Bellevue Healthcare Trust plc Annual Report and Accounts 2024 ## Annual Report and Accounts ## For the year ended 30 November 2024 ## Healthcare Trust plc ## Excellence in Specialty ## Investments INDEPENDENT - ENTREPRENEURIAL - COMMITTED CONTENTS Strategic Report Investment Objective, FinancialInformation, Bellevue Healthcare Trust plc is a high conviction, Performance Summary and Overview .................... 1 long-only investment trust invested in listed or quoted Chairman’s Statement ........................................... 2 global healthcare equities. It is unconstrained and Investment Manager’s Report ................................ 6 Investment Policy, Results and able to invest regardless of market cap, sub sector or Key Performance Indicators ................................. 18 region, and the portfolio is concentrated with a current Risk and Risk Management ................................. 22 maximum of 35 holdings. Bellevue Healthcare Trust Viability Statement ............................................... 26 is managed by Bellevue Asset Management (UK) Ltd. Stakeholder Engagement .................................... 27 Environmental, Social and Bellevue Asset Management (UK) Ltd is authorised Governance (“ESG”) Policy .................................. 31 and regulated by the Financial Conduct Authority, and is Other Information ................................................. 34 part of Bellevue Group AG (“Bellevue Group”), a Swiss Governance investment manager listed on the Swiss stock exchange. Directors’ Report ................................................. 36 Founded in 1993, Bellevue Group is one of the largest Corporate Governance ........................................ 42 and most experienced healthcare investors in Europe. Directors’ Remuneration Policy and Implementation Report ........................................ 49 Report of the Audit and Risk Committee .............. 53 Statement of Directors’ Responsibilities ............... 57 Independent Auditor’s Report .............................. 58 Financials Statement of Comprehensive Income .................. 66 Statement of Financial Position ............................ 67 Statement of Changes in Equity ........................... 68 Statement of Cash Flows ..................................... 69 Notes to the Financial Statements ....................... 70 Other Information Alternative Performance Measures....................... 84 Glossary .............................................................. 85 Annex I – Article 8 Periodic Disclosures ............... 87 Notice of Annual General Meeting ........................ 97 Notes to Notice of Annual General Meeting ......... 99 WWW.BELLEVUEHEALTHCARETRUST.COM Form of Proxy .................................................... 103 Directors, Investment Manager and Advisers ......IBC ## Healthcare Trust plc Strategic Report ## Overview INVESTMENT OBJECTIVE The investment objective of Bellevue Healthcare Trust plc (“the Company”) is to provide Shareholders with capital growth and income over the long term, through investment in listed or quoted global healthcare companies. The Company’s specific return objectives are: (i) to beat the total return of the MSCI World Healthcare Index (in sterling) on a rolling 3 year period (the index total return including dividends reinvested on a net basis); and (ii) to seek to generate a double-digit total Shareholder return per annum over a rolling 3 year period. FINANCIAL INFORMATION As at 30 November As at 30 November 2024 2023 Net asset value (“NAV”) per Ordinary Share (cum income) 154.32p 143.87p Ordinary Share price 141.20p 129.00p 1 Ordinary Share price discount to NAV 8.5% 10.3% 1 Ongoing Charges Ratio (“OCR”) 1.03% 1.02% PERFORMANCE SUMMARY | | | 2 | | | 3 | | --- | --- | --- | --- | --- | --- | | | Year to | | | Year to | | | 30 November 2024 | | | 30 November 2023 | | | 1,4 Share price total return per Ordinary Share 13.7% -15.1% 1,4 NAV total return per Ordinary Share 11.1% -12.7% 4 MSCI World Healthcare Index total return (GBP) 11.5% -7.1% 1 These are Alternative Performance Measures. 2 Total returns in sterling for the year ended 30 November 2024 3 Total returns in sterling for the year ended 30 November 2023 4 Including dividends reinvested in the year. Source: Bellevue Healthcare Trust plc Factsheet November 2024 ALTERNATIVE PERFORMANCE MEASURES (“APMs”) The financial information and performance summary data highlighted in the footnote to the above tables represent APMs of the Company. In addition to these APMs other performance measures have been used by the Company to assess its performance; these can be found in the Key Performance Indicators section of the Annual Report, on page 18. Definitions of these APMs together with how these measures have been calculated can be found on page 84. Bellevue Healthcare Trust plc Annual Report and Accounts 2024 1 ## Chairman’s Statement ### Randeep Grewal ### Chairman Dear Shareholders This is the eighth Annual Report of your Company. PERFORMANCE Over the financial year to 30 November 2024, the share price was 11.1%. This compares with the MSCI World Healthcare (on a total return basis) returned 13.7%; the NAV total return index which produced a total return of 11.5%. The returns are summarised in the following table: Cumulative & annualised performance Cumulative Annualised | | | | Since | | | Since | | --- | --- | --- | --- | --- | --- | --- | | | | inception | | | inception | | | | (2 December | | | (2 December | | | | 1 Year 3 Years 5 Years | | | 2016) 1 Year 3 Years 5 Years | | | 2016) | Share Price 13.7% -15.0% 16.1% 81.9% 13.7% -5.3% 3.0% 7.8% NAV (inc. dividend reinvested) 11.1% -7.0% 27.9% 98.1% 11.1% -2.4% 5.0% 8.9% MSCI World Healthcare Index (GBP) 11.5% 18.3% 51.1% 120.5% 11.5% 5.8% 8.6% 10.4% Source: Bloomberg. All performance figures are calculated as total return with dividends being reinvested in the relevant security, calculated in GBP and with the relevant period ending on 30 November 2024. It is encouraging to note that share price and NAV BOARD COMPOSITION AND EVALUATION performance matched the index in the financial year to Three of the current directors (Jo Dixon, Paul Southgate and 30November 2024. Nevertheless longer term performance myself) joined the Company ahead of its listing in December has been disappointing in both relative and absolute terms. 2016 and hence would be expected to retire over the next The portfolio focus is on a small number of high conviction year (i.e. nine years from appointment). ideas, mainly concentrated in Small or Mid-Cap stocks With an eye to succession planning, we recently announced where the Investment Manager believes their research and the appointment of Sarah MacAulay as a non-executive director, investment expertise find added value. However, the index and Clare Brady as non-executive director and audit chair–elect. performance has been dominated by the rerating of a few very Both Sarah and Clare are experienced investment trust directors Large-Cap stocks, similar to the ‘Magnificent Seven’ impact on (and in fact both currently chair investment trusts). the broader market. Paul Southgate and I will not be putting ourselves up for I cannot emphasise enough the focus of the Board and re-election at the forthcoming AGM. To ensure institutional Bellevue on improving performance and tightening risk continuity, Jo Dixon will remain as Senior Independent management. Two areas of discussion are implementing a Director until the AGM of 2026. more rigorous sell discipline and increasing the number of portfolio positions which would reduce volatility. The latter is The Board unanimously support the proposal to appoint Kate explained in the Investment Manager’s Report and we will be Bolsover as Chairman to succeed me. She brings a wealth of seeking shareholder support via an AGM resolution. Bellevue Healthcare Trust plc Annual Report and Accounts 20242 Strategic Report DDD investment trust experience and knowledge and is indeed an experienced chairman. Shareholders will have the opportunity to meet Clare, Sarah and Kate at our next AGM in April 2025. As per the AIC Code recommendations, this year we undertook an internal Board review at the end of the year. The review covered the overall performance of the Board, the committees, individual directors and the Chair. The overall results were good but as always it provides food for thought on how and where we might improve. ## FEES AND CHARGES The current Investment Management fee is 95 basis points, based on market capitalisation (i.e. not AUM), which more closely aligns the Investment Manager's interests with that of Shareholders. Bellevue has absorbed a number of costs over the years that help reduce the Ongoing Charges Ratio ("OCR"). The OCR this year was 1.03% (2023: 1.02%) and the Board has worked hard over the year to ensure the OCR continues to stay relatively low. I would have liked to get this ratio below 1% before I retired from the Board but a decreasing market capitalisation has worked against that ambition. ## PORTFOLIO POSITIONING The portfolio is exposed to US stocks, especially in the Small / Mid-Cap area and has a high active share. This also inevitably exposes the portfolio to movements in the US dollar. A new US presidency has macroeconomic, market specific and sector specific implications. As with many things in life, some of these issues may be negative and others positive for healthcare; of course, the impact for different healthcare subsectors will vary dramatically. We remain confident that these choppy waters can be navigated by the Investment Manager. ## GEARING The Company has historically had a multi-currency revolving (unsecured) credit facility ("RCF") with The Bank of Nova Scotia. Changes brought about by Basel IV regulations have meant that some banks have withdrawn from the market. We are therefore fortunate that The Bank of Nova Scotia continues to provide a facility for the Company. Due to the Basel IV regulations, the new facility, which commenced in December 2024 is on a secured basis. As we have no unsecured debt, this has very limited practical impact on the Company. ## SHARE CAPITAL AND ISSUANCE The Company's issued share capital (excluding treasury shares of 31,782,418) was 283,369,891 Ordinary Shares (post redemptions) as of 30 November 2024; a decrease from 462,588,550 as of the end of the previous financial year. We did not issue any shares during the year. In November we received redemption notices for 163,834,887 shares. In addition, we bought back 15,383,772 shares during the year. At the AGM, we will be seeking authority to issue 24,180,403 new Ordinary Shares to meet potential investor demand, with share issuance only possible at a premium to NAV. ## REDEMPTIONS, BUYBACKS AND DISCOUNT MANAGEMENT There have been both Company specific (performance) and market factors (investment trust discounts have widened over the last few years) that have led to the Company trading at a discount. Furthermore, as I mentioned in last year's annual report, due to the High Court process to reset our distributable reserves we temporarily paused share buybacks at the year end. At the close of business on 30 November 2023 we were trading at a discount to NAV of 10.3%. During the year the average discount for the shares of the Company was 7%, whilst for the healthcare investment trust peer group it was 9.8%. Bellevue Healthcare Trust plc Annual Report and Accounts 2024 3 ## Chairman's Statement continued Not surprisingly, this situation has led to increased levels of redemption requests – this year that equated to 36.6% of the shareholder base as of the Redemption Point. It has become apparent that the redemption facility, whilst prima facie, laudable by giving Shareholders an annual opportunity to exit near to NAV, has unintended consequences. In particular it attracts Shareholders with a short-term focus to buy shares with no regard to the underlying investment proposition but rather to take advantage of the possibility of an unlimited redemption structure within a defined time horizon. Hence your Board, following extensive shareholder consultation, in the latter months of 2024 called a General Meeting in December to address the redemption facility. The proposal was to replace the redemption facility with a performance-related tender offer to support the long-term nature of a closed-ended investment structure and portfolio ethos, while still providing liquidity for Shareholders. For those who did not follow the detail of what happened at the time there was a need to pull back from that proposal due to a change in stance of one of our significant Shareholders and an increase in holdings by short-term focused Shareholders. It is worth recalling that to change the Company's Articles a special resolution is required, which to pass requires a majority of not less than 75%. With increased confidence in the performance of the underlying portfolio, the Company has been active in share buybacks. Buying back shares at a discount is accretive to longer-term Shareholders. For those Shareholders seeking to exit, buybacks provide immediate liquidity rather than having to wait for an annual redemption. Your Board is determined to try and steer a fair course between redemptions and buybacks whilst ensuring the long-term viability of the Company. ### DIVIDEND The Company targets an annual dividend of 3.5% of the preceding year-end NAV, paid out in two equal instalments. In May 2024, the Company paid out a final dividend of 2.995p in respect of the year 2023. In August 2024, an interim dividend of 2.52p in respect of the financial year 2024 was paid. The Board has proposed a final dividend of 2.52p for the financial year 2024 and, if approved at the forthcoming Annual General Meeting, this will be paid to Shareholders in May 2025. For the financial year 2025, the Board is proposing a total dividend of 5.40p per Ordinary Share (this being 3.5% of the NAV as of the close on 30 November 2024), composed of interim and final dividends of 2.70p per Ordinary Share each, to be paid in August 2025 and April/May 2026 respectively, subject to shareholder approval. ### OUTLOOK There have been periods in market history where the performance of the very largest companies wanes, and smaller, more agile competitors outperform. Over the last few months the outperformance of the 'Magnificent 7' in the wider market, and of the big 'weight-loss' linked companies in the healthcare sector have indeed seemed to be waning. The healthcare sector as a whole is currently trading at relative PE (Price Earnings (ratio)) multiples which are at a discount to the wider market (as discussed in the Investment Manager's section). Within the healthcare sector itself, the relative valuation of smaller and Mid-Cap companies, in comparison to the large companies, also looks particularly attractive. One hopes that this will lead to a rerating of the companies within the portfolio. Moreover, the new leadership at the Federal Trade Commission in the US is expected to streamline the Mergers and Acquisitions ("M&A") process, bolstering smaller companies' valuations. This, combined with the more positive outlook for the sector as a whole provides reasons to be optimistic for the future growth in the value of the portfolio. ### ANNUAL GENERAL MEETING AND SHAREHOLDER COMMUNICATION The next AGM will be on 23 April 2025. The Investment Manager will make a short formal presentation before a question and answer session. We recognise it is not possible for everyone to attend an AGM hence may I remind readers that we have a dedicated email address for investors to submit any enquiries or feedback they might have to info@bellevuehealthcaretrust.com or to the Company Secretary Bellevue@nsm.group. I encourage you to make use of this facility. In the meantime, we will continue to post content from the Investment Manager onto the Company's website to keep you informed of the Company's progress. The Board is proposing a modification of the Company's investment policy to increase the maximum number of holdings from the current 35 to 45 in order to adjust to a 4 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Strategic Report more volatile market environment – this will be the subject of a resolution at the forthcoming AGM and is discussed further in the Investment Manager’s Report. We are also proposing a change to the Company’s return objectives to provide one simple clear target to measure performance. Both these changes are discussed further on pages 18 to 20 (‘Amendments to the Investment Policy and Return Objectives’), are recommended by the Board and we believe should be non-controversial. AND FINALLY… As highlighted above, this will be my final AGM as Chairman of your Company. It has been a privilege to serve. I sincerely hope that the Company proceeds to greater heights in the future. I leave secure in the knowledge that both the Board and the Investment Manager are focused on improving performance and helping drive greater returns for investors; having both confidence in the investment thesis and a Manager who is well positioned to harvest this opportunity. As I discuss above, the wider backdrop also provides reasons to be optimistic. On behalf of the whole Board, may I wish you a prosperous year ahead and thank you for your continued support of Bellevue Healthcare Trust Plc. Randeep Grewal Chairman of the Board of Directors 14 March 2025 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 5 ## Investment Manager’s Report OVERVIEW Groundbreaking advances in science are providing greater The general market’s and the healthcare sector’s insights and understanding into the underlying biology of performance has been dominated by a few stocks in the last disease, allowing better treatments to be developed and couple of years. We believe that as this performance widens helping an ever expanding number of patients. Over the our portfolio should benefit. Furthermore healthcare is well coming years, the application of genomics and Artificial positioned at current levels and, combined with good stock Intelligence will undoubtedly unleash benefits from the huge selection, the backdrop should provide a helpful boost to information datasets that healthcare systems have been performance over the coming years. gathering over many decades. Given this undeniably compelling backdrop, it should puzzle REVIEW us all that, despite all this opportunity and potential, the The Bellevue Healthcare Trust is now eight years old. performance and valuations of healthcare companies relative As such, we thought it worth revisiting our views on the to the broader global equity market are at near-decade lows evolution of the healthcare industry at the time of the as shown in Figures 1 and 2 below. Within this, Small and Company’s launch, discussing what has and has not come Mid-Cap healthcare stocks in which we typically invest have to pass, and then provide an overview of how we see the been treated even more harshly. industry’s continuing evolution. Before we delve into these details, what remains abundantly clear today is that the need for profound and fundamental reform of healthcare systems remains urgent. We seek to invest in innovative companies whose products, technologies and services are at the forefront of improving the standard of care and the means of delivery, driving efficiency across the healthcare system. Figure 1 S&P 500 Healthcare Sector vs. S&P 500 Index – relative performance on annual basis (1990 - 2024) 50% 40% 30% 20% 10% 0% -10% Relative out/(under) performance (%) -20% -30% -40% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 Source: Bloomberg Bellevue Healthcare Trust plc Annual Report and Accounts 20246 Source: Bloomberg Strategic Report Figure 2 illustrates the consequence of this relative Why has this occurred? In part, it is due to the market’s narrow underperformance despite solid operational performance – focus in recent years on a small cohort of Tech-oriented aprofound de-rating in the valuation multiples ascribed to the Mega-Cap companies (the so-called ‘Magnificent 7’). These sector when compared to the wider market. have driven wider market performance and the focus upon Figure 2 PE-Ratio Healthcare vs. Global Equities 31 December 2014 - 31 December 2024 25% 15% 5% -5% 14% Discount -15% -25% 2014 2016 2018 2020 2022 2024 Healthcare = MSCI World Healthcare, global Equities = MSCI World Index. Source: Bellevue Asset Management AG, PE 2024/ EPS-Growth 2021-2026e them has been to the detriment of much else being crowded from a growing and ageing population, and the consequential out of the narrative. We have even seen a microcosm of proliferation of age-associated chronic conditions, with a rising this within healthcare with the Eli Lilly/Novo Nordisk led dependency ratio. Healthcare expenditure cannot rise faster ‘GLP-1 winners and losers’ narrative, starving other areas of than GDP growth indefinitely. healthcare of newsflow and investor attention. The reality was, and still is, that healthcare delivery is wasteful, What we can also say with confidence is that it has not inefficient, over-reliant on a limited supply of skilled human occurred because the companies within this ecosystem capital and administratively burdensome. This combination have not continued their relentless and often awe-inspiring offers considerable opportunities for enhanced productivity progress, nor because regulatory or geopolitical issues have to slow spending growth and free up resources to deliver changed the outlook for the industry. Perhaps, given all the improved care. For these reasons, we saw these changes to geopolitical turmoil and macro-economic uncertainty, it is the healthcare system as inevitable, as a society we simply time for investors to re-evaluate the investment proposition could not carry on as we were. that healthcare provides? In our early marketing materials, we sought to explain the ‘shifting healthcare delivery paradigm’, with an illustration of THE ORIGINAL THESIS the types of products, technologies and services that could Our original top-down view was, and remains, that developed- improve outcomes, and decision-making, and lower costs world healthcare systems need to undertake a fundamental within the different stages of the patient journey. We also reconsideration of the care delivery paradigm, in order to provided a list of the major changes that we anticipated the make them operationally and financially sustainable. Societies healthcare system would undertake over the coming decade. must balance the challenges of inexorable demand arising Both are reproduced below: Bellevue Healthcare Trust plc Annual Report and Accounts 2024 7 ### Investment Manager’s Report continued Figure 3 The Shifting Healthcare Delivery Paradigm Source: Bellevue Asset Management (UK) Ltd. Figure 4 List of Anticipated Changes in Healthcare 7. “Acuity must fall” – hospitals are expensive and full of sick people. No-one wants to be there and newer ‘site of 1. “Everything must change” – Western healthcare care’ models will be increasingly used. systems are broken and not fit for purpose in terms of serving the needs of an ageing population. The human 8. “Connected care and the internet of things” – the skills deficit is already too far gone to bridge with simply future treatment setting will be loaded with passive sensing adding more staff (if you can find them). technology that enhances physician decision-making. 2. “Technology and healthcare will intersect as never 9. The “democratisation of innovation” – the future favours before” – IT innovations such as AI & big data that can those with the best ideas in drugs and med tech being cope with noisy (i.e. incomplete) healthcare records data able to bring projects to middle stages of development will increasingly drive insights and prevention plans. using outsourced models of R&D and production, tilting the balance in favour of disrupters over incumbency. 3. “It’s written in your genes” – genetic data will be at the forefront of diagnosis and population health (preventative 10. Related to the point above, legacy infrastructure in the interventions). pharma/biotech and hospital space has less value than it did historically. 4. “Electronic first” – your first interaction with the healthcare system will be digital; creating a footprint that Source: Bellevue Asset Management (UK) Ltd. can be tracked and allow you to get the best care in the cheapest and most convenient manner possible. PROGRESS TO DATE It is worth considering how the healthcare system has 5. “People are fallible” – we do not follow medical advice evolved since the Company’s inception. During the five years and do not behave rationally. People need to be nudged and to the end of 2022 (which is the last year for which complete prompted to do the right thing and making things easier is data is currently available; comprehensive data sets take time just as important as making treatments better to put together), the World Health Organisation estimates 6. “Knowledge is power” – the future consumer wants to that global spending on healthcare rose from $7.1trn in 2015 be far more engaged in decision-making and future care to $9.8trn by 2022; a compound growth rate of 4.6%, or a models will need to be more patient-centric. 37% increase over five years. Within the OECD sub-set of developed countries, spending rose from $5.9trn to $7.9trn Bellevue Healthcare Trust plc Annual Report and Accounts 20248 Strategic Report over the same period, a compound growth rate of 4.2%. public finances cannot cope with healthcare expenditures These numbers serve to highlight the dependable nature of consuming an ever greater proportion of our marginal wealth the sector’s demand-led growth. creation indefinitely. Within the OECD, the unweighted average increase in The table below discusses a few of the key opportunities/ healthcare spending as a proportion of GDP between 2015 thematics highlighted previously and the progress we and 2022 was 0.4%, which was also the median increase, have witnessed over the past eight years in terms of these amply illustrating the challenges described previously: becoming mainstream elements of healthcare provision: Opportunity/thematic What it means Why is it important Progress Made Site of care shift Moving care away from higher cost Treating patients in a lower cost Advancing. A growing percentage of setting (i.e. hospitals) to lower-cost setting saves significant money procedure volume is now undertaken in (i.e. home, surgical-day centres, for healthcare systems. Patient alternate, lower-cost settings such as pharmacies). convenience and access to care are Ambulatory Surgical Centres (ASCs), often improved too. many of which are partly physician owned. Remote monitoring for Wearables/home technology that More efficient use of human resources Limited. We were expecting more management of chronic monitors a patient without the need for that would otherwise need to progress, but a combination of conditions or recovery a healthcare professional to physically “check-in” with patients. Timely data arcane governance of social care, attend to the patient. collection can provide earlier warning data security breaches and privacy of problems. concerns alongside people’s reluctance to have “monitoring technology” in their homes has stalled progress, but the NHS virtual wards pilots do offer hope that the idea is gaining traction. Robotics and minimally Robotic/minimally invasive surgery Less trauma = faster recovery, quicker Advancing. There has been a brisk invasive surgery results in less tissue trauma versus procedure times and reduced risk of uptake of robotic surgery/minimally traditional ‘open’ surgery. infection due to smaller incision site invasive approaches. Surgeons are in the skin, which saves money and keen to utilise these tools. What increases efficiency. typically limits uptake is the meaningful capital outlay required, but various finance options are typically available and we are seeing uptake at ASCs. Electronic triage and Moving away from face-to-face The Primary-care (GP) led model Largely complete. At the time of the virtual physician visits appointments as the gateway to is very difficult to scale, and hugely IPO, trying to get a UK resident to healthcare, often redirecting patients to expensive. Reducing the number of imagine a world where there was an alternative (cheaper) services. appointments saves time and money. NHS app on their phone was difficult, never mind one that enabled them to book virtual appointments, or that virtual appointments would be more common, but here we are. Novel therapeutics/ More targeted/specific therapeutics Greater efficacy leads to better Advancing. There continues to treatment modalities provide better efficacy with less side outcomes and faster recovery, saving be significant innovation in the effect burden/off target toxicities. money. Reducing side effects improves biotechnology arena. They key to patient quality of life. success is tackling significant un-met or step change in existing treatment needs versus delivering modest improvements to existing options. Connected hospitals Software and hardware that allows a More efficient use of clinical staff where Moderate. In general, there is network environment to be created the burden of admin tasks (i.e. taking agreement on the potential benefits. so patient information is accessible bedside patient stats, test results The challenge in terms of roll-out/uptake across the hospital in a faster, more available electronically and quicker) can comes around integrating multiple stream-lined manner. More efficient be more automated. disparate pre-existing systems under monitoring of patients. a unified single architecture. Further integration and work on the part of vendors is required in order to provide a true one-stop solution for hospitals. Bellevue Healthcare Trust plc Annual Report and Accounts 2024 9 ### Investment Manager’s Report continued Opportunity/thematic What it means Why is it important Progress Made Increased personalisation, Earlier and more precise disease Generally, the earlier and more Moderate. Whilst there have been speed and accuracy of identification, typically at a accurately you diagnose disease, significant advances in molecular testing diagnosis molecular level utilising genomic or the more specific, targeted treatment available, particularly in the oncology proteomic data. options can be selected, hopefully setting, and penetration rates have being required for a shorter duration, improved, there is still a long road which saves significant costs. ahead. Uptake in our minds should have been faster. The UK NHS deserves credit here for being a global pioneer in evaluating such services, even if they are yet to roll out nationally. Looking at the table above, it is encouraging to see that Our fundamental research and analysis leads us to a bias many of the improvement areas we identified have made toward US Mid-Cap growth stocks. In recent times these significant progress over the past eight years, driving strong have been out of favour with investors by comparison to the financial performance in the companies we have invested in. Large/Mega-Cap companies that dominate our benchmark. Nonetheless, we remain confident that we are continuing to However, remote patient monitoring has been a notable focus on the correct underlying themes within the healthcare disappointment, especially given the clear benefits that ecosystem. readily available products, technologies, and services could provide. We underestimated patient concerns regarding data With all the current global challenges, it is easy to be security, which were amplified by high-profile data breaches overwhelmed by the noise and lose sight of the bigger at large corporations and social media companies, but it is picture. The Company’s performance since inception is pleasing to see more traction being gained now (cf. NHS summarised in Figure 5 below. Despite operating in a difficult Virtual Wards pilot). environment, the Company outperformed meaningfully in its first five years and has delivered a positive absolute NAV The number of people willing to work in adult social care is a return in six of its eight calendar years. huge problem, with 1 in 10 positions currently unfilled and a lack of social care resources being the primary cause of ‘bed The Company has only meaningfully underperformed the blocking’ in hospitals. Something is going to have to change. MSCI World Healthcare Index in three of the past eight years (i.e. excluding 2018’s underperformance, which was only a Progress on the uptake/penetration of these thematics/ modest 17 basis points on an NAV basis). In each of those opportunities has largely been linear over the past eight years years of notable relative underperformance, short, sharp (apart from the peak COVID times in 2020/21). Throughout shocks hindered our ability to regain sufficient momentum the entirety of the Company’s history, we have sought to before the end of the respective year. exploit these emerging and growing trends through the companies in which we invest. We are not alone in facing these challenges. Among the six healthcare-focused actively managed investment companies with a similar track record, only one has outperformed its LONGER TERM PERFORMANCE benchmark during our timeframe (and it focuses on biotech, The first five years of the Company’s history yielded very with some private investments). These have indeed been strong absolute and relative performance of the Company’s exceptionally tough times for healthcare investors. NAV, delivering a NAV total return of +16.1%, compared to +13.2% for the MSCI World Healthcare Index. In the subsequent period to date, despite following the same strategy and approach, the performance of the Company’s NAV has been disappointing, with 2022 being most significantly impacted. Bellevue Healthcare Trust plc Annual Report and Accounts 202410 Strategic Report Figure 5 Relative and absolute return since inception (calendar year basis) 30% 25% 20% 15% 10% 5% 0% -5% % Return (relative and absolute) -10% -15% -20% 2017 2018 2019 2020 2021 2022 2023 2024 Delta to MSCI WHC BBH absolute NAV return (£) Source: Bloomberg WHAT’S NEXT? The silver lining is that the sector now appears significantly Healthcare has struggled to capture wider investor attention more attractive on a relative value basis (Figure 2 on page7). — dominated as it currently is by a narrow group of Early signs in 2025 suggest that this may be starting to technology companies — it is important to emphasise that attract renewed interest from generalist investors, even if healthcare is far from broken as a business. Demand for it remains skewed at the moment to Mega-Cap names. services remains robust, and the need for greater efficiency Lest one forget, around one in three newly launched is undeniable. Few sectors can offer as much confidence products from ‘big pharma’ comes from external innovation in the long-term demand outlook as healthcare does, (in-licensing or M&A), and the marked under-performance underpinned as it is by insurmountable demographic trends. of Small and Mid-Cap healthcare and biotechnology The current situation vis-a-vis equity returns reflects a shift in particular may yet kick off a wave of M&A as larger in investor sentiment, despite the industry fundamentals companies see relative value in acquiring their benighted remaining solid. Investors have simply chosen to direct their biotech brethren. focus — and capital — elsewhere. Bellevue Healthcare Trust plc Annual Report and Accounts 2024 11 Investment Manager's Report continued Growth stocks, by their nature, do not need a re-rating to generate alpha; the growth itself should drive that. However, if investor interest in healthcare becomes more positive and broadens out to the growth names, a meaningful re-rating of depressed valuations should be on the horizon. We are still in the early stages of what is likely to be a decades-long transformation. The good news is that the momentum for change is already heading in the right direction. We are enthusiastic about the industry's future. Terms like 'cost-effectiveness' and 'value-based care' are no longer taboo. The pandemic underscored the challenges of recruiting and retaining talent, highlighting the need to reduce the sector's over-reliance on human capital. We can no longer expect frontline workers to 'do more'; we must equip them with the tools to be more productive with their valuable time. Despite these advances, many healthcare systems face even greater challenges than they did eight years ago due to the pandemic. Record waiting lists and widespread dissatisfaction with the quality or cost of care, or both, have created even higher barriers to overcome. The need for urgent reform has never been clearer. As such, we expect to see an acceleration in the adoption of products, technologies, and services that improve outcomes, reduce costs, and empower carers to make better decisions for patients. Emerging patient-centric treatment approaches promise new, personalised, and targeted ways of delivering care, far beyond what was possible in the past. Our growing understanding of genomics offers the potential to not only better understand disease drivers, but also to more effectively treat or even prevent them. It is an exciting time to invest in healthcare. ## FY2024 PERFORMANCE SUMMARY A narrowing of the discount compared to the end of fiscal 2023 meant that the total shareholder return performance was indeed positive versus the comparator, +213bp ahead for the fiscal year. Unfortunately, the fiscal 2024 performance fell just short of generating a relative NAV outperformance for the year, versus our key comparator index, the MSCI World Healthcare Index. However, it is pleasing that performance in the second half of the fiscal year was positive (GBP NAV total return +4.6%, vs +1.7% for the MSCI World Healthcare Index). **Figure 6 The Company's returns for the fiscal year** | Total Return (GBP) | Fiscal 2024 | Rolling 3 Year | Rolling 3 Year (annual eq.) | Since Inception (1 December 2016) | | --- | --- | --- | --- | --- | | BBH Share Price | +13.7% | -15.0% | -5.3% | +81.9% | | BBH NAV | +11.1% | -7.0% | -2.4% | +98.1% | | MSCI World Healthcare Index | +11.5% | +18.3% | +5.8% | +120.5% | | **Relative to MSCI World Healthcare Index** | | | | | | BBH Share Price | +2.1% | -33.3% | -13.2% | -38.6% | | BBH NAV | -0.4% | -25.3% | -2.4% | -22.3% | Source: Bloomberg. All performance figures are calculated as total return with dividends being reinvested in the relevant security, calculated in GBP and with the relevant period ending on 29 November 2024. Alongside our ongoing analysis of the sector's fundamentals, we also undertook a comprehensive review of our investment process in 2024, identifying areas for improvement in risk-adjusted returns. We observed that stock-level volatility around news flow has increased over the past two years. This led to two key conclusions: first, it may be more effective to focus on selecting the best two or three ideas from a given strategy to gain exposure to a desired theme, rather than seeking a single "winner." In order to support this revised approach, the Company's Board is proposing an increase in the maximum number of active holdings from 35 to 45. The Company will still retain its differentiated and concentrated investment approach, but we believe this additional flexibility will improve risk-adjusted returns. Second, we need to carefully consider our tolerance for binary event risks on a case-by-case basis. Where possible, it may make sense to reduce exposure before such events, especially since they often result in higher trading volumes in the immediate aftermath. It is always possible to buy back positions after trimming. We began implementing these adjustments in the second half of 2024 and are already seeing positive results, including 12 **Believe Healthcare Trust plc** Annual Report and Accounts 2024 Strategic Report ![img-0.jpeg](img-0.jpeg) reduced drawdowns and an improved internal rate of return (IRR). ### Portfolio summary During fiscal 2024, the Company held active positions in 44 companies (compared to 34 in FY2023), beginning the year with 27 active positions and ending the year with 33 active positions (18 additions, 11 exits and the write-down to zero of the Venus Medtech holding, which only represented 0.3% of Net Asset Value at the end of FY2023). Two of the exits were due to M&A (Axonics and Silk Road Medical) and three of the additions were prior holdings for the Company (Humana, Neogenomics, and Lundbeck). We would describe seven of the 18 additions as being due to the revised approach of splitting thematic exposures over more than one holding, as discussed previously. In each of these cases, the percentage of gross exposure attributed to the new holding was offset by an equal amount being sold down from an existing holding, offering complimentary end market/customer/thematic exposure. As noted previously, we believe this will smooth returns over time by reducing exposure to stock-specific downside risk. Of the remaining exits, the overwhelming rationale reflects the previously outlined change in approach to managing binary risk – in an era of heightened volatility and all too frequent over-reactions to even modestly negative newsflow, we must have a much lower appetite for any perceived downside risk or reduction in confidence in management. The evolution of the portfolio at the sub-sector level is illustrated in Figure 7 below. Investors can find detailed commentary on the month-by-month evolution of the sub-sector exposure in the monthly factsheets and these should be investors' primary source of information on the portfolio and the strategy. **Figure 7: Portfolio sub-sector evolution** | Subsector Allocation (month end) | November 2023 | May 2024 | November 2024 | % Change (Nov 2023 vs Nov 2024) | | --- | --- | --- | --- | --- | | Conglomerates | 0.0% | 0.0% | 0.0% | n/a | | Dental | 0.0% | 0.0% | 0.0% | n/a | | Diagnostics | 13.3% | 13.6% | 17.3% | +4.0% | | Distributors | 0.0% | 0.0% | 1.0% | +1.0% | | Diversified Therapeutics | 0.0% | 0.0% | 0.0% | n/a | | Facilities | 0.0% | 0.10% | 0.0% | n/a | | Focused Therapeutics | 22.2% | 24.3% | 27.8% | +5.6% | | Generics | 0.0% | 0.0% | 0.0% | n/a | | Healthcare IT | 10.4% | 5.6% | 3.4% | -7.0% | | Healthcare Technology | 5.7% | 14.5% | 9.2% | +3.5% | | Managed Care | 7.8% | 10.5% | 8.9% | +1.1% | | Medical Technology | 19.0% | 12.2% | 17.8% | -1.3% | | Services | 11.7% | 14.0% | 9.1% | -2.6% | | Tools | 9.9% | 5.1% | 5.4% | -4.5% | | Other HC | 0.0% | 0.10% | 0.10% | n/a | | **Total** | **100.0%** | **100.0%** | **100.0%** | | With regard to the portfolio breakdown by market capitalisation, this has intentionally become more balanced over the year. We are still significantly more skewed toward Mid-Cap versus our key comparator index (which was 98.5% Mega-Cap and Large-Cap at the fiscal year end), but there is greater balance across the portfolio compared to the past few years. The already material geographic bias to the United States increased slightly, as Chinese capital markets continued to experience significant challenges. Belevue Healthcare Trust plc Annual Report and Accounts 2024 13 ### Investment Manager’s Report continued Figure 8: Market capitalisation breakdown of portfolio Figure 9: Geographic breakdown of portfolio (operational HQ) 22.4% 21.2% Mega-Cap Europe (inc. UK & CH) | Large-Cap | | | Asia (inc. China & Japan) | | --- | --- | --- | --- | | | 98.2% | 0.6% | | | Mid-Cap | | 1.4% | Rest of World | | Small-Cap | | | United States | 29.7% 26.7% May not sum to 100% due to rounding. Our top five and bottom five contributors to the NAV are not necessarily correspond to their performance for the summarised in Figure 10 below, along with their share price Company, as the size and duration of our holdings varies performance in sterling over the fiscal year (which does over the year). Figure 10 Top 5 Performers (total return) Bottom 5 Performers (total return) Company Sub-sector Performance (GBP) Company Sub-sector Performance (GBP) CareDx Diagnostics +150.7% Pacific Biosciences Tools -77.7% Focused Healthcare Insmed Therapeutics +197.9% Dexcom Technology -33.0% Focused Verona Pharma Therapeutics +190.7% Accolade Healthcare IT -56.2% Healthcare Tandem Diabetes Care Technology +50.1% Evolent Health Healthcare IT -53.9% Silk Road Medical Medical Technology +181.6% Atricure Medical Technology +1.0% We would make the following comments regarding the Accolade and Atricure) and materially reduced exposure to companies in Figure 10: only one of the top performers, the other two. We would be open to increasing our holdings Silk Road Medical, was an M&A target; it was acquired by in Dexcom and Evolent Health again in the future, but only Boston Scientific in September 2024. The majority of the Top when we have tangible evidence that the risks weighing on Performing holdings have been in the portfolio for multiple years. sentiment have been fully addressed. As one might expect based on the previous comments regarding lower risk tolerance, we have exited our positions Market capitalisation breakdown Geographical breakdown (operational HQ) in three of the worst performers (Pacific Biosciences, Market capitalisation breakdown Geographical breakdown (operational HQ) 22.4% 21.2% | Mega-Cap | | | | Europe (inc. UK & CH) | | | --- | --- | --- | --- | --- | --- | | Large-Cap | | Asia | | Asia (inc. China & Japan) | Asia | | | | (inc. China & Japan) | | | (inc. China & Japan) | | | 98.2% | | 0.6% | | | | Mid-Cap | | | 1.4% | Rest of World | | | | | Rest of World | | | Rest of World | | Small-Cap | | | | United States | | 29.7% 26.7% ### Lorem ipsum Lorem ipsum Bellevue Healthcare Trust plc Annual Report and Accounts 202414 ### Lorem ipsum ### Lorem ipsum Strategic Report ![img-1.jpeg](img-1.jpeg) # Full investment portfolio as of 30 November 2024 Inevitably, the portfolio will have evolved over the four months since the fiscal year end. Investors can find additional commentary on the development of the portfolio in the monthly factsheets and these should be investors' source of up-to-date information. | | Company | Sub-sector classification | Fair value £'000 | % Portfolio | | --- | --- | --- | --- | --- | | 1 | UnitedHealth Group | Managed Care | 32,445 | 7.8% | | 2 | CareDx | Diagnostics | 28,367 | 6.8% | | 3 | Exact Sciences | Diagnostics | 19,858 | 4.8% | | 4 | Sarepta Therapeutics | Focused Therapeutics | 19,811 | 4.7% | | 5 | Intuitive Surgical | Medical Technology | 19,347 | 4.6% | | 6 | Tandem Diabetes Care | Healthcare Technology | 18,771 | 4.5% | | 7 | Castle Biosciences | Diagnostics | 17,741 | 4.2% | | 8 | Inspire Medical Systems | Medical Technology | 17,576 | 4.2% | | 9 | Axsome Therapeutics | Focused Therapeutics | 17,377 | 4.2% | | 10 | Verona Pharma | Focused Therapeutics | 17,215 | 4.1% | | **Total Top 10** | | | **208,508** | **49.9%** | | 11 | Neogenomics | Diagnostics | 16,578 | 4.0% | | 12 | Biomarin Pharmaceuticals | Focused Therapeutics | 14,935 | 3.6% | | 13 | Insmed | Focused Therapeutics | 14,781 | 3.5% | | 14 | Evolent Health | Healthcare IT | 14,206 | 3.4% | | 15 | Edwards Lifesciences | Medical Technology | 14,058 | 3.4% | | 16 | Abbott Laboratories | Medical Technology | 14,016 | 3.4% | | 17 | Structure Therapeutics | Focused Therapeutics | 12,168 | 2.9% | | 18 | Insulet | Healthcare Technology | 10,242 | 2.5% | | 19 | Dexcom | Healthcare Technology | 9,584 | 2.3% | | 20 | SI-Bone | Medical Technology | 9,383 | 2.2% | | 21 | Bio-Rad Laboratories | Focused Therapeutics | 8,954 | 2.1% | | 22 | Charles River Laboratories | Services | 7,866 | 1.9% | | 23 | Astrana Health | Services | 6,972 | 1.7% | | 24 | Thermo Fisher | Tools | 6,883 | 1.6% | | 25 | Danaher | Tools | 6,876 | 1.6% | | 26 | Iqvia | Services | 6,629 | 1.6% | | 27 | Natera | Diagnostics | 6,494 | 1.6% | | 28 | Altimmune | Focused Therapeutics | 6,364 | 1.5% | | 29 | Hutchmed | Focused Therapeutics | 5,819 | 1.4% | | 30 | Tems Pharmaceuticals Inc | Focused Therapeutics | 5,195 | 1.2% | | 31 | Elevance Health | Managed Care | 4,640 | 1.1% | | 32 | McKesson | Distributors | 4,161 | 1.0% | | 33 | Lundbeck | Focused Therapeutics | 2,478 | 0.6% | | **Total portfolio** | | | **417,790** | **100.0%** | | **Gross exposure** | | | | **£417.8m** | | **Cash on hand** | | | | **£274.0m** | | **Other net liabilities** | | | | **£(254.5)m** | | **Net Asset Value of Company** | | | | **£437.3m** | The Company's portfolio liquidity parameters remain very high. We estimate 95% of the portfolio could be liquidated within nine trading days at a participation rate of 25%. Belevue Healthcare Trust plc Annual Report and Accounts 2024 15 ### Investment Manager’s Report continued Top 10 summary further gene therapies for other dystrophies and is also UnitedHealth Group (7.8%) moving into RNA therapies for genetic diseases of the Sub-sector: Managed Care central nervous system and lungs, via a collaboration with United Health Group (‘UNH’) is a diversified and vertically Arrowhead Pharma. integrated healthcare care provider focused on two distinct Intuitive Surgical (4.6%) business platforms: (1) health benefits and insurance under Sub-sector: Medical Technology the United Healthcare brand and (2) health services operating Intuitive Surgical (‘ISRG’) is the global leader in robotic surgical under the Optum brand. The health benefits are designed systems. These systems integrate software, hardware, and for multiple customers (both private and public) and Optum sensors to allow doctors to perform robotically aided surgery offers its services to the broad healthcare market (payers, from a remote console. Alongside the system itself, ISRG also providers, employers, governments, life science companies) provides the accompanying consumables necessary for use through its Optum Health, Optum Insight and OptumRx in each procedure, and these provide a recurring revenue businesses, which cover PBM services, analytics and the stream alongside the servicing contracts for the systems physical delivery of services. themselves. A fifth-generation system, “Dv5”, with a number of CareDx (6.8%) improvements in capabilities and workflows, was launched in Sub-sector: Diagnostics the US in mid-2024 to widespread acclaim from customers. CareDx (‘CDNA’) is a specialist diagnostics company and the Tandem Diabetes Care (4.5%) leading provider of non-invasive surveillance testing to organ Sub-sector: Healthcare Technology transplant recipients. These tests evaluate the effectiveness Tandem Diabetes Care (‘TNDM’) manufactures insulin pumps of anti-rejection drug cocktails, so that changes can be and was a pioneer of ‘closed loop’ systems where algorithms made if early signs of organ rejection appear. In this way, automate insulin delivery, thereby increasing the time that it should be possible to extend the viable life of transplanted diabetic patients’ blood sugar remains within a normal range. organs, improving patient quality of life and saving money. New standards for inter-operability of pumps, software CDNA also offers advanced genetic matching tools for and sugar measurement should make such technology recipient selection, and various software tools and services the standard of care. TNDM’s newest durable form factor, to help transplant recipients manage their care. Mobi, was launched in 2024 and will be followed soon Exact Sciences (4.8%) by a tubeless version, with a more advanced patch pump Sub-sector: Diagnostics called Sigi following later. Alongside its best-in-class delivery Exact Sciences is a leading cancer diagnostic company. algorithm (‘ControlIQ’), TNDM should be well positioned for Its main product is Cologuard, a stool-based DNA screening market share gains in the coming years. test for the detection of colorectal cancer, which launched Castle Biosciences (4.2%) in 2014. Exact’s Oncotype gene expression tests (covering Sub-sector: Diagnostics breast and colon cancer) allow more accurate diagnosis and Castle Biosciences (‘CSTL’) is a specialist diagnostics subsequent treatment pathway decisions and it is moving company that is currently focused on the differential into minimal residual disease (MRD) surveillance testing. diagnosis of Melanoma by type. Through an asset acquisition Additionally, EXAS is also looking to expand its menu of from Myriad Genetics, it is also offering a risk stratification patient-centric early cancer diagnostics via Thrive, a company test for patients with cutaneous melanocytic lesions. More focused on “liquid biopsy” for early cancer detection and also recently, through the Cernostics acquisition, the Company is has a blood-based colorectal test ready to launch. branching out into GI oncologic diagnostics, launching a new Sarepta Therapeutics (4.7%) test for Barrett’s oesophagus. Beyond this the Company is Sub-sector: Focused Therapeutics hoping to roll out further tests, particularly in the GI space in Sarepta (‘SRPT’) is focused on the treatment of rare genetic order to achieve scale in this area. diseases, especially muscular conditions. It was a pioneer of exon skipping RNA therapy for Duchenne Muscular Dystrophy (DMD), a serious degenerative disease. More recently, it pioneered a gene therapy (i.e. aiming to be a one-time treatment) for DMD that now has a broad approval covering the majority of patients. It is following this up with Bellevue Healthcare Trust plc Annual Report and Accounts 202416 Strategic Report Inspire Medical Systems (4.2%) Conclusion Sub-sector: Medical Technology As discussed previously, healthcare as an industry sector Inspire (‘INSP’) is a medical device company that has and Mid-Cap growth stocks as an asset class have been developed and commercialised a minimally invasive significantly challenged in recent years, for a number implantable device for the treatment of chronic Obstructive of reasons that are not directly related to the intrinsic Sleep Apnoea (OSA), which is characterised by interrupted quality of the businesses themselves. This has adversely breathing due to a blockage of air flow. This is a serious impacted the Company’s relative and absolute returns for its condition associated with increased cardiovascular disease investors. Itfeels especially ironic that the sector has been risk and mortality. The standard of care for many years has so overlooked when it is surely a poster-child for learnings been ‘CPAP’; patients wear a positive pressure face mask from big data and Artificial Intelligence: few industries are so during sleep that pushes air into the body. This is obtrusive data-driven in formulating new products and technologies or and noisy. In contrast, Inspire is an electrical stimulator that were so early to embed AI into core products and services. senses inward breath and painlessly spasms muscles to ensure the airway remains open. Although the new administration in the United States is upending longstanding conventions around trade and Axsome Therapeutics (4.2%) international co-operation in ways that make its ultimate Sub-sector: Focused Therapeutics conclusions unclear, we can take some comfort from the Axsome Therapeutics (‘AXSM’) is a US-based specialty inescapable fundamentals that underpin healthcare demand, pharma company focused on developing novel, improved alongside a pledge from the administration not to interfere formulations of already established oral products for the with certain social welfare programs. It should ultimately treatment of various central nervous system and neurological prove to be a safe port in a storm. conditions. Its scientific focus is on improved pharmaco- kinetics to enhance therapeutic index, using approaches Beyond this, we continue to see boundless opportunities for such as competitive or molecular inhibition, single isomers incremental innovations to continue to improve the healthcare and drug formulations with enhanced bioavailability. Its key delivery paradigm, and remain convinced that investing into products (Auvelity & pipeline drug AXS-07) are focused on these trends will deliver positive returns for investors. refractory patients in the fields of major depressive disorder (MDD) and migraine treatment. Paul Major and Brett Darke Bellevue Asset Management (UK) Ltd Verona Pharma (4.1%) Sub-sector: Focused Therapeutics 14 March 2025 Verona Pharmaceuticals (‘VRNA’) is a therapeutics company focused on innovative treatments for chronic obstructive pulmonary disease (COPD). Their lead product Ohtuvayre (ensifentrine) was approved in the US for the treatment and maintenance of COPD in mid-2024. The molecule offers a differentiated mechanism of action in so far as combining bronchodilator and anti-inflammatory activity in a twice daily compound that is delivered via a nebuliser. Compared to other COPD agents, the initial launch trajectory of Ohtuvayre has been impressive and the drug has blockbuster potential. Bellevue Healthcare Trust plc Annual Report and Accounts 2024 17 ## Investment Policy, Results and ## Key Performance Indicators INVESTMENT POLICY base currency of the Company is sterling which creates a The Company invests in a concentrated portfolio of listed or potential currency exposure, this will not be hedged using any quoted equities in the global healthcare industry. The Company sort of foreign currency transactions, forward transactions or may also invest in ADRs, or convertible instruments issued by derivative instruments. such companies and may invest in, or underwrite, future equity The Company will not invest in any companies which are, issues by such companies. The Company may utilise contracts at the time of investment, unquoted or untraded companies for differences for investment purposes in certain jurisdictions and has no intention of investing in other investment funds. where taxation or other issues in those jurisdictions may render direct investment in listed or quoted equities less effective. Any AMENDMENTS TO THE INVESTMENT use of derivatives for investment purposes is made on the basis of the same principles of risk spreading and diversification that POLICY AND RETURN OBJECTIVES apply to the Company’s direct investments, as described below, The Board is seeking shareholder approval at the AGM to and such use is not expected in the normal course to form a change the Company’s investment policy to raise the upper material part of the Gross Assets. limit of the number of holdings in the Company’s portfolio from 35 to 45, to reduce volatility, and in addition proposes The investable universe for the Company is the global to simplify the Company’s specific return objectives that form healthcare industry including companies within industries part of the Company’s investment objective. such as pharmaceuticals, biotechnology, medical devices and equipment, healthcare insurers and facility operators, Investment policy information technology (where the product or service supports, At present, the maximum number of stocks that may be held supplies or services the delivery of healthcare), drug retail, in the Company’s portfolio at any one time is 35. The Board consumer healthcare and distribution. proposes changing the investment policy so the portfolio can comprise up to 45 stocks at any one time, to reduce volatility No single holding will represent more than 10 per cent. of Gross of the portfolio. Assets at the time of investment and, when fully invested, the portfolio will have no more than 35 holdings. The Company One of the key aspects to the investment proposition is the will typically seek to maintain a high degree of liquidity in its selection of a core, high conviction portfolio driven by the portfolio holdings (such that 90 per cent of the portfolio may Investment Manager’s fundamental analysis. The fundamental be liquidated in a reasonable number of trading days) and as a strategy remains unchanged, and the Company will continue consequence of the concentrated approach, it is unlikely that a to invest in a relatively concentrated portfolio of listed or position will be taken in a company unless a minimum holding of quoted equities in the global healthcare industry. This strategy 1.0 per cent. of Gross Assets at the time of investment can be has tended to result in a portfolio of small and mid-cap achieved within an acceptable level of liquidity. healthcare companies, and eschewed ownership of the mega- cap companies that dominate the weightings within major There are no restrictions on the constituents of the Company’s healthcare benchmark indices. The Board agrees with the portfolio by index benchmark, geography, market capitalisation Investment Manager that such an approach continues to be or healthcare industry sub-sector. Whilst the MSCI World the most attractive option on a fundamental basis. Healthcare Index (in sterling) will be used to measure the performance of the Company, the Company does not seek However, there has been a widespread dislocation in financial to replicate the index in constructing its portfolio. The portfolio markets since the world exited the COVID-19 pandemic, may, therefore, diverge substantially from the constituents of which has led to a significant concentration of investor returns this index (and, indeed, it is expected to do so). However, in a limited number of mega-cap companies, and healthcare the portfolio is expected to be well diversified in terms of is no exception to this. One consequence of this has been industry sub-sector exposures. Given the nature of the a material increase in volatility for small and mid-cap stocks wider healthcare industry and the geographic location of the versus large and mega-cap stocks. Over the past year, the investable universe, it is expected that the portfolio will have Investment Manager has been seeking to mitigate the impact a majority of its exposure to stocks with their primary listing of this trend through a different approach to the concentration in the United States and with a significant exposure to the of the positions held by the Company, and this has been US dollar in terms of their revenues and profits. Although the successful in reducing volatility. Bellevue Healthcare Trust plc Annual Report and Accounts 202418 Strategic Report Following discussions with the Investment Manager, the Board days) and as a consequence of the concentrated approach, it considers it beneficial for the Company’s portfolio to be able is unlikely that a position will be taken in a company unless a to consist of up to 45 stocks at any one time to enable this minimum holding of 1.0 per cent. of Gross Assets at the time approach to be taken further. The limit of 45 will not include of investment can be achieved within an acceptable level of any stocks that are inactive, meaning that the stock is in a liquidity. company which (i) has either had its primary listing cancelled There are no restrictions on the constituents of the Company’s or suspended for a continuous period of at least 90 days portfolio by index benchmark, geography, market capitalisation and/or (ii) is subject to insolvency or winding-up proceedings or healthcare industry sub-sector. Whilst the MSCI World or any proceedings having an analagous effect. Health Care Index (in sterling) is used to measure the The actual number of investments in the Company’s portfolio performance of the Company, the Company does not seek may vary from time to time depending on the availability of to replicate the index in constructing its portfolio. The portfolio opportunities in the market. may, therefore, diverge substantially from the constituents of this index (and, indeed, it is expected to do so). Subject to shareholder approval of the proposed changes to the investment policy at the AGM, the Company’s investment However, the portfolio is expected to be well diversified in policy will be amended as follows (with the proposed new terms of industry sub-sector exposures. Given the nature of wording shown as underlined text and the proposed deletions the wider healthcare industry and the geographic location of shown as struck through text): the investable universe, it is expected that the portfolio will have a majority of its exposure to stocks with their primary “The Company invests in a concentrated portfolio of listed listing in the United States and with a significant exposure to or quoted equities in the global healthcare industry. The the US dollar in terms of their revenues and profits. Although Company may also invest in ADRs, or convertible instruments the base currency of the Company is sterling which creates a issued by such companies and may invest in, or underwrite, potential currency exposure, this will not be hedged using any future equity issues by such companies. sort of foreign currency transactions, forward transactions or derivative instruments. The Company may utilise contracts for differences for investment purposes in certain jurisdictions where taxation or The Company will not invest in any companies which are, at other issues in those jurisdictions may render direct investment the time of investment, unquoted or untraded companies and in listed or quoted equities less effective. has no intention of investing in other investment funds. Any use of derivatives for investment purposes is made The Company may deploy borrowing to enhance long-term on the basis of the same principles of risk spreading and capital growth. Gearing will be deployed flexibly up to 20 diversification that apply to the Company’s direct investments, per cent. of the Net Asset Value, at the time of borrowing, as described below, and such use is not expected in the although the Investment Manager expects that gearing will, normal course to form a material part of Gross Assets. over the longer term, average between 5 and 10 per cent. of Net Asset Value. In the event that the 20 per cent limit. is The investable universe for the Company is the global breached as a result of market movements, and the Board healthcare industry including companies within industries considers that borrowing should be reduced, the Investment such as pharmaceuticals, biotechnology, medical devices Manager shall be permitted to realise investments in an orderly and equipment, healthcare insurers and facility operators, manner so as not to prejudice shareholders. information technology (where the product or service supports, supplies or services the delivery of healthcare), drug retail, No material change will be made to the investment policy consumer healthcare and distribution. without the approval of Shareholders by ordinary resolution.” No single holding will represent more than 10 per cent. Return objectives of Gross Assets at the time of investment and, when fully Since its launch in 2016, the investment objective of the invested, the portfolio will have no more than 35 45 holdings. Company has been to provide shareholders with capital The Company typically seeks to maintain a high degree of growth and income over the long term, through investment in liquidity in its portfolio holdings (such that 90 per cent. of the listed or quoted global healthcare companies. portfolio may be liquidated in a reasonable number of trading Bellevue Healthcare Trust plc Annual Report and Accounts 2024 19 Investment Policy, Results and Key Performance Indicators continued The Company's current specific return objectives are: (i) to beat the total return of the MSCI World Health Care Index (in sterling) on a rolling 3 year period (the index total return including dividends reinvested on a net basis); and (ii) to seek to generate a double-digit total shareholder return per annum over a rolling 3 year period. The Board is proposing an amendment to update and simplify these to one simple, clear target against which to measure performance. The Company's return objectives (which form part of its investment objective) will be amended as follows (with the proposed new wording shown as underlined text and the proposed deletions shown as struck through text): "The investment objective of the Company is to provide shareholders with capital growth and income over the long term, through investment in listed or quoted global healthcare companies. The Company's specific return objective shall be for its NAV per share (on a total return basis); (i) to beat the total return of the MSCI World Health Care Index (in sterling) on a rolling 3 year period (the index total return including dividends reinvested on a net basis); and (ii) to seek to generate a double-digit total shareholder return per annum over a rolling 3 year period." The amendments to the investment policy are subject to shareholder approval at the AGM but the proposed change to the return objectives is not conditional on shareholder approval and will take effect from 17 March 2025. ## BORROWING POLICY The Company may deploy borrowing to enhance long-term capital growth. Gearing will be deployed flexibly up to 20 per cent. of the Net Asset Value, at the time of borrowing, although the Investment Manager expects that gearing will, over the longer term, average between 5 and 10 per cent. of Net Asset Value. In the event that the 20 per cent limit is breached as a result of market movements, and the Board considers that borrowing should be reduced, the Investment Manager shall be permitted to realise investments in an orderly manner so as not to prejudice shareholders. No material change will be made to the investment policy without the approval of shareholders by ordinary resolution. ## DIVIDEND POLICY The Company will set a target dividend each financial year equal to 3.5% of Net Asset Value as at the last day of the Company's preceding financial year. The target dividend will be announced at the start of each financial year. This is a target only and not a profit forecast and there can be no assurance that it will be met. Dividends will be financed through distributable reserves. In order to increase the distributable reserves available to facilitate the payment of dividends, the Company cancelled the amount of £146,412,136 standing to the credit of its share premium account immediately following first admission of its Ordinary Shares to trading on the London Stock Exchange in order to create a special distributable reserve. With effect from 14 December 2023, a further amount of £617,709,517 standing to the credit of the Company's share premium account was cancelled in order to increase the special distributable reserve. The Company may, at the discretion of the Board, pay all or part of any future dividends out of the special distributable reserve, taking into account the Company's investment objective. The Company intends to pay dividends on a semi-annual basis, by way of two equal dividends, with dividends declared in July and February/March and paid in August and April/May in each year. In accordance with regulation 19 of the Investment Trust (Approved Company) (Tax) Regulations 2011, the Company will not (except to the extent permitted by those regulations) retain more than 15 per cent. of its income (as calculated for UK tax purposes) in respect of an accounting period. ## RESULTS AND DIVIDEND The Company's revenue return after tax for the year amounted to a gain of £160,000 (2023: loss of £1,147,000). The Company's capital return after tax for the year amounted to a gain of £73,574,000 (2023: loss of £119,891,000). Therefore, the total return after tax for the Company was a gain of £73,734,000 (2023: loss of £121,038,000). The Company targeted a total dividend for the year ended 30 November 2024 of 5.04p per Ordinary Share. - Interim dividend of 2.52p paid on 29 August 2024 - Final dividend of 2.52p to be paid on 30 May 2025 (to Shareholders on the register at the close of business on 2 May 2025), subject to Shareholder approval at the AGM to be held on 23 April 2025. 20 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Strategic Report ![Stylized logo of the company name in a stylized font]() ## TARGET TOTAL DIVIDEND FOR THE YEAR ENDING 30 NOVEMBER 2025 For the financial year ending 30 November 2025, the target total dividend will be 5.40p per Ordinary Share, this being 3.5% of the audited net asset value per Ordinary Share of 154.32p (including current financial year revenue items) as at 30 November 2024. The Board intends to declare an interim dividend of 2.70p per Ordinary Share, being half of the target total dividend for the financial year ending 30 November 2025, in July 2025 and intends to pay this dividend in August/September 2025. The Board intends to propose a final dividend of 2.70p per Ordinary Share for the financial year ending 30 November 2025, in February/March 2026 and intends to pay this dividend in April/May 2026. ### FIVE YEAR DIVIDEND PERFORMANCE | | Interim dividend | Final dividend | Total dividend | | --- | --- | --- | --- | | **Dividends paid/payable** | | | | | Year ended 30 Nov 2020 | 2.500p | 2.500p | 5.00p | | Year ended 30 Nov 2021 | 3.015p | 3.015p | 6.03p | | Year ended 30 Nov 2022 | 3.235p | 3.235p | 6.47p | | Year ended 30 Nov 2023 | 2.995p | 2.995p | 5.99p | | Year ended 30 Nov 2024 | 2.520p | 2.520p | 5.04p | | **Target dividend*** | | | | | Year ending 30 Nov 2025 | 2.70p | 2.70p | 5.40p | ## KEY PERFORMANCE INDICATORS ("KPIs") The Board measures the Company's success in attaining its investment objective by reference to the following KPIs: ### (i) To beat the total return of the MSCI World Healthcare Index (in sterling) on a rolling three year period The NAV total return from 1 December 2021 to 30 November 2024 was -7.0%. The total return of the MSCI World Healthcare Index (in sterling terms) over the same period was 18.3%. The Investment Manager's report on pages 6 to 17 incorporates a review of the highlights during the financial year ended 30 November 2024. The Investment Manager's report gives details on investments made during the year and how performance has been achieved. ### (ii) To seek to generate a double-digit total Shareholder return per annum over a rolling three year period The NAV total returns from 1 December 2021 to 30 November 2024 was -7.0%. ### (iii) To meet its target total dividend in each financial year The Company targeted a total dividend of 5.04p per Ordinary Share for the year ended 30 November 2024. The Company paid an interim dividend of 2.520p per Ordinary Share in August 2024 and proposes a final dividend in respect of the year to 30 November 2024 of 2.520p per Ordinary Share. ### (iv) Discount/premium to NAV The discount/premium relative to the NAV per Ordinary Share represented by the share price is monitored by the Board. The share price closed at a 8.5% discount to the NAV as at 30 November 2024 (2023: 10.3% discount). ### (v) Maintenance of reasonable level of ongoing charges The Board monitors the Company's operating costs. Based on the Company's average net assets during the year ended 30 November 2024 the Company's ongoing charges figure calculated in accordance with the Association of Investment Companies ("AIC") methodology was 1.03% (2023: 1.02%). Belevue Healthcare Trust plc Annual Report and Accounts 2024 21 ## Risk and Risk Management PRINCIPAL AND EMERGING RISKS AND Sub-sectoral diversification The Company has no limits on the amount it may invest in UNCERTAINTIES the healthcare sector and is not subject to any sub-sector The Board is responsible for the management of risks faced by investment restrictions. Although the portfolio is expected to be the Company and delegates the review process of this to the well diversified in terms of industry sub-sector exposures, the Audit and Risk Committee (the “Committee”). The Committee Company may have significant exposure to portfolio companies carries out, at least annually, a robust assessment of principal from certain sub-sectors from time to time. and emerging risks and uncertainties and monitors the risks on an ongoing basis. The Committee has a dynamic risk Concentrated portfolio assessment programme in place to help identify key risks in One of the key aspects to the investment proposition is the the business and oversee the effectiveness of internal controls selection of a high conviction portfolio driven by the Investment and processes, providing a visual reflection of the Company’s Manager’s fundamental analysis. The maximum number identified principal and emerging risks. The Committee of stocks being held at any one time is 35 (currently). This considers both the impact and the probability of each risk Investment approach does not propose to follow a benchmark occurring and ensures appropriate controls are in place to and as such cannot be expected to reflect the benchmark reduce risk to an acceptable level. performance. As part of the risk review, the Committee considered the Management of risk challenging global economic and geopolitical environment The Directors acknowledge that market risk is inherent in including: the continuing effects of the Russia/Ukraine war; the investment process. The Company is invested in a the Israel/Hamas conflict with resultant Middle East effects; concentrated, sector specific portfolio of investments and has a tensions between China/Taiwan and China/USA, with well-defined investment policy that states that no single holding attendant global supply chain issues; the increased probability will represent more than 10 per cent. of gross assets at the time of imposition of trade tariffs; and the risks from climate of investment. change. Inflation and interest rates were also discussed. The Investment Manager also has a well-defined investment The principal and emerging risks, together with a summary objective and process which is regularly and rigorously reviewed of the processes and internal controls used to manage and by the independent Board of Directors and performance is mitigate risks where possible are outlined below. reviewed at quarterly Board meetings. The Investment Manager is experienced and employs its expertise in selecting the stocks in which the Company invests. (I) MARKET RISKS Economic conditions During the year under review, the Committee considered the Changes in general economic and market conditions including, Company’s investment performance from the perspective of for example interest rates, inflation, exchange rates, recession, risk management. The Company’s concentrated high conviction taxes and changes in supply and demand can all pose a threat portfolio is selected from bottom-up research resulting in a to the Company’s prospects and thereby the performance of its tendency to select smaller mid-sized companies which has Ordinary Shares. adversely impacted the resulting performance. Another factor Healthcare companies impacting investment performance has been the Company’s The Company invests in global healthcare equities. This sector long-term focus. may be affected by a number of particular risks including Nonetheless, the Committee, in conjunction with the Investment changes in government regulations and government healthcare Manager have reviewed their approach, reflecting on potential programs, increases or decreases in the cost of medical changes that would improve performance, without deviating products and services and product liability claims. Healthcare from the mandate to invest into healthcare transformation that companies in particular, have patent protection, very competitive the Company has followed since inception. In conjunction forces on pricing and susceptibility to product obsolescence. with Bellevue Group, the Investment Management team In addition, successful development of healthcare products reviewed a wide range of metrics relating to trading, timing, risk may be highly uncertain. The market prices for securities of management and fundamental approach. Whilst the investment companies in the healthcare sector can reflect this by being mandate has not changed, this analysis revealed a few aspects highly volatile. Bellevue Healthcare Trust plc Annual Report and Accounts 202422 Strategic Report in the investment process where small alterations may lead to Financial risks in the year under review improved performance. Significantly, the US dollar vs sterling movement negatively impacted the results. The Board policy is not to hedge The analysis suggested that, whilst identification of themes and currencies as that is not within the remit of an equity trends was very robust, the Investment Manager tended to be proposition however some mitigation comes from the rather early to buy into these and, where they narrowed down utilisation of multi-currency debt to recognise the underlying the list of highly operationally-geared assets into such trends, investment currency. one might be better picking the best two or three ideas, rather than trying to select a single holding. The Investment Manager Management of risk has gradually been implementing this revised approach across The Company typically maintains a high degree of liquidity in its the second half of 2024 and the Committee believe that it has portfolio holdings. helped recent performance. Further details on the management of financial risks can be The Board closely monitors the Company’s share price relative found in note 18 to the financial statements. to NAV and the Company’s discount/premium relative to their peer group. A discount management policy including buybacks (III) CORPORATE GOVERNANCE AND and a redemption facility is operated. Extensive marketing is INTERNAL CONTROL RISKS carried out by the Company’s Investment Manager, Broker The Board has contractually delegated to external service and a specialist PR company and regular communication providers the management of the investment portfolio, custodial via the Company’s factsheets and website aims to inform services (which include the safeguarding of the assets), Shareholders. An investment research consultant is engaged to registration services, and accounting and company secretarial provide independent research for retail Shareholders. requirements. The major external service providers are outlined on pages 36 and 37 of the Directors’ Report. In addition to regular market updates from the Investment Manager and reports at Board meetings, the Board convenes The main risk areas arising from the above contracts relate to on an ad hoc basis if required. allocation of the Company’s assets by the Investment Manager, and the professional execution of their duties of performance (II) FINANCIAL RISKS of administrative, registration and custodial services. These The Company’s investment activities expose it to a variety of could lead to various consequences including the loss of the financial risks which include liquidity, currency, leverage, interest Company’s assets, inadequate returns to Shareholders and rate, credit risks and country-specific withholding tax rates. loss of investment trust status. Cyber security risks could lead to breaches of confidentiality, data records being compromised The Company invests in equities, with equities subject to strong and inability to make investment decisions. The failure or breach price fluctuations and specifically healthcare equities, which of physical security could lead to damage or loss of equipment, can be subject to sudden substantial price movements owing with consequential negative results. to market, sector or company factors. There is therefore a risk that the Company’s holdings may not be able to be realised Management of risk at reasonable prices in a reasonable timeframe. Although The Board has appointed experienced service providers. the Company’s performance is measured in sterling, a high Each of the contracts were entered into after full and proper proportion of the Company’s assets may be either denominated consideration of the quality and cost of services offered, in other currencies or be in investments with currency exposure. including the financial control systems in operation in so far as The Company pays interest on its borrowings and as such, the they relate to the affairs of the Company. Company is exposed to interest rate risk due to fluctuations All of the above services are subject to ongoing oversight of the in the prevailing market rates. The Company may take on Board and the performance of the principal service providers is leverage, which may lead to higher price movements compared reviewed on a regular basis. During the year, there have been to the underlying market. changes to service providers, with NSM Funds (UK) Limited appointed as Company Secretary and Administrator on 10April 2024. There have also been recent changes to the senior Bellevue Healthcare Trust plc Annual Report and Accounts 2024 23 ### Risk and Risk Management continued management of a number of service providers including at the (V) KEY PERSON RISK Bellevue Asset Management Board level in Switzerland. The The Company depends on the diligence, skill and judgement Board ensure that all these factors are considered in ensuring of the Investment Manager’s investment professionals and the service provision is maintained at the highest level. information and ideas they generate during the normal course of their activities. The Company’s future success depends on All key service providers produce annual internal control reports the continued service of key personnel. The departure of any for review by the Audit and Risk Committee. These reviews of these individuals without adequate replacement may have a include consideration of their business continuity plans and the material adverse effect on the Company’s business prospects associated cyber security risks. The Company’s key service and results of operations. providers report on cyber risk mitigation and management on a quarterly basis, covering information technology security, which Management of risk provides comfort to the Board that appropriate safeguards The strength and depth of the investment management team are in place. This includes confirmation of business continuity provides comfort that there is not over-reliance on one person capability in the event of a cyber-attack and each service with alternative investment managers available to act if needed. provider is reminded of their duty to disclose any cyber The risk has reduced over time as the Investment Manager’s security breaches to the Company Secretary at least annually. team grows in experience and resources expand in both the All physical locations have security in place and all third-party investment management and administration teams. This risk service providers have disaster recovery plans. rating remains unchanged from the previous year. The Board meets regularly with other members of the wider team employed by the Investment Manager. (IV) REGULATORY RISKS Breaches of Section 1158 of the Corporation Tax Act 2010 could result in loss of investment trust status. Loss of (VI) BUSINESS INTERRUPTION investment trust status would lead to the Company being Disruption or failure in services provided by key service subject to tax on any gains on the disposal of its investments. providers, could mean information is not processed correctly Breaches of the FCA’s rules applicable to listed entities could or in a timely manner, resulting in misappropriation of assets, result in financial penalties or suspension of trading of the regulatory investigation or financial loss, failure of trade Company’s shares on the London Stock Exchange. Breaches settlement, or potential loss of investment trust status. of the Companies Act 2006, The Alternative Investment Fund The failure or breach of information security could potentially Managers’ Directive, accounting standards, the Listing Rules, lead to breaches of confidentiality, data records being Disclosure Guidance and Transparency Rules, and Prospectus compromised and the inability to make investment decisions. Rules could result in financial penalties or legal proceedings The failure or breach of physical security could lead to damage against the Company or its Directors. or loss of equipment, with consequential negative results. Management of risk Management of risk The Company has contracted out relevant services to Each service provider has comprehensive business continuity experienced service providers. The Investment Manager, policies and procedures in place which facilitate continued operation Depositary and Administrator provide regular reports to the Audit of the business in the event of a service disruption or a major and Risk Committee on their monitoring programmes. disruption event. Breaches of any nature are reported to the Board. The Investment Manager monitors investment positions and The Investment Manager, Administrator and Company Secretary the Investment Manager and Administrator monitor the level of each have comprehensive business continuity plans which forecast income and expenditure. Major regulatory change could facilitate continued operation of the business in the event of a impose disproportionate compliance burdens on the Company. service disruption or a major disruption event. The Audit and Risk In such circumstances representations would be made to seek Committee receives the Administrator’s report on internal controls to ensure that the special circumstances of investment trusts and the reports by other key third-party providers are reviewed are recognised. by the Investment Manager and Company Secretary on behalf of During the year there were no material changes to the risk level. the Audit and Risk Committee. The Depositary reports regularly on custody matters, including the continued safe custody of the Company’s assets. Bellevue Healthcare Trust plc Annual Report and Accounts 202424 Strategic Report Cyber security risks are considered and continually monitored In 2022, Bellevue introduced a minimum threshold of 50% by the Investment Manager as these threats evolve and become “Investments with Sustainable Characteristics” for the Company’s increasingly sophisticated. The integrity of the Company’s information portfolio. This is defined by sufficient ESG research coverage, security is closely monitored by the Board, with each of the key a minimum ESG Rating of BB or higher, and compliance with service providers providing a regular report through its internal audit global norms. In addition, the Company must have a minimum function which covers information technology security and provides of 25% of the portfolio qualifying as “Sustainable Investments”, comfort to the Board that appropriate safeguards are in place. of which more information can be found on page 32. As of 30 November 2024, 76% of the investment portfolio met the definition of “Sustainable Investments”, well above the 25% (VII) ESG AND CLIMATE CHANGE RISK minimum threshold and reflects an improvement over the prior The Company does not opt for a UK SDR investment label period, which is likely influenced by the market capitalisation since it does not pursue distinct sustainability objectives characteristics of the portfolio. in accordance with the four UK SDR categories. However, it considers ESG factors in its investment process. The Company’s ESG statement is updated annually and is available on the AIC website and on pages 31 to 33 of this The financial risks from climate change are typically classified report. Investment trusts are currently exempt from TCFD as physical or transitional risks. Physical risks are those arising disclosure, but the Board will continue to monitor the situation. from specific weather events (such as wildfires) and transitional risks are those arising from the changes to regulations (such as the move to net-zero carbon emissions). The Company could (VIII) COMPANY STRUCTURE suffer potential reputational damage from non-compliance with The Company structure is such that it has a redemption facility regulations or incorrect disclosures or as a result of increased through which Shareholders may request the redemption of all investor demand for products which promote ESG investments. or part of their holding of Ordinary Shares on an annual basis. The impact of climate change could affect the Company’s The Board has considered the possibility that Shareholders investments and their valuations and potentially shareholder holding a significant percentage of the Company’s shares returns. Further information on this can be found in the principal continue to request redemption and therefore consider the and emerging risks and uncertainties section of this report. structure of the Company to be a principal risk. Management of risk Management of risk The portfolio is well diversified to mitigate against physical risks. As outlined in the Company’s Prospectus, the Directors Changes in climate change focused regulation, governing have absolute discretion to accept or decline in whole or both the Company and investee companies, will create some part any redemption request. While the Board does not uncertainty. In comparison to the broader economy, the portfolio generally expect to exercise this discretion, reliance cannot has a relatively low carbon footprint and the Investment Manager’s be placed on the Directors exercising their discretion to parent company has deployed a CO reduction strategy. This permit redemption requests, should Shareholders continue to 2 strategy encompasses measures such as an independent redeem. audit of its CO footprint according to ISO14064-1 and GHG 2 protocols, implementation of corporate CO reduction and 2 offsetting of excess emissions with high-quality climate projects. Bellevue Group is targeting a reduction in CO emissions per 2 FTE of at least 30% by 2030. Moreover, the Bellevue Group is certified as carbon neutral by Swiss Climate. Bellevue Healthcare Trust plc Annual Report and Accounts 2024 25 ## Viability Statement The Directors have assessed the viability of the Company As previously outlined, the Board consider the Company to for the five years to 30 November 2029 (the “Period”), which be viable for the next five years and have given consideration the Directors consider to be an appropriate time horizon, to the asset base of the Company, the Company structure taking into account the long-term nature of the Company’s and market opportunities. It is the view that the Company investment objective and recommendation by the Financial is currently viable and the viability is not threatened by the Reporting Council. structure, as the directors have absolute discretion over the redemption procedures including whether to offer a In reaching this conclusion, the Directors have considered redemption facility at all. Additionally, the portfolio continues each of the principal and emerging risks, including climate to be able to be liquidated to meet funding requirements as change and the liquidity and solvency of the Company over they fall due. The Directors’ assessment assumes that the the next five years. The Directors do not expect there to redemption facility does not threaten the existence or viability be any significant change in the current principal risks and of the Company, it can be managed or changed at the adequacy of the mitigants in place over the Period. absolute discretion of the Board. The Directors have considered the Company’s income and In addition to considering the emerging and principal risks as expenditure projections and the fact that the Company’s outlined on pages 22 to 25 and the financial position of the investments comprise readily realisable securities, which Company as described above, the Board has also has regard could, if necessary, be sold to meet the Company’s funding to the following assumptions in considering the Company’s requirements. The expenses of the Company are predictable longer term viability: and modest in comparison with the assets in the portfolio. Portfolio changes and market developments are discussed The continuing relevance of the Company’s investment at quarterly Board meetings. The internal control framework objective and policy in the current environment; of the Company is subject to a formal review on at least an That healthcare will continue to be an investable sector annualbasis. and investors will still wish to have an exposure to such The Directors do not expect there to be a material increase investments; in the annual ongoing charges ratio of the Company over the The level of demand for the Company’s shares, and that Period. The Company’s income from investments and cash since launch the Company has been able to issue further realisable from the sale of its investments provide substantial shares; cover to the Company’s operating expenses under all stress test scenarios reviewed by the Directors. That closed ended investment trusts will continue to be wanted by investors; The Company has a redemption facility through which Shareholders are entitled to request the redemption of all The gearing policy of the Company; or part of their holding of Ordinary Shares on an annual basis. At the last redemption point of 30 November 2024, That regulation will not increase to such an extent that redemption requests in respect of 163,834,887 Ordinary makes the running of the Company uneconomical in Shares were received, all of these Ordinary Shares were comparison to other competitor products redeemed and cancelled by the Company. All shareholders Based on their assessment, the Directors have a reasonable who validly applied to have shares redeemed received a expectation that the Company will be able to continue in Redemption Price of 154.76 pence per share. operation and meet its liabilities as they fall due in the Period. The Board has considered the possibility that Shareholders holding a significant percentage of the Company’s shares continue to request redemption. The Board, however, has absolute discretion over the redemption facility to accept or decline in whole or in part any redemption request, and decisions are subject to Board approval, which must have regard to the overall operation of the Company in this situation. Bellevue Healthcare Trust plc Annual Report and Accounts 202426 Strategic Report ## Stakeholder Engagement This section of the Annual Report covers the Board’s the Company does not have any employees; rather it employs considerations and activities in discharging their duties under external suppliers to fulfil a range of functions, including s.172(1) of the Companies Act 2006, in promoting the success investment management, secretarial, administration, public of the Company for the benefit of its members as a whole. relations, corporate brokering, depositary and banking services. All of these service providers who are stakeholders in the This statement includes consideration of the likely consequences Company themselves help the Board to fulfil its responsibility to of the decisions of the Board in the longer term, how the Board engage with the Shareholders and other stakeholders. has taken wider stakeholders’ needs into account and the impact of the Company’s operations on the environment. The Board has identified the major stakeholders in the Company’s business. On an ongoing basis the Board monitors both potential The Board is ultimately responsible for all stakeholder and actual impacts of the decisions it makes in respect of the engagement. As an externally managed investment company, Company upon those major stakeholders identified. Importance of engagement Examples of engagement and key decisions Shareholders The Board’s principal concern is the interests of the The Board believes that shareholder engagement remains of Company’s Shareholders and potential investors and the upmost importance and is keen that the AGM be a participative Directors have considered this duty when making the event for all. As was the case in 2024, the Investment Manager strategic decisions during the year that affect Shareholders, will attend to answer any questions Shareholders may have. The including the re-appointment of the Investment Manager Company values feedback and questions it may receive from and the recommendation that Shareholders vote in favour of Shareholders ahead of and during the AGM. The Board however the resolutions to continue and to renew the share allotment recognises that it is not possible for everyone to attend the AGM and share buyback authorities at the AGM. and therefore encourage Shareholders to submit any enquiries or feedback to the dedicated email address: As a public company listed on the London Stock Exchange, info@bellevuehealthcaretrust.com. the Company is subject to the Listing Rules and the Disclosure Guidance and Transparency Rules. The UK Should any significant votes be cast against a resolution, Listing Rules include a listing principle that a listed company the Board will engage with Shareholders and explain in its must ensure that it treats all Shareholders of the same class announcement of the results of the AGM the actions it intends to of shares that are in the same position equally in respect of take to consult Shareholders in order to understand the reasons the rights attaching to such shares. behind the votes against. Following the consultation, an update will be published no later than six months after the AGM and the The investment objective of the Company is to provide Annual Report will detail the impact the Shareholder feedback Shareholders with capital growth and income over the has had on any decisions the Board has taken and any actions or long term, through investment in listed or quoted global resolutions proposed. healthcare companies. With the assistance of regular discussions with and the formal The Board maintains open dialogue between Shareholders, advice of the Company’s legal counsel, secretary and corporate the Investment Manager and other service providers. broker; the Board abides by the UK Listing Rules at all times. The Investment Manager and Chairman, along with the The Board and the Investment Manager consider maintaining good Company’s corporate broker meets regularly with the communications and engaging with Shareholders through both Company’s Shareholders to provide Company updates meetings and presentations a key priority. The Board regularly and to foster regular dialogue. Feedback from meetings is considers the share register of the Company and receives regular communicated with the Board. reports from the Investment Manager and Corporate Broker outlining Shareholder meetings and feedback received. Any concerns that are raised in Shareholder meetings are noted and considered by the Board. Bellevue Healthcare Trust plc Annual Report and Accounts 2024 27 ### Stakeholder Engagement continued Importance of engagement Examples of engagement and key decisions On a number of additional occasions during the year the Board wrote to the Company’s larger Shareholders offering meetings or calls with the Chairman or other members of the Board. The Board appreciates that Shareholders vary by size and resources but the Company’s investor relations team, Investment Manager and Board of Directors are pleased to engage with Shareholders, whatever their size. Shareholders are kept informed by the publication of annual and half-yearly reports, monthly factsheets, access to commentary from the Investment Manager via the Company’s website and attendance at events at which the Investment Manager presents. The Company’s Annual and Interim Reports are made available on the Company’s website and are also circulated to Shareholders as requested. This information is supplemented by the daily calculation and publication of the NAV per Ordinary Share, which is announced via a Regulatory Information Service feed and is also available on the Company’s website. Shareholders are able to raise any concerns directly with the Chair or the Board without intervention of the Investment Manager or Company Secretary, they may do this either in person at the AGM or at other events, or in writing via the registered office of the Company. The Board has appointed an independent research consultancy, Kepler, to ensure that information and news about the Company is regularly available for existing and potential Shareholders. Following the redemption in 2023 a number of larger Shareholders requested that the Board review the annual voluntary redemption arrangements. Over the summer 2024 the Board engaged in consultations with the larger Shareholders. Once the scale of redemptions for 2024 became apparent, the desire for a change increased and therefore the Board, following further consultations with major Shareholders, proposed a General Meeting with various changes. At the time of the announcement of the General Meeting, the Board and its Brokers had reason to believe there was overwhelming support from all major Shareholders. However, it later became apparent that some individual wealth managers did not share the central view at one institution and furthermore a number of short-term focused investors appeared on the shareholder register. The Board understood that it was possible to achieve the passing of the special resolution to amend the Company’s articles but also agreed that the role of a Board was not to push through change with the slimmest of majorities but rather to try to work with Shareholders to try to come to a mutually agreeable solution. The Board therefore withdrew the resolutions. More detail can be found in the Chairman’s Statement on page 4. Bellevue Healthcare Trust plc Annual Report and Accounts 202428 Strategic Report Importance of engagement Examples of engagement and key decisions Investment Manager The most significant service provider for the Company’s The Board monitors the Company’s investment performance long-term success is Bellevue Asset Management (UK) in relation to its objectives and investment policy and strategy. Limited, who have been engaged as the Company’s The Board regularly assesses the experience and resources Investment Manager. The Investment Manager is of the Investment Management team and the commitment of responsible for the management of the Company’s portfolio the Investment Manager; to promote the Company and foster in accordance with the Company’s investment policy and Shareholder relations and to ensure that the Company’s objective the terms of the Investment Management Agreement. of providing capital growth combined with dividend income for its investors are met. The Investment Manager has also been appointed as the Company’s AIFM in accordance with the Alternative During the year the Board has had discussions around the Investment Fund Managers Directive (“AIFMD”), for the investment process and risk management, and how and when purpose of providing investment advisory services to the to take losing positions off; this has been supported by detailed Company. analysis from the wider Bellevue Group. More detail can be found in the Investment Manager’s Report on pages 6 to 17. The Investment Manager has placed trust in the investee companies to respond appropriately to operational The Board relies upon the AIFM to ensure the obligations challenges and to ensure that high standards of corporate under the Consumer Duty regulations continue to be adopted governance and regard for Shareholders are at the forefront appropriately. All communications including the website, of managerial decision-making. factsheets and other published documentation are reviewed ahead of publication to ensure they are appropriate for all end users. A ‘value for money’ assessment is also undertaken annually and is made available to distributors on request. The Board has engaged with the Investment Manager to understand the implications of the FCA’s forbearance statement and have explored changes to be applied to key documentation to take advantage of the exemption from PRIIPs and the cost disclosure aspects of MiFID, in line with industry guidance. An open and active relationship is maintained with the Investment Manager and additional meetings are arranged when needed. The Board receives and reviews regular reports and presentations from the Investment Manager. There have been recent changes to the senior management at the Bellevue Group AG executive team level in Switzerland. The management team in both London and Switzerland have attended Board meetings and strategy sessions as requested by the Board of the Company during the year, ensuring that service provision is maintained at the highest level. The Management Engagement Committee met during the year and unanimously endorsed the continued appointment of the Company’s Investment Manager. Bellevue Healthcare Trust plc Annual Report and Accounts 2024 29 ### Stakeholder Engagement continued Importance of engagement Examples of engagement and key decisions Service providers As an externally managed investment trust, the Company The Board has strong working relationships with the Investment conducts all its business through its key service providers. Manager, Broker, Company Secretary, Administrator and Before the engagement of a service provider, the Board Depositary. The Board receives internal control reports from the ensures that the Company’s business outlook as well as its service providers and the Investment Manager. values are similar to those of the service provider. On 10 April 2024 and following a competitive tender process A list of the Company’s key service providers can be found NSM Funds (UK) Limited were appointed as Company Secretary on pages 36 and 37 of this Report. and Administrator. On an annual basis, the Board reviews the continuing During the year under review, the Board sought and received appointment of each service provider to ensure reassurance that all key service providers had appropriate reappointment is in the best interests of the Company’s business continuity plans in place. All key service providers Shareholders. The Board has strong working relationships have maintained a high standard of service and demonstrate with the Investment Manager, Broker, Company Secretary, operational resilience. Administrator and Depositary and receives reports on the The Auditor is invited to attend the Audit and Risk Committee performance of the key service providers by the Investment meeting twice a year. The Audit and Risk Committee Chair Manager and Company Secretary. maintains regular contact with the Audit partner to ensure the audit process is undertaken effectively. Wider community and environment The Company and its appointed professional suppliers keep In making investment decisions, the Investment Manager takes abreast of the rules and regulations affecting the investment into account qualitative measures such as the environmental and company sector. social impact of a company as well as financial and operational measures. The Investment Manager, as steward of the Company’s assets engages with the investee companies to ensure high The Company Secretary and AIFM regularly report to the Board standards of governance. The Board, Company Secretary any changes in the regulatory environment and as AIC members, and AIFM are responsible for ensuring that various the Board can draw on the resources available detailing any regulatory and statutory obligations are met. regulatory changes. The Investment Manager takes voting obligations seriously and there are multiple structures in place to ensure votes are cast in all investee companies shareholder meetings. While the Investment Manager evaluates external proxy agency reports when considering how they might vote, they do not outsource voting to a third party and are happy to go against both their recommendations and the wishes of management, when they consider it important to do so. Over the period in review, the Investment Manager has participated in 35 votable meetings (covering 297 resolutions), More information and the Company’s ESG policy is outlined on pages 31 to 33. In summary, the Directors are cognisant of their duties enshrined in Section 172 of the Companies Act 2006 to make decisions taking into account the long-term consequences of all the Company’s key stakeholders and reflect the Board’s belief that the long-term sustainable success of the Company is linked directly to its key stakeholders. Bellevue Healthcare Trust plc Annual Report and Accounts 202430 Strategic Report ## Environmental, Social and Governance ## (“ESG”) Policy OVERVIEW situation continues to improve. Where MSCI ESG data is not This section summarises the incorporation of ESG factors comprehensive, we utilise other third-party data providers from both a company perspective, i.e. Bellevue Healthcare alongside our internal evaluations. Trust (‘the Company’ or ‘the Trust’) and from the Bellevue Bellevue encourages investee companies to interact with Asset Management (“Bellevue”) perspective, as the appointed these third-party agencies to clarify any misunderstandings investment manager. “We” and “Our” refer to employees in their reports. We have seen further progress in this area, of the Bellevue Group of companies. Both Bellevue Asset with some portfolio companies that were previously viewed as Management (UK) Ltd. and the Trust remain out of scope for ESG laggards — often unjustly, in our opinion — experiencing both the UK climate-related reporting requirements and the EU significant enhancements in their ratings through direct Corporate Sustainability Reporting Directive. engagement. MANAGEMENT OF ESG FACTORS WITHIN External ESG reports are only part of the process; we have our own qualitative criteria that form the basis of THE BELLEVUE HEALTHCARE TRUST decision-making. We do not apply specific scoring criteria INVESTMENT PORTFOLIO for exclusion from our portfolio because we feel such an The Bellevue Healthcare Trust does not opt for an UK SDR approach has significant limitations. Rather, we see scores investment label since it does not pursue distinct sustainability as tools to consider within a much more comprehensive and objectives in accordance with the four UK SDR categories. holistic framework. However, ESG considerations are embedded in the THIRD PARTY DATA METRICS fundamental investment process across Bellevue’s diverse range of managed products and the Trust is no exception. Portfolio-level data and comparables for the reference Index are summarised in Figure 1 below. Formal ESG guidelines cover areas such as compliance with global norms, value-based exclusions, controversies, climate As noted previously, assessments of quantitative ESG change factors and active ownership. These also preclude parameters require careful consideration due to various issues investments into Companies involved in serious violations of present in third-party data that can complicate comparisons. internationally recognised norms regarding the environment, human rights and business ethics, as well as those engaging in ESG Rating and Quality Scores for the reference MSCI World controversial business activities that exceed Bellevue’s stated Healthcare Index have again declined slightly when compared revenue thresholds. to the prior period. MSCI altered its ESG rating methodology in May 2023 by removing the so-called adjustment factors The Trust’s healthcare focus makes it very unlikely that any from the calculation of the ESG Quality Score, which was excluded companies would ever come into scope in the first inadvertently favouring the larger companies that dominate place. However, there have been a number of investment such benchmarks. opportunities since the Trust’s inception that were rejected because the companies did not comply with our broader ESG The Governance Score of the portfolio remains high. The principles. The most common reasons for negative screen-outs individual components within the table are outputs from MSCI continue to be governance structure and/or reporting quality. ESG; we do not target any specific thresholds for these individual items in our ESG assessment process. The assessment of ESG considerations is often over-simplified to the level of significant controversies or an aggregated ESG score provided by third-party agencies. We remain firmly of the view that the process must avoid the pitfalls of an over-simplified “one size fits all” approach. Bellevue continues to use MSCI ESG reports for qualitative and quantitative external data. The scope and quality of external ESG assessments remain variable, although the Bellevue Healthcare Trust plc Annual Report and Accounts 2024 31 ### Environmental, Social and Governance (“ESG”) Policy continued Figure 1 ESG ratings of portfolio and index November 30, 2022 November 30, 2023 November 30, 2024 Portfolio MSCI WHC Portfolio MSCI WHC Portfolio MSCI WHC ESG Rating A AAA BBB A A A Proportion not rated 0% 0% 1% 0% 6.7% 0% ESG Quality Score 6.5 10.0 5.5 7.1 5.9 6.9 Environmental Score 5.4 7.1 5.3 7.0 6.0 6.8 Social Score 4.5 5.2 4.4 5.0 4.8 4.9 Governance Score 6.1 5.8 6.1 6.0 5.9 6.0 Overall Sustainable Impact 34.1% 17.3% 29.3% 16.4% 35.7% 16.6% We are hopeful that scoring methodologies will continue to be adjusted to better aid comparability across the company size spectrum. RESPONSIBLE STEWARDSHIP Responsible investing does not end with due diligence; Bellevue takes voting obligations seriously and there are the importance of ongoing engagement with management multiple structures in place to ensure that we vote in all teams cannot be overstated. Active fund management shareholder meetings. While we evaluate external proxy arguably derives a material proportion of its longer-term alpha agency reports when considering how we might vote, we generation opportunities through the ability to proactively do not outsource our voting to a third-party and are happy consider, debate and influence (via the exercising of voting to go against both their recommendations and the wishes of powers) potential issues at investee companies. management, when we consider it important to do so. Over the period in review, we participated in 35 votable meetings (covering 297 resolutions) and Figures 2 and 3 below summarise how we voted in these meetings: Figure 2 Overall voting statistics Meeting Overview Category Number Percentage Number of votable meetings 35 Number of meetings voted 35 100.00% Number of meetings with at least 1 vote Against, Withhold or Abstain 10 28.57% Ballot Overview Category Number Percentage Number of votable ballots 35 Number of ballots voted 35 100.00% Bellevue Healthcare Trust plc Annual Report and Accounts 202432 Strategic Report ![Stylized logo consisting of three vertical bars of varying lengths (blue, green, red) and the letters 'D', 'D', 'D' and 'D'.]() **Figure 3 Detailed voting breakdown** # **Proposal Overview** | Category | Number | Percentage | | --- | --- | --- | | Number of votable items | 297 | | | Number of items voted | 296 | 99.66% | | Number of votes FOR | 280 | 94.59% | | Number of votes AGAINST | 13 | 4.39% | | Number of votes ABSTAIN | 0 | 0.00% | | Number of votes WITHHOLD | 3 | 1.01% | | Number of votes on MSOP Frequency 1 Year | 0 | 0.00% | | Number of votes on MSOP Frequency 2 Years | 0 | 0.00% | | Number of votes on MSOP Frequency 3 Years | 0 | 0.00% | | Number of votes With Policy | 283 | 95.61% | | Number of votes Against Policy | 13 | 4.39% | | Number of votes With Mgmt | 281 | 94.93% | | Number of votes Against Mgmt | 15 | 5.07% | | Number of votes on MSOP (exclude frequency) | 29 | 9.80% | | Number of votes on Shareholder Proposals | 7 | 2.36% | Engagement with voting is only part of the process. Pragmatically, we are but one of many voices and it may be the case that even after a multi-year engagement with management and exercising our voting power we have not been able to elicit change. In such a situation, we would consider divesting our holding, depending on the materiality of the issues. We have yet to divest a holding due to ESG considerations, which attests to the robustness of the initial screening approach in avoiding controversies. We are quite happy to exit positions when we lose confidence in management or strategy and there are several historical examples of such situations during the Company's lifetime. # **TRUST-SPECIFIC EXCLUSION CRITERIA AND TOLERANCE THRESHOLDS** It would be very easy to claim that one has a blanket ban on investing in everything that's bad or that all one's investments are sustainable. However, some points of view are subjective and some things are what they are: for instance, every human healthcare company is involved in supporting animal testing to some degree. Finally, one must recognise that rarely are matters so clear cut as to be able to definitively state a company has zero involvement or exposure to a controversial area; one can easily take exposures off the balance sheet via outsourcing; animal testing is often outsourced, for example. With these realities in mind, it makes more sense to operate by a set of guiding principles based on data that can be simply ascertained from management and that are realistically achievable for the portfolio overall. Bellevue agreed an expansive list of thresholds with the Board of the Company that came into effect from 1 January 2022 and set revenue threshold exposure levels to specific criteria. More information can be found on the Bellevue Group website www.bellevue.ch/ch-en/private/about-us/sustainability. With respect to the EU Sustainable Finance Disclosure Regulation (SFDR), the Bellevue Healthcare Trust is an Article 8 product. It does not include any sustainability claims in its investment objectives, but does take ESG factors and thresholds into account when making investment decisions. All related disclosure documents (incl. ESG disclosure report, pre-contractual disclosure, periodic disclosure and corporate ESG report) are published on the Company's website. Both Bellevue Asset Management (UK) Ltd. and the Trust remain out of scope for both the UK climate-related reporting requirements and the EU Corporate Sustainability Reporting Directive. Bellevue Healthcare Trust plc Annual Report and Accounts 2024 33 ## Other Information ENVIRONMENTAL MATTERS CONSUMER DUTY The Company has no greenhouse gas emissions to report The Company and Investment Manager are fully cognisant of from its operations, nor does it have responsibility for any other the rules which came into force on 31 July 2023 and have emissions producing sources under the Companies Act 2006 taken the necessary steps to ensure compliance. (Strategic Report and Directors’ Reports) Regulations 2013. OUTLOOK Investment trusts are currently exempt from TCFD disclosure, The outlook for the Company is discussed in the Investment but the Board will continue to monitor the situation. Manager’s Report on page 17. EMPLOYEES STRATEGIC REPORT The Company has no employees. As at 30 November 2024 The Strategic Report set out on pages 1 to 34 of this the Company had five Directors, three of whom were male Annual Report was approved by the Board of Directors on (60%) and two of whom were female (40%). The Board’s policy 14 March 2025. on diversity is contained in the Corporate Governance Report (on pages 44 and 45). For and on behalf of the Board Randeep Grewal SOCIAL, COMMUNITY AND HUMAN RIGHTS Chairman ISSUES 14 March 2025 Having no employees, the Company, as an investment company, has no direct impact on social, community, environmental or human rights matters. MODERN SLAVERY DISCLOSURE Due to the nature of the Company’s business, being a company that does not offer goods or services to consumers, the Board considers that it is not within the scope of modern slavery. The Board considers the Company’s supply chains, dealing predominantly with professional advisers and service providers in the financial service industry, to be low risk in relation to this matter. Bellevue Healthcare Trust plc Annual Report and Accounts 202434 Governance ## Governance Bellevue Healthcare Trust plc Annual Report and Accounts 2024 35 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 35 # Directors' Report ![img-2.jpeg](img-2.jpeg) The Directors present their annual report and accounts for the year ended 30 November 2024. ## STRATEGIC REPORT The Directors' Report should be read in conjunction with the Strategic Report on pages 1 to 34. ## LEGAL AND TAXATION STATUS The Company is an investment company within the meaning of Section 833 of the Companies Act 2006. The Company conducts its affairs in order to meet the requirements for approval as an investment trust under section 1158 of the Corporation Tax Act 2010. The Company has received initial approval as an investment trust and the Company must meet eligibility conditions and ongoing requirements in order for investment trust status to be maintained. In the opinion of the Directors, the Company has met the conditions and requirements for approval as an investment trust for the year ended 30 November 2024. ## ALTERNATIVE FUND INVESTMENT MANAGERS ("AIFM") Bellevue Asset Management (UK) Ltd ("Bellevue") is authorised and regulated by the Financial Conduct Authority ("FCA") to undertake the regulated activities as defined in the Alternative Investment Fund Managers Directive (2011/611/EU) ("AIFMD"). On 1 April 2020, it was announced that Bellevue had been appointed as AIFM to the Company, subject to the overall control and supervision of the Board. Under the terms of the AIFM agreement, Bellevue performs the activity of investment management in accordance with the investment policy of the Company and has discretion to buy, sell, retain, exchange or otherwise deal in investment assets for the account of the Company. The Investment Manager is entitled to receive a management fee payable monthly in arrears and calculated at the rate of one-twelfth of 0.95% per calendar month of market capitalisation. Market capitalisation means the average of the mid-market prices for an ordinary share, respectively, as derived from the daily official list of the London Stock Exchange on each business day in the relevant calendar month multiplied by the number of Ordinary Shares, respectively, in issue on the last business day of the relevant calendar month excluding any Ordinary Shares held in treasury. There is no performance fee payable. As allowed under the AIFMD, Bellevue has delegated the activity of Risk Management to Bellevue Asset Management AG (the "Delegated Risk Manager"). The AIFM agreement may be terminated on 12 months' written notice and may be terminated with immediate effect on the occurrence of certain events, including insolvency, on a change of control of the Investment Manager or in the event of a material breach which fails to be remedied within 30 days of receipt of notice. As an AIFM, Bellevue must ensure that it, together with the Company, is fully compliant with the terms of the AIFMD. In order to accomplish this, the required regulatory obligations are met through the cooperation of both parties as well as with significant input from the Delegated Risk Manager. Bellevue has agreed with the Delegated Risk Manager, and in full compliance with the AIFMD, a Risk Framework in respect of the Company. The Risk Framework seeks to govern the investment and operational risks as well as ensuring that all risk limits are complied with. All required risk reporting is completed by the Delegated Risk Manager. The Delegated Risk Manager monitors the Company on a daily basis in order to ensure that Bellevue is operating within the risk limits contained in the risk policy and seeks to identify breaches. If Bellevue breaches a risk management limit, then it is required to notify the Delegated Risk Manager of the breach as soon as possible, and by the day after the infraction occurred at the latest. In addition to providing details of the breach, Bellevue confirms how and when the breach was resolved or when and how it is intended that the breach will be resolved. 36 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Governance DDD The AIFMD Annex IV reporting requirements are undertaken by the AIFM, Administrator and other selected service providers. ## BROKER The Company's sole Corporate Broker is J.P. Morgan Cazenove. ## DEPOSITARY CACEIS Bank, UK Branch is the Company's Depositary and Custodian. ## COMPANY SECRETARY AND ADMINISTRATOR NSM Funds (UK) Limited were appointed as Company Secretary and Administrator to the Company on 10 April 2024, providing services including calculation of its daily Net Asset Value. Prior to this date company secretarial and administration services were provided by Apex Listed Companies Services (UK) Limited. The Board has had continuous direct access to the advice and services of the Company Secretary who is responsible for ensuring that the Board and Committee procedures are followed, and that applicable rules and regulations are complied with. The Company Secretary provides full company secretarial services to the Company, ensuring that it complies with all legal, regulatory, and corporate governance requirements and officiating at Board meetings and Shareholders' meetings. The Company Secretary is also responsible to the Board for ensuring timely delivery of information and reports and that the statutory obligations of the Company are met. Finally, the Company Secretary is responsible for advising the Board through the Chairman on all governance matters. ## MANAGEMENT ENGAGEMENT The Directors are satisfied that the AIFM has the suitable skills and experience to manage the Company's investments and believe that the continuing appointment of the AIFM is in the interests of Shareholders as a whole. ## ALTERNATIVE INVESTMENT FUND MANAGERS' DIRECTIVE ("AIFMD") In accordance with the AIFMD, the AIFM must ensure that an annual report containing certain information on the Company is made available to investors for each financial year. The investment funds sourcebook of the FCA (the "Sourcebook") details the requirements of the annual report. All the information required by those rules are included in this Annual Report or is or will be made available on the Company's website, www.bellevuehealthcaretrust.com. The AIFM is required to make certain disclosures on its remuneration in respect of the AIFM's relevant reporting period. These disclosures are available on request from the AIFM. ## LEVERAGE (UNDER AIFMD) The AIFM is required to set leverage limits as a percentage of net assets for the Company utilising methods prescribed under AIFMD. These methods are known as the gross method and the commitment method. Under both methods the AIFM has set current maximum limits of leverage for the Company of 120%. A leverage percentage of 100% equates to nil leverage. The Company's leverage under each of these methods at its year end is shown below: | | Gross method | Commitment method | | --- | --- | --- | | Maximum leverage limit | 120% | 120% | | Actual leverage at 30 November 2024 | 100% | 100% | * Definitions of this APM together with how these measures have been calculated can be found on page 84. ## SHARE ISSUES During the year ended 30 November 2024, the Company did not issue any shares through the share issuance programme. The number of Ordinary Shares in issue at 30 November 2024 was 315,152,309 Ordinary Shares, of which 31,782,418 Ordinary Shares are held in Treasury. Therefore, the total number of voting rights in the Company is 283,369,891. The authority to issue new shares pursuant to the placing programme, detailed in the Company's prospectus dated 10 November 2016, expired on 9 November 2017. The Company published a new prospectus on 5 November 2018, for the issuance of up to 345 million Ordinary Shares by way of an Initial Placing, Offer for Subscription and Intermediaries Offer, and pursuant to a new share issuance programme. A supplementary prospectus was issued on 20 February 2019. Bellevue Healthcare Trust plc Annual Report and Accounts 2024 37 Directors' Report continued At the AGM of the Company held on 26 April 2024, the Directors were granted authority to allot up to 47,898,719 Ordinary Shares on a non-pre-emptive basis. This authority will expire at the conclusion of the forthcoming AGM. The authorities have the following benefits for Shareholders: Enable the Company to continue to take advantage of opportunities to make further investments in accordance with its investment objective and policy; Increase the market capitalisation of the Company, helping to make the Company attractive to a wider investor base; A greater number of Ordinary Shares in issue should improve liquidity in the secondary market for the Ordinary Shares and make the Ordinary Shares more attractive to a wider range of investors; and Grow the Company, thereby spreading the Company's fixed running costs across a larger equity capital base which should reduce the level of ongoing expenses per Ordinary Share. It must be noted that the price at which any new Ordinary Shares are issued to satisfy market demand is never less than the prevailing Net Asset Value (cum-income) per Ordinary Share at the time of issue plus a premium to cover the expenses of such issue, therefore Shareholders will not suffer any dilution to the Net Asset Value (cum-income) per Ordinary Share as a result of any such issue. The Board recommends that the Company is granted a new authority to issue up to a maximum of 24,180,403 Ordinary Shares (representing 10% of the shares in issue at the date of this document) and to disapply pre-emption rights when issuing those Ordinary Shares. Resolutions to this effect will be put to Shareholders at the AGM to be held on 23 April 2025. This authority would be used to carry out a series of placings or tap issues, providing the Company with the ability to issue new Ordinary Shares over a period of time to meet investor demand and help with managing the premium that the shares typically trade at. # SCRIP DIVIDEND As reported in the Company half-yearly report to 31 May 2023, the Board reluctantly decided to suspend the scrip dividend option for the time being. # TREASURY SHARES The Companies Act allows companies to hold shares acquired by way of market purchase as treasury shares, rather than having to cancel them. This would give the Company the ability to re-issue Ordinary Shares quickly and cost effectively, thereby improving liquidity and providing the Company with additional flexibility in the management of its capital base. Ordinary Shares will not be sold from treasury at a price less than the (cum income) NAV per existing Ordinary Share at the time of their sale. The Company bought back 15,383,772 during the year ended 30 November 2024. The Company has bought back 41,565,853 Ordinary Shares to be held in treasury since the year end. # DISCOUNT MANAGEMENT The Company may seek to address any significant discount to NAV at which its Ordinary Shares may be trading by purchasing its own Ordinary Shares in the market on an ad hoc basis. As outlined above, 15,383,772 Ordinary Shares have been bought back by the Company during the year to 30 November 2024. The Directors were given authority to make market purchases of up to 69,342,023 Ordinary Shares. The maximum price (exclusive of expenses) which may be paid for an Ordinary Share must not be more than the higher of: (i) 5% above the average of the mid-market values of the Ordinary Shares for the five Business Days before the purchase is made; or (ii) the higher of the price of the last independent trade and the highest current independent bid for the Ordinary Shares. Ordinary Shares will be repurchased only at prices below the prevailing NAV per Ordinary Share, which should have the effect of increasing the NAV per Ordinary Share for remaining Shareholders. It is intended that a renewal of the authority to make market purchases will be sought from Shareholders at each AGM of the Company and authority for the Company to purchase up to 36,246,425 Ordinary Shares (subject to a maximum of 14.99% of the Ordinary Shares in issue at the date of the AGM) will be sought at the forthcoming AGM. Purchases of Ordinary Shares will be made within guidelines established from time to time by the Board. Any purchase of Ordinary Shares would be made only out of the available cash 38 Beflevue Healthcare Trust plc Annual Report and Accounts 2024 Governance ![img-3.jpeg](img-3.jpeg) resources of the Company. Ordinary Shares purchased by the Company may be held in treasury or cancelled. Purchases of Ordinary Shares may be made only in accordance with the Companies Act, the Listing Rules, and the Disclosure Guidance and Transparency Rules. Investors should note that the repurchase of Ordinary Shares is entirely at the discretion of the Board and no expectation or reliance should be placed on such discretion being exercised on any one or more occasions or as to the proportion of Ordinary Shares that may be repurchased. ## REDEMPTION FACILITY The Company has a redemption facility through which Shareholders may request the redemption of all or part of their holding of Ordinary Shares on an annual basis. The redemption facility is entirely at the discretion of the Directors. The Redemption Price of the shares to be redeemed for the November 2024 redemption was calculated by reference to the amount generated upon the realisation of a Redemption Pool, created for the purpose of funding the redemption using the Redemption Pool method set out in the Company's Articles, pursuant to which the Company divided its assets and liabilities into two pools: - (i) the redemption pool, consisting of cash, assets and liabilities attributable to the 163,834,887 Ordinary Shares (announced 14 October 2024) in respect of which valid redemption requests were made; and - (ii) all the other cash, assets and liabilities remained attributable to the continuing shareholders and have continued to be managed in accordance with the current investment policy. The calculated Redemption Price per Ordinary Share equals the aggregate cash received by the Company upon the realisation of the Redemption Pool, after deducting the costs of the redemption, and a pro-rata share of the costs and expenses of the Company not attributable to a particular pool, divided by the number of Redemption Shares. The calculated Redemption Price was 154.76 pence per share including dividends and bank interest received. All shareholders who validly applied to have shares redeemed received a Redemption Price of 154.76 pence per share and all the Ordinary Shares requested were redeemed and cancelled by the Company. Shareholders who validly applied to have their Ordinary Shares redeemed received payments in respect of the valid redemption requests on or around 20 December 2024. The Board engaged a third party to undertake sanctions checking in order to satisfy itself that no beneficial owner appeared on the UK Sanctions Register or other prohibited register as they are required to do in accordance with UK legislation. A small percentage of shareholders that applied to participate in the redemption process did not respond to multiple contact attempts therefore payment was withheld until confirmation was received. The Company's redemption facility is subject to approval by the Board. The process for the redemption of Ordinary Shares, including the calculation of redemption price, is set out in Part 3 of the Securities Note as part of the prospectus published by the Company on 5 November 2018. ## LIFE OF THE COMPANY The Company has no fixed life. ## MARKET INFORMATION The Company's share capital is admitted to the Premium Segment of the Official List of the FCA and is admitted to trading on the London Stock Exchange. The NAV per share is calculated in sterling for each business day that the London Stock Exchange is open for business. The daily NAV per Share is published through a regulatory information service. ## REVOLVING CREDIT FACILITY ("RCF") The Company has a multi-currency RCF with The Bank of Nova Scotia, London Branch. On 24 October 2024, the Company voluntarily amended the RCF, requesting a part cancellation of USD 180m, which reduced the commitment for the RCF to USD 100m. On 17 December 2024, the Company renewed and amended its RCF and under the terms of the amended RCF, the Company may now draw down loans up to an aggregate value of USD 125m (Facility: USD 80m, Accordion USD 45m). The facility will expire in December 2025. The Company's borrowing policy and the terms of the facility are unchanged. As at 30 November 2024, there were no loans draw down. (2023: £31.7 million). Bellevue Healthcare Trust plc Annual Report and Accounts 2024 39 Directors' Report continued ## CAPITAL STRUCTURE AND VOTING RIGHTS As at 30 November 2024, the Company's issued share capital comprised of 50,001 Management Shares and 315,152,309 Ordinary Shares of 1p nominal value, of which 31,782,418 Ordinary Shares are held in Treasury. Therefore, the total number of voting rights in the Company is 283,369,891. Each Ordinary Share held entitles the holder to one vote and there are no restrictions on those voting rights. Voting deadlines are stated in the Notice of Meeting and Form of Proxy and are in accordance with the Companies Act 2006. Management Shares shall not carry any right to receive notice of, nor to attend or vote at any general meeting of the Company. There are no restrictions on the transfer of Ordinary Shares, nor are there any limitations or special rights associated with Ordinary Shares. ## SIGNIFICANT SHAREHOLDERS As at 28 February 2025 the Company was aware of the following substantial interests in the voting rights of the Company. | Name | Number of Ordinary Shares held | % of voting rights | | --- | --- | --- | | JM Finn & Co | 26,370,632 | 10.83 | | Saba Capital Management LP | 18,274,930 | 7.51 | | RBC Brewin Dolphin | 15,286,025 | 6.28 | | Evelyn Partners Limited | 15,272,521 | 6.27 | | EFG Harris Allday | 13,734,215 | 5.64 | | BlackRock Investment Management Ltd | 10,077,880 | 4.14 | | Ravenscroft Investment Management | 9,309,862 | 3.83 | | Brooks Macdonald Asset Management | 8,864,073 | 3.64 | At the latest practicable date prior to the publication of this report, the Company has not been notified of any changes to the above interests apart from notifications received from Saba Capital Management, L.P. ("Saba"), JM Finn & Co ("JM Finn") and Jefferies Financial Group Inc ("Jefferies"). Saba's most recent notification stated that Saba held an interest in 12.08% of the Company's shares in issue (0.89% in shares and 11.19% through financial instruments). JM Finn's most recent notification stated that JM Finn held an interest in 9.98% of the Company's shares in issue. Jefferies most recent notification stated that Jefferies held an interest in 5.05% of the Company's shares in issue (3.06% in shares and 1.99% through financial instruments). ## SETTLEMENT OF ORDINARY SHARE TRANSACTIONS Ordinary Share transactions in the Company are settled by the CREST share settlement system. ## ANTI-BRIBERY AND CORRUPTION It is the Company's policy to conduct all of its business in an honest and ethical manner. The Company takes a zero-tolerance approach to bribery and corruption and is committed to acting professionally, fairly and with integrity in all its business dealings and relationships wherever it operates. The Company's policy and the procedures that implement it are designed to support that commitment. ## NOTICE OF GENERAL MEETINGS At least twenty-one days' notice shall be given to all the members and to the auditors of an Annual General Meeting. All other general meetings shall also be convened by not less than twenty-one days' notice to all those members and to the auditors unless the Company offers members an electronic voting facility and a special resolution reducing the period of notice to not less than fourteen days, in which case a general meeting may be convened by not less than fourteen days' notice in writing. A special resolution will be proposed at the Annual General Meeting to reduce the period of notice for general meetings other than the Annual General Meeting to not less than fourteen days. ## GOING CONCERN The Directors have adopted the going concern basis in preparing the accounts. The following is a summary of the Directors' assessment of the going concern status of the Company. The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for at least twelve months from the date of this document. In reaching this conclusion, the Directors have considered the liquidity of the Company's portfolio of investments as well as its cash position, income and expense flows. The Company's net assets at 30 November 2024 were £437.3 million (2023: £665.5 million). As at 30 November 2024, the Company held £417.8 million (2023: £696.9 million) in investments, cash of £274.0 million, which includes £253.6 million payable to redeeming Shareholders (2023: £110 million) with nil bank loans outstanding (2023: £31.7 million). Further details on the 40 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Governance Company's bank loans are detailed in note 12. The total expenses (excluding finance costs and taxation) for the year ended 30 November 2024 were £7.4 million (2023: £8.9 million), which represented approximately 1.03% (2023: 1.02%) of average net assets during the year. The Company also incurred finance costs of £1.8 million (2023: £4.1 million). The Board is confident that the Company continues to be a going concern, and one of the considerations in coming to this conclusion was the possibility that Shareholders holding a significant percentage of the Company's shares continue to request redemption, as such the Board consider the structure of the Company to be a principal risk. The Board has also discussed the mitigants to this risk, with the main mitigant being the Board's absolute discretion as to how the facility is managed. The Board's discretion over the redemption facility and decisions being subject to Board approval avoids disruption to the overall operation of the Company. Additionally, the portfolio continues to be able to be liquidated to meet funding requirements as they fall due. Directors' assessment assumes that the redemption facility does not threaten the existence or viability of the Company. The redemption facility is to be managed, with the allowance the Board can exercise discretion. At the date of approval of this report, based on the aggregate of investments and cash held, the Company has substantial asset cover against its loan facility and also substantial operating expenses cover. Accordingly, the Financial Statements have been prepared on the going concern basis as it is the Directors' opinion, having considered and assessed the adequacy of the Company's operational resources, liquidity of the investment portfolio, the current annual redemption facility (more information can be found in the Chairman's statement on page 3), debt covenants and any potential impact of the ongoing wars in Ukraine and the Middle East, that the Company will continue in operational existence for a period of at least 12 months from the date the financial statements were authorised for issue. ## AUDITOR INFORMATION Each of the Directors at the date of the approval of this report confirms that: - so far as the Director is aware, there is no relevant audit information of which the Company's auditor are unaware; and - the Director has taken all steps that he or she ought to have taken as Director to make himself/ herself aware of any relevant information and to establish that the Company's auditor is aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the Companies Act 2006. In accordance with Section 489 of the Companies Act 2006, a resolution to re-appoint Ernst & Young LLP as the Company's auditor will be put forward at the forthcoming AGM. By order of the Board 14 March 2025 Belevue Healthcare Trust plc Annual Report and Accounts 2024 41 # Corporate Governance ## INTRODUCTION The Board is committed to achieving and demonstrating high standards of corporate governance. This statement outlines how governance principles were applied throughout the financial year. The UK Corporate Governance Code ('UK Code') issued by the Financial Reporting Council ('FRC') in July 2018 and the AIC Code of Corporate Governance ('AIC Code') issued in February 2019 are the applicable governance codes in this regard. The FRC has confirmed that by following the AIC Code, investment company boards will meet their obligations in relation to the UK Code and paragraph 9.8.6 of the Listing Rules. The AIC Code is available on the AIC website at www.theaic.co.uk, and the UK Code on the FRC website at www.frc.org.uk. ## STATEMENT OF COMPLIANCE The Directors believe that the Company has complied with the AIC Code during the year and up to the date of this report, and thereby the provisions of the UK Code except as set out below. The UK Code includes provisions relating to the role of the chief executive; executive directors' remuneration; and the need for an internal audit function. As an investment company which outsources its administration to third-party providers, the Company has no chief executive or other executives and therefore these provisions are not applicable. It does not maintain an internal audit function. The Audit and Risk Committee considers the need for such a function at least annually and additional detail is provided later on in this statement. ## THE BOARD COMPOSITION, INDEPENDENCE AND SUCCESSION PLANNING As at 30 November 2024, the Board consisted of five non-executive Directors, including the Chairman. All Directors have served since the Company's inception, with the exception of Tony Young and Kate Bolsover, who were appointed to the Board on 23 September 2020 and 2 July 2021 respectively. The Board's composition as at 30 November 2024 comprised 40% female members, 60% male members and 20% ethnic minority member. Hence, the Board is compliant with the recommendations of the Hampton-Alexander review and the Parker review. All of the Directors are independent of the Investment Manager. All of the Directors are able to allocate sufficient time to the Company to discharge their responsibilities effectively. The Board believes that during the year ended 30 November 2024 its composition was appropriate for an investment company of the Company's nature and size. The Board's policy for the appointment of Non-Executive Directors is based on its belief in the benefits of having a diverse range of experience, skills, length of service and backgrounds, including but not limited to gender diversity. Three of the current directors (Jo Dixon, Paul Southgate and Randeep Grewal) joined the Company in October/November 2016. The Board believes that the directors continue to be independent, notwithstanding that, having been appointed in 2016, they will exceed the nine years' limit set out in the UK and AIC Codes during the year. As such, following a comprehensive selection process, conducted using an independent third-party search firm and as per the Board's succession plan, the Company announced on 3 February 2025 the immediate appointment of Sarah MacAulay as a non-executive director, and Clare Brady as non-executive director and Audit Chair-elect. It was further announced on 3 February 2025 that Randeep Grewal and Paul Southgate, who have served on the Board since the launch of the Company in December 2016, will retire from the Board at the April 2025 AGM. Kate Bolsover, who joined the Board in July 2021, will become Chairman following Randeep Grewal's retirement. Clare Brady will assume the role of Chairman of the Audit and Risk Committee at the April 2025 AGM, with Jo Dixon remaining on the Board as Senior Independent Director until the 2026 AGM, avoiding three experienced directors retiring at the same time. This will ensure orderly succession in accordance with the Company's policy, which permits flexibility in these circumstances. The Appointment of Clare Brady and Sarah MacAulay falls to be ratified by shareholders at the forthcoming AGM of the Company to be held in April 2025. The Board is currently engaged in an ongoing search with a head-hunter for another suitable independent non-executive director to further strengthen the Board and during the latter part of 2025, the Company anticipates appointing a further non-executive director. The Board is cognisant that it will need to appoint a Parker Review compliant individual and it will make a further announcement in due course. 42 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Governance The Directors have a broad range of relevant experience to Med-Tech Campus. Tony was previously a member of the meet the Company’s requirements and their biographies are Royal College of Surgeon’s Commission on the Future of given below. Surgery (2017 – 2018). In the 2019 New Year’s Honours list, Professor Young was awarded the OBE for services to clinical leadership. RANDEEP GREWAL (CHAIRMAN AND CHAIR OF THE MANAGEMENT KATE BOLSOVER (NON-EXECUTIVE ENGAGEMENT COMMITTEE) Randeep is an ex-Fund Manager, with over 20 years of DIRECTOR) Healthcare investment experience, including Trium Capital, Kate Bolsover worked in the City of London for over 25 years, F&C Asset Management, ICAP Equities, Hox Therapeutics, initially as an analyst and thereafter running the mutual fund Monument Therapeutics, Tissue Regenix and Tudor. businesses of both Baring Asset Management and Cazenove Randeep is a current non-executive director of The Global Fund Management. Latterly, she was appointed Director of Smaller Companies Trust plc and Chairman-elect of Monks Corporate Communications for JPMorgan Cazenove. Kate is Investment Trust Plc. Randeep trained as a Vascular and Chairman of TR Property Investment Trust and an independent General Surgeon and read both Medicine and Computer director at Baillie Gifford & Co. Kate was also previously Science at Cambridge University. non-executive director of JPMorgan American Investment Trust plc and Montanaro UK Smaller Companies Trust plc, and Chairman of both Invesco Enhanced Income Trust plc and JOSEPHINE DIXON (CHAIR OF THE AUDIT Fidelity Asian Values plc. AND RISK COMMITTEE AND SENIOR INDEPENDENT DIRECTOR) CLARE BRADY (NON-EXECUTIVE Josephine is a chartered accountant who sits on the board DIRECTOR) of Alliance Witan plc. Jo has previously held senior positions Clare is a chartered governance professional with 35 years’ within the NatWest Group and was Finance Director of experience in banking and financial services. Clare is Newcastle United plc. She was Commercial Director, UK, Chairman of Fidelity Asian Values plc and a non-executive Europe and the Middle East at Serco Group and sat on director of The Golden Charter Trust Limited. She is also various advisory boards in the education and charity sector. non-executive director, Audit Committee Chairman and Jo was also previously Chair of JPMorgan European Growth member of the Risk Committee and Conflicts Committee of and Income PLC, and non-executive director and Chair of M&G Group Limited, M&G Investment Management Limited the Audit Committee of Strategic Equity Capital PLC. and M&G Alternatives Investment Management Limited. Clare was a non-executive director of Credit Suisse until PAUL SOUTHGATE (NON-EXECUTIVE its merger with UBS. In her executive career, she was a DIRECTOR) Director of the International Monetary Fund (“IMF”) and Paul is a London-based Portfolio Manager at Pictet Asset prior to that, the Auditor General at the World Bank, based Management, with over 25 years’ investment experience. in Washington D.C. Previously, Clare headed audit and Before joining Pictet, he was a Managing Partner at Eisenstat compliance functions at the Bank of England, Barclays Capital Partners (ECAP) and managed European Equities for Capital, HSBC and Deutsche Bank. both Deephaven Capital and Fortress Investments Group. He began his career with UBS Asset Management. SARAH MACAULAY (NON-EXECUTIVE DIRECTOR) PROFESSOR TONY YOUNG OBE Sarah has over twenty years of fund management experience (NON-EXECUTIVE DIRECTOR) based in both London and Hong Kong, managing unit trusts Tony is a practicing frontline NHS Consultant Urological and institutional assets. She was formerly a Director of Baring Surgeon, Director of Medical Innovation at Anglia Ruskin Asset Management (Asia) Ltd in Hong Kong, Asian Investment University, President of the Institute of Decontamination Manager at Kleinwort Benson Investment Management and Sciences, and National Clinical Director for Innovation for Eagle Star in London. She is currently Chair of Schroder Asian the NHS England. He has founded four Med-Tech start-ups Total Return Investment Company plc, Senior Independent and also co-founded the £500 million Anglia Ruskin Bellevue Healthcare Trust plc Annual Report and Accounts 2024 43 ### Corporate Governance continued Director on the Board of Fidelity Japan Trust plc and a BOARD COMMITTEES non-executive director of Baillie Gifford China Growth Trust plc. The Company has established an Audit and Risk Committee Until March 2024 Sarah was Chair of JPMorgan Multi-Asset which is chaired by Josephine Dixon and consists of all Growth and Income plc and Senior Independent Director of the Directors. abrdn China Investment Company Ltd. A report of the Audit and Risk Committee is included in this Annual Report. The Board considers that the members RESPONSIBILITIES OF THE CHAIRMAN, of the Audit and Risk Committee have the requisite skills THE BOARD, AND ITS COMMITTEES and experience to fulfil the responsibilities of the Audit and The Chairman leads the Board and is responsible for its Risk Committee. The Audit and Risk Committee examines the overall effectiveness in directing the affairs of the Company. effectiveness of the Company’s risk management and internal The Company has adopted a document setting out the control systems. It reviews the half-yearly and annual reports responsibilities of the Chairman, which is available on the and other financial information. It also reviews the scope, website: www.bellevuehealthcaretrust.com. results, cost effectiveness, independence and objectivity of the external auditor. DIRECTOR TENURE The Company has established a Management Engagement The Board recognises the benefits to the Company of having Committee which is chaired by Randeep Grewal and longer serving Directors together with progressive refreshment consists of all the Directors. The Management Engagement of the Board. The Board does not believe that length of Committee’s principal duties are to consider the terms service necessarily disqualifies a Director from seeking of appointment of the AIFM and other service providers, reappointment but, when making a recommendation, the and it annually reviews those appointments and the main Board will take into account the requirements of the AIC Code. terms of the AIFM Agreement and agreements with other The Board has adopted corporate governance best practice service providers. and has a succession plan in place. No Director of the Company has served for nine years or more and all Directors The Board as a whole fulfils the function of the Remuneration remain independent of the Company’s Investment Manager. Committee and Nomination Committee. In line with corporate governance best practice, Directors will offer themselves for election/re-election at the AGM BOARD DIVERSITY of the Company to be held on 23 April 2025. The Board The Company’s policy is that the Board should have an recommends that Directors who are remaining on the Board in appropriate level of diversity in the boardroom, taking into 2025 stand for re-election for the reasons highlighted above account relevant skills, experience, gender, social and and in the performance appraisal section of this report. ethnic backgrounds, cognitive and personal strengths. Brief biographies of the Directors are shown on pages The Directors have appointment letters which do not provide 43 and 44. The policy is to ensure that the Company’s for any specific term. They are subject to re-election at any Directors bring a wide range of knowledge, experience, general meeting at which either the Articles require, or that skills, backgrounds and perspectives to the Board. There will the Board resolves. The Board has approved a policy that be no discrimination on the grounds of gender, religion, all Directors will stand for re-election annually. Copies of race, ethnicity, sexual orientation, age or physical ability. the Directors’ appointment letters are available on request The overriding aim of the policy is to ensure that the Board from the Company Secretary. Upon joining the Board, any is composed of the best combination of people for ensuring new Directors receive an induction and relevant training is effective oversight of the Company and constructive support available to Directors on an ongoing basis. and challenge to the Investment Manager. Consideration is given to the recommendations of the AIC Code and the A procedure has been adopted for Directors, in the Board supports the recommendations of the Hampton furtherance of their duties, to take independent professional Alexander Review and the Parker Review. advice at the expense of the Company. The Board appraises its collective set of cognitive and A policy of insurance against Directors’ and officers’ liabilities personal strengths, independence and diversity on an annual is maintained by the Company. Bellevue Healthcare Trust plc Annual Report and Accounts 202444 Governance basis, and especially during the recruitment process, so as externally managed investment company, the Board employs to ensure it is aligned with the Company’s strategic priorities. no executive staff and therefore does not have a chief The performance appraisal process is described below. executive officer (CEO) or a chief financial officer (CFO) – both of which are deemed senior board positions by the The Board believes its composition is appropriate for the FCA. However, the Board considers the Chair of the Board, Company’s circumstances. However, in line with the Board’s the Chair of the Audit and Risk Committee and the Senior succession planning and tenure policy, or should strategic Independent Director to be senior positions; hence the priorities change, the Board will review and, if required, following disclosures are made on this basis. Furthermore, adjust its composition. the Board has resolved that the Company’s year-end date is the most appropriate date for disclosure purposes. The The Board takes account of the targets set out in the FCA’s following information has been provided by each Director. Listing Rules, which are set out below. The Board discloses the following information in relation to its diversity. As an As required under UKLR 16.3.29, further detail in respect of the diversity targets as at 30 November 2024 are provided in the tables below. Number of senior Number of Board Percentage of the position on the members* Board Board Men 3 60% 1 Women 2 40% 1 Prefer not to say - - - Number of senior Number of Board Percentage of the position on the members* Board Board White British or Other White (including minority-white groups) 4 80% 1 Asian/Asian British 1 20% 1 Prefer not to say - - - * As noted previously, during the full year under review there were 5 non-executive directors, increasing to 7 following the appointment of Sarah MacAulay and Clare Brady on 3 February 2025. MEETING ATTENDANCE The actual number of formal meetings of the Board and Committees during the year under review is given below, together with individual Director’s attendance at those meetings. The first number in the table is the meetings attended by the individual Director. Management Audit and Engagement Quarterly Board Risk Committee Committee Number held 4 3 2 Randeep Grewal 4/4 3/3 2/2 Josephine Dixon 4/4 3/3 2/2 Paul Southgate 4/4 3/3 2/2 Tony Young 4/4 3/3 2/2 Kate Bolsover 4/4 3/3 2/2 There were other ad hoc Board and Committee meetings to deal with administrative matters, strategic issues, board selection, market updates and approving documentation. Bellevue Healthcare Trust plc Annual Report and Accounts 2024 45 ### Corporate Governance continued PERFORMANCE APPRAISAL FINANCIAL ASPECTS OF INTERNAL The Board recognises the importance of the AIC Code’s CONTROL recommendation in respect of evaluating the performance The Directors are responsible for the internal financial of the Board as a whole, the Committees of the Board and control systems of the Company and for reviewing their individual Directors. effectiveness. These aim to ensure the maintenance of proper accounting records, the reliability of the financial In 2024, the Board conducted an internal review of the Board information upon which business decisions are made and and its Committees. The review was positive, and no critical which is used for publication and that the assets of the issues were identified. The recommendations from the report Company are safeguarded. were agreed by the Board. Key priorities were identified for the year ahead by the Board. Lintstock Limited, an external As stated above, the Board has contractually delegated to consultant, was appointed to undertake an external review in external agencies the services the Company requires. 2023 and the Board will continue to conduct external reviews The Board receives and reviews reports on the internal at least every three years. control environments of key suppliers, in order to provide A formal annual performance appraisal process was reasonable assurance on the effectiveness of internal performed on the Company’s main service providers. The financial controls. results were reviewed by the Chairman of the Management The key procedures include review of management accounts Engagement Committee and discussed with the Board. The and net asset value and monitoring of performance at results of the service provider performance evaluation were quarterly Board meetings, segregation of the administrative positive and demonstrated that the service providers were function from that of securities and cash custody and fulfilling their duties effectively. from investment management, maintenance of appropriate insurance, and adherence to physical and computer security INTERNAL CONTROL procedures. In addition, procedures have been put in place The AIC Code requires the Board to review the for authorisation of all expense payments. effectiveness of the Company’s system of internal controls. The Board recognises its ultimate responsibility for the The Statement of Directors’ Responsibilities in respect of the Company’s system of internal controls and for monitoring accounts is on page 57 and a Statement of Going Concern its effectiveness. is on pages 40 and 41. The Report of the Independent Auditor is on pages 58 to 64. The system of internal controls is designed to manage rather than eliminate the risk of failure to achieve business OTHER ASPECTS OF INTERNAL CONTROL objectives. It can provide only reasonable assurance against The Board holds quarterly meetings, plus additional meetings material misstatement or loss. The Board has undertaken as required. Between these meetings there is regular contact a review of the aspects covered by the guidance and has with the Investment Manager, the Company Secretary and identified risk management controls in the key areas of the Administrator. business objectives, accounting, compliance, operations and secretarial as being matters of particular importance upon The Board has agreed policies with the Investment Manager which it requires reports. The Board believes that the existing on key operational issues. The Investment Manager and/ arrangements, set out below, represent an appropriate or the AIFM reports in writing to the Board on operational framework to meet the internal control requirements. and compliance issues. The Investment Manager reports By these procedures the Directors have kept under review directly to the Audit and Risk Committee concerning the the effectiveness of the internal control system throughout internal controls. the year and up to the date of this report. Bellevue Healthcare Trust plc Annual Report and Accounts 202446 Governance The Directors review detailed management accounts from the of proxies lodged for each resolution is announced at Administrator, including holdings in the portfolio, transactions the meeting and is published on the Company website, and other aspects of the financial position of the Company. www.bellevuehealthcaretrust.com, subsequent to the meeting. Shareholders and potential investors may obtain The Depositary provides oversight reports for the quarterly up-to-date information on the Company from the website. Board meetings. Additional ad hoc reports are received as required and Directors have access at all times to the In line with governance recommendations, if 20% or more advice and services of the Company Secretary, which is of votes cast are against any resolution, the Company responsible to the Board for ensuring that Board procedures would announce what action it intended to take to consult are followed, and that applicable rules and regulations are Shareholders views and would provide a summary of the complied with. outcome and actions it intended to take within six months of the date at which the vote was held. The Board confirms that This contact with the AIFM, Administrator and the none of the resolutions put to Shareholders at the AGM in other key service providers enables the Board to 2024 received 20% or more of the votes cast against. monitor the Company’s progress towards its objectives and encompasses an analysis of the risks involved. ANNUAL GENERAL MEETING The effectiveness of the Company’s risk management and The Company seeks to provide a minimum of twenty-one internal controls systems is monitored and a formal review, days’ notice of the AGM the Company would encourage all utilising a detailed risk assessment programme has been Shareholders to attend the AGM. completed. This included consideration of the Administrator, the Depositary and the Registrar’s internal control reports. In line with the requirements of the Companies Act 2006, There are no significant findings to report from the review. the Company will hold an Annual General Meeting (“AGM”) of Shareholders to consider the resolutions laid out in PRINCIPAL RISKS the Notice of Meeting on pages 97 and 98. The Board The Directors confirm that they have carried out a robust encourages Shareholders to attend and participate in the assessment of the principal risks facing the Company, Company’s forthcoming AGM on 23 April 2025 at the including those that would threaten its business model, offices of Stephenson Harwood LLP, 1 Finsbury Circus, future performance, solvency or liquidity. The principal risks London EC2M 7SH. and how they are being managed are set out in the Strategic We recognise it is not possible for everyone to attend the Report on pages 22 to 25. AGM and we would remind Shareholders that any questions relating to the business of the AGM can be sent by email RELATIONS WITH SHAREHOLDERS to info@bellevuehealthcaretrust.com or the Company The Board places great importance on communication Secretary Bellevue@nsm.group. with Shareholders. The Company’s Investment Manager meets with larger Shareholders and reports to the Board. If Shareholders are unable to attend the meeting in person, The Chairman also meets with Shareholders both with the they are strongly encouraged to vote by proxy and to appoint Investment Manager and on his own. Shareholders wishing the “Chairman of the AGM” as their proxy. Details of how to to communicate with the Chairman or any other Director may vote, either electronically, by proxy form or through CREST, do so by writing to the Company Secretary at the registered or if you are an Institutional investor via Proxymity Platform, office of the Company which is shown on page 105 or can be found in the Notes to the Notice of AGM on pages 99 sending an email to info@bellevuehealthcaretrust.com to 101. The lodging of a form of proxy (or an appointment or to the Company Secretary Bellevue@nsm.group. of a proxy through CREST and Proxymity) will not however, prevent a Shareholder from attending the AGM and voting in Information is provided to all Shareholders via the annual and person if they so wish. half-yearly accounts and also by the publication of daily NAVs and monthly factsheets. The Notice of Meeting sets out the business of the AGM and any item not of an entirely routine nature is explained in The Company’s Annual General Meeting provides a the Directors’ Report. Separate resolutions are proposed for forum for communication with all Shareholders. The level each substantive issue. Bellevue Healthcare Trust plc Annual Report and Accounts 2024 47 ### Corporate Governance continued All other general meetings shall be convened by not less than twenty-one days’ notice to all those members and to the auditors unless the Company offers members an electronic voting facility and a special resolution reducing the period of notice to not less than fourteen days prior to the general meeting, in which case a general meeting may be convened by not less than fourteen days’ notice in writing. A special resolution will be proposed at the AGM to reduce the period of notice for general meetings, other than the AGM, to not less than fourteen days. EXERCISE OF VOTING POWERS AND STEWARDSHIP CODE The Company and the Investment Manager support the UK Stewardship Code issued by the Financial Reporting Council. Bellevue Healthcare Trust plc Annual Report and Accounts 202448 Governance ![Three small blue squares arranged in a stylized shape.]() # Directors' Remuneration Policy and Implementation Report This report has been prepared in accordance with Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013. The Directors' Remuneration Implementation Report is put forward for approval by Shareholders on an annual basis. The result of the Shareholder resolution on the Implementation Report is non-binding on the Company, although it gives Shareholders an opportunity to express their views, which will be taken into account by the Board. An Ordinary Resolution to approve the Directors' Remuneration Implementation Report will be put forward for approval at the Company's AGM to be held on 23 April 2025. The Directors' Remuneration Policy was approved by Shareholders at the 2024 AGM. In accordance with statute, the policy must be put to Shareholders for approval every three years and the Board must only operate in accordance with the approved policy during the three-year cycle, unless Shareholder approval is sought to amend the policy. Accordingly, unless amended, the remuneration policy will next be put to Shareholders at the AGM to be held in 2027. The Board has complied with the policy during the year ended 30 November 2024. The law requires the Company's auditor to audit certain disclosures provided in this section of the report. Where disclosures are audited, they are indicated as such. The auditor's opinion is on pages 58 to 64. ## REMUNERATION IMPLEMENTATION The Company currently has seven Non-Executive Directors. Directors' fees with effect from 1 December 2023, were payable at the rate of £67,000 per annum for the Chairman of the Board; £49,550 per annum for the Chair of the Audit and Risk Committee and £39,250 per annum for the other Board members. An additional £1,000 per annum was payable to the Senior Independent Director and an additional £1,000 per annum was payable to the Chair of the Management Engagement Committee. The Board reviews the fees payable to the Directors on an annual basis and has agreed to align the review of Board fees to the Company's year end, as opposed to reviewing them after the year has already commenced. Following the Board's review during the year, no increase has been applied/proposed with effect from 1 December 2024 for the year ending 30 November 2025. Since the Company's IPO in 2016, net fees payable to the Directors have been satisfied in Ordinary Shares acquired in the market. Given the significant growth of the Company since its IPO and in order to continually attract high quality and diverse candidates as non-executive Directors, the Company reviewed the Directors' remuneration arrangements and determined that, with effect from 1 April 2024, the Directors' fees would be paid to the Directors in cash. The Board believes that the fees appropriately reflect the level of demands on the individual Directors, prevailing market rates for an investment trust of the Company's size and complexity, the complexity of regulation and resultant time spent by the Directors on matters, and it will also enable the Company to continue to attract appropriately experienced Directors in the future. The Board also takes into consideration RPI, CPI and other inflationary measures and the impact to the Company's ongoing charges following a rise in fees. Board fees are not considered against any performance measure. The Board agreed Directors' fees would only increase by the level of inflation over the next few years. Due to the size and nature of the Company, it was not deemed necessary to use a remuneration consultant although the Board did take into consideration views from external search consultants on the level of the Company's fees against prevailing market rates and took these into account in its deliberations. The current aggregate remuneration that can be paid to Directors under the Company's Articles of Association is £500,000 per annum. Believe Healthcare Trust plc Annual Report and Accounts 2024 49 ### Directors’ Remuneration Policy and Implementation Report continued | In accordance with the Shareholder Rights Directive. The | percentage change in remuneration in respect of the financial | | | | | | | --- | --- | --- | --- | --- | --- | --- | | Board confirms there were no variable pay awards made to | years prior to the current year in respect of each Director role | | | | | | | the Directors and there were no deferral periods. The annual | is as follows: | | | | | | | | | 30 Nov | 30 Nov | 30 Nov | 30 Nov | 30 Nov | | Financial year to | | 2020* | 2021 | 2022** | 2023 | 2024 | Chair 3% 4.5% 48.2% 3.1% Nil Non-executive Director 3% 4.7% 24.4% 2.2% Nil Chair of the Audit and Risk Committee Supplement 3% 5.8% 85.2% 3.3% Nil Chair of the Management Engagement Committee Supplement 3% Nil -60.0% Nil Nil Senior Independent Director (“SID”) Supplement** 100% Nil -33.3% Nil Nil * The Company appointed a Senior Independent Director in 2020. ** The Company reviewed and refreshed the Committee supplement fees for the year ended 30 November 2022. DIRECTOR SERVICE CONTRACTS him in the actual or purported execution and/or discharge The Directors do not have service contracts with the Company. of his duties and/or the exercise or purported exercise of The Directors are not entitled to compensation on loss of office. his powers and/or otherwise in relation to or in connection The Directors have appointment letters which do not provide for with his duties, powers or office; and purchase and maintain any specific term. However, they are subject to re-election by insurance for any person who is a Director, secretary, or Shareholders at a maximum interval of three years. There are no other officer (other than an auditor) of the Company in restrictions on transfers of the Company’s shares held by the relation to anything done or omitted to be done or alleged to Directors, or any special rights attached to such shares. have been done or omitted to be done as Director, secretary or officer. DIRECTORS’ INDEMNITIES A policy of insurance against Directors’ and officers’ liabilities Subject to the provisions of the Companies Act 2006, is maintained by the Company. the Company may indemnify any person who is a Director, secretary or other officer (other than an auditor) of the PERFORMANCE Company, against (a) any liability whether in connection The following chart shows the performance of the Company’s with any negligence, default, breach of duty or breach of share price by comparison to the MSCI World Healthcare trust by him in relation to the Company or any associated Index (GBP), on a total return basis. company or (b) any other liability incurred by or attaching to 150 120 90 60 Total Return (%) 30 0 -30 Dec 16 Jul 18 Feb 20 Sep 21 Apri 23 Nov 24 BBH +98.1 MSCI WHC Index (GBP) +120.5% Bellevue Healthcare Trust plc Annual Report and Accounts 202450 Governance DIRECTORS’ EMOLUMENTS FOR THE YEAR ENDED 30 NOVEMBER 2024 | Fees and taxable | | | Fees and taxable | | | | --- | --- | --- | --- | --- | --- | | | benefits to | | | benefits to | | | 30 November 2024 | | | 30 November 2023 | | | | | | £ | | | £ | Randeep Grewal 68.0 68.0 Josephine Dixon 51.0 51.0 Paul Southgate 39.0 39.0 Tony Young 39.0 39.0 Kate Bolsover 39.0 39.0 Total 236.0 236.0 There are no other taxable benefits payable by the Company was passed with 99.85% of the proxy votes cast (including other than certain expenses which may be deemed to be discretionary votes) being in favour of the resolution. taxable. None of the above fees were paid to third parties. A non-binding ordinary resolution to approve the Directors’ A non-binding ordinary resolution to approve the Directors’ Remuneration Policy contained in the Annual Report for the Remuneration Implementation Report contained in the Annual year ended 30 November 2023 was put forward for approval Report for the year ended 30 November 2023 was put at the Company’s AGM held on 26 April 2024. The resolution forward at the AGM held on 26 April 2024. The resolution was passed with 99.84% of the proxy votes cast (including discretionary votes) being in favour of the resolution. RELATIVE IMPORTANCE OF SPEND ON PAY The following table sets out the total level of Directors’ remuneration compared to the distributions to Shareholders by way of dividends and share buybacks, and the management fees and other expenses incurred by the Company. Year ended 30 November 2024 2023 £’000 £’000 Income 3,031 2,469 Directors’ fees 236 236 Management fees and other operating expenses 7,413 8,885 Dividends paid and payable to Shareholders 25,422 30,290 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 51 ### Directors’ Remuneration Policy and Implementation Report continued DIRECTORS’ HOLDINGS (AUDITED) The Directors had the following shareholdings in the Company, all of which are beneficially owned. | | | Ordinary | | | Ordinary | | --- | --- | --- | --- | --- | --- | | | Shares as at | | | Shares as at | | | 30 November 2024* | | | 30 November 2023 | | | Randeep Grewal 165,090 149,552 Josephine Dixon 131,102 119,473 Paul Southgate 100,723 95,226 Tony Young 37,511 32,084 Kate Bolsover 31,688 26,335 * As noted previously, Sarah MacAulay and Clare Brady were appointed to the Board on 3 February 2025. STATEMENT On behalf of the Board and in accordance with Part 2 of Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013, I confirm that the above Report on Remuneration Policy and Remuneration Implementation summarises, as applicable, for the financial year to 30 November 2024; the major decisions on Directors’ remuneration; any substantial changes relating to Directors’ remuneration made during the financial year to 30 November 2024; and the context in which the changes occurred and decisions have been taken. Randeep Grewal Chairman 14 March 2025 Bellevue Healthcare Trust plc Annual Report and Accounts 202452 Governance ## Report of the Audit and ## Risk Committee ROLE OF THE AUDIT AND RISK INTERNAL CONTROLS AND RISK COMMITTEE MANAGEMENT The Audit and Risk Committee meets formally to consider The Directors have a dynamic risk register in place which the appointment, independence and objectivity, and outlines key risks and ensures there are measures in place remuneration of the auditor and to review the annual to manage and mitigate risk; and oversee the effectiveness accounts and half-yearly financial report. The Audit and Risk of internal controls and processes. The risk assessment Committee also reviews the Company’s internal financial programme provides a visual reflection of the Company’s controls and its internal control and risk management identified principal and emerging risks, including climate systems. Where non-audit services are provided by change and the war in Ukraine and their potential impact the auditor, full consideration of the financial and other on the Company’s future development and prospects. The implications on the independence of the auditor arising from risk assessment programme also provides the mitigation any such engagement are considered before proceeding. measures which key service providers, including the Investment Manager, have in place to maintain operational resilience and business continuity. The Audit and Risk COMPOSITION Committee carries out, at least annually, a robust assessment All of the Directors of the Company are members of the of the principal and emerging risks and uncertainties and Audit and Risk Committee. The Audit and Risk Committee monitors the risks on an ongoing basis. has formal written terms of reference and copies of these are available on the Company’s website or on request from The Board has overall responsibility for the Company’s the Company Secretary. The Audit and Risk Committee risk management and systems of internal controls and as a whole has recent and relevant financial experience. for reviewing their effectiveness. As is the case with most The UK Code recommends that the Chairman of the Board investment trusts, the investment management, accounting, should not be a member of the Audit and Risk Committee. company secretarial, registrar and depositary services have However, as permitted by the AIC Code, the Directors been delegated to third parties. The effectiveness of the believe that membership of the Audit and Risk Committee internal controls is assessed on a continuing basis and of the independent Chair of the Board, Randeep Grewal is the Committee receives regular reports. The Committee appropriate, and welcome his contribution. is satisfied that internal controls and processes remained satisfactory, and that appropriate systems are in place. INTERNAL AUDIT The Audit and Risk Committee has considered the need FINANCIAL STATEMENTS AND for an internal audit function and considers that this is not SIGNIFICANT ACCOUNTING MATTERS appropriate given the nature and circumstances of the The Audit and Risk Committee reviewed the financial Company. The Audit and Risk Committee keeps the needs statements and considered the following significant for an internal audit function under periodic review. accounting issues in relation to the Company’s financial statements for the year ended 30 November 2024. MEETINGS There have been three Audit and Risk Committee meetings VALUATION AND EXISTENCE OF in the year to 30 November 2024. Meeting attendance is INVESTMENTS shown on page 45 of this Annual Report. Meetings held The Company holds the majority of its assets in quoted during the year have been held in-person. Committee investments. The valuation and existence of these members have operated effectively and there has been no investments is the most material matter in the production break in service from the Company’s service providers. of the financial statements. Investments are valued using independent pricing sources and the holding quantities at the year end were agreed to the Depositary’s records. The Audit and Risk Committee has reviewed the Administrator’s procedures in place for ensuring accurate valuation and existence of investments and is comfortable that these are appropriate. Bellevue Healthcare Trust plc Annual Report and Accounts 2024 53 ### Report of the Audit and Risk Committee continued RECOGNITION OF INCOME MATTERS CONSIDERED IN THE YEAR The Audit and Risk Committee has reviewed the The UK Corporate Governance Code requires the Company Administrator’s procedures for recognition of income and is to describe any significant issues considered in relation comfortable that these are appropriate. The Audit and Risk to the financial statements and how those issues were Committee reviews the treatment of any special dividends addressed. While there were no significant issues, there receivable in the period to ensure that these have been were a number of matters of particular focus that were treated appropriately as revenue or capital. During the considered in the year: year no special dividends were received by the Company. 1. The Company’s Annual Redemption facility and the Revenue recognition accounting policies are disclosed on creation of a Redemption Pool. Note 3 of this Annual Report. 2. The continued implementation of the Company’s share GEO-POLITICS buyback programme as a mechanism of discount During the financial year under review, the Committee management continued to monitor the geopolitical landscape specifically 3. Discussion, challenge and application of the appropriate the ongoing military activity in Ukraine and the Middle East. valuation methodology for unlisted holdings in Geopolitical events such as these can have a significant accordance with relevant guideline/standards. impact on a fragile investment environment, and hence on Company performance. The Board has also paid particular All events were discussed in detail by the Committee, with attention to inflationary pressures and the sensitivity of support from the Company’s service providers and reporting income received from investee companies to volatility in the included in the year end auditor’s report. No issues were sterling/US dollar foreign exchange rate. The Committee discovered. continues to monitor the impact of these and other events which appear in our assessment of risk and of the ability of FINANCIAL REPORTING COUNCIL (“FRC”) the Company to achieve its investment objective. REVIEW The Committee reviews the operational resilience of its During the year the Corporate Reporting Review department various service providers in connection with the mitigation of the FRC wrote to the Company to advise that the Annual of the business risks posed by geopolitical events. The Report for the year ended 30 November 2023 had been Committee is pleased to confirm that all service providers subject to their review. They requested an explanation for have continued to demonstrate their ability to provide the basis on which the Company had recognised a liability services to the expected level, with no breaks in the services at the reporting date for the redemption of share capital provided or significant operational failures. Committee effected after this date, which was described as being at the members have also sought reassurance that external directors’ discretion. The FRC sought clarification of the non- providers were not in breach of sanctions implemented recognition of a liability at the preceding reporting date for a against Russia following the invasion of Ukraine. similar post balance sheet redemption. The Directors exercise their discretion to redeem all or any of the Ordinary Shares which are the subject of valid Redemption Requests by reference to the Redemption Point. The Redemption Point itself is not determinative of the point in time at which redeeming Shareholders become unsecured creditors of the Company, as the discretion of the Directors is exercised by reference to the Redemption Point and not necessarily at the Redemption Point. Accordingly, at that point the redeeming Shareholders are considered to be unsecured creditors of the Company, the Company incurs a liability to pay those Shareholders the Redemption Price by the payment date, which is determined in accordance with the Articles. Bellevue Healthcare Trust plc Annual Report and Accounts 202454 Governance ![img-4.jpeg](img-4.jpeg) The FRC confirmed that the Company satisfactorily explained the basis for the timing of the recognition of the liability and the legal advice received and supported this treatment. As a result of the FRC's enquiry, some enhancements were made to disclosures within this Report for the year ended 30 November 2024. The FRC's role is to consider compliance with the reporting requirements, rather than to verify the information provided. As a result, the review process does not provide assurance that the 2023 Annual Report and Accounts are correct in all material respects. ## GOING CONCERN AND VIABILITY STATEMENTS Having reviewed the Company's financial position, liabilities, principal/emerging risks and uncertainties, the Committee recommended to the Directors that it was appropriate for the Directors to prepare the financial statements on the going concern basis. The viability and going concern statements can be found on pages 26 and 40 and 41 respectively. ## AUDIT TENURE Ernst & Young LLP has been appointed as the Company's auditor since the Company's launch in October 2016 following a competitive process and review of the auditor's credentials. The re-appointment of the external auditor will be reviewed annually by the Audit and Risk Committee and the Board and is subject to approval by Shareholders. In accordance with the FRC guidance, the audit will be put out to tender within ten years of the initial appointment of Ernst & Young LLP. In accordance with auditor rotation best practice, Ahmer Huda is appointed as Audit Partner for the year ending 30 November 2024 audit, his third year as Audit Partner for the Company. The appointment of the auditor is reviewed annually by the Audit and Risk Committee and the Board and is subject to approval by Shareholders. ## PROVISION OF NON-AUDIT SERVICES The Audit and Risk Committee has put a policy in place on the supply of any non-audit services provided by the external auditor. Such services are considered on a case-by-case basis and may only be provided to the Company if the provision of such services is at a reasonable and competitive cost and does not constitute a conflict of interest or potential conflict of interest which would prevent the auditor from remaining objective and independent. No non-audit fees were payable to the Auditor in the year ended 30 November 2024 (2023: Nil). The audit fees (excluding VAT) incurred during the year amounted to £63,676 (2023: £53,025). These fees represent an increase over the prior year, which is comprised of an inflationary increase of 5% (£2,651), an additional audit fee of £6,000 in relation to the share redemption process and an additional non-recurring fee of £2,000 due to change in the Administrator. The Committee reviewed the audit fees being paid by similar comparative companies and concluded that the increase is in line with audit fee rises experienced across the investment trust sector. Audit firms generally have increased the fees that they charge to investment trusts in order to reflect the increased level of work that they have been required to perform, in the context of more rigorous levels of audit scrutiny and regulation. ## AUDITOR INDEPENDENCE The Audit and Risk Committee considered the independence of the auditor and the objectivity of the audit process and is satisfied that Ernst & Young LLP has fulfilled its obligations to Shareholders and as independent auditor to the Company for the year. The Audit and Risk Committee was satisfied with the overall approach to the audit for the year under review. The assessment by the Committee took into account the experience and tenure of the audit partner and the team, the nature and level of services provided and confirmation that the auditor had complied with independence standards. The Audit and Risk Committee also reviews a copy of the latest FRC Audit Quality Inspection Report on the Auditor. After due consideration, the Audit and Risk Committee recommends the re-appointment of Ernst & Young LLP and their re-appointment will be put forward to the Company's Shareholders at the 2025 AGM. ## CONCLUSION WITH RESPECT TO THE ANNUAL REPORT AND FINANCIAL STATEMENTS The Audit and Risk Committee has concluded that the Annual Report for the year ended 30 November 2024, taken as a whole, is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company's business model, strategy and performance. The Audit and Risk Committee has reported its conclusions to the Board of Directors. The Audit and Risk Bellevue Healthcare Trust plc Annual Report and Accounts 2024 55 ### Report of the Audit and Risk Committee continued Committee reached this conclusion through a process of review of the document and enquiries to the various parties involved in the production of the annual report. Josephine Dixon Audit and Risk Committee Chair 14 March 2025 Bellevue Healthcare Trust plc Annual Report and Accounts 202456 Governance ## Statement of Directors’ Responsibilities The Directors are responsible for preparing the Annual Report The accounts are published on the Company’s website at and the financial statements in accordance with applicable www.bellevuehealthcaretrust.com, which is maintained laws and regulations. by the Company’s Investment Manager. The work carried out by the auditor does not involve consideration of Company law requires the Directors to prepare accounts for the maintenance and integrity of these websites and, each financial year. Under that law the Directors have elected accordingly, the auditor accepts no responsibility for any to prepare the financial statements under UK adopted changes that have occurred to the accounts since being International Accounting Standards (“IAS”). Under company initially presented on the website. Legislation in the United law the Directors must not approve the financial statements Kingdom governing the preparation and dissemination of unless they are satisfied that they give a true and fair view financial statements may differ from legislation in other of the state of affairs of the Company as at the end of the jurisdictions. year and of the net return for the year. In preparing these accounts, the Directors are required to: DIRECTORS’ CONFIRMATION STATEMENT select suitable accounting policies in accordance with The Directors each confirm to the best of their IAS 8 Accounting Policies, Changes in Accounting knowledge that: Estimates and Errors and then apply them consistently; the accounts, prepared in accordance with UK adopted present information, including accounting policies, in a IAS, give a true and fair view of the assets, liabilities, manner that provides relevant, reliable, comparable and financial position and profit of the Company; and understandable information; this Annual Report includes a fair review of the make judgements and estimates which are reasonable development and performance of the business and and prudent; position of the Company, together with a description of the principal risks and uncertainties that it faces. state whether UK adopted IAS have been followed, subject to any material departures disclosed and Having taken advice from the Audit and Risk Committee, explained in the accounts; and the Directors consider that the Annual Report and financial statements taken as a whole is fair, balanced and prepare the financial statements on a going concern understandable and provides the information necessary basis unless it is inappropriate to presume that the for Shareholders to assess the Company’s performance, Company will continue in business. business model and strategy. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain For and on behalf of the Board. the Company’s transactions and which disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the accounts Randeep Grewal comply with the Companies Act 2006. They are also Chairman responsible for safeguarding the assets of the Company and 14 March 2025 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Bellevue Healthcare Trust plc Annual Report and Accounts 2024 57 ## Independent Auditor’s Report OPINION Our evaluation of the Directors’ assessment of the Company’s We have audited the financial statements of Bellevue ability to continue to adopt the going concern basis of Healthcare Trust plc (the “Company) for the year ended accounting included: 30 November 2024 which comprise the Statement of Confirmation of our understanding of the Company’s Comprehensive Income, the Statement of Financial Position, going concern assessment process and engaging with the Statement of Changes in Equity, the Statement of Cash the Directors and the Company Secretary to determine if Flows and the related notes 1 to 19, including material all key factors were considered in their assessment. We accounting policies. The financial reporting framework that considered whether the factors taken account of in the has been applied in their preparation is applicable law and UK Directors’ assessment addressed those matters which we adopted International Accounting Standards. considered important. In our opinion, the financial statements: Inspection of the Directors’ assessment of going concern, give a true and fair view of the Company’s affairs as at including the revenue and expense cash flow forecast, 30November 2024 and of its profit for the year then for the period to 30 November 2026 which is at least ended; twelve months from the date these financial statements were authorised for issue. In preparing the revenue and have been properly prepared in accordance with UK- expense forecast, the Company has concluded that it adopted International Accounting Standards; and is able to continue to meet its ongoing costs as they fall due. have been prepared in accordance with the requirements of the Companies Act 2006. Reviewing of the factors and assumptions, including the impact of the current economic environment and other BASIS FOR OPINION significant events that could give rise to market volatility, We conducted our audit in accordance with International as applied to the revenue and expense forecast. We Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our considered the appropriateness of the methods used to responsibilities under those standards are further described calculate the forecast and determined, through testing in the Auditor’s responsibilities for the audit of the financial of the methodology and calculations, that the methods, statements section of our report. We believe that the audit inputs and assumptions utilised were appropriate to be evidence we have obtained is sufficient and appropriate to able to make an assessment of going concern for the provide a basis for our opinion. Company. Consideration of the mitigating factors included in the INDEPENDENCE revenue and expense forecast that are within the control We are independent of the Company in accordance with of the Company, including a review of the Company’s the ethical requirements that are relevant to our audit of the assessment of the liquidity of investments held and financial statements in the UK, including the FRC’s Ethical evaluating the Company’s ability to sell investments in Standard as applied to listed public interest entities, and we order to cover the working capital requirements should its have fulfilled our other ethical responsibilities in accordance revenue decline significantly. Reviewing of the Directors’ with these requirements. assessment of the impact on going concern in respect of the annual redemption facility. The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Company and we remain In relation to the Company’s borrowing arrangements, we independent of the Company in conducting the audit. have inspected the Director’s assessment of the risk of breaching the debt covenants as a result of a reduction CONCLUSIONS RELATING TO GOING in the value of the Company’s portfolio. We recalculated CONCERN the Company’s compliance with debt covenants in the In auditing the financial statements, we have concluded that scenarios assessed by the Directors and reviewed the the Directors’ use of the going concern basis of accounting Director’s reverse stress testing in order to identify what in the preparation of the financial statements is appropriate. Bellevue Healthcare Trust plc Annual Report and Accounts 202458 Governance factors would lead to the Company breaching the financial In relation to the Company’s reporting on how they have covenants. applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the Directors’ Review of the Company’s going concern disclosures statement in the financial statements about whether the included in the Annual Report in order to assess whether Directors considered it appropriate to adopt the going concern the disclosures were appropriate and in conformity with basis of accounting. the reporting standards. Our responsibilities and the responsibilities of the Directors Based on the work we have performed, we have not identified with respect to going concern are described in the relevant any material uncertainties relating to events or conditions that, sections of this report. However, because not all future individually or collectively, may cast significant doubt on the events or conditions can be predicted, this statement is not a Company’s ability to continue as a going concern for a period guarantee as to the Company’s ability to continue as a going to 30 November 2026, which is at least twelve months from concern. when the financial statements are authorised for issue. OVERVIEW OF OUR AUDIT APPROACH Key audit matters • Risk of incomplete or inaccurate revenue recognition, including the classification of special dividends as revenue or capital items in the Statement of Comprehensive Income • Risk of incorrect valuation or ownership of the investment portfolio Materiality • Overall materiality of £4.37m (2023: £6.65m) which represents 1% (2023: 1%) of the Company’s Net Asset Value. AN OVERVIEW OF THE SCOPE OF OUR otherwise appear to be materially misstated, in line with our responsibilities on “Other information”. AUDIT Tailoring the scope In planning and performing our audit we assessed the potential Our assessment of audit risk, our evaluation of materiality and impacts of climate change on the Company’s business and our allocation of performance materiality determine our audit any consequential material impact on its financial statements. scope for the Company. This enables us to form an opinion on the financial statements. We take into account size, risk profile, Our audit effort in considering climate change was focused on the organisation of the Company and effectiveness of controls, the adequacy of the Company’s disclosures in the Financial the potential impact of climate change and changes in the Statements as set out in Note 2 and the conclusion that business environment when assessing the level of work to be there was no further impact of climate change to be taken performed. All audit work was performed directly by the audit into account. In line with UK adopted International Accounting engagement team. Standards investments are valued at fair value, which for the Company are quoted bid prices for investments in active Climate change markets at the balance sheet date. All investments therefore Stakeholders are increasingly interested in how climate change reflect the market participants view of climate change risk on will impact the Company. The Company has determined that the investments held by the Company. We also challenged the impact of climate change could affect the Company’s the Directors’ considerations of climate change in their investments and their valuations and potentially shareholder assessment of viability and going concern and associated returns. These are explained on pages 22 to 25 in the disclosures. Based on our work we have not identified the principal and emerging risks and uncertainties section, which impact of climate change on the financial statements to be a form part of the “Other information,” rather than the audited key audit matter or to impact a key audit matter. financial statements. Our procedures on these unaudited disclosures therefore consisted solely of considering whether they are materially inconsistent with the financial statements, or our knowledge obtained in the course of the audit or Bellevue Healthcare Trust plc Annual Report and Accounts 2024 59 ### Independent Auditor’s Report continued KEY AUDIT MATTERS audit strategy, the allocation of resources in the audit; and Key audit matters are those matters that, in our professional directing the efforts of the engagement team. These matters judgment, were of most significance in our audit of the were addressed in the context of our audit of the financial financial statements of the current period and include the statements as a whole, and in our opinion thereon, and we do most significant assessed risks of material misstatement not provide a separate opinion on these matters. (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall Key observations communicated to Risk Our response to the risk the Audit and Risk Committee Risk of incomplete or inaccurate We performed the following The results of our procedures identified revenue recognition, including the procedures: no material misstatement in relation classification of special dividends to the risk of incomplete or inaccurate • We obtained an understanding of the as revenue or capital items in the revenue recognition, including incorrect Manager’s and Administrator’s process Statement of Comprehensive Income classification of special dividends and controls surrounding revenue as revenue or capital items in the Refer to the Report of the Audit and recognition, including the classification Statement of Comprehensive Income. Risk Committee (page 54); Accounting of special dividends, by performing policies (page 71); and note 5 of the walkthrough procedures. Financial Statements • For all dividends received, we | The Company has reported investment | recalculated the dividend income by | | --- | --- | | income for the year ended 30 November | multiplying the investment holdings at | | 2024 of £0.76m (2023: £0.92m), | the ex-dividend date, traced from the | | consisting of dividend income from | accounting records, by the dividend | | listed equity investments. | per share, which was agreed to an | independent data vendor. We also There is a risk of incomplete or agreed all exchange rates to an inaccurate revenue recognition through external source. In addition, for 100% the failure to recognise proper income of dividends received, we agreed the entitlements or to apply an appropriate amounts to bank statements. accounting treatment. • For all dividends accrued at the In addition to the above, the Directors year end, we reviewed the investee are required to exercise judgement in Company announcements to assess determining whether income receivable whether the entitlement arose prior in the form of special dividends should to 30 November 2024. We did not be classified as ‘revenue’ or ‘capital’ identify any accrued dividends in the in the Statement of Comprehensive year. Income. • To test completeness of recorded The Company did not receive any income, we tested that expected special dividends during the year (2023: dividends for each investee Company none). held during the year has been recorded as income with reference to an external source. • For all investments held during the year, we reviewed the type of dividends paid with reference to an external data source to identify those which were ‘special’. We identified no special dividends. Bellevue Healthcare Trust plc Annual Report and Accounts 202460 Governance Key observations communicated to Risk Our response to the risk the Audit and Risk Committee Risk of incorrect valuation or We performed the following The results of our procedures identified ownership of the investment portfolio procedures: no material misstatement in relation to the risk of incorrect valuation or Refer to the Report of the Audit and We obtained an understanding of the ownership of the investment portfolio. | Risk Committee (page 53); Accounting | processes surrounding investment pricing | | --- | --- | | policies (page 71); and note 4 of the | and legal title of listed investments by | | Financial Statements | performing walkthrough procedures. | | The Company’s investment portfolio | For all listed investments in the portfolio, we | | consists of listed equity investments | compared the market prices and exchange | | valued at £417.8m at 30 November | rates applied to an independent pricing | | 2024 (2023: £694.9m). | vendor and recalculated the investment | valuations as at the year end. The valuation of the assets held in the investment portfolio is the key driver of We inspected the stale pricing report the Company’s net asset value and total produced by the Administrator to identify return. Incorrect investment pricing, or prices that have not changed and verified failure to maintain proper legal title of whether the listed price is a valid fair value the investments held by the Company, through review of trading activity. could have a significant impact on the We compared the Company’s investment net asset value and the return generated holdings at 30 November 2024 to the for shareholders. independent confirmation received directly The fair value of listed investments is from the Company’s Depositary. determined using quoted market bid prices at close of business on the reporting date. Performance materiality OUR APPLICATION OF MATERIALITY The application of materiality at the individual account We apply the concept of materiality in planning and performing or balance level. It is set at an amount to reduce to an the audit, in evaluating the effect of identified misstatements appropriately low level the probability that the aggregate on the audit and in forming our audit opinion. of uncorrected and undetected misstatements exceeds materiality. MATERIALITY The magnitude of an omission or misstatement that, On the basis of our risk assessments, together with our individually or in the aggregate, could reasonably be assessment of the Company’s overall control environment, expected to influence the economic decisions of the users our judgement was that performance materiality was 75% of the financial statements. Materiality provides a basis for (2023: 75%) of our planning materiality, namely £3.28m determining the nature and extent of our audit procedures. (2023: £4.99m). We have set performance materiality at this percentage due to our past experience of the audit that We determined materiality for the Company to be £4.37m indicates a lower risk of misstatements, both corrected and (2023: £6.65m), which is 1% (2023: 1%) of Company’s Net uncorrected. Asset Value. We believe that Net Asset Value provides us with the most important financial metric on which shareholders would judge the performance of the Company. Bellevue Healthcare Trust plc Annual Report and Accounts 2024 61 ### Independent Auditor’s Report continued Reporting threshold the information given in the strategic report and the An amount below which identified misstatements are Directors’ report for the financial year for which the considered as being clearly trivial. financial statements are prepared is consistent with the financial statements; and We agreed with the Audit and Risk Committee that we would report to them all uncorrected audit differences in excess the strategic report and Directors’ report have of £0.22m (2023: £0.33m), which is set at 5% of planning been prepared in accordance with applicable legal materiality, as well as differences below that threshold that, requirements. in our view, warranted reporting on qualitative grounds. We evaluate any uncorrected misstatements against both the MATTERS ON WHICH WE ARE REQUIRED quantitative measures of materiality discussed above and in TO REPORT BY EXCEPTION light of other relevant qualitative considerations in forming our In the light of the knowledge and understanding of the opinion. Company and its environment obtained in the course of the audit, we have not identified material misstatements in the OTHER INFORMATION strategic report or Directors’ report. The other information comprises the information included in the annual report, other than the financial statements and our We have nothing to report in respect of the following matters auditor’s report thereon. The Directors are responsible for the in relation to which the Companies Act 2006 requires us to other information contained within the annual report. report to you if, in our opinion: Our opinion on the financial statements does not cover the adequate accounting records have not been kept, or other information and, except to the extent otherwise explicitly returns adequate for our audit have not been received stated in this report, we do not express any form of assurance from branches not visited by us; or conclusion thereon. the financial statements and the part of the Directors’ Our responsibility is to read the other information and, in Remuneration Report to be audited are not in agreement doing so, consider whether the other information is materially with the accounting records and returns; or inconsistent with the financial statements or our knowledge certain disclosures of Directors’ remuneration specified by obtained in the course of the audit or otherwise appears law are not made; or to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are we have not received all the information and explanations required to determine whether this gives rise to a material we require for our audit. misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a CORPORATE GOVERNANCE STATEMENT material misstatement of the other information, we are required We have reviewed the Directors’ statement in relation to going to report that fact. concern, longer-term viability and that part of the Corporate Governance Statement relating to the Company’s compliance We have nothing to report in this regard. with the provisions of the UK Corporate Governance Code specified for our review by the UK Listing Rules. OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT Based on the work undertaken as part of our audit, we have 2006 concluded that each of the following elements of the Corporate In our opinion the part of the Directors’ remuneration report to Governance Statement is materially consistent with the financial be audited has been properly prepared in accordance with the statements or our knowledge obtained during the audit: Companies Act 2006. Directors’ statement with regards to the appropriateness In our opinion, based on the work undertaken in the course of of adopting the going concern basis of accounting and the audit: any material uncertainties identified set out on pages 40 and 41; Bellevue Healthcare Trust plc Annual Report and Accounts 202462 Governance Directors’ explanation as to its assessment of the considered material if, individually or in the aggregate, they Company’s prospects, the period this assessment covers could reasonably be expected to influence the economic and why the period is appropriate set out on page 26; decisions of users taken on the basis of these financial statements. Director’s statement on whether it has a reasonable Explanation as to what extent the audit was expectation that the Company will be able to continue considered capable of detecting irregularities, in operation and meets its liabilities set out on pages 40 including fraud and41; Irregularities, including fraud, are instances of non- Directors’ statement on fair, balanced and understandable compliance with laws and regulations. We design procedures set out on page 57; in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a Board’s confirmation that it has carried out a robust material misstatement due to fraud is higher than the risk of assessment of the emerging and principal risks set out on not detecting one resulting from error, as fraud may involve page 22; deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to The section of the annual report that describes the review which our procedures are capable of detecting irregularities, of effectiveness of risk management and internal control including fraud is detailed below. systems set out on page 46; and However, the primary responsibility for the prevention and The section describing the work of the Audit and Risk detection of fraud rests with both those charged with Committee set out on page 53. governance of the Company and management. RESPONSIBILITIES OF DIRECTORS We obtained an understanding of the legal and regulatory As explained more fully in the Directors’ responsibilities frameworks that are applicable to the Company and statement set out on page 57, the Directors are responsible determined that the most significant are UK-adopted for the preparation of the financial statements and for being International Accounting Standards, the Companies satisfied that they give a true and fair view, and for such Act 2006, the UK Listing Rules, the UK Corporate internal control as the Directors determine is necessary to Governance Code, the Statement of Recommended enable the preparation of financial statements that are free Practice for the Financial Statements of Investment Trust from material misstatement, whether due to fraud or error. Companies as issued by the Association of Investment Companies, Section 1158 of the Corporation Tax Act In preparing the financial statements, the Directors are 2010, and The Companies (Miscellaneous Reporting) responsible for assessing the Company’s ability to continue Regulations 2018. as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis We understood how the Company is complying with of accounting unless the Directors either intend to liquidate those frameworks by discussions with the Audit and Risk the Company or to cease operations, or have no realistic Committee and Company Secretary, review of the Board alternative but to do so. and Committee minutes and review of papers provided to the Audit and Risk Committee. AUDITOR’S RESPONSIBILITIES FOR THE We assessed the susceptibility of the Company’s financial AUDIT OF THE FINANCIAL STATEMENTS statements to material misstatement, including how fraud Our objectives are to obtain reasonable assurance about might occur by considering the key risks impacting the whether the financial statements as a whole are free from financial statements. We identified a fraud risk with respect material misstatement, whether due to fraud or error, and to the incomplete or inaccurate revenue recognition to issue an auditor’s report that includes our opinion. through incorrect classification of special dividends as Reasonable assurance is a high level of assurance, but is revenue or capital in the Statement of Comprehensive not a guarantee that an audit conducted in accordance with Income. Further discussion of our approach is set out in ISAs (UK) will always detect a material misstatement when it the section on key audit matters above. exists. Misstatements can arise from fraud or error and are Bellevue Healthcare Trust plc Annual Report and Accounts 2024 63 ### Independent Auditor’s Report continued Based on this understanding we designed our audit USE OF OUR REPORT procedures to identify non-compliance with such laws This report is made solely to the Company’s members, as and regulations. Our procedures involved review of the a body, in accordance with Chapter 3 of Part 16 of the reporting to the Directors with respect to the application Companies Act 2006. Our audit work has been undertaken so of the documented policies and procedures and review that we might state to the Company’s members those matters of the financial statements to ensure compliance with the we are required to state to them in an auditor’s report and for reporting requirements of the Company. no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than A further description of our responsibilities for the audit of the the Company and the Company’s members as a body, for our financial statements is located on the audit work, for this report, or for the opinions we have formed. Financial Reporting Council’s website at https://www.frc.org. uk/auditorsresponsibilities. This description forms part of our auditor’s report. OTHER MATTERS WE ARE REQUIRED TO Ahmer Huda ADDRESS Senior Statutory Auditor Following the recommendation from the Audit and Risk Committee, we were appointed by the Company on 27 for and on behalf of Ernst & Young LLP, Statutory Auditor November 2017 to audit the financial statements for the London year ending 30 November 2017 and subsequent financial 14 March 2025 periods. The period of total uninterrupted engagement including previous renewals and reappointments is 8 years, covering the years ending 30 November 2017 to 30 November 2024. The audit opinion is consistent with the additional report to the Audit and Risk Committee. Bellevue Healthcare Trust plc Annual Report and Accounts 202464 Strategic Report ## Financial Statements Bellevue Healthcare Trust plc Annual Report and Accounts 2024 65 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 65 # Statement of Comprehensive Income for the year ended 30 November 2024 | | Note | Year ended 30 November 2024 | | | Year ended 30 November 2023 | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | | Gains/(losses) on investments | | - | 81,306 | 81,306 | - | (109,626) | (109,626) | | Losses on currency movements | | - | (1,241) | (1,241) | - | (789) | (789) | | **Net investment gains/(losses)** | | **-** | **80,065** | **80,065** | **-** | **(110,415)** | **(110,415)** | | Investment and interest income | 5 | 3,031 | - | 3,031 | 2,469 | - | 2,469 | | **Total income** | | **3,031** | **80,065** | **83,096** | **2,469** | **(110,415)** | **(107,946)** | | Investment management fees | | (1,256) | (5,022) | (6,278) | (1,559) | (6,236) | (7,795) | | Other expenses | 7 | (1,135) | - | (1,135) | (1,090) | - | (1,090) | | **Gain/(loss) before finance costs and taxation** | | **640** | **75,043** | **75,683** | **(180)** | **(116,651)** | **(116,831)** | | Finance costs | 8 | (367) | (1,469) | (1,836) | (810) | (3,240) | (4,050) | | **Operating profit/(loss) before taxation** | | **273** | **73,574** | **73,847** | **(990)** | **(119,891)** | **(120,881)** | | Taxation | 9 | (113) | - | (113) | (157) | - | (157) | | **Gain/(loss) for the year** | | **160** | **73,574** | **73,734** | **(1,147)** | **(119,891)** | **(121,038)** | | **Return per Ordinary Share** | 10 | **0.03p** | **16.05p** | **16.08p** | **(0.21)p** | **(21.85)p** | **(22.06)p** | There is no other comprehensive income and therefore the "Profit for the year" is the total comprehensive income for the year. The supplementary revenue and capital columns, including the earnings per Ordinary Shares, are prepared under guidance from the Association of Investment Companies. All revenue and capital items in the above statement derive from continuing operations. The notes on pages 70 to 83 form an integral part of these financial statements. 66 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Financial Statements # Statement of Financial Position as at 30 November 2024 | | Note | 30 November 2024 £'000 | 30 November 2023 £'000 | | --- | --- | --- | --- | | **Non-current assets** | | | | | Investments held at fair value through profit or loss | 4 | 417,790 | 696,916 | | **Current assets** | | | | | Cash and cash equivalents | | 273,993 | 110,954 | | Sales for future settlement | | - | 22 | | Other receivables | 11 | 102 | 111 | | | | **274,095** | **111,087** | | **Total assets** | | **691,885** | **808,003** | | **Current liabilities** | | | | | Bank loans payable | 12 | - | (31,696) | | Redemption payable | 13 | (253,551) | (110,008) | | Other payables | 13 | (1,034) | (762) | | **Total liabilities** | | **(254,585)** | **(142,466)** | | **Net assets** | | **437,300** | **665,537** | | **Equity** | | | | | Share capital | 14 | 3,165 | 4,803 | | Share premium account | | - | 617,709 | | Special distributable reserve | | 314,658 | - | | Capital redemption reserve | | 2,718 | - | | Capital reserve | | 119,036 | 45,462 | | Revenue reserve | | (2,277) | (2,437) | | **Total equity** | | **437,300** | **665,537** | | **Net asset value per Ordinary Share** | 16 | **154.32p** | **143.87p** | Approved by the Board of Directors on and authorised for issue on 14 March 2025 and signed on their behalf by: **Randeep Grewal** *Chairman* Registered in England and Wales with registered number 10415235. The notes on pages 70 to 83 form an integral part of these financial statements. Bellevue Healthcare Trust plc Annual Report and Accounts 2024 67 ## Statement of Changes in Equity for the year ended 30 November 2024 | | | | Share | | Special | | Capital | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Share | premium | | distributable | | Redemption | | Capital | Revenue | | | | | Capital | account | | | reserve | | reserve | reserve | reserve | | Total | | Notes | £’000 | | £’000 | | £’000 | | £’000 | £’000 | | £’000 | £’000 | Opening balance as at 4,803 617,709 - - 45,462 (2,437) 665,537 01December 2023 Gain for the year - - - - 73,574 160 73,734 Transfer to special distributable 3 - (617,709) 617,709 - - - reserve Reallocation of redeemed Ordinary - - (1,080) 1,080 - - - Shares from 2022 and 2023 Redemption of Ordinary Shares 14 (1,638) - (253,551) 1,638 - - (253,551) Buybacks of Ordinary Shares - - (22,768) - - (22,768) Buybacks, Redemption and special distributable reserve - - (239) - - (239) transfer costs Dividend paid 15 - - (25,413) - - (25,413) Closing balance as at 3,165 - 314,658 2,718 119,036 (2,277) 437,300 30November 2024 For the year ended 30 November 2023 | | | | Share | | Special | | Capital | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Share | premium | | distributable | | Redemption | | Capital | Revenue | | | | | Capital | account | | | reserve | | reserve | reserve | reserve | | Total | | Notes | £’000 | | £’000 | | £’000 | | £’000 | £’000 | | £’000 | £’000 | Opening balance as at 5,881 617,371 28,347 - 354,017 (1,290) 1,004,326 01December 2022 Loss for the year - - - - (119,891) (1,147) (121,038) Issue of Ordinary Shares 14 2 340 - - - - 342 Redemption of Ordinary Shares 14 (1,080) - (10,491) - (148,688) - (160,259) Buybacks of Ordinary Shares - - - - (23,439) - (23,439) Ordinary Share issue, Buybacks - (2) (81) - (102) - (185) and Redemption costs Dividend paid 15 - - (17,775) - (16,435) - (34,210) Closing balance as at 4,803 617,709 - - 45,462 (2,437) 665,537 30November 2023 The Company’s distributable reserves consist of the special distributable reserve, revenue reserve and capital reserve attributable to realised profit totalling £431,417,000 (30 November 2023: £43,025,000). The capital redemption reserve is non-distributable. The Company can use its distributable reserves to fund dividends, redemptions of Ordinary Shares and share buy backs. The notes on pages 70 to 83 form an integral part of these financial statements. Bellevue Healthcare Trust plc Annual Report and Accounts 202468 Financial Statements ## Statement of Cash Flows for the year ending 30 November 2024 | | Year ended | | | Year ended | | | --- | --- | --- | --- | --- | --- | | 30 November 2024 | | | 30 November 2023 | | | | | | £’000 | | | £’000 | Operating activities Cash flows Income* 3,031 2,469 Operating expenses (7,195) (8,852) Taxation (113) (157) Net cash flow used in operating activities (4,277) (6,540) Investing activities Cash flows Purchase of investments (588,784) (303,144) Sale of investments 949,238 533,774 Net cash flow from investing activities 360,454 230,630 Financing activities Cash flows Bank loans drawn 11,784 15,722 Bank loans repaid (43,140) (63,121) Loan interest and other charges paid (1,773) (4,552) Dividend paid (25,413) (34,210) Proceeds from issue of Ordinary Shares - 342 Annual redemption of ordinary shares (110,008) (50,251) Buybacks of Ordinary Shares held in treasury (22,768) (23,439) Share issue, Buybacks and Redemption costs (239) (185) Net cash flow used in financing activities (191,557) (159,694) Increase in cash and cash equivalents 164,620 64,396 Cash and cash equivalents at start of year 110,954 46,368 Effect of foreign currency revaluations (1,581) 190 Cash and cash equivalents at end of year 273,993 110,954 * Cash inflow from dividends for the financial year was £756,000 (2023: £765,000). Bank deposits interest income received during the year was £2,275,000 (2023: £1,547,000). The table below shows the movement in liabilities arising from financing activities during the year. | | Year ended | | | Year ended | | | --- | --- | --- | --- | --- | --- | | 30 November 2024 | | | 30 November 2023 | | | | | | £’000 | | | £’000 | Opening balance 31,696 83,731 Repayment of bank loans (43,140) (63,121) Proceeds from bank loans 11,784 15,722 Finance costs 1,836 4,050 Loan interest and other charges paid (1,773) (4,552) Foreign exchange movements (403) (4,134) Closing balance - 31,696 The notes on pages 70 to 83 form an integral part of these financial statements. Bellevue Healthcare Trust plc Annual Report and Accounts 2024 69 ## Notes to the Financial Statements 1. REPORTING ENTITY Bellevue Healthcare Trust plc, formerly BB Healthcare Trust plc, is a closed-ended investment company, registered in England and Wales on 7 October 2016. The Company’s registered office is 4th Floor 46-48 James Street, London, W1U 1EZ. Businessoperations commenced on 2 December 2016 when the Company’s Ordinary Shares were admitted to trading on the London Stock Exchange. The financial statements of the Company are presented for the year from 1 December 2023 to 30November 2024. The Company invests in a concentrated portfolio of listed or quoted equities in the global healthcare industry. The Company may also invest in American Depositary Receipts (ADRs), or convertible instruments issued by such companies and may invest in, or underwrite, future equity issues by such companies. The Company may utilise contracts for differences for investment purposes in certain jurisdictions where taxation or other issues in those jurisdictions may render direct investment in listed or quoted equities less effective. 2. BASIS OF PREPARATION Statement of compliance These financial statements have been prepared in accordance with UK adopted International Accounting Standards (“IAS”). In preparing these financial statements the directors have considered the impact of climate change as a risk as set out on page25, and have concluded that there was no further impact of climate change to be taken into account. In line with IAS investments are valued at fair value, which for the Company is quoted bid prices for investments in active markets at the Statement of Financial Position date and therefore reflect market participants’ view of climate change risk on the investments we hold. When presentational guidance set out in the Statement of Recommended Practice (‘SORP’) for Investment Companies issued by the Association of Investment Companies (‘the AIC’) in July 2022 is consistent with the requirements of UK adopted International Accounting Standards, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP. Going concern The Directors have adopted the going concern basis in preparing the financial statements. In forming this opinion, the Directors have considered the adequacy of the Company’s operational resources, liquidity of the investment portfolio, debt covenants and any potential impact of the ongoing wars in Ukraine and the Middle East may have on the going concern and viability of the Company. In making their assessment, the Directors have reviewed income and expense projections and the liquidity of the investment portfolio, and considered the mitigation measures which key service providers, including the Investment Manager, have in place to maintain operational resilience. The Company’s ability to continue as a going concern for the period assessed by the Directors, being the period to 30 November 2026, which is at least 12 months from the date the financial statements were authorised for issue. Significant accounting estimates, judgements and assumptions The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the year in which the estimates are revised and in any future periods affected. There have been no material estimates, judgements or assumptions, which have had a significant impact on the financial statements for the year. 70 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Financial Statements Functional and presentation currency The financial statements are presented in sterling, which is the Company’s functional currency. The Company’s investments are denominated in multiple currencies. However, the Company’s shares are issued in sterling and the majority of its investors are UK based. In addition, all expenses are paid in GBP as are dividends. All financial information presented in sterling have been rounded to the nearest thousand pounds. 3. ACCOUNTING POLICIES (a) Investments Upon initial recognition investments are classified by the Company “at fair value through profit or loss”. They are accounted for on the date they are traded and are included initially at fair value which is taken to be their cost. Subsequently quoted investments are valued at fair value which is the bid market price, or if bid price is unavailable, the last traded price on the relevant exchange. Unquoted investments are valued at fair value by the Board which is established with regard to the International Private Equity and Venture Capital Valuation Guidelines by using, where appropriate, latest dealing prices, valuations from reliable sources and other relevant factors. Changes in the fair value of investments held at fair value through profit or loss and gains or losses on disposal are included in the capital column of the Statement of Comprehensive Income within gains/(losses) on investments. Investments are derecognised on the trade date of their disposal, which is the point where the Company transfers substantially all the risks and rewards of the ownership of the financial asset. (b) Foreign currency Transactions denominated in foreign currencies are translated into sterling at actual exchange rates as at the date of the transaction. Monetary assets and liabilities, and non-monetary assets held at fair value denominated in foreign currencies are translated into sterling using London closing foreign exchange rates at the year end. Any gain or loss arising from a change in exchange rates subsequent to the date of the transaction is included as an exchange gain or loss to capital or revenue in the Statement of Comprehensive Income as appropriate. (c) Income from investments Dividend income from shares is recognised on ex-dividend dates. Overseas income is grossed up at the appropriate rate of tax. Special dividends are assessed on their individual merits and may be credited to the Statement of Comprehensive Income as a capital item if considered to be closely linked to reconstructions of the investee company or other capital transactions. All other investment income is credited to the Statement of Comprehensive Income as a revenue item. Interest receivable is accrued on a time apportionment basis. (d) Reserves Capital reserves Profits achieved in cash by selling investments and changes in fair value arising upon the revaluation of investments that remain in the portfolio are all charged to the capital column of the Statement of Comprehensive Income and allocated to the capital reserve. Special distributable reserve Following admission of the Company’s Ordinary Shares to trading on the London Stock Exchange, the Directors applied to the Court to cancel the share premium account so as to create a new special distributable reserve which may be treated as distributable reserves and out of which tender offers and share buybacks may be funded. This reserve may also be used to fund dividend payments. In December 2023 the Board obtained approval from the High Court to transfer a further £617,709,000 from the share premium account into the special distributable reserve. The Company’s distributable reserves consist of the special distributable reserve, revenue reserve and capital reserve attributable to realised profit. 71 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Notes to the Financial Statements continued Capital redemption reserve The capital redemption reserve reflects the nominal value of redeemed Ordinary Shares. Share premium The share premium account arose from the net proceeds of issuing new shares. The excess of the issue price of a share over its nominal value is the share premium. Revenue reserves The revenue reserve reflects all income and expenditure recognised in the revenue column of the income statement and is distributable by way of dividends. (e) Expenses All expenses are accounted for on an accruals basis. Expenses directly related to the acquisition or disposal of an investment (transaction costs) are taken to the income statement as a capital item. Expenses are recognised through the Statement of Comprehensive Income as revenue items except as follows: Investment management fees In accordance with the Company’s stated policy and the Directors’ expectation of the split of future returns, 80% of investment management fees are charged as a capital item in the Statement of Comprehensive Income. Finance costs Finance costs include interest payable and direct loan costs. In accordance with Directors’ expectation of the split of future returns, 80% of finance costs are charged as capital items in the Statement of Comprehensive Income. Loan arrangement costs are amortised over the term of the loan. (f) Cash and cash equivalents Cash comprises cash at hand and on-demand deposits. Cash equivalents are short term (three months or less); highly liquid investments that are readily convertible to known amounts of cash, are subject to insignificant risks of changes in value, and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. (g) Taxation Irrecoverable taxation on dividends is recognised on an accruals basis in the Statement of Comprehensive Income. Deferred taxation Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the statement of financial position liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Investment trusts which have approval as such under Section 1158 of the Corporation Tax Act 2010 are not liable for taxation on capital gains in UK. (h) Financial assets and financial liabilities All financial assets and liabilities are recognised in the financial statements at fair value, with the exception of short-term assets and liabilities, which are held at cost that approximates to fair value, and bank loans payable that are initially recognised at the fair value of the consideration received, net of directly attributable costs, and subsequently recognised at amortised cost. (i) Adoption of new IFRS standards A number of new standards and amendments are effective for the annual periods beginning on or after 1 January 2023. None of these have a material impact on the measurement of the amounts recognised in the financial statements of the Company. 72 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Financial Statements (j) Future Developments in IFRS standards A number of new standards and/or amendments to standards are effective for the annual periods beginning after 1 January 2024. None of these are expected to have a significant effect on the measurement of the amounts recognised in the financial statements of the Company. New standard and/or amendment Effective on or after Amendments to IAS 1 Presentation of Financial Statements—Classification of Liabilities as Current or Non-current on or after 01 January 2024 1 January 2024 Amendments to IAS 1 Presentation of Financial Statements—Non-current Liabilities with Covenants 01 January 2024 Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: 01 January 2024 Disclosures—Supplier Finance Arrangements IFRS 18 Presentation and Disclosure in Financial Statements 01 January 2027 Amendments to IFRS 9 and IFRS 7—Amendments to the Classification and Measurement of Financial Instruments 01 January 2026 (k) Equity shares The Company has treated the Ordinary Shares and Management Shares as equity in accordance with IAS 32 Financial Instruments: Presentation, which classifies financial instruments into financial assets, financial liabilities and equity instruments. Both share classes have an entitlement to the residual interest in the assets of the Company after deducting liabilities, suffice that the Management Shares have no participation in any surplus beyond their paid up capital. The Management Shares are not redeemable but the Ordinary Shares are subject to an annual redemption option at the discretion of the Directors. Ordinary Shares participate in dividends and any other profits of the Company. Redeemed Ordinary Shares are derecognised, and a liability recognised, once the redemption process has been completed, and there is a legal obligation to cancel the shares. The nominal value of the redeemed Ordinary Shares is transferred to the capital redemption reserve. (l) Segmental reporting The Board has considered the requirements of IFRS 8 – “Operating Segments”. The Company has entered into an Investment Management Agreement with the Investment Manager under which the Investment Manager is responsible for the management of the Company’s investment portfolio, subject to the overall supervision of the Board of Directors. Accordingly, the Board is deemed to be the “Chief Operating Decision Maker” of the Company. The Directors are of the opinion that the Company is engaged in a single segment of business being that of an investment trust, as disclosed in note 1. 4. INVESTMENT HELD AT FAIR VALUE THROUGH PROFIT OR LOSS (a) Summary of valuation | | 30 November | | 30 November | | | --- | --- | --- | --- | --- | | | | 2024 | | 2023 | | As at | | £’000 | | £’000 | Investments held at fair value through profit or loss – Listed overseas 417,790 696,916 Closing valuation 417,790 696,916 73 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Notes to the Financial Statements continued # **(b) Movements in valuation** | | £'000 | £'000 | | --- | --- | --- | | Opening valuation | 696,916 | 1,043,349 | | Opening unrealised losses on investments | 287,597 | 131,376 | | Opening book cost | 984,513 | 1,174,725 | | Additions, at cost | 588,595 | 301,659 | | Disposals, at cost | (1,101,985) | (491,871) | | Closing book cost | 471,123 | 984,513 | | Revaluation of investments | (53,333) | (287,597) | | **Closing valuation** | **417,790** | **696,916** | In respect of the investments sold during the year, they have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the investments. Total investments sold during the year ended 30 November 2024 amounted to £949,527,000 (30 November 2023: £533,108,000). Transaction costs on investment purchases for the year ended 30 November 2024 amounted to £189,000 (30 November 2023: £90,000) and on investment sales for the financial year to 30 November 2024 amounted to £311,000 (30 November 2023: £167,000). # **(c) Gains/(losses) on investments** | | £'000 | £'000 | | --- | --- | --- | | Realised gains/(losses) on disposal of investments | (152,958) | 40,980 | | Movement in unrealised gains/(losses) on investments held | 234,264 | (150,606) | | **Total gains/(losses) on investments** | **81,306** | **(109,626)** | Under IFRS 13 'Fair Value Measurement', an entity is required to classify investments using a fair value hierarchy that reflects the significance of the inputs used in making the measurement decision. The following shows the analysis of financial assets recognised at fair value based on: # **Level 1** The unadjusted quoted price in an active market for identical assets or liabilities that the entity can access at the measurement date. # **Level 2** Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly. # **Level 3** Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability. The classification of the Company's investments held at fair value is detailed in the table below: | | As at 30 November 2024 | | | | | --- | --- | --- | --- | --- | | | Level 1 £'000 | Level 2 £'000 | Level 3 £'000 | Total £'000 | | Investments at fair value through profit and loss | 417,790 | - | - | **417,790** | | | As at 30 November 2023 | | | | | --- | --- | --- | --- | --- | | | Level 1 £'000 | Level 2 £'000 | Level 3 £'000 | Total £'000 | | Investments at fair value through profit and loss | 694,884 | - | 2,032 | **696,916** | 74 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Financial Statements The level 3 investment comprises the Company’s holding in Venus MedTech, which was suspended from trading during the prior year. For 2023, the board applied a discount taking into account the projected impact of the suspension on the price movement, as well as other factors directly related to Venus MedTech. As at the 30 November 2024 year end the Board in consultation with the AIFM’s Valuation Committee has decided to write down the investment to a nil valuation. The movement in the Level 3 unquoted investments during the year is shown below: | | 30 November | | 30 November | | | --- | --- | --- | --- | --- | | | | 2024 | | 2023 | | As at | | £’000 | | £’000 | Opening balance as at 2,032 - Transfers to level 3 during the year - 9,724 Revaluation losses on level 3 investments held (2,032) (7,692) Closing valuation - 2,032 There were no transfers between levels during the year ended 30 November 2024 (30 November 2023: one) 5. INVESTMENT AND INTEREST INCOME | | Year | | Year | | --- | --- | --- | --- | | | ended | | ended | | 30 November | | 30 November | | | | 2024 | | 2023 | | | £’000 | | £’000 | Income from investments Overseas dividends 756 922 Other income: Bank interest on deposits 2,275 1,547 Total income 3,031 2,469 6. INVESTMENT MANAGEMENT FEE 2024 2023 Revenue Capital Total Revenue Capital Total £’000 £’000 £’000 £’000 £’000 £’000 Management fee 1,256 5,022 6,278 1,559 6,236 7,795 The Company’s Investment Manager is Bellevue Asset Management (UK) Ltd (the “Investment Manager”). The Investment Manager is entitled to receive a management fee payable monthly in arrears and calculated at the rate of one-twelfth of 0.95%per calendar month of market capitalisation. Market capitalisation means the average of the mid-market prices for an Ordinary Share, as derived from the daily official list of the London Stock Exchange on each business day in the relevant calendar month multiplied by the number of Ordinary Shares in issue on the last business day of the relevant calendar month excluding any Ordinary Shares held in treasury. There is no performance fee payable to the Investment Manager. 75 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Notes to the Financial Statements continued ## 7. OTHER EXPENSES | | 2024 £'000 | 2023 £'000 | | --- | --- | --- | | Administration fees | 255 | 259 | | Audit fees | 66 | 53 | | Broker fees | 51 | 6 | | Custody services | 164 | 202 | | Directors' fees | 236 | 236 | | Printing fees | 29 | 23 | | Registrar fees | 95 | 85 | | Other operating expenses | 239 | 226 | | **Total** | **1,135** | **1,090** | The audit fee for the current year comprises an additional non-recurring fee for procedures performed for the change of administrator of £2,000 and £6,000 in relation to the additional procedures on the calculation of the Redemption Pool, this has been recognised as a redemption cost in the special distributable reserve. ## 8. FINANCE COSTS | | Year ended 30 November 2024 | | | | --- | --- | --- | --- | | | Revenue £'000 | Capital £'000 | Total £'000 | | Loan interest | 362 | 1,449 | **1,811** | | Other finance costs | 5 | 20 | **25** | | **Total** | **367** | **1,469** | **1,836** | | | Year ended 30 November 2023 | | | | --- | --- | --- | --- | | | Revenue £'000 | Capital £'000 | Total £'000 | | Loan interest | 703 | 2,810 | **3,513** | | Other finance costs | 107 | 430 | **537** | | **Total** | **810** | **3,240** | **4,050** | ## 9. TAXATION ### (a) Analysis of tax charge for the year: | | Year ended 30 November 2024 | | | Year ended 30 November 2023 | | | | --- | --- | --- | --- | --- | --- | --- | | | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | | Withholding tax expense | 113 | - | **113** | 157 | - | **157** | | **Total tax charge for the year** | **113** | **-** | **113** | **157** | **-** | **157** | 76 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Financial Statements (b) Factors affecting the tax charge for the year: The effective UK corporation tax rate for the year is 25% (2023: 23.00%). The tax charge differs from the charge resulting from applying the standard rate of UK corporation tax for an investment trust company. The differences are explained below: | 2024 | 2023 | | --- | --- | | Total | Total | | £’000 | £’000 | Operating profit/(loss) before taxation 73,847 (120,881) UK Corporation tax at 25% (2023: 23.00%) 18,462 (27,803) Effects of: (Gains)/losses on investments not taxable (20,016) 25,395 Overseas dividends not taxable (189) (212) Withholding tax expense 113 157 Unutilised excess expenses 1,743 2,620 Total tax charge for the year 113 157 The Company is not liable to tax on capital gains due to its status as an investment trust. The Company has a total gross tax loss of £64,058,267 (2023: £53,398,267) and as a result an unrealised deferred tax asset of £16,014,567 (2023: 13,350,000) based on the prospective UK corporation tax rate of 25%. This asset has accumulated because deductible expenses exceeded taxable income for the year ended 30 November 2024. No asset has been recognised in the accounts because, given the composition of the Company’s portfolio, it is not likely that this asset will be utilised in the foreseeable future. 10. RETURN PER SHARE Return per share is based on the weighted average number of Ordinary Shares in issue during the year ended 30 November 2024 of 458,515,182 (30 November 2023: 548,691,353). Management Shares and shares held in treasury do not participate in the profit or loss of the Company, hence they are not included in the calculation below. As at 30 November 2024 Revenue Capital Total Profit for the year (£’000) 160 73,574 73,734 Return per Ordinary Share (basic and diluted) 0.03p 16.05p 16.08p As at 30 November 2023 Revenue Capital Total Loss for the year (£’000) (1,147) (119,891) (121,038) Loss per Ordinary Share (basic and diluted) (0.21)p (21.85)p (22.06)p 11. OTHER RECEIVABLES | | As at | | As at | | --- | --- | --- | --- | | 30 November | | 30 November | | | | 2024 | | 2023 | | | £’000 | | £’000 | Prepayments 41 46 VAT recoverable 26 28 Recoverable tax on dividend 35 37 Total 102 111 77 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Notes to the Financial Statements continued 12. BANK LOANS The Company has a multi-currency Revolving Credit Facility (“RCF”) with The Bank of Nova Scotia, London Branch. Under the terms of the RCF, the Company could draw down loans up to an aggregate value of USD 280 million. On 24 October 2024 the Company amended the RCF, under the terms of the amended RCF, the Company could draw down loans up to an aggregate value of USD 100 million. The RCF was renewed in December 2024 and the Company amended the terms so that it could draw down loans up to an aggregate value of USD 125 million. The facility will expire in December 2025. As at 30 November 2024, the aggregate of loans draw down was £Nil (2023: £31,696,000). A commitment fee is calculated at 0.35 per cent per annum, if the unutilised amount equals or exceeds 50 per cent of the total commitment; or 0.45 per cent per annum if the unutilised amount is less than 50 per cent of the total commitment. 13. OTHER PAYABLES | | As at | | As at | | --- | --- | --- | --- | | 30 November | | 30 November | | | | 2024 | | 2023 | | | £’000 | | £’000 | Loan interest payable 89 26 Accrued expenses 945 736 Redemption payable 253,551 110,008 254,585 110,770 Redemption payable On 14 October 2024 the Company announced that 163,834,887 Ordinary Share redemption requests had been received for the 2024 redemption point (the “2024 Redemption”). The Board resolved to effect the 2024 Redemption using a redemption pool to which the Company notionally divided its assets and liabilities into two pools, the redemption pool and continuing pool. The value to be returned was determined to be the realisation value of the redemption pool assets, after deducting the costs of the redemption, and a pro-rata share of the costs and expenses of the Company not attributable to a particular pool. On 29November 2024 the calculated redemption price was 154.76 pence per share (including dividends and bank interest received) and the 163,834,887 redeeming Ordinary Shares were cancelled with effect from 29 November 2024. As per IAS 32 and relevant accounting standards the redemption liability crystalised when the shares were cancelled and the former holders of Redemption Shares are now creditors of the Company. The 2023 redemption payable is in relation to the Company’s announcement on 3 November 2023 that valid redemption requests in respect of 77,428,034 Ordinary Shares had been received for the 30 November 2023 redemption point. All of these shares were redeemed and cancelled by the Company. The calculated redemption price was 142.07718 pence pershare. 14. SHARE CAPITAL As at 30 November 2024 As at 30 November 2023 No. of shares £’000 No. of shares £’000 Allotted, issued and fully paid: Redeemable Ordinary Shares of 1p each (‘Ordinary Shares’) 283,369,891 2,834 462,588,550 4,626 Shares held in treasury 31,782,418 318 16,398,646 164 Management Shares of £1 each 50,001 13 50,001 13 Total 315,202,310 3,165 479,037,197 4,803 78 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Financial Statements Share Movement During the year to 30 November 2024, 15,383,772 Ordinary Shares (30 November 2023: 16,398,646) were bought back into treasury through the Company’s share buyback programme. 2024 Redemption The Company received redemption requests for 163,834,887 Ordinary shares in respect of the 2024 redemption offer which represented 36.34% of the issued capital, see note 13 for further details. The 163,834,887 Ordinary Shares redeemed were cancelled with effect from 29 November 2024. 15. DIVIDEND Year ended 30 November 2024 Year ended 30 November 2023 | Pence per | | Special | Revenue | | | Pence per | | Special | Revenue | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Ordinary | | reserve | | reserve | Total | Ordinary | | reserve | | reserve | Total | | | Share | £’000 | | £’000 | £’000 | | Share | £’000 | | £’000 | £’000 | Final dividend - 2022 - - - - 3.235p 17,775 - 17,775 Interim dividend - 2023 - - - - 2.995p 16,435 - 16,435 Final dividend - 2023 2.995p 13,846 - 13,846 - - - - Interim dividend - 2024 2.520p 11,567 - 11,567 - - - - Total 5.515p 25,413 - 25,413 6.230p 34,210 - 34,210 The dividend relating to the year ending 30 November 2024, which is the basis on which the requirements of Section 1159 of the Corporation Tax Act 2010 are considered is detailed below: Year ended 30 November 2024 Year ended 30 November 2023 | Pence per | | Special | Revenue | | | Pence per | | Special | Revenue | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Ordinary | | reserve | | reserve | Total | Ordinary | | reserve | | reserve | Total | | | Share | £’000 | | £’000 | £’000 | | Share | £’000 | | £’000 | £’000 | Interim dividend – paid 2.520p 11,567 - 11,567 2.995p 16,435 - 16,435 Final dividend – payable/paid 2.520p 7,141 - 7,141 2.995p 13,855 - 13,855 Total 5.04p 18,708 - 18,708 5.990p 30,290 - 30,290 The Directors recommend the payment of a final dividend for the year of 2.52p per share. Subject to approval at the Company’s Annual General Meeting, the dividend will have an ex-dividend date of 1 May 2025 and will be paid on 30 May 2025 to shareholders on the register at 2 May 2025. The dividend will be funded from the Company’s distributable reserves as per the table above. 16. NET ASSETS PER ORDINARY SHARE Net assets per Ordinary Share as at 30 November 2024 is based on £437,300,000 of net assets of the Company attributable to the 283,369,891 Ordinary Shares in issue (excluding treasury shares) as at 30 November 2024. £12,500 of net assets as at 30 November 2024 is attributable to the Management Shares. 17. RELATED PARTY TRANSACTIONS Fees payable to the Investment Manager are shown in note 6. As at 30 November 2024, the fee outstanding to the Investment Manager was £478,000 (30 November 2023: £461,000). Directors’ fees paid during the year are disclosed within the Directors’ Remuneration Report on page 51. Fees payable as at 30 November 2024 were £Nil (2023: £39,383). The Directors’ shareholdings are disclosed in the Directors’ Remuneration Implementation Report on page 52 in this Annual Report. 79 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Notes to the Financial Statements continued 18. FINANCIAL INSTRUMENTS AND CAPITAL DISCLOSURE The Company is subject to a number of risks in relation to economic conditions and healthcare companies. These risks are categorised as market risks, liquidity risks, currency risks, leverage risk, interest rate risk and credit risk. The Board monitors closely the Company’s exposure to these risks but does so in order to reduce the likelihood of a permanent reduction in the Company’s net assets rather than to minimise the short term volatility. Further details on these risks and the management of these risks are included in the Directors’ report. (i) Market risks Market risk is the risk that the fair value or future cash flows of the Company’s financial assets and liabilities may fluctuate because of changes in market prices. The Company’s financial assets and liabilities at 30 November 2024 comprised: 2024 2023 | | Interest | Non-interest | | | Interest | Non-interest | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | bearing | | bearing | Total | bearing | | bearing | Total | | Investments | £’000 | | £’000 | £’000 | £’000 | | £’000 | £’000 | Hong Kong - 5,819 5,819 2,032 2,032 Danish krone - 2,478 2,478 - - US dollar - 409,493 409,493 694,884 694,884 Total investment - 417,790 417,790 696,916 696,916 Floating rate Cash at bank 273,993 - 273,993 110,954 - 110,954 Short term debtors - 102 102 - 133 133 ### Bank loans payable-US dollar - - - (31,696) - (31,696) Short term creditors - (254,585) (254,585) - (110,770) (110,770) Total 273,993 (254,483) 19,510 79,258 (110,637) (31,379) Market price risk sensitivity The effect on the portfolio of a 10.0% increase or decrease in market prices would have resulted in an increase or decrease of £41,779,000 (2023: £69,692,000) in the investments held at fair value through profit or loss at the period end, which is equivalent to 9.6% (2023: 10.5%) in the net assets attributable to equity holders. This analysis assumes that all other variables remain constant. (ii) Liquidity risks Liquidity risk is the risk that the Company will not be able to meet its obligations when due. There is a risk that the Company’s holdings may not be able to be realised at reasonable prices in a reasonable timeframe. Financial liabilities by maturity at the period end are shown below: | 30 November | | 30 November | | | --- | --- | --- | --- | | | 2024 | | 2024 | | | £’000 | | £’000 | Within one month-purchases due for settlement and other payables (254,585) (110,770) Between one and three months – Bank loans payable - (31,696) Total (254,585) (142,466) 80 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Financial Statements Management of liquidity risks The Company will typically seek to maintain a high degree of liquidity in its portfolio holdings (such that a position could typically be exited within 1 to 5 trading days, with minimal price impact) and as a consequence of the concentrated approach, it is unlikely that a position will be taken in a company unless a minimum holding of 1.0 per cent of gross assets at the time of investment can be achieved within an acceptable level of liquidity. The Company’s Investment Manager monitors the liquidity of the Company’s portfolio on a regular basis. See note 12 for the maturity profiles of the loans. Other payables are typically settled within a month. (iii) Currency risks Although the Company’s performance is measured in sterling, a high proportion of the Company’s assets may be either denominated in other currencies or be in investments with currency exposure. Currency sensitivity The below table shows the strengthening/(weakening) of sterling against the local currencies over the financial year for the Company’s financial assets and liabilities held at 30 November 2024. 30 November 2024 % change Danish krone 3.91 Euro 3.84 Swiss franc 1.60 Hong Kong dollar 0.57 US dollar 0.89 Foreign currency risk profile 30 November 2024 30 November 2023 | | | | | | | | Total | | | | | | | Total | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Investment | | Net monetary | | | currency | | Investment | | Net monetary | | | currency | | | | exposure | | | exposure | | exposure | | exposure | | | exposure | | exposure | | | Investments | | £’000 | | | £’000 | | £’000 | | £’000 | | | £’000 | | £’000 | Danish krone 2,478 307 2,785 - - - Euro - 3 3 - - - Swiss franc - 4 4 - 6 6 Hong Kong dollar 5,819 21 5,840 2,032 - 2,032 US dollar 409,493 15,993 425,486 694,884 35,888 730,772 Total investment 417,790 16,328 434,118 696,916 35,894 732,810 81 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Notes to the Financial Statements continued Based on the financial assets and liabilities at 30 November 2024 and all other things being equal, if sterling had weakened against the local currencies by 10%, the impact on the Company’s net assets at 30 November 2024 would have been as follows: | 30 November | | 30 November | | | --- | --- | --- | --- | | | 2024 | | 2023 | | | £’000 | | £’000 | Danish krone 279 - Swiss franc - 1 Hong Kong dollar 584 203 US dollar 42,549 73,077 Management of currency risks The Company’s Investment Manager monitors the currency risk of the Company’s portfolio on a regular basis. Foreign currency exposure is regularly reported to the Board by the Investment Manager. Currency risk will not be hedged using any sort of foreign currency transactions, forward transactions or derivative instruments. (iv) Leverage risks The Company may use borrowings to seek to enhance investment returns. While the use of borrowings should enhance the total return on the Ordinary Shares where the return on the Company’s underlying assets is rising and exceeds the cost of borrowing, it will have the opposite effect where the return on the Company’s underlying assets is rising at a lower rate than the cost of borrowing or falling, further reducing the total return on the Ordinary Shares. As a result, the use of borrowings by the Company may increase the volatility of the Net Asset Value per Ordinary Share. Any reduction in the carrying value of the Company’s investments may lead to a correspondingly greater percentage reduction in its Net Asset Value (which is likely to adversely affect the price of an Ordinary Share). Any reduction in the number of Ordinary Shares in issue (for example, as a result of buy backs or redemptions) will, in the absence of a corresponding reduction in borrowings, result in an increase in the Company’s level of gearing. To the extent that a fall in the carrying value of the Company’s investments causes gearing to rise to a level that is not consistent with the Company’s gearing policy or borrowing limits, the Company may have to sell investments in order to reduce borrowings, which may give rise to a loss of value compared to the book value of the investments, as well as a reduction in income from investments. The Company will pay interest on its borrowings. As such, the Company is exposed to interest rate risk due to fluctuations in the prevailing market rates. As at 30 November 2024, the Company held cash balance of £274million (2023: £111million) of which £254million (2023: £110million) were payable to Redeeming Shareholders, consequently the Company considers it to bear no significant interest rate risk exposure. As at the year end, the Company’s gearing ratio was nil (2023: 4.7%), based on the drawn down loans as a percentage of gross asset value. As at the year end, the Company did not hold any derivative instruments. Management of leverage risks Gearing will be deployed flexibly up to 20 per cent of the Net Asset Value, at the time of borrowing, although the Investment Manager expects that gearing will, over the longer term, average between 5 and 10 per cent of the Net Asset Value. In the event the 20 per cent limit is breached as a result of market movements, and the Board considers that borrowing should be reduced, the Investment Manager shall be permitted to realise investments in an orderly manner so as not to prejudice Shareholders. Further details of the Company’s bank loans is disclosed in note 12. 82 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Financial Statements #### (v) Interest rate risks As at 30 November 2024 no loans were outstanding, and the Company had a cash balance of £274 million of which £254 million were payable to redeeming shareholders in December 2024. Consequently, the Company considers it to bear no significant interest rate risk exposure. #### (vi) Credit risks Credit risk is the potential of a counterparty failing to meet its obligations in accordance with the agreed terms. Cash and other assets that are required to be held in custody will be held by the depositary or its sub-custodians. Where the Company utilises derivative instruments, it is likely to take a credit risk with regard to the parties with whom it trades and may also bear the risk of settlement default. #### Management of credit risks The Company has appointed CACEIS Bank as its depositary. The Standard & Poor's credit rating of CACEIS is A+ (2023: A+). The credit rating of CACEIS was reviewed at the time of appointment and is reviewed on a regular basis by the Investment Manager and/or the Board. The Investment Manager monitors the Company's exposure to its counterparties on a regular basis and trades in equities are performed on a delivery versus payment basis. The Company's assets are segregated from those of the Depositary or any of its sub-custodians. At 30 November 2024, the Depository held £417,790,000 (2023: £696,916,000) in respect of investments and £273,993,000 (2023: £110,954,000) in respect of cash on behalf of the Company. #### (vii) Capital management policies and procedures The Company considers its capital to consist of its share capital of Ordinary Shares of 1p each, Management Shares of £1 each, and reserves totalling £437,300,000 (2023: £665,537,000) and bank loans payable ENI (2023: £31,696,000). The Company has a redemption facility through which Shareholders will be entitled to request the redemption of all or part of their holding of Ordinary Shares on an annual basis. The redemption point for the Ordinary Shares was 29 November 2024 and will be annual thereafter. The Redemption facility is entirely at the discretion of the Directors. The Investment Manager and the Company's broker monitor the demand for the Company's shares and the Directors review the position at Board meetings Use of distributable reserves is disclosed in the footnote on the Statement of Changes in Equity on page 68. The principal compliance required by the loan covenants at the year end were: 1. the borrower will not permit the adjusted asset coverage to be less than 3.50 to 1.00; and 2. the borrower will not permit the net asset value to be less than GBP 400,000,000 at any time. Following the renewal of the RCF the loan covenants from December 2024 are: 1. the borrower will not permit the adjusted asset coverage to be less than 3.50 to 1.00; and 2. the borrower will not permit the net asset value to be less than GBP 250,000,000 at any time. ### 19. POST BALANCE SHEET EVENTS The 2024 redemption liability was paid on 20 December 2024 with the redeeming shareholders being paid 154.76 pence per cancelled share with a total of £253,550,871 being paid. Bellevue Healthcare Trust plc Annual Report and Accounts 2024 83 # Alternative Performance Measures ## DISCOUNT The amount, expressed as a percentage, by which the share price is less than the Net Asset Value per Ordinary Share. | As at 30 November 2024 | | Page | £'000 | | --- | --- | --- | --- | | NAV per Ordinary Share (pence) | **a** | 1 | 154.32 | | Share price (pence) | **b** | | 141.20 | | **Discount** | **(b+a)-1** | | **-8.5%** | ## LEVERAGE An alternative word for "Gearing". Under AIFMD, leverage is any method by which the exposure of an AIF is increased through borrowing of cash or securities or leverage embedded in derivative positions. Under AIFMD, leverage is broadly similar to gearing, but is expressed as a ratio between the assets (excluding borrowings) and the net assets (after taking account of borrowing). Under the gross method, exposure represents the sum of the Company's positions after deduction of cash balances, without taking account of any hedging or netting arrangements. Under the commitment method, exposure is calculated without the deduction of cash balances and after certain hedging and netting positions are offset against each other. ## ONGOING CHARGES A measure, expressed as a percentage of average daily net assets, of the regular, recurring annual costs of running an investment company. | As at 30 November 2024 | | Page | £ | | --- | --- | --- | --- | | Average NAV | **a** | n/a | 722,068,747 | | Annualised expenses | **b** | n/a | 7,412,000 | | **Ongoing charges** | **(b+a)** | | **1.03%** | ## TOTAL RETURN A measure of performance that includes both income and capital returns. This takes into account capital gains and reinvestment of dividends paid out by the Company into the Ordinary Shares of the Company on the ex-dividend date. | As at 30 November 2024 | | Page | Share price | NAV | | --- | --- | --- | --- | --- | | Opening at 1 December 2023 (p) | **a** | n/a | 129.00 | 143.87 | | Closing at 30 November 2024 (p) | **b** | 1 | 141.20 | 154.32 | | Price movement (b+a)-1 | **c** | n/a | 9.5% | 7.3% | | Dividend reinvestment | **d** | n/a | 4.2% | 3.8% | | **Total return** | **(c+d)** | | **13.7%** | **11.1%** | n/a = not applicable. 84 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Other Information ## Glossary American Depositary Receipt or A negotiable certificate issued by a U.S. bank representing a specified number of shares in a foreign “ADR” stock traded on a U.S. exchange. AIC Association of Investment Companies. Alternative Investment Fund or “AIF” An investment vehicle under AIFMD. Under AIFMD (see below) the Company is classified as an AIF. Alternative Investment Fund A European Union directive which came into force on 22 July 2013 and has been implemented in Managers Directive or “AIFMD” the UK and remains in force post BREXIT. Annual General Meeting or “AGM” A meeting held once a year which Shareholders can attend and where they can vote on resolutions to be put forward at the meeting and ask Directors questions about the company in which they are invested. CFD or Contract for Difference A financial instrument, which provides exposure to an underlying equity with the provider financing the cost to the buyer with the buyer receiving the difference of any gain or paying for any loss. Custodian An entity that is appointed to safeguard a company’s assets. Discount The amount, expressed as a percentage, by which the share price is less than the net asset value per share. The discount is calculated on the closing share price. Depositary Under AIFMD the depositary is appointed under a strict liability regime to oversee inter alia, thosecharged with safekeeping of the Company’s assets and cash monitoring. Dividend Income receivable from an investment in shares. ESG Environmental, social and governance Ex-dividend date The date from which you are not entitled to receive a dividend which has been declared and is due to be paid to Shareholders. Financial Conduct Authority or The independent body that regulates the financial services industry in the UK. “FCA” Gearing A term used to describe the extent that a portfolio has increased in size as a way to magnify income and capital returns, but which can also magnify losses. A bank loan is a common method of gearing. Gross assets The Company’s total assets adjusted for any leverage amount (outstanding bank loan). Index An independent Market tool which is used to compare performance across different investment companies and funds. It quantifies performance of a basket of stocks which is considered to replicate a particular stock market or sector. Investment company A company formed to invest in a diversified portfolio of assets. Investment Trust An investment company which is based in the UK and which meets certain tax conditions which enables it to be exempt from UK corporation tax on its capital gains. The Company is an investmenttrust. Large-Cap A Company with a market capitalisation above $10 billion. Bellevue Healthcare Trust plc Annual Report and Accounts 2024 85 Glossary continued Leverage An alternative word for “Gearing”. Under AIFMD, leverage is any method by which the exposure of an AIF is increased through borrowing of cash or securities or leverage embedded in derivative positions. Under AIFMD, leverage is broadly similar to gearing, but is expressed as a ratio between the assets (excluding borrowings) and the net assets (after taking account of borrowing). Under the gross method, exposure represents the sum of the Company’s positions after deduction of cash balances, without taking account of any hedging or netting arrangements. Under the commitment method, exposure is calculated without the deduction of cash balances and after certain hedging and netting positions are offset against each other. Liquidity The extent to which investments can be sold at short notice. Management Shares Non-redeemable preference shares of £1.00 each in the capital of the Company. Mega-Cap A Company with a market capitalisation above $50 billion. Mid-Cap A Company with a market capitalisation between $2 and $10 billion. Net assets An investment company’s assets less its liabilities. Net asset value (“NAV”) per Ordinary Net assets divided by the number of Ordinary Shares in issue (excluding any shares held in treasury). Share OECD The Organisation for Economic Co-operation and Development is an intergovernmental organisation with 38 member countries. Ongoing charges ratio A measure, expressed as a percentage of average net assets, of the regular, recurring annual costs of running an investment company. Ordinary Shares The Company’s redeemable Ordinary Shares of 1p each. Portfolio A collection of different investments held in order to deliver returns to Shareholders and to spreadrisk. Premium The amount, expressed as a percentage, by which the share price is more than the net asset value per share. Redemption Facility The facility of the Company for the redemption of Ordinary Shares as set out in the Articles. Redemption Point 5.00 p.m. on the last Business Day in November each year (or such other date and/or time as the Directors may determine), on which date holders of Ordinary Shares which have submitted valid Redemption Requests to have their Ordinary Shares redeemed will be considered for redemption atthe discretion of the Board. Redemption Request A written notice to the Company to redeem Ordinary Shares in the form from time to time prescribed by the Company. Share buyback A purchase of a company’s own shares. Shares can either be bought back for cancellation or held in treasury. Share price The price of a share as determined by a relevant stock market. Small-Cap A Company with a market capitalisation less than $2 billion. Total return A measure of performance that takes into account both income and capital returns. This may take into account capital gains, dividends, interests and other realised variables over a given period oftime. Treasury shares A company’s own shares which are available to be sold by a company to raise funds. Volatility A measure of how much a share moves up and down in price over a period of time. Bellevue Healthcare Trust plc Annual Report and Accounts 202486 Other Information # Annex I – Article 8 Periodic Disclosures **Sustainable investment** means an investment in an economic activity that contributes to an environmental or social objective, provided that the investment does not significantly harm any environmental or social objective and that the investee companies follow good governance practices. The **EU Taxonomy** is a classification system laid down in Regulation (EU) 2020/852, establishing a list of **environmentally sustainable economic activities**. That Regulation does not include a list of socially sustainable economic activities. Sustainable investments with an environmental objective might be aligned with the Taxonomy or not. Template periodic disclosure for the financial products referred to in Article 8, paragraphs 1, 2 and 2a, of Regulation (EU) 2019/2088 and Article 6, first paragraph, of Regulation (EU) 2020/852 **ANNEX IV – periodic report as per November 30, 2024** **Name of product:** Bellevue Healthcare Trust **Corporate identifier (LEI):** 213800HQ3J3H9YF2UI82 ## ENVIRONMENTAL AND/OR SOCIAL CHARACTERISTICS Did this financial product have a sustainable investment objective? ☐ Yes ☐ It made **sustainable investments with an environmental objective:** ___% ☐ in economic activities that qualify as environmentally sustainable under the EU Taxonomy ☐ in economic activities that do not qualify as environmentally sustainable under the EU Taxonomy ☐ It made **sustainable investments with a social objective:** ___% ☐ No ☑ It **promoted Environmental/Social (E/S) characteristics** and while it did not have as its objective a sustainable investment, it had a proportion of 75.8% of sustainable investments ☐ with an environmental objective in economic activities that qualify as environmentally sustainable under the EU Taxonomy ☑ with an environmental objective in economic activities that do not qualify as environmentally sustainable under the EU Taxonomy ☑ with a social objective ☐ It promoted E/S characteristics, but **did not make any sustainable investments** **To what extent were the environmental and/or social characteristics promoted by this financial product met?** The investment strategy takes into account social, environmental as well as governance-related characteristics (ESG) as part of the implementation of its investment objectives, in accordance with the provisions of Article 8 of the EU Disclosure Regulation 2019/2088 (EU SFDR). These mainly include the following elements: Exclusion of serious violations of global norms, value-based exclusions based on revenue thresholds, ESG integration into fundamental company analysis, ESG stewardship through constructive company dialogue (engagement), and exercise of voting rights (proxy voting). Bellevue Healthcare Trust plc Annual Report and Accounts 2024 87 Annex I – Article 8 Periodic Disclosures continued **Sustainability indicators** measure how the environmental or social characteristics promoted by the financial product are attained. ### How did the sustainability indicators perform? The sustainability indicators are represented by the minimum exclusion criteria, by ESG integration and by Stewardship (engagement and proxy voting) activities specified in the mandatory elements of the investment strategy. The mandatory exclusion criteria applied were checked by the investment monitoring system/portfolio management system and were complied with at all times. **A Global Norms:** none of the portfolio companies exhibited very severe controversies (MSCI ESG Fall status) against UN Global Compact, UN Guiding Principles on Business and Human Rights and Standards and Rights of the International Labour Organization (ILO 1 + 2). **B Value-based exclusions:** all portfolio companies were within the permissible revenue tolerances. Find below the value-based exclusions overview as per November 30, 2024: #### Value based exclusions | Criteria | Revenue tolerance | Number of companies involved (within tolerance) | Aggr. weight of companies involved (within tolerance) in % | | --- | --- | --- | --- | | Controversial weapons | 0.0% | 0 | 0.0% | | Conventional weapons | 2.0% | 0 | 0.0% | | Thermal coal | 2.0% | 0 | 0.0% | | Other fossil fuels | 2.0% | 0 | 0.0% | | Nuclear power | 2.0% | 0 | 0.0% | | Palm oil | 5.0% | 0 | 0.0% | | Responsible mineral sourcing | 2.0% | 0 | 0.0% | | Environmentally damaging agricultural chemicals | 10.0% | 0 | 0.0% | | Alcohol production (beverages) | 2.0% | 0 | 0.0% | | Production of tobacco | 2.0% | 0 | 0.0% | | Sale of tobacco | 10.0% | 0 | 0.0% | | Cannabis-based products^{1)} | n/a | 0 | 0.0% | | Pornography | 2.0% | 0 | 0.0% | | Gambling | 2.0% | 0 | 0.0% | | Predatory lending practices | 2.0% | 0 | 0.0% | | Animal testing and welfare^{2)} | n/a | 0 | 0.0% | | Genetic research^{3)} | n/a | 0 | 0.0% | | Use of embryonic stem cells | n/a | 0 | 0.0% | 1) We may invest in holdings that offer therapeutic products derived from, or containing cannabinoids. However, the investment manager would not knowingly invest into production or supply of recreational cannabis products. 2) Pre-clinical testing in animals are integral and legally required for approving medicines. We limit our focus to ensuring that investee companies adhere to the highest standards of welfare in respect of the animals. 3) We do not consider this to be controversial, as long as research follows accepted ethical guidelines and is appropriately supervised. **C ESG integration:** Based on the premise that sustainability risks can have a negative impact on returns, the aim of ESG integration is to identify and address such risks within the scope of the investment process. The data gained through ESG screening is also used by the asset manager to anticipate new developments with respect to sustainability and to incorporate these findings into its investment decisions. As per November 30, 2024, the fund exhibited following ESG rating profile: 88 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Other Information MSCI ESG rating distribution (portfolio) ESG research coverage ESG Rating 93.0% ESG Carbon Data 93.0% ESG Net Alignment Scores (SDG) 93.0% UN Global Compact 93.0% UNGPs (Human Rights) 93.0% ILO Set of Standards 93.0% D Stewardship: For the year from December 1, 2023 until November 30, 2024, the fund executed its voting rights for 35 companies or 100% of the portfolio holdings and formally engaged with selected companies on ESG. From 297 votable items we voted on 296 items whereof we voted in 94.6% FOR, in 4.4% AGAINST and in 1% WITHHOLD the proposals. What were the objectives of the sustainable investments that the financial product partially made and how did the sustainable investment contribute to such objectives? The goals of sustainable investments are to positively contribute to at least one of the 17 United Nations Sustainable Development Goals (UN SDGs). The MSCI ESG Rating and MSCI UN SDG Alignment Score methodologies allow an investment to qualify as sustainable under the provisions of Article 2(17) of the EU SFDR. As per end of the reporting period, the fund’s holdings exhibited on aggregate a positive alignment to following UN SDGs (highlighted in color): Principal adverse impacts are the most significant negative impacts of investment decisions on sustainability factors relating to environmental, social and employee matters, respect for human rights, anti-corruption and anti- bribery matters. 89 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Annex I – Article 8 Periodic Disclosures continued How did the sustainable investments that the financial product partially made not cause significant harm to any environmental or social sustainable investment objective? The sustainable investments must not significantly harm (DNSH) any of the 17 United Nations Sustainable Development Goals (UN SDGs). Therefore we currently use the so-called UN SDG Alignment Score methodology provided by MSCI ESG. The scale for the SDG Alignment Score ranges from -10.0 to +10.0. A company that shows a positive contribution to at least one of the 17 UN SDGs (i.e. MSCI ESG UN SDG Net Alignment Score >=2.0) must not show a negative contribution to any other UN SDG (i.e. MSCI ESG UN SDG Net Alignment Score <-2.0). Furthermore, the issuers must exhibit at least an MSCI ESG rating of BB (“Good Governance”). All holdings that contribute positively to UN SDGs are simultaneously tested on DNSH and good governance. BAM Risk Management and BAM Product Management perform regular portfolio checks (at least quarterly) to ensure that sustainable investments comply with DNSH and Good Governance. How were the indicators for adverse impacts on sustainability factors taken into account? The adverse impact indicators were considered within the minimum exclusion criteria (no serious violations of UN Global Compact, UN Guiding Principles on Business and Human Rights Compliance and standards and rights of the International Labor Organisation). This was implicitly accompanied by consideration of PAIs No.4 (investment in fossil fuel companies), No.10 (violations of the UNGC Principles and the Organization for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises), and No.14 (engagement in controversial weapons (anti-personnel mines, cluster munitions, chemical and biological weapons). Furthermore, No.3 (GHG intensity), No.8 (water emissions) and No.9 (hazardous waste) were explicitly considered as separate criteria. PAI No. 1 (GHG emissions) and No. 2 (GHG footprint) are included in the MSCI ESG overall rating with different weightings depending on the industry relevance and were thus implicitly taken into account via the MSCI ESG minimum rating of “BB” per issuer. Were sustainable investments aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights? Details: The OECD Guidelines were taken into account as part of the minimum exclusion criteria (noserious violations of UN Global Compact, UN Guiding Principles on Business and Human Rights Compliance and standards and rights of the International Labor Organisation). In addition to data from MSCI ESG Research, public company data, broker research and specific exchanges with companies were also used to assess sustainability. 90 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Other Information The EU Taxonomy sets out a “do no significant harm” principle by which Taxonomy-aligned investments should not significantly harm EU Taxonomy objectives and is accompanied by specific Union criteria. The “do no significant harm” principle applies only to those investments underlying the financial product that take into account the EU criteria for environmentally sustainable economic activities. The investments underlying the remaining portion of this financial product do not take into account the EU criteria for environmentally sustainable economic activities. Any other sustainable investments must also not significantly harm any environmental or social objectives. How did this financial product consider principal adverse impacts on sustainability factors? The main adverse impacts of investment decisions on sustainability factors (PAIs) were taken into account in the “minimum exclusion criteria” mentioned in the context of the mandatory elements of the investment strategy and at least for the proportion of the fund assets categorized as “investments with sustainable characteristics” and as “sustainable investments”. This was implicitly accompanied by the consideration of PAIs No.4 (investment in fossil fuel companies), No.10 (violations of UNGC principles and of the Organization for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises) and No.14 (engagement in controversial weapons (anti-personnel mines, cluster munitions, chemical and biological weapons). Furthermore, No.3 (GHG intensity), No.8 (water emissions) and No.9 (hazardous waste) were explicitly considered as separate criteria. PAI No. 1 (GHG emissions) and No. 2 (GHG footprint) were included in the MSCI ESG overall rating with different weightings depending on the industry relevance and were thus implicitly taken into account via the MSCI ESG minimum rating of BB per issuer. What were the top investments of this financial product? NAME AVG WGT IN % COUNTRY SECTOR TANDEM DIABETES CARE INC 6.58 UNITED STATES Health Care CAREDX INC 6.10 UNITED STATES Health Care EXACT SCIENCES CORP 5.88 UNITED STATES Health Care INSMED INC 5.21 UNITED STATES Health Care EVOLENT HEALTH INC-A 5.13 UNITED STATES Health Care The list includes the OPTION CARE HEALTH INC 5.1 UNITED STATES Health Care investments constituting the greatest proportion AXSOME THERAPEUTICS INC 4.76 UNITED STATES Health Care of investments of CHARLES RIVER LABORATORIES 4.39 UNITED STATES Health Care the financial product during the reference UNITED HEALTH GROUP INC 4.28 UNITED STATES Health Care period which is from BIO-RAD LABORATORIES-A 4.11 UNITED STATES Health Care December 1, 2023 until November 30, 2024 DEXCOM INC 3.66 UNITED STATES Health Care SAREPTA THERAPEUTICS INC 3.28 UNITED STATES Health Care INTUITIVE SURGICAL INC 3.23 UNITED STATES Health Care Asset allocation CASTLE BIOSCIENCES INC 3.10 UNITED STATES Health Care describes the share of INSPIRE MEDICAL SYSTEMS INC 3.03 UNITED STATES Health Care investments in specific assets. Above data has been compiled based on daily closing prices and averaged for the reference period. Classification of securities including Sector and Country are determined as at the last day of the reference period. 91 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Annex I – Article 8 Periodic Disclosures continued What was the proportion of sustainability-related investments? What was the asset allocation? #1A Sustainable #1 Aligned with E/S characteristics #1B Other E/S Investments characteristics #2 Other #1 Aligned with E/S characteristics includes the investments of the financial product used to attain the environmental or social characteristics promoted by the financial product. #2 Other includes the remaining investments of the financial product which are neither aligned with the environmental or social characteristics, nor are qualified as sustainable investments. The category #1 Aligned with E/S characteristics covers: – The sub-category #1A Sustainable covers environmentally and socially sustainable investments. – The sub-category #1B Other E/S characteristics covers investments aligned with the environmental or social characteristics that do not qualify as sustainable investments. 92 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Other Information ![Three small blue squares arranged in a 2x2 grid.]() To comply with the EU Taxonomy, the criteria for **fossil gas** include limitations on emissions and switching to fully renewable power or low-carbon fuels by the end of 2035. For **nuclear energy**, the criteria include comprehensive safety and waste management rules. **Enabling activities** directly enable other activities to make a substantial contribution to an environmental objective. **Transitional activities are** activities for which low-carbon alternatives are not yet available and among others have greenhouse gas emission levels corresponding to the best performance. As per end of the reporting period, the fund exhibited following asset allocation according to EU SFDR: ![img-5.jpeg](img-5.jpeg) ### In which economic sectors were the investments made? During the reporting period, the fund was invested in the following economic sectors: | SECTOR | SUB-SECTOR | AVG WGT IN % | | --- | --- | --- | | Health Care | Biotechnology | 23.3% | | | Health Care Equipment & Supplies | 26.0% | | | Health Care Providers & Services | 21.2% | | | Health Care Technology | 5.1% | | | Life Sciences Tools & Services | 10.9% | | | Pharmaceuticals | 10.8% | | other (Cash) | | 2.7% | | Total | | 100.0% | Above data has been calculated based on daily closing prices and averaged for the reference period. Classification of securities including Sector and Country are determined as at the last day of the reference period. During the period under review, the fund was not investing in companies, that derive revenues from exploration, mining, extraction, production, processing, storage, refining or distribution, including transportation, storage and trade, of fossil fuels as defined in Article 2, point (62), of Regulation (EU) 2018/1999 of the European Parliament and of the Council. ### To what extent were the sustainable investments with an environmental objective aligned with the EU Taxonomy? The main objective of this fund is to achieve long-term capital growth by considering E/S characteristics. Therefore, this sub-fund does not currently commit to invest a minimum proportion of its total assets in environmentally sustainable economic activities as defined in Article 3 of the EU Taxonomy Regulation (2020/852). This also concerns information on investments in economic activities that are classified as enabling or transitional activities pursuant to Article 16 or 10(2) of the EU Taxonomy Regulation (2020/852). Bellevue Healthcare Trust plc Annual Report and Accounts 2024 93 Annex I – Article 8 Periodic Disclosures continued Did the financial product invest in fossil gas and/or nuclear energy related 1 activities complying with the EU Taxonomy ? Taxonomy-aligned Yes: activities are expressed as a share of: In fossil gas In nuclear energy – turnover reflecting the share of revenue X No from green activities of investee companies. The graphs below show in green the percentage of investments that were aligned with the EU Taxonomy. As there is no appropriate methodology to determine the taxonomy- – capital expenditure alignment of sovereign bonds*, the first graph shows the Taxonomy alignment in (CapEx) showing the relation to all the investments of the financial product including sovereign bonds, while green investments the second graph shows the Taxonomy alignment only in relation to the investments of made by investee the financial product other than sovereign bonds. companies, e.g. for a transition to a green 2. Taxonomy-alignment of investments 1. Taxonomy-alignment of investments excluding sovereign bonds* economy. including sovereign bonds* 0% 0% – operational Turnover x% x% x% 100% Turnover x% x% x% 100% expenditure (OpEx) reflecting green 0% 0% operational activities of | investee companies. | CapEx | x% x% x% | 100% | CapEx | x% x% x% | 100% | | --- | --- | --- | --- | --- | --- | --- | | | | 0% | | | 0% | | | | OpEx | x% x% | 100% | OpEx | x% x% x% | 100% | | | 0% 50% 100% | | 0% 50% 100% | | --- | --- | --- | --- | | Taxonomy-aligned: Fossil gas | | Taxonomy-aligned: Fossil gas | | | Taxonomy-aligned: Nuclear | | Taxonomy-aligned: Nuclear | | | Taxonomy-aligned (no gas and nuclear) | | Taxonomy-aligned (no gas and nuclear) | | | Non Taxonomy-aligned | | Non Taxonomy-aligned | | This graph represents 100% of the total investments. * For the purpose of these graphs, ‘sovereign bonds’ consist of all sovereign exposures. are sustainable What was the share of investments made in transitional and enabling investments with an activities? environmental objective Transitional activities 0%; enabling activities 0% that do not take into account the criteria for environmentally sustainable economic activities under Regulation (EU) 2020/852. 1 Fossil gas and/or nuclear related activities will only comply with the EU Taxonomy where they contribute to limiting climate change (“climate change mitigation”) and do not significantly harm any EU Taxonomy objective - see explanatory note in the The graphs below show in green the percentage of investments that were aligned with the EU Taxonomy. left hand margin. The full criteria for fossil gas and nuclear energy economic activities that comply with the EU Taxonomy are As there is no appropriate methodology to determine the taxonomy-alignment of sovereign bonds*, the laid down in Commission Delegated Regulation (EU) 2022/1214. first graph shows the Taxonomy alignment in relation to all the investments of the financial product including sovereign bonds, while the second graph shows the Taxonomy alignment only in relation to the 94 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 investments of the financial product other than sovereign bonds. * For the purpose of these graphs, ‘sovereign bonds’ consist of all sovereign exposures. Other Information What was the share of sustainable investments with an environmental objective not aligned with the EU Taxonomy? Sustainable investments are assessed on the basis of their contributions to the 17 United Nations Sustainable Development Goals (SDGs). As those encompass environmental as well as social objectives, a separate minimum quota for E and S cannot be set. Per end of the period under review the fund held 75.8% sustainable investments whereas the total share of sustainable investments in relation to environmental goals of the fund was 5.6%. What was the share of socially sustainable investments? Sustainable investments are assessed on the basis of their contributions to the 17 United Nations Sustainable Development Goals (SDGs). As those encompass environmental as well as social objectives, a separate minimum quota for E and S cannot be set. Per end of the period under review the fund held 75.8% sustainable investments whereas the total share of sustainable investments in relation to social goals of the fund was 70.2%. What investments were included under “other”, what was their purpose and were there any minimum environmental or social safeguards? Hedging instruments, investments for diversification purposes, investments for which no data are available, or cash for liquidity management. What actions have been taken to meet the environmental and/or social characteristics during the reference period? BAM Risk Management and BAM Product Management was periodically checking the portfolios against compliance with our BAM Exclusion list which considers global norms and value-based norms compliance. Moreover, the fund was investing at least 75% of its portfolio in stocks with MSCI ESG rating of at least BB or higher in order to be qualified as an investment with ESG characteristics. With regards to its positive contributions to UN SDGs the fund was investing at least 25% of its portfolio in stocks with a positive alignment to at least one UN SDG (incl. DNSH and good governance). As mentioned above, selected companies were subject of an engagement process and the fund voted for 100% of its holdings. How did this financial product perform compared to the reference benchmark? ? No reference benchmark is defined for the measurement of its ESG characteristics. 95 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 ? ? ? ? Annex I – Article 8 Periodic Disclosures continued How does the reference benchmark differ from a broad market index? N/A Reference benchmarks How did this financial product perform with regard to the sustainability are indexes to measure indicators to determine the alignment of the reference benchmark with whether the financial the environmental or social characteristics promoted? product attains the N/A environmental or social characteristics that they How did this financial product perform compared with the reference promote. benchmark? N/A How did this financial product perform compared with the broad market index? N/A 96 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 Other Information ![Logo consisting of three horizontal bars of varying lengths, with the letters 'D' and 'D' in a stylized font.]() # Notice of Annual General Meeting Notice is hereby given that the Annual General Meeting of Bellevue Healthcare Trust plc will be held on 23 April 2025 at 12 noon at the offices of Stephenson Harwood LLP at 1 Finsbury Circus, London EC2M 7SH, United Kingdom for the following purposes: To consider and if thought fit pass the following resolutions of which resolutions 1 to 12 will be proposed as ordinary resolutions and resolutions 13 to 15 will be proposed as special resolutions. ## ORDINARY RESOLUTIONS 1. 1. To receive the Company's Annual Report and Accounts for the year ended 30 November 2024, with the reports of the Directors and auditors thereon. 2. 2. To approve the Directors' Remuneration Implementation Report included in the Annual Report for the year ended 30 November 2024. 3. 3. To re-elect Josephine Dixon as a Director of the Company. 4. 4. To re-elect Tony Young as a Director of the Company. 5. 5. To re-elect Kate Bolsover as a Director of the Company. 6. 6. To elect Clare Brady as a Director of the Company. 7. 7. To elect Sarah MacAulay as a Director of the Company. 8. 8. To reappoint Ernst & Young LLP as auditors to the Company. 9. 9. To authorise the Directors to fix the remuneration of the auditors until the conclusion of the next Annual General Meeting of the Company. 10. 10. To approve a final dividend of 2.52p per Ordinary Share of the Company in respect of the year ended 30 November 2024. 11. 11. That the proposed investment policy set out on pages 18 to 20 of the Annual Report for the year ended 30 November 2024, be and is hereby adopted as the investment policy of the Company to the exclusion of the existing investment policy of the Company. 12. 12. That the Directors be and are hereby generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006 (the "Act") (in substitution for all subsisting authorities to the extent unused) to exercise all the powers of the Company to allot up to 24,180,403 Ordinary Shares of 1p each in the capital of the Company ("Ordinary Shares"), such authority to expire (unless previously varied, revoked or renewed by the Company in general meeting) at the conclusion of the Annual General Meeting of the Company to be held in 2026 or, if earlier, on the expiry of 15 months from the passing of this resolution, save that the Company may, at any time prior to the expiry of such authority, make an offer or enter into an agreement which would or might require the allotment of shares in pursuance of such an offer or agreement as if such authority had not expired. ## SPECIAL RESOLUTIONS 1. 13. That, subject to the passing of resolution 12, in substitution for any existing power under sections 570 and 573 of the Act but without prejudice to the exercise of any such power prior to the date hereof, the Directors be and are hereby empowered (pursuant to sections 570 and 573 of the Act) to allot Ordinary Shares for cash pursuant to the authority referred to in Resolution 12 above and to sell Ordinary Shares from treasury for cash as if section 561 of the Act did not apply to any such allotment or sale, provided that this authority shall be limited to the allotment or sale of up to 24,180,403 Ordinary Shares, such power to expire (unless previously varied, revoked or renewed by the Company in general meeting) at the conclusion of the Annual General Meeting of the Company to be held in 2026 or, if earlier, on the expiry of 15 months from the passing of this resolution, save that the Company may, at any time prior to the expiry of such power, make an offer or enter into an agreement which would or might require equity securities to be allotted or sold from treasury after the expiry of such power, and the Directors may allot or sell from treasury equity securities in pursuance of such an offer or an agreement as if such power had not expired. 2. 14. That the Company be and is hereby generally and unconditionally authorised in accordance with section 701 of the Act to make market purchases (within the meaning of section 693(4) of the Act) of its Ordinary Shares, provided that: 1. a) the maximum number of Ordinary Shares hereby authorised to be purchased shall be 36,246,425 (representing 14.99% of the Company's issued Ordinary Share capital (excluding shares held in treasury) at the date of the notice of this meeting) or, if different, such amount as represents 14.99% of the Company's issued share capital (excluding shares held in treasury) at the date of the passing of this resolution; Bellevue Healthcare Trust plc Annual Report and Accounts 2024 97 Notice of Annual General Meeting continued b) the minimum price (exclusive of any expenses) which may be paid for an Ordinary Share is 1p; c) the maximum price (excluding expenses) which may be paid for an Ordinary Share is not more than the higher of (i) 5% above the average of the middle market quotations for the Ordinary Shares for the five business days immediately before the day on which it purchases that share and (ii) the higher of the price of the last independent trade and the highest current independent bid for the Ordinary Shares; d) the authority hereby conferred shall expire at the conclusion of the Annual General Meeting of the Company to be held in 2026 or, if earlier, on the expiry of 15months from the passing of this resolution, unless such authority is renewed prior to such time; and e) the Company may make a contract to purchase Ordinary Shares under the authority hereby conferred prior to the expiry of such authority, which will or may be executed wholly or partly after the expiration of such authority and may make a purchase of Ordinary Shares pursuant to any such contract. 15. That a general meeting of the Company other than an Annual General Meeting may be called on not less than 14 clear days’ notice, provided that this authority shall expire at the conclusion of the Company’s next Annual General Meeting after the date of the passing of this resolution. Registered office: 4th Floor 46-48 James Street London W1U 1EZ By order of the Board NSM Funds (UK) Limited Company Secretary 14 March 2025 Bellevue Healthcare Trust plc Annual Report and Accounts 202498 Other Information ## Notes to Notice of Annual General ## Meeting WEBSITE ADDRESS have given different voting instructions, the proxy may, on 1. Information regarding the meeting, including the information a show of hands, vote both “for” and “against” in order to required by section 311A of the Companies Act 2006, reflect the different voting instructions. is available from www.bellevuehealthcaretrust.com. VOTING BY CORPORATE ENTITLEMENT TO ATTEND AND VOTE REPRESENTATIVES 2. Only those holders of Ordinary Shares registered on the 5. Corporate representatives are entitled to attend and vote Company’s register of members at close of business on on behalf of the corporate member in accordance with 17 April 2025 or, if this meeting is adjourned, at close of Section 323 of the Companies Act 2006 provided they business on the day two days (excluding non-working do not do so in relation to the same shares. days) prior to the adjourned meeting, shall be entitled to vote at the meeting. RECEIPT AND TERMINATION OF PROXIES 6. The Form of Proxy and any power of attorney (or a Should a shareholder have a question that they would like notarially certified copy or office copy thereof) under to raise at the AGM, either of the Board or the Investment which it is executed must be received by MUFG Manager, the Board would ask that they either ask the Corporate Markets by no later than 12 noon on 17April question in advance of the AGM by sending it by email 2025 in respect of the meeting. In the case of an to info@bellevuehealthcaretrust.com or attending adjournment, the Form of Proxy must be received by the AGM and asking the question at the meeting at MUFG Corporate Markets no later than 48 hours before the appropriate time. Answers to all questions will be the rescheduled meeting. On completing the Form of published on the Company’s website after the AGM. Proxy, sign it and return it to MUFG Corporate Markets at In the case of joint holders of a voting right, the vote of the address shown on the Form of Proxy in the envelope the senior who tenders a vote shall be accepted to the provided. As postage has been prepaid no stamp is exclusion of the votes of the other joint holders and, for required. this purpose, seniority shall be determined by the order A member may terminate a proxy’s authority at any time in which the names stand in the Register of Members in before the commencement of the AGM. respect of the joint holding. Termination must be provided in writing and submitted to the Company’s Registrar. In accordance with the APPOINTMENT OF PROXIES Company’s Articles of Association, in determining the 3. Pursuant to Section 324 of the Companies Act 2006, time for delivery of proxies, no account shall be taken of a member entitled to attend and vote at the meeting may any part of a day that is not a working day. appoint more than one proxy, provided that each proxy is appointed to exercise the rights attached to different Alternatively, you may appoint a proxy or proxies shares held by him. A proxy need not be a member of electronically by visiting https://www.signalshares.com/. theCompany. You will need to register using your investor code and If Shareholders are not attending the AGM, Shareholders follow the instructions on how to vote. Proxies submitted are strongly urged to appoint the Chairman as their proxy via www.signalshares.com for the AGM must be to vote on their behalf. transmitted so as to be received by the Company’s Registrar, MUFG Corporate Markets, no later than PROXIES’ RIGHTS TO VOTE 48 hours before the time appointed for the meeting 4. On a vote on a show of hands, each proxy has one vote. (excluding weekends and public holidays) or any adjournment of the meeting. Proxies received after that If a proxy is appointed by more than one member and all date will not be valid. such members have instructed the proxy to vote in the same way, the proxy will only be entitled, on a show of If you are an institutional investor you may be able to hands, to vote “for” or “against” as applicable. If a proxy is appoint a proxy electronically via the Proxymity platform, appointed by more than one member, but such members a process which has been agreed by the Company Bellevue Healthcare Trust plc Annual Report and Accounts 2024 99 Notes to Notice of Annual General Meeting continued and approved by the Registrar. For further information CREST members and, where applicable, their CREST regarding Proxymity, please go to www.proxymity.io. sponsors or voting service providers should note that Your proxy must be lodged by 12 noon on 17 April Euroclear UK & International Limited does not make 2025 in order to be considered valid. Before you available special procedures in CREST for any particular can appoint a proxy via this process you will need messages. Normal system timings and limitations will to have agreed to Proxymity’s associated terms and therefore apply in relation to the input of CREST Proxy conditions. It is important that you read these carefully Instructions. It is the responsibility of the CREST member as you will be bound by them and they will govern the concerned to take (or, if the CREST member is a electronic appointment of your proxy. An electronic proxy CREST personal member or sponsored member or has appointment via the Proxymity platform may be revoked appointed a voting service provider(s), to procure that his completely by sending an authenticated message via the CREST sponsor or voting service provider(s) take(s)) such platform instructing the removal of your proxy vote. action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any APPOINTMENT OF PROXY THROUGH particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service CREST providers are referred, in particular, to those sections of 7. CREST members who wish to appoint a proxy or proxies the CREST Manual concerning practical limitations of the through the CREST electronic proxy appointment service CREST system and timings. may do so for the meeting to be held on the above date and any adjournment(s) thereof by using the procedures The Company may treat as invalid a CREST described in the CREST Manual. CREST Personal Proxy Instruction in the circumstances set out in Members or other CREST sponsored members, and Regulation 35(5) (a) of the Uncertificated Securities those CREST members who have appointed a voting Regulations2001. service provider(s), should refer to their CREST sponsor All messages relating to the appointment of a proxy or or voting service provider(s), who will be able to take the an instruction to a previously appointed proxy, which are appropriate action on their behalf. to be transmitted through CREST, must be lodged by In order for a proxy appointment or instruction made no later than 12 noon on 17 April 2025 in respect of the using the CREST service to be valid, the appropriate meeting. In the case of an adjournment, all messages CREST message (a “CREST Proxy Instruction”) must must be lodged with MUFG Corporate Markets no later be properly authenticated in accordance with Euroclear than 48 hours before the rescheduled meeting. UK & International Limited’s specifications and must contain the information required for such instructions, NOMINATED PERSONS as described in the CREST Manual. The message, 8. If you are a person who has been nominated under regardless of whether it constitutes the appointment of section 146 of the Companies Act 2006 to enjoy a proxy or an amendment to the instruction given to a information rights: previously appointed proxy, must, in order to be valid, You may have a right under an agreement between be transmitted so as to be received by the Company’s you and the member of the Company who has agent (ID: RA10) by the latest time(s) for receipt of proxy nominated you to have information rights (Relevant appointments specified in the notice of meeting. For Member) to be appointed or to have someone else this purpose, the time of receipt will be taken to be the appointed as a proxy for the meeting. time (as determined by the timestamp applied to the message by the CREST Applications Host) from which If you either do not have such a right or if you have the Company’s agent is able to retrieve the message by such a right but do not wish to exercise it, you may enquiry to CREST in the manner prescribed by CREST. have a right under an agreement between you and After this time any change of instructions to a proxy’s the Relevant Member to give instructions to the appointee through CREST should be communicated to Relevant Member as to the exercise of voting rights. the appointee through othermeans. Your main point of contact in terms of your investment in the Company remains the Relevant Bellevue Healthcare Trust plc Annual Report and Accounts 2024100 Other Information ![img-6.jpeg](img-6.jpeg) Member (or, perhaps, your custodian or broker) and you should continue to contact them (and not the Company) regarding any changes or queries relating to your personal details and your interest in the Company (including any administrative matters). The only exception to this is where the Company expressly requests a response from you. If you are not a member of the Company but you have been nominated by a member of the Company to enjoy information rights, you do not have a right to appoint any proxies under the procedures set out in the notes to the form of proxy. ## QUESTIONS AT THE MEETING 9. Under section 319A of the Companies Act 2006, the Company must answer any question you ask relating to the business being dealt with at the meeting unless: - answering the question would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information; - the answer has already been given on a website in the form of an answer to a question; or - it is undesirable in the interests of the Company or the good order of the meeting that the question be answered. If Shareholders would like to ask any questions prior to the meeting, Shareholders are invited to submit their questions by email to info@bellevuehealthcaretrust.com or attend the AGM virtually and ask the question at the meeting at the appropriate time. Answers to all questions will be published on the Company's website after the AGM. Please note all questions should be submitted by close of business on 17 April 2025. ## WEBSITE PUBLICATION OF AUDIT CONCERNS 10. Under section 527 of the Companies Act 2006, shareholders meeting the threshold requirements set out in that section have the right to request the Company to publish on its website a statement setting out any matter that such shareholders propose to raise at the meeting relating to 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. Where the Company is required to publish such a statement on its website: - It may not require the shareholders making the request to pay any expenses incurred by the Company in complying with the request; - It must forward the statement to the Company's auditors no later than the time the statement is made available on the Company's website; and - The statement may be dealt with as part of the business of the meeting. ## ISSUED SHARES AND TOTAL VOTING RIGHTS 11. As at 14 March 2025, the total number of shares in the Company in respect of which members are entitled to exercise voting rights is 241,804,038 Ordinary Shares of £0.01 each, additionally the Company holds 73,348,271 of its Ordinary Shares in treasury. The total number of voting rights in relation to the Ordinary Shares in the Company is 241,804,038. ## COMMUNICATION 12. Members who have general queries about the meeting should use the following means of communication: - emailing MUFG Corporate Markets at shareholderenquiries@cm.mpms.mufg.com or calling MUFG Corporate Markets' Shareholder helpline (lines are open from 9:00 a.m. to 5:30 p.m. Monday to Friday, excluding public holidays) +44 371 664 0300. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate; or - in writing to MUFG Corporate Markets at Central Square, 29 Wellington Street, Leeds, LS1 4DL. You may not use any electronic address provided either in this notice of meeting or in any related documents (including the Form of Proxy for this meeting) to communicate with the Company for any purposes other than those expressly stated. Bellevue Healthcare Trust plc Annual Report and Accounts 2024 101 THIS PAGE IS INTENTIONALLY LEFT BLANK Bellevue Healthcare Trust plc Annual Report and Accounts 2024102 Other Information ![img-7.jpeg](img-7.jpeg) # Bellevue Healthcare Trust plc ## Form of Proxy I/We ... of... (BLOCK CAPITALS PLEASE) being (a) member(s) of Bellevue Healthcare Trust plc appoint the Chairman of the meeting, or ... (see note 1) ... of ... as my/our proxy and, on a poll, to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held on 23 April 2025 at 12.00 noon and any adjournment thereof. Please indicate with an 'X' in the spaces provided how you wish your votes to be cast on the resolutions specified. | Resolution | For | Against | Withheld | Discretionary | | --- | --- | --- | --- | --- | | 1. To receive and adopt the Annual Report and Accounts for the year ended 30 November 2024. | | | | | | 2. To approve the Directors' remuneration implementation report. | | | | | | 3. To re-elect Josephine Dixon as a Director. | | | | | | 4. To re-elect Tony Young as a Director. | | | | | | 5. To re-elect Kate Bolsover as a Director. | | | | | | 6. To elect Clare Brady as a Director. | | | | | | 7. To elect Sarah MacAulay as a Director. | | | | | | 8. To re-appoint Ernst & Young LLP as auditors to the Company. | | | | | | 9. To authorise the Directors to fix the remuneration of the auditors. | | | | | | 10. To approve a final dividend of 2.52 pence per Ordinary Share. | | | | | | 11. To approve the new Investment Policy of the Company. | | | | | | 12. To give authority to allot new shares. | | | | | | 13. To give authority to allot new shares free from pre emption rights. | | | | | | 14. To give authority for the Company to purchase its own shares. | | | | | | 15. To authorise calling general meetings (other than Annual General Meetings) on 14 clear days' notice. | | | | | Subject to any voting instructions so given the proxy will vote, or may abstain from voting, on any resolution as he may think fit. Signature ... Dated this... day of ... 2025 Bellevue Healthcare Trust plc Annual Report and Accounts 2024 103 Form of Proxy continued NOTES 1. If any other proxy is preferred, strike out the words “Chairman of the Meeting” and add the name and address of the proxy you wish to appoint and initial the alteration. The proxy need not be a member. 2. If the appointer is a corporation this form must be completed under its common seal or under the hand of some officer or attorney duly authorised in writing. 3. A vote withheld is not a vote in law and will not be counted in the calculation of the proportion of the votes for or against a resolution. 4. The signature of any one of joint holders will be sufficient, but the names of all the joint holders should be stated. 5. To appoint more than one proxy you may photocopy this form. Please indicate the proxy holder’s name and the number of shares in relation to which they are authorised to act as your proxy (which, in aggregate, should not exceed the number of shares held by you). Please also indicate if the proxy instruction is one of multiple instructions being given. All forms must be signed and should be returned together in the same envelope. 6. To be valid, this form and the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power, must reach the registrars of the Company, MUFG Corporate Markets not less than forty-eight hours before the time appointed for holding the Annual General Meeting or adjournment as the case may be. 7. The completion of this form will not preclude a member from attending the Meeting and voting in person. Unless otherwise indicated on the Form of Proxy, CREST, Proxymity or any other electronic voting instruction, the proxy will vote as they think fit or, at their discretion, withhold from voting. 8. Any alteration of this form must be initialled. Your completed and signed proxy form should be posted, in the enclosed reply paid envelope, to the Company’s Registrars, MUFG Corporate Markets, PXS 1, MUFG Corporate Markets, Central Square, 29Wellington Street, Leeds, LS1 4DL, so as to arrive before 12 noon on 17 April 2025. ## # Bellevue Healthcare Trust plc Annual Report and Accounts 2024104 ## Directors, Investment Manager ## and Advisers | DIRECTORS | INVESTMENT MANAGER (“AIFM”) | | --- | --- | | Randeep Grewal (Chairman) | Bellevue Asset Management (UK) Ltd | | Josephine Dixon | 32 London Bridge Street | | Kate Bolsover | 24th Floor | | Paul Southgate | London | | Professor Tony Young OBE | SE1 9SG | Clare Brady* Sarah MacAulay* SECRETARY & ADMINISTRATOR NSM Funds (UK) Limited *Appointed 3 February 2025 4th Floor, 46-48 James Street London CORPORATE BROKER W1U 1EZ J.P. Morgan Cazenove 25 Bank Street AUDITORS Canary Wharf Ernst & Young LLP E14 5JP 25 Churchill Place Canary Wharf DEPOSITARY AND CUSTODIAN London CACEIS Bank, UK Branch Broadwalk House E14 5EY 5 Appold Street London REGISTERED OFFICE EC2A 2DA 4th Floor, 46-48 James Street London REGISTRAR W1U 1EZ MUFG Corporate Markets Central Square LEGAL ADVISER 29 Wellington Street Leeds Stephenson Harwood LLP LS1 4DL 1 Finsbury Circus London EC2M 7SH COMPANY SECURITY INFORMATION AND IDENTIFICATION CODES WEBSITE www.bellevuehealthcaretrust.com ISIN GB00BZCNLL95 SEDOL BZCNLL9 BLOOMBERG TICKER BBH LDN LEGAL ENTITY IDENTIFIER (LEI) 213800HQ3J3H9YF2UI82 GLOBAL INTERMEDIARY IDENTIFICATION NUMBER (GIIN) VL68MY.99999.SL.826 This document is printed on Experian Satin, : a paper sourced from well managed, ® responsible, FSC certified forests and other controlled sources. The pulp used in this product is bleached using an elemental Designed and chlorine free (ECF) process. printed by perivan.com Bellevue Healthcare Trust plc Annual Report and Accounts 2024 ## www.bellevuehealthcaretrust.com ## Healthcare Trust plc