176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:47 Page a ## Schroder British ## Opportunities Trust ## plc ## Report and Accounts for the ## year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:47 Page b ### Investment objective The Company’s investment objective is to deliver long-term total returns throughout the life of the Company by investing in a diversified public equity and private equity portfolio of predominantly UK Companies. ### Target return The Company aims to provide a NAV total return of 10per cent. per annum (once the Company is fully deployed across the target allocation between public and private equity investments) over the life of the Company. ### Investment policy The Company will invest in a diversified portfolio of both public equity investments and private equity investments consisting predominantly of UK Companies with strong long- term growth prospects. It is anticipated that the Company’s portfolio will typically consist of 30 to 50 holdings and will target companies with an equity value between approximately £50 million and £2billion at the time of initial investment. The Company will focus on companies which the Portfolio Managers consider to be sustainable from an environmental, social and governance perspective, supporting at least one of the goals and/or sub-goals of the United Nations’ Sustainable Development Goals (“SDGs”), or which the Portfolio Managers consider would benefit from their support in helping them incorporate SDGs into their business planning and/or in reporting their alignment with SDGs. The Company may, from time to time, use borrowings for investment and efficient portfolio management purposes. Gearing will not exceed 10 per cent. of Net Asset Value, calculated at the time of drawdown of the relevant borrowing. ### Why invest in SBO? • A differentiated public and private investment strategy investing in high growth small & mid-sized UK companies. • Provides access to a far larger universe of high quality, high growth UK companies than available from purely public markets. • Executed by an established team of experienced investment professionals with strong track records, proven processes and extensive networks. • A portfolio that aims to target companies that support the United Nations Sustainable Development Goals. Scan this QR code on your smartphone camera to sign-up to receive regular updates on Schroder British Opportunities Trust plc. The full investment policy can be found on the website. 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:47 Page 1 ## Contents Strategic Report Financial Highlights 2 Chairman’s Statement 3 Portfolio Managers’ Review 5 Investment Portfolio 20 Business Review 21 Strategic Report Strategic Report Governance Board of Directors 38 Directors’ Report 39 Audit and Risk Committee Report 43 Management Engagement Committee Report 46 Nomination Committee Report 47 Directors’ Remuneration Report 49 Governance Financial Statement of Directors’ Responsibilities in respect of the Annual Report and Accounts 52 Financial Independent Auditor’s Report 53 Income Statement 61 Statement of Changes in Equity 62 Statement of Financial Position 63 Cash Flow Statement 64 Notes to the Accounts 65 Annual General Meeting Annual General Meeting – Recommendations 82 Notice of Annual General Meeting 83 Explanatory Notes to the Notice of Meeting 84 Definitions of Terms and Performance Measures 86 Shareholder Information 88 Annual General Meeting Report and Accounts Report and Accounts 1 for the year ended 31 March 2023 for the year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:47 Page 2 ## Financial Highlights Some of the financial measures below are classified as Alternative Performance Measures, as defined by the European Securities and Markets Authority, and are indicated with an asterisk (*). Definitions of these performance measures, and other terms used in this report, are given on page 86 together with supporting calculations where appropriate. ### Returns for the year ended 31 March 2023 (31 March 2022: Public 35.2% % % 57.6%) ## +3.1 -18.5 Private 64.8% (31 March 2022: 42.4%) | (Nine months | | | (Nine months | | | | --- | --- | --- | --- | --- | --- | | ended 31 March | | | ended 31 March | | | | 2022: | 1 -4.0%) | | 2022: | 1 -20.0%) | | | | | Share price | | | Equity holdings | Net asset value (“NAV”) per share ### Other financial information 31 March 2023 31 March 2022 % Change Shareholders’ funds (£’000) 79,311 78,103 +1.5 Shares in issue 73,900,000 75,000,000 (1.5) NAV per share (pence) 107.32 104.14 +3.1 Share price (pence) 68.50 84.00 (18.5) Share price discount to NAV per share* (%) 36.2 19.3 2 Net cash* (%) (9.8) (19.8) Year ended Nine months ended 1 31 March 2023 31 March 2022 Net revenue loss after taxation (£’000) (639) (577) Net revenue loss per share (pence) (0.86) (0.77) Dividend per share (pence) – – 3 Ongoing Charges* (%) 1.47 1.39 1 The Company changed its accounting date to 31 March commencing 1 July 2021. The comparative figures cover the nine month period from 30 June 2021 to 31 March 2022. 2 Borrowings used for investment purposes, less cash, expressed as a percentage of net assets. The Company currently has no borrowings, so this is shown as a negative, net cash figure. 3 Based on annualised ongoing charges where the financial year is less than a full year, in accordance with Association of Investment companies (“AIC”) guidance. Schroder British Opportunities Trust plc 2 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:47 Page 3 ## Chairman’s Statement | I am pleased to present | during the period under review from -19.3% to -36.2% as at | | | --- | --- | --- | | your Company’s third | 31March 2023. The share price falling to this higher discount | | | report and accounts since | correlates with market sentiment towards growth stocks and | | | the launch of the Company | private equity investment companies in particular. It | is | | in 2020. This report covers | frustrating when our share price does not reflect the | | | the year ended 31March | performance or the potential of the Company’s portfolio. | | 2023. Further comment on performance and portfolio activity can be found in the Portfolio Managers’ review. ### Investment policy Strategic Report ### Your Company invests in a Valuations diversified mix of public and The portfolio has a mix of public and private equities. Public private companies, either investments are obviously valued at the prevailing market based in the UK or price. Shareholders in investment companies with a private generating a significant portfolio are often sceptical of valuations when they don’t see proportion of their revenue in the UK. We seek to invest in them change as much or as rapidly as they do in many public companies with potential for high growth and with strong companies. Your Board considers its governance role in the ESG credentials, particularly where we believe these to be private equities valuations process to be of utmost undervalued by the market. Our objective is to deliver long importance. We are fortunate to have a specialist valuations term and sustainable capital growth for shareholders. team within Schroders, who are independent of the Portfolio Managers, and who report their findings directly to the Board. The results we are reporting reflect their in-depth ### Performance analysis and a discursive and challenging valuations process. In all cases, we use public market comparables. Shareholders will be fully aware of the significant market volatility throughout the year under review. The war in In December 2022, revised international private equity and Ukraine, inflation, rising interest rates after a prolonged venture valuations (IPEV) guidelines were issued, built on period of close to free money, highly priced US technology industry best practice. Shareholders will be comforted to stocks falling in value and the contagion from that, have all learn that the Company’s valuation process was already fully been factors. Fast growing companies that need cash to fuel compliant with these guidelines. their growth have generally been out of favour, but this sentiment has also hit other growth companies that are profitable already or have cash reserves that will fund them ### Discount management through to that point. The Board monitors the Company’s discount levels and In certain areas of the private equity market there has been regularly reviews its share buyback policy. The Board significant downwards revaluation, although this has instigated a highly accretive buyback, seeking to convey to generally not been the case in the part of the market that we the market our confidence in the value of the portfolio. focus on. We are not venture investors. We focus on the 1,100,000 shares were purchased by the Company and are growth and the buyout sector. Of the Company’s portfolio of being held in treasury. These shares can be reissued when nine private businesses, diversified across sectors, eight are the share price recovers to a premium to NAV. either profitable or on a clear path to profitability. These companies have an average of c.40% revenue growth and good margins. Our decision to focus on this area of the ### private equity market has proved to be the right one in this Dividend environment. Our private portfolio contributed 10% to the No dividend has been declared or recommended for the year. Company’s NAV during the period under review. Your Company is focused on providing capital growth and The Company’s public holdings fell slightly in value as UK has a policy to only pay dividends to the extent that it is small and mid-cap stocks were badly affected by the macro necessary to maintain the Company’s investment trust status. factors affecting the market. Despite this difficult environment, it is pleasing to report that ### your Company’s NAV increased by 3.1% during the period Portfolio Managers (from 104.14p to 107.32p). This positive overall result The Company’s portfolio has been co-managed by Rory highlights the benefit of blending public and private Bateman (Schroders’ Co-Head of Investment and Head of companies together in one portfolio. Equities), and Tim Creed (Schroders Capital’s Head of Private Unfortunately, this robust NAV performance did not produce Equity Investments). In view of recognising talent within the a commensurate improvement in our share price, which team, Uzo Ekwue and Peraveenan (‘Pav’) Sriharan will suffered a decline of -18.5%. The discount to NAV widened additionally join them as Co-Managers of the portfolio. Uzo is 1 Allocation % calculated using 6th of June 2022 Gross Asset Value with Private Equity valuations as at 31 December 2021 2 Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Report and Accounts 3 for the year ended 31 March 2023 # Chairman's Statement a Fund Manager within Schroders' UK Equity team, where she manages assets across the market cap spectrum. She joined Schroders in November 2020 and has been working closely alongside Rory since the Company's inception. Pav covers Schroders Capital's private equity investment activities in Europe and forms part of the technology and consumer sector groups. He started at Schroders in September 2012 and joined the private equity team in January 2022, and has been working closely with Tim on the Company's private investments since then. ## Board Chris Keljik, a non-executive Director since our IPO, resigned in February for personal reasons. We thank him and wish him well. The Board decided not to replace Chris immediately, conscious of our relatively small size and expense ratio. Chris's role as Chair of the Management Engagement Committee has been taken by current non-executive Director, Professor Tim Jenkinson. We believe the Board has adequate resources to manage workloads at this time but expects to recruit a replacement in due course. We will seek to add diversity to the Board when doing so. The Board completed an evaluation of its performance during the year, taking input from Directors and related parties. It was concluded that Board performance was either at or above the standard in all areas measured. ## Presentation from the Portfolio Managers Our Portfolio Managers will be presenting at a webinar on Tuesday, 11 July 2023 from 10-11 am to provide some insight into their decision making and the current portfolio. Shareholders are encouraged to register for the event at: https://registration.duuzra.com/form/SBOAnnualResults23. Regular news about the Company can be found on the Company's website: https://www.schroders.com/en/uk/private-investor/fundcentre/funds-in-focus/investment-trusts/schrodersinvestment-trusts/never-miss-an-update ## AGM Our AGM will be held on Wednesday, 27 September 2023 at 1.00 pm at 1 London Wall Place, London EC2Y 5AU. Your Board welcomes shareholders' comments and questions for them or for the Portfolio Managers. A short presentation will be given by the investment management team at the meeting. Please contact us via our Company Secretary's email: amcompanysecretary@schroders.com or, if you prefer to write in, to: The Company Secretary, Schroder British Opportunities Trust plc, at the above address. We will endeavour to get your questions answered at or prior to the AGM and will be providing answers to commonly asked questions on our webpage. Shareholders are encouraged to cast their votes by proxy to ensure that they are counted. The Directors consider that all of the resolutions listed are in the best interests of the Company and its shareholders and therefore recommend a vote in favour of each, as the Directors intend to do in respect of their own holdings. ## Why invest in SBO today? I am often asked by private investors and wealth managers why they should invest in SBO at this time. If asked that question today, my response would be: - 65% of total investments are in private companies. - Eight of these nine investments are already profitable or have a clear pathway to profitability, that have in aggregate grown sales 40% over the past 12 months. - We have had nine successive quarters of an increase in the valuation of the private portfolio. - We also have some interesting positions in UK small to mid-cap public companies, which we expect to benefit from a re-rating when markets recover. ## Outlook The current economic environment is challenging and many company valuations are trading close to historic lows. In a number of cases there is disconnect between an investment company's share price and the value of its portfolio holdings, and that is certainly the case here. Your Board and the Portfolio Managers view our current discount as unjustly high and expect to see this start to close in the coming months. Having avoided a recession, the UK's economy is showing some positive signs with inflation seemingly peaked, which in turn should limit further interest rate rises. Small and mid-cap stocks are expected to be early beneficiaries from any recovery. The Company had £7.8 million in cash as at 31 March 2023, and therefore is well positioned to take advantage of new attractive investment opportunities. Our differentiated public-private equity strategy enables us to continue to invest without boundaries, thus providing access to a broader investable universe. Our current portfolio of growing and innovative British companies are expected to perform well. The patient investor that can look beyond the recent and current environment should be well rewarded. Neil England Chairman 5 July 2023 Schroder British Opportunities Trust plc 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 5 ## Portfolio Managers’ Review ### Introduction ### Summary Strategic Report Figures as at 31March 2023. *Based on EBITDA profitability. ### The investment case At present, there are many instances where there is a Firstly, the UK is among the lowest valued of any regional disconnect between an investment company’s share price stock markets at present, with a notable valuation discount to and the value of its portfolio holdings, and we believe this is global peers (illustrated in the below figure). This provides certainly the case with the Company. We believe the investors with the opportunity to invest in UK assets at a investment case is currently enhanced by two forms of discount to what they would be worth if they were listed, in discount. say, the US. UK equities unloved: valuations extremely low relative to global equities in a historical context !"#$#%"$&'()*+,*-$#%) .,*/+,&",',0)*0")1 23/&,,4 !"#$%&'$()*'&$+,-'&*(&.$/0$1234$56&'$37$85,9)($ O5- @($5,$?@*A+90B$='5C +,=$*,.$85(9A0$%'5 > +9 */A&$ <%%&+)1.()#$(.$=1&)"2$>!$/&7%-.("' 95$13$:*'-)$7;71 -58%* ,+&($PQR4$5>$95 9*A$+,6&(98&,9($C&'&$ U]$(8*AA$*,.$8+.$-*%($)*6&$(@/(9*,9+*A$'&W'*9+,=$ Average valuation premium/(discount)*: MSCI UK vs MSCI World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| I4: *=*+,(9$-)*AA&,=+,=$8*'G&9$/*-G.'5% | | | | | | --- | --- | --- | --- | --- | | | | *65+.+,=$*'&*($*9$='&*9&'$6*A@*9+5,$'+(G | 5"6$2+(*"+'$&?$@8$7-+A")$+")1+.' | | | I4N | | X+(-5,, & -9$/&9 C&&,$()*' &$%'+-& $* ,.$6*A@ &$5>$ | <9'*9&=+&($>5-@(&.$5,$+.&,9+>0+,=$-58%*,+&($9)*9$ | | | | Source: Morgan Stanley Research. 1January 1988 to 31 May 2023. MSCI UK versus MSCI World. *Based on blended valuation metric comprised of price- | | | -.#$ | | !"#$%&'()(*"'$&*"+$),"$#"-+$(./012"23 | | %5'9>5A+5$)5A.+, =( | &M)+/+9$(9'5,=$@,.&'A0+,=$>+,*,-+*A$%&'>5'8*,-&$ | | | I9: | to-earnings, price to book value and dividend yield. | | | /0%&1+$ | %5+(&.$95$.5$C&AA | | H:+,9&- | | 5"6$(.*"' )7". )' | | %&'()*+, | | --- | --- | --- | --- | --- | --- | | I9N | | For illustrative purposes only and should not be viewed as a recommendation to buy or sell. | | N@0$*,.$/@+A.$(9'*9&=+&($*A(5$)*6&$%59&,9+*A$95$ | | | | HI&'* | | :+,9&-B$IOIB$K+'@8$P@,?@59&.T$*,.$ | | | (@--&&. N09&($Y&-),5A5=0$P?@59&.T I8: H J*(0K*'G B1)1+"$(.*"')7". )' 89()"2 $:(2' I8N [Q2^8$-*()$%5(+9+5,$P*($*9 13$:*'-)$7;71T$95$ J@'585,&0B$J:Z<$*,.$Z.&*=&,$(5A.$*>9&'$ | !"#$."4-)(*"'$&*"+$),"$#"-+$(./012"23 | | | .&%A50$+,$65A*9+A&$8* ' G&9( | | | --- | --- | --- | --- | --- | | IO: | | '&- &+6+,= $/+.(B$+AA@ (9'*9+,=$(@--& (($+,$+. &,9+>0 +,=$ | | | | | H L'*% ) -5 '& | @,.&'6*A@&.$/@(+,&((&( | :5'&$>A& M+/+A+90$9 5$+,6& (9$+,$K J $ +,6&(9 8&, 9($*($ | "!#$ | Report and Accounts | ION | | | E;_E;$=@+.*, -&$*,.$9) &$%'+6*9&$&?@+90$A+8+9$ | | %&'()*+, | 5 | | --- | --- | --- | --- | --- | --- | --- | | | H ! *9+5, *A$JM% ' &(( | ;(' )+(:1)(&. | | | | | | | | | '&85 6&. | for the year ended 31 March 2023 | | | | IN: | HLN$L'5@% | O+'(9$-*()$=&,&'*9+5,$P[72R8T$>'58$%'+6*9&$&?@+90$ | | | | | | | 77 77 76 76 6: 6: 64 69 69 68 68 6O 6N 6N 6P 6P 6Q 6Q 67 66 66 :: :: :4 :9 :9 :8 :8 :O :O :N :P :P :Q :Q :7 :6 :6 4: 4: 44 44 49 48 48 4O 4O 4N 4P 4P 4Q 4Q 47 47 46 9: 9: 94 94 99 98 | )5A.+,=( B$> 5AA5C+,=$I@AA+=*,$*,. $\*9 &'A5=+-$ | | | | | -58/+,*9+5 , B'1.", # Portfolio Managers' Review Furthermore, listed UK small and mid-cap companies (the focus of the portfolio's public equity allocation) have notably underperformed UK large caps over the past year, as fast-growing small and mid-cap businesses in new and emerging industries were shunned for most of the period in preference for large companies able to return cash today. We are confident that UK small and mid-caps are poised to do well from here, which we discuss in the outlook section. Secondly, the Company's shares are priced at a discount to NAV, which we believe is driven by exogenous factors. To demonstrate this, in early 2022 the shares reached a modest premium to NAV until unexpected geopolitical factors and negative sentiment around the private equity asset class drove the Company's shares to trade at a discount. While the discount grew throughout the course of the year, it has recently stabilised for several months at the low-to-mid 30% region. While other private equity-exposed investment trusts have also slipped to a discount, the operational performance of the Company's unlisted holdings has, in aggregate, been very positive since inception and momentum remains generally strong, illustrated by the below underlying metrics and ultimately by continued valuation uplifts. ## Key private equity allocation metrics ![img-0.jpeg](img-0.jpeg) **Sales growth** (last 12 months) ![img-1.jpeg](img-1.jpeg) **EBITDA margin** (last 12 months) EBITDA = earnings before interest, taxes, depreciation and amortization. EBITDA margin is a measure of a company's operating profit as a percentage of its revenue. Weighted averages using latest last 12 month figures available. We believe this operational performance reflects the resilient characteristics we are seeking to invest in and the maturity of our portfolio companies, which are already at profitability (74% as at 31 March 2023¹) or approaching it, while growing revenues quickly. In short, we believe the combination of these two discounts provides a window of opportunity for investors to buy a quality, fast-growing portfolio of predominantly UK businesses at a wide discount. Additionally, the winding-up resolution, a feature of the Company since its inception, should act as a catalyst to the closing of the discount². While only an illustration, assuming a recent discount of 33% to net asset value remains, this may imply that investors could see an approximate 8.5% annualised return on their investment from now until 31 May 2028 (assuming a hypothetical crystallisation of all investments on 31 May 2028). While only illustrative, we believe this is a notable return profile. If the discount exacerbates, the return increases further. We have modelled this below for illustrative purposes. While it may be argued that this annualised return is only achievable if we realise par, we are confident this is achievable as cash is tradeable at cash, the public equity portfolio is valued at market and the private equity portfolio is valued above cost despite turbulent markets. ¹On an EBITDA profitability view ²The Articles require the Directors to put forward, at a general meeting of the Company to be held in the year 2028 but in any event no later than 31 May 2028, a winding-up resolution to place the Company into voluntary liquidation. ## Illustrative example: implied annualised return **Implied annualised return** From 5 July 2023 until 31 May 2028 ![img-2.jpeg](img-2.jpeg) Source: Schroders. For illustrative purposes only. Readers of this document should not rely on forward-looking statements due to the inherent uncertainty. Implied annualised return represents the extended internal rate of return, taking into account cash flows and discount rates, as well as the corresponding dates. 6 Schroder British Opportunities Trust plc 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 7 ## Portfolio Managers’ Review While private equity valuations have held up better than ### Market those of public markets, the asset class has not been immune Over the 12 months to end March 2023, UK small and mid- to global economic headwinds, inflation and increased cap stocks performed poorly as their valuations were interest rates. Our focus is on the small to mid-market area of negatively impacted by rising interest rates, as Russia’s the UK private equity landscape, but we believe the following invasion of Ukraine looked set to prolong the inflation provides useful insight into recent activity to contextualise problem facing developed economies. UK mid-caps and UK the period under review. Following a stellar year in 2021, deal small caps (represented by the FTSE 250 and FTSE Small Cap volumes in the UK mid-market private equity segment fell by indices) saw total returns of –7.9% and –9.0% respectively, 19% year-on-year in 2022 (from 843 deals to 680 deals), while while UK large caps (represented by the FTSE 100) returned the total deal value fell 6% (from £49.1bn to £46.0bn). Despite 3 +5.4%. The UK small and mid-cap area of the market has a these year-on-year decreases, this was still a relatively strong Strategic Report larger contingent of fast-growing businesses in new and year for private equity deals in the context of the last five emerging industries, which were shunned for most of 2022 in years. Additionally, exit volumes fell by nearly 23% year-on- preference for large companies able to return cash today. At year in 2022 (from 189 exits to 146 exits), while the total exit 4 the same time, higher interest rates threatened to further value fell 55% (from £19.1bn to £8.6bn). Conspicuously there squeeze consumers also struggling to cope with soaring were no IPO exits over the year, which is most likely energy and food costs, weighing heavily on quoted retailers, explained by uncertainty in markets. as well as the travel and leisure and home construction sectors. These and other domestically focused companies are well represented in UK small and mid-cap indices. Valuations ### Portfolio performance reached very depressed levels in the autumn when some ill- advised policies from the Liz Truss government spooked Since the Company’s IPO in December 2020, the net asset markets. A collapse in sterling and soaring market interest value has been resilient despite a volatile market backdrop. rates threatened to heap further pressure on consumers and The portfolio’s combined exposure to both public and private businesses, although a new government was able to restore equity markets has provided NAV stability since inception, confidence and stability to asset prices relatively quickly. with the portfolio’s listed holdings driving returns in the More broadly, hopes built towards the back end of 2022 that Company’s first reporting period to 30June 2021, while central banks might ‘pivot’ to cutting interest rates in late strong performance of the unquoted portfolio allocation 2023 also contributed to a recovery in UK small and mid-caps. provided a substantial cushion to falls in asset prices over the Domestically focused companies recovered particularly well 9month reporting period to the end of March 2022, before during this phase as the UK economy performed much more also driving the Company’s positive NAV development over resiliently than feared as European wholesale energy prices the past 12months to the end of March 2023. Indeed, eight fell back very sharply. out of the nine unquoted holdings are performing well with uplifts to their original valuations. Share price and NAV per share performance since inception to 31December 2022 439: 434: 43:: )+$K&-(A"M,-#$,J( Source: Schroders, Morningstar. NAV per share does not include latest quarterly revaluation of private equity holdings 12EH-(H$"F(*$"M-2(-"(?+.#& :36: 3 Source: FTSE Russell, 12 months to 31 March 2023, in GBP. 4 :37: Source for data: KPMG UK Mid-market PE review, February 2023. :3Q: :3P: | X#D.E%(&Y#E-/(+.."%+-E",(F+E,(%",-$ED#-"$(-"( | | | | Report and Accounts | | | --- | --- | --- | --- | --- | --- | | | | X$E?+-&(&Y#E-/(+.."%+-E",(F+E,(%",-$ED#-"$(-"(UVW(G&$H"$F+,%&( | | | 7 | | | UVW(G&$H"$F+,%&( | | for the year ended 31 March 2023 | | | :3N: T&%(9: )+$(94 5#,(94 !&G(94 T&%(94 )+$(99 5#,(99 !&G(99 T&%(99 )+$(98 !2+$&(G$E%& UVW(G &$(12+$& 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 8 ## Portfolio Managers’ Review Below, we focus on the past 12 months and discuss what has driven the increase in the Company’s net asset value. Attribution analysis (£m) for 12 months to 31March 2023 Quoted Unquoted Net cash Other NAV Value as at 31March 2022 37.3 27.4 15.5 (2.1) 78.1 + Investments 4.7 15.1 (19.8) – – – Realisations at value (11.2) (2.4) 13.6 – – +/- Fair value gains/(losses) (4.6) 7.8 – – 3.2 +/- Costs and other movements – – (1.5) (0.5) (2.0) Value as at 31March 2023 26.2 47.9 7.8 (2.6) 79.3 5 Key positive and negative performers over the 12 months The net asset value increased 1.5% over the period, which to 31March 2023 comprised: • Quoted holdings: -5.9% Top 5 contributors Contribution % • Unquoted holdings: +10.0% Mintec 2.9 • Buybacks: -1.0% Cera 2.6 • Costs and other movements: -1.6% EasyPark 2.1 In a challenging environment, the portfolio’s private equity CFC 1.9 (unquoted) holdings have continued to perform well in Culligan (formerly Waterlogic) 1.7 aggregate and the overall resilience of the private equity holdings has been particularly pleasing. We believe that the Company’s private equity focus on the ‘growth capital’ and Bottom 5 contributors Contribution % ‘buyout’ areas of the private equity landscape, in contrast to venture capital and pre-IPO areas, which have been more Graphcore –1.8 negatively impacted by rising inflation and interest rates, has National Express –1.0 contributed to the resilience of the NAV. Looking closer at the past 12 months, transactional activity (e.g. add-on GB Group –1.0 transactions and financing rounds) and trading gains of the Ascential –0.9 unquoted holdings in aggregate have driven strong performance, despite multiple contraction which Genuit –0.7 demonstrates the prudent valuation approach applied. Source: HSBC, as at 31March 2023. Numbers have been rounded Private equity allocation attribution – 12 months to 31March 2023 '#($$ ,#"$$ %#&$$ )(#*+$ ),#%+$ )*#%+$ !"#!$$ !"#$%% 5("%$$%1*, The Company’s private equity allocation has seen significant Transformational add-on acquisitions executed by Waterlogic | | 6 | | 6789 | | --- | --- | --- | --- | | EBITDA | development, driven by strong organic and | (combination with Culligan) and Mintec (with its acquisition of | | | inorganic growth, which is illustrated by the figure below. | | Agribriefing for example) have enhanced total EBITDA. | | 5 The net asset value increase of 1.5% differs to the 3.1% increase in NAV per share over the period due to share buybacks conducted over the period. 6 EBITDA = earnings before interest, taxes, depreciation and amortisation. It is used as a measure of a company’s profitability, specifically representing cash profit generated by a company’s operations. Schroder British Opportunities Trust plc Z$+,1+%-E",+.( 8 +%-E?E-/(+-(G"$-H".E"( ;"FG+,/(G&$H"$F+,%&(+,A(?+.#+-E", %"FG+,E&1 !"#$$#%&' %()#*+,(-./(+.- 01/23+4#(,(+.- 5637*+8#83*+- '39:3.*1+#/:9.*29( %(.#7(;. <=>1.?(6 @*-.6*;:.*1+#AB3.(6918*CD !"#$E#%&' 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 9 ## Portfolio Managers’ Review EBITDA development of the Company’s private equity We like companies that employ market consolidation allocation: 12 months to 31 March 2023 strategies (often referred to as “Buy and Build”) as these often allow companies to consolidate fragmented markets and smaller competitors, and complementary business can be bought, typically at lower multiples, leading to immediate multiple accretion. Our companies have been very active in employing this strategy. Furthermore, organic growth delivered through market expansion, new product development, cross and upselling and curating strategic partnerships were some of the levers employed to deliver strong EBITDA accretion. Strategic Report 7 The growth seen by our profitable private equity portfolio companies, in both revenue and profit-based KPIs, is almost double that of publicly listed comparables. Nonetheless, we 8 are marking these profitable companies at a c.25% discount to public comparables. This reiterates our valuation prudence. Source: Schroders EBITDA-positive private equity portfolio companies valued at notable discount to public markets Source Schroders. 1. Peer group specific sector comparables. 2. The Rule of 40 is a principle that states a software company’s combined revenue growth rate and profit margin should equal or exceed 40% to demand premium valuations Turning to individual private equity portfolio companies, a to-food commodity prices, forecasts, cost-modelling tools key contributor over the year was Mintec, the world’s leading and fundamental market data, serving over 5,000 customers independent provider of global commodity price data & in 50 countries. market intelligence, which was added to the portfolio in the Cera Care, Europe’s largest provider of digital-first home first half of 2022 and has seen its fair value almost double | Sales growth outperformed public | | with a similar profitability outperformance… | healthcare, was a strong contributor over the year following a | continuing to trade at a ~25% discount to | | --- | --- | --- | --- | --- | | | 1) since. Over the period, the company acquired French | | | | | comparables | by two-fold... | | | public markets | further funding round to accelerate its growth in August business CommoPrices, an independent provider of £ millions LTM sales growth (%) Rule of 40 (%) 2 2022, in which the Company made an additional investment. EV/EBITDA multiple (x) commodity price data and analysis, and more recently 4 4343.4.43.4443.4 58.2 We were pleased to have been able to participate in Cera’s Agribriefing, which comprises multiple global brands 77775.35775.3.775.33775.3 latest financing and help them empower those in the care specialising in agri-food supply chains through its products 52.2 sector. Ageing populations, post-pandemic recovery and and proprietary data. These acquisitions complemented the 93.3 major staff shortages have created a series of issues facing company’s investment in Kairos, a provider of commodity 3131.8x.31.8x831.8xx31.8x healthcare providers and governments. Cera’s proposition is market intelligence and commodity risk management, 307.5 88989%%89% 4040%%40% 4 positioned to address these challenges. More recently, the bought in 2021. These acquisitions have established Mintec company has taken further steps to strengthen its offering 97.7 as the largest agri-food-focused price reporting agency and through the use of artificial intelligence, launching “Cera global information provider with a unique portfolio of feed- 2 2323.1x.23.1x123.1xx23.1x Brain”, a platform that helps to automate and power Cera’s 7 EBITDA-positive. 16166.46166.4.166.44166.4 2121%%21% 8 4444%%44% Discount between the average of the respective portfolio Company’s EBITDA valuation multiple against the respective peer group sector comparable averages, which has been elected by the independent Report and Accounts valuation team. 9 for the year ended 31 March 2023 Q1-22 New Transformative Organic Inorganic Q1-23FX investments add-on Sector-specific public reference markets EBITDA positive PE portfolio companies # Portfolio Managers' Review care delivery operations. This is discussed in further detail in the top 10 holdings section below. The Company's holding in EasyPark, the parking tech company that helps drivers to find, manage and pay for both parking and electric vehicle charging, saw its valuation increase over the period. The company continues to grow and strengthen its position as the parking tech company with the widest coverage in the world. In 2022, EasyPark grew both in new and existing markets, adding new cities such as Paris and Boston, as well as new countries, such as Slovakia. From an operational perspective, the company continues to deliver very strong transaction and monthly active user volumes. A further contributor was global designer, manufacturer, distributor and service provider of purified drinking water dispensers, Waterlogic, which completed its merger with Culligan International – the innovative brand in consumer-focused, sustainable water solutions and services. The merger led to the Company receiving £2.4m in sales proceeds, which is a key milestone considering the Company only launched in December 2020. As at 31 March 2022, the Company's holding in Waterlogic was valued at £6.0m. As at 31 March 2023, and following the £2.4m distribution, the holding was valued at £5.1m. The Company's holding in CFC, one of the world's most successful technology-led insurance platforms and a global leader in the cyber market, was another strong contributor over the year. CFC operates a unique model in the insurance industry, and benefits from a 20-year track record of innovative insurance products. Cyber risk is a fast-growing market and CFC are well positioned from an insurance perspective in this space to increase market share. On the more challenging side, Graphcore, which was added to the portfolio towards the end of 2020 as part of a $222m Series E funding round alongside Ontario Teachers' Pension Plan, Fidelity International and existing Graphcore investors, has been revalued downwards over the year. Graphcore, which has developed a next generation processor for machine learning and AI applications, is currently facing a challenging market environment given the long sales cycles that surround such revolutionary technologies. Additionally, the company has not been immune to the US Department of Commerce's sweeping set of export controls to restrict China from certain semi-conductor chips and chip-making equipment announced in early October 2022. The scale of the artificial intelligence and machine learning opportunity longer term remains immense and Graphcore's technology continues to set new benchmarks in performance. The situation is developing, and we continue to monitor it closely. As mentioned in the market section above, UK small and mid-caps in the public equity market fared relatively poorly over the period and, given the focus of the portfolio's public allocation of investing in small and medium-sized businesses listed in the UK, performance was challenging for this part of the portfolio in absolute terms. In particular, the share price performance of holdings in National Express, GB Group, Ascential and Genuit weighed on returns. However, there were bright spots, with the Company benefiting from M&A activity in the market, as holdings in Euromoney, Ideagen and EMIS Group were all subject to takeover bids over the period, with all three positions subsequently exited. Meanwhile, shares in Volution Group, a leading supplier of ventilation products, performed well. In March 2023, the company reported a strong set of interim results, with half year revenues and adjusted operating profits up 8.5% and 7.1% respectively year-on-year, following on from strong annual results published in October 2022. ## Revenue growth and analysis The public equity element of the portfolio has an aggregate weighted average revenue growth of 71.5% over the last financial year.⁹ We believe it is useful to contextualise the performance of the portfolio's public equity allocation in the wider context of other UK smaller-company investors. For illustrative purposes, when comparing the Company's public equity allocation performance to the IA UK Smaller Companies peer group, it ranks in the first quartile over the 12 months to 31 March 2023.¹⁰ ## Portfolio positioning & activity The portfolio is diversified across a number of industry sectors, and in the chart below we show the split of the portfolio as at 31 March 2023. We believe that diversification is key to the protection of capital. Whilst some areas of the market may be in favour in certain periods, we believe that a diversified portfolio should better protect investors in the long run, with more stable investment returns. ### Portfolio breakdown by industry as % of total investments ![img-3.jpeg](img-3.jpeg) Source: Schroders, as at 31 March 2023. The portfolio has been constructed from the bottom up, with a focus on high growth businesses. The result is a portfolio that is well-exposed to companies with a technology offering (notably in software & IT services areas of the market), which reflects the digitalisation age of today as well as our belief that this is likely to continue. However, the portfolio is well diversified to include other sectors, such as consumer ⁹Past performance is not a guide to future performance and may not be repeated. Revenue growth calculated using the last two financial year revenue figures for each public portfolio company. Weighted averages calculated using each position as a proportion of total public equity holdings in the portfolio. ¹⁰Source: Schroders, Morningstar, Aladdin. Rankings are based on the performance of the public equity portion of the Company (excluding cash). The IA UK Smaller Companies peer group median average ongoing charge (0.90%) was applied to the Company's public equity gross performance and compared against the IA UK Smaller Companies peer group (net of fees). 10 Schroder British Opportunities Trust plc 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 11 ## Portfolio Managers’ Review services, media, hotels, restaurants & leisure and financial Where we have invested in companies that have not yet services. reached profitability, they are well-funded at point of investment and possess a clear route towards profitability, We invest in growing companies that have a number of and we expect them to deliver substantial value over the long attractive characteristics that we believe should allow them to term. withstand challenging economic environments and prosper. Whilst the macroeconomic backdrop is expected to ebb and The portfolio’s private equity allocation is not focused on the flow, our core focus is to invest in quality, growth companies pre IPO or ‘crossover’ area and earlier-stage venture capital that have strong balance sheets and that can sustainably companies that had witnessed notable negative impacts to compound their earnings over the long run. These are valuations during the downturn of late, putting some of them typically companies that have considerable pricing power, at funding risk. In contrast, it is focused on growth capital market leadership (or an opportunity to gain scale via and small/mid-market buyout-stage companies, where Strategic Report consolidation), attractive unit economics and strong valuations have contracted in some cases but declines have management teams. While there is exposure to the wider been moderate in comparison and notably have been offset consumer discretionary sector, which continues to face by robust growth in financial performance. The businesses significant inflationary risk, we believe the characteristics of the Company is investing in have already cleared the higher our investments mean they are well-positioned to navigate risk hurdles, and are now generating revenues, building scale the current landscape and beyond. Furthermore, our and either already profitable or close to it. That does not investments are typically profitable, with profitable mean they are risk free but the portfolio has already been 11 companies making up 74% of total investments as at substantially de-risked and the individual businesses within it 31March 2023. are now focused on fulfilling their significant growth potential. Source: Schroders. For illustrative purposes only and should not be viewed as a recommendation to buy or sell. *Where we denote Valuation risk as the risk around the perceived value of an underlying asset whereas investment risk encompasses a broader set of risks beyond valuation including but not limited to factors such as market dynamics, economic conditions and industry specific risks. Following the resolutions of the Company’s 2022 AGM in These were followed in June by the announced investment September 2022, the 50:50 public/private allocation guidance into Pirum (through Bowmark Capital), a leading provider of and the private equity limit of 60% of the Company’s gross post-trade automation and collateral management asset value were removed, providing us with greater technology for the global securities industry. We had been flexibility to take advantage of further private equity tracking these businesses for an extended period prior to opportunities. Since then we have explored a number of investment through our long-term relationships with private further investments for the portfolio but have rejected a equity firms Synova, Vitruvian Partners and Bowmark Capital, number, largely as a result of maintaining price discipline. and were delighted to complete investments in these strong, However, we have a healthy pipeline of potential private UK-based, market leaders. equity investments across a breadth of opportunities. As at Additionally, the Company made a follow-on investment in 31March 2023, private equity investments represented 65% August 2022 into Cera Care, Europe’s largest provider of of total investments, compared to 42% as at 31March 2022. digital-first home healthcare, as part of a new funding round Over the year, the Company continued to take advantage of to accelerate the company’s growth and expand from its broad investment universe, scouring both private and servicing 15,000 to 100,000 at-home patients each day. public markets for the brightest growth prospects in the UK, Furthermore, we were pleased to report the first cash focusing on small and mid-sized companies. We added a generation from our private equity holdings. Following the number of exciting companies to the portfolio while also completion of the merger in November 2022 between increasing portfolio concentration, demonstrating our Waterlogic (a global designer, manufacturer, distributor and conviction in the portfolio’s investments. service provider of purified drinking water dispensers) and Culligan International (the innovative brand in consumer- ### Private equity activity focused, sustainable water solutions and services), the Company received £2.4m in sales proceeds. The Company We announced three new private equity investments over the remains invested as we believe the combined business has 12-month period. In May 2022, we announced investments !"#$%&'()*+,-$.)/0#.$)/#)-$1&/$ considerable potential for future growth. into Mintec (through Synova), a leading provider of food- related commodity pricing, and CFC (through Vitruvian (/23).#$#452.+$2*3#-.'#*.- Partners), a technology-driven global insurance business. 11 On an EBITDA profitability view. | !"#$%&" | !"#$%&" | | 67*++8 | :;( | <*&=")7"=* | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 2&34$5 | | | | >%&#*&3%#( | Report and Accounts | | | '""()"*&+, | +*$")-&"./01 | | 9%,3%$ | 9%,3%$ | 9%,3%$ | | | 11 | for the year ended 31 March 2023 6/#)-$&1$"#20".#*#7$3)85).2&*$/2-9:$ )/#)-$<2."$0/#).#-.$)'&5*.$&1$=)(2.)8$3-$*5'>#/$&1$7#)8- ; 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 12 ## Portfolio Managers’ Review Elsewhere, we used periods of market weakness to increase ### Public equity activity existing positions in stocks where we continue to have a high Three of our public equity holdings received takeover conviction. These included online women’s clothing retailer, approaches during the 12-month period to 31March 2023. Sosandar, and business review platform, Trustpilot. Shareholders approved a bid by Becketts Bidco, a consortium of PE firms that comprised Astorg and Epiris, for Euromoney Institutional Investor. In addition, shareholders approved a ### Outlook £1.24bn all-cash takeover by Optum Health Solutions UK Ltd, a subsidiary of UnitedHealth Group Inc, for Emis Group. The sell-off in UK small and mid-caps in 2022 was Furthermore, Ideagen was acquired by Rainforest Bidco indiscriminate, and not discerning between the “good” and Limited, a wholly owned subsidiary of funds managed by Hg. “less good” companies. We believe that when clearer signs of We are pleased that these bids and the resultant exits of a sustained economic recovery materialise and market these positions benefited portfolio performance. sentiment substantially improves, small and mid-caps should be the first to re-rate in response. Our analysis shows that We added Bytes Technology Group, one of the UK’s leading such market underperformance in the past by UK small and resellers of software, security and cloud-based products, to mid-caps has usually been followed by outperformance over the portfolio in 2023. This is a high quality, cash-generative three- to five-year periods relative to large cap companies in company, and we expect it to be resilient across economic the FTSE 100. The below figure illustrates this for UK small cycles due to its sticky customer base and high renewal rates. caps. UK small cap performance vs. FTSE 100 Buying on weakness had given the best long-term returns Source: Schroders, returns are shown for the Numis Small Cap plus AIM ex IT index vs FTSE 100 index. Based on rolling 12 month performance from 30September 1990 to 31December 2022. Aside from the relative valuation opportunity with UK equities balance sheets, as illustrated in the below figure which shows remaining unloved relative to world markets in an historical UK corporates’ cash as a percentage of total assets, which has context (as noted in the investment case section), in increased considerably since 2000. aggregate, they are also attractive as a result of their strong Small Cap | pervious | ... subsequent | | ... subsequent | | | --- | --- | --- | --- | --- | | 12 month | | 3 year | | 5 year | | performance | performance | | performance | | vs. FTSE 100 % 40 30 20 10 0 -10 Schroder British Opportunities Trust plc 12 -20 -30 0 to -5% -5 to -10% -10 to -15% -15 to -30% 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 13 ## Portfolio Managers’ Review UK corporates – cash as % of total assets @DO CTO CVO CUO Strategic Report CCO CDO ATO DD DC DU DV DT AD AC AU AV AT CD CC Source: Office of National Statistics, 31 March 2000 to 31 December 2022. The valuation opportunity can also be looked at through the harder to achieve at larger companies, which have often lens of free cash flow yields, with the UK having one of the been through several rounds of private equity or institutional highest yields in the world, making the market a compelling ownership. Portfolio company EasyPark, for example, has investment opportunity in our view. Free cash flow is the evolved as a company in terms of product offering, maturity money a firm has left over after paying its operating and in the marketplace and thorough geographical expansion. capital expenses. The yield is calculated as free cash flow We believe buy and build strategies are also positioned to do divided by market value. The below figure illustrates how the well, with opportunities to buy smaller companies with the forecast (fiscal year 2) free cash flow yield for UK equities intention to improve profitability and sell at higher multiples (represented by the FTSE All Share) outstrips that of global in the future. Furthermore, despite the economic backdrop, equities (represented by the MSCI AC World) at present: we are seeing strong significant deal flow across a breadth of opportunities. Given our private equity team’s established Forecast free cash flow yield: UK equities ahead of global and formidable network in the UK (as well as globally) with equities hard-to-access investment partners, we are well positioned to seek out the best opportunities for the Company going forward. Our differentiated public-private equity strategy enables us to continue to invest without boundaries, whilst providing access to a broader investable universe to the benefit of shareholders. We believe this differentiates the Company from other investment trusts and provides us with an advantage when selecting attractive investment opportunities. While we are pleased with the investments in the portfolio at present, we continue to seek out high quality, growth opportunities with the aim of delivering long-term total returns. The investment team harnesses Schroders Capital’s strong network of co-investment partners developed over 25 years, giving them access to unique investment opportunities. Meanwhile, our extensive resources in both 6789: Source: Factset Research, 26 June 2023. public and private equities work together to the benefit of the Company, providing a more comprehensive view of the In private equity markets, with financial engineering unlikely landscape in which companies operate, making us more to propel returns in the near term due to increased rates, ;0(<,+%&$,)%6%;)$$%=,(/%;+">%?0$+@%A:B informed investors that we believe contributes to better inflation and macroeconomic uncertainty, we believe investment decision-making. T strategies focused on identifying companies that exhibit $#"' strong underlying financial performance are poised to do We believe that the current cash position (£7.8m as at W well. This may be achieved by the expansion of product lines, 31March 2023) and prudent liquidity profile of the public V geographic footprint, and professionalising management to equity allocation of the portfolio provide us with an excellent ?#"' improve profit margins, for example. This is all easier to do opportunity to make further investments in high growth N among small and medium-sized companies, and typically companies and/or initiate positions in mispriced growth U @ C Report and Accounts 13 for the year ended 31 March 2023 A D X5=;%J88%=6"(' B=YH%JY%Z*(81 # Portfolio Managers' Review companies. Furthermore, following the approval from shareholders to remove the 50:50 public/private allocation guidance and the 60% private equity limit provides us with greater flexibility to take advantage of further private equity opportunities, and utilise our healthy pipeline of potential private equity investments. ## Schroder Investment Management Limited 5 July 2023 The Company's top ten holdings as of 31 March 2023 are set out below, with overviews of each company and recent updates regarding their businesses. | Top 10 holdings | Quoted/unquoted | Fair value as of 31 March 2022 (£'000) | % of total investments | Fair value as of 31 March 2023 (£'000) | % of total investments | | --- | --- | --- | --- | --- | --- | | Mintec^{1} | Unquoted | – | – | 8,614 | 11.6 | | Rapyd Financial Network^{1} | Unquoted | 8,565 | 13.2 | 8,399 | 11.3 | | Cera | Unquoted | 4,509 | 7.0 | 6,986 | 9.5 | | Pirum^{1} | Unquoted | – | – | 6,087 | 8.2 | | Culligan^{1} | Unquoted | 6,045 | 9.3 | 5,053 | 6.9 | | EasyPark^{1} | Unquoted | 2,775 | 4.3 | 4,492 | 6.1 | | CFC^{1} | Unquoted | – | – | 4,098 | 5.5 | | Learning Curve | Unquoted | 2,336 | 3.6 | 2,455 | 3.3 | | Volution | Quoted | 1,192 | 1.8 | 2,012 | 2.7 | | Watches of Switzerland | Quoted | 1,721 | 2.7 | 1,908 | 2.6 | Source: Schroders. 1. The fair value disclosed for the following investments represents the Company's investment in an intermediary vehicle: - Mintec (held via Synova Merlin LP). - Rapyd Financial Network (held via Target Global Fund). - Pirum (held via Bowmark Investment Partnership LP). - Culligan (held via EPIC-1b Fund). - EasyPark (held via Purple Garden Invest (D) AB). - CFC (held via Vitruvian Investment Partnership). - Learning Curve (held via Agilitas Boyd 2020 Co-Invest Fund). 14 Schroder British Opportunities Trust plc 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 15 ## Portfolio Managers’ Review ## Mintec Rapyd ## (unquotedholding) (unquotedholding) The world’s leading independent provider of global Integrates the world’s many payment networks and commodity price data, price forecasts & market technologies into a single platform intelligence for the food, CPG and capital goods supply Rapyd is the fastest way to power local payments chains anywhere in the world, enabling companies across the Mintec enables the world’s largest food and globe to access markets quicker than ever before. By Strategic Report manufacturing brands to implement more efficient and utilizing Rapyd’s payments network and Fintech-as-a- sustainable procurement strategies. They do this through Service platform, businesses and consumers can engage their cutting-edge Software as a Service platform, Mintec in local and cross-border transactions in any market. The Analytics, which delivers market prices and analysis for Rapyd platform is unifying fragmented payment systems thousands of commodities, food ingredients and worldwide by bringing together 900-plus payment associated materials. Their data and tools empower their methods in over 100 countries. customers to understand prices better, analyse their spend and negotiate with confidence. Latest updates: • In May 2022, the company announced the launch of Latest updates: “Virtual Accounts”, a product that empowers businesses • In May 2022, Mintec launched the latest version of its to expand globally while supporting local payments. This multi-award-winning procurement and commodity price new offering allows organizations anywhere in the world intelligence platform (Mintec Analytics 4.1), including new to securely and reliably accept local bank transfers in 40 features that increase price visibility and improve countries in more than 25 currencies, including the US, efficiency for commodity buying teams. UK, EU, and APAC regions. • In December 2022, the company acquired French • Also in May 2022, Rapyd opened its first office in the business, CommoPrices, an independent provider of Dubai International Financial Centre. The UAE emerged as commodity price data and analysis operating across an attractive fintech hub during the pandemic with similar sectors, to extend its coverage of commodity price increased digital adoption, a booming eCommerce data and intelligence. economy, and transformative digital marketing initiatives. • In January 2023, Mintec announced the acquisition of • In July 2022, it was announced that Rakuten Viber had AgriBriefing, which includes the brands Urner Barry, partnered with Rapyd to unlock instant cross-border peer- Strategie Grains, FeedInfo and Tropical Research Services. to-peer payments. Building on previous acquisitions by Mintec (including • In 2022, Rapyd was named an EMEA 60 Leader by Kairos Commodities in 2021 and the aforementioned PYMNTS, the global leader in payments industry news CommoPrices), this established the combined company and data analytics, as well as being named on Forbes’ as the largest agri-food-focused PRA and global Cloud 100 list – the list of the world’s top private cloud information provider with a unique portfolio of feed-to- companies. food commodity prices, forecasts, cost-modelling tools and fundamental market data, serving over 5,000 customers in 50 countries. Report and Accounts 15 for the year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 16 ## Portfolio Managers’ Review ## Cera Pirum ## (unquotedholding) (unquotedholding) Europe’s largest provider of digital-first home healthcare A leading provider of post-trade automation and collateral management technology for the global Cera is Europe’s largest provider of digital-first home securities industry healthcare. They are transforming healthcare by moving services such as care, nursing, telehealth and repeat Pirum has created a set of award-winning, highly medications out of hospitals and into people’s own homes innovative and flexible services which are tailored to fully through technology. In combining pioneering technology support the complexities of financial institutions around with their community of professional carers and nurses, the world. Pirum provides a secure processing hub which Cera are empowering people to live longer, better, seamlessly links market participants, allowing them to healthier lives in their own homes. electronically process and verify key transaction details. Through easy integration with their services, Pirum’s clients have increased processing efficiency, reduced operational risk and improved profitability by reducing manual processing. Latest updates: • In August 2022, the company raised c.£260m in an equity and debt funding round, with the goal of increasing the number of patients its serves from 15,000 to 100,000. We Latest updates: were pleased to have been able to participate in this financing to accelerate the company’s growth and help • In October 2022, Pirum expanded its Trade Risk Manager Cera empower those in the care sector. service to provide visibility of the collateral status at a transaction level. • Subsequently, Cera announced its expansion into nursing services across its UK network, marking the company’s • Knowing the status of collateral prior to releasing an first move into additional healthcare services, as part of instruction to market is a key step in reducing its overall ambition to move more aspects of healthcare counterparty risk and preventing fails and CSDR fines. out of hospitals and into people’s own homes. • This expansion leverages Pirum’s Loan Release service • More recently, Cera launched its latest AI-powered which provides valuable automation for lenders to release technology, Cera Brain, a platform that helps to automate their market instructions on the back of the borrower and power the company’s care delivery operations. Using collateralising the lender and provides extensive AI across key features, Cera Brain should enhance the prioritisation tools and controls to ensure loans are company’s impact in the sector, utilising technology to released within market cut offs to increase settlement automate administrative tasks, more efficiently match rates and market efficiency. carers to patients, enable better regulatory compliance checks, onboard patients faster and drive healthcare workflow automation. This new technology should enable Cera to care for more people, allowing carers to see an estimated 20% more patients per day. It should also power a more efficient model of care delivery, making the sector more sustainable by reducing overhead costs, allowing carers and frontline staff to be paid better. • Lastly, Cera has recently been ranked the Number 1 UK HealthTech company in the HealthTech50 list for 2023, which is testament to the company’s continued technology-enabled growth. Schroder British Opportunities Trust plc 16 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 17 ## Portfolio Managers’ Review ## Culligan EasyPark ## (formerlyWaterlogic) (unquotedholding) Parking tech company that helps drivers to find, manage ## (unquotedholding) and pay for both parking and electric vehicle charging The leading provider of drinking water dispensers for EasyPark’s technology supports its users, cities and businesses across the globe parking operators with parking administration, planning Culligan is an innovative brand in consumer-focused, and management. The company has a unique market Strategic Report sustainable water solutions and services. It was coverage with presence in over 20 countries and more established in 1936 as a provider of water softening than 3,200 cities. solutions for residences in Northbrook, Illinois, and has since grown to become a worldwide leader in water treatment needs, from the simplest filtration system to complex industrial water solutions. Latest updates: • In 2022, EasyPark grew both in new and existing markets, launching in new cities such as Paris in France and Boston in the US, as well as in new countries, such as Slovakia. Latest updates: • The company launched support for the EasyPark app for • In November 2022, Culligan International – the innovative Android Auto. brand in consumer-focused, sustainable water solutions and services – and Waterlogic Group Holdings – a global • In a collaboration with French automobile manufacturer, designer, manufacturer, distributor and service provider Renault, EasyPark launched direct in-car integration of the of purified drinking water dispensers – announced the EasyPark app in the New Renault Megane E-Tech completion of their merger, creating a global leader in infotainment system. clean and sustainable drinking water solutions and • Additionally, the company continued to expand services. collaborations with both local and nationwide operators • As result of the merger agreement, the Company for electric car charging in Sweden, Denmark, Finland, received £2.4million, representing the first cash Norway and Slovenia. generation from the Company’s private equity portfolio. • The Company remains a shareholder as the combined business has considerable potential for future growth. Report and Accounts 17 for the year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 18 ## Portfolio Managers’ Review ## CFC Learning Curve ## (unquotedholding) (unquotedholding) Technology-driven global insurance business UK training and education specialist For over 20 years, CFC has built market-leading solutions Learning Curve works with further education providers, to some of the insurance industry’s biggest challenges. employers and learners to help them achieve success. The company uses technology and data science to stay Since 2004, the company has grown both organically and one step ahead. From developing cutting-edge insurance through acquisition to become one of the largest and products, pioneering autonomous underwriting, most diverse providers in the country. deploying advanced threat intelligence, to offering unparalleled service to its partners and customers, CFC is re-imagining the world of specialist insurance. Latest updates: • In September 2022, Learning Curve announced the acquisition of Yorkshire-based White Rose Beauty Latest updates: Colleges, one of the largest beauty therapy training • In July 2022, CFC enhanced its UK proposition, partnering providers in the UK, in a move which will complement its with legal services company, Farillio, to launch a digital existing academy provision. The acquisition is expected to platform for its professional liability and management see the addition of a further 3,500 learners each year in liability policyholders. Designed for small business nine new locations and 170 employees, confirming owners, the platform delivers practical tools and expert Learning Curve’s position as one of the largest providers resources to help customers grow and scale their of high-quality beauty training in the country. businesses. • In February 2023, the company announced it is • Also in July 2022, the company announced the expansion expanding its successful Hair and Beauty training of its market-leading cyber threat analysis capability into academies in the London region with two brand-new, North America and Australia. CFC’s cyber threat analysis, a state-of-the-art salons. critical component of its proactive cyber insurance offering, focuses solely on identifying new cyber threats and working with cyber customers to prevent attacks before they happen. • In January 2023, CFC established a dedicated team to meet increasing demand from fintechs, as part of its financial institutions practice. Since launching its solution, built specifically to cover the risks faced by organisations operating in the fintech space in 2020, CFC has seen the volume of submissions increase by more than 100% year- on-year over the past two years and has grown its fintech book by 100% over the past year. • In March 2023, the company announced the expansion of its “admitted product” suite with the addition of professional liability and technology Errors & Omissions (E&O), having traded its admitted solution for cyber since 2020. Schroder British Opportunities Trust plc 18 Portfolio Managers' Review # Volution (quoted holding) A leading supplier of ventilation products Volution is a market leader in residential and commercial ventilation solutions, covering the UK, Continental Europe and Australasia. They aim for their products to enhance customers' experience of ventilation by reducing energy consumption, improving indoor air quality and design and making them easier to use. The company has primary markets in the UK, Continental Europe and Australasia. ![img-4.jpeg](img-4.jpeg) Latest updates: - Volution published a strong set of interim results (6 months to 31 January 2023) in March 2023, driven in particular by strong UK residential RMI (repair, maintenance and improvement) demand, with the company successfully managing inflationary headwinds and supply chain challenges through pricing discipline and inventory optimisation. - The interim results showed that revenue was up 8.5% (7.3% organic growth and 1.2% inorganic growth), while adjusted operating margin stood at 21.1% above the company's long-term operating margin target. - Volution has continued to execute on its acquisition strategy (acquiring Bera in Germany in July 2022 and the remaining shares of ERI Corporation UK Limited more recently). The company is optimistic of being able to add further earnings-accretive acquisitions in the future, given its strong pipeline of potential candidates and strong balance sheet. # Watches of Switzerland (quoted holding) The UK's largest luxury watch retailer Watches of Switzerland is the leading luxury watch specialist in the UK, with a significant presence in the US with a complementary jewellery offering. There are 15 Watches of Switzerland showrooms across the UK, including dedicated Rolex and Jaeger-LeCoultre boutiques. The company's success is based on strong, long-standing partnerships with the most prestigious luxury watch brands, supported by impactful marketing and powered by leading edge technology to provide clients with a modern, distinctive luxury experience. ![img-5.jpeg](img-5.jpeg) Latest updates: - In December 2022, Watches of Switzerland released its H1 (26 weeks to 30 October 2022) results, revealing that group revenue had increased 23% on a constant currency basis and 31% at reported rates. - The luxury watches division's revenue grew 31% year-on-year on a reported rates basis to £667m, representing 87% of total group sales (unchanged from H1 FY 2022), with growth driven by increases in average selling price and volume. - In terms of geography, its US revenues grew year-on-year 60% and 80% on constant currency and reported rates bases respectively, with revenue growth excluding acquisitions at +44% constant currency. - Meanwhile, UK performance was driven by domestic clientele, with revenue of £454m up 8% year-on-year. - The company has continued to expand its retail network, opening 20 showrooms across the UK, US and Europe in the first half of FY23. Strategic Report Report and Accounts for the year ended 31 March 2023 19 # Investment Portfolio at 31 March 2023 | Holding | Quoted/unquoted | Country of incorporation (of underlying holding where applicable) | Industry Sector | Fair value £'000 | Total investments % | | --- | --- | --- | --- | --- | --- | | Mintec^{1} | Unquoted | United Kingdom | Software | 8,614 | 11.6 | | Rapid Financial Network^{1} | Unquoted | United Kingdom | IT Services | 8,399 | 11.3 | | Cera EHP S à r l | Unquoted | United Kingdom | Health Care Technology | 6,986 | 9.5 | | Pirum Systems^{1} | Unquoted | United Kingdom | Software | 6,087 | 8.2 | | Culligan^{1} (formerly Waterlogic) | Unquoted | United Kingdom | Diversified Consumer Services | 5,053 | 6.9 | | EasyPark^{1} | Unquoted | Sweden | Software | 4,492 | 6.1 | | CFC Underwriting^{1} | Unquoted | United Kingdom | Insurance | 4,098 | 5.5 | | Learning Curve^{1} | Unquoted | United Kingdom | Diversified Consumer Services | 2,455 | 3.3 | | Volution | Quoted | United Kingdom | Building Products | 2,012 | 2.7 | | Watches of Switzerland | Quoted | United Kingdom | Specialty Retail | 1,908 | 2.6 | | Graphcore | Unquoted | United Kingdom | Semiconductors & Semiconductor Equipment | 1,778 | 2.4 | | City Pub | Quoted | United Kingdom | Hotels, Restaurants & Leisure | 1,644 | 2.2 | | SSP | Quoted | United Kingdom | Hotels, Restaurants & Leisure | 1,620 | 2.2 | | Dalata Hotel | Quoted | Ireland | Hotels, Restaurants & Leisure | 1,588 | 2.1 | | Ascential | Quoted | United Kingdom | Media | 1,544 | 2.1 | | OSB | Quoted | United Kingdom | Financial Services | 1,524 | 2.1 | | Keywords Studios | Quoted | United Kingdom | IT Services | 1,439 | 1.9 | | Trainline | Quoted | United Kingdom | Hotels, Restaurants & Leisure | 1,408 | 1.9 | | Learning Technologies | Quoted | United Kingdom | Software | 1,286 | 1.7 | | Discoverie | Quoted | United Kingdom | Electrical Equipment | 1,206 | 1.6 | | Sosandar | Quoted | United Kingdom | Textiles, Apparel & Luxury Goods | 1,093 | 1.5 | | GB | Quoted | United Kingdom | Software | 1,073 | 1.4 | | MaxCyte | Quoted | United States | Life Sciences Tools & Services | 907 | 1.2 | | National Express | Quoted | United Kingdom | Ground Transportation | 903 | 1.2 | | Judges Scientific | Quoted | United Kingdom | Machinery | 831 | 1.1 | | Trustpilot | Quoted | United Kingdom | Interactive Media & Services | 830 | 1.1 | | Bytes Technology | Quoted | United Kingdom | Software | 802 | 1.1 | | On the Beach | Quoted | United Kingdom | Hotels, Restaurants & Leisure | 798 | 1.1 | | Luceco | Quoted | United Kingdom | Electrical Equipment | 451 | 0.6 | | Lendinvest | Quoted | United Kingdom | Financial Services | 437 | 0.6 | | Victorian Plumbing | Quoted | United Kingdom | Specialty Retail | 363 | 0.5 | | Invinity Energy Systems | Quoted | Jersey | Electrical Equipment | 200 | 0.3 | | TinyBuild | Quoted | United States | Entertainment | 179 | 0.2 | | Velocys | Quoted | United Kingdom | Energy Equipment & Services | 120 | 0.2 | | **Total investments^{2}** | | | | **74,128** | **100.0** | $^{1}$ The fair value disclosed for the following investments represents the Company's investment in an intermediary vehicle: Mintec (held via Synova Merlin LP) Rapid Financial Network (held via Target Global Fund) Pirum Systems (held via Bowmark Investment Partnership LP) Culligan (held via Epic-1b Fund) Easypark (held via Purple Garden Invest (D) AB) CFC Underwriting (held via Vitruvian Investment Partnership LLP) Learning Curve (held via Agilitas Boyd 2020 Co-invest Fund) $^{2}$ Total investments comprise: | | £'000 | % | | --- | --- | --- | | Unquoted | 47,962 | 64.8 | | Quoted on FTSE 250 | 12,551 | 17.0 | | Quoted on AIM | 9,572 | 12.8 | | Quoted on FTSE Allshare | 2,455 | 3.3 | | Listed on a recognised stock exchange overseas | 1,588 | 2.1 | | **Total** | **74,128** | **100.0** | 20 Schroder British Opportunities Trust plc 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 21 ## Business Review The Strategic Report sets out the Company’s strategy for delivering the investment objective (set out on the inside front cover), the business model, the risks involved and how the Board manages and mitigates those risks. It also details the Company’s purpose, values and culture, and how it interacts with stakeholders. Investment Strategy • Manager implements the investment strategy by following an • Sets objectives, investment process Strategic Report Board strategy and KPIs • Support by strong research and risk • Appoints Manager environment Competitiveness and other service • Regular reporting and providers to achieve Oversight interaction with the objectives Board is focused on Board Responsible for ensuring: Investor • • Oversees portfolio overall strategy and • that the vehicle Value management oversight including remains attractive • Monitors achievement risk management to investors of KPIs Promotion • Activities centred • that the fees • Oversee whether on the creation of and Ongoing gearing is employed • Marketing and sales shareholder value Charges remain capability of the • Oversee discount/ Manager competitive premium management and the provision of • Support from the liquidity through Corporate Broker with buybacks and share secondary market issuance intervention to support discount/premium management deliver the Company’s investment objective, as demonstrated ### Why invest in SBO? in the diagram above. • A differentiated public and private investment strategy investing in high growth small & mid-sized UK ### companies. Investment objective The Company’s investment objective is to deliver long-term • Provides access to a far larger universe of high quality, total returns throughout the life of the Company by investing high growth UK companies than available from purely in a diversified public equity and private equity portfolio of public markets. predominantly UK Companies. • Executed by an established team of experienced ### investment professionals with strong track records, Investment policy proven processes and extensive networks. The Company will invest in a diversified portfolio of both public equity investments and private equity investments • A portfolio that aims to target companies that support consisting predominantly of UK Companies with strong long- the United Nations Sustainable Development Goals. term growth prospects. It is anticipated that the Company’s portfolio will typically ### Business model consist of 30 to 50 holdings and will target companies with an The Company is a listed investment trust, that has equity value between approximately £50million and outsourced its operations to third party service providers. The £2billion at the time of initial investment. Company has a fixed life and in the event that no alternative proposals are put forward to shareholders and approved by The Company will focus on companies which the Portfolio shareholders ahead of the winding-up date, and on or before Managers consider to be sustainable from an environmental, a general meeting by 31May 2028, a winding-up resolution social and governance perspective, supporting at least one of will be proposed at the winding-up date to voluntarily the goals and/or sub-goals of the United Nations’ Sustainable liquidate the Company. Development Goals (“SDGs”), or which the Portfolio Managers consider would benefit from their support in helping them The Board has appointed the Manager, Schroder Unit Trusts incorporate SDGs into their business planning and/or in Limited, to implement the investment strategy and to reporting their alignment with SDGs. manage the Company’s assets in line with the appropriate restrictions placed on it by the Board, including limits on the The Company may, from time to time, use borrowings for type and relative size of holdings which may be held in the investment and efficient portfolio management purposes. portfolio and on the use of gearing, cash, derivatives and Gearing will not exceed 10per cent. of Net Asset Value, other financial instruments as appropriate. The terms of the calculated at the time of drawdown of the relevant appointment are described more completely in the Directors’ borrowing. Report including delegation to the Portfolio Managers. The The full investment policy can be found on the website at: Manager also promotes the Company using its sales and www.schroders.com/sbo. marketing teams. The Board and Manager work together to Report and Accounts 21 for the year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 22 ## Business Review they do not overpay for growth opportunities. On one side of ### Investment approach the portfolio, there is a focus on high-growth names that are The Company combines Schroders’ extensive public and set to benefit from secular tailwinds. These companies will be private equity investment experience to access UK company at or near profitability and delivering strong growth growth across the life cycle, focusing on small and medium- characteristics, such as rising customer numbers or increased sized businesses. The Company is philosophically market share. On the other side, the team will look for what ownership-agnostic in the sense that its strategy is to invest in they call “mispriced growth” companies, which are growing both public and private companies. Furthermore, the companies that have fallen out of favour and are trading on Company believes that investors are best served by an depressed valuations, but which the team believes have the offering that considers a comprehensive UK growth equity ability to recover and thrive in the future. universe, as publicly-listed small and mid-caps only represent More generally, the portfolio’s public allocation seeks to invest a fraction of company growth in the UK economy. in UK small and medium-sized businesses, with the potential The Company’s portfolio has been constructed from the to provide primary capital to support growth. The Company bottom up, with investments focused on quality, growing and utilises the significant research capabilities and long track predominantly profitable companies, that have strong record of Schroders’ broad listed equities business, which is balance sheets and that can sustainably compound their particularly well-known for its small and mid-cap expertise. earnings over the long run. Typically, these businesses will In terms of the portfolio’s private equity allocation, the exhibit considerable pricing power (which is particularly investment team focuses on direct and co-investment beneficial in these times of high inflation), strong opportunities that span the growth capital and small/mid- management teams, and will already be delivering strong market buyout areas of the market, where they believe revenue growth. Where portfolio companies have not yet numerous companies exist with considerable transformation reached profitability, the investment team seeks out potential, while avoiding areas that the team believe pose companies that are well-funded and possess a clear route heightened valuation risk (see figure below). The Company’s towards profitability. private equity allocation leverages Schroders Capital’s more Given the high-growth nature of the opportunities targeted, than 25 years’ experience in private equity investing and 100+ the portfolio will have notable exposure to software and IT European specialist GP relationships to create strong deal services areas of the market. However, the portfolio is well- flow for high selectivity of direct and co-investments. diversified to include other sectors, such as consumer Schroders Capital has c.£14bn of private equity assets under services, healthcare, leisure and financial services. management (as at 31 December 2022) and was recently The Portfolio Managers believe that the price paid is one of awarded “Co-investor of the Year” at the RealDeals Private the most important determinants of long-term investment Equity Awards 2023. returns and therefore maintain valuation discipline to ensure Source: Schroders. For illustrative purposes only and should not be viewed as a recommendation to buy or sell. *Where we denote Valuation risk as the risk around the perceived value of an underlying asset whereas investment risk encompasses a broader set of risks beyond valuation including but not limited to factors such as market dynamics, economic conditions and industry specific risks. The Company’s private equity allocation by stage: !"#$%&'()*+,-$.)/0#.$)/#)-$1&/$ (/23).#$#452.+$2*3#-.'#*.- | !"#$%&" | | !"#$%&" | | 67*++8 | :;( | <*&=")7"=* | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | 2&34$5 | | | | >%&#*&3%#( | | '""()"*&+, | Schroder British Opportunities Trust plc | +*$")-&"./01 | | 9%,3%$ | 9%,3%$ | 9%,3%$ | | 22 6/#)-$&1$"#20".#*#7$3)85).2&*$/2-9:$ )/#)-$<2."$0/#).#-.$)'&5*.$&1$=)(2.)8$3-$*5'>#/$&1$7#)8- ;  176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 23 ## Business Review private and public equity investments to reflect the clear ### Investment process differences in executing individual investments in the private The Company’s portfolio is managed by the Portfolio versus public equity markets. However, portfolio construction Managers, who employ a collaborative, team-based and first-line risk management are the joint responsibility of approach, creating a combination of Schroders’ public and the private equity and public equity investment teams within private equity capabilities with oversight in place. The the Portfolio Managers, alongside the AIFM, who has Company believes that it is appropriate for the Portfolio responsibility for the risk management of the Company, Managers to separate the investment process between delegated from the Board. ### Private equity investment process Strategic Report The private equity investment process is illustrated below. The investment team believes that high-quality deal sourcing An assessment of whether the investment opportunity meets is fundamental to long-term success and spend considerable the key criteria for inclusion in the Company is undertaken time on this activity by working closely with their extensive early to ensure a proposal is suitable and conforms to the network of European specialist GP relationships. Sourcing investment policy and objectives. efforts are further enhanced by technology, including The comprehensive due-diligence process undertaken will advanced proprietary tools, internal databases and third- include an assessment of the following for a particular party information services. company: Report and Accounts 23 for the year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 24 ## Business Review ### Public equity investment process The Portfolio Managers select public equity stocks for the opportunities. These companies will then be subject to Company based principally on ideas generated by Schroders’ detailed due diligence. in-house research capability, but also by making selective use The public equity stock selection process is outlined below. of Schroders’ network of contacts, and of sell-side research. The public equity allocation utilises an initial screen to narrow down the universe into high growth and mispriced growth Source: Schroders. For illustrative purposes only and should not be viewed as a recommendation to buy or sell. Public equity investments may include the following: Source: Schroders. For illustrative purposes only and should not be viewed as a recommendation to buy or sell. Schroder British Opportunities Trust plc 24 # Business Review ## Promotion The Company promotes its shares to a broad range of investors including discretionary wealth managers, private investors, financial advisers and institutions which have the potential to be long-term supporters of the investment strategy. The Company seeks to achieve this through its Manager and Corporate Broker, which promote the shares of the Company through regular contact with both current and potential shareholders, as well as their advisers. These activities consist of investor lunches, one-on-one meetings, regional road shows and attendance at conferences for professional investors. In addition, the Company's shares are supported by the Manager's wider marketing of investment companies targeted at all types of investors. This includes maintaining close relationships with adviser and execution-only platforms, advertising in the trade press, maintaining relationships with financial journalists and the provision of digital information on Schroders' website. The Board also seeks active engagement with investors, and meetings with the Chairman are offered to investors when appropriate. Shareholders are encouraged to sign up to the Manager's Investment Trusts update, to receive information on the Company directly: https://www.schroders.com/en/uk/privateinvestor/fund-centre/funds-in-focus/investment-trusts/schroders-investment-trusts/never-miss-an-update/. Details of the Board's approach to discount/premium management and share issuance may be found in the Chairman's Statement on page 3 and in the Annual General Meeting – Recommendations on page 82. ### Relations with shareholders Shareholder relations are given high priority by both the Board and the Manager. The Company communicates with shareholders through its webpages and the annual and half year reports which aim to provide shareholders with a clear understanding of the Company's activities and its results. The engagement and meetings held during the year are described on page 42. The Directors attend the AGM and are available to respond to queries from shareholders. ## Key Performance Indicators ("KPI"s) The Board reviews performance using a number of key measures, to monitor and assess the Company's success in achieving its objective. Further comment on performance can be found in the Chairman's statement. The following KPIs are used: - Share price discount and premium; and Some KPIs are Alternative Performance Indicators ("APIs"), and further details can be found on page 2 and definitions of these terms on page 86. ## NAV performance The Directors regard the Company's NAV performance as being the overall measure of value, delivered to shareholders over the long-term. The Company's NAV per share at 31 March 2023 was 107.32p (31 March 2022: 104.14p). During the year the Company's NAV per share rose by 3.1%. Most of this increase was generated by the private equity investments with a small contribution from the buy back programme, which offset the performance from the public equity sleeve. Since IPO the NAV per share has increased by 9.5%. A full description of performance during the year under review is contained in the Portfolio Managers' Review. ### Share price discount and premium The Board recognises that it is in the interests of shareholders to maintain a share price as close as possible to the net asset value ("NAV") per share, whilst acknowledging the challenge this brings to a Company with a substantial portfolio of unquoted investments. Despite the share buy backs during the year, in common with many investment trusts which include private equity investments the share price discount to NAV per share widened at 31 March 2023 to 36.2% (31 March 2022: 19.3%). The Directors intend to seek renewal at each Annual General Meeting of their authority to allot shares or to buy back shares with a view to managing the premium/discount as well as creating further shareholder value; when market conditions allow. Shares will only be issued at a premium to NAV and bought back at a discount to NAV. ### Ongoing charges The Company monitors operating expenses on a regular basis. The ongoing charges at 31 March 2023 were 1.47% (31 March 2022: 1.93%). The calculation is shown in the definition of terms and performance measures on page 86. ## Purpose, Values and Culture ### Purpose The Company's purpose is to provide all investors with access to high quality public and private equity companies focused on sustainable growth, resulting in long-term shareholder value, in line with the investment objective. One of the goals and/or sub-goals of the United Nations' Sustainable Development Goals ("SDGs"), or which the Portfolio Managers consider would benefit from their support in helping them incorporate SDGs into their business planning and/or in reporting their alignment with SDGs. ### Values The Company's culture is driven by its values: excellence, integrity and transparency, with collegial behaviour and constructive, robust challenge. The values are all centred on achieving returns for shareholders in line with the Company's investment objective. As all of the Directors are shareholders in the Company, the Directors' interests are aligned with those of other shareholders in this regard. The Board is responsible for promoting strong relationships with the Manager and other service providers, as well as maintaining constructive relationships with shareholders, in order to promote the interests of shareholders. The Board's focus is Report and Accounts for the year ended 31 March 2023 25 Strategic Report # Business Review on long-term growth rather than providing shareholders with dividend income. The Board recognises that sustainability and ESG matters should be fundamental to the investment approach and an essential element of a company's business model and therefore key to generating long-term shareholder value. Further details on ESG company engagement can be found on pages 32 and 33. ## Culture The Board is committed to encouraging and actively creating a culture that is responsive to the views of shareholders and its wider stakeholders. As the Company has no employees and acts through its service providers, its culture is represented by the values and behaviour of the Board and third parties to which it delegates. The Board encourages a culture of constructive challenge with all key suppliers and transparency with all stakeholders. The culture is driven by the Company's values which are detailed above. The s172 statement provides further details of how the Board has operated in this regard. The Board engages with its outsourced service providers to safeguard the Company's interests. As part of this ongoing monitoring, the Board receives reporting from its service providers with respect to their anti-bribery and corruption policies; Modern Slavery Act 2015 statements; diversity policies; and greenhouse gas and energy usage reporting. ## Responsible investment The Manager adopts sustainability and impact investing practices as an integral part of identifying, assessing and monitoring portfolio companies. They believe that responsible investment creates long-term value for both public and private equity investments and benefits all stakeholders. Please refer to the Sustainability section for more information on how the Manager incorporates the assessment of sustainability factors into the investment process. The Board expects the Manager to engage with investee companies on social, environmental, governance and business ethics issues and to promote best practice. The Board expects the Manager to consider these issues when exercising the Company's voting rights. Further detail on engagement and stewardship can be found on pages 32 and 33. In addition to the description of the Portfolio Managers' integration of ESG into the investment process, a description of the Schroders policy on these matters can be found on Schroders' website at www.schroders.com. The Board notes that Schroders believes that companies with good ESG management often perform better and deliver superior returns over time. Engaging with companies to understand how they approach ESG management is an integral part of the investment process. Schroders is compliant with the UK Stewardship Code and its application with the principles therein is reported on its website www.schroders.com/en/about-us/corporate-responsibility/sustainability/interpret/. The Board receives reporting from the Manager on the application of its ESG stewardship. ## Corporate and Social Responsibility ### Diversity In accordance with the requirements of LR.9.8.6R, for the year ended 31 March 2023, the Company sets out data on the diversity of the individuals of the Company's Board and its executive management. ### Table for reporting on gender identity | | Number of Board members | Percentage of the Board % SID | Number of senior positions on the Board (CEO, CFO, and Chair) | Number in executive management | Percentage of executive management % | | --- | --- | --- | --- | --- | --- | | Men | 2 | 66.6 | 1 | n/a | n/a | | Women | 1 | 33.3 | 1* | n/a | n/a | | Other | n/a | n/a | n/a | n/a | n/a | | Not specified/prefer not to say | n/a | n/a | n/a | n/a | n/a | ### Table for reporting on ethnic background | | Number of Board members | Percentage of the Board % SID | Number of senior positions on the Board (CEO, CFO, and Chair) | Number in executive management | Percentage of executive management % | | --- | --- | --- | --- | --- | --- | | White British or other White (including minority white groups) | 3 | 100 | 2* | n/a | n/a | | Mixed Multiple Ethnic Groups | n/a | n/a | n/a | n/a | n/a | | Asian/Asian British | n/a | n/a | n/a | n/a | n/a | | Black/African/Caribbean/Black British | n/a | n/a | n/a | n/a | n/a | | Other ethnic group, including Arab | n/a | n/a | n/a | n/a | n/a | | Not specified/prefer not to say | n/a | n/a | n/a | n/a | n/a | *The FCA defines senior Board positions as Chairman, Chief Executive Officer (CEO), Chief Financial Officer (CFO) or Senior Independent Director. As an investment trust with no executive officers, the Company has no CEO or CFO. The Board has resolved that the Company's year end date is the most appropriate date for disclosure purposes. Data collection was done on a self-identifying reporting basis in a questionnaire which asked individuals to identify their gender identity and ethnic background categories as set out in the required table. The Company is an investment trust and has no employees or senior management. As at 31 March 2023, the Company did not meet the expected targets of 40% of the individuals on the Board being women or at least one individual on its Board being from an ethnic minority background. The Board comprised of two men and one woman. The Board fully supports all forms of diversity, including gender and ethnic diversity, and has adopted a diversity and inclusion policy. Whilst the Directors are all independent and have a diverse range of views and experiences, the Board is conscious that its composition is not as diverse as the Directors would like. The Board did not meet two of the targets set out in LR.9.8.6 due to the Company's IPO being at the end of 2020, and all 26 Schroder British Opportunities Trust plc 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 27 ## Business Review Directors were appointed at that time. The Company has a small Board and it will take several years to implement a complete succession plan. Recognising the benefits of a diverse Board, it is intended that improving diversity will be a key factor when the Board makes its next appointment. However, due to the nature of the Audit Committee’s responsibilities, the Board considers the Audit and Risk Chairman, the position for which is held by a woman, to be a senior position as reflected in the table on the previous page. Strategic Report Financial crime policy The Company continues to be committed to carrying out its business fairly, honestly and openly. The Company has a financial crime policy, covering bribery and corruption, tax evasion, money laundering, terrorist financing and sanctions. The Board seeks confirmations that the Company’s service providers’ policies are operating soundly. Greenhouse gas emissions and energy usage As the Company outsources its operations to third parties, during the year, it consumed no energy and so has no greenhouse gas emissions, energy consumption or energy efficiency action to report. Report and Accounts 27 for the year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 28 ## Business Review ### Section 172 of the Companies Act 2006 During the year, the Board discharged its duty under section 172 of the Companies Act 2006 to promote the success of the Company for the benefit of its members as a whole, having regard to the interests of its stakeholders. The Board has identified its key stakeholders as the Company’s shareholders, the Manager, other service providers and the investee companies. The Board takes a long-term view of the consequences of its decisions, and aims to maintain a reputation for high standards of business conduct and fair treatment among the Company’s shareholders. The Board notes that the Company has no employees and the impact of its own operations on the environment and local community is through the impact its service providers or investee companies have. Fulfilling this duty naturally supports the Company in achieving its investment objective and helps to ensure that all decisions are made in a responsible way, taking sustainability into account. In accordance with the requirements of the Companies (Miscellaneous Reporting) Regulations 2018, the Directors explain below how they have individually and collectively discharged their duties under section 172 of the Companies Act 2006 over the course of the year and key decisions made during the year and related engagement activities. Stakeholder How we engage Shareholders The Company welcomes attendance and participation from shareholders at the AGM. If attending, shareholders have the opportunity to meet the Directors and ask questions at the AGM. The Board values the feedback and questions which it receives from shareholders. The annual and half year results presentations, as well as monthly updates are available on the Company’s webpage with results announced via a regulatory news service. Feedback and/or questions received from shareholders enable the Company to evolve its reporting which, in turn, helps to deliver transparent and understandable updates. The Portfolio Managers communicate with shareholders periodically. All investors are offered the opportunity to meet the Chairman and other Board members without using the Portfolio Managers or Company Secretary as a conduit, by writing to the Company’s registered office. At Board meetings, the Directors receive updates on the share trading activity, share price performance and any shareholders’ feedback, as well as any publications or comments in the press. The Board, through the Manager, also engages some external providers, such as investor communications advisors, to obtain a more detailed view on specific aspects of shareholder communications, such as developing more effective ways to communicate with investors. For key decisions, the Board takes into account feedback from shareholders either directly or through service providers, including the Portfolio Managers. The Manager The Manager aims to continue to achieve consistent, long-term returns in line with the investment objective and maintains a close and collaborative working relationship with the Board. The Board maintains a constructive collaborate relationship with the Manager, encouraging open discussion and making sure the Manager is acting in the best interests of shareholders. To provide the Manager flexibility to take advantage of further private equity opportunities, the Board reviewed and recommended for shareholder approval changes to the investment policy and restrictions. The Board invites the Manager to attend all Board and certain committee meetings and receives regular reports on the performance of the investments and the implementation of the investment strategy, policy and objective. The portfolio activities undertaken by the Manager and the impact of decisions affecting investment performance are set out in the Portfolio Managers’ Review on pages 5 to 19. The management engagement committee reviews the performance of the Manager, its remuneration and the discharge of its contractual obligations at least annually. Schroder British Opportunities Trust plc 28 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 29 ## Business Review Stakeholder How we engage Service The Board maintains regular contact with its key external providers, both through the Board and committee Providers meetings, as well as outside of the regular meeting cycle. Their advice, as well as their needs and views, are routinely taken into account. The Board reviews service levels of providers to ensure services are being delivered to the required standard. The management engagement committee periodically reviews the market rates for services received, to ensure that the Company continues to receive high quality service at a competitive cost. The Board regularly considers how it meets various regulatory and statutory obligations and follows voluntary and best-practice guidance, while being mindful of how any decisions which it makes can affect its shareholders and wider stakeholders, in the short and the long-term. The Board receives reports from the Manager, Corporate Strategic Report Broker and Company Secretary on recent and proposed changes in regulation and market practice, as well as any likely reputational threats which, in turn, influence the Board’s decision-making process. Investee The Board engages with the Manager who communicates with investee companies regarding any issues which companies might affect the long-term success of those investments and in turn the Company. The Board believes that it is in the interests of all stakeholders to consider environmental, social and governance ESG factors. The Portfolio Managers take these issues into account when selecting and retaining investments with our investee companies and this continues throughout the life of our investment. Further details on ESG engagement are set out on pages 32 and 33. The Portfolio Managers have discretionary powers to exercise voting rights on behalf of the Company on all resolutions proposed by the investee companies, when the Company’s rights permit voting. In respect of the year under review, the Portfolio Managers engaged with many of the Company’s investee companies and voted at all the annual general meetings and extraordinary meetings held during the year by the Company’s investee companies (further details can be found on pages 32 and 33). The Board monitors investments made and divested and questions the Portfolio Managers’ rationale for exposures taken and voting decisions made. ### Examples of Stakeholder Consideration during the Year The Directors were particularly mindful of stakeholder considerations in reaching the following key decisions during the year ended 31 March 2023: • the Board reviewed and recommended for shareholder approval, changes to the investment policy and restrictions, to provide the Portfolio Managers flexibility to take advantage of further private equity opportunities; • the Board, having sought authority from shareholders, removed the 50:50 public/private allocation guidance and the private equity limit given the strong pipeline of investment opportunities identified by the Portfolio Managers. This will give the Portfolio Managers more flexibility to take advantage of further private equity opportunities; • the Board is responsible for discount management and is cognisant of the prevailing discount to NAV. During the year under review, the Board utilised a share buyback programme to seek to reduce the discount at which the ordinary shares trade relative to their prevailing NAV and determined that current market conditions had seen high, unforeseen levels of volatility which the Board does not regard as normal market conditions. A total of 1.1million shares have been bought back and factors such as the size of the Company, the illiquid nature of the private equity holdings, borrowings and cash were considered and will continue to be in any further buybacks; • the Board and management engagement committee undertook reviews of the third-party service providers and agreed that their continued appointment remained in the best interests of the Company and its shareholders, the audit and risk committee reviewed externally audited internal controls reports of the Depositary and Registrar; and • the Board continued to consider Board succession planning following the retirement of Chris Keljik as a non-executive Director. The Board has adequate resources to manage workloads at this time but expects to recruit a replacement in due course and will seek to add diversity to the Board when doing so. Report and Accounts 29 for the year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 30 ## Business Review ### Approach to sustainability The Portfolio Managers believe that companies do not operate in a vacuum; rather, their long-term success is in part tied to their ability to adapt to social and environmental trends shaping their industries. For instance, the ability to attract and retain talent, to build strong customer relationships or to adapt to changing regulations are vital to their competitiveness. All are complicated by workers’ growing expectations that their employers’ values match their own, the growing importance consumers attach to environmental features or product sustainability and the growing pressures governments face to reign back corporate excesses. The challenges vary from company to company and industry to industry, as do the features the Portfolio Managers look for in companies, but the principles and the importance they attach to them are consistent. The same structural trends are also reshaping industries, driving growth in some markets and shrinking others, as capital moves to industries and technologies that will help solve social and environmental challenges. The approach to sustainability as part of the Company’s broader investment process is set out below. Pre investment process Post investment process The appraisal process of an investment from a sustainability Following investment, the below are conducted: perspective is described below: Exclusion screening: Engagement: From the outset, companies operating in certain areas, such as The Portfolio Managers seek to influence corporate behaviour chemical and biological weapons for example, are screened out. through direct engagement and/or proxy voting. The Portfolio 1 Excluded activities are set out in Schroders’ Group exclusions Managers engage and vote on any issue affecting the long-term 2 and Schroders Capital’s Sustainability and Impact Policy . sustainable value of the Company’s portfolio companies. Engagements are discussed further below. United Nations’ Sustainable Development Goals (“UN SDGs”): Monitoring: The Portfolio Managers seek companies whose business models The Portfolio Managers monitor the ESG performance of are aligned with at least one of the UN SDGs or one of the investments throughout their time as shareholders, and assess if subgoals. However, not every investment will meet this criteria. companies have responded to their requests for change. For such companies, if the Portfolio Managers believe the If they feel they do not have enough information, or have fundamental and structural drivers of the business are sound, identified gaps in companies’ awareness or management of their we would then invest with the intention to contribute to the ESG risks and opportunities, they establish dialogue with that development of the firm’s ESG credentials. This is discussed firm. further below. The Portfolio Managers also undertake reactive engagement as a result of any negative incident involving one of their investments, in order to understand why it may have occurred, the actions the company is taking as a result, and what the current and future risks may be. Finally, to ensure that the Portfolio Managers consider all potential ESG concerns, where available, they examine the external ESG ratings for the portfolio companies on an annual basis. Companies with a downward trend in ratings may indicate potentially higher ESG risk and therefore be flagged up for further engagement. Assessment: The Portfolio Managers assess companies’ ESG risks and opportunities, identify gaps in their awareness or management of ESG factors, and examine their external ratings. In doing so, the Portfolio Managers are able to determine how they could add value as shareholders. The core of our ESG evaluation stems from a number of Schroders’ proprietary quantitative research tools, such as CONTEXT, SustainEx and World-Check: – CONTEXT provides a systematic framework for analysing a company’s relationship with its key stakeholders, thus assessing the sustainability of its business model; – SustainEx quantifies the positive and negative impacts on the environment and society; – World-Check is a service that conducts contracting party risk assessment. 1 https://www.schroders.com/en/global/individual/about-us/what-we-do/sustainable-investing/our-sustainable-investment-policies-disclosures-voting- reports/group-exclusions/ 2 https://mybrand.schroders.com/m/f97b8ea198e1cf2/original/April-2022_SC-SI-Policy-vF-1-4.pdf Schroder British Opportunities Trust plc 30 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 31 ## Business Review United Nations’ Sustainable Development Goals (“SDGs”) UN SDGs were adopted by all UN Member States in 2015 as part of the 2030 Agenda for Sustainable Development to As alluded to earlier, the Company will focus on companies address global challenges. The global challenges described which the Portfolio Managers consider to be sustainable from by the SDGs have been building up over several decades, and an environmental, social and governance perspective, the goals represent a framework to guide ideas and supporting at least one of the goals and/or sub-goals of the innovation towards tackling those challenges. The 17 discrete United Nations’ Sustainable Development Goals (“SDGs”), or goals (shown below), each focus on distinct challenges and which the Portfolio Managers consider would benefit from are underpinned by a comprehensive range of metrics their support in helping them incorporate SDGs into their comprising 169 targets. business planning and/or in reporting their alignment with SDGs. Strategic Report The Portfolio Managers believe that investors, big and small, 2015. More recently, it has been estimated that this gap now 3 have a part to play in meeting these global goals. While stands at c.$4 trillion per year. originally intended for governments and policymakers, the As investors, the SDGs can help us understand where to SDGs have evolved into a universally recognised framework, deploy capital and to frame investment decisions. The used by both the public and private sectors, with both playing Portfolio Managers believe that a number of the long-term a key role in developing solutions. The United Nations trends that underpin the achievement of these goals, can Conference on Trade and Development (UNCTAD) estimated provide tailwinds for investments. Businesses which are that an annual $2.5 trillion was required to achieve the SDGs aligned to one or more of these could be well positioned for in developing countries, when the goals were adopted in growth. 3 https://unctad.org/news/closing-investment-gap-global-goals-key- building-better-future Report and Accounts 31 for the year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 32 ## Business Review The below table serves to illustrate which UN SDGs the Portfolio Managers have deemed are aligned to a sample of our investee companies. For the Company’s public equity investments, the Portfolio Managers utilise Schroders’ proprietary tool, ThemEx, which seeks to align a company’s products and services to the SDGs and sustainable investment themes. For the Company’s private equity investments, the Portfolio Managers review investments to identify if their business models might positively contribute to one or more UN SDGs, and where possible the relevant targets. Private equity Public equity Select UN SDG* Select UN SDG* portfolio company portfolio company Rapyd National Express Cera Volution Leaning Curve SSP Waterlogic discoverIE EasyPark Trainline *The list of relevant UN SDGs may not be exhaustive for each holding There have been instances where investments have been made where the investment team thought the companies would benefit from Schroders’ support in helping them incorporate SDGs into their business planning and/or in reporting their alignment with SDGs. For example, the Portfolio Managers have discussed these points with Graphcore’s management in the past. As the company navigates a difficult macro environment, the Portfolio Managers look to provide the company with further support on this matter. ### Engagement As part of the investment process, the Portfolio Managers meet with company management teams and/or GPs (in the case of private equity co-investments) in advance of investing. This engagement is maintained throughout the life of an investment. The Portfolio Managers take pride in their level of engagement with companies. Schroders’ brand, as well as extensive resources across public and private equity investment teams, affords them the ability to regularly engage on all aspects of corporate strategy, including environmental, social and governance matters. During the year, the Portfolio Managers engaged portfolio holding SSP Group, a leading operator of food and beverage outlets in travel locations worldwide, on the topic of human capital management. They also engaged Watches of Switzerland on Schroder British Opportunities Trust plc 32 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 33 ## Business Review executive renumeration. Additionally, various options were discussed, including share buybacks, with the management of a number of the portfolio’s public equity holding companies whose share prices had fallen materially. Regarding the portfolio’s public equity holdings, Schroders voted at 38 meetings over the 12-month period: • 29 AGM meetings • 5 EGM meetings • 3 court meetings Strategic Report • 1 warrant holder meeting • Votes for management proposals: 94.86% (443 out of 467 resolutions) • Votes against management proposals: 5.14% (24 out of 467 resolutions) Resolutions Schroders voted against included: • Director election/re-election • Strategic transactions • Remuneration policy and implementation • Auditor reappointment • Share allotments/buybacks Additionally, the investment team seeks to use its expertise and network to provide support to the portfolio’s private companies’ business development and strategy. The following engagement case study has been anonymized for the best interest of the portfolio company and shareholders in the company. Over the past year, the investment team explored options to support an unlisted portfolio company on its strategic partnerships to advance its digital capabilities, introductions to potential investors and M&A opportunities. Leveraging Schroders Capital’s extensive network of investors and companies, the team set up five introductory meetings with private equity investors not acquainted with the company, as well as instigating discussions with the company’s management and other companies invested in by Schroders Capital. Following discussions with the company’s management on bidding tactics and key considerations regarding potential acquisitions, the company improved its position with regards to ongoing acquisition opportunities. Going forward, we will continue to engage with companies and investment partners to ensure the companies we invest in are managed with due consideration of sustainability. We will continue to promote the importance of sustainable investment and business practices, and will provide advice and guidance where possible. Report and Accounts 33 for the year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 34 ## Business Review ### Principal risks and uncertainties The Board is responsible for the Company’s system of risk management and internal control, and for reviewing its effectiveness. The Board has adopted a detailed matrix of principal risks affecting the Company’s business as an investment trust and has established associated policies and processes designed to manage and, where possible, mitigate those risks, which are monitored by the audit and risk committee on an ongoing basis. The Board has also adopted a risk appetite statement. This system assists the Board in determining the nature and extent of the risks it is willing to take in achieving the Company’s strategic objectives. Both the principal risks and the monitoring system are also subject to regular, robust review. The last review took place in March2023. Although the Board believes that it has a robust framework of internal controls in place this can provide only reasonable, and not absolute, assurance against material financial misstatement or loss and is designed to manage, not eliminate, risk. Actions taken by the Board and, where appropriate, its committees, to manage and mitigate the Company’s principal risks and uncertainties are set out in the table below. ### Emerging risks and uncertainties During the year, the Board continued to discuss and monitor a number of risks which could affect the Company or the valuations of investee companies. Two emerging risks were considered, geopolitical risks and ESG risks. The Board receives updates from the Portfolio Managers, Company Secretary and other service providers on other potential risks that could affect the Company. Geopolitical risk includes the impact of regional tensions, trade wars and sanctions against companies. During the year, the Board noted that the Russian invasion of Ukraine impacted supply chains, inflation and interest rates both in the UK and globally. Increases in interest rates lead to increases in the discount rates used to value growth companies. This has led to the Board determining that the market risks faced by the Company have increased in the last year. ESG risks are increasing generally owing to greater awareness of the long term cost of the environmental impact of corporate activities as well as changes in investor requirements. This has led to the Board considering the market risks affecting the pricing of the Company’s investments as having increased during the last year. Strategic Risks Mitigation and management Change trend The Company’s investment objective may The appropriateness of the Company’s ## become out of line with the requirements of investment remit is regularly reviewed and the  investors, or the Company’s investment strategy Board monitors the success of the Company in may not be sufficiently differentiated from other meeting its stated objectives. products resulting in the Company being The Company has a fixed life which will only be subscale and shares trading at a discount. extended if the Company continues to meet investor requirements. | The Company has a fixed life. In the event that | The private equity Portfolio Managers have | | | --- | --- | --- | | no alternative proposals are put forward to | extensive experience and a track record in |  | | shareholders, or such proposals are not | accurately timing the exits of private equity | | | approved by shareholders, the Company will | investments. | | | commence winding up in 2028. It could take | The Board will ensure that any alternative | | | several years until all of the Company's private | proposals to be made to shareholders, are put | | | equity investments are disposed of and any final | forward at an appropriate time. | | distribution of proceeds made to shareholders. Schroder British Opportunities Trust plc 34 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 35 ## Business Review Market Risks Mitigation and management Change trend Underlying investee companies within the The Portfolio Managers adopt an active ##  Company’s portfolio may experience fluctuations management approach and focus on sustainable in their operating results due to fluctuations in businesses capable of generating long-term The increased risk reflects the market or general economic conditions returns for shareholders. concerns around general (including changes to interest rates, inflation, The Board receives quarterly reports from the economic conditions geopolitical and ESG related regulations). These Portfolio Managers on the performance of the following the ongoing war in would in turn affect the performance of the Company’s investments and the market outlook. Ukraine as well as higher Company. inflation and interest rate rises. Strategic Report Changes to the framework of regulation and The Company Secretary, Corporate Broker, ##  legislation (including rules relating to listed Portfolio Managers and auditor appraise the closed-end investment companies or loss of the Board of any prospective changes to the legal exemption for investment trusts from UK tax on and regulatory framework, so that requisite chargeable gains) within which the Company actions can be planned. operates could have a material adverse impact on the Company. Operational Risks Mitigation and management Change trend The Company's shares may not trade in line The Board monitors the NAV and receives ##  with NAV, depending on factors such as regular updates. The Board has a supply and demand for the Company's discount/premium policy and the Board The increased risk reflects shares, market conditions and general consider whether a buyback would be for the heightened market volatility. investor sentiment. The operation of the benefit of the Company as a whole, its Company's policy to manage any discount shareholders and take into account relevant could result in the Company's operating factors and circumstances at the time. charges ratio becoming excessive. The Board monitors marketing and distribution activity regularly. The Company’s investment portfolio is The Board regularly considers key man risk ##  managed by the Portfolio Managers and, in and seeks assurances concerning the depth particular, is led by two key individuals. Loss of expertise of the investment management of a portfolio manager could affect teams which manage the Company’s performance and market sentiment leading portfolio. to a widening discount of the share price The Board receives assurances from the compared with the NAV. Manager regarding the Portfolio Manager’s incentive arrangements and succession planning. Private equity investments are generally less Contracts are drafted to include obligations to ##  liquid and more difficult to value than publicly provide information with regard to investee traded companies. A lack of open market data companies in a timely manner, where possible. and reliance on investee company projections The Manager has an extensive track record of may also make it more difficult to estimate fair valuing privately held investments. value on a timely basis. The audit and risk committee reviews all valuations of unquoted investments on a quarterly basis and challenges methodologies used by the Portfolio Managers. Liquidity risks include those risks resulting from Concentration limits are imposed on single ##  holding private equity investments as well as not investments to minimise the size of positions. being able to participate in follow-on fundraises The Portfolio Managers consider liquidity risk through lack of available capital which could when selecting investments. result in dilution of an investment. The Portfolio Managers will seek to manage cashflow such that the Company will be able to participate in follow up fundraisings where appropriate. The Board receives quarterly reports from the Manager on the portfolio's liquidity. Report and Accounts 35 for the year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 36 ## Business Review Operational Risks Mitigation and management Change trend The Company has no employees and the Experienced third party service providers are ##  Directors have been appointed on a non- employed by the Company under appropriate executive basis. The Company is therefore reliant terms and conditions and with agreed service upon the performance of third-party service level specifications. Service level agreements providers. include clauses which set out the notice periods for termination. Failure of any of the Company’s service providers The Board receives regular reports from its to perform in accordance with the terms of its service providers and the management appointment, to protect against breaches of the engagement committee reviews the Company’s legal and regulatory obligations such performance of key service providers at least as data protection, or to perform its obligations annually. at all as a result of insolvency, fraud, breaches of cyber security, failures in business continuity The audit and risk committee reviews reports on plans or other causes, could have a material the external audits of the internal controls of detrimental impact on the operation of the certain key service providers. Company. Failure to price sustainability risks into an investment by the Portfolio Manager which could lead to future losses. The AIFM, the Portfolio Managers, the Depositary, the Company Secretary and the Administrator perform services that are integral to the operation of the Company and any of the Company’s service providers could terminate their contract. the Company’s portfolio of listed investments, the Company’s ### Risk assessment and internal controls cash balances and the forecast income and expenditure flows ### review by the Board as well as commitments to provide further funding to the Company’s private equity investee companies; the Company Risk assessment includes consideration of the scope and currently has no borrowings. A substantial proportion of the quality of the systems of internal control operating within key Company’s expenditure varies with the value of the service providers, and ensures regular communication of the investment portfolio. In the event that there is insufficient results of monitoring by such providers to the audit and risk cash to meet the Company’s liabilities, the listed investments committee, including the incidence of significant control in the portfolio may be realised and the Directors have failings or weaknesses that have been identified at any time reviewed the average days to liquidate the listed investments. and the extent to which they have resulted in unforeseen The Company is a closed-end investment trust and there is no outcomes or contingencies that may have a material impact requirement to redeem or buy back shares. The Company on the Company’s performance or condition. has additionally performed stress tests which confirm that a No significant control failings or weaknesses were identified 50% fall in the market prices of the portfolio would not affect from the audit and risk committee’s ongoing risk assessment the Board’s conclusions in respect of going concern. which has been in place throughout the year and up to the ### date of this report. The Board is satisfied that it has Viability statement undertaken a detailed review of the risks facing the In accordance with the AIC Code the Board has considered Company. the longer term prospects for the Company beyond the An analysis of the financial risks facing the Company is set twelve months required to assess the Company’s ability to out in note 22 to the accounts on pages77 to 80. continue as a going concern. The Board believes that a period of five years reflects a suitable time horizon for strategic planning, the investment cycle of private equity and the longer term view taken by the Portfolio Managers and ### Going concern investors; this period is in line with the Company’s Key The Directors have a reasonable expectation that the Information Document. The Company has a fixed life. In the Company has adequate resources to continue in operational event that no alternative proposals are put forward to existence until 31 July 2024 which is more than twelve shareholders, or such proposals are not approved by months from the date when this Report and accounts was shareholders, the Company will commence winding up in signed and the Directors have accordingly adopted the going 2028. concern basis in preparing this Report and accounts. As an investment trust, the Company is entitled to beneficial In reaching this assessment the Directors have considered treatment with regard to chargeable gains. Any change to the principal risks, the impact of the emerging risks and such taxation arrangements could affect the Company’s uncertainties and the matters referred to in the viability viability as an effective investment vehicle. statement. They have additionally considered the liquidity of Schroder British Opportunities Trust plc 36 176432 British Opportunities Trust plc Annual Report Pt1.qxp_176432 British Opportunities Trust plc Annual Report Pt1 05/07/2023 16:48 Page 37 ## Business Review In their assessment of the prospects for the Company over The conclusion of this review is that the Board has a the next five years, the Directors have assumed that the reasonable expectation that the Company will be able to Company will continue to adopt the same investment continue in operation and meet its liabilities as they fall due objective, that the Company’s performance will continue to over the next five years. be attractive to shareholders and that the Company will By order of the Board continue to meet the requirements so as to retain its status as an investment trust. Schroder Investment Management Limited The Directors have considered each of the Company’s Company Secretary principal and emerging risks and uncertainties detailed on pages34 to 36. In particular, the Directors concluded that the emerging geopolitical and ESG risks do not materially impact 5 July 2023 Strategic Report the viability of the Company. The Directors have also considered a significant fall in equity markets on the value of the Company’s investment portfolio. The Directors have, furthermore, considered the Company’s projections of income and expenditure as well as any commitments to provide funding to investee companies. They have noted that the Company’s investment portfolio will continue to comprise a significant proportion of highly liquid listed equities which can be readily realised and that a substantial proportion of the Company’s operating expenses vary with the value of the investment portfolio. As stated in Going Concern above, the Company is a closed-end investment trust and there is no requirement to redeem or buy back shares. A stress test to evaluate the consequences of a 50% reduction in the market value of the Company’s investments over the five year period has also been evaluated. Report and Accounts 37 for the year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 38 ## Board of Directors ### Neil England Status: Independent non-executive Chairman Length of service: appointed as a Director and Chairman in November 2020. Neil has held a number of leadership roles in various sectors including food, FMCG (fast moving consumer goods), distribution, technology and financial services. Neil was Vice President of Mars Incorporated; Group Chief Executive at The Albert Fisher Group Plc and Group Commercial Director at Gallaher Group Plc. Neil has been Chairman of a number of companies including ITE Group Plc, Blackrock Emerging Europe Plc and six private businesses. He is currently the Chairman of Augmentum Fintech plc (a specialist venture capital investment company) and a non-executive Director of a private equity backed leisure business. Neil has extensive international business expertise in public and private companies varying in size from start-ups to global corporations. He is an experienced Chairman. Neil remained free from conflict and had sufficient time available to discharge his duties effectively. Committee membership: audit and risk, management engagement and nominations committees (Chairman) Number of shares held: 55,000* ### Diana Dyer Bartlett Status: Independent non-executive Director and Chairman of audit and risk committee Length of service: appointed as a Director in November 2020. After qualifying as a chartered accountant with Deloitte Haskins & Sells, Diana spent five years in investment banking with Hill Samuel. Since then she has held a number of executive roles including as finance Director of various venture capital and private equity backed businesses and listed companies involved in software, financial services, renewable energy and coal mining. She was also Company Secretary of Tullett Prebon plc and Collins Stewart Tullett plc. Diana is currently Chairman of Smithson Investment Trust plc and Audit Committee Chairman of Mid Wynd International Investment Trust plc. Diana has a strong financial background and her listed company experience makes her a valuable member of the Board. Diana remained free from conflict and had sufficient time available to discharge her duties effectively. Committee membership: audit and risk (Chairman)**, management engagement and nominations committees Number of shares held: 46,345* ### Tim Jenkinson Status: Independent non-executive Director and Chairman of management engagement committee Length of service: appointed as a Director in November 2020. Tim is Professor of Finance at the Saïd Business School, University of Oxford, Director of the Oxford Private Equity Institute and one of the founders of the Private Equity Research Consortium. Tim’s research has won many awards. He is a Professorial Fellow at Keble College, University of Oxford and a Research Associate of the European Corporate Governance Institute. Tim is a partner at the European economic consulting firm Oxera. He has previously held Board positions in PSource Structured Debt Limited, the US financial services firm DFC Global Corporation and the German utility comparison firm, Verivox GmbH. Tim was a Specialist Advisor to the Culture, Media and Sport Select Committee of the UK Parliament. Tim is an experienced researcher and lecturer, teaching courses on private equity, entrepreneurial finance, and valuation. Tim remained free from conflict and had sufficient time available to discharge his duties effectively. Committee membership: audit and risk, management engagement (Chairman) and nominations committees Number of shares held: 6,609* *Shareholdings are as at 5 July 2023, full details of Directors’ shareholdings are set out in the Remuneration Report on page49. **A primary responsibility of the committee is oversight of the valuations process. In the coming year, the Board plans to separate this committee into two, namely an audit and risk committee, and a valuation committee. Schroder British Opportunities Trust plc 38 176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 39 ## Directors’ Report The Directors submit their report and the audited Report and by third parties. Additional meetings of the Board are accounts of the Company for the year from 1April 2022 to 31 arranged as required. March 2023. The Board has approved a policy on Directors’ conflicts of interest. Under this policy, Directors are required to disclose all actual and potential conflicts of interest to the Board as ### Directors and officers they arise for consideration and approval. The Board may Chairman impose restrictions or refuse to authorise such conflicts if deemed appropriate. No Directors have any connections with The Chairman is an independent non-executive Director who the Manager, shared directorships with other Directors or is responsible for leadership of the Board and ensuring its material interests in any contract which is significant to the effectiveness in all aspects of its role. The Chairman’s other Company’s business. significant commitments are detailed on page38. He has no conflicting relationships. ### Company Secretary Key service providers Schroder Investment Management Limited provides The Board has adopted an outsourced business model and company secretarial support to the Board and is responsible has appointed the following key service providers: for assisting the Chairman with Board meetings and advising the Board with respect to governance. The Company Manager Secretary also manages the relationship with the Company’s The Company is an Alternative Investment Fund as defined by service providers, except for the Manager. Shareholders the AIFM Directive and has appointed Schroder Unit Trusts wishing to lodge questions in advance of the AGM are invited Limited (“SUTL”) as the Manager in line with the terms of an to do so by writing to the Company Secretary at the address Alternative Investment Fund Manager (“AIFM”) agreement. given on the outside back cover or by email to: The AIFM agreement, which is governed by the laws of amcompanysecretary@schroders.com. England and Wales, can be terminated by either party on sixmonths’ notice or on immediate notice in the event of Governance certain breaches or the insolvency of either party. As at the ### Role and operation of the Board date of this report no such notice had been given by either The Board (of three Directors, listed on page 38) is the party. Company’s governing body; it sets the Company’s strategy SUTL is authorised and regulated by the FCA and provides and is collectively responsible to shareholders for its long- portfolio management, risk management, accounting and term success. The Board is responsible for appointing and company secretarial services to the Company under the AIFM subsequently monitoring the activities of the Manager and agreement. The Manager also provides general marketing other service providers to ensure that the investment support for the Company and manages relationships with key objective of the Company continues to be met. The Board also investors, in conjunction with the Chairman, other Board ensures that the Manager adheres to the investment members or the Corporate Broker as appropriate. The restrictions set by the Board and acts within the parameters Manager has delegated investment management, set by it in respect of any gearing. The Business Review on accounting, administration and company secretarial services pages21 to 37 sets out further detail of how the Board to another wholly owned subsidiary of Schroders plc, reviews the Company’s strategy, risk management and Schroder Investment Management Limited (“SIM”). The internal controls and also includes other information required Company Secretary has an independent reporting line to the for the Directors’ Report, and is incorporated by reference. Manager and distribution functions within Schroders. The A formal schedule of matters specifically reserved for decision Manager has in place appropriate professional indemnity by the Board has been defined and a procedure adopted for cover. Directors, in the furtherance of their duties, to take Private investments are managed by Schroders’ specialist independent professional advice at the expense of the private equity team, Schroders Capital. Schroders Capital has Company. over 20 years’ experience successfully investing in companies, The Chairman ensures that all Directors receive relevant both directly via direct co-investment and through funds. management, regulatory and financial information in a timely They manage over £12.9 billion of assets across several manner and that they are provided, on a regular basis, with specialist strategies. The private portion of the Company’s key information on the Company’s policies, regulatory portfolio is managed by Tim Creed, Schroders Capital’s Head requirements and internal controls. The Board meets at least of European Private Equity. Tim is a member of the firm’s quarterly and receives and considers reports regularly from Global Investment Committee and he is supported by a the Manager and other key advisers and ad hoc reports and sizable team of private equity investment professionals who information are supplied to the Board as required. commit a substantial amount of their time to the portfolio. Four Board meetings are usually scheduled each year to deal The Schroders Group manages £737.5 billion (as at with matters including: the setting and monitoring of 31December 2022) on behalf of institutional and retail investment strategy; approval of borrowings and/or cash investors, financial institutions and high net worth clients positions; review of investment performance; the level of from around the world, invested in a broad range of asset premium or discount of the Company’s shares to NAV per classes across equities, fixed income, multi-asset and share and promotion of the Company; and services provided alternatives. Report and Accounts 39 for the year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 40 ## Directors’ Report Management and performance fees charged by an underlying investment vehicle does not exceed a fee that is approximately 15 per cent. on gains over a The AIFM is entitled to receive from the Company a hurdle that is, as far as reasonably practicable, management fee calculated and paid quarterly in arrears, on commensurate with the Performance Hurdle. The AIFM shall the last Business Day of March, June, September and also be entitled to a company secretarial and administrative December, at an annual rate of 0.6% per annum of the fee from the Company, equal to the lower of: (i) 0.2 per cent. quarterly cum income Net Asset Value. The AIFM will also be per annum of the quarterly cum income Net Asset Value; and entitled to receive a performance fee, the sum of which will (ii) £250,000 per annum, paid quarterly in arrears on the last be equal to 15per cent. of the amount by which the “PE Business Day of March, June, September and December. Portfolio Total Return” at the end of a “Calculation Period” exceeds a hurdle of 10% per annum. Details of all amounts payable to the Manager are set out in note19 to the accounts on page75. “PE Portfolio” shall mean the Company’s private equity investments and any public equity investments which, at the Depositary time of investment, constituted private equity investments. HSBC Bank plc, which is authorised by the Prudential “PE Portfolio Total Return” shall mean realised and Regulation Authority and regulated by the Financial Conduct unrealised gains and losses on the PE portfolio during the Authority and the Prudential Regulation Authority, carries out Calculation Period, plus any dividends paid during the certain duties of a Depositary specified in the AIFM Directive Calculation Period, minus any management fee or dealing including, in relation to the Company: costs payable in respect of the PE Portfolio during the Calculation Period, expressed as a percentage of the time – safekeeping of the assets of the Company which are weighted invested capital of the PE Portfolio. entrusted to it; If a performance fee shall be payable in accordance with the – cash monitoring and verifying the Company’s cash flows; above, it shall only be paid in full if the “Payment Amount” is and greater than the performance fee. – oversight of the Company and the Manager. “Listed Value Change” means the aggregate price increase The Company, the Manager and the Depositary may or decrease attributable to each PE Portfolio Investment in terminate the depositary agreement at any time by giving listed shares that are held at the end of the relevant 90days’ notice in writing. The Depositary may only be Calculation Period. removed from office when a new Depositary is appointed by the Company. “Payment Amount” means the sum of: (i) aggregate net realised profits on PE Portfolio Investments since the start of the relevant Calculation Period; (ii) plus an amount equal to ### each IPO Unrealised Gain where the IPO of the relevant PE Compliance with the Association of Portfolio Investment takes place during the relevant ### Investment Companies ( “ AIC”) Code of Calculation Period; (iii) if Listed Value Change is positive in ### Corporate Governance respect of the Calculation Period, then plus an amount equal to the Listed Value Change or, if Listed Value Change is The Company is committed to high standards of corporate negative in respect of that Calculation Period, minus an governance and has implemented a framework for corporate amount equal to the Listed Value Change; and (iv) plus the governance which it considers to be appropriate for an aggregate amount of all dividends or other income received investment trust. from PE Portfolio Investments of the Company in that Calculation Period. If the NAV has decreased any accrued The Financial Conduct Authority requires all UK listed performance fee is carried forward and becomes payable in companies to disclose how they have applied the principles the next period in which the NAV increases. and complied with the provisions of the UK Corporate Governance Code 2018 (the “UK Code”) issued by the “Calculation Period” means each financial period ending on Financial Reporting Council (“FRC”). The UK Code is available the Company’s accounting reference date, except that (i) the on the FRC’s website: www.frc.org.uk. first Calculation Period shall be the period commencing on Initial Admission and ending on 30June 2021; and (ii) the final The Company is a member of the AIC, which has published its Calculation Period shall be the period commencing on the own Code of Corporate Governance to recognise the special day after the Company’s then accounting reference date and circumstances of investment trusts ( www.theaic.co.uk) as ending on the winding-up date. endorsed by the FRC. The Board has considered the principles and provisions of the AIC Code of Corporate The accrued performance fee shall only be payable by the Governance 2019 (the “AIC Code”), which addresses those set Company in respect of a Calculation Period if the Company’s out in the UK Code, as well as setting out additional net asset value per share has increased over that Calculation provisions on issues that are of specific relevance to the Period. Company as an investment trust. The Company may make private equity investments through The AIC Code also includes an explanation of how the underlying investment vehicles in respect of which the AIFM principles and provisions set out in the UK Code are adapted or other members of the Schroders group may receive fees. to make them relevant for investment companies. In such circumstances, the AIFM will not charge any fees to the Company in respect of such investment. In addition, the AIFM will take all reasonable steps to ensure that any fee Schroder British Opportunities Trust plc 40 # Directors' Report The Board considers that reporting against the principles and provisions of the AIC Code provides more relevant information to shareholders. The Board confirms that the Company has complied throughout the year under review with the relevant principles and provisions of the AIC Code except as set out below: - the role of executive Directors and senior management; - executive Directors' remuneration; - the need for an internal audit function; and - the requirement to establish a remuneration committee. The Board considers that these provisions, except for the requirement to establish a remuneration committee, are not relevant to the Company, as an externally managed investment company. Furthermore, all of the Company's day to day management and administrative functions are outsourced to third parties and the Company has no executive Directors, employees or internal operations. The Company has not therefore reported further in respect of these provisions. The nomination committee fulfils the function of the remuneration committee and considers any change in the Directors' remuneration policy. A separate committee has not therefore been established. As permitted under the AIC Code, the Chairman is a member of the audit and risk committee. An explanation as to why this is considered appropriate is set out in the audit and risk committee Report on page 43. The Board comprises entirely non-executive Directors, the appointment of a Senior Independent Director is not considered necessary. However, the Chairman of the audit and risk committee effectively acts as the Senior Independent Director, leads the evaluation of the performance of the Chairman and is available to Directors and/or shareholders if they have concerns which cannot be resolved through discussion with the Chairman. ## Revenue, final dividend and dividend policy The net revenue loss for the year, after finance costs and taxation, was £639,000, equivalent to a revenue loss per ordinary share of 0.86 pence. The Company's intention is to look for overall return rather than seeking any particular level of dividend income. Subject to the requirement to make distributions to maintain investment trust status, any dividends and other distributions paid by the Company will be made at the discretion of the Board. The payment of any such dividends or other distributions (if any) will depend on the Company's ability to generate realised profits and to acquire investments which pay dividends, its financial condition, its current and anticipated cash needs, its costs and net proceeds on sale of its investments, legal and regulatory restrictions and such other factors as the Board may deem relevant from time to time. As such, investors should have no expectation that dividends or distributions will be paid at all. The Company has adopted a policy of allocating all operating costs to revenue reserves rather than apportioning any to the capital reserve. This policy is expected to result in a revenue loss being reported in most accounting periods. ## Committees In order to assist the Board in fulfilling its governance responsibilities, it has delegated certain functions to committees. The roles and responsibilities of these committees, together with details of work undertaken during the year under review, are outlined in the next few pages. The reports of the audit and risk committee, management engagement committee and nomination committee are incorporated into and form part of the Directors' Report. ## Company Status The Company carries on business as an investment trust. Its shares are listed and admitted to trading on the premium segment of the main market of the London Stock Exchange. It has been approved by HM Revenue & Customs as an investment trust in accordance with section 1158 of the Corporation Tax Act 2010, by way of a one-off application and it is intended that the Company will continue to conduct its affairs in a manner which will enable it to retain this status. The Company is domiciled in the UK and is an investment company within the meaning of section 833 of the Companies Act 2006. The Company is not a "close" company for taxation purposes. The Articles require the Directors to put forward, at a general meeting of the Company to be held in the year 2028 but in any event no later than 31 May 2028, a winding-up resolution to place the Company into voluntary liquidation. The Articles provide that voting on the winding-up resolution will be enhanced such that, provided any single vote is cast in favour, the winding-up resolution will be passed, unless alternative proposals have been approved by shareholders. ## Share capital and substantial share interests As at 31 March 2023, the Company had 73,900,000 ordinary shares of 1p in issue. 1,100,000 shares were held in treasury. Accordingly, the total number of voting rights in the Company at 31 March 2023 was 73,900,000. Details of changes to the Company's share capital during the year are given in note 14 to the accounts on page 73. The Board will be seeking approval from shareholders to buy back shares, reissue shares held in treasury and issue new shares, as more particularly described in the AGM notice and Annual General Meeting – Recommendations section. All shares in issue rank equally with respect to voting, dividends and any distribution on winding up. Governance Report and Accounts for the year ended 31 March 2023 41 176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 42 ## Directors’ Report The Company has received notifications in accordance with Directors’ and officers’ liability insurance and the FCA’s Disclosure Guidance and Transparency Rule 5.1.2R indemnities of the below interests in 3% or more of the voting rights Directors’ and officers’ liability insurance cover was in place attaching to the Company’s issued share capital. for the Directors throughout the year. The Company’s articles As at 31 % of total of association provide, subject to the provisions of UK March 2023 voting rights legislation, an indemnity for Directors in respect of costs which they may incur relating to the defence of any Schroders plc 21,151,996 28.203% proceedings brought against them arising out of their East Riding Of Yorkshire positions as Directors, in which they are acquitted or Council 15,000,000 20.000% judgment is given in their favour by the court. This indemnity is a qualifying third party indemnity policy and was in place Following the year end and at the date of this report, there throughout the year under review for each Director and to the have been no changes. date of this report. ### Provision of information to the auditor By order of the Board The Directors at the date of approval of this report confirm that, so far as each of them is aware, there is no relevant audit information of which the Company’s auditor is unaware; and each Director has taken all the steps that he or she ought to have taken as a Director in order to make himself or herself Schroder Investment Management Limited aware of any relevant audit information and to establish that Company Secretary the Company’s auditor is aware of that information. 5 July 2023 ### Directors’ attendance at meetings The number of scheduled meetings of the Board and its committees held during the year and the attendance of individual Directors is shown below. Audit Management and Risk Engagement Nomination Director Board Committee Committee Committee Neil England 4/4 4/4 2/2 2/2 Diana Dyer Bartlett 4/4 4/4 2/2 2/2 Tim Jenkinson 4/4 4/4 2/2 2/2 Chris Keljik* 3/3 3/3 1/1 1/1 *Chris Keljik resigned from the Board on 28 February 2023. Schroder British Opportunities Trust plc 42 176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 43 ## Audit and Risk Committee Report The responsibilities and work carried out by the audit and risk committee during the year are set out below. The duties, which include monitoring the integrity of the Company’s financial reporting and internal controls, may be found in the terms of reference which are set out on the Company’s webpage: www.schroders.com/sbo. A primary responsibility of the committee is oversight of the valuations process. In the coming year, the Board plans to separate this responsibility by forming a valuations committee. Due to the size of the Board, all Directors are members of the committee. Diana Dyer Bartlett is the Chairman of the committee. The Board has satisfied itself that at least one of the committee’s members has recent and relevant financial experience and that the committee as a whole has competence relevant to the sector in which the Company operates. The Chairman of the Board is a member of the committee, and was independent on appointment. ### Ongoing risk review ### Audit Annual ### Audit ### planning report Approach The committee’s key roles and responsibilities are set out below. Governance Risk Management and Internal Report and accounts Audit Controls and Valuation Principal risks Report and accounts Audit results To establish a process for identifying, To monitor the integrity of the Report and To discuss any matters arising from the assessing, managing and monitoring accounts of the Company and any formal audit and recommendations made by the emerging and principal risks of the announcements relating to the Company’s auditor. Company. financial performance and valuation. The committee is responsible for reviewing the adequacy and effectiveness of the Company's internal controls and the whistleblowing procedures operated by the AIFM and other services providers. Emerging risks and uncertainties Going concern and viability Auditor appointment, independence To ensure a robust assessment of the To review the position and make and performance Company’s emerging and principal risks recommendations to the Board in To make recommendations to the Board, and procedures is in place to identify relation to whether it considers it in relation to the appointment, emerging risks, and an explanation of appropriate to adopt the going concern re-appointment, effectiveness, and any how these are being managed or basis of accounting in preparing its non-audit services by the auditor and mitigated. annual and half-yearly Report and removal of the external auditor. To review accounts. their independence, and to recommend The committee is also responsible for to the Board their remuneration. To reviewing the disclosures made by the review the audit plan and engagement Company in the viability statement. letter. Report and Accounts 43 for the year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 44 ## Audit and Risk Committee Report The committee identified no significant internal control issues during the committee’s review of the Company’s principal risks and uncertainties. The below table sets out how the committee discharged its duties during the year and up until the approval of this report. The committee met four times during the year. Further details on attendance can be found on page42. An evaluation of the committee’s effectiveness and review of its terms of reference was performed in March 2023 and the next will be completed as part of the Board and committee evaluation process in the next reporting year. Application for the year Risks Management and Internal Financial Reports and Valuation Audit Controls | Service provider controls | Valuation and existence of holdings | | Meetings with the auditor | | --- | --- | --- | --- | | Consideration of the internal controls | Considered reports from the Manager | | The auditor attended meetings to | | maintained by the Manager, Depositary | and Depository, including quarterly | | present their audit plan and the findings | | and Registrar. | reports and one at the year end. The | | of the audit. | | | committee has reviewed the valuation | | The committee met the auditor without | | | methodologies used for both public and | | representatives of the Manager present. | | | private | investments. | | | Internal controls and risk | Recognition of investment income | | Effectiveness of the independent audit | | management | Reviewed consideration of dividends | | process and auditor performance | | Consideration of several key aspects of | received against forecast and the | | Evaluated the effectiveness of the | | internal control and risk management | allocation of special dividends. | | independent audit firm and process prior | | operating within the Manager, | The committee took steps to gain an | | to making a recommendation that it | | administrator Depositary and Registrar, | understanding of the processes to | | should be re-appointed at the forthcoming | | including assurance reports and | record investment income so that | | AGM. Evaluated the auditor’s performance | | presentations on these controls. | dividends paid by any investee | | against agreed criteria including: | | During the year, the administrator | companies held at any time during the | | qualification; knowledge, expertise and | | highlighted an error on one of the daily | year, had been recorded and, where | | resources; independence policies; | | NAV announcements. The administrator | appropriate, collected. | | effectiveness of audit planning; adherence | | confirmed that this was rectified that | | | to auditing standards; and overall | | day. The committee discussed oversight | | | competence was considered, alongside | | of services with the administrator who | | | feedback from the Manager on the audit | | confirmed an independent review had | | | process. Professional scepticism of the | | taken place and implemented controls to | | | auditor was questioned and the committee | | ensure it would not be repeated. | | | was satisfied with the auditor’s replies. | | Compliance with the investment trust | Calculation of the investment | | Auditor independence | | qualifying rules in S1158 of the | management fee and performance fee | | Ernst & Young LLP has provided audit | | Corporation Tax Act 2010 | Confirmed that the management fees | | services to the Company since it was | | Consideration of the Manager’s report | have been calculated in accordance with | | appointed on 19 May 2021. This is the | | confirming compliance. | the AIFM agreement. | | third period that Ernst & Young LLP will | be undertaking the Company’s audit. External auditor confirmation of The auditors are required to rotate the compliance with s1158. senior statutory auditor every five years. This is the third period that the senior statutory auditor, Caroline Mercer, has conducted the audit of the Company’s Report and accounts. The auditors were appointed due to their experience. There are no contractual obligations restricting the choice of external auditors. Overall accuracy of the report and Audit results accounts Met with and reviewed a comprehensive Consideration of the draft report and report from the auditor which detailed accounts and the letter from the the results of the audit, compliance with Manager in support of the letter of regulatory requirements, safeguards representation to the auditor. that have been established, and on their own internal quality control procedures. Schroder British Opportunities Trust plc 44 176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 45 ## Audit and Risk Committee Report Application for the year Risks Management and Internal Financial Reports and Valuation Audit Controls Principal risks Fair, balanced and understandable Provision of non-audit services by the Reviewed the principal and emerging Reviewed the report and accounts to auditor risks together with key risk mitigations. advise the Board whether it was fair, The committee has reviewed the FRC’s The committee additionally adopted a balanced and understandable. Guidance on Audit Committees and has risk appetite statement. Reviewed whether performance formulated a policy on the provision of measures were reflective of the non-audit services by the Company’s business, whether there was adequate auditor. The committee has determined commentary on the Company’s that the Company’s appointed auditor strengths and weaknesses and that the will not be considered for the provision of report and accounts, were taken as a certain non-audit services, such as whole were consistent with the Board’s accounting and preparation of the Report view of the operation of the Company. and accounts, internal audit and custody. The auditor may, if required, provide The committee considered the new IPEV other non-audit services which will be guidelines had been reviewed and their judged on a case-by-case basis. implications for the Company’s The committee was satisfied that this did valuations. not affect the independence or objectivity of the auditor. Discussed the additional procedures the Going concern and viability Consent to continue as auditor auditor carried out in compliance with Reviewing the impact of risks on going Ernst & Young LLP indicated to the the new fraud auditing standard. concern and longer-term viability. committee their willingness to continue The committee reviewed the disclosures to act as auditor. in the report and accounts on going concern and viability. Governance The committee reviewed the forecasts and sensitivity analysis prepared by the Manager, the liquidity of the Company’s portfolio and the key risks which could affect viability. Recommendations made to, and approved by, the Board: The committee recommended that the Board approve the quarterly valuations, the half year report and year end report and accounts. The committee recommended that the going concern for the half and full year report presumption be adopted in the report and accounts and the explanations set out in the viability statement. As a result of the work performed, the committee has concluded that the report for the year ended 31 March 2023, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s position, performance, business model and strategy, and has reported on these findings to the Board. The Board’s conclusions in this respect are set out in the Statement of Directors’ Responsibilities on page52. Having reviewed the performance of the auditors as described above, the committee considered it appropriate to recommend the firm’s re-appointment. Resolutions to re-appoint Ernst & Young LLP as auditor to the Company, and to authorise the Directors to determine their remuneration will be proposed at the AGM. Diana Dyer Bartlett Audit and risk committee Chairman 5 July 2023 Report and Accounts 45 for the year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 46 ## Management Engagement Committee Report • The management engagement committee is responsible for (1) the monitoring and oversight of the Manager’s performance and fees, and confirming the Manager’s ongoing suitability, and (2) reviewing and assessing the Company’s other service providers, including reviewing their fees. All Directors are members of the committee. Tim Jenkinson is the Chairman of the committee. Its terms of reference are available on the Company’s webpage: www.schroders.com/sbo. The committee held two scheduled meetings during the year. Approach Oversight of the Manager Oversight of other service providers The committee: The committee reviews the performance and comp - etitiveness of the following service providers on at least • reviews the Manager’s performance, over the short an annual basis: and long term, against a peer group and the market. • Depositary and Custodian • considers the reporting it has received from the Manager throughout the year and the reporting from • Corporate Broker the Manager to the shareholders. • Registrar • assesses management fees including the The committee receives a report from the Company performance fee on an absolute and relative basis, Secretary on ancillary service providers, and considers receiving input from the Company’s broker, including any recommendations. peer group and industry figures, as well as the structure of the fees. The committee notes the audit and risk committee’s review of the auditor. • reviews the appropriateness of the Manager’s contract, including terms such as notice period. • assesses whether the Company receives appropriate administrative, accounting, company secretarial and marketing support from the Manager. Application for the year The committee undertook a detailed review of the The committee conducted their annual review of service Manager’s performance and agreed that it has the providers which were deemed satisfactory, including a appropriate depth and quality of resource to deliver detailed review of the Depositary & Custodian took superior returns over the longer term. place. The committee also reviewed the terms of the AIFM The committee had undertaken an evaluation of the agreement, including the fee structure. Manager, Registrar, and Depositary and Custodian’s internal controls. The committee reviewed the other services provided by the Manager and agreed they were satisfactory. Recommendations made to, and approved by, the Board: • That the ongoing appointment of the Manager on the terms of the AIFM agreement, including the fee, was in the best interests of shareholders as a whole. • That the Company’s service providers’ performance remained satisfactory. Schroder British Opportunities Trust plc 46 176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 47 ## Nomination Committee Report The nomination committee is responsible for (1) the recruitment, selection and induction of Directors, (2) their assessment during their tenure, and (3) the Board’s succession. All Directors are members of the committee. Neil England is the Chairman of the committee. Its terms of reference are available on the Company’s webpage: www.schroders.com/sbo. The committee held one scheduled meeting during the year. Oversight of Directors Annual review Application Annual Selection Induction of succession of succession evaluation policy policy Approach Selection and induction Board evaluation and Directors’ fees Succession • Committee prepares a job • Committee assesses each Director • The Board’s succession policy is specification for each role, and annually, and considers if an external that Directors’ tenure will be for an independent recruitment evaluation is appropriate. no longer than nine years, firm is appointed. For the except in exceptional • Evaluation focuses on whether each Chairman of committees, the circumstances, and that each Director continues to demonstrate Governance committee considers current Director will be subject to commitment to their role and provides a Board members too. annual re-election at the AGM. valuable contribution to the Board during • Job specification outlines the the year, taking into account time • Committee reviews the Board’s knowledge, professional skills, commitment, independence, conflicts and current and future needs at personal qualities and training needs. least annually. Should any need experience requirements. be identified the committee will • Following the evaluation, the committee initiate the selection process. • Potential candidates assessed provides a recommendation to against the Company’s diversity shareholders with respect to the annual • Committee oversees the policy. re-election of Directors at the AGM. handover process for retiring Directors. • Committee discusses the long • All Directors retire at the AGM and their list, invites a number of re-election is subject to shareholder candidates for interview and approval. makes a recommendation to • Committee reviews Directors’ fees, taking the Board. into account comparative data and reports • Committee reviews the to shareholders. induction and training of new • Any proposed changes to the Directors. remuneration policy for Directors discussed and reported to shareholders. Report and Accounts 47 for the year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 48 ## Nomination Committee Report Application for the year Selection and induction Board evaluation and Directors’ fees Succession | • No new appointments were | • A Board and committee evaluation process | • The committee believes it is | | --- | --- | --- | | made during the year. | was undertaken in September 2022 and | important for the Board to have | | | reported to the committee in December | the appropriate skills and | | | 2022. | diversity and will continue to | review composition and • The committee also reviewed each succession plans with these in Director’s time commitment and mind. independence by reviewing a complete list of appointments, including pro bono not for profit roles, to ensure that each Director remained free from conflict and had sufficient time available to discharge each of their duties effectively. All Directors were considered to be independent in character and judgement. • The committee also considered each Director’s contributions, and noted that in addition to extensive experience as professionals and non-executive Directors, each Director had valuable skills and experience, as detailed in their biographies on page 38. • Based on its assessment, the committee provided individual recommendations for each Director’s re-election. • The committee reviewed Directors’ fees, using external benchmarking, and recommended that Directors’ fees, remain unchanged as detailed in the remuneration report. Recommendations made to, and approved by, the Board: • That all Directors continue to demonstrate commitment to their roles, provide a valuable contribution to the deliberations of the Board, remuneration of the Directors remains appropriate and Directors remain free from conflicts with the Company and its Directors contribute to the long-term sustainable success of the Company, so should all be recommended for re-election by shareholders at the AGM. • That the Remuneration Report be put to shareholders for approval. Schroder British Opportunities Trust plc 48 # Directors' Remuneration Report ## Introduction The following remuneration policy is currently in force and is subject to a binding vote every three years. The next vote will take place at the 2024 AGM and the current policy provisions will apply until that date. The below Directors' report on remuneration is subject to an annual advisory vote. An ordinary resolution to approve this report will be put to shareholders at the forthcoming AGM. At the AGM held on 30 November 2021, 99.99% of the votes cast (including votes cast at the Chairman's discretion) in respect of approval of the Directors' Remuneration Policy were in favour, while 0.01% were against and 10,000 were withheld. At the AGM held on 5 September 2022, 99.98% of the votes cast (including votes cast at the Chairman's discretion) in respect of approval of the Directors' Remuneration Report were in favour, while 0.02% were against and 5,952 were withheld for the year ended 31 March 2022. ## Directors' remuneration policy The determination of the Directors' fees is a matter dealt with by the Board and the nomination committee. The committee has reviewed the Directors' fees and agreed that they remain unchanged as detailed in the remuneration report. It is the Board's policy to determine the level of Directors' remuneration having regard to amounts payable to non-executive Directors in the industry generally, the role that individual Directors fulfil in respect of Board and committee responsibilities, and time committed to the Company's affairs, taking into account the aggregate limit of fees set out in the Company's articles of association. This aggregate level of Directors' fees is currently set at £500,000 per financial year and any increase in this level requires approval by the Board and the Company's shareholders. The Chairman of the Board and the Chair of the audit and risk committee each receive fees at a higher rate than the other Directors to reflect their additional responsibilities. Directors' fees are set at a level to recruit and retain individuals of sufficient calibre, with the level of knowledge, experience and expertise necessary, and to promote the success of the Company in reaching its short and long-term strategic objectives. Any Director who performs services which in the opinion of the Directors are outside the scope of the ordinary duties of a Director, may be paid additional remuneration to be determined by the Directors, subject to the previously mentioned fee cap. The Board and its committees comprise non-executive Directors. No Director past or present has an entitlement to a pension from the Company and the Company has not, and does not intend, to operate a share scheme for Directors or to award any share options or long-term performance incentives to any Director. No Director has a service contract with the Company; however, Directors have a letter of appointment. Directors do not receive exit payments and are not provided with any compensation for loss of office. No other payments are made to Directors other than the reimbursement of reasonable out-of-pocket expenses incurred in attending to the Company's business. The Directors' letters of appointment are available for inspection at the Company's registered office address during normal business hours and during the AGM at the location of such meeting. ## Implementation of policy The Board did not seek the views of shareholders in setting this remuneration policy. Any comments on the policy received from shareholders would be considered on a case by case basis. As the Company does not have any employees, no employee pay and employment conditions were taken into account when setting this remuneration policy and no employees were consulted in its construction. Directors' fees are reviewed annually and take into account research from third parties on the fee levels of Directors of peer group companies, inflation, as well as industry norms and factors affecting the time commitment expected of the Directors. New Directors are subject to the provisions set out in this remuneration policy. ## Directors' report on remuneration This report sets out how the remuneration policy was implemented during the year ended 31 March 2023. ## Consideration of matters relating to Directors' remuneration Directors' remuneration was last reviewed by the nomination committee and the Board in July 2022. The members of the Board at the time that remuneration levels were considered are set out on page 38. Although no external advice was sought in considering the levels of Directors' fees, information on fees paid to Directors of other investment companies managed by Schroders and peer group companies provided by the Manager and Corporate Broker was taken into consideration as was independent third party research. Governance Report and Accounts for the year ended 31 March 2023 49 # Directors' Remuneration Report ## Fees paid to Directors The following amounts were paid by the Company to Directors for their services in respect of the year ended 31 March 2023. Directors' remuneration is all fixed; they do not receive any variable remuneration. ## Remuneration report | Directors | Fees | | Taxable benefits^{1} | | Total | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | Year ended 31 March 2023 £ | Nine month period ended 31 March 2022 £ | Year ended 31 March 2023 £ | Nine month period ended 31 March 2022 £ | Year ended 31 March 2023 £ | Nine month period ended 31 March 2022 £ | Seven month period ended 30 June 2021 £ | | Neil England (Chairman) | 42,003 | 30,110 | – | 618 | 42,003 | 30,728 | 23,287 | | Diana Dyer Bartlett | 36,753 | 26,345 | – | 193 | 36,753 | 26,538 | 19,966 | | Tim Jenkinson | 31,502 | 22,582 | 44 | 43 | 31,546 | 22,625 | 17,536 | | Chris Keljik^{2} | 28,827 | 22,582 | – | – | 28,827 | 22,582 | 17,877 | | | 139,085 | 101,619 | 44 | 854 | 139,129 | 102,473 | 78,666 | $^{1}$Comprise amounts reimbursed for expenses incurred in carrying out business for the Company, and which have been grossed up to include PAYE and NI contributions. $^{2}$Resigned from the Board on 28 February 2023. The information in the above table has been audited. ## Change in annual remuneration payable | Directors | Change in annual fee over the year ended 31 March 2023^{1} | Change in annual fee over the nine month period ended 31 March 2022^{1} | | --- | --- | --- | | | % | % | | Neil England (Chairman) | 2.5 | 2.6 | | Diana Dyer Bartlett | 3.9 | 3.4 | | Tim Jenkinson | 4.6 | 0.3 | | Chris Keljik^{2} | n/a | (1.8) | $^{1}$The changes have been calculated based on annualised fees for the nine months ended 31 March 2022 and the seven months ended 30 June 2021. $^{2}$Resigned from the Board on 28 February 2023. The information in the above table has been audited. The table below compares the remuneration payable to Directors, to distributions made to shareholders during the year under review and the prior period. In considering these figures, shareholders should take into account the Company's investment objective. | | Year ended 31 March 2023 £'000 | Nine month period ended 31 March 2022 £'000 | % Change^{1} | | --- | --- | --- | --- | | Remuneration payable to Directors | 139 | 102 | 2.2 | | Distributions paid to shareholders: share buybacks | 808 | – | – | $^{1}$The change has been calculated based on an annualised fee for the nine months ended 31 March 2022. ## Performance graph since 1 December 2020 (launch date) A graph showing the Company's share price total return versus the FTSE 250 ex Investment Trusts Index$^{1}$ total return is set out below. ![img-6.jpeg](img-6.jpeg) $^{1}$Source: Morningstar. Rebased to 100 at 1 December 2020. The FTSE 250 ex Investment Trusts Index has been selected as an appropriate comparison as it best represents the companies that the Manager uses to select investment opportunities. Companies within this index represent the growth characteristics that the Manager seeks to meet the long term investment objective of delivering returns to shareholders. Definitions of terms and performance measures are provided on pages 86 and 87. 50 Schroder British Opportunities Trust plc # Directors' Remuneration Report ## Directors' share interests The Company's articles of association do not require Directors to own shares in the Company. The interests of Directors, who held office at the end of the year, including those of connected persons, at the beginning and end of the financial year under review, are set out below. | | At 31 March 2023^{1} | At 31 March 2022^{1} | | --- | --- | --- | | Neil England | 55,000 | 30,000 | | Diana Dyer Bartlett | 46,345 | 20,000 | | Tim Jenkinson | 6,609 | – | $^{1}$Ordinary shares of 1p each. The information in the above table has been audited. On behalf of the Board **Neil England** Chairman 5 July 2023 Governance Report and Accounts for the year ended 31 March 2023 51 176432 British Opportunities Trust plc Annual Report Pt2.qxp_176432 British Opportunities Trust plc Annual Report Pt2 05/07/2023 16:54 Page 52 ## Statement of Directors’ Responsibilities The Directors are responsible for preparing the annual – the Strategic Report contained in the report and report, and the Report and accounts in accordance with accounts includes a fair review of the development and applicable law and regulations. performance of the business and the position of the Company, together with a description of the principal Company law requires the Directors to prepare the Report risks and uncertainties that it faces; and and accounts for each financial year. Under that law, the Directors have prepared the Report and accounts in – the annual report and accounts, taken as a whole, is fair, accordance with United Kingdom Generally Accepted balanced and understandable and provides the Accounting Practice (United Kingdom Accounting Standards, information necessary for shareholders to assess the comprising Financial Reporting Standard (FRS) 102 “The Company’s position and performance, business model Financial Reporting Standard applicable in the UK and and strategy. Republic of Ireland” and applicable law). Under company law, On behalf of the Board the Directors must not approve the Report and accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the return or loss of the Company for that year. In preparing these Report and accounts, the Directors are required to: Neil England Chairman – select suitable accounting policies and then apply them consistently; 5 July 2023 – make judgements and accounting estimates that are reasonable and prudent; – state whether applicable UK Accounting Standards, comprising FRS 102, have been followed, subject to any material departures disclosed and explained in the Report and accounts; – notify the Company’s shareholders in writing about the use of disclosure exemptions in FRS 102, used in the preparation of the Report and accounts; and – prepare the Report and accounts on a going concern basis unless it is inappropriate to presume that the Company will continue in business. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Report and accounts and the Directors’ Remuneration Report comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Manager is responsible for the maintenance and integrity of the webpage dedicated to the Company. Legislation in the United Kingdom governing the preparation and dissemination of Report and accounts may differ from legislation in other jurisdictions. Each of the Directors, whose names and functions are listed on page 38 , confirm that to the best of their knowledge: – the Report and accounts, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), give a true and fair view of the assets, liabilities, financial position and net return of the Company; Schroder British Opportunities Trust plc 52 176432 British Opportunities Trust plc Annual Report Pt3(A).qxp_176432 British Opportunities Trust plc Annual Report Pt3(A) 05/07/2023 16:57 Page 53 ## Independent Auditor’s Report ## to the Members of Schroder British Opportunities ## Trust plc ### Opinion We have audited the financial statements of Schroder British Opportunities Trust plc (the “Company”) for the year ended 31March 2023 which comprise the Income Statement, the Statement of Changes in Equity, the Statement of Financial Position, the Cash Flow Statement and the related notes 1 to 25, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice). In our opinion, the financial statements: – give a true and fair view of the Company’s affairs as at 31March 2023 and of its profit for the year then ended; – have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and – have been prepared in accordance with the requirements of the Companies Act 2006. ### Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion ### Independence We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council’s (‘FRC’) Ethical Standard as applied to public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Company and we remain independent of Company in conducting the audit. ### Conclusions relating to going concern In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Company’s ability to continue to adopt the going concern basis of accounting included: – Confirmation of our understanding of the Company’s going concern assessment process and we engaged with the Directors and the Company Secretary to determine if all key factors that we have become aware of during our audit were considered in their assessment. Financial – Inspection of the Directors’ assessment of going concern, including the revenue forecast, for the period to 31July 2024 which is at least twelve months from the date the financial statements were authorised for issue. – Review of the factors and assumptions, including the impact of the current economic environment, as applied to the revenue forecast and the liquidity assessment of the investments. We considered the appropriateness of the methods used to calculate the revenue forecast and the liquidity assessment and determined, through testing of the methodology and calculations, that the methods, inputs and assumptions utilised were appropriate to be able to make an assessment for the Company. – Review of the Company’s assessment of the liquidity of investments held and evaluated the Company’s ability to sell those investments in order to cover working capital requirements as a result of the Company operating at a forecasted revenue loss. – Consideration of the commitments that have been made with respect to the purchase of unquoted investments and made sure that these have been appropriately taken account of when preparing the forecast. – Review of the Company’s going concern disclosures included in the annual report in order to assess that the disclosures were appropriate and in conformity with the reporting standards. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period assessed by the Directors, being the period to 31July 2024, which is at least 12 months from when the financial statements are authorised for issue. Report and Accounts 53 for the year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt3(A).qxp_176432 British Opportunities Trust plc Annual Report Pt3(A) 05/07/2023 16:57 Page 54 ## Independent Auditor’s Report ## to the Members of Schroder British Opportunities ## Trust plc In relation to the Company’s reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it appropriate to adopt the going concern basis of accounting. Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Company’s ability to continue as a going concern. ### Overview of our audit approach Key audit matters – Risk of incorrect valuation or ownership of the investment portfolio – Risk of incorrect calculation of the performance fee Materiality – Overall materiality of £0.79m (2022: £0.78m) which represents 1% (2022: 1%) of Shareholders’ funds. An overview of the scope of our audit Tailoring the scope Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for the Company. This enables us to form an opinion on the financial statements. We take into account size, risk profile, the organisation of the Company and effectiveness of controls, the potential impact of climate change, and changes in the business environment when assessing the level of work to be performed. ### Climate change Stakeholders are increasingly interested in how climate change will impact companies. The Company has determined that the most significant future impacts from climate change on its operations will be from how climate change could affect the Company’s investments and overall investment process, This is explained on page 34 in the principal risks and uncertainties section. This disclosure forms part of the “Other information,” rather than the audited financial statements. Our procedures on these unaudited disclosures therefore consisted solely of considering whether they are materially inconsistent with the financial statements, or our knowledge obtained in the course of the audit or otherwise appear to be materially misstated, in line with our responsibilities on “Other information”. Our audit effort in considering climate change was focused on the adequacy of the Company’s disclosures in the financial statements as set out in Note 2c and conclusion that there was no further impact of climate change to be taken into account as the quoted investments are valued based on market pricing as required by FRS 102. The Company’s unquoted investments are valued using a variety of techniques consistent with the recommendations set out in the International Private Equity and Venture Capital (IPEV) guidelines. Valuations are cross-checked for reasonableness using alternative methods such as: prices of recent transactions, earnings multiples, probability weighted expected returns or option pricing models as appropriate and are therefore deemed to reflect market participants view of climate change risk on the investments held. We also challenged the Directors’ considerations of climate change in their assessment of viability and associated disclosures. ### Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters. Schroder British Opportunities Trust plc 54 176432 British Opportunities Trust plc Annual Report Pt3(A).qxp_176432 British Opportunities Trust plc Annual Report Pt3(A) 05/07/2023 16:57 Page 55 ## Independent Auditor’s Report ## to the Members of Schroder British Opportunities ## Trust plc Risk Our response to the risk Key observations communicated to the Audit and Risk Committee | Incorrect valuation or ownership of | We have performed the following | The results of our procedures identified | | --- | --- | --- | | the investment portfolio (as described | procedures: | no material misstatements in relation to | | on page 44 in the Audit and Risk | | the risk of incorrect valuation or | We obtained an understanding of the Committee Report and as per the ownership of the investment portfolio. Portfolio Manager’s and the accounting policy set out on page 65) Administrator’s processes and controls | The value of the investment portfolio at | surrounding legal title and valuation of | | --- | --- | | 31March 2023 was £74.13m (2022: | quoted and unquoted investments by | | £64.69m) consisting of quoted | performing walkthrough procedures. | investments with an aggregate value of For all quoted investments in the £26.17m (2022: £37.28m) and unquoted portfolio, we compared the market investments with an aggregate value of prices and exchange rates applied to an £47.96m (2022: £27.41m). independent pricing vendor and The valuation of the assets held in the recalculated the investment valuations investment portfolio is the key driver of as at the year end the Company’s net asset value and total We confirmed with the Administrator return. Incorrect investment pricing, or that there were no investments with a failure to maintain proper legal title to stale prices for the quoted investments the investments held by the Company as at the year end and therefore no could have a significant impact on the stale pricing report produced. We portfolio valuation and the return obtained the market prices, from an generated for shareholders. independent pricing vendor, for 5 | The fair value of quoted investments is | business days pre and post the year | | --- | --- | | determined by reference to bid prices | end date and calculated the day-on-day | | which are at close of business on the | movement and confirmed there are no | | reporting date. | stale prices. | | Unquoted investments are valued at | We compared the Company’s quoted | | fair value by the Directors following a | investment holdings at 31March 2023 | | detailed review and appropriate | to independent confirmations received | | challenge of the valuations proposed by | directly from the Company’s Custodian | | Schroder Capital (the “Portfolio | and Depositary. | Manager” for unquoted investments). We recalculated the unrealised The unquoted investment policy applies gains/losses on the unquoted methodologies consistent with the investments as at the year end using International Private Equity and Venture the book-cost reconciliation. Capital Valuation guidelines (‘IPEV’). Financial We engaged our team of valuation The valuation of the unquoted specialists to review the valuations of all investments, and the resultant impact unquoted investments and this on the unrealised gains/(losses), is the included completing the following area requiring the most significant procedures: judgement and estimation in the | preparation of the financial statements | – Reviewing the valuation papers | | | --- | --- | --- | | and has been classified as an area of | | prepared by the Portfolio Manager | | fraud risk as highlighted below on | | for the year ended 31March 2023 | | page60. | | to gain an understanding of the | valuation methodologies and assumptions used; – Assessing whether the valuations have been performed in line with general valuation approaches as set out in UK GAAP and the International Private Equity and Venture capital (‘IPEV’) guidelines; Report and Accounts 55 for the year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt3(A).qxp_176432 British Opportunities Trust plc Annual Report Pt3(A) 05/07/2023 16:57 Page 56 ## Independent Auditor’s Report ## to the Members of Schroder British Opportunities ## Trust plc Risk Our response to the risk Key observations communicated to the Audit and Risk Committee – Assessing and validating the appropriateness of data inputs and challenging the assumptions used to support the valuations; – Assessing and undertaking our own analysis of other facts and circumstances, such as market movement and comparative company information, that have an impact on the fair market value of the investments; and – Assessing whether Management’s valuations are reasonable and within an independently calculated acceptable valuation range taking into consideration the growth of the investee companies during the year along with the overall movement in the market based on a portfolio of comparable companies for each investee company. We corroborated a sample of inputs used by the Portfolio Manager in the valuation to information which has been substantively tested as part of our audit. Where relevant, we obtained the most recent reporting produced by the general partnersand compared these to the Company’s valuations as at 31March 2023 to ensure consistencies in the assumptions or data inputs used. We reviewed the financial statements to ensure that there are adequate disclosures regarding valuation uncertainty and assumptions made in the valuation, including the fair value hierarchy. We obtained confirmations directly from the underlying portfolio companies with respect to the unquoted investments held by the Company. Schroder British Opportunities Trust plc 56 176432 British Opportunities Trust plc Annual Report Pt3(A).qxp_176432 British Opportunities Trust plc Annual Report Pt3(A) 05/07/2023 16:57 Page 57 ## Independent Auditor’s Report ## to the Members of Schroder British Opportunities ## Trust plc Risk Our response to the risk Key observations communicated to the Audit and Risk Committee | Incorrect calculation of the | We have performed the following | The results of our procedures identified | | --- | --- | --- | | performance fee (as described on | procedures: | no material misstatements in relation to | | page44 in the Audit and Risk Committee | | the risk of incorrect calculation of the | We obtained an understanding of the Report and as per the accounting policy performance fee. Manager’s and the Administrator’s set out on page 66) processes surrounding the calculation The Manager is entitled to a of performance fees by performing performance fee, the sum of which will walkthrough procedures. be equal to 15% of the amount by We tested the mathematical accuracy of which the Private Equity Portfolio Total the calculation, verified that the Return at the end of the calculation calculation was in accordance with the period exceeds the performance Investment Management Agreement hurdle. and verified the inputs used to The amount of performance fee appropriate support including the accrued as at 31March 2023 was audited valuations data. £1.67m (2022: £1.12m), which We reviewed the conditions for represents the fee payable for the payment of the performance fee and periods ended 30June 2021 and verified that the realised gain incurred 31March 2022 and year ended on the unquoted investment, 31March 2023. Waterlogic, meets the conditions for the | The performance fee is only paid on | Company to be liable to make a | | --- | --- | | subsequent realisation of the unquoted | payment of an equal amount as at | | investments and therefore £0.48m | 31March 2023. | (2022: £nil) has been presented as a current liability as at 31March 2023 representing a realisation in the year with respect to the investment in Waterlogic. As the inputs to the performance fee are dependent on the valuations of the unquoted investments, there is a risk that the valuation of unquoted investments is overstated resulting in a higher performance fee due to the Manager. Financial There have been no changes to the areas of audit focus raised in the above risk table from the prior year. ### Our application of materiality We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit and in forming our audit opinion. ### Materiality The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the economic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our audit procedures. We determined materiality for the Company to be £0.79million (2022: £0.78million), which is 1% (2022: 1%) of shareholders’ funds. We believe that shareholders’ funds provides us with materiality aligned to the key measure of the Company’s performance. Report and Accounts 57 for the year ended 31 March 2023 # Independent Auditor's Report to the Members of Schroder British Opportunities Trust plc ## Performance materiality *The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.* On the basis of our risk assessments, together with our assessment of the Company's overall control environment, our judgement was that performance materiality was 75% (2022: 75%) of our planning materiality, namely £0.59m (2022: £0.59m). Given the importance of the distinction between revenue and capital for investment trusts, we have also applied a separate testing threshold for the revenue column of the Income Statement which is usually calculated as 5% of net revenue before tax. In the case of the Company, as there is a net loss before tax, we have set our revenue testing threshold in line with the reporting threshold which is calculated as 5% of planning materiality and is £0.04m (2022: £0.04m). ## Reporting threshold *An amount below which identified misstatements are considered as being clearly trivial.* We agreed with the Audit and Risk Committee that we would report to them all uncorrected audit differences in excess of £0.04m (2022: £0.04m), which is set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of other relevant qualitative considerations in forming our opinion. ## Other information The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The Directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements, or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact. We have nothing to report in this regard. ## Opinions on other matters prescribed by the Companies Act 2006 In our opinion the part of the Directors' remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006. In our opinion, based on the work undertaken in the course of the audit: - the information given in the strategic report and the Directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and - the strategic report and Directors' report have been prepared in accordance with applicable legal requirements. ## Matters on which we are required to report by exception In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or Directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with the accounting records and returns; or - certain disclosures of Directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit. 58 Schroder British Opportunities Trust plc 176432 British Opportunities Trust plc Annual Report Pt3(A).qxp_176432 British Opportunities Trust plc Annual Report Pt3(A) 05/07/2023 16:57 Page 59 ## Independent Auditor’s Report ## to the Members of Schroder British Opportunities ## Trust plc ### Corporate Governance Statement We have reviewed the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Company’s compliance with the provisions of the Association of Investment Companies (AIC) Code of Corporate Governance specified for our review by the Listing Rules. Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit: – Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out on page 36; – Directors’ explanation as to its assessment of the Company’s prospects, the period this assessment covers and why the period is appropriate set out on page 36; – Director’s statement on whether it has a reasonable expectation that the Company will be able to continue in operation and meets its liabilities set out on pages 36 and 37; – Directors’ statement on fair, balanced and understandable set out on page 52; – The Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page34; – The section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on pages 43 and 44; and – The section describing the work of the audit and risk committee set out on page 43. ### Responsibilities of Directors As explained more fully in the Directors’ responsibilities statement set out on page 52, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal contro l as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. ### Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a Financial material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. ### Explanation as to what extent the audit was considered capable of detecting ### irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the Company and management. – We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant are United Kingdom Generally Accepted Accounting Practice, the Companies Act 2006, the Listing Rules, the UK Corporate Governance Code, the Association of Investment Companies’ (the ‘AIC’) Code of Corporate Governance, the AIC’s Statement of Recommended Practice, Section 1158 of the Corporation Tax Act 2010 and The Companies (Miscellaneous Reporting) Regulations 2018. Report and Accounts 59 for the year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt3(A).qxp_176432 British Opportunities Trust plc Annual Report Pt3(A) 05/07/2023 16:57 Page 60 ## Independent Auditor’s Report ## to the Members of Schroder British Opportunities ## Trust plc – We understood how the Company is complying with those frameworks through discussions with the Audit and Risk Committee and Company Secretary and review of Board minutes and the Company’s documented policies and procedures. – We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur by considering the key risks impacting the financial statements. We identified fraud risks with respect to the incorrect valuation of the unquoted investments and the resulting impact on unrealised gains/(losses) and incorrect calculation of the performance fee. Further discussion of our approach is set out in the section on key audit matters above which include our response to the fraud risks and other areas of audit focus. – Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved review of the Company Secretary’s reporting to the Directors with respect to the application of the documented policies and procedures and review of the financial statements to ensure compliance with reporting requirements of the Company. A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. ### Other matters we are required to address – Following the recommendation from the audit & risk committee, we were appointed by the Company on 19 May 2021 to audit the financial statements for the period ending 30June 2021 and subsequent financial periods. The period of total uninterrupted engagement including previous renewals and reappointments is 3 periods, covering the periods ending 30June 2021 and 31March 2022 and year to 31March 2023. – The audit opinion is consistent with the additional report to the audit and risk committee. ### Use of our report This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Caroline Mercer (Senior statutory auditor) for and on behalf of Ernst & Young LLP, Statutory Auditor Edinburgh 5July 2023 Schroder British Opportunities Trust plc 60 176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 61 ## Income Statement ## For the year ended 31 March 2023 For the nine months 1 2023 ended 31 March 2022 Revenue Capital Total Revenue Capital Total Note £’000 £’000 £’000 £’000 £’000 £’000 Gains/(losses) on investments held at fair | value through profit or loss 3 | | – 3,198 3,198 – (1,453) (1,453) | | --- | --- | --- | | Losses on derivative contracts | | – – – – (481) (481) | | Gains on foreign exchange | | – 16 16 – – – | | Income from investments 4 | 392 – 392 296 – 296 | | Other interest receivable and similar income 4 77 – 77 – – – Gross return/(loss) 469 3,214 3,683 296 (1,934) (1,638) | Portfolio management fee 5 | | (458) – (458) (372) – (372) | | | --- | --- | --- | --- | | Performance fee 5 | | | – (555) (555) – (714) (714) | | Administrative expenses 6 | (650) – (650) (500) – (500) | | | Transaction costs 11 – (4) (4) – 1 1 Net return/(loss) before finance costs and taxation (639) 2,655 2,016 (576) (2,647) (3,223) Finance costs 7 – – – (1) – (1) Net return/(loss) before taxation (639) 2,655 2,016 (577) (2,647) (3,224) Taxation 8 – – – – – – Net return/(loss) after taxation (639) 2,655 2,016 (577) (2,647) (3,224) Return/(loss) per share 10 (0.86)p 3.57p 2.71p (0.77)p (3.53)p (4.30)p 1 The Company changed its accounting date to 31 March commencing 1 July 2021. The comparative figures cover the nine month period from 30 June 2021 to 31 March 2022. The “Total” column of this statement is the profit and loss account of the Company. The “Revenue” and “Capital” columns represent supplementary information prepared under guidance issued by The Association of Investment Companies. The Company has no other items of other comprehensive income, and therefore the net return/(loss) after taxation is also the total comprehensive income. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year, or comparative period. The notes on pages 65 to 81 form an integral part of these accounts. Financial Report and Accounts 61 for the year ended 31 March 2023 # Statement of Changes in Equity ## For the year ended 31 March 2023 | | Called-up share capital £'000 | Special reserve £'000 | Capital reserves £'000 | Revenue reserve £'000 | Total £'000 | | --- | --- | --- | --- | --- | --- | | At 31 March 2022 | 750 | 72,765 | 5,598 | (1,010) | 78,103 | | Repurchase of the Company's own shares into treasury | - | (808) | - | - | (808) | | Net return/(loss) after taxation | - | - | 2,655 | (639) | 2,016 | | **At 31 March 2023** | **750** | **71,957** | **8,253** | **(1,649)** | **79,311** | ## For the nine months ended 31 March 2022$^{1}$ | | Called-up share capital £'000 | Special reserve £'000 | Capital reserves £'000 | Revenue reserve £'000 | Total £'000 | | --- | --- | --- | --- | --- | --- | | At 30 June 2021 | 750 | 72,765 | 8,245 | (433) | 81,327 | | Net loss after taxation | - | - | (2,647) | (577) | (3,224) | | **At 31 March 2022** | **750** | **72,765** | **5,598** | **(1,010)** | **78,103** | $^{1}$The Company changed its accounting date to 31 March commencing 1 July 2021. The comparative figures cover the nine month period from 30 June 2021 to 31 March 2022. The notes on pages 65 to 81 form an integral part of these accounts. 62 Schroder British Opportunities Trust plc # Statement of Financial Position at 31 March 2023 | | Note | 31 March 2023 £'000 | 31 March 2022^{1} £'000 | | --- | --- | --- | --- | | **Fixed assets** | | | | | Investments held at fair value through profit or loss | 11 | 74,128 | 64,691 | | **Current assets** | | | | | Debtors | 12 | 151 | 115 | | Cash at bank and in hand | 12 | 7,759 | 15,452 | | | | 7,910 | 15,567 | | **Current liabilities** | | | | | Creditors: amounts falling due within one year | 13 | (1,543) | (1,039) | | **Net current assets** | | 6,367 | 14,528 | | **Total assets less current liabilities** | | 80,495 | 79,219 | | **Creditors: amounts falling due after more than one year** | | | | | Performance fee | | (1,184) | (1,116) | | **Net assets** | | 79,311 | 78,103 | | **Capital and reserves** | | | | | Called-up share capital | 14 | 750 | 750 | | Capital reserves | 15 | 80,210 | 78,363 | | Revenue reserve | 15 | (1,649) | (1,010) | | **Total equity shareholders' funds** | | 79,311 | 78,103 | | **Net asset value per share** | 16 | 107.32p | 104.14p | $^{1}$Restated as detailed in note 13 on page 72. The accounts were approved and authorised for issue by the Board of Directors on 5 July 2023 and signed on its behalf by: **Neil England** Chairman The notes on pages 65 to 81 form an integral part of these accounts. Registered in England and Wales as a public company limited by shares **Company registration number: 12892325** Financial Report and Accounts for the year ended 31 March 2023 63 # Cash Flow Statement | | Note | Year ended 31 March 2023 £'000 | For the nine months ended 31 March 2022^{1} £'000 | | --- | --- | --- | --- | | **Net cash outflow from operating activities** | 17 | (662) | (180) | | **Investing activities** | | | | | Purchases of investments | | (19,840) | (7,285) | | Sales of investments | | 13,601 | 5,650 | | Cash outflow from derivative instruments | | – | (693) | | **Net cash outflow from investing activities** | | (6,239) | (2,328) | | **Net cash outflow before financing** | | (6,901) | (2,508) | | **Financing activities** | | | | | Repurchase of Ordinary shares into treasury | | (808) | – | | **Net cash outflow from financing activities** | | (808) | – | | **Net cash outflow in the year/period** | | (7,709) | (2,508) | | **Cash at bank and in hand at the beginning of the year/period** | | 15,452 | 17,960 | | **Net cash outflow in the year/period** | | (7,709) | (2,508) | | **Exchange movements** | | 16 | – | | **Cash at bank and in hand at the end of the year/period** | | 7,759 | 15,452 | Included under operating activities are dividends received during the year amounting to £362,000 (period ended 31 March 2022: £230,000) and interest receipts amounting to £62,000 (period ended 31 March 2022: nil). $^{1}$The Company changed its accounting date to 31 March commencing 1 July 2021. The comparative figures cover the nine month period from 30 June 2021 to 31 March 2022. The notes on pages 65 to 81 form an integral part of these accounts. 64 Schroder British Opportunities Trust plc # Notes to the Accounts ## 1. Accounting period The Company changed its accounting date to 31 March commencing 1 July 2021. The comparative figures cover the nine month period from 30 June 2021 to 31 March 2022. ## 2. Accounting policies ### (a) Basis of accounting Schroder British Opportunities Trust plc ("the Company") is registered in England and Wales as a public company limited by shares. The Company's registered office is 1 London Wall Place, London EC2Y 5AU, United Kingdom. The accounts are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice ("UK GAAP"), in particular in accordance with Financial Reporting Standard (FRS) 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland". The accounts are prepared in accordance with Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" (the "SORP") issued by the Association of Investment Companies in July 2022, except for certain financial information required by paragraph 82(c) regarding unquoted holdings with a value greater than 5% of the portfolio or included in the top 10, where information is not publicly available. All of the Company's operations are of a continuing nature. The accounts have been prepared on a going concern basis with investments at fair value through profit or loss. The Directors believe that the Company has adequate resources to continue operating for the period to 31 July 2024, which is at least 12 months from the date of approval of this report and accounts. In forming this opinion, the Directors have taken into consideration: the controls and monitoring processes in place, the Company's other payables, the level of operating expenses, comprising largely variable costs which would reduce pro rata in the event of a market downturn, the Company's cash flow forecasts and the liquidity of the Company's investments. In forming this opinion, the Directors have also considered the Company's principal risks, including climate change. Further details of Directors' considerations regarding this are given in the Chairman's Statement, Investment Managers' Review, Going Concern Statement, Viability Statement and under the Principal and Emerging Risks heading on page 34. The accounts have been prepared on the assumption that approval as an investment trust will continue to be granted. The accounts are presented in sterling and amounts have been rounded to the nearest thousand. ### (b) Use of judgements, estimates and assumptions The preparation of the accounts requires management to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. The resulting accounting estimates and assumptions will, by definition, seldom equal the related actual results. Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. The key estimates in the accounts are the determination of the fair values of the unquoted investments by the Investment Manager for consideration by the Directors. These estimates are key, as they significantly impact the valuation of the unquoted investments at the year end. The fair valuation process involves estimation using subjective inputs that are unobservable (for which market data is unavailable). The key estimates and assumptions are described in note 21 on pages 75 and 76. Fair value estimates are cross-checked to alternative estimation methods where possible to improve the robustness of the estimates. The risk of an over or under estimation of fair values is greater when methodologies are applied using more subjective inputs. ### (c) Valuation of investments The Company's business is investing in financial assets with a view to profiting from their total return in the form of income and capital growth. This portfolio of financial assets is managed and its performance evaluated on a fair value basis, in accordance with a documented investment objective and information is provided internally on that basis to the Company's Board of Directors. Accordingly, upon initial recognition the investments are recognised by the Company as "held at fair value through profit or loss". Investments are included initially at cost, excluding expenses incidental to purchase which are written off to capital at the time of acquisition. Subsequently the investments are valued at fair value, using the methodology below. Financial Report and Accounts for the year ended 31 March 2023 65 176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 66 ## Notes to the Accounts This valuation process is consistent with International Private Equity and Venture Capital (“IPEV”) guidelines issued in December 2022, which are intended to set out current best practice on the valuation of Private Equity investments. (i) Investments traded in active markets are valued using quoted bid prices. (ii) Investments which are not traded in an active market are valued using the price of a recent investment, where there is considered to have been no material change in fair value. (iii) Where (ii) is no longer considered appropriate, investments are valued at the price used in a material arm’s length transaction by an independent third party, and where there is no impact on the rights of existing shareholders. (iv) In the absence of (iii), one of the following methods may be used: – Revenue or EBITDA multiples, based on listed investments in the relevant sector but adjusted for lack of marketability. – Recent transaction prices adjusted for the company’s performance against key milestones. – Option price modelling. (v) Investments in funds are valued using the NAV per unit with an appropriate discount or premium applied to arrive at a unit price. Purchases and sales of quoted investments are accounted for on a trade date basis. Purchases and sales of unquoted investments are recognised when the related contract becomes unconditional. In line with FRS102 the Company’s listed investments are valued at fair value, which are quoted bid prices for investments in active markets at the accounting date and therefore reflect market participants view of climate change risk on the investments held. The Company’s unquoted investments at 31 March 2023 were valued using a variety of techniques consistent with the recommendations set out in the IPEV guidelines. Valuations of all unquoted investments are cross-checked for reasonableness using alternative methods such as: prices of recent transactions, earnings multiples, probability weighted expected returns or option pricing models as appropriate, and are therefore deemed to reflect market participants’ view of climate change risk on the investments held. (d) Accounting for reserves Gains and losses on sales of investments are included in the Income Statement and in capital reserves within “Gains and losses on sales of investments”. Increases and decreases in the valuation of investments held at the year end are included in the Income Statement and in capital reserves within “Holding gains and losses on investments”. Foreign exchange gains and losses on cash and deposit balances are included in the Income Statement and in capital reserves. (e) Income Dividends receivable are included in revenue on an ex-dividend basis except where, in the opinion of the Board, the dividend is capital in nature, in which case it is included in capital. Overseas dividends are included gross of any withholding tax. Deposit interest outstanding at the year end is calculated and accrued on a time apportionment basis using market rates of interest. (f) Expenses All expenses are accounted for on an accruals basis. Expenses are allocated wholly to revenue, except that: – Any performance fee is charged wholly to capital. – Expenses incidental to the purchase or sale of an investment are charged to capital. These expenses are commonly referred to as transaction costs and mainly comprise brokerage commission. Details of transaction costs are given are given in note 11 on pages 70 to 72. (g) Cash and cash equivalents Cash at bank and in hand may comprise cash and demand deposits which are readily convertible to a known amount of cash and are subject to insignificant risk of changes in value. Schroder British Opportunities Trust plc 66 # Notes to the Accounts ## (h) Financial instruments Other debtors and creditors do not carry any interest, are short-term in nature and are accordingly stated at nominal value, with debtors reduced by appropriate allowances for estimated irrecoverable amounts. Bank loans are initially measured at fair value and subsequently measured at amortised cost. They are recorded at the proceeds received net of direct issue costs. ## (i) Taxation The tax charge for the year includes a provision for all amounts expected to be received or paid. Deferred tax is provided on all timing differences that have originated but not reversed by the accounting date. Deferred tax liabilities are recognised for all taxable timing differences but deferred tax assets are only recognised to the extent that it is probable that taxable profits will be available against which those timing differences can be utilised. Deferred tax is measured at the tax rate which is expected to apply in the years in which the timing differences are expected to reverse, based on tax rates that have been enacted or substantively enacted at the accounting date and is measured on an undiscounted basis. ## (j) Value added tax ("VAT") Expenses are disclosed inclusive of the related irrecoverable VAT. ## (k) Foreign currency In accordance with FRS 102, the Company is required to determine a functional currency, being the currency in which the Company predominantly operates. The Board, having regard to the currency of the Company's share capital and the predominant currency in which its shareholders operate, has determined that sterling is the functional currency and the currency in which the accounts are presented. Transactions denominated in foreign currencies are converted at actual exchange rates as at the date of the transaction. Monetary assets, liabilities and equity investments held at fair value, denominated in foreign currencies at the year end are translated at the rates of exchange prevailing at 1600 hours on the accounting date. ## (l) Repurchases of shares into treasury and subsequent reissues The cost of repurchasing the Company's own shares into treasury, including the related stamp duty and transaction costs is dealt with in the Statement of Changes in Equity. Share repurchase transactions are accounted for on a trade date basis. The sales proceeds of treasury shares reissued are treated as a realised profit up to the amount of the weighted average purchase price of those shares and is transferred to capital reserves. Any excess of sales proceeds over the purchase price is transferred to "share premium". ## 3. Gains/(losses) on investments held at fair value through profit or loss | | Year ended 31 March 2023 £'000 | Nine months ended 31 March 2022 £'000 | | --- | --- | --- | | Gains/(losses) on sales of investments based on historic cost | 889 | (274) | | Amounts recognised in investment holding gains and losses in the previous period in respect of investments sold in the period | 327 | (310) | | Gains/(losses) on sales of investments based on the carrying value at the previous balance sheet date | 1,216 | (584) | | Net movement in investment holding gains and losses | 1,982 | (869) | | Gains/(losses) on investments held at fair value through profit and loss | 3,198 | (1,453) | Financial Report and Accounts for the year ended 31 March 2023 67 # Notes to the Accounts ## 4. Income from investments | | Year ended 31 March 2023 £'000 | Nine months ended 31 March 2022 £'000 | | --- | --- | --- | | **Income from investments:** | | | | UK dividends | 374 | 233 | | Overseas dividends | 18 | 63 | | | **392** | **296** | | **Other interest receivable and similar income:** | | | | Deposit interest | 77 | – | | Other income | – | – | | | **77** | **–** | | **Total income** | **469** | **296** | ## 5. Investment management fee and performance fee | | Year ended 31 March 2023 £'000 | Nine months ended 31 March 2022 £'000 | | --- | --- | --- | | **Revenue:** | | | | Investment management fee | 458 | 372 | | **Capital:** | | | | Performance fee | 555 | 714 | The bases for calculating the investment management and performance fees are set out in the Directors' Report on page 40 and details of all amounts payable to the Manager are given in note 19 on page 75. ## 6. Administrative expenses | | Year ended 31 March 2023 £'000 | Nine months ended 31 March 2022 £'000 | | --- | --- | --- | | Other administrative expenses | 185 | 155 | | Company secretarial and administrative fee payable to Schroders | 180 | 135 | | Directors' fees^{1} | 139 | 102 | | Auditor's remuneration for the audit of the Company's annual accounts^{2} | 146 | 108 | | | **650** | **500** | $^{1}$Full details are given in the remuneration report on pages 49 to 51. $^{2}$Includes VAT amounting to £24,000 (2022: £18,000). 68 Schroder British Opportunities Trust plc 176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 69 ## Notes to the Accounts ### 7. Finance costs Nine Year months ended ended 31 March 31 March 2023 2022 £’000 £’000 Interest paid on futures and overdrafts – 1 ### 8. Taxation (a) Analysis of tax charge for the period Year ended Nine months ended 31 March 2023 31 March 2022 Revenue Capital Total Revenue Capital Total £’000 £’000 £’000 £’000 £’000 £’000 Taxation – – – – – – The Company has no corporation tax liability for the year ended 31 March 2023 (period ended 31 March 2022: nil). (b) Factors affecting tax charge for the period Year ended Nine months ended 31 March 2023 31 March 2022 Revenue Capital Total Revenue Capital Total £’000 £’000 £’000 £’000 £’000 £’000 Net return/(loss) before taxation (639) 2,655 2,016 (577) (2,647) (3,224) Net return/(loss) before taxation multiplied by the Company’s applicable rate of corporation tax for the period of 19.0% (period ended 31 March 2022: 19.0%) (121) 504 383 (110) (503) (613) Effects of: | Capital (gains)/losses on investments | – (569) (569) – 368 368 | | --- | --- | | Income not chargeable to corporation tax | (71) – (71) (46) – (46) | | Expenses not deductible for corporation tax purposes | – 1 1 – (1) (1) | Unrelieved management expenses 192 64 256 156 136 292 Financial Taxation for the period – – – – – – (c) Deferred taxation The Company has an unrecognised deferred tax asset of £983,000 (2022: £646,000) based on a prospective corporation tax rate of 25% (period ended 31 March 2022: 25%). The main rate of corporation tax has increased to 25% for the fiscal year beginning on 1 April 2023. This deferred tax asset has arisen due to the cumulative excess of deductible expenses over taxable income. Given the composition of the Company’s portfolio, it is not likely that this asset will be utilised in the foreseeable future and therefore no asset has been recognised in the accounts. Given the Company’s intention to meet the conditions required to retain its status as an Investment Trust Company, noprovision has been made for deferred tax on any capital gains or losses arising on the revaluation or disposal of investments. ### 9. Dividends The Company has reported a revenue loss after taxation of £639,000 (period ended 31 March 2022: £577,000) for the year and accordingly there is no requirement to pay a dividend under Section 1158 of the Corporation Tax Act 2010. Report and Accounts 69 for the year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 70 ## Notes to the Accounts ### 10. Return/(loss) per share Nine months Year ended ended 31 March 31 March 2023 2022 £’000 £’000 Revenue loss (639) (577) Capital return/(loss) 2,655 (2,647) Total return/(loss) 2,016 (3,224) Weighted average number of shares in issue during the year 74,376,633 75,000,000 Revenue loss per share (0.86)p (0.77)p Capital return/(loss) per share 3.57p (3.53)p Total return/(loss) per share 2.71p (4.30)p ### 11. Investments held at fair value through profit or loss (a) Movement in investments Nine months Year ended ended 31 March 31 March 2023 2022 £’000 £’000 Opening book cost 59,200 57,839 Opening investment holding gains 5,491 6,670 | Opening fair value | 64,691 64,509 | | --- | --- | | Purchases at cost | 19,840 7,285 | | Sales proceeds | (13,601) (5,650) | Gains/(losses) on investments held at fair value through profit or loss 3,198 (1,453) Closing fair value 74,128 64,691 Closing book cost 66,328 59,200 Closing investment holding gains 7,800 5,491 Closing fair value 74,128 64,691 Schroder British Opportunities Trust plc 70 176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 71 ## Notes to the Accounts (b) Material revaluations of unquoted investments Year ended 31 March 2023 Opening Closing valuation valuation at 31 March at 31 March 2022 Purchases Sales Revaluation 2023 £’000 £’000 £’000 £’000 £’000 Investment Rapyd Financial Network 8,565 – – (166) 8,399 Cera EHP S.à r.l. 4,509 407 – 2,070 6,986 Mintec – 6,304 – 2,310 8,614 Pirum Systems – 5,752 – 335 6,087 Culligan (formerly Waterlogic) 6,045 38 (2,384) 1,354 5,053 EasyPark 2,775 30 – 1,687 4,492 CFC Underwriting – 2,610 – 1,488 4,098 Learning Curve 2,336 8 – 111 2,455 Graphcore 3,178 – – (1,400) 1,778 27,408 15,149 (2,384) 7,789 47,962 Nine months ended 31 March 2022 Opening Closing valuation valuation at 30 June at 31 March 2022 Purchases Sales Revaluation 2022 £’000 £’000 £’000 £’000 £’00 0 Investment Rapyd Financial Network 6,667 – – 1,898 8,565 Culligan (formerly Waterlogic) 3,928 180 – 1,937 6,045 Cera EHP S.à r.l. 3,245 36 – 1,228 4,509 Graphcore 2,896 – – 282 3,178 EasyPark 1,962 4 – 809 2,775 Learning Curve 2,032 6 – 298 2,336 20,730 226 – 6,452 27,408 (c) Material disposals of unquoted investments Year ended 31 March 2023 Financial Opening Opening book cost valuation at 31 March at 31 March Realised 2022 2022 Sales gain £’000 £’000 £’000 £’000 Investment Culligan (formerly Waterlogic) 1,897 2,372 (2,384) 487 The above represents a part disposal, following the Waterlogic/Culligen business combination. There were no disposals of unquoted investments in the nine months ended 31 March 2022. Report and Accounts 71 for the year ended 31 March 2023 # Notes to the Accounts ## (d) Transaction costs The following transaction costs, comprising stamp duty, brokerage commission and legal fees, were incurred in the year: | | Year ended 31 March 2023 £'000 | Nine months ended 31 March 2022 £'000 | | --- | --- | --- | | On acquisitions | | | | Stamp duty and brokerage commission | 18 | 15 | | Legal fees | 4 | (1) | | On disposals | | | | Brokerage commission | 5 | 3 | | | 27 | 17 | ## 12. Current assets ### Debtors | | 31 March 2023 £'000 | 31 March 2022 £'000 | | --- | --- | --- | | Dividends and interest receivable | 133 | 88 | | Other debtors | 18 | 27 | | | 151 | 115 | The Directors consider that the carrying amount of debtors approximates to their fair value. ### Cash at bank and in hand The carrying amount of cash, amounting to £7,759,000 (2022: £15,452,000), represents its fair value. ## 13. Current liabilities ### Creditors: amounts falling due within one year | | 31 March 2023 £'000 | 31 March 2022 £'000 | | --- | --- | --- | | Other creditors and accruals | 1,056 | 1,039^{1} | | Performance fee payable | 487 | – | | | 1,543 | 1,039 | $^{1}$Other creditors and accruals at 31 March 2022 were previously reported as £2,155,000. The 31 March 2022 balance has been restated to £1,039,000 because performance fees of £1,116,000 could not have fallen due within one year, under any circumstances. Therefore they have been reclassified as creditors: amounts falling due after more than one year. The Directors consider that the carrying amount of creditors falling due within one year approximates to their fair value. 72 Schroder British Opportunities Trust plc # Notes to the Accounts ## 14. Called-up share capital The issued share capital at the accounting date was as follows: | | 31 March 2023 £'000 | Nine months ended 31 March 2022 £'000 | | --- | --- | --- | | Ordinary Shares allotted, called up and fully paid: | | | | 75,000,000 shares of 1p each: | 750 | 750 | | Repurchase of 1,100,000 (2022: nil) shares into treasury | (11) | – | | Subtotal of 73,900,000 (2022: 75,000,000) shares | 739 | 750 | | 1,100,000 (2022: nil) shares held in treasury | 11 | – | | **Closing balance^{1}** | **750** | **750** | $^{1}$Represents 75,000,000 (2022: 75,000,000) shares of 1p each, including 1,100,000 (2022: nil) held in treasury. During the year, the Company repurchased 1,100,000 of its own shares, nominal value £11,000, to hold in treasury, representing 1.5% of the shares outstanding at the beginning of the year. The total consideration paid for these shares amounted to £808,000. The reason for these purchases was to seek to manage the volatility of the share price discount to NAV per share. ## 15. Reserves ### Year ended 31 March 2023 | | Capital reserves | | | | | --- | --- | --- | --- | --- | | | Special reserve^{1} £'000 | Gains and losses on sales of investments^{2} £'000 | Investment holding gains and losses^{3} £'000 | Revenue reserve^{4} £'000 | | **At 31 March 2022** | **72,765** | **319** | **5,279** | **(1,010)** | | Gains on sales of investments based on the carrying value at the previous balance sheet date | – | 1,216 | – | – | | Net movement in investment holding gains and losses | – | – | 1,982 | – | | Transfer on disposal of investments | – | (539) | 539 | – | | Realised gains on foreign exchange balances | – | 16 | – | – | | Repurchase of the Company's own shares into treasury | (808) | – | – | – | | Performance fee allocated to capital | – | (555) | – | – | | Transaction costs | – | (4) | – | – | | Retained revenue for the period | – | – | – | (639) | | **At 31 March 2023** | **71,957** | **453** | **7,800** | **(1,649)** | Financial Report and Accounts for the year ended 31 March 2023 73 176432 British Opportunities Trust plc Annual Report Pt3(B).qxp_176432 British Opportunities Trust plc Annual Report Pt3(B) 05/07/2023 17:01 Page 74 ## Notes to the Accounts Nine months ended 31 March 2023 Capital reserves Gains Investment and losses holding Special on sales of gains and Revenue 1 2 3 4 reserve investments losses reserve £’000 £’000 £’000 £’000 At 30 June 2021 72,765 1,787 6,458 (433) Losses on sales of investments based on the carrying value at the previous balance sheet date – (584) – – Net movement in investment holding gains and losses – – (869) – Transfer on disposal of investments – 310 (310) – Realised losses on derivatives – (481) – – Performance fee allocated to capital – (714) – – Transaction costs – 1 – – Retained revenue for the period – – – (577) At 31 March 2022 72,765 319 5,279 (1,010) The Company’s Articles of Association permit dividend distributions out of realised capital profits. 1 This is a distributable capital reserve arising from the cancellation of the share premium, and may be distributed as dividends or used to repurchase the Company’s own shares. 2 This is a realised (distributable) capital reserve and may be distributed as dividends or used to repurchase the Company’s own shares. 3 This reserve may include some holding gains/(losses) on liquid investments (which may be deemed to be realised) and other amounts which are unrealised. An analysis has not been made between those amounts that are realised (and may be distributed as dividends or used to r epurchase the Company’s own shares) and those that are unrealised. 4 A credit balance on the revenue reserve may be distributed as dividends or used to repurchase the Company’s own shares. ### 16. Net asset value per share 31 March 31 March 2023 2022 £’000 £’000 Net assets attributable to shareholders (£’000) 79,311 78,103 Shares in issue at the year end 73,900,000 75,000,000 Net asset value per share 107.32p 104.14p ### 17. Reconciliation of total return on ordinary activities before finance costs and ### taxation to net cash outflow from operating activities Nine months Year ended ended 31 March 31 March 2023 2022 £’000 £’000 Net return/(loss) before taxation 2,016 (3,224) | Less capital (return)/loss before taxation ( | 2,655) 2,647 | | | --- | --- | --- | | Decrease in prepayments and accrued income | | (45) (65) | | Decrease/(increase) in other debtors | | 9 (11) | | Increase in creditors and performance fee payable | 572 1,186 | | Performance fee and transaction costs allocated to capital (559) (713) Net cash outflow from operating activities (662) (180) ### 18. Uncalled capital commitments At 31 March 2023, the Company had uncalled capital commitments amounting to £5,476,000 (31 March 2022: £7,869,000) in respect of follow-on investments, which may be called by investee companies, subject to their achievement of certain milestones and objectives. Schroder British Opportunities Trust plc 74 # Notes to the Accounts ## 19. Transactions with the Manager Under the terms of the Alternative Investment Fund Manager Agreement, the Manager is entitled to receive a management fee, a company secretarial and administrative fee, and a performance fee. Details of the bases of these calculations are given in the Directors' Report on page 40. The management fee payable in respect of the year ended 31 March 2023 amounted to £458,000 (period ended 31 March 2022: £372,000), and £458,000 (31 March 2022: £650,000) was outstanding at the year/period end. Any investments in funds managed or advised by the Manager or any of its associated companies, are excluded from the assets used for the purpose of the calculation and therefore incur no fee. There have been no such investments during the year (period ended 31 March 2022: nil). A performance fee provision amounting to £555,000 (period ended 31 March 2022: £714,000) has been included in these accounts. An amount of £487,000 is immediately payable and has been included in these accounts as a creditor falling due within one year. The remaining balance of £1,184,000 (31 March 2022: £1,116,000) is carried forward until such time as it may be paid under the terms of the AIFM Agreement. The company secretarial and administrative fee payable for the year amounted to £180,000 (period ended 31 March 2022: £135,000). Company secretarial and administration fees amounting to £420,000 (31 March 2022: £240,000) were outstanding at the year end. No Director of the Company served as a Director of any company within the Schroder Group at any time during the year. ## 20. Related party transactions Details of the remuneration payable to Directors are given in the Directors' Remuneration Report on page 49 and details of Directors' shareholdings are given in the Directors' Remuneration Report on page 51. Details of transactions with the Manager are given in note 19 above. There have been no other transactions with related parties during the year (period ended 31 March 2022: nil). ## 21. Disclosures regarding financial instruments measured at fair value The Company's financial instruments within the scope of FRS 102 that are held at fair value comprise its investment portfolio. FRS 102 requires that financial instruments held at fair value are categorised into a hierarchy consisting of the three levels below. A fair value measurement is categorised in its entirety on the basis of the lowest level input that is significant to the fair value measurement. Level 1 – valued using unadjusted quoted prices in active markets for identical assets. Level 2 – valued using observable inputs other than quoted prices included within Level 1. Level 3 – valued using inputs that are unobservable. Details of the Company's policy for valuing investments are given in note 2(c) on pages 65 and 66. Level 3 investments have been valued in accordance with note 2(c) (ii) – (v). The Company's unquoted investments at 31 March 2023 were valued using a variety of techniques consistent with the recommendations set out in the International Private Equity and Venture Capital guidelines (IPEV). For investments held directly or via an intermediary vehicle, the Company has established its own estimate utilising widely accepted valuation methods. The determination of fair value by the Manager involves key assumptions dependent upon the valuation technique used. The Company uses the following techniques, which are all consistent with the IPEV Guidelines. The primary technique is the "Multiples" approach. This involves subjective inputs and therefore presents a greater risk of over or under estimation, particularly in the absence of a recent transaction. The key assumption in the Multiples approach is that the selection of comparable companies provides a reasonable basis for identifying the relationship between enterprise value and revenue to apply in the determination of fair value. Typically between 5 and 10 comparable companies will be selected for each investment depending on how many relevant comparable companies are identified. The resultant revenue or earnings multiples derived will vary depending on how many relevant comparable companies are identified and the industries they operate in and vary in the range of 2.4 times to 33.5 times (based on various enterprise valuation metrics). The price of a recent investment may also be used as an appropriate calibration for estimating fair value. Other judgements and assumptions may include: discounts applied due to reduced liquidity; probabilities assigned to potential exit via sale or IPO; and judgements relating to the achievement of performance targets and milestones. Financial Report and Accounts for the year ended 31 March 2023 75 # Notes to the Accounts Valuation techniques include the following, along with the associated range of inputs where relevant, and the total amount valued using each method. | | Multiple range | Value £'000 | | --- | --- | --- | | Revenue multiple | 2.4 to 12.1 | 19,877 | | EBITDA multiple | 9.0 to 33.5 | 26,307 | | Black-Scholes-Merton-Model | N/A | 1,778 | | | | **47,962** | Valuations are cross-checked for reasonableness to alternative multiples-based, income approaches, option pricing models or benchmark index movements as appropriate. At 31 March 2023, the Company's investment portfolio was categorised as follows: | | 2023 | | | | | --- | --- | --- | --- | --- | | | Level 1 £'000 | Level 2 £'000 | Level 3 £'000 | Total £'000 | | Investments in equities – quoted | 26,166 | – | – | 26,166 | | – unquoted | – | – | 47,962 | 47,962 | | **Total** | **26,166** | **–** | **47,962** | **74,128** | At 31 March 2022, the Company's investment portfolio was categorised as follows: | | 2022 | | | | | --- | --- | --- | --- | --- | | | Level 1 £'000 | Level 2 £'000 | Level 3 £'000 | Total £'000 | | Investments in equities – quoted | 37,283 | – | – | 37,283 | | – unquoted | – | – | 27,408 | 27,408 | | **Total** | **37,283** | **–** | **27,408** | **64,691** | There have been no transfers between Levels 1, 2 or 3 during the year (period ended 31 March 2022: nil). Movements in fair value measurements included in Level 3 during the year are as follows: | | Year ended 31 March 2023 £'000 | Nine months ended 31 March 2022 £'000 | | --- | --- | --- | | Opening fair value of Level 3 Investments | 27,408 | 20,730 | | Purchases at cost | 15,149 | 226 | | Sales proceeds | (2,384) | – | | Net gains on investments | 7,789 | 6,452 | | Closing fair value of Level 3 investments | 47,962 | 27,408 | | Closing book cost | 30,803 | 17,551 | | Closing investment holding gains | 17,159 | 9,857 | | Closing fair value of Level 3 investments | 47,962 | 27,408 | 76 Schroder British Opportunities Trust plc # Notes to the Accounts ## 22. Financial instruments' exposure to risk and risk management policies The Company's objectives are set out on the inside front cover of this report. In pursuing these objectives, the Company is exposed to a variety of financial risks that could result in a reduction in the Company's net assets or a reduction in the profits available for dividends. These financial risks include market risk (comprising interest rate risk and other price risk), liquidity risk and credit risk. The Directors' policy for managing these risks is set out below. The Board has oversight of the Company's risk management policy. The Company has no significant exposure to foreign exchange risk on monetary items. The Company's classes of financial instruments may comprise the following: - investments in shares of quoted and unquoted companies which are held in accordance with the Company's investment objective; - short-term debtors, creditors and cash arising directly from its operations; - bank loans or overdrafts for investment purposes and for efficient portfolio management; and - derivatives used for investment purposes, efficient portfolio management or currency hedging. ### (a) Market risk The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. This market risk comprises two elements: interest rate risk and other price risk. Information to enable an evaluation of the nature and extent of these two elements of market risk is given in parts (i) and (ii) of this note, together with sensitivity analyses where appropriate. The Board reviews and agrees policies for managing these risks. The Manager assesses the exposure to market risk when making each investment decision and monitors the overall level of market risk on the whole of the investment portfolio on an ongoing basis. ### (i) Interest rate risk Interest rate movements may affect the level of income receivable on cash balances and the interest payable on any loans or overdrafts when interest rates are re-set. #### Management of interest rate risk Liquidity and borrowings are managed with the aim of increasing returns to shareholders. The Company may borrow from time to time, but gearing will not exceed 10 per cent of net asset value at the time of drawing. Gearing is defined as borrowings less cash, expressed as a percentage of net assets. However, the Company has not used any loans or overdrafts during the year (2022: nil). #### Interest rate exposure The exposure of financial assets and financial liabilities to floating interest rates, giving cash flow interest rate risk when rates are re-set, is shown below: | | 31 March 2023 £'000 | 31 March 2022 £'000 | | --- | --- | --- | | Exposure to floating interest rates: | | | | Cash at bank and in hand | 7,759 | 15,452 | The floating rate assets comprise cash deposits on call. Sterling cash deposits at call earn interest at floating rates based on Sterling Overnight Index Average rates ("SONIA"). The above period end amount may not be representative of the exposure to interest rates during the year, due to fluctuating cash balances. Financial Report and Accounts for the year ended 31 March 2023 77 # Notes to the Accounts ## Interest rate sensitivity The following table illustrates the sensitivity of the return after taxation for the year and net assets to a 0.25% increase or decrease in interest rates in regards to the Company's monetary financial assets and financial liabilities. This level of change is considered to be a reasonable illustration based on observation of current market conditions. The sensitivity analysis is based on the Company's monetary financial instruments held at the accounting date with all other variables held constant. | | 31 March 2023 | | 31 March 2022 | | | --- | --- | --- | --- | --- | | | 0.25% increase in rate £'000 | 0.25% decrease in rate £'000 | 0.25% increase in rate £'000 | 0.25% decrease in rate £'000 | | Income statement – return after taxation | | | | | | Revenue return | 19 | (19) | 39 | (39) | | Capital return | - | - | - | - | | Total return after taxation | 19 | (19) | 39 | (39) | | Net assets | 19 | (19) | 39 | (39) | ### (ii) Other price risk Other price risk includes changes in market prices which may affect the value of investments. ## Management of other price risk The Board meets on at least four occasions each year to consider the asset allocation of the portfolio and the risk associated with particular industry sectors. The investment management team has responsibility for monitoring the portfolio, which is selected in accordance with the Company's investment objective and seeks to ensure that individual stocks meet an acceptable risk/reward profile. The Board may authorise the Manager to enter derivative transactions for efficient portfolio management. ## Market price risk exposure The Company's total exposure to changes in market prices at the year end comprises the following: | | 31 March 2023 £'000 | 31 March 2022 £'000 | | --- | --- | --- | | Investments held at fair value through profit or loss | 74,128 | 64,691 | The above data is broadly representative of the exposure to market price risk during the year. ## Concentration of exposure to market price risk A sector and geographical analysis of the Company's investments is given on page 20. This shows a concentration of exposure to economic conditions in the United Kingdom. In addition, the Company's holds 9 (31 March 2022: 6) investments amounting to approximately £45.0 million (31 March 2022: £27.4 million), or 58.8% (31 March 2022: 35.1%) of NAV, whose valuation is deemed to be potentially volatile, due to the valuation techniques which have sensitive inputs. ## Market price risk sensitivity The following table illustrates the sensitivity of the return after taxation for the year and net assets to an increase or decrease of 20% in the fair values of the Company's investments. This level of change is considered to be a reasonable illustration based on observation of current market conditions. The sensitivity analysis is based on the Company's exposure through equity investments and includes the impact on the management fee and performance fee, but assumes that all other variables are held constant. 78 Schroder British Opportunities Trust plc # Notes to the Accounts | | 31 March 2023 | | 31 March 2022 | | | --- | --- | --- | --- | --- | | | 20% increase in fair value £'000 | 20% decrease in fair value £'000 | 20% increase in fair value £'000 | 20% decrease in fair value £'000 | | Income statement – return after taxation | | | | | | Revenue return | (89) | 89 | (78) | 78 | | Capital return | 14,826 | (14,826) | 12,938 | (12,938) | | Total return after taxation and net assets | 14,737 | (14,737) | 12,860 | (12,860) | | Percentage change in net asset value | 18.6% | (18.6%) | 16.5% | (16.5%) | ## (b) Liquidity risk This is the risk that the Company will encounter difficulty in meeting its obligations associated with financial liabilities that are settled by delivering cash or another financial asset. ### Management of the risk At the year end, the Company's assets included quoted "public equity investments" amounting to £26,166,000 (31 March 2022: £37,283,000), which can be sold to meet ongoing funding requirements. Additionally, the Company had less liquid, "private equity investments" amounting to £45,027,000 (31 March 2022: £27,408,000) and cash balances amounting to £7,759,000 (31 March 2022: £15,452,000). ### Liquidity risk exposure Contractual maturities of financial liabilities, based on the earliest date on which payment can be required are as follows: | | 31 March 2023 | | | 31 March 2022 | | | | --- | --- | --- | --- | --- | --- | --- | | | Three months or less £'000 | More than one year £'000 | Total £'000 | Three months or less £'000 | More than one year £'000 | Total £'000 | | **Creditors: amounts falling due within one year** | | | | | | | | Other creditors and accruals | 1,543 | 1,184 | 2,727 | 1,039 | 1,116 | 2,155 | ## (c) Credit risk Credit risk is the risk that the failure of the counterparty to a transaction to discharge its obligations under that transaction could result in loss to the Company. ### Management of credit risk This risk is not significant and is managed as follows: #### Portfolio dealing The credit ratings of broker counterparties is monitored by the AIFM and limits are set on exposure to any one broker. #### Cash Counterparties are subject to daily credit analysis by the Manager. Cash balances will only be deposited with reputable banks with high quality credit ratings. #### Exposure to the Custodian The Custodian of the Company's assets is HSBC Bank plc which has long-term Credit Ratings of AA- with Fitch and A1 with Moody's. The Company's investments are held in accounts which are segregated from the Custodian's own trading assets. If the Custodian were to become insolvent, the Company's right of ownership of its investments is clear and they are therefore protected. However the Company's cash balances are all deposited with the Custodian as banker and held on the Custodian's balance sheet. Accordingly, in accordance with usual banking practice, the Company will rank as a general creditor to the Custodian in respect of cash balances. #### Credit risk exposure The amounts shown in the statement of financial position under debtors and cash at bank and in hand represent the maximum exposure to credit risk at the year end. No debtors are past their due date and none have been provided for. Financial Report and Accounts for the year ended 31 March 2023 79 # Notes to the Accounts ## (d) Fair values of financial assets and financial liabilities All financial assets and liabilities are either carried in the statement of financial position at fair value, or at a reasonable approximation of fair value. ## 23. Capital management policies and procedures The Company's capital management objectives are to ensure that it will be able to continue as a going concern, and to maximise the income and capital return to its equity shareholders. The Company's capital structure comprises the following: | | 31 March 2023 £'000 | 31 March 2022 £'000 | | --- | --- | --- | | **Equity** | | | | Called-up share capital | 750 | 750 | | Reserves | 78,561 | 77,353 | | **Total equity** | **79,311** | **78,103** | The Board, with the assistance of the Manager, monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review will include: - the possible use of gearing, which will take into account the Manager's views on the market; - the potential benefit of repurchasing the Company's own shares for cancellation or holding in treasury, which will take into account the share price discount; - the opportunity for issue of new shares; and - any dividend to be paid, in excess of that which is required to be distributed. ## 24. Events after the accounting date which have not been reflected in the accounts A performance fee amounting to £487,000 payable to the Manager, in relation to the partial disposal of Waterlogic, is included in the Statement of Financial Position within creditors falling due within one year. However since the year end, the Board has accepted Schroders' offer to disregard the Payment Amount, which would have triggered a performance fee pay-out in the year ending 31 March 2024. This agreement will have the effect of moving this performance fee into creditors falling due after more than one year in the Statement of Financial Position. Schroders considers this concession to be appropriate due to the disappointing performance of the share price versus the net asset value. 80 Schroder British Opportunities Trust plc # Notes to the Accounts ## 25. Disclosures regarding material unquoted holdings (comprising more than 5% of the portfolio and/or included in the top ten holdings) | Holding | Description of its business | Class of shares held | Cost of the investment £'000 | Fair value at 31 March 2023 £'000 | Fair value at 31 March 2022 £'000 | Total income received in the year £'000 | | --- | --- | --- | --- | --- | --- | --- | | Mintec | Provides market intelligence, commodity prices and price forecasts across the agri-food supply chain | Ordinary | 6,305 | 8,614 | Not held | - | | Rapyd Financial Network | Global Fintech company | Ordinary | 3,297 | 8,399 | 8,565 | - | | Cera EHP S à r l | Provides home care services for elderly people | Ordinary | 3,399 | 6,986 | 4,509 | - | | Pirum Systems | Provides a secure processing hub which seamlessly links market participants together, allowing them to electronically process and verify key transaction details | Ordinary | 5,752 | 6,087 | Not held | - | | Culligan (formerly Waterlogic) | Global provider of purified drinking water dispensers | Ordinary | 2,623 | 5,053^{1} | 6,045 | - | | EasyPark | Digital parking, electrical vehicle charging and mobility services | Ordinary | 1,996 | 4,492 | 2,775 | - | | CFC Underwriting | Specialist in insurance for cyber security and tech insurance for IT consultants | Ordinary | 2,610 | 4,098 | Not held | - | | Learning Curve | Provider of training and education services for adults | Ordinary | 2,188 | 2,455 | 2,336 | - | $^{1}$Net of a £2,384,000 distribution received during the year, following the Waterlogic/Culligan business combination. The Company has not included certain disclosures required by paragraph 82(c) of the SORP. In particular, turnover, pre-tax profit and attributable net assets, because it is not publicly available. Financial Report and Accounts for the year ended 31 March 2023 81 # Annual General Meeting – Recommendations **The following information is important and requires your immediate attention. If you are in any doubt about the action you should take, you should consult an independent financial adviser, authorised under the Financial Services and Markets Act 2000. If you have sold or transferred all of your ordinary shares in the Company, please forward this document with its accompanying form of proxy at once to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for onward transmission to the purchaser or transferee.** ## Notice of Annual General Meeting (AGM) Notice is hereby given that the Annual General Meeting ("AGM") of the Company will be held on Wednesday 27 September 2023 at 1.00 p.m. The formal Notice of Meeting is set out on page 83. Shareholders are encouraged to vote by proxy, appointing the Chair of the meeting as their proxy. ## Ordinary business Resolutions 1 to 9 are all ordinary resolutions. Resolution 1 is a required resolution. Resolution 2 concerns the Directors' Report on Remuneration, on pages 49 to 51. Resolution 3 concerns the authorisation of the Directors to determine that no final dividend for the year ended 31 March 2023 will be paid. Resolutions 4 to 6 invite shareholders to re-elect each of the Directors for another financial reporting period, following the recommendations of the nomination committee, set out on page 48 (their biographies are set out on page 38). Resolutions 7 and 8 concern the re-appointment and remuneration of the Company's auditor, discussed in the audit and risk committee report on pages 43 to 45. ## Special business ### Resolution 9: Directors' authority to allot shares (ordinary resolution) and resolution 10: power to disapply pre-emption rights (special resolution) The Directors are seeking authority to allot a limited number of treasury shares and unissued ordinary shares for cash without first offering them to existing shareholders in accordance with statutory pre-emption procedures. Appropriate resolutions will be proposed at the forthcoming AGM and are set out in full in the Notice of AGM. An ordinary resolution will be proposed to authorise the Directors to allot shares up to a maximum aggregate nominal amount of £73,900 (being 10% of the issued share capital (excluding any shares held in treasury) as at 5 July 2023). A special resolution will be proposed to authorise the Directors to allot shares up to a maximum aggregate nominal amount of £73,900 (being 10% of the issued share capital as at 5 July 2023) on a non pre-emptive basis. This authority includes shares that the Company sells or transfers that have been held in treasury. The Directors do not intend to allot ordinary shares or sell treasury shares, on a non preemptive basis, pursuant to this authority other than to take advantage of opportunities in the market as they arise and only if they believe it to be advantageous to the Company as a whole. Shares issued or treasury shares reissued, under this authority, will be at a price that is equal to or greater than the Company's NAV per share, plus any applicable costs, as at the latest practicable date before the allotment of such shares. If approved, both of these authorities will expire at the conclusion of the AGM in 2024 unless renewed, varied or revoked earlier. ### Resolution 11: authority to make market purchases of the Company's own shares (special resolution) On 5 September 2022, a special resolution was passed to give the Company authority to make market purchases of up to 14.99% of the ordinary shares. 454,892 shares were bought back under this authority. The Directors will continue to monitor the level of the discount and consider the merits of further buybacks, which should be accretive in nature when discounts are wide. However, any decision to buy back shares will be influenced by such factors as: market conditions; the small size of the Company; the illiquid nature of the private equity holdings; the need to retain cash for investment opportunities; and the level of the Company's borrowing, if any. A special resolution will be proposed at the forthcoming AGM to give the Company authority to make market purchases of up to 14.99% of the ordinary shares in issue as at 5 July 2023 (excluding treasury shares). The Directors will continue to monitor the level. The Directors consider that any purchase would be for the benefit of the Company and its shareholders. Any shares so purchased would be cancelled or held in treasury for potential reissue. If renewed, this authority will lapse at the conclusion of the AGM in 2024 unless renewed, varied or revoked earlier. ### Resolution 12: notice period for general meetings (special resolution) Resolution 12 set out in the Notice of AGM is a special resolution and will, if passed, allow the Company to hold general meetings (other than annual general meetings) on a minimum notice period of 14 clear days, rather than 21 clear days as required by the Companies Act 2006. The approval will be effective until the Company's next AGM to be held in 2024. The Directors will only call general meetings on 14 clear days' notice when they consider it to be in the best interests of the Company's shareholders and will only do so if the Company offers facilities for all shareholders to vote by electronic means and when the matter needs to be dealt with expediently. 82 Schroder British Opportunities Trust plc # Notice of Annual General Meeting Notice is hereby given that the Annual General Meeting of Schroder British Opportunities Trust plc will be held on Wednesday 27 September 2023 at 1.00 p.m. at 1 London Wall Place, London EC2Y 5AU to consider the following resolutions, of which resolutions 1 to 9 will be proposed as ordinary resolutions, and resolutions 10 to 12 will be proposed as special resolutions: 1. To receive the Directors' Report and the audited accounts for the year ended 31 March 2023. 2. To approve the Directors' Report on Remuneration for the year ended 31 March 2023. 3. To authorise the Directors to determine that no final dividend for the year ended 31 March 2023 will be paid. 4. To approve the re-election of Neil England as a Director of the Company. 5. To approve the re-election of Diana Dyer Bartlett as a Director of the Company. 6. To approve the re-election of Tim Jenkinson as a Director of the Company. 7. To re-appoint Ernst & Young LLP as auditor to the Company. 8. To authorise the Directors to determine the remuneration of Ernst & Young LLP as auditor to the Company. 9. To consider, and if thought fit, pass the following resolution as an ordinary resolution: "THAT in addition to all existing authorities, the Directors be generally and unconditionally authorised pursuant to section 551 of the Companies Act 2006 (the "Act") to exercise all the powers of the Company to allot relevant securities (within the meaning of section 551 of the Act) up to an aggregate nominal amount of £73,900 (being 10% of the issued ordinary share capital, excluding treasury shares, at 5 July 2023) for a period expiring (unless previously renewed, varied or revoked by the Company in general meeting) at the conclusion of the Annual General Meeting of the Company in 2024, but that the Company may make an offer or agreement which would or might require relevant securities to be allotted after expiry of this authority and the Board may allot relevant securities in pursuance of that offer or agreement." 10. To consider and, if thought fit, to pass the following resolution as a special resolution: "That, subject to the passing of Resolution 9 set out above, the Directors be and are hereby empowered, pursuant to Section 571 of the Act, to allot equity securities (including any shares held in treasury) (as defined in section 560(1) of the Act) pursuant to the authority given in accordance with section 551 of the Act by the said Resolution 9 and/or where such allotment constitutes an allotment of equity securities by virtue of section 560(2) of the Act as if Section 561(1) of the Act did not apply to any such allotment, provided that this power shall be limited to the allotment of equity securities up to an aggregate nominal amount of £73,900, (representing 10% of the aggregate nominal amount of the share capital in issue, excluding treasury shares at 5 July 2023); and where equity securities are issued pursuant to this power they will only be issued at a price which is equal or greater than the Company's NAV per share as at the latest practicable date before the allotment; and provided that this power shall expire at the conclusion of the next Annual General Meeting of the Company but so that this power shall enable the Company to make offers or agreements before such expiry which would or might require equity securities to be allotted after such expiry." 11. To consider and, if thought fit, to pass the following resolution as a special resolution: "THAT the Company be and is hereby generally and unconditionally authorised in accordance with Section 701 of the Companies Act 2006 (the "Act") to make market purchases (within the meaning of Section 693 of the Act) of ordinary shares of 1p each in the capital of the Company ("Share") at whatever discount the prevailing market price represents to the prevailing net asset value per Share provided that: (a) the maximum number of Shares which may be purchased is 11,077,610, representing 14.99% of the Company's issued ordinary share capital as at 5 July 2023 (excluding treasury shares); (b) the maximum price (exclusive of expenses) which may be paid for a Share shall not exceed the higher of; i) 105% of the average of the middle market quotations for the Shares as taken from the London Stock Exchange Daily Official List for the five business days preceding the date of purchase; and ii) the higher of the last independent bid and the highest current independent bid on the London Stock Exchange; (c) the minimum price (exclusive of expenses) which may be paid for a Share shall be 1p, being the nominal value per Share; (d) this authority hereby conferred shall expire at the conclusion of the next Annual General Meeting of the Company in 2024 (unless previously renewed, varied or revoked by the Company prior to such date); (e) the Company may make a contract to purchase Shares under the authority hereby conferred which will or may be executed wholly or partly after the expiration of such authority and may make a purchase of Shares pursuant to any such contract; and (f) any Shares so purchased will be cancelled or held in treasury." 12. To consider and, if thought fit, to pass the following resolution as a special resolution: THAT a general meeting, other than an annual general meeting, may be called on not less than 14 clear days' notice. By order of the Board **Schroder Investment Management Limited** Company Secretary 5 July 2023 Registered Office: 1 London Wall Place, London EC2Y 5AU Registered Number: 12892325 Annual General Meeting Report and Accounts for the year ended 31 March 2023 83 176432 British Opportunities Trust plc Annual Report Pt4.qxp_176432 British Opportunities Trust plc Annual Report Pt4 05/07/2023 17:06 Page 84 ## Explanatory Notes to the Notice of Meeting 1. Ordinary shareholders are entitled to attend, ask questions appoint a proxy by logging onto their portfolio at and vote at the meeting and to appoint one or more www.shareview.co.uk using their user ID and password. proxies, who need not be a shareholder, as their proxy to Once logged in simply click “View” on the “My Investments” exercise all or any of their rights to attend, speak and vote page, click on the link to vote then follow the on-screen on their behalf at the meeting. instructions. The on-screen instructions give details on how to complete the appointment process. Please note that to A proxy form is attached. Shareholders are encouraged to be valid, your proxy instructions must be received by appoint the Chairman as proxy. If you wish to appoint a Equiniti no later than 1:00 p.m. on 25 September 2023. If person other than the Chairman as your proxy, please insert you have any difficulties with online voting, you should the name of your chosen proxy holder in the space provided contact the shareholder helpline on +44 (0) 800 032 0641. If at the top of the form. If the proxy is being appointed in calling from outside of the UK, please ensure the country relation to less than your full voting entitlement, please code is used. enter in the box next to the proxy holder’s name the number of shares in relation to which they are authorised to If an ordinary shareholder submits more than one valid act as your proxy. If left blank your proxy will be deemed to proxy appointment, the appointment received last before be authorised in respect of your full voting entitlement (or if the latest time for receipt of proxies will take precedence. this proxy form has been issued in respect of a designated Shareholders may not use any electronic address provided account for a shareholder, the full voting entitlement for either in this Notice of Annual General Meeting or any that designated account). Additional proxy forms can be related documents to communicate with the Company for obtained by contacting the Company’s Registrars, Equiniti any purposes other than expressly stated. Limited, on +44 (0) 800 032 0641. (If calling from outside of Representatives of shareholders that are corporations will the UK, please ensure the country code is used), or you may have to produce evidence of their proper appointment photocopy the attached proxy form. Please indicate in the when attending the Annual General Meeting. box next to the proxy holder’s name the number of shares in relation to which they are authorised to act as your proxy. 2. Any person to whom this notice is sent who is a person Please also indicate by ticking the box provided if the proxy nominated under section 146 of the Companies Act 2006 to instruction is one of multiple instructions being given. enjoy information rights (a “Nominated Person”) may, under Completion and return of a form of proxy will not preclude a an agreement between him or her and the shareholder by member from attending the Annual General Meeting and whom he or she was nominated, have a right to be voting in person. appointed (or to have someone else appointed) as a proxy for the Annual General Meeting. If a Nominated Person has On a vote by show of hands, every ordinary shareholder no such proxy appointment right or does not wish to who is present in person has one vote and every duly exercise it, he or she may, under any such agreement, have appointed proxy who is present has one vote. On a poll a right to give instructions to the shareholder as to the vote, every ordinary shareholder who is present in person exercise of voting rights. or by way of a proxy has one vote for every share of which he/she is a holder. Voting will be by poll. The statement of the rights of ordinary shareholders in relation to the appointment of proxies in note 1 above does The “Vote Withheld” option on the proxy form is provided to not apply to Nominated Persons. The rights described in that enable you to abstain on any particular resolution. However note can only be exercised by ordinary shareholders of the it should be noted that a “Vote Withheld” is not a vote in law Company. and will not be counted in the calculation of the proportion of the votes ‘For’ and ‘Against’ a resolution. A proxy form 3. Pursuant to Regulation 41 of the Uncertificated Securities must be signed and dated by the shareholder or his or her Regulations 2001, the Company has specified that only those attorney duly authorised in writing. In the case of joint shareholders registered in the Register of members of the holdings, any one holder may sign this form. The vote of the Company at 6.30 p.m. on 25September 2023, or 6.30p.m. senior joint holder who tenders a vote, whether in person or two days prior to the date of an adjourned meeting, shall be by proxy, will be accepted to the exclusion of the votes of entitled to attend and vote at the meeting in respect of the the other joint holder and for this purpose seniority will be number of shares registered in their name at that time. determined by the order in which the names appear on the Changes to the Register of Members after 6.30p.m. on Register of Members in respect of the joint holding. To be 25September 2023 shall be disregarded in determining the valid, proxy form(s) must be completed and returned to the right of any person to attend and vote at the meeting. Company’s Registrars, Equiniti Limited, Aspect House, 4. CREST members who wish to appoint a proxy or proxies Spencer Road, Lancing, West Sussex BN99 6DA, in the through the CREST electronic proxy appointment service enclosed envelope together with any power of attorney or may do so by using the procedures described in the CREST other authority under which it is signed or a copy of such manual. The CREST manual can be viewed at authority certified notarially, to arrive no later than 48 hours www.euroclear.com. A CREST message appointing a proxy (a before the time fixed for the meeting, or an adjourned “CREST proxy instruction”) regardless of whether it meeting. Shareholders may also appoint a proxy to vote on constitutes the appointment of a proxy or an amendment to the resolutions being put to the meeting electronically at the instruction previously given to a previously appointed www.sharevote.co.uk. Shareholders who are not registered proxy must, in order to be valid, be transmitted so as to be to vote electronically, will need to enter the Voting ID, Task received by the issuer’s agent (ID RA19) by the latest time for ID and Shareholder Reference ID set out in their receipt of proxy appointments. personalised proxy form. Alternatively, shareholders who have already registered with Equiniti’s Shareview service can Schroder British Opportunities Trust plc 84 # Explanatory Notes to the Notice of Meeting 5. Copies of the terms of appointment of the non-executive Directors and a statement of all transactions of each Director and of their family interests in the shares of the Company, will be available for inspection by any member of the Company at the registered office of the Company during normal business hours on any weekday (English public holidays excepted) and at the Annual General Meeting by any attendee, for at least 15 minutes prior to, and during, the Annual General Meeting. None of the Directors has a contract of service with the Company. 6. The biographies of the Directors offering themselves for election and are set out on page 38 of the Company's report and accounts for the year ended 31 March 2023. 7. As at 5 July 2023, 75,000,000 ordinary shares of 1 pence each were in issue (1,100,000 were held in treasury). Therefore the total number of voting rights of the Company as at 5 July 2023 was 73,900,000. 8. A copy of this Notice of meeting, which includes details of shareholder voting rights, together with any other information as required under Section 311A of the Companies Act 2006, is available from the Company's webpage, www.schroders.co.uk/sbo. 9. Pursuant to Section 319A of the Companies Act, the Company must cause to be answered at the Annual General Meeting any question relating to the business being dealt with at the AGM which is put by a member attending the meeting, except in certain circumstances, including if it is undesirable in the interests of the Company or the good order of the meeting that the question be answered or if to do so would involve the disclosure of confidential information. Shareholders are asked to send their questions by post or by email (amcompanysecretary@schroders.com). 10. Members satisfying the thresholds in section 527 of the Companies Act 2006 can require the Company to publish a statement on its website setting out any matter relating to: (a) the audit of the Company's Accounts (including the auditor's report and the conduct of the audit) that are to be laid before the Meeting; or (b) any circumstance connected with an auditor of the Company ceasing to hold office since the last AGM, that the members propose to raise at the Meeting. The Company cannot require the members requesting the publication to pay its expenses. Any statement placed on the website must also be sent to the Company's auditors no later than the time it makes its statement available on the website. The business which may be dealt with at the meeting includes any statement that the Company has been required to publish on its website. 11. The Company's privacy policy is available on its webpages. www.schroders.com/sbo. Shareholders can contact Equiniti for details of how Equiniti processes their personal information as part of the AGM. Annual General Meeting Report and Accounts for the year ended 31 March 2023 85 # Definitions of Terms and Performance Measures The terms and performance measures below are those commonly used by investment companies to assess values, investment performance and operating costs. Numerical calculations are given where relevant. Some of the financial measures below are classified Alternative Performance Measures ("APMs") as defined by the European Securities and Markets Authority. Under this definition, APMs include a financial measure of historical financial performance or financial position, other than a financial measure defined or specified in the applicable financial reporting framework. APMs have been marked with an asterisk. ## Investment policy* The Company will invest in a diversified portfolio of both public equity investments and private equity investments consisting predominantly of UK Companies with strong long-term growth prospects. "Public equity investments" mean any investments in any of the following categories (a), (b) and (c) below (although it is envisaged that the Company will predominantly focus on those of an equity and/or quasi-equity nature as set out under categories (a) and (b) below): - (a) ordinary shares or similar securities issued by an issuer which are traded on any of the following: - (i) any "regulated market" as defined in MiFID II and as listed in the register of regulated markets within the EEA maintained by the European Securities and Markets Authority from time to time; or - (ii) any "recognised investment exchange" as recognised by the FCA under Part XVIII of FSMA; or - (iii) any "recognised overseas investment exchange" as recognised by the FCA under Part XVIII of FSMA; - (b) securities or other instruments giving the right to acquire or sell any of the securities referred to in (a) above, including without limitation warrants, options, futures, convertible bonds and convertible loan notes; and - (c) preference shares issued by an issuer referred to in (a) above. "Private equity investments" mean any investments in any of the following categories (w), (x), (y) and (z) below (although it is envisaged that the Company will predominantly focus on those of an equity and/or quasi-equity nature as set out under categories (w) and (x) below): - (w) shares in companies and other securities/units/interests equivalent to shares in companies, partnerships (including limited partnership interests) or other entities, provided that they are not already captured under the definition of "public equity investments" above; - (x) securities, derivatives or other instruments giving the right to acquire or sell any of the shares/securities/units/interests referred to in (w) above, including without limitation warrants, options, futures, contingent value rights, convertible bonds, convertible loan notes, convertible loan stocks or convertible preferred equity; *The full policy can be found on the Company's website. - (y) preference shares issued by an issuer referred to in (w) above; and - (z) debt-based investments not otherwise covered above, including loan stock, payment-in-kind instruments and shareholder loans. It is anticipated that the Company's portfolio will typically consist of 30 to 50 holdings and will target companies with an equity value between approximately £50 million and £2 billion at the time of initial investment. The Company will focus on companies which the Manager considers to be sustainable from an environmental, social and governance perspective, supporting at least one of the goals and/or sub-goals of the United Nations' Sustainable Development Goals ("SDGs"), or which the Manager considers would benefit from their support in helping them incorporate SDGs into their business planning and/or in reporting their alignment with SDGs. "UK Companies" means companies which are incorporated, headquartered or have their principal business activities in the United Kingdom, and companies headquartered outside the United Kingdom which derive, or are expected to derive, a significant proportion of their revenues or profits from the United Kingdom. ## Net asset value ("NAV") per share The NAV per share of 107.32p (31 March 2022: 104.14p) represents the net assets attributable to equity shareholders of £79,311,000 (31 March 2022: £78,103,000) divided by the 73,900,000 (31 March 2022: 75,000,000) shares in issue at the year end. ## Discount/premium** The amount by which the share price of an investment trust is lower (discount) or higher (premium) than the NAV per share. If shares are trading at a discount, investors would be paying less than the value attributable to the shares by reference to the underlying assets. A premium or discount is generally the consequence of supply and demand for the shares on the stock market. The discount or premium is expressed as a percentage of the NAV per share. The discount at the year end amounted to 36.2% (31 March 2022: 19.3%), as the closing share price at 68.5p (31 March 2022: 84.0p) was 36.2% (31 March 2022: 19.3%) lower than the closing NAV of 107.32p (31 March 2022: 104.14p). ## Gearing/(net cash)** The gearing percentage reflects the amount of borrowings (that is, bank loans or overdrafts) that the Company has used to invest in the market. This figure is indicative of the extra amount by which shareholders' funds would move if the Company's investments were to rise or fall. Gearing is defined as: borrowings used for investment purposes, less cash, expressed as a percentage of net assets. A negative figure so calculated is termed a "net cash" position. 86 Schroder British Opportunities Trust plc # Definitions of Terms and Performance Measures At the year end, the Company had no loans or overdrafts, and thus was in a net cash position, calculated as follows: | | 31 March 2023 £'000 | 31 March 2022 £'000 | | --- | --- | --- | | Borrowings used for investment purposes, less cash | (7,759) | (15,452) | | Net assets | 79,311 | 78,103 | | Net cash | (9.8)% | (19.8)% | ## Ongoing Charges** The Ongoing Charges ("OGC") figure is a measure of the ongoing operating cost of the Company. It is calculated in accordance with the AIC's recommended methodology, and represents total annualised operating expenses payable including any management fee, but excluding any finance costs transaction costs and performance fee provision, expressed as a percentage of the average daily net asset values during the year. For the year ended 31 March 2023, operating expenses amounted to £1,108,000 (period ended 31 March 2022: £872,000, giving £1,126,000 when adjusted to an annualised figure). This produces an OGC figure of 1.47% (period ended 31 March 2022: 1.39%), when expressed as a percentage of the average daily net asset values during the year of £75.3 million (period ended 31 March 2022: £80.8 million). ## Leverage** For the purpose of the Alternative Investment Fund Managers (AIFM) Directive, leverage is any method which increases the Company's exposure, including the borrowing of cash and the use of derivatives. It is expressed as the ratio of the Company's exposure to its net asset value and is required to be calculated both on a "Gross" and a "Commitment" method. Under the Gross method, exposure represents the sum of the absolute values of all positions, so as to give an indication of overall exposure. Under the Commitment method, exposure is calculated in a similar way, but after netting off hedges which satisfy certain strict criteria. **Alternative performance Measures ("APMs"). Report and Accounts for the year ended 31 March 2023 87 Annual General Meeting 176432 British Opportunities Trust plc Annual Report Pt4.qxp_176432 British Opportunities Trust plc Annual Report Pt4 05/07/2023 17:06 Page 88 ## Shareholder Information ### Webpages and share price information Alternative Investment Fund Managers ### The Company has dedicated webpages, which may be found Directive (“AIFMD”) disclosures at www.schroders.com/sbo. The webpages have been The AIFMD, as transposed into the FCA Handbook in the UK, designed to be used as the Company’s primary method of requires that certain pre-investment information be made electronic communication with shareholders. They contain available to investors in Alternative Investment Funds (such details of the Company’s share price and copies of annual as the Company) and also that certain regular and periodic reports and other documents published by the Company as disclosures are made. This information and these disclosures well as information on the Directors, terms of reference of may be found either below, elsewhere in this annual report, committees and other governance arrangements. In or in the Company’s AIFMD information disclosure document addition, the webpages contain links to announcements published on the Company’s webpages. made by the Company to the market, Equiniti’s shareview service and Schroders’ website. There is also a section Leverage entitled “How to Invest”. The Company’s leverage ratio calculation and exposure limits The Company releases its NAV per share on both a cum and as required by the AIFMD are published on the Company’s ex-income basis, diluted where applicable, to the market on webpages. The Company is also required to periodically a daily basis. publish its actual leverage exposures. As at 31March 2023 these were: Share price information may also be found in the Financial Times and at the Company’s webpages. Maximum Actual Leverage exposure ratio ratio ### Association of Investment Companies Gross method 250.0% 103.4% The Company is a member of the Association of Investment Commitment method 200.0% 93.5% Companies. Further information on the Association can be found on its website, www.theaic.co.uk. ### Publication of Key Information Document ### ISA status ### (“KID”) by the AIFM The Company’s shares are eligible for stocks and shares ISAs. Pursuant to the Packaged Retail and Insurance-based Products (“PRIIPs”) Regulation, the Manager, as the Company’s AIFM, is required to publish a short KID on the ### Non-Mainstream Pooled Company. KIDs are designed to provide certain prescribed information to retail investors, including details of potential ### Investments Status returns under different performance scenarios and a The Company currently conducts its affairs so that its risk/reward indicator. The Company’s KID is available on its shares can be recommended by IFAs to ordinary retail webpages. investors in accordance with the FCA’s rules in relation to non-mainstream investment products and intends to continue to do so for the foreseeable future. The Company’s ### Complaints shares are excluded from the FCA’s restrictions which apply to non-mainstream investment products because they are The Company has adopted a policy on complaints and other shares in an investment trust. shareholder communications which ensures that shareholder complaints and communications addressed to the Company Secretary, the Chairman or the Board are, in ### Financial calendar each case, considered by the Chairman and the Board. Results announced July Annual General Meeting September Half year results announced December Financial year end March Schroder British Opportunities Trust plc Report and Accounts 88 for the year ended 31 March 2023 176432 British Opportunities Trust plc Annual Report Pt4.qxp_176432 British Opportunities Trust plc Annual Report Pt4 05/07/2023 17:06 Page 89 176432 British Opportunities Trust plc Annual Report Pt4.qxp_176432 British Opportunities Trust plc Annual Report Pt4 05/07/2023 17:06 Page 90 ### www.schroders.com/sbo | Directors | Independent Auditors | | --- | --- | | Neil England (Chairman) | Ernst & Young LLP | | Diana Dyer Bartlett | Atria One | | Tim Jenkinson | 144 Morrison Street | Edinburgh EH3 8EX ### Advisers Registrars Alternative Investment Fund Manager Equiniti Limited | (the “Manager”) | Aspect House | | --- | --- | | Schroder Unit Trusts Limited | Spencer Road | | 1 London Wall Place | Lancing | | London EC2Y 5AU | West Sussex BN99 6DA | 1 Shareholder helpline: +44 (0) 800 032 0641 Portfolio Managers Website: www.shareview.co.uk Schroder Investment Management Limited 1 Calls to this number are free of charge from UK landlines. 1 London Wall Place London EC2Y 5AU Communications with shareholders are mailed to the address held on the register. Any notifications and enquiries Schroders Capital Management (Switzerland) AG relating to shareholdings, including a change of address or Affolternstrasse 56 other amendment should be directed to Equiniti Limited at 8050 Zurich the above address and telephone number above. Switzerland Shareholder enquiries Company Secretary General enquiries about the Company should be addressed Schroder Investment Management Limited to the Company Secretary at the Company’s Registered 1 London Wall Place Office. London EC2Y 5AU Dealing Codes Telephone: 020 7658 3847 ISIN: GB00BN7JZR28 Registered Office SEDOL: BN7JZR2 Ticker: SBO 1 London Wall Place London EC2Y 5AU Global Intermediary Identification Number (GIIN) QML9TQ.99999.SL.826 Depositary and Custodian HSBC Bank plc Legal Entity Identifier (LEI) 8 Canada Square 5493003UY8LIHFW6HM02 London E14 5HQ Corporate Broker Peel Hunt LLP 100 Liverpool Street London EC2MY 2AT The Company’s privacy notice is available on its webpages.