delivering an 8% IRR during Company
ownership). During the period the fund contributed 0.39p to
Company NAV per share from rental income and capital
gains. On impact performance the fund housed 595 tenants
at risk of homelessness in the year, alongside broader
targeted social outcomes such as building long term
resilience to homelessness. In the last year, 76% of tenants
reported that they benefited from improvement in their
support networks and relationships.
The Man GPM RI Community Housing Fund aims to
address the UK’s housing crisis through the provision of new
affordable rental and shared ownership homes. The target is
for 70% of its homes to be affordable and delivered in
mixed-tenure communities, predominantly leased to housing
associations. The fund seeks to achieve returns driven by
long-term inflation-linked income streams, with a stabilised
yield
3
of 5% from income producing assets. During the
period, the fund drew down £2.55m and as of 30June 2023
the Company’s investment was valued at £8.15m (9% of
NAV). The fund contributed 0.48p to Company NAV per share
performance in the period, mainly due to income and capital
gains from stabilised assets in the portfolio. The fund is now
substantially committed and expects to fund 1,295homes
across the UK, with a focus on people on median or lower
incomes. This is significantly ahead of schedule – 2 years
since the fund’s first close in April 2021 versus the forecast
investment period of 5years. On impact performance, 973
homes had been built or acquired as of December 2022,
100% of which are in areas of constrained affordability and
91% of which are to be offered as affordable homes.
The UK construction industry is currently in a period of
heightened financial stress. Insolvencies have affected
market participants across different sizes, locations and
construction trades. Man CHF mitigates development risk in
a number of ways, including having a variety of development
types and providers. For example, the fund manager
contracts with a mix of traditional housebuilders and
modular builders, operate with fixed price contracts, procure
insurances and guarantees, and have defensive payment
terms. For modular builders specifically, the risk of
insolvency is mitigated by having payment terms which are
structured to mitigate the risk of failure, and the developer
providing a bond to cover losses, typically a percentage of
the contract sum. In addition to this, there will be warranties
from sub-contractors. To mitigate the risk of delay in
delivering homes, favourable terms for the fund are set that
include payments in the event of late handovers. The fund
manager has a Clerk of Works and Project Monitor who
reviews in detail the monitoring reports and is regularly on
site to mitigate the risk of poor construction and delivery.
The Social and Sustainable Housing LP (SASH), managed
by Social and Sustainable Capital, provides investment to
high-performing social sector organisations with local
3
Stabilised yield is the target yield once development is complete and units are occupied.
Portfolio Manager’s Report
North East RISE, Bridges SOF II
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Report and Accounts
for the year ended 30 June 2023
23
Strategic Report
Portfolio Manager’s Report
knowledge and networks, and a strong track record of
managing transitional supported housing for vulnerable
individuals. They may include survivors of domestic violence,
children leaving the care system, ex-offenders, asylum
seekers, people with complex mental health issues and
people with addiction issues. SASH makes flexible secured
loans which participate in changes in property prices and
rental incomes – generated from government-backed rental
payments with a target net return of 6%. During the period,
the fund drew down £3.72m and as of 30 June, the
Company’s investment was valued at £8.55m (10% of NAV).
The fund contributed 0.16p to Company NAV per share
growth during the period with the fund still in its Investment
Period and deployment on track. On impact performance the
fund has placed 693 vulnerable people (including 158
children) in the year into housing while contributing more
consistent and higher quality service provision.
Asset class: Social Outcomes Contracts
Social outcomes contracts (SOCs) aim to help the
government achieve better life outcomes for vulnerable
people and better value for public funds. They are public
sector contracts designed to overcome challenges in the way
that public services have traditionally been managed. The
providers of these services are being paid for achieving
specified and measurable outcomes rather than prescribed
inputs. Investment is used to cover the upfront costs
incurred to deliver the service, which ultimately produces the
desired social outcomes. We look to invest in a pool of
outcomes contracts that is diversified across central and local
government commissioners and different policy areas.
As of 30 June 2023, the value of investments in this asset
class is £4.27m (5% of 30 June 2023 NAV). The Company has
committed £8.59m (10% of NAV) to investments in this asset
class, £4.32m (5% of NAV) of which remains undrawn at the
year end.
Bridges Social Outcomes Fund II, managed by Bridges
Fund Management, invests in social outcomes contracts,
receiving payments when outcomes are delivered and
thereby ensuring that payment is aligned with measurable
improvements in the lives of participants. The fund has a
target return of 6%. During the period the fund drew down a
further £306k taking the total value of the investment to
£4.27m (5% of NAV). The fund contributed 0.48p to Company
NAV per share performance during the period with overall
outcomes payments running in line with plan. So far, the
fund has supported 21,437 people across homeless,
education, employment and family care services, achieving
£57.7m outcomes payments to date. Based on a recent
report published by Big Society Capital
4
, it is estimated that
for every £1 spent by commissioners on outcomes
partnerships, £10.2 of public value has been generated.
Liquidity Assets
Value at
30 June 2023
(£)
Value as % of
NAV
Target return/benchmark
Contribution to SBSI
total return (last
12months) (pps)
Interest rate
duration
Yield: fixed or
floating
TwentyFour Sustainable
Enhanced Income Asset
Backed Securities
3,149,032 3.55%
Providing income over 3 month
SONIAover 3-5 years
0.37 0.11 Floating
Vontobel Fund TwentyFour
Sustainable Short Term Bond
Income Fund
387,323 0.44% SONIA + 250bps over ~3yrs 0.03 1.43 Fixed
Bluefield Solar Income Fund
Ltd
2,353,846 2.65% Target dividend: 8.16pps p.a. (0.08) Renewables
Greencoat UK Wind Plc
1,711,399 1.93% IRR: 8-9% 0.03 Renewables
Rathbone Ethical Bond Fund
1,741,024 1.96%
Outperform IA Sterling Corporate Bond
over a 5 year period
(0.08) 5.70 Fixed
EdenTree Responsible and
Sustainable Bond Fund B
0 0.00% Outperform IA Sterling Corporate Bond (0.07) Fixed
CT UK Social Bond Fund
0 0.00%
ICE BofA 1-10 Year Sterling Non-Gilt
index
(0.03) Fixed
Total Liquid Assets 9,342,624 10.53% 0.17
Asset class: Liquidity Assets
The Company includes an allocation into Liquidity Assets to
mitigate cash drag during the ramp up of private funds.
Liquidity Assets sit within a broader set of tools to manage
Company cash and commitment levels, with the central
objective of contributing to the Company’s target returns
and impact goals by minimising the amount of unproductive
cash held prior to deployment. In the current environment of
heightened inflation, we believe this allocation is particularly
important to reduce the cash drag impact on the
performance of the Company. This allocation can be invested
in bond funds, real estate investment trusts, infrastructure
trusts and other liquid investments that align with the
Company’s liquidity requirements, meet high ESG standards
and are compliant with the Company’s investment policy. As
of 30June 2023, the Company had invested a total of £9.34m
4
BSC_Outcomes_For_All_Report_2022.pdf (cdn.ngo)
Portfolio Manager’s Report
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24
Schroder BSC Social Impact Trust plc
in five funds, and fully redeemed positions in two funds (in
grey), detailed in the table below.
Our Liquidity Assets portfolio, representing 11% of NAV, has
contributed 0.17p per share to the Company’s total NAV. The
positive performance was achieved by robust dividend
income from underlying investments and benefited from
overweighting floating rate credit. Early portfolio rebalancing
to reduce fixed income duration exposure from the above
exits and reducing renewable energy trusts also minimised
negative mark-to-market returns. The cash from the sales of
the liquidity assets was deployed into the High Impact
portfolio.
With the significant increase in base rates during the period,
the Company expects an increasing use of Money Market
Funds to manage liquidity with 1.93% of NAV invested in
money market funds at period end.
The existing portfolio at year end reflects a focus on
generating positive real returns by capturing spreads over
cash returns through dividends from investments with
strong ESG credentials (77% of the Liquidity Assets portfolio).
Elsewhere, we retain flexibility with 4% in short duration
fixed income exposure for near-term liquidity and 19% in
mid duration that is best placed to capture yield curve
mispricing.
Portfolio Manager’s Report
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Report and Accounts
for the year ended 30 June 2023
25
Strategic Report
Portfolio Manager’s Report
2
14.4%
ofNAV
Mature
Evergreen Holdings
Fund size (£m): 66
Asset Class: Debt and equity for social
enterprises
Provide long term, large (£5m+) investment (mix of
debt and equity) and support to established mission-
led organisations.
1
16.7%
ofNAV
Mature
Charity Bond Portfolio
Portfolio size (£m): 15
Asset Class: Debt and equity for social
enterprises
Direct investments in bonds issued by charities
targeting support for disadvantaged and vulnerable
groups.
High Impact Portfolio Investments
As at 30 June 2023
Charity Bond Portfolio 30/06/2023
Company Commitment (£m) 15.05
Value (£m) 14.85
Distributions to date (£m) 4.38
Drawn Commitment (£m) 15.05
Premium paid at purchase (£m) 0.00
Total paid into investment (£m) 17.43
% drawn 100.0%
Total Value to Paid In 1.10
Bridges Evergreen Holdings 30/06/2023
Company Commitment (£m) 10.00
Value (£m) 12.75
Distributions to date (£m) 1.28
Drawn Commitment (£m) 10.00
Premium paid at purchase (£m) 0.43
Total paid into investment (£m) 10.81
% drawn 100.0%
Total Value to Paid In 1.30
3
11.5%
ofNAV
Mature
UK Affordable Housing Fund
Fund size (£m): 671
Asset Class: High Impact housing
Homes for people unable to purchase or rent on the
open market leased to housing associations and
local authorities.
UK Affordable Housing Fund
30/06/2023
Company Commitment (£m)
10.00
Value (£m)
10.24
Distributions to date (£m)
0.22
Drawn Commitment (£m)
10.00
Discount received at purchase (£m)
(0.10)
Total paid into investment (£m)
9.91
% drawn 100.0%
Total Value to Paid In
1.06
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26
Schroder BSC Social Impact Trust plc
Portfolio Manager’s Report
Investments
As at 30 June 2023
5
9.2%
ofNAV
Investment
Phase
Fund size (£m): 235
Asset Class: High Impact housing
Mixed tenure affordable homes benefiting more
disadvantaged groups leased to local authorities
and housing associations.
Man Group Community Housing Fund 30/06/2023
Company Commitment (£m) 10.00
Value (£m) 8.15
Distributions to date (£m) 0.06
Drawn Commitment (£m) 7.95
Premium paid at purchase (£m) 0.00
Total paid into investment (£m) 8.00
% drawn 79.5%
Total Value to Paid In 1.03
4
9.6%
ofNAV
Investment
Phase
Fund size (£m): 64
Asset Class: High impact housing
Secured lending to leading charities supporting
vulnerable people through housing.
SASH (Social and Sustainable Housing LP) 30/06/2023
Company Commitment (£m) 10.00
Value (£m) 8.55
Distributions to date (£m) 0.13
Drawn Commitment (£m) 8.74
Discount received at purchase (£m) (0.14)
Total paid into investment (£m) 8.55
% drawn 86.9%
Total Value to Paid In 1.01
Social and
Sustainable
Housing
Community Housing
Fund
6
6.2%
ofNAV
Mature
Fund size (£m): 18
Asset Class: Debt and equity for social
enterprises
An evergreen fund that makes majority secured
loans to charities and social enterprises across
theUK.
Community Investment Fund 30/06/2023
Company Commitment (£m) 7.17
Value (£m) 5.47
Distributions to date (£m) 1.68
Drawn Commitment (£m) 7.17
Discount received at purchase (£m) (2.67)
Total paid into investment (£m) 6.03
% drawn 100.0%
Total Value to Paid In 1.19
Community
Investment
Fund
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Report and Accounts
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27
Strategic Report
8
6.1%
ofNAV
Mature
Co-Investment
Portfolio
Portfolio size (£m): 7
Asset Class: Debt and equity for social
enterprises
Co-investments into secured floating rate loans to
charities benefiting more disadvantaged groups.
9
4.8%
of NAV
Investment
Phase
Social Outcomes
Fund II
Fund size (£m): 35
Asset Class: Social outcome contracts
Invests in social outcomes contracts across the
areas of homelessness, children’s services,
education and training and health.
Charity Bank Co-investment Portfolio 30/06/2023
Company Commitment (£m) 6.98
Value (£m) 5.41
Distributions to date (£m) 1.07
Drawn Commitment (£m) 5.96
Premium paid at purchase (£m) 0.00
Total paid into Investment (£m) 5.96
% drawn 85.4%
Total Value to Paid in 1.09
Bridges Social Outcomes Fund II 30/06/2023
Company Commitment (£m) 8.30
Value (£m) 4.27
Distributions to date (£m) 0.52
Drawn Commitment (£m) 4.91
Discount received at purchase (£m) (0.33)
Total paid into Investment (£m) 4.11
% drawn 53.5%
Total Value to Paid in 1.17
Portfolio Manager’s Report
Investments
As at 30 June 2023
7
6.2%
of NAV
Mature
Real Lettings
Property Fund
Fund size (£m): 57
Asset Class: High Impact housing
Homes for families and individuals at risk of
homelessness leased to large charities delivering
support services.
Resonance Real Lettings Property Fund
30/06/2023
Company Commitment (£m)
4.24
Value (£m)
5.48
Distributions to date (£m)
2.12
Drawn Commitment (£m)
4.24
Premium paid at purchase (£m)
0.82
Total paid into Investment (£m)
6.54
% drawn
100.0%
Total Value to Paid in
1.16
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Schroder BSC Social Impact Trust plc
Portfolio Manager’s Report
Bond size (£m): 6
Asset Class: Debt and equity for social
enterprises
Direct investment in a private bond supporting
growth of the leading secured lender to
sustainability and social impact organisations.
Triodos Bond UK Bond Issue 30/06/2023
Company Commitment (£m) 2.50
Value (£m) 2.52
Distributions to date (£m) 0.24
Drawn Commitment (£m) 2.50
Premium paid at purchase (£m) 0.00
Total paid into Investment (£m) 2.50
% drawn 100.0%
Total Value to Paid in 1.10
Definitions
Company Commitment (£m) Total commitment to the investment
Value (£m) Current value of the drawn portion of the investment
Distributions to date (£m) Capital and income distributions since investment
Drawn Commitment (£m) Drawn portion of the commitment
Premium paid/Discount received at
purchase (£m)
Premium paid/discount received by the Company at purchase, either from BSC as part of the original
seed portfolio, or in a secondary market purchase. The amount reflects value
differences between original cost of the investment and value at the time of purchase
Total paid into Investment (£m) Total cost of the investment to the Company, including any premium/(discount)
at purchase for the seed portfolio and secondary market purchases
% drawn % of the Company Total Commitment drawn by investee
Total Value to Paid In (Value + Distributions) divided by (Total paid into investment)
Calculated over the period from investment by the Company to 30 June 2023
Investments
As at 30 June 2023
10
2.8%
ofNAV
Mature
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29
Strategic Report
Impact Report
The Company’s investments support social organisations
empowering disadvantaged and underserved people to
improve educational outcomes and access better training
and employment opportunities.
An estimated £31billion in funding is needed to meet the UK’s
rising demands for social care by 2030. Meanwhile between
£3000-4000 is spent per person on healthcare annually. The
Company invests in organisations providing health and care
services and additional early intervention support to reduce
both poor health outcomes and the strain on public health and
care institutions
Reducing poverty and inequality
Education, training and decent work
Good health and well-being
Just transition to net zero
The Company targets four key impact themes. These have been selected based on our assessment of entrenched social issues in the
UK, current investment gaps, and the availability of sustainable, high impact solutions that have the potential to scale with targeted
investment.
Lower-income people in the UK face multiple barriers to
accessing essential products and services. This ‘poverty
premium’ costs the UK more than £2.8 billion a year. The
Company’s investments provide essential services and
housing that are tailored to disadvantaged and underserved
groups, directly contributing to the UK’s goals to reduce
poverty and inequality.
Moving the UK to net zero emissions by 2050 will require an
estimated £6 trillion in investment over the next 30 years. This
unprecedented level of financial mobilisation also offers huge
opportunities for positive social impact. Investments that combine
positive social and environmental outcomes are also more likely to
gain wider community and public buy-in, which is vital to a
successful transition. The Company invests in organisations leading
the drive towards a more sustainable, fair economy, and creating
new opportunities to reduce emissions and social inequality.
266,000disadvantaged people
served
Company attributed share: 22,000
10,243 people provided with
health and care services
Company attributed share: 1,186
10,344 people provided with
education, training and
employment support
Company attributed share: 3,038
57,535, metric tonnes of CO2 avoided
Company attributed share: 5,788
Investments aligned to theme
Investments aligned to theme
Investments aligned to theme
Investments aligned to theme
*
*
*
*
£67m savings and income generated
for underserved people
Company attributed share: £5.35m
The Company published its second Impact Report in June 2023. The report provides an in-depth assessment of impact
performance across the Company portfolio and sets out the Company’s priorities for enhancing impact management in the
year ahead.
*Pie charts represent percentage of portfolio aligned to each impact theme
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Schroder BSC Social Impact Trust plc
Impact Report
Progress Report Card
The Company targets deep, scalable positive impact for disadvantaged and vulnerable people in the UK, by connecting
investors with opportunities that have an unmet need for capital. We assess progress for all investments, and for the
Company as a whole, towards this mission.
Joe Shamash
Big Society Capital
27 October 2023
What
Important positive
outcomes, meaningful to
those experiencing the
issue and addressing at
least one SDG
On track
100% of capital deployed in line with
thesis and aligned with at least one
UN SDG
On track
100% of capital deployed in line with
thesis and aligned with at least one
UN SDG
Who
Beneficiaries, who are
disadvantaged and/or
vulnerable
On track
94% of beneficiaries from
disadvantaged or vulnerable groups
in year (targeting minimum 60% at
portfolio level year on year)
On track
90% of beneficiaries from
disadvantaged or vulnerable groups
How much
Significant depth
of impact, in
making meaningful
improvements for
people, and high scale
of impact, through
reaching a large number
of underserved people
On track
Scale – in year investments reaching
more than 168,000 people
Depth: All investments providing
services with high potential for deep
and sustained positive impact
On track
Scale – in year investments reaching
more than 160,000 people
Area for improvement
Impact measurement extension
ongoing, focus on enterprise level
impact (growth and resilience)
Area for improvement
Extend outcome measurement in
portfolio segments with limited
data on depth of impact (ongoing)
Contribution
Significant improvement
or additional benefit as
aresult of investment
and activities
On track
£98m (cumulative) savings generated
through improved and more
accessibleservices
27,000 people housed (cumulative)
On track
£55.6m savings generated through
improved and more accessible services
19,000 people housed with
Fundsupport
Area for improvement
Assessment of outcomes in
Housing (ongoing, in-year focus on
counterparty resilience and tenant
service quality)
Area for improvement
Assessment of outcomes and
performance in Housing (ongoing)
Risk
Fund managers must
assess and mitigate
the risks that may
prevent the intended
outcomes occurring
On track
ESG measurement and management
extended to include Equality,
Diversity and Inclusion surveying
and action plans, CO2 emissions and
environmental monitoring
Mitigated by focus on social
organisations with stong track records.
Average social organisation track
record of 28 years.
Impact risks assessed and managed
for all investments
On track
Area for development
Alignment with UK Sustainable
Disclosure Requirements
oncepublished
Priority area
Assessment and deeper engagement
with investees on ESG Risk
Management (achieved)
What we look for Progress summary 2023 Progress summary 2022
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Strategic Report
Providing affor dable, neighbourly social accommodation for
elderly people
There is a dearth of social housing in the UK, with over
1million households waiting for a social home
6
and a trend
of more of these homes being demolished or sold than built
each year. Loneliness is also a problem for 1.4 million older
people
7
.
The loan from the Company and Charity Bank helped UUWT
to demolish and rebuild a former Almshouse in Uxbridge,
updated to the highest standard, improving accessibility with
the needs of older people at the forefront of the renovation.
The facility is designed for independent living and self-
sufficiency, while staying faithful to the courtyard design of
the original building with dedicated space to encourage a
sense of community which has been attributed to a longer
life for Almshouse residents
8
.
The site includes a mix of 20 affordable properties alongside
10 commercial properties, with rents tied to Local Housing
Allowance. Providing purpose-built accommodation for older
people frees up local housing stock for families in need of
social housing.
UUWT are able to finance the loan with a variety of
commercial lets owned in the local area as well as rental
income from the sought-after private units which provides
security for the loan repayment despite an increase in cost-
of-living.
Charity Bank
Co-investment
Portfolio (Target
return: margin (2.51%)
+ BoE base rate
£6.43m co- investment
(Company: £1.75m)
Secured loan: 2019
20 affordable
apartments
Helps to address the housing
crisis by providing
affordable accommodation
to pensioners
20 apartments let at affordable rent,
providing independent living to the
elderly, and all units supported by
benefit payments.
Secured, asset-backed loan with low
loan to value.
UUWT’s principal funding source is
its commercial property portfolio.
Property values have increased, with
the quality of the underlying
portfolio and rental income being
maintained this year.
What: High quality, modern,
purpose-built affordable accommodation
with community space.
Who: Local people with state pension and
housing benefit eligibility.
How Much: 20 affordable apartments.
Contribution: UUWT helps to address
the housing crisis by providing affordable
accommodation to pensioners – these
residents have often downsized, freeing
up space in social housing elsewhere in
the area.
Risk: Residents have a monthly lunch
with trustees to share feedback and ideas
and ensure that any concerns about the
accommodation are addressed.
Financial drivers and risk mitigation Impact return and risk mitigation
Sweet
Spot
Debt and Equity for Social Enterprises
Uxbridge United Welfare Trust (UUWT)
Impact in practice – Case studies
6
Shelter
7
Age UK
8
Bayes Business School, City University London
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Schroder BSC Social Impact Trust plc
Affordable housing for rent and purchase in Milton Keynes
The UK housing crisis has led to a lack of affordability for
housing across the UK. Man Group’s Community Housing
Fund is investing in the building and management of
affordable housing across the least affordable parts of the
UK.
The Towergate development in Milton Keynes is made up of
55 two- and three-bedroom homes which are for key
workers or households on median household incomes, and
form part of a larger 150 home package with property
developer Crest Nicholson.
Of the units, 35 have been handed over and a further 14
units are due to complete before the end of 2023. Each of
the units the third quarter of this year meet the Decent
Homes Standard and have an average Standard Assessment
Procedure (SAP) rating of 84 (out of between 1 and 100+),
meaning reduced lower fuel costs for residents and lower
emissions, helping further reduce the financial burden on
residents and helping to minimise the impact of the
development on the environment.
Lack of good quality local housing availability means that
demand is consistent and reliable these units have been
reserved extremely quickly, with demand far outstripping
supply, underlying the significant local need.
High Impact Housing
Towergate – Man Community Housing Fund
Man CHF portfolio
£235m fund size
(Company: £10.0m)
55 two- and
three-bedroom
homes for shared
ownership
Housing for
key-workers in areas
of low affordability
Tenure is 100% Shared Ownership,
targeted at key worker and median
income households in an area of low
affordability.
High exposure to house price
inflation through staircasing* and
the stabilised rental income
generated from Shared Ownership
tenures.
Homes built to high energy
efficiency standards to meet current
requirements of EPC B and above,
thus minimising energy costs for
residents and ensuring resilience in
the face of further legislative
changes.
What: Affordable homes for shared
ownership, built with high energy efficiency
standards.
Who: Key workers and median income
households.
How Much: 55 two- and three-bedroom
homes for shared ownership.
Contribution: Housing for key-workers
and median income households in an
area where affordability is below the
national average
9
Risk: All homes meet the Decent Homes
Standard and the nationally described
space standard to ensure they improve
quality of life for residents.
Financial drivers and risk mitigation Impact return and risk mitigation
Sweet
Spot
Impact in practice – Case studies
*Staircasing is a term used in “shared ownership” home sales, to describe the process that allows shared owners to buy partial equity stakes in
their homes over time, building up to 100% ownership.
9
Housing affordability in England and Wales – Office for National Statistics
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Strategic Report
Impact in practice – Case studies
Social Outcomes Contracts
Norfolk Carers Partnership – Bridges Social Outcomes Fund II
employment, and is more likely to be carried out by women
than men. Black, Asian and ethnic minority carers are more
likely to be struggling financially
11
.
Norfolk County Council did a review of its carer support
services and found that they were not reaching enough
carers; and even when they did, the support was largely
focused on the cared-for person.
An outcomes contract was designed and launched in 2020,
supporting adult unpaid carers caring for another adult
living in Norfolk. The programme provides an advice line,
which offers signposting, advice and statutory carer
assessment. Through this service, carers can also access a
range of support services including breaks, counseling,
benefits advice and one-to-one support with a dedicated
practitioner.
One of the aims of the programme is to identify more carers
and provide support tailored to their situation. The outcomes
which the commissioner, Norfolk County Council, will pay for
are an improvement in carer well-being and sustainment of
the caring role when appropriate.
Bridges SOF II
Portfolio
£35m fund size
(Company: £8.3m)
10,000 carers to be
supported in Norfolk
Support unpaid carers
and relieve pressure
on the care system
Fund achieved £57.7m of outcomes
for 21,437 people as of 31 March
2023, and on track to achieve
£105m.
Diverse funding model enabling
holistic, strengths-based and
personalised approaches through
support by the local authority and
co-commissioning funding
(recognising wider benefits created)
from central government.
Active management of delivery
around social outcomes helps create
better outcomes and better value
while managing delivery risk.
What: Supporting unpaid carers to
improve their well-being and sustain
their caring role.
Who: Unpaid adult carers caring for an
adult who lives in Norfolk.
How much: The programme is expected
to support 10,000 carers in Norfolk, with
5,979 carers receiving support at the end
of September 2023.
Contribution: The programme increases
accessibility and improves quality of
intervention for carers as well as value
for money for government.
Risk: Higher level of referrals than
anticipated with increasing levels of
unmet needs due to pressures in the care
system. Mitigated through the track
record of the partners involved.
Financial drivers and risk mitigation Impact return and risk mitigation
Sweet
Spot
Outcomes contract providing support for unpaid carers in
Norfolk
The number of unpaid carers in England and Wales is
estimated at 5 million
10
according to the most recent census
2021, with 100,000 adult carers estimated to live in Norfolk.
Caring has significant impact on finances, health and
10
Unpaid care, England and Wales – Office for National Statistics
11
Carers UK
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Schroder BSC Social Impact Trust plc
Total
Carrying Invest-
Nature of Listed/ Country of Industry Value
1
ments
Holding Interest Unlisted Incorporation Sector £’000 %
UK Affordable Housing Fund Equity Shares Unlisted United Kingdom Investor in Affordable 10,199 11.5
and Social Housing
Social and Sustainable Housing LP Limited Partnership Unlisted United Kingdom Investor in Affordable 8,547 9.6
Interest and Social Housing
Man GPM RI Community Housing
1
LP Limited Partnership Unlisted United Kingdom Investor in Affordable 8,146 9.1
Interest and Social Housing
Resonance Real Lettings Limited Partnership Unlisted United Kingdom Investor in Affordable 5,476 6.2
Property Fund LP Interest and Social Housing
High Impact Property 32,368 36.4
Bridges Evergreen Capital LP Limited Partnership Unlisted United Kingdom Investor in Profit-With- 12,750 14.3
Interest Purpose Organisations
Community Investment Fund Limited Partnership Unlisted United Kingdom Investor in Communities
Interest supporting Social
Inclusion and Change 5,468 6.2
Triodos Bank UK Limited 2020 Fixed Income Security Unlisted United Kingdom Ethical Banking 2,500 2.8
Bond 4% 23/12/2030
Rathbones Bond Portfolio: Fixed Income Security Listed United Kingdom Charity (Affordable and 2,483 2.8
Hightown Housing Association 4% Social Housing)
31/10/2029
Rathbones Bond Portfolio: Dolphin Fixed Income Security Listed United Kingdom Charity (Affordable and 2,450 2.8
Square Charitable Foundation 4.25% Social Housing)
06/07/2028
Charity Bank Co Invest Portfolio: Fixed Income Security Unlisted United Kingdom Charity (Medical) 2,440 2.7
Sue Ryder FRN 04/12/2043
Rathbones Bond Portfolio: Greensleeves Fixed Income Security Listed United Kingdom Charity (Care Services) 2,357 2.7
Homes Trust 4.25% 30/03/2026
Rathbones Bond Portfolio: Fixed Income Security
Listed United Kingdom Ethical Banking 2,223 2.5
RCB Bonds PLC 3.5% 08/12/2033
Charity Bank Co-Invest Portfolio: Fixed Income Security Unlisted United Kingdom Charity (Community and 1,743 2.0
Uxbridge United Welfare Trust 2.85% Social Housing)
20/12/2033
Rathbones Bond Portfolio: Fixed Income Security Unlisted United Kingdom Charity (Care Services) 1,650 1.9
Thera Trust 5.5% 31/03/2024
Rathbones Bond Portfolio: Fixed Income Security Listed United Kingdom Charity (Public Gardens) 1,500 1.7
Alnwick Garden Trust 5% 27/03/2030
Charity Bank Co-Invest Portfolio: Fixed Income Security Unlisted United Kingdom Charity (Care Services) 980 1.1
Abbeyfield York 3.6% 12/05/2049
Rathbones Bond Portfolio: Golden Lane Fixed Income Security Listed United Kingdom Charity (Affordable and 952 1.1
Housing 3.9% 23/11/2029 Social Housing)
Rathbones Bond Portfolio: B4RN Fixed Income Security Unlisted United Kingdom Communications for Rural 865 1.0
(Broadband for Rural North Communities
Limited) 4.5% 30/04/2026
Charity Bank Co-Invest Portfolio: Fixed Income Security Unlisted United Kingdom Charity (Care Services) 223 0.3
Abbeyfield Southdowns 3.35%
26/7/2044
Rathbones Bond Portfolio:
Fixed Income Security Unlisted United Kingdom Renewable Energy 217 0.2
Coigach Community CIC 5.248%
31/03/2030
Debt and Equity for Social Enterprises 40,801 46.1
Bridges Social Outcomes Fund II LP Limited Partnership Unlisted United Kingdom Social Outcomes Contracts 4,271 4.8
Interest
Social Outcomes Contracts 4,271 4.8
TwentyFour Sustainable Enhanced Equity Shares Listed Luxembourg Diversified 3,149 3.5
Income ABS Fund
Bluefield Solar Income Fund Equity Shares Listed Guernsey Diversified 2,354 2.6
Rathbone Ethical Bond Fund Equity Shares Listed United Kingdom Diversified 1,741 2.0
Greencoat UK Wind Plc Fund Equity Shares Listed United Kingdom Diversified 1,711 1.9
Vontobel Fund TwentyFour Sustainable Equity Shares Listed Luxembourg Diversified 387 0.4
Short Term Bond Fund
Liquidity Assets 9,342 10.4
Total investments
2
86,782 97.7
Cash at bank and in hand 2,089 2.4
Other net liabilities (118) (0.1)
Total Shareholders’ Funds 88,753 100.0
1
Fixed income securities amounting to £22,583,000 are included at amortised cost. These include investments amounting to £11,965,000 which are
listed, but traded in inactive markets.
2
Total investments comprise:
£'000 %
Unquoted 65,475 75.4
Listed in the UK 15,417 17.8
Listed on a recognised stock exchange overseas 5,890 6.8
Total 86,782 100.0
Investment Portfolio
at 30 June 2023
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35
Strategic Report
Material unquoted holdings (comprising more than 5% of the portfolio and/or included in the
top ten)
Income
receivable
Cost of the Fair in the
investment value year
Holding Description of the business £’000 £’000 £’000
Bridges Evergreen Capital LP Provides long term, large (£5m+) investment 10,434 12,750 300
(mix of debt and equity) and support to established
mission-led organisations.
UK Affordable Housing Fund Delivering affordable and sustainable homes for those 9,906 10,199 130
unable to purchase or rent in the open market.
Social and Sustainable Housing LP Secured lending to leading charities supporting 8,552 8,547 104
vulnerable people through housing.
Man GPM RI Community Housing 1 LP Mixed tenure affordable homes benefiting more 7,946 8,146 21
disadvantaged groups leased to local authorities and
housing associations.
Resonance Real Lettings Property Fund LP Homes for families and individuals at risk of homelessness 4,831 5,476 168
leased to large charities delivering support services.
Community Investment Fund An evergreen fund that makes majority secured loans to 4,500 5,468 150
charities and social enterprises across the UK.
Bridges Social Outcomes Fund II LP Investments in social outcomes contracts across the areas 3,739 4,271 153
of homelessness, children's services, education and training
and health.
Triodos Bank UK Limited 2020 Bond 4% 23/12/2030 Direct investment in a private bond supporting growth of 2,500 2,500 117
the leading secured lender to sustainability and social
impact organisations.
Charity Bank Co Invest Portfolio: Sue Ryder Co-investments in to secured floating rate loans to charities 2,440 2,440 134
FRN 04/12/2043 benefiting more disadvantaged groups.
Charity Bank Co-Invest Portfolio: Uxbridge Co-investments in to secured floating rate loans to charities 1,743 1,743 99
United Welfare Trust 2.85% 20/12/2033 benefiting more disadvantaged groups.
Section 82 of the AIC SORP requires the Company to disclose turnover, pre-tax profits and net assets attributable to shareholders at the valuation date.
Where such information is not publicly available, this has not been disclosed.
Investment Portfolio
at 30 June 2023
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Schroder BSC Social Impact Trust plc
Environmental, Social and Governance Risk
Management
Key Company processes for ensuring ESG alignment and performance Portfolio status 2023
Signal
Clear signalling that ESG factors are
important by publishing and sharing
from the outset Big Society Capital’s
Responsible Business Principles.
All fund managers are signed up to
the Responsible Business Principles or
a carefully assessed equivalent.
Screening
Negative screen applied to ensure the
investment opportunity will not invest
in any excluded sectors. Investees are
also required to provide an annual
compliance certificate confirming that
Big Society Capital’s negative
exclusions have been adhered to or a
carefully assessed equivalent.
No underlying investments within
excluded sectors.
Assessment
Risk-based assessment of the fund
manager’s ESG approach to ensure it
is appropriate and will identify and
manage material ESG risk in frontline
investees.
Initial risk-based assessments have
been undertaken on all Company
investments with no material ESG
risks identified that are not being
sufficiently managed.
Engagement and stewardship
Building trusted relationships with
fund managers that enable us to
influence their approach, including
ESG risk management, and agreeing
appropriate targets for ESG
measurement.
Established and trusted relationships
with all fund managers in place. More
specific engagement objectives are
due to be developed in the coming
year where appropriate.
Monitoring
Portfolio Manager maintains an
ongoing dialogue about ESG with
fund managers and, where
appropriate, monitors any ESG-
related action plans that respond to
material ESG risks.
Clear frameworks for impact
measurement within core portfolio.
ESG management processes also
applied across core portfolio and
liquid investments in ethical Bond
Funds and Renewables Funds.
Annual impact conversations include
open discussions of experience in
implementing ESG management and
alignment to evolving ESG regulatory
frameworks.
Learning and market engagement
Engage with peer organisations and
wider sectoral bodies to share
insights and support the development
of standards and best practices.
Big Society Capital response
submitted to FCA Consultation Paper
CP22/20 on Sustainability Disclosure
Requirements (SDR). Contributed to
roundtables and discussions hosted
by Impact Investing Institute, Global
Impact Investing Network, and BVCA.
Continued sectoral engagement with
the Equity Impact Project in social
housing.
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Strategic Report
Engagement
Big Society Capital, the Company’s portfolio manager, actively
engages with underlying fund managers throughout due
diligence, investment and portfolio management stages of
the investment process. Their engagement seeks to ensure
that the organisation’s investment approach, processes and
operations minimise negative and maximise positive impacts
for people, communities and the planet. These aims and
beliefs act as the foundation of our engagement approach
with fund managers and other stakeholders that contribute
to the achievement of the Company’s investment objectives,
which are outlined in Big Society Capital’s Engagement Policy.
The policy was updated in 2023 to comply with the new
Investment Firms Prudential Regime (IFPR) disclosure
requirements to note the Company’s voting behaviour.
Alignment with evolving Environmental,
Social and Governance regulatory
frameworks and standards
The Company has been closely monitoring the evolving
landscape of ESG regulatory frameworks. In January 2023,
Big Society Capital and Schroders submitted responses to the
Financial Conduct Authority (FCA) on its consultation paper
on the Sustainability Disclosure Requirements (SDR) and
shared the response with fund managers. As a long-standing
impact investor, Big Society Capital also contributed to the
responses and discussions held by other key players in the
impact investing industry such as the Impact Investing
Institute, Global Impact Investing Network (GIIN), and British
Private Equity and Venture Capital Association (BVCA) to
augment the views of the impact investing industry. The
response primarily focused on how to improve the
Sustainable Impact label, offering the expertise in impact
investing developed over the last 10 years.
Big Society Capital has published voluntary Task Force on
Climate-Related Financial Disclosures (TCFD) disclosures for
two consecutive years ahead of the mandatory requirement.
TCFD disclosure will become a formal requirement for Big
Society Capital starting with the Financial Statements for the
year ending 31 December 2023, which will be published in
2024.
The 2022 TCFD disclosure for Schroders can be found at
https://mybrand.schroders.com/m/8645ae373488e2e/
original/Schroders_TCFD_2022.pdf
.
Big Society Capital became a PRI signatory in 2023. The
organisation also participates in asset class-wide initiatives,
for example, the Equity Impact Project and Sustainability
Reporting Standards with respect to housing funds.
Equality, Diversity and Inclusion (EDI)
Tackling inequality is at the heart of the Company’s mission.
Since inception the Company’s portfolio has delivered
substantial progress in reaching diverse communities, with
more than 94% of the people reached by portfolio
organisations coming from vulnerable, underserved or
marginalised backgrounds.
Ensuring Equality, Diversity and Inclusive approaches at every
level within the Company is also crucial to our mission.
Following a detailed independent review, Big Society Capital
launched a five-year action plan for Equality, Diversity and
Inclusion in 2021. The initiatives of this plan will flow through
to the management of the Company.
Embedding EDI in the Company’s
investment process
Our hypothesis is that more diverse fund managers will lead
to more diverse-led frontline organisations, who will in turn
generate greater outcomes for underrepresented groups.
There is a proven business case for this: organisations that
are more diverse and have inclusive cultures often have
better performance and greater innovation. There is also an
impact case, as we are likely to have a greater positive social
impact if we are more representative, diverse, and inclusive
as a sector. And the reasons go beyond any economic
rationale: it simply is the right thing to do.
Specifically, Big Society Capital is building in EDI
considerations across our investment strategy, process,
portfolio management and reporting. Considering both EDI-
related policy and evidence of inclusive practice, our
approach includes:
1. Systematically considering how our investments
contribute to specific EDI goals being set within our asset
classes.
2. Looking at fund EDI policies, and, crucially, understanding
how fund managers live those policies in practice. We
want to understand the equalities impact of proposed
investment strategies, and how EDI is embedded in Fund
investment processes.
3. Track progress against these goals by engaging with our
managers on EDI in portfolio monitoring and data
collection.
In 2022, Big Society Capital asked some of the largest fund
managers in the portfolio to share data on diversity within
their organisations and, for the first time, also on their
portfolio companies. The findings below include the
responses from 60% of the Company’s portfolio.
Environmental, Social and Governance Risk
Management Summary
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38
Schroder BSC Social Impact Trust plc
Environmental, Social and Governance Risk
Management Summary
Progress update on EDI action plan
Joe Shamash
Big Society Capital
27 October 2023
Priority areas Goals and progress to date
People and culture: Embedding Equality, Diversity and
Inclusion into our culture, policies and practices. We want
to ensure we live our values, demonstrating this through
our behaviours and how we respect and value each other
and the partners and organisations we work with.
2022-2023:
Signatory to the Diversity Forum manifesto
27
.
Targeting reductions in gender and ethnicity pay gaps.
Ongoing engagement with market leading EDI programmes.
Rolled out Reverse Mentoring programme and preparing
Female Development Programme.
Launched Asking for a Friend sessions.
Investment and portfolio: There is no such thing as an
equality “neutral” investor or investment. In our investment
strategy we want to embed equality, diversity, and inclusion
considerations intentionally, reflecting these in how we
articulate our impact approach where it is meaningful
wherever possible.
2022-2023:
Collected diversity and gender pay gap data from fund
managers and published results in Dec 2022.
Developing EDI assessment framework for due diligence.
Contributed to Equality Impact Investing Taskforce, Diversity
Forum and DiversityVC.
Engagement and market building: We will work with
partners to build our shared capacity and understanding
on how to improve equality, diversity, and inclusion in the
wider sector.
Focusing on breaking down barriers, we will develop
shared tools and resources with users at the heart of
design to support this and collaborate share and amplify
the best practice of others.
2022-2023:
Hosted Addressing Imbalance programme.
Launched Investment Committees of the Future.
Developing user voice training.
Summary of EDI fund manager survey findings
26
26
Survey results are displayed as a percentage of fund managers who responded to the specific question. Where fund managers have not answered a
question, they have not been included in the population (n = denominator). For non-disability, the percentage represents % of able-bodied individuals in
the respective team.
0%
20%
40%
60%
80%
100%
>75% Male >75% Over-45 >75% White Non-Disability
Investment Committee
Board
Executive Team
Investment Team
Investment Committee
Board
Executive Team
Investment Team
Investment Committee
Board
Executive Team
Investment Team
Investment Committee
Board
Executive Team
Investment Team
% of Fund managers
0%
n=3
0%
n=2
40%
n=5
33%
n=3
17%
n=6
67%
n=3
0%
n=2
50%
n=4
100%
n=1
100%
n=2
50%
n=2
50%
n=2
50%
n=4
0%
n=2
33%
n=3
60%
n=5
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Report and Accounts
for the year ended 30 June 2023
39
Strategic Report
Strategic Report
Purpose, values and culture
The Company’s purpose is to create long term shareholder
value.
The Company’s culture is driven by its values: Transparency,
Engagement and Rigour, with collegial behaviour and
constructive, robust challenge. The values are all centred on
achieving returns for shareholders in line with the
Company’s investment objective. The Board also promotes
the effective management or mitigation of the risks faced by
the Company and, to the extent it does not conflict with the
investment objective, aims to structure the Company’s
operations with regard to all its stakeholders and take
account of the impact of the Company’s operations on the
environment and community.
As the Company has no employees and acts through its
service providers, its culture is represented by the values and
behaviour of the Board and third parties to which it
delegates. The Board aims to fulfil the Company’s investment
objective by encouraging a culture of constructive challenge
with all key suppliers and openness with all stakeholders.
The Board is responsible for embedding the Company’s
culture in the Company‘s operations.
Strategy and business model
The Company is a listed investment trust, that has outsourced
its operations to third party service providers.
The Board has appointed the Manager, Schroder Unit Trusts
Limited, to act as the Company’s alternative investment fund
manager for the purposes of the AIFM Rules. The Board
believes that Schroders’ institutional risk management
capabilities and infrastructure provide the stable and robust
platform needed for the efficient management of the
Company. The AIFM is responsible for providing
administrative, company secretarial and marketing services
to the Company. These include general fund administration
services (including calculation of the NAV based on the data
provided by the Portfolio Manager), bookkeeping, and
accounts preparation.
The Company and the AIFM have appointed Big Society
Capital Limited to provide portfolio management and
related services in respect of the Company’s portfolio. The
terms of the appointments are described more completely
in the Directors’ Report. The Manager also promotes the
Company using its sales and marketing teams. The Board,
Manager and Portfolio Manager work together to deliver
the Company’s investment objective, as demonstrated in
the diagram above. The investment and promotion
processes set out in the diagram are described in more
detail below.
Investment objective
The Company’s investment objective is to deliver
measurable positive social impact as well as long term
capital growth and income, through investing in a
diversified portfolio of private market impact funds, co-
investments alongside impact investors and direct
investments in order to gain exposure to private market
Social Impact Investments.
The Company aims to provide a Net Asset Value total
return of CPI plus 2 per cent. per annum (once the portfolio
is fully invested and averaged over a rolling three- to five-
year period, net of fees) with low correlation to traditional
quoted markets while helping to address significant social
issues in the UK.
•
Responsible for
overall strategy and
oversight of
Managers including
risk management
• Activities centred on
the creation of
shareholder value
and positive social
impact
Investor
Value and
Social
Impact
•
Portfolio Manager
implements the investment
strategy by following an
investment process
• Supported by strong
research and risk
control environment
• Regular reporting and
interaction with the
Board
• Set objectives,
strategy and KPIs
• Appoint Manager,
Portfolio Manager
and other service
providers to achieve
investment objective
• Oversee portfolio
management
• Monitor achievement
of KPIs
• Oversee discount/
premium management
and the provision of
liquidity through share
issuance or buybacks
• Marketing and sales
capability of the
Manager
• Support from the
Portfolio Manager and
Corporate Broker for
secondary market
intervention to support
discount/premium
management
Board is focused on
ensuring:
• that the fees
and Ongoing
Charges remain
competitive
• that the Company
remains attractive
to investors
Investment
Strategy
Promotion
Competitiveness
Board
The Strategic Report sets out the Company’s strategy for delivering the investment objective set out on the
inside front cover, the business model, the risks involved and how the Board manages and mitigates those risks.
It also details the Company’s purpose, values and culture, and how it interacts with stakeholders.
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Schroder BSC Social Impact Trust plc
Strategic Report
Investment policy
The Company will invest in a diversified portfolio of private
market Impact Funds and Co-Investments alongside such
funds or other impact investors (including the Portfolio
Manager), which in turn support charities and social
enterprises, with a focus on the United Kingdom. The
Company may also make Direct Investments. The Company
will make Social Impact Investments that seek to deliver a
positive social outcome together with a financial return,
including but not limited to Investments in:
• High Impact Housing – Including property funds that
either acquire or develop high quality affordable
housing, from more specialist housing for vulnerable
groups (for example, transition accommodation for
people who were formerly homeless or fleeing domestic
violence) to housing for low income renters currently
living in poor quality or insecure accommodation.
• Debt and Equity for Social Enterprises – Including
charity bonds, portfolios of secured loans and funds that
invest in established social enterprises via mezzanine
debt and/or equity.
• Social Outcomes Contracts – Contracts between a
public sector or government body and a delivery
organisation whereby an external investor provides
upfront capital to the delivery organisation and is repaid
by the income stream from the public sector body based
upon social outcomes delivered rather than on a fee for
service basis.
The market for Social Impact Investments in the United
Kingdom is a rapidly evolving market and the Company
retains the flexibility to invest in Social Impact Investments
other than those in the three categories set out above.
The Company will typically obtain exposure to Social Impact
Investments through investing in Impact Funds and Co-
Investments. The Company will usually make investments on
a commitment basis, expected to be called over a period of
time. The Company will generally hold minority interests in
Impact Funds, but may hold majority interests where
appropriate including, for example, where the Company may
be a cornerstone investor alongside the Portfolio Manager.
Co-Investments would be made alongside third party impact
investors, including the Portfolio Manager. It is expected that
the Company will invest in Impact Funds and Co-Investments
alongside the Portfolio Manager, benefitting from the broad
range of opportunities sourced by the Portfolio Manager.
Direct Investments are not expected to comprise a material
proportion of the Company's portfolio.
The portfolio composition at any one time will reflect the
opportunities available to the Portfolio Manager, based on
the performance, social impact and maturity of the Impact
Funds, Co-Investments and Direct Investments.
Investment process
Big Society Capital begins by identifying and framing
solutions to deep rooted social issues where investment
could play a role, seeking to understand the available
revenue models and their financial and social impact
potential and risks. Big Society Capital also receives inbound
proposals to address these social issues and, where
investment products are not currently available, aims to
design these proposals with suitable partners.
Big Society Capital then undertakes robust investment
analysis to test a proposed investment’s hypothesis for both
financial returns and social impact. Big Society Capital
leverages proprietary tools and tests to analyse the context
of a proposal, the impact outcomes and financial drivers and
their associated risks, including ESG-related risks, and to
analyse the delivery risk by conducting due diligence on the
operational and management aspects of the proposal. There
is a strong learning culture at Big Society Capital that is
reflected throughout the investment process to ensure that
lessons learned from Big Society Capital’s existing portfolio
and the team’s diverse experience are reflected in its analysis
and recommendations.
In selecting investments, Big Society Capital analyses the
revenue streams of the underlying investments. Government
funding may be available to address significant social issues
in the UK, but the innovation or delivery to best tackle the
issues lies in the charity and social enterprise sector. From a
financial perspective these businesses have demand, risk and
return characteristics that are distinct from mainstream
financial markets given the government revenue streams.
When building the Company’s portfolio, Big Society Capital
aims to use the team’s financial and impact understanding to
produce an optimal, diversified portfolio to deliver the target
financial and impact outcomes and to manage risk. It is
anticipated the Company will invest in the more proven
investment models and managers that have been developed
within the existing Big Society Capital portfolio.
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41
Strategic Report
Performance Monitoring and Valuation
1. Valuation Committee – meets half yearly to
consider and approve for recommendation to the
Board
2. Performance Committee – meets half yearly to
compare against original investment thesis and
identify any actions required and what lessons
can be drawn
Idea Generation
Actively search for new investment opportunities.
Big Society Capital starts with the social issue and
then designs and improves routes to bring together
the needs of enterprises and investors.
Deal Origination
Significant reach in sourcing investments through:
1) Big Society Capital’s strong reputation; 2) support
of existing managers to develop new proposals;
3) actively seek out new managers to develop new
proposals; and 4) maximise the team’s network.
Pre – Due Diligence
Idea is formally tested against investment and
portfolio allocation objectives.
Due Diligence
A “search for truth”. Range of proprietary tools used
throughout the process, including management DD,
DD toolkits across impact, financial and operational
due diligence, model and review templates and deal
structuring guidelines.
Investment Approval
Debate and Challenge. The deal team submits a
proposal to an investment committee dedicated to
the Company’s portfolio. The proposal focusses on
clarity, testable theses, key performance indicators
and risk.
Deal Structuring and execution
Transaction structures and documentation
created to mitigate risks identified during due
diligence while maintaining incentives for the
investee. During documentation the deal team
will work with the investee company to agree an
implementation plan. For example an “impact
canvas” is developed and agreed, which is a tool
that summarises the key objectives of the
investment and the resulting KPIs that will be
monitored over the life of the investment.
Exit
After working to an exit to best deliver financial and
impact returns the team will reflect on learnings
during the life of the investment and prepare a
report for Big Society Capital’s learning database.
Portfolio Management
1. Managing investment performance across
impact on people and financial return
2. Supporting impact manager development
providing structured support where impact
managers face common challenges e.g. impact
management
Strategic Report
Investment restrictions
The Company will manage its assets with the objective of
spreading risk through the following investment restrictions
that limit the Company’s exposure to not more than:
• 60 per cent. of Net Assets in High Impact Housing;
• 60 per cent. of Net Assets in Debt and Equity for Social
Enterprises, of which, not more than 30 per cent. of Net
Assets will be held in equity interests via funds;
• 40 per cent. of Net Assets in Social Outcomes Contracts;
• 30 per cent. of Net Assets in Social Impact Investments
other than High Impact Housing, Debt and Equity for
Social Enterprises and Social Outcomes Contracts;
• 10 per cent. of Net Assets to a single Investment, held
directly or indirectly on a look-through basis;
• 20 per cent. of Net Assets to any one Impact Fund;
• 25 per cent. of Net Assets to Impact Funds managed or
advised by the same investment management and
advisory group; and
• 15 per cent. of Net Assets to non-UK Investments.
Each of the above restrictions will be calculated at the time of
commitment and where the Company’s exposure will be the
aggregate of the value of the Company’s Investments plus its
outstanding commitments. Where the Company makes an
Investment otherwise than on a commitment basis, the time
of commitment will be the time of investment.
The Company will not be required to dispose of any
investment or to rebalance the portfolio as a result of a
change in the respective valuations of its assets. However,
the Portfolio Manager will regularly monitor the portfolio
and may make adjustments from time to time consistent
with the objective of spreading risk. Where the calculation of
an investment restriction requires an analysis of underlying
Investments held by an Impact Fund in which the Company
is invested, such calculation will be based on the information
reasonably available to the Portfolio Manager at the relevant
time.
As a result of managing its assets and spreading investment
risk in accordance with the above restrictions, the Company
expects to have diversified exposure across its various
counterparties and co-investors.
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Schroder BSC Social Impact Trust plc
Hedging and derivatives
The Company will not employ derivatives of any kind for
investment purposes.
Whilst the Company may use derivatives for currency
hedging purposes, non-Sterling exposures are expected to
be limited and, to the extent there are such exposures, the
Company currently anticipates that these will not be hedged.
Borrowing policy
The Company may, from time to time, use borrowings for
working capital and portfolio management purposes,
including for the purpose of satisfying capital calls and the
short term funding of investments. Borrowings will not
exceed 20 per cent. of the Company’s Net Assets, calculated
at the time of borrowing.
Cash and liquidity management
The Company may hold cash on deposit and may invest in
cash equivalent investments, which may include short-term
investments in money market type funds and tradeable debt
securities. In order to efficiently allocate the Company’s
funds whilst it may otherwise hold significant levels of cash,
the Company may also make short and medium term liquid
investments, including in social bond funds, closed-ended
listed funds and other liquid ESG investments, that the
Portfolio Manager considers are consistent with the
Company’s liquidity requirements, investment policy,
investment guidelines and risk profile while also meeting
high ESG criteria (“Liquidity Assets”). The Company may
invest up to 30 per cent. of Net Assets in Liquidity Assets,
measured at the time of investment. The Company intends
to only utilise the full 30 per cent. allocation immediately
after a fundraise and at most times no more than
20percent. of Net Assets shall be invested in Liquidity
Assets.
The Company will seek to ensure the Liquidity Assets target
the Portfolio Manager’s responsible investment policy, which
is underpinned by nine core responsible business principles,
including:
• ‘Do No Harm’ – To minimise negative impacts on target
beneficiaries and communities, the environment,
employees, and all stakeholders.
• ‘Protect the Environment’ – To promote and practice the
efficient use of natural resources and protect the
environment wherever possible.
• ‘Inclusive Practices’ – To promote equality, diversity and
inclusion practices through good corporate governance
and decision making, employment, organisational
culture and values, and operational delivery.
When identifying key ESG risks, the Portfolio Manager aims
to be proportionately compliant with its responsible
investment policy, based on an assessment of the materiality
of the ESG risks and best practice within the target industry.
The policy is integrated into the Portfolio Manager’s
investment approach. For example, material ESG risks that
are identified will be reported to the SBSI Investment
Committee when a recommendation paper is presented for
decision.
Co-Investments would be made alongside third party impact
investors, including the Portfolio Manager. It is expected that
the Company will invest in Impact Funds and Co-Investments
alongside the Portfolio Manager, benefitting from the broad
range of opportunities sourced by the Portfolio Manager.
Direct Investments are not expected to comprise a material
proportion of the Company’s portfolio.
The portfolio composition at any one time will reflect the
opportunities available to the Portfolio Manager, based on
the performance, social impact and maturity of the Impact
Funds, Co-Investments and Direct Investments. There may
be times when it is appropriate for the Company to have a
significant cash or cash equivalent position instead of being
fully or near fully invested, including for the purpose of
seeking to satisfy expected capital calls on commitments to
Impact Funds and to manage the working capital
requirements of the Company.
There is no restriction on the amount of cash or cash
equivalent investments that the Company may hold. Cash
and certain cash equivalents will be held with approved
counterparties and in line with prudent cash management
guidelines agreed between the Board, AIFM and Portfolio
Manager.
Changes to the investment policy
No material change will be made to the investment policy
without the approval of Shareholders by ordinary resolution.
Non-material changes to the investment policy may be
approved by the Board.
In the event of a breach of the investment policy set out
above and the investment and gearing restrictions set out
therein, the Portfolio Manager shall inform the AIFM and the
Board upon becoming aware of the same and if the AIFM
and/or the Board considers the breach to be material,
notification will be made to a Regulatory Information Service.
Promotion and shareholder relations
The Company promotes its shares to a broad range of
investors who 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.
Promotion is focused via two channels:
– Discretionary fund managers. The Manager promotes
the Company via both London and regional sales teams.
– Retail end investors. The Company promotes its shares
via engaging with platforms, via the press, and through
its webpages.
These activities consist of investor meetings, 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
advisers 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 Chair are offered to
Strategic Report
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43
Strategic Report
professional investors where appropriate. Shareholders are
also encouraged to sign up to the Manager’s Investment
Trusts update, to receive information on the Company
directly.
https://www.schroders.com/en/uk/privateinvestor/fund-
centre/funds-infocus/investment-trusts/schroders-
investment-trusts/never-miss-anupdate/
Details of the Board’s approach to discount management and
share issuance may be found in the Annual General Meeting
Recommendations on page 91.
Shareholder relations are given high priority by both the
Board and the Manager. In addition to the engagement and
meetings held during the year described on page 56, the
chairs of the Board and committees and the other Directors,
usually attend the AGM and are available to respond to
queries and concerns from shareholders. The Board is keen
to hear from shareholders and can do so by writing to the
Company Secretary (Company Secretary, Schroder BSC Social
Impact Trust plc, 1 London Wall Place, London EC2Y 5AU), or
emailing amcompanysecretary@schroders.com.
Key performance indicator – the investment
objective
The Board measures the development and success of the
Company’s business through achievement of the Company’s
investment objective which is considered to be the most
significant key performance indicator for the Company.
Comment on performance against the investment objective
can be found in the Chair’s Statement and the Portfolio
Manager’s Report.
Ongoing Charges
The Board continues to review the Company’s Ongoing
Charges to ensure that the total costs incurred by
shareholders in the running of the Company remain fair and
competitive when measured against peer group funds and
other market factors. An analysis of the Company’s costs,
including management fees, Directors’ fees and general
expenses, is submitted to each Board meeting. Management
fees are reviewed at least annually.
Corporate and Social Responsibility
The Board recognises the Company’s responsibilities with
respect to corporate and social responsibility and engages
with its outsourced service providers to safeguard the
Company’s interests. As part of this ongoing monitoring, the
Board receives reporting from its service providers with
respect to their anti-bribery and corruption policies; Modern
Slavery Act 2015 statements; diversity policies; and
greenhouse gas and energy usage reporting.
Further disclosures
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 that its debates and decision-making are greatly
enriched by a wider range of perspectives and thinking.
The Board will encourage any recruitment agencies it
engages to find a range of candidates that meet the objective
criteria agreed for each appointment. Appointments will
always be based on merit. Candidates for board vacancies
are selected based on their skills and experience, which are
matched against the balance of skills and experience of the
overall board taking into account the criteria for the role
being offered. The board also considers the diversity and
inclusion policies of its service providers.
Implementation of diversity policy
The Board has adopted the FCA’s Listing Rules
(LR9.8.6R(9)(a)) in relation to diversity which requires that:
(i) at least 40% of individuals on the board are women;
(ii) at least one of the senior board positions is held by a
woman; and
(iii) at least one individual on the board is from a minority
ethnic background.
The FCA defines senior board positions as Chair, 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 position of the Chair 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 Company has met all but the target for one individual to
be from a minority ethnic background as at its chosen
reference date, 30 June 2023, and there have been no
changes since then to the date of publication of the annual
report and accounts. It is the Board’s intention that achieving
all three targets continues to be a priority during the Board’s
next succession appointments.
The data is set out in the tables below.
Number
Number Percentage of senior
of Board of the positions on Listing
Members Board the Board Rules Target
Men 2 50% 0
Women 2 50% 1
Number
Number Percentage of senior
of Board of the positions on Listing
Members Board the Board Rules Target
4 100% 1
Mixed/Multiple Ethnic
Groups 0 0% 0
Asian/Asian British 0 0% 0
Black/African/Caribbean/
Black British 0 0% 0
Other ethnic group,
including Arab 0 0% 0
Not specified/prefer
not to say 0 0% 0
Women should make
up at least 40% of
the Board and hold
at least one of the
senior positions
At least one member
of the board should
be from an ethnic
minority background
excluding white
ethnic groups (as set
out in categories used
by the Office for
National Statistics)
White British or other
White (including
minority-white groups)
Strategic Report
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Schroder BSC Social Impact Trust plc
Given that the Company is an investment trust with no
executive board members, the columns and references
regarding executive management have not been included in
the above table.
Financial crime policy
The Company continues to be committed to carrying out its
business fairly, honestly and openly operates a financial
crime policy (available on the Company’s website), 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.
Greenhouse gas emissions and energy usage
The Company qualifies as a low energy user and is exempt
from reporting under the Streamlined Energy & Carbon
Reporting requirements. It has no significant greenhouse gas
emissions, energy consumption or energy efficiency action to
report.
Responsible investment
The Company delegates to its Portfolio Manager the
responsibility for taking ESG issues into account when
assessing the selection, retention and realisation of
investments. The Board expects the Portfolio Manager to
engage with investee companies on social, environmental
and governance issues and to promote best practice.
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Promoting the success of the Company, section 172 of the Companies Act 2006
The Directors are required to include in the annual report a statement which describes how they have discharged their duties
under section 172 of the Companies Act 2006 in promoting the success of the Company for the benefit of its members as a
whole having regard to the interests of all stakeholders. This includes the likely consequences of the decisions in the longer
term and how wider stakeholders’ needs have been taken into account.
As an externally managed investment trust, the Company has no employees, operations or premises. The Board has identified
its key stakeholders as the Company’s shareholders, the Manager and the Portfolio Manager, other service providers and the
Investee companies / social impact managers.
The following disclosure explains how the Directors have engaged with stakeholders, how stakeholders’ needs have been
taken into account, the outcome of this engagement and the impact that it has had on the Board’s decisions. Key activities
undertaken during the reporting period are also outlined. As an externally managed investment trust, the Company has no
employees, operations or premises. The Board has therefore identified its key stakeholders as the Company’s shareholders,
the Manager, other service providers and the social impact managers to which assets are allocated.
Strategic Report
Stakeholder Engagement
Shareholders The Board recognises the importance of engaging with shareholders on a regular basis in order to
maintain a high level of transparency and accountability. The Board receives regular reports from the
Manager and broker on shareholder engagement, and the Manager and Portfolio Manager maintain
regular and open dialogue with shareholders. The Manager also has a dedicated client services team
which maintains regular contact with the Company’s shareholders and reports regularly to the Board.
Shareholders can also contact the Chair and Directors throughout the year via the Company
Secretary or the Corporate Broker. The Chair is also available to meet major shareholders to
understand their views and to help inform the Board’s decision making process. During the year
under review a number of meetings of this nature took place.
The Company maintains a website from which copies of the annual and half year reports along with
factsheets and other relevant materials are available. Shareholders are also invited to attend the
AGM at which they have the opportunity to speak directly with the Directors and Portfolio Manager.
The Board is responsible for formulating the strategy to manage the discount or premium at which
the Company’s shares trade to NAV. The strategy is designed to contain discount volatility, provide
liquidity to the market and enhance returns to shareholders.
Manager and
Portfolio
Manager
The Board’s main working relationships are with the Manager and the Portfolio Manager. The Manager
is responsible for providing administrative, company secretarial, accounting and marketing services to
the Company. Together with the Company, the Manager has appointed the Portfolio Manager to
perform portfolio management and related services in respect of the Company’s portfolio.
The Board maintains a constructive and collaborative relationship with the Manager and Portfolio
Manager, encouraging open discussion.
The Board invites the Portfolio Manager to attend all Board and certain committee meetings and
receives regular reports on the performance of the portfolio and the implementation of the investment
strategy, policy and objective. The portfolio activities undertaken by the Portfolio Manager and the
impact of decisions affecting investment performance are set out in the Portfolio Manager’s Review on
pages 12 to 18.
The Management Engagement Committee reviews the performance of the Manager and Portfolio
Manager, their remuneration and the discharge of their contractual obligations at least annually.
Other service
providers,
including:
– depositary
and custodian
– registrar
– corporate
broker
– legal counsel
– third-party
research
provider
The Board maintains regular contact with its key service providers, both at the Board and committee
meetings, and through ad hoc communication during the year. The need to foster business
relationships with key service providers is central to the Directors’ decision-making as the Board of an
externally managed investment trust.
During the year, the Management Engagement Committee undertook reviews of the third-party
service providers and agreed that their continued appointment remained in the best interests of the
Company and its Shareholders. The committee periodically reviews the market rates for services
received, to ensure that the Company continues to receive high quality service at a competitive cost.
Directors attended a meeting during the year to assess the internal controls of certain service
providers including the Company’s Depositary HSBC Bank, the registrar, Equiniti and Schroder’s
Group Internal Audit. These meetings enable the Board to conduct due diligence on operations and
IT risks amongst service providers; and to receive up to date information on changes to regulation
and market practice in the industry.
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Schroder BSC Social Impact Trust plc
Stakeholder Engagement
Investee
companies /
Social impact
managers
The Board recognises the importance of good stewardship and communication with investee
companies / social impact managers to whom assets are allocated in meeting the Company’s
investment objective and strategy. The Portfolio Management team conducts face-to-face and/or
virtual meetings with all portfolio companies’ management teams to understand current trading and
prospects for their funds and businesses, and to ensure that their ESG investment principles and
approach are understood.
The Portfolio Manager, where available, has representatives in governance bodies of investee
companies (such as Board seats, voting or observer roles in investment committees, or
representation in Advisory Committees). The Portfolio Manager reports to the Board on stewardship
issues and the Board will question the rationale for decisions made. Through engagement and
exercising governance rights, the Portfolio Manager actively works with companies to improve
corporate standards, transparency and accountability.
Specific 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 30 June 2023, accordingly:
– the Board has declared an interim dividend of 2.30p per ordinary share (2022: 1.30p) which, will be paid on 20 December
2023 to shareholders on the register on 10 November 2023;
– in May 2023 the Board visited Hull to experience first hand the valuable work that was being undertaken by Hull Women’s
Network and East Yorkshire Mind;
– In January 2023, the Company began to buy back a limited number of shares with the aim of narrowing the discount at
which the shares were trading to NAV;
– the Chair has actively engaged with current and prospective shareholders who may have a desire, or mandate, to allocate
or further allocate to social impact;
– webinars and forums have been held to educate and inform investors; and
– the Company engaged with the Financial Conduct Authority’s Sustainable Disclosure Requirement (SDR) consultation
through Schroders and Big Society Capital.
Strategic Report
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Report and Accounts
for the year ended 30 June 2023
47
Strategic Report
Strategic Report
Principal and emerging risks and uncertainties
The Board, through its delegation to the Audit and Risk Committee, is responsible for the Company’s system of risk
management and internal control and for reviewing its effectiveness. The Board has adopted a detailed matrix of principal
risks affecting the Company’s business as an investment trust and has established associated policies and processes designed
to manage and, where possible, mitigate those risks, which are monitored by the Audit and Risk Committee on an ongoing
basis. This system assists the Board in determining the nature and extent of the risks it is willing to take in achieving the
Company’s strategic objectives. Both the principal and emerging risks and the monitoring system are also subject to robust
assessment at least annually. The last assessment took place in October 2023.
During the year, the Board discussed and monitored a number of risks which could potentially impact the Company’s ability to
meet its strategic objectives. The Board received updates from the Manager, Portfolio Manager, Company Secretary and other
service providers on emerging risks that could affect the Company. The Board was mindful of the following emerging risks
during the year; the ongoing conflict in Ukraine, rising inflation and interest rates, the threat of a UK recession and volatile
energy prices. These risks were not seen as new principal or emerging risks but those that exacerbate existing risks and have
been incorporated in the market risks section in the table below.
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 risks and
uncertainties are set out in the table below.
The "Change" column on the right highlights the Audit and Risk Committee's assessment of any increases or decreases in risk
during the year after mitigation and management. The arrows show the risks as increased or decreased, and sideway arrows
show risks as stable.
Risk Mitigation and management Change
Strategic risk
The Company’s investment objectives may
become out of line with the requirements of
investors, or the Company’s investment
strategy might not lead to the Company
achieving its investment objective resulting in
the Company being subscale and shares
trading at a discount.
The appropriateness of the Company’s investment
remit is regularly reviewed and the success of the
Company in meeting its stated objectives is
monitored.
The share price relative to NAV per share is
monitored and the Board has implemented a
buy-back programme.
The target return of the company is inflation plus
2%. There is no guarantee that this will be
achieved and in high inflation environments the
target becomes more challenging despite a
element of the portfolios investment returns
benefitting from higher inflation, with a lag.
Continuity risk
31 December 2023, and in any two-year period
following such date, the Ordinary Shares have
traded, on average, at a discount in excess of
10 per cent. to Net Asset Value per Share, the
Directors will propose an ordinary resolution at
the Company’s next annual general meeting
that the Company continues its business as
presently constituted (the “Continuation
Resolution”).
It could take several years until all of the
Company's private equity investments are
disposed of and any final distribution of
proceeds made to shareholders.
The Company moved from trading at a
premium to NAV to trading at an average
discount of 7.3% in the twelve months to
30June 2023, which is narrower than the
average investment trust discount over the
period.
The Portfolio Manager has extensive experience
and a track record in accurately timing the exits of
private equity investments. The Board will regularly
monitor the position to ensure that any alternative
proposals to be made to shareholders are put
forward at an appropriate time.
The Board also made enquiry of the broker and
discussed with Big Society Capital and Schroders,
who in aggregate hold 43.99% of the Company’s
total voting rights as at 30 September 2023. It
believed that there is no reason to anticipate that
shareholders would not be supportive should a
continuation vote be held in 2024.
If the Continuation Resolution is not passed, the
Directors will put forward proposals for the
reconstruction or reorganisation of the Company,
bearing in mind the liquidity of the Company’s
Investments, as soon as reasonably practicable
following the date on which the Continuation
Resolution is not passed. These proposals may or
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Schroder BSC Social Impact Trust plc
Strategic Report
Risk Mitigation and management Change
may not involve winding up the Company and,
accordingly, failure to pass the Continuation
Resolution will not necessarily result in the winding
up of the Company.
Investment management risks
Risks relating to the social impact of investee
companies and the achievement of the target
financial return.
The Portfolio Manager has extensive experience in
selecting private social impact investments and
has a robust investment process to ensure that
the anticipated positive impact of investee
companies is realistic and achievable. The Board
also monitors impact regularly and publishes an
annual impact report.
The Portfolio Manager makes investments
according to a tested and robust process and
based on the goal of achieving the target return. A
pipeline of opportunities is vetted and reviewed
and significant care is taken in selecting high
quality managers and investees. The Portfolio
Manager receives regular management
information and engages regularly with investees
to monitor and ensure performance to plan.
Liquidity risk
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.
Risks relating to investment commitments and
capital calls.
Concentration limits are imposed on single
investments to minimise the size of positions.
The Portfolio Manager can sell Liquidity Assets to
meet investment commitments and capital calls.
The Portfolio Manager will monitor and manage
cash flows and expected capital calls.
The Portfolio Manager will seek to manage
cashflow such that the Company will be able to
participate in follow on fundraisings where
appropriate.
Valuation risk
Private equity investments are generally less
liquid and more difficult to value than publicly
traded companies. A lack of open market data
and reliance on investee company projections
may also make it more difficult to estimate fair
value on a timely basis.
Contracts with investee companies and funds are
drafted to include obligations to provide
information to the Portfolio Manager in a timely
manner, where possible.
The Portfolio Manager and AIFM have extensive
track records of valuing privately held
investments.
A valuation policy has been agreed by the AIFM
and Portfolio Manager and includes a robust
process for the valuation of assets, including
consideration of the valuations provided by
investee companies and the methodologies they
have used. Any changes to this policy must be
approved by the Audit and Risk Committee.
The Audit and Risk Committee reviews all
valuations of unlisted investments and challenges
the methodologies used by the Portfolio Manager
and AIFM. The Audit and Risk Committee may also
appoint an independent party to complete a
valuation of the Company’s assets.
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Report and Accounts
for the year ended 30 June 2023
49
Strategic Report
Risk Mitigation and management Change
Cyber security risks
Each of the Company’s service providers is at
risk of cyber attack, data theft or disruption to
their infrastructure which could have an effect
on the services they provide to the Company.
These risks could lead to reputational damage
or the risk or loss control of sensitive
information leading to a potential breach of
data protection law.
Experienced third party service providers are
employed by the Company under appropriate
terms and conditions and with agreed service
level specifications in relation to cyber security
and related procedures.
The Board receives regular reports from its service
providers and the Management Engagement
Committee will review the performance of key
service providers at least annually.
The Audit and Risk Committee reviews reports on
the external audits of the internal controls
operated by certain service providers.
Economic, policy, and market risk
Changes in general economic and market
conditions, such as interest rates, inflation
rates, industry conditions, tax laws, political
events and trends can substantially and
adversely affect the value of investments.
Market risk includes the potential impact of
events which are outside the Company’s
control, such as pandemics, civil unrest and
wars.
Policy risk includes the potential negative
impact of changes in UK government policies
that affect the business models, revenue
streams or have other material implications for
investees.
The risk profile of the portfolio is considered and
appropriate strategies to mitigate any negative
impact of substantial changes in markets and
government policies are discussed with the
Portfolio Manager.
The rise in government bond yields has had, and
may continue to have, a negative impact on
property prices. A portion of the Company’s
portfolio is invested in UK property.
N/A
Strategic Report
Risk assessment and internal controls review by the Board
Risk assessment includes consideration of the scope and quality of the systems of internal control operating within key
service providers, and ensures regular communication of the results of monitoring by such providers to the Audit and Risk
Committee, including the incidence of significant control failings or weaknesses that have been identified at any time and
the extent to which they have resulted in unforeseen outcomes or contingencies that may have a material impact on the
Company’s performance or condition.
No significant control failings or weaknesses were identified from the Audit and Risk Committee’s ongoing risk assessment
which has been in place throughout the financial year and up to the date of this report. The Board is satisfied that it has
undertaken a detailed review of the risks facing the Company.
A full analysis of the financial risks facing the Company is set out in note 20 to the accounts on pages86 to 89.
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50
Schroder BSC Social Impact Trust plc
Strategic Report
Viability statement
The Directors have assessed the viability of the Company over
a five year period, taking into account the Company’s position
at 30 June 2023 and the potential impact of the principal risks
and uncertainties it faces for the review period. The Directors
have assessed the Company’s operational resilience and they
are satisfied that the Company’s outsourced service providers
will continue to operate effectively, following the
implementation of their business continuity plans.
A period of five years has been chosen as the Board believes
that this reflects a suitable time horizon for strategic planning,
taking into account the investment policy, liquidity of
investments, payment of commitments, potential impact of
economic cycles, nature of operating costs, dividends and
availability of funding. This time period also reflects the
average holding period of an investment.
In its assessment of the viability of the Company, the directors
have considered each of the Company’s principal risks and
uncertainties detailed on pages 47 to 49. The Directors have
also considered the Company’s income and expenditure
projections, liquid investments, cash balances as well as
commitments to provide further funding to the Company’s
private equity investee companies; the Company currently has
no borrowings. A substantial proportion of the Company’s
expenditure varies with the value of the investment portfolio.
In the event that there is insufficient cash to meet the
Company’s liabilities, the liquid investments in the portfolio
may be realised.
The Company has additionally performed stress tests which
confirm that a 50% fall in the market prices of the portfolio
would not affect the Board’s conclusions in respect of going
concern.
The Board monitors the portfolio risk profile, limits imposed
on gearing, counterparty exposure, liquidity risk and financial
controls at its quarterly meetings. Although there continue to
be regulatory changes which could increase costs or impact
revenue, the Directors do not believe that this would be
sufficient to affect its viability.
The Board has assumed that the business model of a closed
ended investment company, as well as the Company’s
investment objective, will continue to be attractive to investors.
The Directors also considered the beneficial tax treatment the
Company is eligible for as an investment trust. If changes to
these taxation arrangements were to be made it would affect
the viability of the Company to act as an effective investment
vehicle.
The Board made enquiry of the broker and discussed with Big
Society Capital and Schroders, who in aggregate hold 43.99%
of the Company’s total voting rights as at 30 September 2023.
It believes that there is no reason to anticipate that
shareholders would not be supportive should a continuation
vote be held in 2024.
Therefore, Directors have concluded that there is a reasonable
expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the five
year period of their assessment.
Going concern
The Directors have assessed the principal risks, the impact of
the emerging risks and uncertainties and the matters
referred to in the viability statement. 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
31October 2024 which is at least twelve months from the
date the financial statements were authorised for issue.
By order of the Board
Schroder Investment Management Limited
Company Secretary
27 October 2023
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Report and Accounts
for the period ended 30 June 2023
Governance
51
Board of Directors
Susannah Nicklin
Status: Independent non-executive Chair
Length of service: appointed a Director and Chair in November 2020.
Experience: Susannah Nicklin, CFA, is an investment and financial services
professional with 25 years of experience in executive roles at Goldman Sachs
and Alliance Bernstein in the US, Australia and the UK. She has also previously been
involved in the social impact private equity sector with Bridges Ventures, the Global
Impact Investing Network and Impact Ventures UK. She was previously a non-
executive director of Pantheon International plc and Amati AIM VCT plc. She is
currently non-executive director of The North American Income Trust plc,
Baronsmead Venture Trust plc, Ecofin Global Utilities and Infrastructure Trust plc,
and Frog Capital Limited. Susannah is also serving on the newly created AIC ESG
Forum.
Committee membership: Audit and Risk, Management Engagement and
Nomination.
Current remuneration: £40,000 per annum
Number of shares held: 21,558*
Mike Balfour
Status: Independent non-executive Director and Chair of Audit and
Risk Committee
Length of service: appointed a Director in November 2020
Experience: Mike Balfour is chair of Fidelity China Special Situations plc and a non-
executive director and chair of the audit committee of abrdn Property Income Trust
plc. He also chairs TPT Investment Management. He has over 35 years’ experience
in financial services. He was chief executive of Thomas Miller Investment Ltd until
2016 and prior senior appointments included chief executive at Glasgow
Investment Managers and chief investment officer at Edinburgh Fund Managers
Limited. He is a member of the Institute of Chartered Accountants of Scotland.
Committee membership: Audit and Risk (Chair), Management Engagement and
Nomination
Current remuneration: £35,000 per annum
Number of shares held: 20,000*
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Schroder BSC Social Impact Trust plc
52
Board of Directors
James B. Broderick
Status: Independent non-executive Director and Chair of
Management Engagement Committee
Length of service: appointed a Director in November 2020
Experience: James B. Broderick is deputy chair of the Impact Investing Institute,
with primary responsibility for leading the engagement with UK pension funds. He
also worked in 2016-2019 with the Institute’s predecessor bodies, the
Implementation Taskforce on Growing a Culture of Social Impact Investing, and the
Advisory Group, both sponsored by the Cabinet Office. He is currently a trustee of
Philanthropy Impact, which works with advisors, philanthropists and charities to
promote philanthropy and social impact investing. He was also a commissioner in
the Commission on Social Investment, chaired by Lord Victor Adebowale CBE.
James was head of UBS Wealth Management in the UK & Jersey for five years
before retiring in 2018, in which position he also served as chair of UBS Optimus
Foundation (UK). Before that, he worked for 19 years at JPMorgan Asset
Management, latterly as head of its EMEA business. In that position, he was CEO
and/or director of the firm’s principal asset management and insurance
subsidiaries in the UK, and a director of the principal affiliated mutual fund
investment and management companies in continental Europe.
Committee membership: Audit and Risk, Management Engagement (Chair) and
Nomination.
Current remuneration: £30,000 per annum
Number of shares held: 500,000*
Alice Chapple
Status: Independent non-executive Director and Chair of Nomination
Committee
Length of service: appointed a Director in November 2020
Experience: Alice Chapple is an economist and a specialist in impact investment
and impact assessment. She established Impact Value, a consultancy advising on
impact investment, in October 2012. Before establishing Impact Value, Alice
worked as director of sustainable financial markets at Forum for the Future.
Prior to Forum for the Future, she worked at UK development finance institution
CDC (now BII) as financial analyst, fund manager and social and environmental
advisor. In the late 1990s, she established a programme for evaluation of
development impact and in the 2000s she designed processes for fund managers
to assess the ESG aspects of their investments.
Alice’s current roles include chair of the Tracker Group (which seeks to align capital
markets with a sustainable future through Carbon Tracker and Planet Tracker),
chair of the Walcot Foundation, trustee of the Shell Foundation, director of i(x) Net
Zero plc and member of the Advisory Boards of Acre Impact Fund, WHEB Asset
Management, Frontier Finance Solutions and Connected Asset Management. Alice
has also developed the University of Cambridge Institute of Sustainability
Leadership’s course on sustainable finance.
Committee membership: Audit and Risk, Management Engagement and
Nomination (Chair).
Current remuneration: £30,000 per annum
Number of shares held: 10,000*
*Shareholdings are as at 27 October 2023, full details of Directors’ shareholdings are set out in the Remuneration Report on
page65.
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Report and Accounts
for the period ended 30 June 2023
Governance
53
Directors’ Report
Directors and officers
The Directors as at 30 June 2023 and their biographies are set
out on pages 51 and 52.
Chair
The Chair is an independent non-executive Director who is
responsible for leadership of the Board and ensuring its
effectiveness in all aspects of its role. The Chair’s other
significant commitments are detailed on page 51. She has no
conflicting relationships.
Company Secretary
Schroder Investment Management Limited provides
company secretarial support to the Board and is responsible
for assisting the Chair with Board meetings and advising the
Board with respect to governance. The Company Secretary
also manages the relationship with the Company’s service
providers, except for the Manager. Shareholders wishing to
lodge questions in advance of the AGM are invited to do so by
writing to the Company Secretary at the address given on the
outside back cover or by email to:
amcompanysecretary@schroders.com.
Role and operation of the Board
The Board (of four Directors, listed on pages 51 and 52) 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,
Portfolio Manager and other service providers to seek to
ensure that the investment objective of the Company
continues to be met. The Board also ensures that the
Portfolio Manager adheres to the investment restrictions set
by the Board and acts within the parameters set by it in
respect of any gearing. This is also monitored by the Manager
as part of its responsibilities as AIFM. The Strategic Report on
pages39 to 50 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 Chair 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 Portfolio Manager and other key advisers, as well as ad
hoc reports and information supplied to the Board as
required.
Four Board meetings are usually scheduled each year to
cover matters including: the setting and monitoring of
investment strategy; approval of borrowings and/or cash
positions; review of investment performance; the level of
premium or discount of the Company’s shares to NAV per
share; promotion of the Company; services provided by third
parties. Additional meetings of the Board are arranged as
required.
The Board is satisfied that it is of sufficient size with an
appropriate balance of diverse skills and experience,
independence and knowledge of the Company, its sector and
the wider investment trust industry, to enable it to discharge
its duties and responsibilities effectively and that no individual
or group of individuals dominates decision making.
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 or Portfolio Manager, shared directorships with
other Directors or material interests in any contract which is
significant to the Company’s business.
Key service providers
The Board has adopted an outsourced business model and
has appointed the following key service providers:
Manager
The Company is an Alternative Investment Fund as defined by
the AIFM Directive and has appointed Schroder Unit Trusts
Limited (“SUTL”) as the Manager in accordance with the terms
of an 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 Financial Conduct
Authority (“FCA”) and provides portfolio management, risk
management, accounting and company secretarial services
to the Company under the AIFM agreement. Part of the fund
accounting and administration activities are currently
performed by HSBC Securities Services (UK) Limited. The
Manager also provides general marketing support for the
Company and manages relationships with key investors, in
conjunction with the Chair, 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 Manager has in place
appropriate professional indemnity cover.
The Schroders Group manages £726.1m (as at 30 June 2023)
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.
Portfolio Manager
Big Society Capital is the delegated Portfolio Manager. It uses
its social impact expertise to source deals, perform robust
due diligence and manage the portfolio. As at 30 June 2023,
Big Society Capital are also the Company’s largest
shareholder, with a 26.3% stake.
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Schroder BSC Social Impact Trust plc
54
Directors’ Report
Management fee
The AIFM is entitled to receive from the Company in respect
of its AIFM, administration and company secretarial services,
a management fee calculated and paid bi-annually in arrears
at an annual rate of 0.80 per cent. per annum of “chargeable
assets”, of which 50% is payable to the Portfolio Manager.
For this purpose, “chargeable assets” shall be calculated as
the cum-income Net Asset Value of the Company adding back
any loans, less any cash, money market instruments and
Liquidity Asset, and any investments in funds which are
managed by the Manager, the Portfolio Manager or any
member of their respective groups.
For the purpose of calculating “chargeable assets” only,
“Liquidity Asset” means:
(a) any security that is admitted to trading on (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; or
(b) any unit, share or other security issued by a collective
investment scheme that has been authorised and regulated
by the FCA and which has trading on a monthly or more
frequent basis,
in each case being investments intended to benefit
stakeholders using ESG frameworks to ensure a variety of
stakeholders beyond just shareholders’ interests are
addressed.
Depositary
HSBC Bank plc, (“HSBC Bank”) which is authorised by the
Prudential Regulation Authority and regulated by the 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
– oversight of the Company and the Manager to the extent
described in the AIFM Directive.
HSBC Bank is liable to the Company for losses suffered by it
as a result of any negligence, wilful default, fraud or
fraudulent misrepresentation on its part.
The Company, the Manager and HSBC Bank may terminate
the depositary agreement at any time by giving 90days’
notice in writing. HSBC Bank 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 dividends, management of general
meetings (including the registering of proxy votes and
scrutineer services as necessary), handling shareholder
queries, correspondence and processing corporate actions.
Corporate Governance Statement
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 Board of the Company has considered the principles and
provisions of the AIC Code of Corporate Governance (the “AIC
Code”). The AIC Code addresses the Principles and Provisions
set out in the Financial Reporting Council’s (“FRC”) UK
Corporate Governance Code (the “UK Code”), as well as
setting out additional Provisions on issues that are of specific
relevance to the Company as an investment company. The
Board considers that reporting against the Principles and
Provisions of the AIC Code, which has been endorsed by the
FRC provides more relevant information to shareholders.
The AIC Code is available on the AIC website
https://www.theaic.co.uk/aic-code-of-corporate-governance.
It includes an explanation of how the AIC Code adopts the
Principles and Provisions set out in the UK Code to make
them relevant for investment companies. The UK Code is
available from the FRC’s website at
www.frc.org.uk.
The Board is satisfied that the Company’s current governance
framework is compliant with the AIC Code with the exception
of forming a remuneration committee. Given the Company
has no chief executive or other executive directors, the size of
the Board and the infrequent nature at which it is expected
that Directors’ fees will need to be changed, the Board believe
a separate committee responsible for reviewing and
determining fees is not necessary but will be considered in
future. As permitted under the AIC Code, the Chair 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 57.
The Board has also determined that given its size, it is
appropriate that all Directors are members of the Audit and
Risk, Management Engagement and Nomination Committees
and the appointment of a Senior Independent Director is not
considered necessary. However, the Chair of the Audit and
Risk Committee effectively acts as the Senior Independent
Director, leads the evaluation of the performance of the Chair
and is available to Directors and/or shareholders if they have
concerns which cannot be resolved through discussion with
the Chair.
As all of the Company's day-today management and
administrative functions are outsourced to third parties, it has
no executive directors, employees or internal operations and
therefore has not reported in respect of the following UK
Code Provisions:
• the role of the executive directors and senior
management;
• the need for an internal audit function; and
• executive directors’ remuneration.
Revenue and interim dividend
The net revenue return for the year under review, after
finance costs and taxation, was £1,974,000, equivalent to a
revenue return per ordinary share of 2.32pence. As stated in
the Company’s prospectus, the Company will use the
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Report and Accounts
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Governance
55
investment trust interest streaming regime. This enables an
investment trust which receives “qualifying interest income”
to treat the whole or part of a dividend distribution as an
interest distribution. The effect of streaming is to move the
point of taxation in respect of the Company’s qualifying
interest income, from the Company to its investors and the
Company may treat the streamed payment as a loan
relationship deduction in its tax computation.
For investors within the charge to UK corporation tax, the
distribution will be taxed in the normal way as interest under
a creditor relationship. For UK income taxpayers it will be
taxed as interest received on the date the distribution was
made. The potential benefit is to any investor who is not liable
to taxation.
The Board has recommended the payment of an interim
dividend of 2.30pence per share payable on 20 December
2023 to shareholders on the register on 10 November 2023.
The ex dividend date will be 9 November 2023. This year’s
dividend is split between an interest distribution of 2.16
pence per share and an equity dividend of 0.14 pence per
share.
The Board’s policy is to pay out substantially all the
Company’s normal revenue. The Company may be required
to pay a second dividend distribution in respect of the year
ended 30 June 2023, in order to comply with the investment
trust qualifying rules in section 1158 of the Corporation Tax
Act 2010. The income retention test in section 1158 is based
on income receivable in the corporation tax computation, and
income receivable from the Company’s holdings in limited
partnerships will be taxed on a “look through” basis, sourced
from accounting information which may not be available until
after the year end.
Committees
In order to assist the Board in fulfilling its governance
responsibilities, it has delegated certain functions to
committees. The roles and responsibilities of these
committees, together with details of work undertaken during
the year under review, are outlined in the next few pages.
The reports of the Audit and Risk, Management Engagement
and Nomination Committees are incorporated into and form
part of the Directors’ Report.
Other required Directors’ Report
disclosures under laws, regulations, and
the UK Code
Status
The Company has been incorporated with an unlimited life.
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.
Ithas 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 not a “close” company for taxation purposes.
The Company is domiciled in the UK and is an investment
company within the meaning of section 833 of the Companies
Act 2006.
If in the two-year period ending on 31 December 2023, and in
any two-year period following such date, the Ordinary Shares
have traded, on average, at a discount in excess of 10 per
cent. to Net Asset Value per Share, the Directors will propose
an ordinary resolution at the Company’s next annual general
meeting that the Company continues its business as
presently constituted (the “Continuation Resolution”).
If the Continuation Resolution is not passed, the Directors will
put forward proposals for the reconstruction or
reorganisation of the Company, bearing in mind the liquidity
of the Company’s Investments, as soon as reasonably
practicable following the date on which the Continuation
Resolution is not passed. These proposals may or may not
involve winding up the Company and, accordingly, failure to
pass the Continuation Resolution will not necessarily result in
the winding up of the Company.
The discount prevailing on each business day will be
determined by reference to the closing market price of
Ordinary Shares on that day and the last announced Net
Asset Value per Share (adjusted for dividends).
Information included in Strategic Report
The Company’s disclosures on future developments and
carbon emissions are included in the Strategic Report on
pages 10 to 11 and 17 to 18 and page 44 respectively. The
Chair's Statement and Portfolio Manager's Report form part
of the Strategic Report.
Financial risk management
Details of the Company’s financial risk management
objectives and exposure to risk can be found in note 20 on
pages 86 to 89.
Share capital
Details of the Company's issued share capital are given in
note 12 to the accounts on page 83. Details of the voting
rights in the Company’s shares as at 26 October 2023 are
given in note 7 to the Notice of Annual General Meeting on
page 94.
The ordinary shares carry the right to receive dividends and
have one voting right per ordinary share. There are no
restrictions on the voting rights of the ordinary shares or on
the transfer of the ordinary shares. There are no shares which
carry specific rights with regard to the control of the
Company. At 30 June 2023, the Company’s issued share
capital was 84,604,866 ordinary shares, excluding 711,720
shares held in treasury.
Share repurchases
The Company has authority to purchase its ordinary shares in
the market to be held in treasury or for cancellation. During
the year the Company bought back 711,720 ordinary shares
at an average price of 94.15p per share, at an average
discount of 11.6%, for a total cost of £670,000. Since the year
end and up to 26 October 2023, a further 449,924 ordinary
shares have been repurchased for a total cost of £411,130.84.
Directors’ Report
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Schroder BSC Social Impact Trust plc
56
Directors’ Report
The latest buy back authority was granted to Directors on
2December 2022 and expires at the conclusion of the Annual
General Meeting on 15 December 2023. The Directors are
proposing that their authority to buy back shares be renewed
at the forthcoming Annual General Meeting.
Substantial share interests
The Company has received notifications in accordance with
the Financial Conduct Authority’s (“FCA”) 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% or more of
the Company's voting rights.
As at 30 June 2023
%
of total
Number of voting
shares rights
Big Society Capital Limited 22,425,000 26.28
Schroders plc 19,618,185 22.99
1
East Riding of Yorkshire Council 7,500,000 10.00
2
Newton Investment
Management Limited 4,215,408 4.96
EQ Investors Limited 3,595,000 4.79
Stichting Juridisch Eigendom
Privium Sustainable Impact
Fund 4,000,000 4.69
1
16.73% of the holding is held by clients of Cazenove Capital Management
2
Notification based on an issued share capital of 75,000,000 shares and
received prior to the increase in share capital in November 2021
The Company also received a notification on 5 August 2021
from Pentwater Capital Management LP for a holding of
3,550,000 shares and 4.73% of total voting rights. Based on
information received, the Company is of the knowledge that
Pentwater Capital Management LP is no longer a shareholder
of the Company.
There have been no notified changes to the above holdings
since the year end.
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 under review and the
attendance of individual Directors is shown below. Whenever
possible all Directors attend the AGM.
Audit Management
and Risk Engagement Nomination
Director Board Committee Committee Committee
Susannah Nicklin 4/4 2/2 1/1 1/1
Mike Balfour 4/4 2/2 1/1 1/1
James B. Broderick 4/4 2/2 1/1 1/1
Alice Chapple 4/4 2/2 1/1 1/1
The Board and Committees meet more frequently, between
scheduled meetings, when business needs require.
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 the
Companies Act 2006, 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 is a
qualifying third party indemnity policy and was in place
throughout the year under review for each Director and to
the date of this report.
By order of the Board
Schroder Investment Management Limited
Company Secretary
27 October 2023
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Report and Accounts
for the period ended 30 June 2023
Governance
57
Audit and Risk Committee Report
The responsibilities and work carried out by the Audit and Risk Committee during the year under review are set out in the
following report. The duties and responsibilities of the Committee, which include monitoring the integrity of the Company’s
financial reporting and internal controls, are set out in further detail, and may be found in the terms of reference which are
set out on the Company’s website,
www.schroders.com/sbsi.
All Directors are members of the Committee. Mike Balfour is the Chair of the Committee. The AIC Code permits the Chair of
the Board to be a member of the audit committee of an investment trust. As the Board consisted of only four members,
recognising Susannah Nicklin’s significant experience, it is considered appropriate for the Chair to be a member of the Audit
and Risk 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 Committee’s effectiveness was assessed, and considered to be satisfactory, as part of the Directors’ annual
review of the Board and its committees.
Half year
report
Audit
planning
Audit
Annual
report
Post-audit
review
Risk Management and
Internal Controls
Principal and Emerging Risks and
uncertainties
To establish a process for identifying,
assessing, managing and monitoring
the Company’s emerging and principal
risks and uncertainties and identifying
how these are being managed or
mitigated.
Internal controls
To consider the appropriateness of the
Company’s internal financial controls
and review the adequacy and
effectiveness of the Company’s risk
management systems.
As the Company outsources all of its
functions to third parties, it also
requires its service providers to report
on their internal controls.
Financial Reports and
Valuation
Financial statements
To monitor the integrity of the financial
statements of the Company and any
formal announcements relating to the
Company’s financial performance and
valuation. To review the annual and
half year reports.
Going concern and viability
To review the position and make
recommendations to the Board in
relation to whether it considers it
appropriate to adopt the going
concern basis of accounting in
preparing its annual and half-yearly
report and accounts.
The Committee is also responsible for
reviewing the disclosures made in the
viability statement.
Audit
Audit results
To discuss any matters arising
from the audit and consider
recommendations made by the
auditor.
Auditor appointment,
independence and performance
To make recommendations to the
Board, in relation to the appointment,
re-appointment, effectiveness and
removal of the external auditor
together with any non-audit services.
To review auditor independence, and
to approve their remuneration and
terms of engagement. Reviewing the
audit plan and engagement letter.
Approach
The following table sets out how the Committee discharged its duties during the year. The Committee met twice during the
year under review. Further details on attendance can be found on page 56. In addition, an evaluation of the committee’s
effectiveness and review of its terms of reference were also completed during the year.
The committee’s key roles and responsibilities are set out below.
Ongoing risk review
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Significant issues identified during the year under review and key matters communicated by the auditor during the audit are
included below.
Schroder BSC Social Impact Trust plc
58
Audit and Risk Committee Report
Risk and Internal
Controls
Principal and emerging risks
Reviewed the principal and emerging
risks faced by the Company together
with the systems, processes and
oversight in place to manage and
mitigate the risks.
Internal controls
Consideration of several key aspects of
internal control and risk management
operating within the Manager,
Portfolio Manager, depositary and
registrar, including assurance reports
and presentations on these controls.
Compliance with the investment
trust qualifying rules in S1158 of
the Corporation Tax Act 2010
Consideration of the Manager’s report
confirming compliance.
Financial Reports and
Valuation
Valuation and existence of holdings
The Company’s accounting policy for
valuing unquoted investments is set
out in note 1 on page 78 of the notes
to the accounts.
The Committee reviewed the
valuations taking account of the latest
available information about the
Company’s investments and the
Portfolio Manager’s knowledge of the
underlying investments.
Calculation of the investment
management fee
The management fee is calculated in
accordance with the contractual terms
contained in the AIFM agreement.
The Committee reviewed the
calculation of the management fee.
Overall accuracy of the report and
accounts
Consideration of the draft report and
accounts and the letter of comfort
from the Manager in support of the
letter of representation to the auditor.
Audit
Meetings with the auditors
Met the auditors without
representatives of the Manager
present. Representatives of the auditor
attended the committee meeting at
which the draft annual report and
accounts were considered and
presented a report on the findings of
the audit.
Auditors independence
On 16 October 2020, BDO LLP was
appointed as auditor to the Company.
This is the third year that BDO LLP will
be undertaking the Company’s audit.
The auditor is required to rotate the
senior statutory auditor every five
years. This is the third year that the
senior statutory auditor, Vanessa-
Jayne Bradley has conducted the audit
of the Company’s annual report and
accounts.
There are no contractual obligations
restricting the choice of external
auditor.
Audit results
The Committee 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 their own
internal quality control procedures.
Application during the year
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Governance
59
Risk Management and
Internal Controls
Financial Reports and
Valuation
Fair, balanced and understandable
Reviewed the annual report and
accounts to advise the Board whether
it was fair, balanced and
understandable.
Going concern and viability
Reviewed the impact of risks on going
concern and longer-term viability, as
described further in page 50.
Audit
Provision of non-audit services by
the auditor
The Committee has reviewed the FRC’s
Guidance on Audit Committees and
has formulated a policy on the
provision of non-audit services by the
Company’s auditor.
The Committee has determined that
the Company’s appointed auditor will
not be considered for the provision of
certain non-audit services, such as
accounting and preparation of the
financial statements, internal audit
and custody. The auditor may, if
required, provide other non-audit
services which will be judged on a
case-by-case basis.
The Committee was satisfied that this
did not affect the independence or
objectivity of the auditor.
Consent to continue as auditor
BDO LLP indicated to the committee
their willingness to continue to act as
auditor.
Application during the year (continued)
Audit and Risk Committee Report
Recommendations made to, and approved by, the Board:
• As a result of the work performed, the Committee concluded that the annual report for the year ended 30 June 2023,
taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess
the Company’s position, performance, business model and strategy, and has reported on these findings to the Board.
The Board’s conclusions in this respect are set out in the Statement of Directors’ Responsibilities on page 66.
• The Committee recommended that the Board approve the report and accounts.
• The Committee recommended that the going concern presumption be adopted in the annual report and accounts and
the explanations set out in the viability statement.
• Having reviewed the performance of the auditor as described above, the Committee considered it appropriate to
recommend the firm’s re-appointment. Resolutions to re-appoint BDO LLP as auditor to the Company, and to authorise
the Directors to determine their remuneration will be proposed at the AGM.
Mike Balfour
Audit and Risk Committee chair
27 October 2023
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Oversight of other service providers
The Committee reviews the performance and
competitiveness of the following service providers on at
least an annual basis:
• Depositary and custodian
• Corporate broker
• Registrar
The Committee also receives a report from the Company
Secretary on ancillary service providers, and considers
any recommendations.
The Committee noted the Audit and Risk Committee’s
review of the Auditor
Schroder BSC Social Impact Trust plc
60
Oversight of the Manager and the Portfolio
Manager
The Committee:
• reviews the Portfolio Manager’s performance, over the
short and long term, against the Company’s target
investment return, peer group and the market and
considers the social impact performance of investments
made on behalf of the Company.
• considers the reporting it has received from the
Manager and Portfolio Manager throughout the year,
and the reporting from the Manager and Portfolio
Manager to shareholders.
• assesses management fees 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 and
Portfolio Manager’s contracts, including terms such
as notice period.
• assesses whether the Company receives appropriate
administrative, accounting, company secretarial and
marketing support from the Manager.
The Committee undertook a detailed review of the
Portfolio 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 and
portfolio management agreements, including fee
structures, and agreed they remained fit for purpose.
The Committee reviewed the other services provided by
the Manager and agreed they were satisfactory.
The annual review of each of the service providers was
satisfactory.
The committee noted that the Audit and Risk Committee
had undertaken a detailed evaluation of the Manager,
registrar, and safekeeping agents’ internal controls.
Application during the year
Management Engagement Committee Report
The Management Engagement Committee is responsible for (1) the monitoring and oversight of the Manager’s and Portfolio
Manager’s performance and fees, and confirming their ongoing suitability, and (2) reviewing and assessing the Company’s
other service providers, including reviewing their fees. All Directors are members of the Committee. With effect from 13 October
2022, James B. Broderick was appointed as Chair of the Committee. The Committee’s terms of reference are available on the
Company’s website, www.schroders.com/sbsi. The Committee's effectiveness was assessed, and judged to be satisfactory, as
part of the Directors' annual review of the Board and its committees.
Recommendations made to, and approved by, the Board:
• That the ongoing appointment of the Manager and Portfolio Manager on the terms of their agreements with the Company,
including fees, was in the best interests of shareholders as a whole.
• That the Company’s service providers’ performance remained satisfactory.
• That James B. Broderick be appointed as Chair of the Committee with effect from 13 October 2022.
Approach
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Report and Accounts
for the period ended 30 June 2023
Governance
61
Selection and induction
• Committee prepares a job
specification for each role, and
an independent recruitment
firm is appointed following a
selection process. For the Chair
and the chairs of committees,
the Committee considers
current Board members too.
• Job specification outlines the
knowledge, professional skills,
personal qualities and
experience requirements.
• Potential candidates assessed
against the Company’s diversity
policy.
• Committee discusses the long
list, invites a number of
candidates for interview and
makes a recommendation to
the Board.
• Committee reviews the
induction and training of new
Directors.
Board evaluation and Directors’ fees
• Committee assesses each Director
annually.
• 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
election or re-election is subject to
shareholder approval.
• Committee reviews Directors’ fees, taking
into account comparative data and reports
to shareholders in the Remuneration
Report.
• Any proposed changes to the
remuneration policy for Directors are
discussed and reported to shareholders.
Succession
• The Board’s succession policy is
that Directors’ tenure will be for
no longer than nine years,
except in exceptional
circumstances, and that each
Director will be subject to
annual re-election at the AGM.
The policy reflects FRC guidance
that the Chair should not
remain in post beyond nine
years from the date of their first
appointment to the Board, and
that serving on the Board for
more than nine years from the
date of first appointment is
likely to impair, or could appear
to impair the independence of
Directors.
• Committee reviews the Board’s
current and future needs at
least annually. Should any need
be identified the Committee will
initiate the selection process.
• Committee oversees the
handover process for retiring
Directors.
Nomination Committee Report
The Nomination Committee is responsible for (1) the recruitment, selection and induction of Directors, (2) their assessment
during their tenure and fees, and (3) the Board’s succession. All Directors are members. With effect from 13 October 2022,
Alice Chapple was appointed as Chair of the Committee. The Committee’s terms of reference are available on the Company’s
website, www.schroders.com/sbsi. The Committee's effectiveness was assessed, and judged to be satisfactory, as part of the
Directors' annual review of the Board and its committees.
Approach
Oversight of Directors
Selection
Induction
Annual
evaluation
Annual review
of succession
policy
Application
of succession
policy
Application during the year
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Schroder BSC Social Impact Trust plc
62
Selection and induction
• No new appointments were
made during the year.
Board evaluation and Directors’ fees
• The Board, Chair and committee evaluation
process was undertaken in October 2023.
The evaluation included the completion of
questionnaires, culminating in written
reports being provided to the Committee.
The evaluation of the Board and its
committees was led by the Chair of the
Committee. The evaluation of the Chair was
led by the Chair of the Audit and Risk
Committee.
• The Committee reviewed each Director’s
time commitment and independence by
reviewing a complete list of appointments,
including pro bono not for profit roles, to
ensure that each Director remained free
from conflict and had sufficient time
available to discharge each of their duties
effectively. All Directors were considered to
be independent in character and
judgement.
• The Committee considered each Director’s
contributions, and noted that in addition to
extensive experience as professionals and
non-executive Directors, each Director had
valuable skills and experience, as detailed in
their biographies on pages 51 and 52.
• Based on its assessment, the Committee
provided individual recommendations for
each Director’s re-election.
• The Committee reviewed the remuneration
policy for recommendation to the Board and
shareholders, taking into account the
provisions of the Company’s articles of
association and the prevailing
remuneration environment for investment
companies.
• The Committee reviewed Directors’ fees,
using external benchmarking, and
recommended that Directors’ fees, remain
unchanged as detailed in the remuneration
report.
Succession
• The Committee believes it is
important for the Board to have
the appropriate skills and
diversity and has reviewed
composition and succession
plans with these in mind.
• The Board has complied with
the FCA Listing Rule in relation
to diversity and provided the
relevant disclosures on page 43.
Nomination Committee Report
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 and remain free from conflicts with the Company and its Directors, and should all be recommended for re-election
by shareholders at the AGM. Biographies of each Director can be found on pages 51 and 52.
• That Alice Chapple be appointed as Chair of the Committee with effect from 13 October 2022.
Application
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Report and Accounts
for the period ended 30 June 2023
Governance
63
Directors’ Remuneration Report
Introduction
The following remuneration policy is currently in force and is
subject to a binding vote every three years. The next vote will
take place at the AGM in 2024 and the current policy
provisions will continue to apply until that date. The below
Directors’ Remuneration Report 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 3 December 2021, 100% of the votes cast
(including votes cast at the Chair’s discretion) in respect of
approval of the Directors’ Remuneration Policy were in
favour. 3,000 votes were withheld.
At the AGM held on 2 December 2022, 100% of the votes cast
(including votes cast at the Chair’s discretion) in respect of
approval of the Directors’ Remuneration Report for the year
ended 30 June 2022 were in favour. Novotes were withheld.
Directors’ remuneration policy
The determination of the Directors’ fees is the responsibility
of the Nomination Committee, which makes
recommendations to the Board.
It is the Nomination Committee'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 Chair of the Board and the Chair of the Audit and Risk
Committee each receive fees at a higher rate than the other
Directors to reflect their additional responsibilities. Directors’
fees are set at a level to recruit and retain individuals of
sufficient calibre, with the level of knowledge, experience and
expertise necessary, and to promote the success of the
Company in reaching its short and long-term strategic
objectives.
The Board and its committees exclusively 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. 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 and in accordance with the
Company’s articles of association. No other payments are
made to Directors other than the reimbursement of
reasonable out-of-pocket expenses incurred in attending to
the Company’s business.
The 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.
Implementation of policy
The Board did not seek the views of shareholders in setting
this remuneration policy. Any comments on the policy
received from shareholders would be considered on a case
by case basis.
As the Company does not have any employees, no employee
pay and employment conditions were taken into account
when setting this remuneration policy and no employees
were consulted in its construction.
Directors’ fees are reviewed annually and take into account
research from third parties on the fee levels of Directors of
peer group companies, as well as industry norms, inflation
and factors affecting the time commitment expected of the
Directors. New Directors are subject to the provisions set out
in this remuneration policy.
Directors’ annual report on remuneration
This report sets out how the remuneration policy was
implemented during the year ended 30 June 2023.
Consideration of matters relating to Directors’
remuneration
Directors’ remuneration was last reviewed by the Nomination
Committee in October 2023 and it was determined not to
make any changes. The members of the Committee and
Board at the time that remuneration levels were considered
were as set out on pages63 to 65. 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 was taken into
consideration as was independent third party research.
Following this review, it was determined that Directors’ fees
would not be changed and for the year ending 30 June 2024
will be £30,000 per annum for each Director plus an
additional annual fee of £5,000 per annum for the Chair of
the Audit and Risk Committee. The Chair’s fee will be £40,000
per annum. Directors’ fees (before expenses) for the year
ending 30June 2024 are therefore expected to total £135,000
in aggregate.
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Schroder BSC Social Impact Trust plc
64
Directors’ Remuneration Report
Fees paid to Directors
The following amounts were paid by the Company to Directors for their services in respect of the year ended 30June 2023.
Directors’ remuneration is fixed; they do not receive any variable remuneration. The performance of the Company over the
period is presented on page 2, under the heading “Financial highlights”.
Change in annual fee over
Fees Taxable benefits
1
years ended 30 June
2023 2022 2023 2022 2023 2022 2021
2
Directors £ £ £ £ % % %
Susannah Nicklin (Chair) 40,000 40,046 486 – 0.0 0.0 0.0
Michael Balfour 35,000 35,040 4,643 1,563 0.0 0.0 0.0
James Broderick 30,000 30,034 292 – 0.0 0.0 0.0
Alice Chapple 30,000 30,034 168 – 0.0 0.0 0.0
135,000 135,154 5,589 1,563
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
Comprise amounts paid in respect of the period from inception on 22December 2020, to 30 June 2021.
The information in the above table has been audited.
Expenditure by the Company on remuneration and distributions to shareholders
The table below compares the remuneration payable to Directors, to distributions made to shareholders during the year under
review and the prior year. In considering these figures, shareholders should take into account the Company’s investment
objective.
Year ended Year ended
30 June 30 June
2023 2022 %
£’000 £’000 Change
Remuneration payable to Directors 141 137 2.9
Distributions paid to shareholders:
– Dividends paid 1,109 428
– Share buybacks 674 –
Total distributions to shareholders 1,783 428 316.6
The information in the above table has been audited.
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Report and Accounts
for the period ended 30 June 2023
Governance
65
Performance graph since 22 December 2020 (launch date)
Share price total return versus the FTSE All-Share Index Total Return, for the period from launch
on 22 December 2020, to 30 June 2023
1
1
Source: Morningstar. Rebased to 100 at 22 December 2020. The Company is legally required to compare its performance with a broad equity market
index. The Company’s performance is expected to have a low correlation to traditional quoted markets and has no meaningful index compar
ator. So the
FTSE All-Share Index been chosen as it is reflective of economic conditions in the UK.
Definitions of terms and performance measures are provided on page 95.
Directors’ share interests
The Company’s articles of association do not require Directors to own shares in the Company. The interests of Directors,
including those of connected persons, at the beginning and end of the financial year under review, are set out below.
As at As at
30 June 30 June
Director 2023
1
2022
1
Susannah Nicklin 21,558 19,512
Mike Balfour 20,000 10,000
James Broderick 500,000 500,000
Alice Chapple 10,000 10,000
1
Ordinary shares of 1p each
The information in the above table has been audited. There have been no changes in the Directors’ interests in the shares of
the Company between 30 June 2023 and the date of this Annual Report.
On behalf of the Board
Susannah Nicklin
Chair
27 October 2023
FTSE All-Share Index
Share price
94
96
98
100
102
104
106
108
110
112
114
116
118
120
122
124
126
128
130
22/12/2020
30/06/2021 30/06/2023
30/06/2022
Directors’ Remuneration Report
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Schroder BSC Social Impact Trust plc
66
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the annual report
and accounts in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial
statements for each financial period. Under that law the
Directors have prepared the financial statements in
accordance with United Kingdom Generally Accepted
Accounting Practice (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;
– prepare a directors’ report, a strategic report and
directors’ remuneration report which comply with the
requirements of the Companies Act 2006; 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 Directors are responsible for ensuring the annual report
and the financial statements are made available on a website.
Financial statements are published on the Company’s website
in accordance with legislation in the United Kingdom
governing the preparation and dissemination of financial
statements, which may vary from legislation in other
jurisdictions. The maintenance and integrity of the
Company’s website is the responsibility of the Manager. The
Directors’ responsibility also extends to the ongoing integrity
of the financial statements contained therein.
Each of the Directors, whose names and functions are listed
on pages 51 and 52, 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 annual report and accounts includes a fair review of
the development and performance of the business and
the
financial position of the Company, together with a
description of the principal risks and uncertainties that it
faces; and
– the annual report and accounts, taken as a whole, is fair,
balanced and understandable and provides the
information necessary for shareholders to assess the
Company’s position and performance, business model
and strategy.
On behalf of the Board
Susannah Nicklin
Chair
27 October 2023
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67
Financial
Opinion on the financial statements
In our opinion the financial statements:
• give a true and fair view of the state of the Company’s affairs as at 30 June 2023 and of its net return after taxation 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.
We have audited the financial statements of Schroder BSC Social Impact Trust plc (the ‘Company’) for the year ended 30 June
2023 which comprise the Income Statement, the Statement of Changes in Equity, the Statement of Financial Position, the Cash
Flow Statement and the notes to the financial statements, 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United
Kingdom Generally Accepted Accounting Practice).
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. Our audit opinion is consistent with the additional report to the audit committee.
Independence
Following the recommendation of the audit committee, we were appointed by the Board of Directors on 16 October 2020 to
audit the financial statements for the year ended 30 June 2021 and subsequent financial periods. The period of total
uninterrupted engagement including retenders and reappointments is three years, covering the years ended 30 June 2021 to
30 June 2023. We remain independent of the Company in accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and
we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by
that standard were not provided to the Company.
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:
• Evaluating the appropriateness of the Directors’ method of assessing the going concern in light of geopolitical instability,
elevated inflation rates, depressed market prices and general market volatility by reviewing the information used by the
Directors in completing their assessment; and
• Assessing the appropriateness of Directors’ assumptions and judgements made in their base case and stress tested
forecasts including consideration of current cash levels, committed funding and financial ratios to ascertain the financial
health of the Company.
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 of
at least twelve months from when the financial statements are authorised for issue.
In relation to the Company’s reporting on how it has 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.
Overview
2023 2022
Key audit matters – Valuation of unquoted investments ✔ ✔
Materiality – Company financial statements as a whole
£1.33m (2022: £1.70m) based on 1.5% (2022: 2%) of Net assets (2022: Investments)
Independent Auditor’s Report
to the Members of Schroder BSC Social Impact
Trust plc
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Schroder BSC Social Impact Trust plc
Key audit matter How the scope of our audit
addressed the key audit matter
For 100% of the unquoted investment population, we
challenged whether the valuation methodology was
the most appropriate in the circumstances under the
International Private Equity and Venture Capital
Valuation (“IPEV”) Guidelines and FRS 102 and
performed the following procedures:
Unquoted Investment held at fair value
We attended all the Valuation Committee meetings in
the year to observe the Portfolio Manager discussing
and challenging the estimation uncertainty in the
valuations and movements in valuations in the year.
We obtained the unaudited June 2023 quarterly
reports prepared by the Fund General Partners from
the Portfolio Manager, which form the starting point
of the Portfolio Manager and the Manager’s period
end valuation and used this to recalculate the value of
the investments at the year-end.
We obtained direct confirmation from the Funds of the
Net Asset Values (‘NAV’) held at the balance sheet date.
We recalculated the Company’s share of NAV based on
the direct confirmation received and the NAV reported
within the June 2023 Investor Report.
We reviewed the associated audited financial
statements and audit reports of the Funds to check for
each Fund that the audit report was unmodified and
that the respective audit firms have the requisite skills
and knowledge to audit the Funds. Additionally, we
checked that the Fund investments are carried at fair
value in accordance with the IPEV Guidelines and
FRS102 which is the same basis as the Company.
We analysed movements in the valuations of the
Funds and reviewed the movements in the valuation
of underlying investments held in the Funds, between
the date of the audited financial statements and the
June 2023 Investor Reports. We obtained explanations
for any material movements from the Portfolio
Manager and the Manager and looked for
corroborating information in the Investor Reports
provided by the General Partners of the Fund to
support any material valuation movements.
We consider the valuation of unquoted
investments to be the most significant
audit area.
There is an inherent risk of management
override arising from the unquoted
investment valuations being prepared by
the Manager, and the Portfolio Manager
who is remunerated on the net asset
value of the Company.
There is a high level of estimation
uncertainty involved in determining the
unquoted investment valuations.
Investments is the most significant
balance in the financial statements and
where we utilise most of our audit
resources and was therefore considered
to be a key audit matter.
Valuation of unquoted
investments
(Note 1b and 9)
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the Company and its environment, including the Company’s system
of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of
management override of internal controls, including assessing whether there was evidence of bias by the Directors that may
have represented a risk of material misstatement.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not
due to fraud) that we identified, including 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. This matter was addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on this matter.
Independent Auditor’s Report
to the Members of Schroder BSC Social Impact
Trust plc
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Report and Accounts
for the year ended 30 June 2023
69
Financial
Independent Auditor’s Report
to the Members of Schroder BSC Social Impact
Trust plc
Key audit matter How the scope of our audit
addressed the key audit matter
Investment held at amortised cost
We obtained direct confirmation from the holders of
the loan notes of the capital amount outstanding at
the balance sheet date.
For all the investments held in loan portfolios, we
agreed all the inputs used in the amortisation
calculation to the underlying loan agreements. We
also agreed capital and interest repayments to the
underlying loan agreement and to bank statements if
amounts had been paid in the period.
We recalculated the amortised cost of each of the
loans.
We considered whether there were any impairment
indicators present within the loan, such as interest
payments not being made or capital repayments
missed. We did this by tracing all payments through
bank statements to confirm these were all made in
line with the agreement.
Key observations:
Based on the procedures performed we consider the
investment valuations and ownership to be
appropriate.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.
We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these
levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and
the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
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Schroder BSC Social Impact Trust plc
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
Company financial statements
2023 2022
£m £m
Materiality 1.33 1.7
Basis for determining materiality 1.5% of Net assets 2% of Investments
Rationale for the benchmark applied We have changed the basis of materiality in the current year from Investments to
Net Asset. This is as the Investment Trust has now been operating for a number of
years since initial fundraise, with the funds raised, now invested in various
investments. As such to be consistent with the approach followed for Investment
Trusts, the basis of materiality was changed from Investments to Net Assets. The
% chosen was set at 1.5% in the current year as the portfolio held is predominately
made up of unquoted investments, with a significant portion of quoted
investments, also held.
Performance materiality 1.0 1.3
The level of performance materiality applied was set after having considered a
number of factors including the expected total value of known and likely
misstatements and the level of transactions in the year.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £66,000 (2022:
£88,000) for the financial statements as a whole. We also agreed to report differences below these thresholds that, in our
view, warranted reporting on qualitative grounds.
Other information
The Directors are responsible for the other information. The other information comprises the information included in the
report and accounts other than the financial statements and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our 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 this other information, we are required to report that fact.
We have nothing to report in this regard.
Rationale for the percentage
applied for performance materiality
75% of materiality 75% of materiality Basis for determining performance
materiality
Independent Auditor’s Report
to the Members of Schroder BSC Social Impact
Trust plc
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Report and Accounts
for the year ended 30 June 2023
71
Financial
Independent Auditor’s Report
to the Members of Schroder BSC Social Impact
Trust plc
Corporate governance statement
The Listing Rules require us to review 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.
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.
Going concern and longer-term viability • The Directors' statement with regards to the appropriateness of adopting the
going concern basis of accounting and any material uncertainties identified;
and
• The Directors’ explanation as to their assessment of the Company’s prospects,
the period this assessment covers and why the period is appropriate
Other Code provisions • Directors’ statement on fair, balanced and understandable;
• Board’s confirmation that it has carried out a robust assessment of the
emerging and principal risks;
• The section of the annual report that describes the review of effectiveness of
risk management and internal control systems; and
• The section describing the work of the audit committee.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report and Directors’ report 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 the Directors’ report have been prepared in
accordance with applicable legal requirements.
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 the Directors’ report.
Directors’ remuneration In our opinion, the part of the Directors’ remuneration report to be audited has
been properly prepared in accordance with the Companies Act 2006.
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.
Matters on which we are required to
report by exception
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Responsibilities of Directors
As explained more fully in the statement of Directors’ responsibilities, 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.
Extent to which the audit was 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 material misstatements in respect of irregularities, including fraud. The extent to
which our procedures are capable of detecting irregularities, including fraud is detailed below:
Non-compliance with laws and regulations
Based on:
• Our understanding of the Company and the industry in which it operates;
• Discussion with management and those charged with governance; and
• Obtaining and understanding of the Company’s policies and procedures regarding compliance with laws and regulations,
we considered the significant laws and regulations to be Companies Act 2006, the FCA listing and DTR rules, the principles of
the AIC Code of Corporate Governance, industry practice represented by the AIC SORP, the applicable accounting framework,
and the Company’s qualification as an Investment Trust under UK tax legislation as any non-compliance of this would lead to
the Company losing various deductions and exemptions from corporation tax.
Our procedures in respect of the above included:
• Agreement of the financial statement disclosures to underlying supporting documentation;
• Enquiries of management and those charged with governance relating to the existence of any non-compliance with laws
and regulations;
• Reviewing minutes of meeting of those charged with governance throughout the period for instances of non-compliance
with laws and regulations; and
• Reviewing the calculation in relation to Investment Trust compliance to check that the Company was meeting its
requirements to retain its Investment Trust Status.
Fraud
We assessed the susceptibility of the financial statement to material misstatement including fraud.
Our risk assessment procedures included:
• Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;
• Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud; and
• Discussion amongst the engagement team as to how and where fraud might occur in the financial statements.
Independent Auditor’s Report
to the Members of Schroder BSC Social Impact
Trust plc
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Report and Accounts
for the year ended 30 June 2023
73
Financial
Independent Auditor’s Report
to the Members of Schroder BSC Social Impact
Trust plc
Based on our risk assessment, we considered the areas most susceptible to be valuation of unquoted investments and the
risk of management override of controls in relation to the significant judgements made.
Our procedures in respect of the above included:
• In relation to the risk of management override of controls we assessed the significant judgements made by management
as set out in the Key Audit Matters section of the report;
• In response to the risk of fraud in the valuation of the unquoted investments we performed the procedures set out in the
Key Audit Matters section of the report;
• Recalculating investment management fees in total; and
• Obtaining independent confirmation of bank balances.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members
who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-
compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising
that 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, misrepresentations or through collusion. There
are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and
regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of
it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
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.
Vanessa-Jayne Bradley (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
27 October 2023
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
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Schroder BSC Social Impact Trust plc
Income Statement
For the year ended 30 June 2023
2023 2022
Revenue Capital Total Revenue Capital Total
Note £’000 £’000 £’000 £’000 £’000 £’000
(Losses)/gains on investments held at fair value
through profit or loss 2
– (1,020) (1,020) – 632 632
Income from investments 3
2,695 – 2,695 1,817 – 1,817
Other interest receivable and similar income 3 77 – 77 40 – 40
Gross return 2,772 (1,020) 1,752 1,857 632 2,489
Investment management fees 4
(334) (334) (668) (286) (286) (572)
Administrative expenses 5
(464) – (464) (452) – (452)
Transaction costs – – – – (22) (22)
Net return/(loss) before taxation 1,974 (1,354) 620 1,119 324 1,443
Taxation 6 – – – – – –
Net return/(loss) after taxation 1,974 (1,354) 620 1,119 324 1,443
Return/(loss) per share 7 2.32p (1.59)p 0.73p 1.37p 0.40p 1.77p
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 year (2022: none).
The notes on pages 78 to 90 form an integral part of these accounts.
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Report and Accounts
for the year ended 30 June 2023
75
Financial
Statement of Changes in Equity
For the year ended 30 June 2023
Year ended 30 June 2023
Called-up
share Share Special Capital Revenue
capital premium reserve reserves reserve Total
Note £’000 £’000 £’000 £’000 £’000 £’000
At 30 June 2022 853 10,571 72,993 4,373 1,126 89,916
Repurchase of the Company’s own shares
into treasury
– – (674) – – (674)
Net (loss)/return after taxation – – – (1,354) 1,974 620
Dividends paid in the year 8 – – – – (1,109) (1,109)
At 30 June 2023 853 10,571 72,319 3,019 1,991 88,753
Year ended 30 June 2022
Called-up
share Share Special Capital Revenue
capital premium reserve reserves reserve Total
Note £’000 £’000 £’000 £’000 £’000 £’000
At 30 June 2021 750 – 72,993 4,049 435 78,227
Issue of ordinary shares 103 10,729 – – – 10,832
Share issue costs – (158) – – – (158)
Net return after taxation – – – 324 1,119 1,443
Dividends paid in the year 8 – – – – (428) (428)
At 30 June 2022 853 10,571 72,993 4,373 1,126 89,916
The notes on pages 78 to 90 form an integral part of these accounts.
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Schroder BSC Social Impact Trust plc
Statement of Financial Position
at 30 June 2023
30 June 30 June
2023 2022
Note £’000 £’000
Fixed assets
Investments held at fair value through profit or loss 9 64,199 67,000
Investments held at amortised cost 9 22,583 21,832
86,782 88,832
Current assets
Debtors 10 401 206
Cash at bank and in hand 2,089 1,310
2,490 1,516
Current liabilities
Creditors: amounts falling due within one year 11 (519) (432)
Net current assets 1,971 1,084
Total assets less current liabilities 88,753 89,916
Net assets 88,753 89,916
Capital and reserves
Called-up share capital 12 853 853
Share premium 13
10,571 10,571
Special reserve 13
72,319 72,993
Capital reserves 13
3,019 4,373
Revenue reserve 13 1,991 1,126
Total equity shareholders’ funds 88,753 89,916
Net asset value per share 14 104.90p 105.39p
These accounts were approved and authorised for issue by the Board of Directors on 27 October 2023 and signed on its
behalf by:
Susannah Nicklin
Chair
The notes on pages 78 to 90 form an integral part of these accounts.
Registered in England and Wales as a public company limited by shares
Company registration number: 12902443
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Report and Accounts
for the year ended 30 June 2023
77
Financial
Cash Flow Statement
For the year ended 30 June 2023
2023 2022
Note £’000 £’000
Net cash inflow from operating activities
15 1,116 873
Investing activities
Purchases of investments (7,833) (31,411)
Sales of investments 9,279 4,516
Net cash inflow/(outflow) from investing activities 1,446 (26,895)
Net cash inflow/(outflow) before financing 2,562 (26,022)
Financing activities
Dividend paid (1,109) (428)
Repurchase of the Company’s own shares into treasury
(674) –
Issue of Ordinary Shares
– 10,832
Share issue costs – (158)
Net cash (outflow)/inflow from financing activities (1,783) 10,246
Net cash inflow/(outflow) in the year 779 (15,776)
Cash at bank and in hand at the beginning of the year 1,310 17,086
Net cash inflow/(outflow) in the year 779 (15,776)
Cash at bank and in hand at the end of the year 2,089 1,310
Included in net cash inflow from operating activities are dividends received amounting to £860,000 (year ended 30 June 2022:
£723,000), income from debt securities amounting to £1,236,000 (year ended 30 June 2022: £1,039,000) and other interest
receivable and similar income amounting to £70,000 (year ended 30 June 2022: £40,000).
The notes on pages 78 to 90 form an integral part of these accounts.
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Schroder BSC Social Impact Trust plc
Notes to the Accounts
1. Accounting Policies
(a) Basis of accounting
Schroder BSC Social Impact 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.
The accounts are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting
Practice (“UK GAAP”), in particular in accordance with Financial Reporting Standard (FRS) 102 “The Financial Reporting
Standard applicable in the UK and Republic of Ireland”, and with the 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. All of the Company’s operations are of a continuing nature.
The accounts have been prepared on a going concern basis under the historical cost convention, as modified by the
revaluation of investments held at fair value. The Directors believe that the Company has adequate resources to continue
operating until 31 October 2024, which is at least 12 months from the date of approval of these accounts. In forming this
opinion, the Directors have taken into consideration: the controls and monitoring processes in place; the Company’s level of
debt, undrawn commitments and other payables; the low level of operating expenses, comprising largely variable costs which
would reduce pro rata in the event of a market downturn; the Company’s cash flow forecasts and the liquidity of the
Company’s investments. In forming this opinion, the Directors have also considered any potential impact of climate change,
and the risk/impact of elevated and sustained inflation and interest rates on the viability of the Company. The Company has
additionally performed stress tests which confirm that a 50% fall in the market prices of the portfolio would not affect the
Board’s conclusions in respect of going concern. Further details of Directors’ considerations regarding this are given in the
Chair’s Statement, Portfolio Managers’ Review, Going Concern Statement, Viability Statement and under the Principal and
emerging risks and uncertainties heading on page 47.
The accounts are presented in sterling and amounts have been rounded to the nearest thousand.
The accounting policies applied to these accounts are consistent with those applied in the accounts for the year ended 30 June
2022.
Certain judgements, estimates and assumptions have been required in valuing the Company’s investments and these are
detailed in note 19 on page 85.
(b) 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. Investments with a fixed coupon and redemption amount are valued at amortised cost in accordance with
FRS 102. Other financial assets are managed and their 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.
Upon initial recognition these investments are designated by the Company as “held at fair value through profit or loss”,
included initially at cost and subsequently at fair value using the methodology below. This valuation process is consistent with
International Private Equity and Venture Capital Guidelines issued in December 2022, which are intended to set out current
best practice on the valuation of Private Capital investments.
(i) Quoted bid prices for investments traded in active markets.
(ii) The price of a recent investment, where there is considered to have been no material change in fair value.
(iii) Where it is felt that a milestone has been reached or a target achieved, the Company may use the price of a recent
investment adjusted to reflect that change.
(iv) Investments in funds may be valued using the NAV per unit with an appropriate discount or premium applied to arrive
at a unit price.
(v) Price earnings multiples, based on comparable businesses.
(vi) Industry benchmarks, where available.
(vii) Discounted Cash Flow techniques, where reliable estimates of cash flows are available.
The above valuation methodologies are deemed to reflect the impact of climate change risk on the investments held.
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.
(c) Accounting for reserves
Gains and losses on sales of investments and the management fee or finance costs allocated to capital, are included in the
Income Statement and dealt with in capital reserves. Increases and decreases in the valuation of investments held at the year
end, are included in the Income Statement and in capital reserves within “Investment holding gains and losses”.
For shares that are repurchased and held in treasury, the full cost is charged to the Special reserve.
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Report and Accounts
for the year ended 30 June 2023
79
Financial
Notes to the Accounts
(d) 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.
Income from limited partnerships will be included in revenue on the income declaration date.
Income from fixed interest debt securities is recognised using the effective interest method.
Deposit interest outstanding at the year end is calculated and accrued on a time apportionment basis using market rates of
interest.
(e) Expenses
All expenses are accounted for on an accruals basis. Expenses are allocated wholly to the revenue column of the Income
Statement with the following exceptions:
– The management fee is allocated 50% to revenue and 50% to capital in line with the Board’s expected long-term split
of revenue and capital return from the Company’s investment portfolio.
– Expenses incidental to the purchase of an investment are charged to capital. These expenses are commonly referred to
as transaction costs and comprise brokerage commission and stamp duty. Details of transaction costs are given in
note 9 (c) on page 83.
The underlying costs incurred by the Company’s investments in collective funds are not included in the various expense
disclosures.
(f) Finance costs
Finance costs, including any premiums payable on settlement or redemption and direct issue costs, are accounted for on an
accruals basis using the effective interest method and in accordance with FRS 102.
Finance costs are allocated 50% to revenue and 50% to capital in line with the Board’s expected long-term split of revenue and
capital return from the Company’s investment portfolio.
(g) Financial instruments
Cash at bank and in hand may comprise cash, short-term deposits and highly liquid investments which are readily convertible
to a known amount of cash and are subject to insignificant risk of changes in value.
Other debtors and creditors do not carry any interest, are short-term in nature and are accordingly stated at nominal value,
with debtors reduced by appropriate allowances for estimated irrecoverable amounts.
Bank loans and overdrafts are initially measured at fair value and subsequently measured at amortised cost. They are
recorded at the proceeds received net of direct issue costs. The Company had no bank loans or overdrafts at 30 June 2023
(2022: nil).
(h) Taxation
Taxation on ordinary activities comprises amounts expected to be received or paid.
Tax relief is allocated to expenses charged to the capital column of the Income Statement on the “marginal basis”. On this
basis, if taxable income is capable of being entirely offset by revenue expenses, then no tax relief is transferred to the capital
column.
As the Company continues to meet the conditions required to retain its status as an Investment Trust, any capital gains or
losses arising on the revaluation or disposal of investments are exempt. The Company has no deferred tax asset, recognised
or unrecognised at 30 June 2023 (2022: nil).
(i) Value added tax (“VAT”)
Expenses are disclosed inclusive of the related irrecoverable VAT.
(j) Dividends payable
In accordance with FRS 102, dividends payable are included in the accounts in the year in which they are paid. Part, or all of
any dividend declared may be designated as an “interest distribution”, calculated in accordance with the investment trust
income streaming rules and paid without deduction of any income tax.
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Schroder BSC Social Impact Trust plc
2. Gains on investments held at fair value through profit or loss
2023 2022
£’000 £’000
(Losses)/gains on sales of investments based on historic cost (642) 99
Amounts recognised in investment holding gains in the previous
year in respect of investments sold in the year 537 12
(Losses)/gains on sales of investments based on the carrying value at the
previous balance sheet date
(105) 111
Net movement in investment holding (losses)/gains (915) 521
(Losses)/gains on investments held at fair value in the current year through profit and loss (1,020) 632
3. Income from investments
2023 2022
£’000 £’000
Income from investments:
UK dividends
1,133 752
Overseas dividends
163 20
Interest income from debt securities and other financial assets 1,399 1,045
2,695 1,817
Other interest receivable and similar income:
Deposit interest
37 2
Other income 40 38
77 40
Total income 2,772 1,857
4. Investment management fees
2023 2022
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Investment management fees 334 334 668 286 286 572
The bases for calculating the investment management fees are set out in the Report of the Directors on page 54 and details of
all amounts payable to the managers are given in note 17 on page 85.
5. Administrative expenses
2023 2022
£’000 £’000
Other administrative expenses 261 263
Directors’ fees
1
141 137
Auditor’s remuneration for the audit of the Company’s annual accounts
2
62 52
464 452
1
Full details are given in the remuneration report on pages 65 to 66
2
Includes VAT amounting to £12,000 (2022: £9,000).
Notes to the Accounts
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Report and Accounts
for the year ended 30 June 2023
81
Financial
6. Taxation
(a) Analysis of tax charge for the year
2023 2022
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Taxation for the year – – – – – –
The Company has no corporation tax liability for the year ended 30 June 2023 (2022: nil).
(b) Factors affecting tax charge for the year
2023 2022
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Net return before taxation 1,974 (1,354) 620 1,119 324 1,443
Net return before taxation multiplied by the
Company’s applicable rate of corporation tax for
the year of 20.5% (2022: 19%)
405 (278) 127 213 62 275
Effects of:
Capital gains on investments
– 210 210 – (120) (120)
Tax deductible interest distribution
(405) 68 (337) (213) 54 (159)
Expenses not deductible for corporation tax purposes – – – – 4 4
Taxation on ordinary activities – – – – – –
UK Corporation Tax rate has increased from 19% to 25% with effect from 1 April 2023.
(c) Deferred taxation
The Company has met the condition to retain its status as an Investment Trust Company. The Company has no unrecognised
deferred tax asset (2022: nil).
7. Return per share
2023 2022
£’000 £’000
Revenue return 1,974 1,119
Capital return (1,354) 324
Total return 620 1,443
Weighted average number of shares in issue during the year
85,132,892 81,387,804
Revenue return per share
2.32p 1.37p
Capital return per share (1.59)p 0.40p
Total return per share 0.73p 1.77p
There are no dilutive instruments, the return per share is actual return.
8. Dividends
2023 2022
£’000 £’000
2022 final dividend of 1.30p (2021: 0.57p) paid out of revenue profits as
an interest distribution 1,109 428
2023 2022
£’000 £’000
2023 final dividend proposed of 2.30p (2022: 1.30p), to be paid out of revenue profits 1,946 1,109
The 2023 final dividend of 2.30p will be split between a 2.16p interest distribution and a 0.14p equity dividend (2022: 1.30p
was interest distribution).
The proposed final dividend amounting to £1,946,000 (2022: £1,109,000) is the amount used for the basis of determining
whether the Company has satisfied the distribution requirements of Section 1158 of the Corporation Tax Act 2010. The
revenue available for distribution by way of dividend for the year is £1,974,000 (2022: £1,119,000).
Notes to the Accounts
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Schroder BSC Social Impact Trust plc
9. Fixed assets
(a) Movement in investments
2023 2022
Investments Investments Investments Investments
held at fair held at held at fair held at
value through amortised value through amortised
profit or loss cost Total profit or loss cost Total
£’000 £’000 £’000 £’000 £’000 £’000
Opening book cost 62,267 21,832 84,099 37,169 21,142 58,311
Opening investment holding gains 4,733 – 4,733 4,200 – 4,200
Opening fair value
67,000 21,832 88,832 41,369 21,142 62,511
Purchases at cost
7,269 980 8,249 31,411 3,195 34,606
Sales proceeds
(9,050) (229) (9,279) (6,101) (2,816) (8,917)
(Losses)/gains on investments
held at fair value through profit
or loss (1,020) – (1,020) 321 311 632
Closing fair value 64,199 22,583 86,782 67,000 21,832 88,832
Closing book cost
59,844 22,583 82,427 62,267 21,832 84,099
Closing investment holding gains 4,355 – 4,355 4,733 – 4,733
Closing fair value 64,199 22,583 86,782 67,000 21,832 88,832
(b) Unquoted investments, including investments quoted in inactive markets
Material revaluations of unquoted investments during the year
Opening Closing
valuation valuation
at 30 June at 30 June
2022 Purchases Revaluation Distributions 2023
Investment £’000 £’000 £’000 £’000 £’000
Bridges Evergreen Capital LP 14,451 – (1,701) – 12,750
Man GPM RI Community Housing 1 LP 5,202 2,930 397 (383) 8,146
UK Affordable Housing Fund 9,848 – 351 – 10,199
Material revaluations of unquoted investments during the year ended 30 June 2022
Opening Closing
valuation valuation
at 30 June at 30 June
2021 Purchases Revaluation Distributions 2022
Investment £’000 £’000 £’000 £’000 £’000
Community Investment fund – 4,500 957 – 5,457
Material disposals of unquoted investments during the year
2023
Book Sales Realised
cost proceeds gain/(loss)
Investment £’000 £’000 £’000
Resonance Real Lettings Property Fund LP 990 990 –
Notes to the Accounts
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Report and Accounts
for the year ended 30 June 2023
83
Financial
Material disposals of unquoted investments during the year ended 30 June 2022
2022
Book Sales Realised
cost proceeds gain/(loss)
Investment £’000 £’000 £’000
Man GPM RI Community Housing 1 LP 851 851 –
There were no material disposals of unquoted investments during the year ended 30 June 2022.
(c) Transaction costs
The following transaction costs, comprising stamp duty and legal fees, were incurred in the year:
2023 2022
£’000 £’000
On acquisitions – 12
On disposals – –
– 12
10. Current assets
2023 2022
Debtors £’000 £’000
Dividends and interest receivable 382 193
Other debtors 19 13
401 206
The Directors consider that the carrying amount of debtors approximates to their fair value.
11. Current liabilities
Creditors: amounts falling due within one year
2023 2022
£’000 £’000
Other creditors and accruals 519 432
The Directors consider that the carrying amount of creditors falling due within one year approximates to their fair value.
12. Called-up share capital
2023 2022
£’000 £’000
Ordinary Shares of 1p each, allotted, called up and fully paid:
Opening balance of 85,316,586 (2022: 75,000,000) shares
853 750
Repurchase of 711,720 (2022: nil) shares into treasury
(7) –
Placing of nil (2022: 10,316,586) shares – 103
Subtotal of 84,604,866 (2022: 85,316,586) shares
846 853
711,720 (2022: nil) shares held in treasury 7 –
Closing balance
1
853 853
1
Represents 85,316,586 (2022: 85,316,586) shares of 1p each, including 711,720 (2022: nil) held in treasury.
During the year, the Company repurchased 711,720 of its own shares, nominal value £7,117, to hold in treasury, representing
0.83% of the shares outstanding at the beginning of the year. The total consideration paid for these shares amounted to
£674,000. The reason for these purchases was to seek to manage the volatility of the share price discount to NAV per share.
Notes to the Accounts
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Schroder BSC Social Impact Trust plc
13. Reserves
Year ended 30 June 2023
Capital reserves
Gains Investment
and losses holding
Share Special on sales of gains and Revenue
premium
1
reserve
2
investments
3
losses
4
reserve
5
£’000 £’000 £’000 £’000 £’000
Opening balance 10,571 72,993 (360) 4,733 1,126
Losses on sales of investments based on the
carrying value at the previous balance sheet date
– – (105) – –
Net movement in investment holding losses – – – (915) –
Transfer on disposal of investments – – (537) 537 –
Repurchase of the Company’s own shares into treasury – (674) – – –
Management fees allocated to capital – – (334) – –
Dividends paid – – – – (1,109)
Retained revenue for the year – – – – 1,974
Closing balance 10,571 72,319 (1,336) 4,355 1,991
Year ended 30 June 2022
Capital reserves
Gains Investment
and losses holding
Share Special on sales of gains and Revenue
premium
1
reserve
2
investments
3
losses
4
reserve
5
£’000 £’000 £’000 £’000 £’000
Opening balance – 72,993 (151) 4,200 435
Proceeds of placing 10,729 – – – –
Expenses of placing (158) – – – –
Gains on sales of investments based on the
carrying value at the previous balance sheet date – – 111 – –
Net movement in investment holding gains – – – 521 –
Transfer on disposal of investments – – (12) 12 –
Management fees allocated to capital – – (286) – –
Transaction costs – – (22) – –
Dividend paid – – – – (428)
Retained revenue for the year – – – – 1,119
Closing balance 10,571 72,993 (360) 4,733 1,126
The Company’s Articles of Association permit dividend distributions out of realised capital profits.
1
Share premium is a non distributable reserve and represents the amount by which the fair value of the consideration received from shares issued
exceeds the nominal value of shares issued.
2
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.
3
This is a realised (distributable) capital reserve and may be distributed as dividends or used to repurchase the Company’s own shares.
4
This reserve may include some holding gains 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.
5
The revenue reserve may be distributed as dividends or used to repurchase the Company’s own shares.
14. Net asset value per share
2023 2022
Net assets attributable to shareholders (£’000) 88,753 89,916
Shares in issue at the year end 84,604,866 85,316,586
Net asset value per share 104.90p 105.39p
Notes to the Accounts
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Report and Accounts
for the year ended 30 June 2023
85
Financial
15. Reconciliation of total return on ordinary activities before finance costs and
taxation to net cash inflow from operating activities
2023 2022
£’000 £’000
Total return before taxation 620 1,443
Less capital return before taxation
1,354 (324)
Less accumulation dividends
1
(416) (51)
(Increase)/decrease in prepayments and accrued income
(189) 14
(Increase)/decrease in other debtors
(6) 1
Increase in other creditors
87 98
Management fee and transaction costs allocated to capital (334) (308)
Net cash inflow from operating activities 1,116 873
1
Accumulation dividends are capitalised to investments.
16. Uncalled capital commitments
At 30 June 2023, the Company had uncalled capital commitments amounting to £8,749,000 (2022: £17,392,000) in respect of
follow-on investments, which may be drawn down or called by investee entities, subject to standard notice periods.
17. Transactions with the Managers
Under the terms of the Alternative Investment Fund Manager Agreement, the Manager is entitled to receive a management
fee. Details of the basis of the calculation are given in the Directors’ Report on page 54.
The fee payable to the Manager in respect of the year ended 30 June 2023 amounted to £614,000 (2022: £512,000), of which
£307,000 (2022: £171,000) 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.
Under the terms of the Investment Management Agreement, the Manager may reclaim from the Company certain expenses
paid by the Manager on behalf of the Company to HSBC in connection with accounting and administrative services provided
to the Company. These charges amounted to £66,000 for the year ended 30 June 2023 (2022: £96,000), and the whole of this
amount (2022: same) was outstanding at the year end.
No Director of the Company served as a Director of any company within the Schroder Group at any time during the year, or
prior period.
In accordance with the terms of a discretionary mandate between the Company, Big Society Capital Limited and Rathbone
Investment Management Limited is entitled to receive a management fee for portfolio management services relating to
certain of the Company’s investments. Details of the basis of the calculation are given in the Directors’ Report on page 54. The
fee payable to Rathbone in respect of the year ended 30June 2023 amounted to £55,000, (2022: £61,000) of which £13,000
(2022: £14,000) was outstanding at the year end.
18. Related party transactions
Details of the remuneration payable to directors are given in the Directors’ Remuneration Report on page 64 and details of
Directors’ shareholdings are given in the Directors’ Remuneration Report on page 65. Details of transactions with the
Managers are given in note 17 above. There have been no other transactions with related parties during the year or prior
period.
19. 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 certain investments held
in 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.
Notes to the Accounts
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Schroder BSC Social Impact Trust plc
Details of the Company’s policy for valuing investments are given in note 1(b) on page 78. Level 3 investments have been
valued in accordance with note 1(b)(ii) to (vii).
The Company’s unlisted investments held at fair value are valued using a variety of techniques consistent with the
recommendations set out in the International Private Equity and Venture Capital guidelines. Investments in third-party
managed funds were valued by reference to the most recent net asset value provided by the relevant manager. The valuation
methods adopted by third-party managers include using comparable company multiples, net asset values, assessment of
comparable company performance and assessment of milestone achievement at the investee. For certain investments, such
as High Impact Housing, the third-party manager may appoint external valuers to periodically value the underlying portfolio
of assets. The valuations of third-party managed funds will also be subject to an annual audit. The valuations of all
investments are considered by the Portfolio Manager and recommended to the AIFM, who in turn recommends them to the
Company. Where it is deemed appropriate, the Portfolio Manager may recommend an adjusted valuation to the extent that
the adjusted valuation represents the Portfolio Manager’s view of fair value.
At 30 June, the Company’s investment held at fair value, were categorised as follows:
2023 2022
£’000 £’000
Level 1 9,342 16,847
Level 2
– –
Level 3 54,857 50,153
Total 64,199 67,000
There have been no other transfers between Levels 1, 2 or 3 during the year (2022: nil).
Movements in fair value measurements included in Level 3 during the year are as follows:
2023 2022
£’000 £’000
Opening book cost 44,693 26,222
Opening investment holding gains 5,460 4,244
Opening fair value of Level 3 investments
50,153 30,466
Purchases at cost
6,957 18,471
Sales proceeds
(1,742) –
Net gains on investments (511) 1,216
Closing fair value of Level 3 investments 54,857 50,153
Closing book cost
49,908 44,693
Closing investment holding gains 4,949 5,460
Closing fair value of Level 3 investments 54,857 50,153
20. 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.
TheDirectors’ policy for managing these risks is set out below. The Board coordinates the Company’s risk management policy.
The Company has no significant exposure to foreign exchange risk on monetary items.
The Company’s classes of financial instruments may comprise the following:
– investments in collective funds, listed and unlisted bonds, shares of quoted and unquoted companies which are held in
accordance with the Company’s investment objective;
– debtors, creditors, short-term deposit and cash arising directly from its operations;
– bank loans used for investment purposes; and
– derivatives used for efficient portfolio management or currency hedging.
Notes to the Accounts
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Report and Accounts
for the year ended 30 June 2023
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Financial
(a) Market risk
The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market
prices. This market risk comprises two elements: interest rate risk and other price risk. Information to enable an evaluation of
the nature and extent of these two elements of market risk is given in parts (i) and (ii) of this note, together with sensitivity
analyses where appropriate. The Board reviews and agrees policies for managing these risks. The Manager assesses the
exposure to market risk when making each investment decision and monitors the overall level of market risk on the whole of
the investment portfolio on an ongoing basis.
(i) Interest rate risk
Interest rate movements may affect the level of income receivable on investments carrying a floating interest rate coupon,
cash balances and 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 20 per cent of net asset value at the time of drawing. Gearing is defined as
borrowings less cash, expressed as a percentage of net assets. The Company has arranged an overdraft facility with HSBC
Bank plc but it has not been utilised during the year or prior year.
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:
2023 2022
£’000 £’000
Exposure to floating interest rates:
Investments carrying a floating interest rate coupon
5,603 4,852
Cash at bank and in hand 2,089 1,310
7,692 6,162
Sterling cash balances at call earn interest at floating rates based on the Sterling Overnight Interest Average rates (“SONIA”).
The above year end amounts are broadly representative of the exposure to interest rates during the year and prior year.
Interest rate sensitivity
The following table illustrates the sensitivity of the return after taxation for the year and net assets to a 0.75% (2022: 0.75%)
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.
2023 2022
0.75% 0.75% 0.75% 0.75%
increase decrease increase decrease
in rate in rate in rate in rate
£’000 £’000 £’000 £’000
Income statement – return after taxation
Revenue return
58 (58) 46 (46)
Capital return – – – –
Total return after taxation 58 (58) 46 (46)
Net assets 58 (58) 46 (46)
(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 portfolio 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
Notes to the Accounts
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Schroder BSC Social Impact Trust plc
acceptable risk/reward profile. The Board may authorise the Manager to enter derivative transactions for the purpose of
currency hedging, although non-sterling exposures are expected to be limited.
Market price risk exposure
The Company’s total exposure to changes in market prices at 30 June comprises the following:
2023 2022
£’000 £’000
Investments held at fair value through profit or loss 64,199 67,000
The above data is broadly representative of the exposure to market price risk during the period.
Concentration of exposure to market price risk
An analysis of the Company’s investments is given on pages 34 and 35. This shows a concentration of exposure to the social
housing sector in the United Kingdom.
Market price risk sensitivity
The following table illustrates the sensitivity of the return after taxation for the period and net assets to an increase or
decrease of 10% 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 to
the underlying investments and includes the impact on the management fee but assumes that all other variables are held
constant.
2023 2022
10% 10% 10% 10%
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
(26) 26 (27) 27
Capital return 6,394 (6,394) 6,673 (6,673)
Total return after taxation and net assets 6,368 (6,368) 6,646 (6,646)
Percentage change in net asset value
7.2% (7.2%) 7.4% (7.4%)
(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
The Portfolio Manager monitors the cash position to ensure sufficient is available to meet the Company’s financial obligations.
For this purpose, the Portfolio Manager may retain up to 20% of net assets in Liquidity Assets, other liquid investments and a
reserve of cash. The Company has also arranged an overdraft facility with HSBC Bank plc.
Liquidity risk exposure
Contractual maturities of financial liabilities, based on the earliest date on which payment can be required are as follows:
2023 2022
Three Three
months months
or less Total or less Total
£’000 £’000 £’000 £’000
Creditors: amounts falling due within one year
Other creditors and accruals (519) (519) (432) (432)
(519) (519) (432) (432)
Notes to the Accounts
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Report and Accounts
for the year ended 30 June 2023
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Financial
(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.
Credit risk exposure
The Company is exposed to credit risk principally from debt securities held, loans and receivables and cash deposits.
Portfolio dealing
The credit ratings of broker counterparties are monitored by the AIFM and limits are set on exposure to any one broker.
Exposure to the Custodian
The custodian of the Company’s assets is HSBC Bank plc which has long-term Credit Ratings of AA- with Fitch and Aa3 with
Moody’s.
Any assets held by the custodian will be 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 those 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.
Exposure to debt securities
The Portfolio Manager’s investment process ensures that potential investments are subject to robust analysis, appropriate
due diligence and approval by an investment committee. Pre-investment checks are made to prevent breach of the Company’s
investment limits, which are designed to ensure a diversified portfolio to manage risk. Debt securities are subject to
continuous monitoring and quarterly reports are presented to the Board.
Credit risk exposure
The following amounts shown in the Statement of Financial Position, represent the maximum exposure to credit risk at the
year end:
2023 2022
Balance Maximum Balance Maximum
sheet exposure sheet exposure
£’000 £’000 £’000 £’000
Fixed assets
Investments held at fair value through profit 64,199 – 67,000 –
Investments held at amortised cost (debt securities) 22,583 22,583 21,832 21,832
Current assets
Debtors 401 401 206 206
Cash at bank and in hand 2,089 2,089 1,310 1,310
89,272 25,073 90,348 23,348
(d) Fair values of financial assets and financial liabilities
All financial assets and liabilities are either carried in the balance sheet at fair value, or the balance sheet amount is a
reasonable approximation of fair value.
Notes to the Accounts
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21. 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:
2023 2022
£’000 £’000
Equity
Called-up share capital 853 853
Reserves 87,900 89,063
Total equity 88,753 89,916
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.
22. Events after the accounting date that have not been reflected in the financial
statements
There have been no events we are aware of since the balance sheet date which either require changes to be made to the
figures included in the financial statements or to be disclosed by way of note.
Notes to the Accounts
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Report and Accounts
for the year ended 30 June 2023
Annual General Meeting
91
Annual General Meeting – Recommendations
The Annual General Meeting (“AGM”) of the Company will
be held on Friday, 15 December 2023 at 12.00 p.m. The
formal Notice of Meeting is set out on page 92.
The following information is important and requires your
immediate attention. If you are in any doubt about the
action you should take, you should consult an
independent financial adviser, authorised under the
Financial Services and Markets Act 2000. If you have sold
or transferred all of your ordinary shares in the
Company, please forward this document with its
accompanying form of proxy at once to the purchaser or
transferee, or to the stockbroker, bank or other agent
through whom the sale or transfer was effected, for
onward transmission to the purchaser or transferee.
Ordinary business
Resolutions 1 to 9 are all ordinary resolutions. Resolution1 is
a required resolution. Resolution 2 concerns the Company’s
payment of interim dividends. Resolution 3 concerns the
Directors’ Remuneration Report, on pages 63 to 65.
Resolutions4 to 7 invite shareholders to re-elect each of the
Directors for a further year, following the recommendations
of the Nomination Committee, set out on pages61 and 62
(their biographies are set out on pages 51 and 52).
Resolutions8 and 9 concern the re-appointment and
remuneration of the Company’s Auditor, discussed in the
Audit and Risk Committee Report on pages 57 and 59.
Special business
Resolution 10 – Directors’ authority to allot shares
(ordinary resolution) and resolution 11 – power to
disapply pre-emption rights (special resolution)
The Directors are seeking authority to allot a limited number
of 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
£84,155 (being 10% of the issued share capital (excluding any
shares held in treasury) as at 26 October 2023).
A special resolution will be proposed to authorise the
Directors to allot shares up to a maximum aggregate
nominal amount of £84,155 (being 10% of the issued share
capital as at 26 October 2023) on a non pre-emptive basis.
This authority includes shares that the Company sells or
transfers that have been held in treasury. The Directors do
not intend to allot ordinary shares or sell treasury shares, on
a non 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 2024 unless renewed, varied or
revoked earlier.
Resolution 12: authority to make market
purchases of the Company’s own shares (special
resolution)
At the AGM held on 2 December 2022, the Company was
granted authority to make market purchases of up to
12,788,956 ordinary shares for cancellation or holding in
treasury. 1,161,644 ordinary shares were bought back under
this authority and the Company therefore has remaining
authority to purchase up to 11,627,312 ordinary shares. This
authority will expire at the forthcoming AGM.
The Directors believe it is in the best interests of the
Company and its shareholders to have a general authority
for the Company to buy back its ordinary shares in the
market as they keep under review the share price discount to
NAV. 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 26 October 2023 (excluding treasury shares). The Directors
will exercise this authority to buy back shares only when the
share price is at a discount to the Company’s NAV and only if
the Directors consider that any purchase would be for the
benefit of the Company and its shareholders, taking into
account relevant factors and circumstances at the time. Any
shares so purchased would be cancelled or held in treasury
for potential reissue.
If renewed, this authority will lapse at the conclusion of the
AGM in 2024 unless renewed, varied or revoked earlier.
Resolution 13: notice period for general meetings
(special resolution)
Resolution 13 set out in the Notice of AGM is a special
resolution and will, if passed, allow the Company to hold
general meetings (other than annual general meetings) on a
minimum notice period of 14 clear days, rather than 21 clear
days as required by the Companies Act 2006. The approval
will be effective until the Company’s next AGM to be held in
2024. The Directors will only call general meetings on
14clear 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 above resolutions and the other resolutions to
be proposed at the forthcoming AGM, as they intend to do in
respect of their own beneficial holdings.
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Schroder BSC Social Impact Trust plc
92
Notice is hereby given that the Annual General Meeting of
Schroder BSC Social Impact Trust plc will be held on Friday,
15December 2023 at 12.00 p.m. at 1 London Wall Place, London
EC2Y5AU to consider the following resolutions, of which
resolutions1 to 10 will be proposed as ordinary resolutions, and
resolutions11 to 13 will be proposed as special resolutions:
ORDINARY BUSINESS
1. To receive the Annual Report and Accounts for the year ended
30 June 2023.
2. To authorise the Directors of the Company to declare and pay
all dividends of the Company as interim dividends and for the
last dividend referable to a financial year not to be categorised
as a final dividend that is subject to shareholder approval.
3. To approve the Directors’ Remuneration Report for the year
ended 30 June 2023.
4. To approve the re-election of Susannah Nicklin as a Director of
the Company.
5. To approve the re-election of Mike Balfour as a Director of the
Company.
6. To approve the re-election of James B. Broderick as a Director
of the Company.
7. To approve the re-election of Alice Chapple as a Director of the
Company.
8. To re-appoint BDO LLP as auditor to the Company.
9. To authorise the Directors to determine the remuneration of
BDO LLP as auditor to the Company.
SPECIAL BUSINESS
10. To consider, and if thought fit, pass the following resolution as
an ordinary resolution:
“THAT in substitution for 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 £84,155 (being 10% of the
issued ordinary share capital, excluding treasury shares, at
26October 2023) for a period expiring (unless previously
renewed, varied or revoked by the Company in general
meeting) at the conclusion of the Annual General Meeting of
the Company in 2024, but that the Company may make an
offer or agreement which would or might require relevant
securities to be allotted after expiry of this authority and the
Board may allot relevant securities in pursuance of that offer
or agreement.”
11. To consider and, if thought fit, to pass the following resolution
as a special resolution:
“THAT, subject to the passing of Resolution 10 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 10 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 £84,155 (representing 10% of
the aggregate nominal amount of the share capital, excluding
treasury shares, in issue at 26October 2023); and where
equity securities are issued pursuant to this power they will
only be issued at a price which is equal or greater than the
Company’s NAV per share as at the latest practicable date
before the allotment; and provided that this power shall expire
at the conclusion of the next Annual General Meeting of the
Company but so that this power shall enable the Company to
make offers or agreements before such expiry which would or
might require equity securities to be allotted after such
expiry.”
12. 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 12,614,826, representing 14.99% of the
Company’s issued ordinary share capital as at 26 October
2023 (excluding treasury shares);
(b) the maximum price (exclusive of expenses) which may be
paid for a Share shall not exceed the higher of;
i) 105% of the average of the middle market
quotations for the Shares as taken from the London
Stock Exchange Daily Official List for the five
business days preceding the date of purchase; and
ii) the higher of the last independent bid and the
highest current independent bid on the London
Stock Exchange;
(c) the minimum price (exclusive of expenses) which may be
paid for a Share shall be 1p, being the nominal value per
Share;
(d) this authority hereby conferred shall expire at the
conclusion of the next Annual General Meeting of the
Company in 2024 (unless previously renewed, varied or
revoked by the Company prior to such date);
(e) the Company may make a contract to purchase Shares
under the authority hereby conferred which will or may
be executed wholly or partly after the expiration of such
authority and may make a purchase of Shares pursuant
to any such contract; and
(f) any Shares so purchased will be cancelled or held in
treasury.”
13. To consider and, if thought fit, to pass the following resolution
as a special resolution:
THAT a general meeting, other than an annual general
meeting, may be called on not less than 14 clear days’ notice.
By order of the Board
Schroder Investment Management Limited
Company Secretary
27 October 2023
Registered Office:
1 London Wall Place,
London EC2Y 5AU
Registered Number: 12892325
Notice of Annual General Meeting
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Report and Accounts
for the year ended 30 June 2023
Annual General Meeting
93
1. Ordinary shareholders are entitled to attend, ask questions
and vote at the meeting and to appoint one or more
proxies, who need not be a shareholder, as their proxy to
exercise all or any of their rights to attend, speak and vote
on their behalf at the meeting.
A proxy form is attached. Shareholders are encouraged to
appoint the Chair as proxy. If you wish to appoint a person
other than the Chair as your proxy, please insert the name
of your chosen proxy holder in the space provided at the
top of the form. If the proxy is being appointed in relation to
less than your full voting entitlement, please enter in the
box next to the proxy holder’s name the number of shares
in relation to which they are authorised to act as your proxy.
If left blank your proxy will be deemed to be authorised in
respect of your full voting entitlement (or if this proxy form
has been issued in respect of a designated account for a
shareholder, the full voting entitlement for that designated
account). Additional proxy forms can be obtained by
contacting the Company’s Registrars, Equiniti Limited, on
+44 (0)800 032 0641, or you may photocopy the attached
proxy form. Please indicate in the box next to the proxy
holder’s name the number of shares in relation to which
they are authorised to act as your proxy. Please also indicate
by ticking the box provided if the proxy instruction is one of
multiple instructions being given. Completion and return of
a form of proxy will not preclude a member from attending
the Annual General Meeting and voting in person.
On a vote by show of hands, every ordinary shareholder
who is present in person has one vote and every duly
appointed proxy who is present has one vote. On a poll
vote, every ordinary shareholder who is present in person
or by way of a proxy has one vote for every share of which
he/she is a holder. Voting will be by poll.
The “Vote Withheld” option on the proxy form is provided to
enable you to abstain on any particular resolution. However
it should be noted that a “Vote Withheld” is not a vote in law
and will not be counted in the calculation of the proportion
of the votes ‘For’ and ‘Against’ a resolution. A proxy form
must be signed and dated by the shareholder or his or her
attorney duly authorised in writing. In the case of joint
holdings, any one holder may sign this form. The vote of the
senior joint holder who tenders a vote, whether in person or
by proxy, will be accepted to the exclusion of the votes of
the other joint holder and for this purpose seniority will be
determined by the order in which the names appear on the
Register of Members in respect of the joint holding. To be
valid, proxy form(s) must be completed and returned to the
Company’s Registrars, Equiniti Limited, Aspect House,
Spencer Road, Lancing, West Sussex BN99 6DA, in the
enclosed envelope together with any power of attorney or
other authority under which it is signed or a copy of such
authority certified notarially, to arrive no later than 48 hours
before the time fixed for the meeting, or an adjourned
meeting. Shareholders may also appoint a proxy to vote on
the resolutions being put to the meeting electronically at
www.sharevote.co.uk. Shareholders who are not registered
to vote electronically, will need to enter the Voting ID, Task
ID and Shareholder Reference Number set out in their
personalised proxy form. Alternatively, shareholders who
have already registered with Equiniti’s Shareview service can
appoint a proxy by logging onto their portfolio at
www.shareview.co.uk using their user ID and password.
Once logged in simply click “View” on the “My Investments”
page, click on the link to vote then follow the on-screen
instructions. The on-screen instructions give details on how
to complete the appointment process. Please note that to
be valid, your proxy instructions must be received by
Equiniti no later than 12 noon on 13 December 2023. If you
have any difficulties with online voting, you should contact
the shareholder helpline on +44 (0)800 032 0641.
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 6.30p.m. on 13 December 2023, or 6.30p.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 6.30p.m. on
13December 2023 shall be disregarded in determining the
right of any person to attend and vote at the meeting.
4. CREST members who wish to appoint a proxy or proxies
through the CREST electronic proxy appointment service
may do so by using the procedures described in the CREST
manual. The CREST manual can be viewed at
www.euroclear.com. A CREST message appointing a proxy (a
“CREST proxy instruction”) regardless of whether it
constitutes the appointment of a proxy or an amendment to
the instruction previously given to a previously appointed
proxy must, in order to be valid, be transmitted so as to be
received by the issuer’s agent (ID RA19) by the latest time for
receipt of proxy appointments. If you are an institutional
investor you may be able to appoint a proxy electronically via
the Proxymity platform, a process which has been agreed by
the Company and approved by the Registrar. For further
information regarding Proxymity, please go to
www.proxymity.io. Your proxy must be lodged by 12 noon
Explanatory Notes to the Notice of Meeting
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Schroder BSC Social Impact Trust plc
94
on 13 December 2023 in order to be considered valid. Before
you can appoint a proxy via this process you will need to
have agreed to Proxymity’s associated terms and conditions.
It is important that you read these carefully as you will be
bound by them and they will govern the electronic
appointment of your proxy.
5. Copies of the terms of appointment of the non-executive
Directors and a statement of all transactions of each Director
and of their family interests in the shares of the Company,
will be available for inspection by any member of the
Company at the registered office of the Company during
normal business hours on any weekday (English public
holidays excepted) and at the Annual General Meeting by
any attendee, for at least 15 minutes prior to, and during,
the Annual General Meeting. None of the Directors has a
contract of service with the Company.
6. The biographies of the Directors offering themselves for
re-election are set out on pages 51 and 52 of the Company’s
Annual Report and Accounts for the year ended 30 June
2023.
7. As at 26 October 2023, 85,316,586 ordinary shares of
1pence each were in issue (1,161,644 were held in
treasury). Therefore the total number of voting rights of
the Company as at 26October 2023 was 84,154,942.
8. A copy of this Notice of meeting, which includes details of
shareholder voting rights, together with any other
information as required under Section 311A of the
Companies Act 2006, is available from the Company’s
website,
www.schroders.co.uk/sbsi.
9. Pursuant to Section 319A of the Companies Act 2006, the
Company must cause to be answered at the Annual
General Meeting any question relating to the business
being dealt with at the AGM which is put by a member
attending the meeting, except in certain circumstances,
including if it is undesirable in the interests of the
Company or the good order of the meeting that the
question be answered or if to do so would involve the
disclosure of confidential information.
10. Members satisfying the thresholds in section 527 of the
Companies Act 2006 can require the Company to publish a
statement on its website setting out any matter relating to:
(a) the audit of the Company’s Accounts (including the
auditor’s report and the conduct of the audit) that are to
be laid before the Meeting; or
(b) any circumstance connected with an auditor of the
Company ceasing to hold office since the last AGM, that
the members propose to raise at the Meeting. The
Company cannot require the members requesting the
publication to pay its expenses. Any statement placed
on the website must also be sent to the Company’s
auditors no later than the time it makes its statement
available on the website. The business which may be
dealt with at the meeting includes any statement that
the Company has been required to publish on its
website.
11. The Company’s privacy policy is available on its website.
Shareholders can contact Equiniti for details of how
Equiniti processes their personal information as part of the
AGM.
Explanatory Notes to the Notice of Meeting
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Report and Accounts
for the year ended 30 June 2023
Annual General Meeting
95
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 as
Alternative Performance Measures (“APMs”) as defined
by the European Securities and Markets Authority. Under
this definition, APMs include a financial measure of
historical financial performance or financial position,
other than a financial measure defined or specified in the
applicable financial reporting framework. APMs have
been marked with an asterisk.
Net asset value (”NAV”) per share
The NAV per share of 104.90p (2022: 105.39p) represents the
net assets attributable to equity shareholders of £88,753,000
(2022: £89,916,000) divided by the 84,604,866 (2022:
85,316,586) shares in issue at the year end.
Total return*
The combined effect of any dividends paid, together with the
rise or fall in the share price or NAV per share. Total return
statistics enable the investor to make performance
comparisons between investment companies with different
dividend policies. Any dividends received by a shareholder
are assumed to have been reinvested in either the assets of
the Company at its NAV per share at the time the shares
were quoted ex-dividend (to calculate the NAV per share
total return) or in additional shares of the Company (to
calculate the share price total return).
The NAV total return for the year ended 30 June 2023 is
calculated as follows:
Opening NAV at 30/6/22 105.39p
Closing NAV at 30/6/23 104.90p
Dividend NAV on
received XD date XD date Factor
1.30p 3/11/22 104.29p 1.0124
NAV total return, being the closing NAV, multiplied
by the factor, expressed as a percentage change
in the opening NAV: +0.78
The NAV total return for the year ended 30 June 2022 is
calculated as follows:
Opening NAV at 30/6/21 104.30p
Closing NAV at 30/6/22 105.39p
Dividend NAV on
received XD date XD date Factor
0.57p 28/10/21 103.92p
1.0055
NAV total return, being the closing NAV, multiplied
by the factor, expressed as a percentage change
in the opening NAV: +1.6%
The share price total return for the year ended 30 June 2023
is calculated as follows:
Opening share price at 30/6/22 106.50p
Closing share price at 30/6/23 93.50p
Share price
Dividend on
received XD date XD date Factor
1.30p 3/11/22 96.50p 1.0135
Share price total return, being the closing share
price, multiplied by the factor, expressed as
a percentage change in the opening share price: -11.0%
The share price total return for the year ended 30 June 2022
is calculated as follows:
Opening share price at 30/6/21 103.50p
Closing share price at 30/6/22 106.50p
Share price
Dividend on
received XD date XD date Factor
0.57p 28/10/2021 103.50p 1.0055
Share price total return, being the closing share
price, multiplied by the factor, expressed as
a percentage change in the opening share price: +3.5%
Discount/premium*
The amount by which the share price of an investment trust
is lower (discount) or higher (premium) than the NAV per
share. The discount or premium is expressed as a
percentage of the NAV per share. The discount at the year
end amounted to 10.9% (2022: 1.1% premium), as the closing
share price at 93.50p (2022: 106.50p) was 10.9% lower (2022:
1.1% higher) than the closing NAV of 104.90p (2022:
105.39p).
Gearing/(net cash)*
The gearing percentage reflects the amount of borrowings
(that is, bank loans or overdrafts) that the Company has used
to invest in the market. This figure is indicative of the extra
amount by which shareholders’ funds would move if the
Company’s investments were to rise or fall. Gearing is
defined as: borrowings used for investment purposes, less
cash, expressed as a percentage of net assets. A negative
figure so calculated is termed a “net cash” position.
At the year end, the Company had no loans or overdrafts,
and thus was in a net cash position, calculated as follows:
2023 2022
£’000 £’000
Borrowings/(net cash) used for
investment purposes (2,089) (1,310)
Net assets 88,753 89,916
Net cash (2.4)% (1.5)%
Definitions of Terms and Performance Measures
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Schroder BSC Social Impact Trust plc
96
Ongoing Charges*
Ongoing Charges (OGC) 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 and
transaction costs, expressed as a percentage of the average
daily net asset values during the year. The operating
expenses calculated as above amounted to £1,132,000 (2022:
£1,024,000) for the year. This amount, expressed as a
percentage of the average net asset values during the year of
£89.4 million (2022: £84.1 million), gives an OGC figure of
1.27% (2022: 1.22%).
Leverage*
For the purpose of the Alternative Investment Fund
Managers (AIFM) Directive, leverage is any method which
increases the Company’s exposure, including the borrowing
of cash and the use of derivatives. It is expressed as the ratio
of the Company’s exposure to its net asset value and is
required to be calculated both on a “Gross” and a
“Commitment” method. Under the Gross method, exposure
represents the sum of the absolute values of all positions, so
as to give an indication of overall exposure. Under the
Commitment method, exposure is calculated in a similar way,
but after netting off hedges which satisfy certain strict
criteria. The leverage ratios and limits are presented on
page101 under Shareholder Information.
*
Alternative Performance Measures
Definitions of Terms and Performance Measures
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Report and Accounts
for the year ended 30 June 2023
Annual General Meeting
97
1. Number of beneficiaries
The Company reports on the total number of beneficiaries
reached directly by frontline organisations within the
portfolio, and also reports on the subset of the total that is
attributable to the Company’s investment.
Total beneficiaries:
This is an aggregation of the beneficiaries reached across the
three asset classes in which the Company invests:
– Housing – the total number of people provided with
homes by housing initiatives financed by organisations
supported by the Company.
– Debt and Equity for Social Enterprises – the total number
of people provided with services or products by
organisations and projects financed by organisations
supported by the Company.
– Social Outcomes Contracts – the total number of people
provided with services by partnerships financed by the
Bridges Social Outcomes Fund II.
The total figure includes:
– Where the finance is targeted at a specific project (e.g.
full finance for a frontline organisation to use for a
specific purpose such as development of a new housing
asset) the total number of beneficiaries reached by the
project.
– Where the finance is targeted towards an organisation’s
resilience and/or growth, the total number served by an
organisation since investment.
Approach for the Company’s investment in the Triodos Bank
Bond: The £5.7m Triodos Bank Bond contributes to Triodos
Bank’s capitalisation, enabling the bank to leverage by eight
times to provide at least £45.6m in loans, within a larger
loanbook. Triodos Bank reports to the Company on social
impact for its entire loanbook, however the Company’s
calculation for total beneficiaries reached by the Bank Bond is
based only on the Company’s proportionate share of loans
made possible by the Bond.
Share of beneficiaries attributed to the Company:
This report includes the attributed share of total beneficiaries
and other key impact metrics, based on the Company’s
investment as a proportion of the frontline investee’s total
capital.
2. Reporting on contribution to impact
Investment and non-financial support provided through the
Company and underlying fund managers makes a significant
contribution towards positive impact: however we recognise
this as one set of inputs among many that are instrumental
in portfolio organisations achieving positive outcomes for
people. The contribution of an investment towards the
outcomes achieved by investee organisations is highly
variable and may depend on the size and purpose of the
investment, the effect this has on a fund, a frontline
organisation’s ability to raise capital from other sources, and
the nature of non-financial support provided to fund
managers and frontline organisations. Given the wide range
of variables, this report focuses on providing a clear picture
of the impact achieved by organisations with contribution
from the Company, and offers the Company attributed
figures as a proxy based indicative estimate to support
investor requirements for aggregation and onward
reporting.
3. Disadvantaged and Vulnerable
Beneficiaries
The number of people served who are from disadvantaged
or vulnerable backgrounds is a key performance indicator for
the Company. We define this as people or groups who are at
risk of harm or disadvantage, including:
– People living in poverty and/or financial exclusion
– People experiencing homelessness and people at risk of
homelessness
– People with long-term health and disability conditions
– Vulnerable children and vulnerable young people
– People with learning disabilities and other
neurodivergences
– People with mental health needs
– Victims of domestic violence/abuse
– Refugees, asylum seekers, undocumented and other
migrants
– Ex-offenders
– Voluntary carers
– Vulnerable parents (e.g. single parents)
– Older people with acute conditions
4. Partner track record/age
The track record of frontline organisations is a high-level
indicator used to assess impact risk across the Company’s
portfolio. The average track record for the portfolio is based
on weighted average (by the Company’s commitment) of the
age of all frontline organisations financed through the
Company’s investments, taken from the date of the
organisation’s formal registration to the current reporting
period.
5. UN Sustainable Development Goal
(SDG) alignment
The frontline organisations in the Company’s portfolio are
generally aligned with multiple SDGs (on average, each
frontline organisation is aligned with three SDGs). Alignment
is assessed by fund managers and validated as part of the
Portfolio Manager’s annual review. Social organisations
frequently take a multi-tiered holistic approach to impact,
recognising multiple dimensions of exclusion or need for
disadvantaged and vulnerable groups. This combined
approach is a major driver for positive impact performance
and reduced financial and impact risk.
Combining housing (SDG 11) services with education
(SDG4), care (SDG 3) and energy efficiency technology
(SDGs7 and 13) can drastically improve a tenant’s financial
and personal well-being, reducing risks of defaults and
Methodological notes
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enhancing prospects of sustained positive outcomes. The
Company therefore recognises where frontline organisations
are aligned to multiple SDGs.
The Company’s approach to due diligence and monitoring
also ensures that the risk of any of the portfolio companies
having a negative impact on any of the SDGs is assessed and
mitigated.
6. UN Sustainable Development Goal
(SDG) contribution
SDG sub-indicators and/or national action plans can provide
a benchmark for where we currently are, and an indicator of
the potential value of investments as a contribution towards
meeting targets. The Company’s Impact Report provides
assessment of the Company’s portfolio against SDGs where
relevant SDG sub-indicators have been identified and UK
level targets recognised. SDG targets and sub indicators are
sourced primarily from the UK Office for National Statistics
and the Open SDG Platform,
https://sdgdata.gov.uk/, and
from the UK Government Corporate Report on Implementing
the SDGs.
https://www.gov.uk/government/publications/
implementing-the-sustainable-development-goals/
implementing-the-sustainable-development-goals--2
7. Savings and short term value to
government
The Company invests in initiatives seeking to provide benefits
to society in innovative and cost-effective ways. The
Company’s Impact Report includes quantification of value
generated for 12% of the portfolio, where we have high-
quality data on the global cost of provision, comparable data
on existing alternative provision models as counterfactuals,
and high-quality data on medium to long term outcomes for
beneficiaries and government. This is primarily applicable in
investments that operate at comparatively large scale, in
well-established and data rich sectors, and with business
models that require quantification of value generated for
payment.
Social Outcomes Contracts: Short term value to
government is calculated using one of three methodologies:
a. Delivering against a public ”rate card”. For projects
delivering against a public ‘rate card’, the value to
government is the price of outcomes that Government
was prepared to pay according to the rate card. Where
this is higher than the amount actually paid, this signifies
that the project offered a discount to the rate card
prices, or achieved more outcomes above the contract
cap, or both.
b. Short term savings: For local projects targeting short
term savings for a local authority, the value to
government is the gross value of these savings during
the tracking period (from investment to the latest
available report).
c. Valued at cost: Where there is no public outcomes rate
card or a definitive short-term saving created at the level
of the commissioning authority, no additional value has
been assigned to the outcomes over and above that
which government has been willing to pay.
For more information on SOCs, please see
https://www.bridgesfundmanagement.com/outcomes
contracts/
Debt and Equity for Social Enterprises, AgilityEco:
Calculated based on the average annual savings generated
through reduction in energy bills as a result of energy
efficiency improvements per household.
For more information, please see AgilityEco’s annual impact
report
https://www.agilityeco.co.uk/news/agilityeco-launches-
its-impactreport-20212022.
In addition, the total figure for this asset class includes
community benefit funds generated by renewable energy
assets. Investments also include small scale social
organisations that have limited capacity for measurement,
and organisations such as social housing providers where a
lack of consistent measurement standards makes
comparison of costs and benefits challenging. The
Company’s Portfolio Manager is currently exploring methods
for assessing savings generated through housing services
and other enterprise models, however there is not currently
sufficiently reliable data to report on this.
8. Data quality
The impact data presented in this report is taken from the
latest available fund manager impact reports submitted to
the Company. The report also draws on annual impact
reports from frontline investee organisations where
available.
9. Reporting on contribution to impact
Investment and non-financial support provided through the
Company and portfolio fund managers makes a significant
contribution towards positive impact: however we recognise
this as one set of inputs among many that are instrumental
in portfolio organisations achieving positive outcomes for
people. The contribution of an investment towards the
outcomes achieved by investee organisations is highly
variable and may depend on the size and purpose of the
investment, the effect this has on a fund, frontline
organisation’s ability to raise capital from other sources, and
the nature of non-financial support provided to fund
managers and frontline organisations. Given the wide range
of variables, this report focuses on providing a clear picture
of the impact achieved by organisations with contribution
from the Company but does not seek to attribute a share of
impact directly to the Company.
Schroder BSC Social Impact Trust plc
98
Methodological notes
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Report and Accounts
for the year ended 30 June 2023
99
Notes
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Schroder BSC Social Impact Trust plc
100
Notes
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Shareholder Information
Website and share price information
The Company has a dedicated website, which may be found
at
www.schroders.com/sbsi. The website has 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 report 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 website 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 website.
Association of Investment Companies
The Company is a member of the Association of Investment
Companies. Further information on the Association can be
found on its website,
www.theaic.co.uk.
ISA status
The Company’s shares are eligible for stocks and shares ISAs.
Non-Mainstream Pooled
Investments Status
The Company currently conducts its affairs so that its
shares can be recommended by IFAs to ordinary retail
investors in accordance with the FCA’s rules in relation to
non-mainstream investment products and intends to
continue to do so for the foreseeable future. The Company’s
shares are excluded from the FCA’s restrictions which apply
to non-mainstream investment products because they are
shares in an investment trust.
Financial calendar
Annual results announced October
Annual General Meeting December
Half year results announced March
Financial year end June
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 website.
Leverage
The Company’s leverage policy and details of its leverage
ratio calculation and exposure limits as required by the
AIFMD are published on the Company’s webpages and within
this report. The Company is also required to periodically
publish its actual leverage exposures. As at 30June 2023
these were:
Leverage exposure Maximum ratio Actual ratio
Gross method 150.0% 97.7%
Commitment method 150.0% 97.7%
Illiquid assets
As at the date of this report, none of the Company’s assets
are subject to special arrangements arising from their illiquid
nature.
Remuneration disclosures
Quantitative remuneration disclosures to be made in this
annual report in accordance with FCA Handbook rule
FUND3.3.5 may also be found in the Company’s AIFMD
information disclosure document published on the
Company’s website.
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
website.
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 Chair or the Board are, in each
case, considered by the Chair and the Board.
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Directors
Susannah Nicklin (Chair)
Mike Balfour
James B. Broderick
Alice Chapple
Advisers
Alternative Investment Fund Manager
(the “Manager”)
Schroder Unit Trusts Limited
1 London Wall Place
London EC2Y 5AU
Portfolio Manager
Big Society Capital Limited
New Fetter Place
8-10 New Fetter Lane
London EC4A 1AZ
United Kingdom
Company Secretary
Schroder Investment Management Limited
1 London Wall Place
London EC2Y 5AU
Telephone: 020 7658 3847
Registered Office
1 London Wall Place
London EC2Y 5AU
Depositary and Custodian
HSBC Bank plc
8 Canada Square
London E14 5HQ
Corporate Broker
Winterflood Securities Limited
The Atrium Building
Cannon Bridge House
25 Dowgate Hill
London EC4R 2GA
United Kingdom
Independent Auditors
BDO LLP
55 Baker Street
London W1U 7EU
United Kingdom
Registrars
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Shareholder helpline: 0800 032 0641*
Website:
www.shareview.co.uk
*
Calls to this number are free of charge from UK landlines.
Communications with shareholders are mailed to the
address held on the register. Any notifications and enquiries
relating to shareholdings, including a change of address or
other amendment should be directed to Equiniti Limited at
the above address and telephone number above.
Shareholder enquiries
General enquiries about the Company should be addressed
to the Company Secretary at the Company’s Registered
Office.
Dealing Codes
ISIN: GB00BF781319
SEDOL: BF78131
Ticker: SBSI
Global Intermediary Identification Number (GIIN)
PXF89P.99999.SL.826
Legal Entity Identifier (LEI)
549300PG5MF2NY4ZRM86
www.schroders.com/sbsi
The Company’s privacy notice is
available on its website.
176774 Schroder - BSC Social Impact Trust plc - Annual Report Pt4.qxp_176774 Schroder - BSC Social Impact Trust plc - Annual Report Pt4 30/10/2023 08:40 Page 102