Schroder BSC Social Impact Trust plc
Annual report and accounts
for the year ended 30 June 2024
Annual report and accounts
for the year ended 30 June 2024
Schroder BSC Social Impact Trust plc
Performance Summary (for the year ended 30 June 2024)
NAV per share total return*
1.5%
2023: 0.8%
Share price
86.75p
2023: 93.50p
Share price total return*
–4.8%
2023: –11.0%
Share price discount
to NAV per share*
16.7%
2023: 10.9%
Revenue return per share
3.16p
2023: 2.32p
NAV per share*
104.13p
2023: 104.90p
Investment objective
The Company’s investment objective is to deliver measurable positive social impact as well as long term capital growth and income, through
investing in a diversified portfolio of private market Impact Funds, co-investments alongside impact investors and direct investments in order to
gain exposure to private market Social Impact Investments.
The Company aims to provide a Net Asset Value total return of CPI plus 2% per annum (once the portfolio is fully invested and averaged over
a rolling three-to five-year period, net of fees) with low correlation to traditional quoted markets while helping to address significant social issues
in the UK. The full published investment policy can be found on pages 27 to 30.
A proposed new investment objective and policy will be put to shareholders at an Extraordinary General Meeting (“EGM”) to align with
Sustainability Disclosure Requirements (“SDR”) principles and guidance. Please see the Chair’s Statement on pages 8 to 10 for further details.
Some of the financial measures are classified as APMs, as defined by the European Securities and Markets Authority and are indicated with
an asterisk (*). Definitions of these performance measures, and other terms used in this report, are given on pages 84 to 85 with
supporting calculations where appropriate.
Performance Summary (for the year ended 30 June 2024)
NAV per share total return*
1.5%
2023: 0.8%
Share price
86.75p
2023: 93.50p
Share price total return*
–4.8%
2023: –11.0%
Share price discount
to NAV per share*
16.7%
2023: 10.9%
Revenue return per share
3.16p
2023: 2.32p
NAV per share*
104.13p
2023: 104.90p
Investment objective
The Company’s investment objective is to deliver measurable positive social impact as well as long term capital growth and income, through
investing in a diversified portfolio of private market Impact Funds, co-investments alongside impact investors and direct investments in order to
gain exposure to private market Social Impact Investments.
The Company aims to provide a Net Asset Value total return of CPI plus 2% per annum (once the portfolio is fully invested and averaged over
a rolling three-to five-year period, net of fees) with low correlation to traditional quoted markets while helping to address significant social issues
in the UK. The full published investment policy can be found on pages 27 to 30.
A proposed new investment objective and policy will be put to shareholders at an Extraordinary General Meeting (“EGM”) to align with
Sustainability Disclosure Requirements (“SDR”) principles and guidance. Please see the Chair’s Statement on pages 8 to 10 for further details.
Some of the financial measures are classified as APMs, as defined by the European Securities and Markets Authority and are indicated with
an asterisk (*). Definitions of these performance measures, and other terms used in this report, are given on pages 84 to 85 with
supporting calculations where appropriate.
Schroder BSC Social Impact Trust plc
1
Strategic Report
Key Performance Indicators 4
Impact Highlights 6
Chair’s Statement 8
Portfolio Manager’s Report 11
Investment Portfolio 22
Environmental, Social and
Governance Risk Management 24
Business Review 27
Governance
Board of Directors 40
Directors’ Report 42
Audit and Risk Committee Report 46
Management Engagement
Committee Report 49
Nomination Committee Report 50
Directors’ Remuneration Report 52
Statement of Directors’
Responsibilities 55
Financial
Independent Auditor’s Report 58
Income Statement 63
Statement of Changes in Equity 64
Balance Sheet 65
Cash Flow Statement 66
Notes to the Accounts 67
Other Information
(Unaudited)
Annual General Meeting –
Recommendations 80
Notice of Annual General Meeting 81
Explanatory Notes to the
Notice of Meeting 82
Definitions of Terms and Alternative
Performance Measures 84
Impact Methodology Notes 86
Shareholder Information 88
Information about the Company 90
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Social Impact Trust plc
Financial Other Information (Unaudited) Governance Introduction Strategic Report Financial Other Information (Unaudited) Governance Introduction Strategic Report
Strategic Report
Key Performance Indicators 4
Impact Highlights 6
Chair’s Statement 8
Portfolio Manager’s Report 11
Investment Portfolio 22
Environmental, Social and
Governance Risk Management 24
Business Review 27
Governance
Board of Directors 40
Directors’ Report 42
Audit and Risk Committee Report 46
Management Engagement
Committee Report 49
Nomination Committee Report 50
Directors’ Remuneration Report 52
Statement of Directors’
Responsibilities 55
Financial
Independent Auditor’s Report 58
Income Statement 63
Statement of Changes in Equity 64
Balance Sheet 65
Cash Flow Statement 66
Notes to the Accounts 67
Other Information
(Unaudited)
Annual General Meeting –
Recommendations 80
Notice of Annual General Meeting 81
Explanatory Notes to the
Notice of Meeting 82
Definitions of Terms and Alternative
Performance Measures 84
Impact Methodology Notes 86
Shareholder Information 88
Information about the Company 90
Scan this QR code on your
smartphone camera to
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updates on Schroder BSC
Social Impact Trust plc
Financial Other Information (Unaudited) Governance Introduction Strategic Report Financial Other Information (Unaudited) Governance Introduction Strategic Report
2
2
Schroder
Asian Total Return Investment Company plc
3
Strategic report
Strategic Report
Key Performance Indicators 4
Impact Highlights 6
Chair’s Statement 8
Portfolio Manager’s Report 11
Investment Portfolio 22
Environmental, Social and
Governance Risk Management 24
Business Review 27
Strategic report
Strategic Report
Key Performance Indicators 4
Impact Highlights 6
Chair’s Statement 8
Portfolio Manager’s Report 11
Investment Portfolio 22
Environmental, Social and
Governance Risk Management 24
Business Review 27
4
Schroder BSC Social Impact Trust plc
Key Performance Indicators
In order to track the Company’s progress the following key performance
indicators are monitored.
Financial
Net Asset Value (“NAV”) total
return per share 1
NAV per share reflects the value
attributable to our equity
shareholders including dividends paid.
Discussion of this can be found in Financial Highlights the inside
front cover of this report and within the Strategic Report between
pages 4 to 37. 2022
2023
2024
Annualised
since inception
1.60%
0.78%
1.46%
2.79%
Share Price correlation 2,3 with
FTSE All Share
Share price correlation describes the
relationship between the respective
price movement of the Company’s share
price and equity markets.
Discussion of this can be found within the Portfolio Manager’s
Report between pages 11 to 21. 2022
2023
2024
Since
inception (0.78)
(0.76)
(0.61)
0.23
1
The Company aims to provide a NAV total return of CPI plus 2% per annum (once the portfolio is fully invested and averaged over a rolling three-to five-year period).
2
Share Price correlation with FTSE All Share is classified as an alternative performance measure. Correlation is calculated by obtaining the daily closing prices in each
time period for both the Company and FTSE All Share Index, sourced from Morningstar.
3
Low correlation to traditional equity markets tends to reflect a useful diversifier. Correlation of less than 0.5 indicates a low correlation to the quoted markets.
Negative correlation means the Company’s share price moves in the opposite direction to the FTSE All Share index.
Key Performance Indicators
In order to track the Company’s progress the following key performance
indicators are monitored.
Financial
Net Asset Value (“NAV”) total
return per share 1
NAV per share reflects the value
attributable to our equity
shareholders including dividends paid.
Discussion of this can be found in Financial Highlights the inside
front cover of this report and within the Strategic Report between
pages 4 to 37. 2022
2023
2024
Annualised
since inception
1.60%
0.78%
1.46%
2.79%
Share Price correlation 2,3 with
FTSE All Share
Share price correlation describes the
relationship between the respective
price movement of the Company’s share
price and equity markets.
Discussion of this can be found within the Portfolio Manager’s
Report between pages 11 to 21. 2022
2023
2024
Since
inception (0.78)
(0.76)
(0.61)
0.23
1
The Company aims to provide a NAV total return of CPI plus 2% per annum (once the portfolio is fully invested and averaged over a rolling three-to five-year period).
2
Share Price correlation with FTSE All Share is classified as an alternative performance measure. Correlation is calculated by obtaining the daily closing prices in each
time period for both the Company and FTSE All Share Index, sourced from Morningstar.
3
Low correlation to traditional equity markets tends to reflect a useful diversifier. Correlation of less than 0.5 indicates a low correlation to the quoted markets.
Negative correlation means the Company’s share price moves in the opposite direction to the FTSE All Share index.
Schroder BSC Social Impact Trust plc
5
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Impact
Cumulative number of people benefitted
since Company launch
Measures the number of people directly
benefitting from the Company’s investees’
activities.
Discussion of this can be found within the Portfolio Manager’s
Report between pages 11 to 21 and the 2024 Impact Report. 2022
2023
2024 400,000
276,000
160,000
Disadvantaged and vulnerable
people served 4
Measures the proportion of the above
who are from more disadvantaged and
vulnerable groups.
Discussion of this can be found within the Portfolio Manager’s
Report between pages 11 to 21 and the 2024 Impact Report.
2022
2023
2024
90%
94%
95%
4
Definition of ‘Disadvantaged and vulnerable’ is given on pages 86 to 87.
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Impact
Cumulative number of people benefitted
since Company launch
Measures the number of people directly
benefitting from the Company’s investees’
activities.
Discussion of this can be found within the Portfolio Manager’s
Report between pages 11 to 21 and the 2024 Impact Report. 2022
2023
2024 400,000
276,000
160,000
Disadvantaged and vulnerable
people served 4
Measures the proportion of the above
who are from more disadvantaged and
vulnerable groups.
Discussion of this can be found within the Portfolio Manager’s
Report between pages 11 to 21 and the 2024 Impact Report.
2022
2023
2024
90%
94%
95%
4
Definition of ‘Disadvantaged and vulnerable’ is given on pages 86 to 87.
6
Schroder BSC Social Impact Trust plc
Impact Highlights
How the Company supports positive social im
Impact investments must have a clear, measurable rationale for how investment is intended to contr
a “Theory of Change”, which forms the basis of the UK’s emerging criteria for Sustainable Impact Inve
co-investments, in partnership with fund managers, to frontline organisations with strong track reco
deliver solutions for vulnerable, disadvantaged and underserved people across the UK.
£41m
£41m
£7m
1 2
2
2
£86m
1
This figure refers to the total amount the Company has raised from investors to date.
2
These figures refer to amounts committed rather than invested.
Source: Schroder BSC Social Impact Trust plc as at 31 December 2023.
Impact Highlights
How the Company supports positive social im
Impact investments must have a clear, measurable rationale for how investment is intended to contr
a “Theory of Change”, which forms the basis of the UK’s emerging criteria for Sustainable Impact Inve
co-investments, in partnership with fund managers, to frontline organisations with strong track reco
deliver solutions for vulnerable, disadvantaged and underserved people across the UK.
£41m
£41m
£7m
1 2
2
2
£86m
1
This figure refers to the total amount the Company has raised from investors to date.
2
These figures refer to amounts committed rather than invested.
Source: Schroder BSC Social Impact Trust plc as at 31 December 2023.
Schroder BSC Social Impact Trust plc
7
Introduction Strategic Report Governance Financial Other Information (Unaudited)
act
ibute towards positive social change. In the social investment market this is often referred to as
stments. The Company’s Theory of Change sets out how capital is deployed through funds and
rds of working on critical social challenges, enabling them to grow and become more resilient, to
Introduction Strategic Report Governance Financial Other Information (Unaudited)
act
ibute towards positive social change. In the social investment market this is often referred to as
stments. The Company’s Theory of Change sets out how capital is deployed through funds and
rds of working on critical social challenges, enabling them to grow and become more resilient, to
8
Schroder BSC Social Impact Trust plc
Chair’s Statement
It is clear that demand for the
services the Company helps
to finance is significant,
urgent and unmet. Finding
opportunities to spend more
wisely on these issues is at
the top of the Government’s
agenda.
The Schroder BSC Social Impact Trust (the “Company” or “Social
Impact Trust”) delivered a robust performance in the year, against
a challenging macro-economic and political backdrop. Capital
returned from the portfolio was quickly re-deployed, the dividend
increase reflected maturing investments, and, vitally, the Company
continued to invest in life-changing projects across the UK,
significantly improving the circumstances of thousands of vulnerable
people.
Private investment in delivering impact continues to grow at pace,
although opportunities for investors to direct their capital to
organisations supporting people in the greatest need remain more
limited. The Company offers a unique proposition, allowing investors
of all sizes to access high quality, high impact social investments.
Over its four years of operation, the Company has demonstrated how
impact investing can address social needs while providing resilient
financial returns. As we move forward, the Board hopes to see
the Company grow, enabling increased investment to reach
much-needed social solutions.
Navigating a period of economic and
political turbulence
After a technical recession in late 2023, the UK economy rebounded
in the first half of 2024 with 0.7% GDP growth January to March
followed by a 0.6% increase April to June. The Consumer Price Index
rose by 2% in the period under review. The Bank of England
maintained a 5.25% base rate from August 2023 until it was reduced
to 5% after the period end. With inflation appearing to be stabilising
from the peaks of late 2022 further cuts are anticipated in the coming
months.
This was a difficult macro backdrop for the Company, mitigated to
some extent by the portfolio’s high proportion of inflation-linked or
correlated assets. Some of the benefits of this are expected to be
reflected in the portfolio performance in the future after a lagged
effect.
The snap election in July also led to a lack of clarity on policy and
general uncertainty, generating further macro challenges.
The Labour Party came into power in July 2024, after the period end,
and has recently noted the level of fiscal constraint it faces. However,
the Government’s policy priorities, as announced in the King’s Speech,
align with several of the Company’s areas of focus.
Continuing to tackle poverty, inequality and
homelessness
The constraints on public spending are particularly worrying in the
face of worsening problems for UK society. The proportion of people
experiencing food insecurity and material deprivation in 2022-23 has
increased significantly versus a few years ago. Homelessness rose by
16% year-on-year at the end of 2023. The proportion of working-age
people reporting long-term health conditions in the UK has risen
to 36%.
It is clear that demand for the services the Company helps to finance
is significant, urgent and unmet. Finding opportunities to invest more
wisely on these issues is at the top of the Government’s agenda.
The Company has again demonstrated the results its portfolio can
achieve in these areas this year. The portfolio has positively impacted
400,000 people since inception, provided affordable, decent homes
for 35,000 disadvantaged, vulnerable and lower-income groups and
delivered £217 million (cumulative) savings through improved and
more accessible services. The Company 2024 Impact Report is
available at: https://publications.schroders.com/view/683320694/.
New investments this year saw the Company committing to delivering
more affordable homes to deprived areas, via the Simply Affordable
Homes fund (“SAH”) (managed by Savills Investment Management),
and supporting UK communities to help deliver a just transition to net
zero, via an investment in a community renewable energy project.
Better Society Capital’s role as portfolio
manager
The Schroder BSC Social Impact Trust has a portfolio managed by
Better Society Capital (“BSC” or the “Portfolio Manager”), the UK’s
leading financial institution dedicated to social impact investing in its
home country and an experienced market-builder.
Chair’s Statement
It is clear that demand for the
services the Company helps
to finance is significant,
urgent and unmet. Finding
opportunities to spend more
wisely on these issues is at
the top of the Government’s
agenda.
The Schroder BSC Social Impact Trust (the “Company” or “Social
Impact Trust”) delivered a robust performance in the year, against
a challenging macro-economic and political backdrop. Capital
returned from the portfolio was quickly re-deployed, the dividend
increase reflected maturing investments, and, vitally, the Company
continued to invest in life-changing projects across the UK,
significantly improving the circumstances of thousands of vulnerable
people.
Private investment in delivering impact continues to grow at pace,
although opportunities for investors to direct their capital to
organisations supporting people in the greatest need remain more
limited. The Company offers a unique proposition, allowing investors
of all sizes to access high quality, high impact social investments.
Over its four years of operation, the Company has demonstrated how
impact investing can address social needs while providing resilient
financial returns. As we move forward, the Board hopes to see
the Company grow, enabling increased investment to reach
much-needed social solutions.
Navigating a period of economic and
political turbulence
After a technical recession in late 2023, the UK economy rebounded
in the first half of 2024 with 0.7% GDP growth January to March
followed by a 0.6% increase April to June. The Consumer Price Index
rose by 2% in the period under review. The Bank of England
maintained a 5.25% base rate from August 2023 until it was reduced
to 5% after the period end. With inflation appearing to be stabilising
from the peaks of late 2022 further cuts are anticipated in the coming
months.
This was a difficult macro backdrop for the Company, mitigated to
some extent by the portfolio’s high proportion of inflation-linked or
correlated assets. Some of the benefits of this are expected to be
reflected in the portfolio performance in the future after a lagged
effect.
The snap election in July also led to a lack of clarity on policy and
general uncertainty, generating further macro challenges.
The Labour Party came into power in July 2024, after the period end,
and has recently noted the level of fiscal constraint it faces. However,
the Government’s policy priorities, as announced in the King’s Speech,
align with several of the Company’s areas of focus.
Continuing to tackle poverty, inequality and
homelessness
The constraints on public spending are particularly worrying in the
face of worsening problems for UK society. The proportion of people
experiencing food insecurity and material deprivation in 2022-23 has
increased significantly versus a few years ago. Homelessness rose by
16% year-on-year at the end of 2023. The proportion of working-age
people reporting long-term health conditions in the UK has risen
to 36%.
It is clear that demand for the services the Company helps to finance
is significant, urgent and unmet. Finding opportunities to invest more
wisely on these issues is at the top of the Government’s agenda.
The Company has again demonstrated the results its portfolio can
achieve in these areas this year. The portfolio has positively impacted
400,000 people since inception, provided affordable, decent homes
for 35,000 disadvantaged, vulnerable and lower-income groups and
delivered £217 million (cumulative) savings through improved and
more accessible services. The Company 2024 Impact Report is
available at: https://publications.schroders.com/view/683320694/.
New investments this year saw the Company committing to delivering
more affordable homes to deprived areas, via the Simply Affordable
Homes fund (“SAH”) (managed by Savills Investment Management),
and supporting UK communities to help deliver a just transition to net
zero, via an investment in a community renewable energy project.
Better Society Capital’s role as portfolio
manager
The Schroder BSC Social Impact Trust has a portfolio managed by
Better Society Capital (“BSC” or the “Portfolio Manager”), the UK’s
leading financial institution dedicated to social impact investing in its
home country and an experienced market-builder.
Introduction
Strategic Report
Governance
Financial
Other Information (Unaudited)
Schroder BSC Social Impact Trust plc 9
As part of its wider remit, BSC supports the growth of the social
impact investment market, building relationships and exploring new
ways to work alongside the investment community. For the Company,
this means an extensive pipeline of investible opportunities, as well as
deepening the capital pool engaged in impact investing.
This year, pre-election, BSC was highly engaged with policymakers,
and the team are optimistic that these conversations have been
fruitful in building awareness of the value of social impact investing
amongst key decision makers. The Board hopes to see this greater
awareness translating into wider investor interest and opportunities
for private capital to play a helpful role in tackling difficult social
challenges and strengthening communities across the UK.
Resilient financial performance
For the year ended 30 June 2024, the Company’s NAV total return was
1.5%, leading to a cumulative return of 10.2% since inception. The
largest positive contribution to the return came from investment
income (4.0p per share), partially offset by valuation losses (1.5p per
share) principally due to the write-down in the Bridges Evergreen
Holdings (“BEH”) disclosed in the Interim Report along with a
provision made for refinancing a Charity Bond. Liquidity Assets had
a positive contribution to NAV per share of 0.6p. While financial
returns did not meet our longer-term ambition, largely due to market
conditions affecting the operating and exit environment, we are
pleased to have seen the Portfolio Manager acting quickly and
diligently to proactively safeguard the long-term financial value of the
portfolio, while supporting fund managers and social enterprises to
continue delivering their services.
We are pleased that the Company will pay out substantially all of its
income as a dividend, resulting in a dividend made up wholly of an
interest distribution of 2.94p per share (2023: 2.30p), another
significant year-on-year increase in line with our guidance range,
which was raised last year.
A more detailed analysis of performance and additional information
on the portfolio is included in the Portfolio Manager’s Report.
Demonstrating and promoting our unique
investor proposition
From inception, we have stated that the Company offers portfolio
diversification, with a differentiated risk/return profile. The Company
has delivered resilient NAV total returns since its inception on
22 December 2020, in a highly volatile market, with an annualised
NAV total return per share of 2.8%.
Another key differentiator of the Company is our deep impact focus.
We therefore see the introduction of the SDR as a helpful opportunity
to evidence the quality of the Portfolio Manager’s impact-driven
investment process. It is the Board’s intention that the Company
adopts the “Sustainability Impact” label, given it is in line with the
Company’s existing central aims and objectives*.
Significant work has taken place with Schroders (the “Manager” or
“AIFM”), the Portfolio Manager, and professional advisers to date to
ensure adoption of this label. We are currently in dialogue with the
FCA in relation to amending the Company’s investment policy, adding
additional disclosure to align with SDR guidance. On FCA approval of
the proposed new investment policy, the change will be put to
shareholders at an EGM. Further details are expected to be included
in a Circular containing the Notice of EGM and proposed new
investment policy and objective to be voted on by shareholders.
Investor engagement remains very important to the Company, which
is proactively pursuing opportunities to reach a broader audience and
connect more deeply with its existing shareholders. The management
team has been focusing on developing our marketing materials and
articulating better what we can offer to investors. The Company has
a unique ability to share its experience in impact investing, provide
reporting support, thematic case studies and much more to its
investors. We would encourage shareholders to take advantage of
these opportunities, and I would be delighted to hear from investors
about what they most value.
Managing the discount
Despite the Company’s resilient NAV and impact performance, and
similarly to the majority of UK investment trusts, its shares continue to
trade at a discount to NAV. The share price total return during the
period was –4.8% in line with broader negative investor sentiment
towards UK alternative equities and during the financial year, the
Company traded at an average discount to NAV of 13.9% and the
average discount across the UK investment trust market was 14.7%.
The Company’s share price traded at a 16.7% discount to NAV at the
period end, and as of 22 October 2024, the discount had widened
to 19.67%.
The discount to NAV over the financial year was indicative of negative
investor sentiment across the sector, particularly towards alternative
asset classes. In tackling this, throughout the year, the Board has
remained focused on articulating the Company’s unique proposition
through promotional activities combined with the judicious use of
share buybacks.
During the year ended 30 June 2024 the Company bought back
1,575,205 ordinary shares for a total consideration of £1.4 million.
All shares were bought at a discount to the prevailing NAV and were
placed into Treasury for future re-issue. This has been accretive to the
NAV total return per share in the period by 0.27p per share. While the
Board is reluctant to shrink the size of the Company, we believe the
careful use of buybacks has not only been accretive, but also helped
liquidity and demonstrates our confidence in the portfolio.
In the Prospectus, published at the time of the IPO, the Company
undertook to provide shareholders with the opportunity to vote on
the Company’s continuation should the Company’s shares trade, on
average, at a discount in excess of 10% to NAV for the two-year period
ending 31 December 2023 and in any subsequent two-year period.
The average discount for the two-year period to 31 December 2023
was 6.7%. The current period under assessment is the two-year
period to 31 December 2025. In the event that a vote was triggered,
shareholders would be provided with the opportunity to vote on
whether the Company should continue in its present form at the
AGM in 2026.
Since 30 June 2024 and up to 22 October 2024, a further 496,486
shares have been bought back and placed in Treasury. At the
forthcoming Annual General Meeting (“AGM”) the Board will seek to
renew the authorities previously granted by shareholders to issue or
buy back shares. We encourage shareholders to vote in favour of
these resolutions which are described in more detail in the Notice of
AGM on pages 81 to 83.
In the longer term, we remain committed to plans to raise funds
through share issuance. This approach will allow us to capitalise on
the attractive pipeline of high impact investments identified by our
Portfolio Manager. By deploying additional capital, we would also be
able to positively change the lives of more people in the UK.
* For more information on the labelling regime please see FCA policy statement via this link here: https://www.fca.org.uk/publication/policy/ps23-16.pdf.
Schroder BSC Social Impact Trust plc 9
As part of its wider remit, BSC supports the growth of the social
impact investment market, building relationships and exploring new
ways to work alongside the investment community. For the Company,
this means an extensive pipeline of investible opportunities, as well as
deepening the capital pool engaged in impact investing.
This year, pre-election, BSC was highly engaged with policymakers,
and the team are optimistic that these conversations have been
fruitful in building awareness of the value of social impact investing
amongst key decision makers. The Board hopes to see this greater
awareness translating into wider investor interest and opportunities
for private capital to play a helpful role in tackling difficult social
challenges and strengthening communities across the UK.
Resilient financial performance
For the year ended 30 June 2024, the Company’s NAV total return was
1.5%, leading to a cumulative return of 10.2% since inception. The
largest positive contribution to the return came from investment
income (4.0p per share), partially offset by valuation losses (1.5p per
share) principally due to the write-down in the Bridges Evergreen
Holdings (“BEH”) disclosed in the Interim Report along with a
provision made for refinancing a Charity Bond. Liquidity Assets had
a positive contribution to NAV per share of 0.6p. While financial
returns did not meet our longer-term ambition, largely due to market
conditions affecting the operating and exit environment, we are
pleased to have seen the Portfolio Manager acting quickly and
diligently to proactively safeguard the long-term financial value of the
portfolio, while supporting fund managers and social enterprises to
continue delivering their services.
We are pleased that the Company will pay out substantially all of its
income as a dividend, resulting in a dividend made up wholly of an
interest distribution of 2.94p per share (2023: 2.30p), another
significant year-on-year increase in line with our guidance range,
which was raised last year.
A more detailed analysis of performance and additional information
on the portfolio is included in the Portfolio Manager’s Report.
Demonstrating and promoting our unique
investor proposition
From inception, we have stated that the Company offers portfolio
diversification, with a differentiated risk/return profile. The Company
has delivered resilient NAV total returns since its inception on
22 December 2020, in a highly volatile market, with an annualised
NAV total return per share of 2.8%.
Another key differentiator of the Company is our deep impact focus.
We therefore see the introduction of the SDR as a helpful opportunity
to evidence the quality of the Portfolio Manager’s impact-driven
investment process. It is the Board’s intention that the Company
adopts the “Sustainability Impact” label, given it is in line with the
Company’s existing central aims and objectives*.
Significant work has taken place with Schroders (the “Manager” or
“AIFM”), the Portfolio Manager, and professional advisers to date to
ensure adoption of this label. We are currently in dialogue with the
FCA in relation to amending the Company’s investment policy, adding
additional disclosure to align with SDR guidance. On FCA approval of
the proposed new investment policy, the change will be put to
shareholders at an EGM. Further details are expected to be included
in a Circular containing the Notice of EGM and proposed new
investment policy and objective to be voted on by shareholders.
Investor engagement remains very important to the Company, which
is proactively pursuing opportunities to reach a broader audience and
connect more deeply with its existing shareholders. The management
team has been focusing on developing our marketing materials and
articulating better what we can offer to investors. The Company has
a unique ability to share its experience in impact investing, provide
reporting support, thematic case studies and much more to its
investors. We would encourage shareholders to take advantage of
these opportunities, and I would be delighted to hear from investors
about what they most value.
Managing the discount
Despite the Company’s resilient NAV and impact performance, and
similarly to the majority of UK investment trusts, its shares continue to
trade at a discount to NAV. The share price total return during the
period was –4.8% in line with broader negative investor sentiment
towards UK alternative equities and during the financial year, the
Company traded at an average discount to NAV of 13.9% and the
average discount across the UK investment trust market was 14.7%.
The Company’s share price traded at a 16.7% discount to NAV at the
period end, and as of 22 October 2024, the discount had widened
to 19.67%.
The discount to NAV over the financial year was indicative of negative
investor sentiment across the sector, particularly towards alternative
asset classes. In tackling this, throughout the year, the Board has
remained focused on articulating the Company’s unique proposition
through promotional activities combined with the judicious use of
share buybacks.
During the year ended 30 June 2024 the Company bought back
1,575,205 ordinary shares for a total consideration of £1.4 million.
All shares were bought at a discount to the prevailing NAV and were
placed into Treasury for future re-issue. This has been accretive to the
NAV total return per share in the period by 0.27p per share. While the
Board is reluctant to shrink the size of the Company, we believe the
careful use of buybacks has not only been accretive, but also helped
liquidity and demonstrates our confidence in the portfolio.
In the Prospectus, published at the time of the IPO, the Company
undertook to provide shareholders with the opportunity to vote on
the Company’s continuation should the Company’s shares trade, on
average, at a discount in excess of 10% to NAV for the two-year period
ending 31 December 2023 and in any subsequent two-year period.
The average discount for the two-year period to 31 December 2023
was 6.7%. The current period under assessment is the two-year
period to 31 December 2025. In the event that a vote was triggered,
shareholders would be provided with the opportunity to vote on
whether the Company should continue in its present form at the
AGM in 2026.
Since 30 June 2024 and up to 22 October 2024, a further 496,486
shares have been bought back and placed in Treasury. At the
forthcoming Annual General Meeting (“AGM”) the Board will seek to
renew the authorities previously granted by shareholders to issue or
buy back shares. We encourage shareholders to vote in favour of
these resolutions which are described in more detail in the Notice of
AGM on pages 81 to 83.
In the longer term, we remain committed to plans to raise funds
through share issuance. This approach will allow us to capitalise on
the attractive pipeline of high impact investments identified by our
Portfolio Manager. By deploying additional capital, we would also be
able to positively change the lives of more people in the UK.
* For more information on the labelling regime please see FCA policy statement via this link here: https://www.fca.org.uk/publication/policy/ps23-16.pdf.
10
Schroder BSC Social Impact Trust plc
Chair’s Statement
continued
Online presentation
Our Portfolio Manager will be giving a presentation at an investor
webinar on Thursday 24 October 2024 at 9.00 am (which can be
signed up to via the following link:
https://www.schroders.events/SBSI24).
AGM
The AGM will be held on 18 December 2024 at 12.00 pm at the offices
of Schroders at 1 London Wall Place, London, EC2Y 5AU. The Portfolio
Manager will give a presentation following the formal business of the
AGM, and attendees will be able to ask questions in person. The
presentation will be made available on the Company’s website
following the meeting. Details of the AGM are set out on in this
Annual Report.
Board changes
Mike Balfour has served on the Board since the Company’s IPO, and
having completed four years in post, will step down from the Board at
the conclusion of this year’s AGM. I would like to thank him on behalf
of the Board and all of the Company’s stakeholders for his unfailing
dedication and meticulousness as Chairman of the Audit and Risk
Committee and for his wisdom as a Board member. He will be missed.
We are delighted to have appointed Ranjan Ramparia to the Board on
16 October 2024. This followed a thorough search process
undertaken by Sapphire Partners Limited, a specialist recruitment
firm. Ms Ramparia is a qualified Chartered Accountant and
experienced business professional with a background in corporate
finance and investment management. On behalf of all the directors,
I welcome Ranjan to the Board. She will succeed Mike Balfour as Chair
of the Audit and Risk Committee.
Outlook – a pivotal moment for social
impact investment in the UK
Several factors give me confidence in the outlook for the UK social
impact investment market over the next year, and for the Company.
Firstly, the UK continues to grapple with structural challenges, such as
homelessness, an ageing population and pressures on the health
system, as well as a restricted government budget. We believe that
the Company’s investments are therefore extremely valuable, allowing
capital to be deployed to organisations delivering essential,
government-mandated services while at the same time delivering
significant financial and social savings.
Secondly, the General Election in July 2024 represented the most
significant political shift for the UK since Brexit. While it is early days,
we believe this represents a significant opportunity to bring
communities together and build partnerships between public sector
bodies, private organisations and the people of the UK. The Schroder
BSC Social Impact Trust can play an important role in this mission,
evidencing how innovative solutions implemented and financed well
can benefit everyone involved.
And finally, at the same time the operating environment for social
enterprises shows early signs of improvement. While we remain
cautious, inflation looks to be easing, and the latest Social Enterprise
Barometer report, published August 2024, shows a growing number
of social enterprises increasing their reserves compared to a year ago.
While uncertainty continues, the Company remains committed to its
goals of delivering high quality impact and stable financial returns to
shareholders with low correlation to traditional quoted markets. We
have an attractive pipeline of investment opportunities available to us
and look forward to the year ahead as we continue to provide
significant social impact for vulnerable and disadvantaged people
across the UK. Our biggest opportunity lies in effectively engaging
with a wider pool of investors and I hope this report will encourage
you to be in touch and learn more.
Susannah Nicklin
Chair
23 October 2024
Chair’s Statement
continued
Online presentation
Our Portfolio Manager will be giving a presentation at an investor
webinar on Thursday 24 October 2024 at 9.00 am (which can be
signed up to via the following link:
https://www.schroders.events/SBSI24).
AGM
The AGM will be held on 18 December 2024 at 12.00 pm at the offices
of Schroders at 1 London Wall Place, London, EC2Y 5AU. The Portfolio
Manager will give a presentation following the formal business of the
AGM, and attendees will be able to ask questions in person. The
presentation will be made available on the Company’s website
following the meeting. Details of the AGM are set out on in this
Annual Report.
Board changes
Mike Balfour has served on the Board since the Company’s IPO, and
having completed four years in post, will step down from the Board at
the conclusion of this year’s AGM. I would like to thank him on behalf
of the Board and all of the Company’s stakeholders for his unfailing
dedication and meticulousness as Chairman of the Audit and Risk
Committee and for his wisdom as a Board member. He will be missed.
We are delighted to have appointed Ranjan Ramparia to the Board on
16 October 2024. This followed a thorough search process
undertaken by Sapphire Partners Limited, a specialist recruitment
firm. Ms Ramparia is a qualified Chartered Accountant and
experienced business professional with a background in corporate
finance and investment management. On behalf of all the directors,
I welcome Ranjan to the Board. She will succeed Mike Balfour as Chair
of the Audit and Risk Committee.
Outlook – a pivotal moment for social
impact investment in the UK
Several factors give me confidence in the outlook for the UK social
impact investment market over the next year, and for the Company.
Firstly, the UK continues to grapple with structural challenges, such as
homelessness, an ageing population and pressures on the health
system, as well as a restricted government budget. We believe that
the Company’s investments are therefore extremely valuable, allowing
capital to be deployed to organisations delivering essential,
government-mandated services while at the same time delivering
significant financial and social savings.
Secondly, the General Election in July 2024 represented the most
significant political shift for the UK since Brexit. While it is early days,
we believe this represents a significant opportunity to bring
communities together and build partnerships between public sector
bodies, private organisations and the people of the UK. The Schroder
BSC Social Impact Trust can play an important role in this mission,
evidencing how innovative solutions implemented and financed well
can benefit everyone involved.
And finally, at the same time the operating environment for social
enterprises shows early signs of improvement. While we remain
cautious, inflation looks to be easing, and the latest Social Enterprise
Barometer report, published August 2024, shows a growing number
of social enterprises increasing their reserves compared to a year ago.
While uncertainty continues, the Company remains committed to its
goals of delivering high quality impact and stable financial returns to
shareholders with low correlation to traditional quoted markets. We
have an attractive pipeline of investment opportunities available to us
and look forward to the year ahead as we continue to provide
significant social impact for vulnerable and disadvantaged people
across the UK. Our biggest opportunity lies in effectively engaging
with a wider pool of investors and I hope this report will encourage
you to be in touch and learn more.
Susannah Nicklin
Chair
23 October 2024
Schroder BSC Social Impact Trust plc
11
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Portfolio Manager’s Report
Market developments
In the twelve months to 30 June 2024, we have seen a return to stability
in interest rates, with the Bank of England base rate remaining constant
at 5.25% during the period, inflation decreasing to the 2% target and
emerging signs of an economic rebound.
However, lagged and long-term effects of the market disruptions of the
previous 18 months continue to impact the operating environment of
companies in the UK, while we see a continued increase in the number
of people affected by issues like poverty, deprivation
1
and
homelessness
2
, with negative repercussions on long term health
3
.
The year was also marked by political uncertainty, with the impending
election in the UK leading to lack of clarity on the outlook for the policy
environment.
While a new Labour government came into power in July 2024, after
the period end, the backdrop of a constrained fiscal environment and
pressures on public spending remains, at a time when the need to
address social issues continues to be as urgent as ever.
In this market environment, we have continued to manage the
Company’s portfolio to address and mitigate the emerging risks, as well
as act on areas of opportunity.
Looking first at risk management, while our portfolio includes seasoned
companies with decades of experience in delivering UK social impact
solutions, these organisations are not immune to broader market
disruptions. We have been working across our portfolio to help
organisations and funds adapt to the operating environment and new
opportunity set.
On financial returns, we have aimed to build a portfolio with a degree
of inflation correlation. While we have previously caveated that some of
these correlations would be partial and/or lagged, we have seen the
benefit of higher interest rates reflected in the increased income from
the floating rate loans; this will be passed on to investors as increased
dividend income. From the last quarter of the financial year ending
30 June 24, we have also started to see increased income in the High
Impact Housing portfolio, reflecting increases in the Local Housing
Allowance effective as of April 2024.
Looking at opportunities, against a challenging exit environment, we
have seen several successful exits and refinancings within the portfolio,
which we detail further in the report. At the portfolio level, we have
re-committed £8.6m of capital during the year (representing 10% of
NAV) into new investments, increasing the diversification of our
portfolio with a new renewable energy investment contributing to the
theme we call ‘Just Transition to Net Zero’ and growing our High Impact
Housing portfolio. We have also seen capital recycling within the
underlying funds. Where capital is returned from successful exits and
refinancings, we often work with our fund managers to have the
proceeds returned to the Company, pending re-deployment into
High Impact Investments, mitigating fee and cash drag for the
Company’s investors.
We continue to see high and growing demand for social impact
investments, as evidenced by the growing need in the UK alongside
constrained public spending. The Impact Investing Institute’s market
sizing report
4
published on 16 September 2024 estimated that the
UK impact investing market had grown at a compound annual
growth rate of 10.1% between the beginning of 2021 and end of 2023,
to £76.8bn assets under management, significantly outpacing the
broader UK asset management sector, which had an annual growth
rate between –2% and 0% over the same period. Using a narrower
definition of the market, Better Society Capital’s market sizing exercise
estimated that the UK social impact investing market grew by a
compound annual rate of 15% between the end of 2020 to the end of
2023, to £10bn.
We are also seeing an expanding and maturing pipeline of investment
opportunities, primarily in private markets that are difficult for many
investors to access. We believe the Company remains well positioned
to offer investors access to a mature portfolio of high-quality impact
investments within this expanding opportunity set, as evidenced by our
ability to efficiently recycle capital repaid in the last year.
Performance update
The Net Asset Value (NAV) total return per share for the twelve-month
period to 30 June 2024 was 1.5%. Overall, the Company’s total NAV
reduced slightly from £88.75m to £86.46m over the period due to
distributions to shareholders via a dividend payment (£1.93m) and
share buy-backs (£1.41m) reducing the number of shares in issue from
84.60m to 83.02m, offset by the net return of £1.05m during the year
under review.
The Company’s NAV per share declined from 104.90p to 104.13p –
including the 2.30p dividend payment – with a full performance bridge
in the chart below.
100.00
101.00
102.00
103.00
104.00
105.00
106.00
107.00
108.00
104.13
Closing NAV per share
0.27
Share buybacks
–2.30
Dividends paid
–0.5
Other expenses
–0.75
Company-level investment
management fees
4.00
Investment income
–1.49
Valuation losses
104.90
Opening NAV per share
Total
NAV per share progression
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Portfolio Manager’s Report
Market developments
In the twelve months to 30 June 2024, we have seen a return to stability
in interest rates, with the Bank of England base rate remaining constant
at 5.25% during the period, inflation decreasing to the 2% target and
emerging signs of an economic rebound.
However, lagged and long-term effects of the market disruptions of the
previous 18 months continue to impact the operating environment of
companies in the UK, while we see a continued increase in the number
of people affected by issues like poverty, deprivation
1
and
homelessness
2
, with negative repercussions on long term health
3
.
The year was also marked by political uncertainty, with the impending
election in the UK leading to lack of clarity on the outlook for the policy
environment.
While a new Labour government came into power in July 2024, after
the period end, the backdrop of a constrained fiscal environment and
pressures on public spending remains, at a time when the need to
address social issues continues to be as urgent as ever.
In this market environment, we have continued to manage the
Company’s portfolio to address and mitigate the emerging risks, as well
as act on areas of opportunity.
Looking first at risk management, while our portfolio includes seasoned
companies with decades of experience in delivering UK social impact
solutions, these organisations are not immune to broader market
disruptions. We have been working across our portfolio to help
organisations and funds adapt to the operating environment and new
opportunity set.
On financial returns, we have aimed to build a portfolio with a degree
of inflation correlation. While we have previously caveated that some of
these correlations would be partial and/or lagged, we have seen the
benefit of higher interest rates reflected in the increased income from
the floating rate loans; this will be passed on to investors as increased
dividend income. From the last quarter of the financial year ending
30 June 24, we have also started to see increased income in the High
Impact Housing portfolio, reflecting increases in the Local Housing
Allowance effective as of April 2024.
Looking at opportunities, against a challenging exit environment, we
have seen several successful exits and refinancings within the portfolio,
which we detail further in the report. At the portfolio level, we have
re-committed £8.6m of capital during the year (representing 10% of
NAV) into new investments, increasing the diversification of our
portfolio with a new renewable energy investment contributing to the
theme we call ‘Just Transition to Net Zero’ and growing our High Impact
Housing portfolio. We have also seen capital recycling within the
underlying funds. Where capital is returned from successful exits and
refinancings, we often work with our fund managers to have the
proceeds returned to the Company, pending re-deployment into
High Impact Investments, mitigating fee and cash drag for the
Company’s investors.
We continue to see high and growing demand for social impact
investments, as evidenced by the growing need in the UK alongside
constrained public spending. The Impact Investing Institute’s market
sizing report
4
published on 16 September 2024 estimated that the
UK impact investing market had grown at a compound annual
growth rate of 10.1% between the beginning of 2021 and end of 2023,
to £76.8bn assets under management, significantly outpacing the
broader UK asset management sector, which had an annual growth
rate between –2% and 0% over the same period. Using a narrower
definition of the market, Better Society Capital’s market sizing exercise
estimated that the UK social impact investing market grew by a
compound annual rate of 15% between the end of 2020 to the end of
2023, to £10bn.
We are also seeing an expanding and maturing pipeline of investment
opportunities, primarily in private markets that are difficult for many
investors to access. We believe the Company remains well positioned
to offer investors access to a mature portfolio of high-quality impact
investments within this expanding opportunity set, as evidenced by our
ability to efficiently recycle capital repaid in the last year.
Performance update
The Net Asset Value (NAV) total return per share for the twelve-month
period to 30 June 2024 was 1.5%. Overall, the Company’s total NAV
reduced slightly from £88.75m to £86.46m over the period due to
distributions to shareholders via a dividend payment (£1.93m) and
share buy-backs (£1.41m) reducing the number of shares in issue from
84.60m to 83.02m, offset by the net return of £1.05m during the year
under review.
The Company’s NAV per share declined from 104.90p to 104.13p –
including the 2.30p dividend payment – with a full performance bridge
in the chart below.
100.00
101.00
102.00
103.00
104.00
105.00
106.00
107.00
108.00
104.13
Closing NAV per share
0.27
Share buybacks
–2.30
Dividends paid
–0.5
Other expenses
–0.75
Company-level investment
management fees
4.00
Investment income
–1.49
Valuation losses
104.90
Opening NAV per share
Total
NAV per share progression
12
Schroder BSC Social Impact Trust plc
In the twelve months to 30 June 2024 the Company recorded gross
revenue of £3.49m (2023: £2.77m) and net revenue after fees, costs
and expenses of £2.65m (2023: £1.97m), providing a net revenue
return per share of 3.16 pence (2023: 2.32 pence). The Company
recorded losses on the fair value of investments of £0.83m,
recognised an impairment provision of £0.41m and recorded
capitalised expenses of £0.36m, resulting in a total gross return of
£2.24m, and a total net return of £1.05m, or 1.25 pence per share.
The Company will pay a dividend made up wholly of an interest
distribution of 2.94p per share (2023: 2.30p) on 20 December 2024,
which represents a dividend yield of 2.82% based on the net asset
value at 30 June 2024. This is in line with our guided dividend range of
2-3% yield on net asset value p.a.
The key drivers of financial performance in the twelve-month period
to 30 June 2024 were:
• A mix of income and capital gains in the Social Outcomes
Contracts portfolio driven by strong performance of the
underlying projects, with Bridges Social Outcomes Fund II
contributing 0.56p to NAV per share;
• A ramp-up of returns in the High Impact Housing portfolio, in
particular valuation gains in the Real Lettings Property Fund,
contributing 0.55p to NAV per share, driven by the increases in
the Local Housing Allowance (LHA) effective from 1 April 2024
(with an expected 13% uplift in annual rental income) and uplifts
in the value of its property portfolio;
• BEH had a negative 1.00p contribution to NAV per share, due to
a capital loss on the disposal of AgilityEco, relative to the
previously recorded book value of the investment, as disclosed in
the Interim Report. The full year loss was slightly lower than the
(1.10)p per share disclosed in the Interim Report, thanks to
dividend income and continued performance of the remaining
investments.
The Social Impact performance of the portfolio was reported in the
Company’s third Impact Report published in July 2024. The report
highlighted that since launch, the Company’s investments have
reached 400,000 people, 95% of whom are from disadvantaged,
vulnerable or underserved backgrounds; generated £217m in social
outcomes and savings; and funded 35,000 affordable, decent homes.
Portfolio exits and new investments
The Company’s capital is fully committed to High Impact Investments
(drawn or pending drawdowns). The Portfolio Manager continuously
monitors a pipeline of additional High Impact Investments to allow
efficient recycling of capital that is returned to the Company via
distributions, scheduled maturities or early exits, and in anticipation
of new capital raises should the share price discount be closed.
During the period under review, £5.9m (7% of NAV) of capital was
returned largely through the Charity Bank Co-investment portfolio, as
scheduled maturities alongside the early repayment of the remaining
£2.4m balance of the Sue Ryder loan, as well as capital returned by
the Bridges Social Outcomes Fund II (£1.9m).
We have made two new commitments:
• £3.6m to Community Energy Together Limited (“CETL”) (fully
drawn at commitment in December 2023): a community
renewable energy project company, contributing to a ‘Just
Transition to Net Zero’; and
• £5.0m to SAH (managed by Savills Investment Management)
(first drawdown after period end): SAH aims to deliver affordable
homes across the UK, with a focus on areas with high local
authority waiting lists and areas ranked within the lowest 40% in
the Index of Multiple Deprivation. SAH will invest in and manage
a diversified portfolio of affordable housing, comprising both
affordable and social-rent homes as well as shared-ownership
homes, generating government-backed and inflation-linked
income streams.
Portfolio cash flows and balance sheet
During the period, net drawdowns for High Impact Investments were
£0.62m, comprising new deployment of capital of £6.47m, and capital
repayments of £5.85m (£3.12m of which are recallable distributions):
• In Debt and Equity for Social Enterprises :
– BEH exited AgilityEco via a sale to M Group Service,
delivering a 3.4 times money multiple return on the original
BEH investment (2.7 times since investment by the
Company); the proceeds from the exit will be reinvested in
other high impact opportunities; post period end, the fund
made a recallable distribution to investors, pending
re-investment by BEH;
– £3.6m was deployed into the Company’s new investment in
CETL;
– In the Charity Bank Co-investment portfolio, we have
received an early repayment of the Sue Ryder £2.64m loan,
and a £1.02m drawdown for the Abbeyfield York loan;
– The Community Investment Fund made a recallable
distribution of £1.22m following the refinancing of the
Resilient Energy Forest of Dean loan, and a drawdown of
£0.64m for new investments, including a new loan to Social
adVentures for the purchase of a detached family home in
Salford Greater Manchester, which has opened a new
children’s home for three children aged 8 to 18 years;
• In High Impact Housing , £0.86m was drawn by Social and
Sustainable Housing LP and £0.08m by Man GPM RI Community
Housing Fund, deployed towards delivering more affordable and
social housing in the UK.
• Within Social Outcomes Contracts , further investment was
made into new and existing projects for the delivery of public
services in areas such as homelessness and healthcare.
Portfolio Manager’s Report
continued
1
Institute for Fiscal Studies, March 2024
2
The Guardian, Apr 2024
3
Office for National Statistics, July 2023
4
https://www.impactinvest.org.uk/resources/publications/the-uk-impact-investing-market-size-scope-and-potential/
In the twelve months to 30 June 2024 the Company recorded gross
revenue of £3.49m (2023: £2.77m) and net revenue after fees, costs
and expenses of £2.65m (2023: £1.97m), providing a net revenue
return per share of 3.16 pence (2023: 2.32 pence). The Company
recorded losses on the fair value of investments of £0.83m,
recognised an impairment provision of £0.41m and recorded
capitalised expenses of £0.36m, resulting in a total gross return of
£2.24m, and a total net return of £1.05m, or 1.25 pence per share.
The Company will pay a dividend made up wholly of an interest
distribution of 2.94p per share (2023: 2.30p) on 20 December 2024,
which represents a dividend yield of 2.82% based on the net asset
value at 30 June 2024. This is in line with our guided dividend range of
2-3% yield on net asset value p.a.
The key drivers of financial performance in the twelve-month period
to 30 June 2024 were:
• A mix of income and capital gains in the Social Outcomes
Contracts portfolio driven by strong performance of the
underlying projects, with Bridges Social Outcomes Fund II
contributing 0.56p to NAV per share;
• A ramp-up of returns in the High Impact Housing portfolio, in
particular valuation gains in the Real Lettings Property Fund,
contributing 0.55p to NAV per share, driven by the increases in
the Local Housing Allowance (LHA) effective from 1 April 2024
(with an expected 13% uplift in annual rental income) and uplifts
in the value of its property portfolio;
• BEH had a negative 1.00p contribution to NAV per share, due to
a capital loss on the disposal of AgilityEco, relative to the
previously recorded book value of the investment, as disclosed in
the Interim Report. The full year loss was slightly lower than the
(1.10)p per share disclosed in the Interim Report, thanks to
dividend income and continued performance of the remaining
investments.
The Social Impact performance of the portfolio was reported in the
Company’s third Impact Report published in July 2024. The report
highlighted that since launch, the Company’s investments have
reached 400,000 people, 95% of whom are from disadvantaged,
vulnerable or underserved backgrounds; generated £217m in social
outcomes and savings; and funded 35,000 affordable, decent homes.
Portfolio exits and new investments
The Company’s capital is fully committed to High Impact Investments
(drawn or pending drawdowns). The Portfolio Manager continuously
monitors a pipeline of additional High Impact Investments to allow
efficient recycling of capital that is returned to the Company via
distributions, scheduled maturities or early exits, and in anticipation
of new capital raises should the share price discount be closed.
During the period under review, £5.9m (7% of NAV) of capital was
returned largely through the Charity Bank Co-investment portfolio, as
scheduled maturities alongside the early repayment of the remaining
£2.4m balance of the Sue Ryder loan, as well as capital returned by
the Bridges Social Outcomes Fund II (£1.9m).
We have made two new commitments:
• £3.6m to Community Energy Together Limited (“CETL”) (fully
drawn at commitment in December 2023): a community
renewable energy project company, contributing to a ‘Just
Transition to Net Zero’; and
• £5.0m to SAH (managed by Savills Investment Management)
(first drawdown after period end): SAH aims to deliver affordable
homes across the UK, with a focus on areas with high local
authority waiting lists and areas ranked within the lowest 40% in
the Index of Multiple Deprivation. SAH will invest in and manage
a diversified portfolio of affordable housing, comprising both
affordable and social-rent homes as well as shared-ownership
homes, generating government-backed and inflation-linked
income streams.
Portfolio cash flows and balance sheet
During the period, net drawdowns for High Impact Investments were
£0.62m, comprising new deployment of capital of £6.47m, and capital
repayments of £5.85m (£3.12m of which are recallable distributions):
• In Debt and Equity for Social Enterprises :
– BEH exited AgilityEco via a sale to M Group Service,
delivering a 3.4 times money multiple return on the original
BEH investment (2.7 times since investment by the
Company); the proceeds from the exit will be reinvested in
other high impact opportunities; post period end, the fund
made a recallable distribution to investors, pending
re-investment by BEH;
– £3.6m was deployed into the Company’s new investment in
CETL;
– In the Charity Bank Co-investment portfolio, we have
received an early repayment of the Sue Ryder £2.64m loan,
and a £1.02m drawdown for the Abbeyfield York loan;
– The Community Investment Fund made a recallable
distribution of £1.22m following the refinancing of the
Resilient Energy Forest of Dean loan, and a drawdown of
£0.64m for new investments, including a new loan to Social
adVentures for the purchase of a detached family home in
Salford Greater Manchester, which has opened a new
children’s home for three children aged 8 to 18 years;
• In High Impact Housing , £0.86m was drawn by Social and
Sustainable Housing LP and £0.08m by Man GPM RI Community
Housing Fund, deployed towards delivering more affordable and
social housing in the UK.
• Within Social Outcomes Contracts , further investment was
made into new and existing projects for the delivery of public
services in areas such as homelessness and healthcare.
Portfolio Manager’s Report
continued
1
Institute for Fiscal Studies, March 2024
2
The Guardian, Apr 2024
3
Office for National Statistics, July 2023
4
https://www.impactinvest.org.uk/resources/publications/the-uk-impact-investing-market-size-scope-and-potential/
Portfolio allocation
A diversified asset allocation delivering local UK social
impact
The Company delivers its investment objective through allocating to
best-in-class social impact managers in private markets – with proven
track records delivering high quality financial returns alongside
measurable social impact for more disadvantaged groups in the UK.
Investments that are committed but not yet drawn by private market
funds are held in listed Liquidity Assets investments to mitigate cash
drag during longer drawdown periods.
As of 30 June 2024, total commitments (drawn and undrawn) to
High Impact Investments amounted to 104% of NAV, while the drawn
portion of the commitments was at 90% of NAV (“invested as % of
NAV”). Capital awaiting deployment into High Impact Investments is
currently held in Liquidity Assets (including investment funds and
money market funds earning interest in line with base rates) (11% of
NAV).
While current undrawn commitments exceed the amounts held in
Liquidity Assets, this is mainly a reflection of the long drawdown
periods of some of our commitments (in particular in housing), and
when matched against expected capital repayments, we are
maintaining appropriate cover for expected drawdowns.
*See asset class description on page 16.
Exposure: NAV of High Impact Investments + undrawn commitments. Totals may not sum due to rounding.
Data as of 30 June 2024
Providing access to a seasoned high impact portfolio
The Company has built a seasoned high impact portfolio that would
be difficult for shareholders to access directly – through a
combination of a seed portfolio and secondary investments from
Better Society Capital, the Portfolio Manager, as well as its
relationships and knowledge of the sector. This provides a greater
allocation to more mature assets that will help drive future financial
and impact performance. The Portfolio Manager’s broader portfolio
relationships offer additional fee benefits to Company shareholders –
with 43% of the Company’s portfolio with no or discounted
management fees – from co-investments or fee discounts that the
Portfolio Manager has negotiated, often through their role as initial
cornerstone investor in funds.
High Impact Exposure as a % of NAV 30 June 2024
Vintage
Vintage is defined as year of fund establishment:
Access – Ease of access for other investors
Access – Exposure as % of NAV 30 June 2024
Fees
H igh Impact Housing
Debt and Equity for
Social Enterprises
Social Outcome Contracts
48%
48%
8%
High Impact
Exposure as
a % of NAV
High Impact Housing
Debt and Equity for Social
Enterprises
Social Outcomes Contracts
Li q uidity Assets
39%
47%
11%
3%
Invested
as a % of
NAV
2013- 2016
2017- 2019
2020- 202 4
32%
43%
29%
Co-investments/ Secondaries
Private funds closed to new
investors
Private funds with irregular
fundraises
Charity B onds 51%
22%
14% 17%
No manager fees or
discounted
Market rate fees
43%
57%
Schroder BSC Social Impact Trust plc 13
Introduction Strategic Report Governance Financial Other Information (Unaudited)
A diversified asset allocation delivering local UK social
impact
The Company delivers its investment objective through allocating to
best-in-class social impact managers in private markets – with proven
track records delivering high quality financial returns alongside
measurable social impact for more disadvantaged groups in the UK.
Investments that are committed but not yet drawn by private market
funds are held in listed Liquidity Assets investments to mitigate cash
drag during longer drawdown periods.
As of 30 June 2024, total commitments (drawn and undrawn) to
High Impact Investments amounted to 104% of NAV, while the drawn
portion of the commitments was at 90% of NAV (“invested as % of
NAV”). Capital awaiting deployment into High Impact Investments is
currently held in Liquidity Assets (including investment funds and
money market funds earning interest in line with base rates) (11% of
NAV).
While current undrawn commitments exceed the amounts held in
Liquidity Assets, this is mainly a reflection of the long drawdown
periods of some of our commitments (in particular in housing), and
when matched against expected capital repayments, we are
maintaining appropriate cover for expected drawdowns.
*See asset class description on page 16.
Exposure: NAV of High Impact Investments + undrawn commitments. Totals may not sum due to rounding.
Data as of 30 June 2024
Providing access to a seasoned high impact portfolio
The Company has built a seasoned high impact portfolio that would
be difficult for shareholders to access directly – through a
combination of a seed portfolio and secondary investments from
Better Society Capital, the Portfolio Manager, as well as its
relationships and knowledge of the sector. This provides a greater
allocation to more mature assets that will help drive future financial
and impact performance. The Portfolio Manager’s broader portfolio
relationships offer additional fee benefits to Company shareholders –
with 43% of the Company’s portfolio with no or discounted
management fees – from co-investments or fee discounts that the
Portfolio Manager has negotiated, often through their role as initial
cornerstone investor in funds.
High Impact Exposure as a % of NAV 30 June 2024
Vintage
Vintage is defined as year of fund establishment:
Access – Ease of access for other investors
Access – Exposure as % of NAV 30 June 2024
Fees
H igh Impact Housing
Debt and Equity for
Social Enterprises
Social Outcome Contracts
48%
48%
8%
High Impact
Exposure as
a % of NAV
High Impact Housing
Debt and Equity for Social
Enterprises
Social Outcomes Contracts
Li q uidity Assets
39%
47%
11%
3%
Invested
as a % of
NAV
2013- 2016
2017- 2019
2020- 202 4
32%
43%
29%
Co-investments/ Secondaries
Private funds closed to new
investors
Private funds with irregular
fundraises
Charity B onds 51%
22%
14% 17%
No manager fees or
discounted
Market rate fees
43%
57%
Schroder BSC Social Impact Trust plc 13
Introduction Strategic Report Governance Financial Other Information (Unaudited)
14
Schroder BSC Social Impact Trust plc
Targeting inflation resilient returns
The Company aims to deliver an asset allocation that is resilient
through periods of rising prices through targeting two-thirds of its
asset allocation to assets that will benefit from inflation. These assets
are:
• Property and renewables – with a mix of long dated inflation
linked leases, shorter property leases where value is more driven
by property prices, and smaller investments in community
renewables in our Debt and Equity for Social Enterprises asset
class; we also hold renewables investments in our Liquidity
Assets portfolio.
• Mezzanine and equity investments – where the value is driven by
government contracts that have historically moved with inflation.
• Floating rate instruments which benefit from increases in the
base rate (currently base rates are higher than inflation, and are
expected to decrease).
As of 30 June 2024, the Company had committed 66% of its capital to
inflation sensitive assets. The remaining capital committed to high
impact investments was allocated to fixed income securities such as
charity bonds and social outcomes contracts; the Company aims to
minimise the duration of these fixed income assets, to allow
reinvestment over time into the prevailing interest rate environment.
Including the investments in Liquidity Assets, the Company’s invested
amount in assets that are linked or correlated with inflation is 67% of
its capital.
Asset Types*
*Please note totals may not sum due to rounding.
To date the Company has underperformed its CPI+2% aim, with
double digit inflation levels not being reflected in portfolio returns
given lease caps, increases in discount rates, falls in real value of
house prices and lags in inflation feeding through into new contracts.
We expect to see future returns now benefiting as the lagged impact
of higher inflation and interest rate reductions feed across the
portfolio.
Targeting low correlation to mainstream
markets
The Company’s asset allocation aims to achieve low correlation to
mainstream markets by backing business models that are
underpinned by government expenditure and have been historically
resilient through economic cycles. As of 30 June 2024, 71% of the
committed portfolio (55% invested) is underpinned by government
backed revenue streams. These revenue streams are themselves
diversified across policy areas, such as housing, clean energy and fuel
poverty, education, and addressing inequalities/levelling up. This
diversification reduces exposure to individual policy risk, such as the
risk that government or budgetary changes would significantly
reduce or withdraw payments. The Company targets areas with
a track record of delivering impact for more disadvantaged groups
and generating savings for the public purse which provides additional
revenue resilience. In the twelve months to 30 June 2024, the
Company’s share price had a negative correlation with the FTSE All
Share Index of (0.76) (compared to (0.61) in the previous year), and
since Company IPO, the share price had a negative correlation of
(0.78) with the market index.
In a challenging period for financial markets since the IPO in
December 2020 the Company’s portfolio performance has shown
resilience, delivering a NAV Total Return per share of 10.2%
(2.8% annualised).
Recent events
The Company recently won its category at the Best ESG Investment
Fund: Impact (private markets) at the ESG Investing Awards 2024. The
Judges commented that “their clear report card approach following
IMP principles was impressive. Easy to digest a huge amount of
information in their impact report. We particularly liked their reporting of
impact metrics including the financials. This was backed by clear
intentionality and approach.” The Company was also shortlisted for the
Best Impact Fund at the Sustainable Investment Awards in September
2024. The Company has won four awards since its launch. Judges have
cited its unique offering of a diversified portfolio delivering deep social
impact for more disadvantaged groups across the UK. We are pleased
that the Company’s contribution is being recognised as playing a key
role in the evolution of sustainable investing.
In October 2024 Better Society Capital completed an equity
investment into Resonance Limited (“Resonance”), the parent
company of the manager of the Real Lettings Property Fund in the
Company’s portfolio, to accelerate Resonance’s growth. The Portfolio
Manager now holds 5.2% of the capital of Resonance by way of
non-voting shares. This does not form a part of the Company’s
investment portfolio.
Outlook
The start of the Company’s new financial year was marked by the
UK election, bringing the Labour Party into power. A common thread
remains that social issues requiring intervention are growing, while
public spending remains under pressure.
We welcome the new government’s indications of their intention to
work in partnership with private capital to address the UK’s most
urgent issues:
• Several public sector investment partnership opportunities are
emerging with opportunities to create social impact. For
example, the Government is launching a National Wealth Fund
5
capitalised with £7.3bn and a remit to invest in new and growing
industries, targeting £3 of private investment for every £1 of
public investment. Great British Energy
6
, a publicly owned
national energy company, is also being created, capitalised with
£8.3bn to catalyse up to £60bn of private investment, including
funding to ensure communities own and benefit from clean
power projects.
Housing & renewables
Mezz anine
Floating rate
Fix ed income and SOCs
Cash
7% 13%
43% 34%
4%
Portfolio Manager’s Report
continued
5
Gov.uk: Chancellor Rachel Reeves is taking immediate action to fix the foundations of our economy
6
Gov.uk: Great British Energy founding statement
Targeting inflation resilient returns
The Company aims to deliver an asset allocation that is resilient
through periods of rising prices through targeting two-thirds of its
asset allocation to assets that will benefit from inflation. These assets
are:
• Property and renewables – with a mix of long dated inflation
linked leases, shorter property leases where value is more driven
by property prices, and smaller investments in community
renewables in our Debt and Equity for Social Enterprises asset
class; we also hold renewables investments in our Liquidity
Assets portfolio.
• Mezzanine and equity investments – where the value is driven by
government contracts that have historically moved with inflation.
• Floating rate instruments which benefit from increases in the
base rate (currently base rates are higher than inflation, and are
expected to decrease).
As of 30 June 2024, the Company had committed 66% of its capital to
inflation sensitive assets. The remaining capital committed to high
impact investments was allocated to fixed income securities such as
charity bonds and social outcomes contracts; the Company aims to
minimise the duration of these fixed income assets, to allow
reinvestment over time into the prevailing interest rate environment.
Including the investments in Liquidity Assets, the Company’s invested
amount in assets that are linked or correlated with inflation is 67% of
its capital.
Asset Types*
*Please note totals may not sum due to rounding.
To date the Company has underperformed its CPI+2% aim, with
double digit inflation levels not being reflected in portfolio returns
given lease caps, increases in discount rates, falls in real value of
house prices and lags in inflation feeding through into new contracts.
We expect to see future returns now benefiting as the lagged impact
of higher inflation and interest rate reductions feed across the
portfolio.
Targeting low correlation to mainstream
markets
The Company’s asset allocation aims to achieve low correlation to
mainstream markets by backing business models that are
underpinned by government expenditure and have been historically
resilient through economic cycles. As of 30 June 2024, 71% of the
committed portfolio (55% invested) is underpinned by government
backed revenue streams. These revenue streams are themselves
diversified across policy areas, such as housing, clean energy and fuel
poverty, education, and addressing inequalities/levelling up. This
diversification reduces exposure to individual policy risk, such as the
risk that government or budgetary changes would significantly
reduce or withdraw payments. The Company targets areas with
a track record of delivering impact for more disadvantaged groups
and generating savings for the public purse which provides additional
revenue resilience. In the twelve months to 30 June 2024, the
Company’s share price had a negative correlation with the FTSE All
Share Index of (0.76) (compared to (0.61) in the previous year), and
since Company IPO, the share price had a negative correlation of
(0.78) with the market index.
In a challenging period for financial markets since the IPO in
December 2020 the Company’s portfolio performance has shown
resilience, delivering a NAV Total Return per share of 10.2%
(2.8% annualised).
Recent events
The Company recently won its category at the Best ESG Investment
Fund: Impact (private markets) at the ESG Investing Awards 2024. The
Judges commented that “their clear report card approach following
IMP principles was impressive. Easy to digest a huge amount of
information in their impact report. We particularly liked their reporting of
impact metrics including the financials. This was backed by clear
intentionality and approach.” The Company was also shortlisted for the
Best Impact Fund at the Sustainable Investment Awards in September
2024. The Company has won four awards since its launch. Judges have
cited its unique offering of a diversified portfolio delivering deep social
impact for more disadvantaged groups across the UK. We are pleased
that the Company’s contribution is being recognised as playing a key
role in the evolution of sustainable investing.
In October 2024 Better Society Capital completed an equity
investment into Resonance Limited (“Resonance”), the parent
company of the manager of the Real Lettings Property Fund in the
Company’s portfolio, to accelerate Resonance’s growth. The Portfolio
Manager now holds 5.2% of the capital of Resonance by way of
non-voting shares. This does not form a part of the Company’s
investment portfolio.
Outlook
The start of the Company’s new financial year was marked by the
UK election, bringing the Labour Party into power. A common thread
remains that social issues requiring intervention are growing, while
public spending remains under pressure.
We welcome the new government’s indications of their intention to
work in partnership with private capital to address the UK’s most
urgent issues:
• Several public sector investment partnership opportunities are
emerging with opportunities to create social impact. For
example, the Government is launching a National Wealth Fund
5
capitalised with £7.3bn and a remit to invest in new and growing
industries, targeting £3 of private investment for every £1 of
public investment. Great British Energy
6
, a publicly owned
national energy company, is also being created, capitalised with
£8.3bn to catalyse up to £60bn of private investment, including
funding to ensure communities own and benefit from clean
power projects.
Housing & renewables
Mezz anine
Floating rate
Fix ed income and SOCs
Cash
7% 13%
43% 34%
4%
Portfolio Manager’s Report
continued
5
Gov.uk: Chancellor Rachel Reeves is taking immediate action to fix the foundations of our economy
6
Gov.uk: Great British Energy founding statement
•
Secondly, broader changes to the public sector landscape are
anticipated. For example, the commitment to deliver 1.5 million
homes
7
with incentives for social and affordable housebuilding
alongside the promise of social rent stability. Other favourable
changes to the landscape may follow the pensions review
8
and
“Local Growth Plans”
9
which all regional governments with
devolution deals will develop.
Finally, during the pre-election period the new Government was
actively considering how to harness the power of the “impact
economy” – social impact private markets, purpose-driven businesses
and philanthropists – to help them deliver their ambitions once in
government
10
. Across all areas, the Portfolio Manager, Better Society
Capital, is following developments closely and engaging where
suitable to explore social impact opportunities.
Another important policy development was the launch of the FCA’s
SDR labelling regime in July 2024. The framework signals the
regulator’s commitment to supporting the integrity and growth of the
impact and wider sustainability investment markets in the UK. We
believe transparent labelling and disclosure of impact products are
essential for the impact investment market to grow healthily. We
believe that our deep impact focus is strongly aligned with the
principles of the Sustainability Impact label and, as mentioned in the
Chair’s statement, will be seeking shareholder approval for changes
to our investment policy to ensure alignment with the principles and
guidance of the labelling regime*.
As markets stabilise and we gain further clarity on policy, we think the
Company is in a unique position to offer shareholders access to
a diversified portfolio of private investments into organisations
delivering high impact solutions for the most disadvantaged and
vulnerable groups in the UK, while achieving high quality returns with
low correlation to traditional quoted markets.
Schroder BSC Social Impact Trust plc 15
Introduction Strategic Report Governance Financial Other Information (Unaudited)
7
Gov.uk: Housing targets increased to get Britain building again
8
Gov.uk: Chancellor vows ‘big bang on growth’ to boost investment and savings
9
Gov.uk: Deputy Prime Minister kickstarts new devolution revolution to boost local power
10
https://www.cityam.com/labour-must-partner-with-businesses-in-the-impact-economy/
*For more information on the labelling regime please see FCA policy statement via this link here: https://www.fca.org.uk/publication/policy/ps23-16.pdf
anticipated. For example, the commitment to deliver 1.5 million
homes
7
with incentives for social and affordable housebuilding
alongside the promise of social rent stability. Other favourable
changes to the landscape may follow the pensions review
8
and
“Local Growth Plans”
9
which all regional governments with
devolution deals will develop.
Finally, during the pre-election period the new Government was
actively considering how to harness the power of the “impact
economy” – social impact private markets, purpose-driven businesses
and philanthropists – to help them deliver their ambitions once in
government
10
. Across all areas, the Portfolio Manager, Better Society
Capital, is following developments closely and engaging where
suitable to explore social impact opportunities.
Another important policy development was the launch of the FCA’s
SDR labelling regime in July 2024. The framework signals the
regulator’s commitment to supporting the integrity and growth of the
impact and wider sustainability investment markets in the UK. We
believe transparent labelling and disclosure of impact products are
essential for the impact investment market to grow healthily. We
believe that our deep impact focus is strongly aligned with the
principles of the Sustainability Impact label and, as mentioned in the
Chair’s statement, will be seeking shareholder approval for changes
to our investment policy to ensure alignment with the principles and
guidance of the labelling regime*.
As markets stabilise and we gain further clarity on policy, we think the
Company is in a unique position to offer shareholders access to
a diversified portfolio of private investments into organisations
delivering high impact solutions for the most disadvantaged and
vulnerable groups in the UK, while achieving high quality returns with
low correlation to traditional quoted markets.
Schroder BSC Social Impact Trust plc 15
Introduction Strategic Report Governance Financial Other Information (Unaudited)
7
Gov.uk: Housing targets increased to get Britain building again
8
Gov.uk: Chancellor vows ‘big bang on growth’ to boost investment and savings
9
Gov.uk: Deputy Prime Minister kickstarts new devolution revolution to boost local power
10
https://www.cityam.com/labour-must-partner-with-businesses-in-the-impact-economy/
*For more information on the labelling regime please see FCA policy statement via this link here: https://www.fca.org.uk/publication/policy/ps23-16.pdf
Portfolio developments
The Company invests primarily in three asset classes that were selected to give a diversified set of opportunities with low correlation, both with
one another and with mainstream financial developments across all three in the year under review.
16 Schroder BSC Social Impact Trust plc
Portfolio Manager’s Report
continued
Debt and Equity for Social
Enterprises
Lending and some preference shares to typically large and well-
established charities and social enterprises to help fund expansion
projects to scale operations and impact including:
– Health and Social Care
– Community Facilities and Services
– Fuel Poverty
High Impact Housing
Investment to increase the number of safe, secure and genuinely
affordable homes for more disadvantaged groups, diversified
across:
– Transitional Supported Housing
– General Needs Social and Affordable Housing
– Specialist Supported Housing
Social Outcome Contracts
Outcomes Contracts, where private capital enables a consortium of
expert charities and social enterprises to deliver outcomes for
Government commissioned contracts across:
– Family Therapy and Children’s Services
– Homelessness
– Adult Health and Social Care
The Company invests primarily in three asset classes that were selected to give a diversified set of opportunities with low correlation, both with
one another and with mainstream financial developments across all three in the year under review.
16 Schroder BSC Social Impact Trust plc
Portfolio Manager’s Report
continued
Debt and Equity for Social
Enterprises
Lending and some preference shares to typically large and well-
established charities and social enterprises to help fund expansion
projects to scale operations and impact including:
– Health and Social Care
– Community Facilities and Services
– Fuel Poverty
High Impact Housing
Investment to increase the number of safe, secure and genuinely
affordable homes for more disadvantaged groups, diversified
across:
– Transitional Supported Housing
– General Needs Social and Affordable Housing
– Specialist Supported Housing
Social Outcome Contracts
Outcomes Contracts, where private capital enables a consortium of
expert charities and social enterprises to deliver outcomes for
Government commissioned contracts across:
– Family Therapy and Children’s Services
– Homelessness
– Adult Health and Social Care
Schroder BSC Social Impact Trust plc
17
Introduction Strategic Report Governance Financial Other Information (Unaudited)
High Impact Portfolio* Date of Value at Undrawn Contribution to SBSI
Company 30 June 2024 Value as commitment total return (last 12 TVPI
11
DPI
11
Value
High Impact Portfolio Vintage investment (£)** % of NAV (£) months) (pps) IRR***
Charity Bond Portfolio 2013-2022 2020 14,521,294 17% 0 0.34 1.12 0.29
Bridges Evergreen Holdings 2016 2020 11,482,341 13% 0 (1.00) 1.23 0.13
Community Investment Fund 2014 2022 4,916,495 6% 577,621 0.21 1.25 0.29
Charity Bank Co-Investment Facility 2019-2022 2020 3,779,085 4% 0 0.45 1.13 0.59 5.3%
Community Together Energy Limited 2023 2023 3,699,762 4% 0 0.20 1.04 0.02
Triodos Bank UK Bond Issue 2020 2020 2,516,712 3% 0 0.12 1.14 0.13
Total 40,915,690 47% 577,621 0.32 1.15 0.27
UK Affordable Housing Fund 2018 2020 10,371,849 12% 0 0.34 1.08 0.04
Social and Sustainable Housing 2019 2020 9,494,109 11% 494,664 0.38 1.05 0.04
Man GPM RI Community Housing Fund 2021 2021 8,168,443 9% 1,993,815 (0.00) 1.03 0.01
Resonance Real Lettings Property Fund 2013 2020 5,779,341 7% 0 0.55 1.26 0.27 3.4%
Simply Affordable Homes 2024 2024 0 0% 5,000,000 0.00 0.00 0.00
Total 33,813,742 39% 7,488,478 1.27 1.09 0.07
Bridges Social Outcomes Fund II 2018 2020 2,721,686 3% 4,108,037 0.56 1.26 0.63 High single
Total 2,721,686 3% 4,108,037 0.56 1.26 0.63 digit****
Total 77,451,118 90% 12,174,137 2.15 1.13 0.21 4.8%
11
TVPI/DPI since Company investment. See below for calculation methodologies used.
Calculation methodologies for TVPI, DPI & IRR:
TVPI (Total Value to Paid in) - (Value at year-end + distributions to date)/Total paid into investment to date
DPI (Distribution to Paid in) - (Distributions to date)/Total paid into investment to date
VIRR (Value IRR) - Internal rate of return, using value at year-end to be the terminal value and assumed realisation date
*Totals may not sum due to rounding.
**Value including accrued interest where applicable.
***Since Company IPO.
****Outperformed fund target, due to The Company investing at a more mature stage of the fund, as Bridges SOF II was part of the seed portfolio at IPO.
Debt & Equity
for Social
Enterprises
High impact
Housing
SOCs
Introduction Strategic Report Governance Financial Other Information (Unaudited)
High Impact Portfolio* Date of Value at Undrawn Contribution to SBSI
Company 30 June 2024 Value as commitment total return (last 12 TVPI
11
DPI
11
Value
High Impact Portfolio Vintage investment (£)** % of NAV (£) months) (pps) IRR***
Charity Bond Portfolio 2013-2022 2020 14,521,294 17% 0 0.34 1.12 0.29
Bridges Evergreen Holdings 2016 2020 11,482,341 13% 0 (1.00) 1.23 0.13
Community Investment Fund 2014 2022 4,916,495 6% 577,621 0.21 1.25 0.29
Charity Bank Co-Investment Facility 2019-2022 2020 3,779,085 4% 0 0.45 1.13 0.59 5.3%
Community Together Energy Limited 2023 2023 3,699,762 4% 0 0.20 1.04 0.02
Triodos Bank UK Bond Issue 2020 2020 2,516,712 3% 0 0.12 1.14 0.13
Total 40,915,690 47% 577,621 0.32 1.15 0.27
UK Affordable Housing Fund 2018 2020 10,371,849 12% 0 0.34 1.08 0.04
Social and Sustainable Housing 2019 2020 9,494,109 11% 494,664 0.38 1.05 0.04
Man GPM RI Community Housing Fund 2021 2021 8,168,443 9% 1,993,815 (0.00) 1.03 0.01
Resonance Real Lettings Property Fund 2013 2020 5,779,341 7% 0 0.55 1.26 0.27 3.4%
Simply Affordable Homes 2024 2024 0 0% 5,000,000 0.00 0.00 0.00
Total 33,813,742 39% 7,488,478 1.27 1.09 0.07
Bridges Social Outcomes Fund II 2018 2020 2,721,686 3% 4,108,037 0.56 1.26 0.63 High single
Total 2,721,686 3% 4,108,037 0.56 1.26 0.63 digit****
Total 77,451,118 90% 12,174,137 2.15 1.13 0.21 4.8%
11
TVPI/DPI since Company investment. See below for calculation methodologies used.
Calculation methodologies for TVPI, DPI & IRR:
TVPI (Total Value to Paid in) - (Value at year-end + distributions to date)/Total paid into investment to date
DPI (Distribution to Paid in) - (Distributions to date)/Total paid into investment to date
VIRR (Value IRR) - Internal rate of return, using value at year-end to be the terminal value and assumed realisation date
*Totals may not sum due to rounding.
**Value including accrued interest where applicable.
***Since Company IPO.
****Outperformed fund target, due to The Company investing at a more mature stage of the fund, as Bridges SOF II was part of the seed portfolio at IPO.
Debt & Equity
for Social
Enterprises
High impact
Housing
SOCs
18
Schroder BSC Social Impact Trust plc
Child Dynamix, Community Investment Fund
Asset class: Debt and Equity for Social
Enterprises
Many impact-led social enterprises need capital to grow and
increase their impact, as well as to satisfy their existing working
capital requirements. The Company’s portfolio is designed to include
a diversified set of investments, including charity bonds, asset-
backed lending and portfolios of secured loans, and funds that
invest in established social enterprises via mezzanine debt and/or
equity. The underlying charities and social enterprises deliver
interventions to support the most disadvantaged or vulnerable
members of society, in areas such as health and social care, and
often benefit from government backed revenue streams.
As of 30 June 2024, the value of investments in this asset class was
£40.9 million (47% of 30 June 2024 NAV). The Company has
committed £41.5 million (48% of NAV) to investments in this asset
class, £0.58 million (1% of NAV) of which remains undrawn at the
year end.
BEH run by Bridges Fund Management, is a long-term capital
vehicle that makes equity investments into highly impactful
businesses. Post period end, the fund was converted from an
evergreen to a closed ended structure, to be re-named as the
Bridges Inclusive Growth Fund. The fund will continue its strategy of
providing patient, flexible capital to impact-led businesses that
deliver measurable social outcomes for vulnerable groups in the UK.
As of 30 June 2024, the Company’s investment was valued at £11.5m
(13% of NAV) and was 100% drawn, funding investments into the
Ethical Housing Company & New Reflexions (following the AgilityEco
exit earlier in the year). BEH’s financial performance was below
target driven by valuation losses following the AgilityEco exit,
resulting in a 1p decline in the Company’s NAV per share in the
period. While the write-down was disappointing, the sale of the
AgilityEco investment delivered a 3.4x money multiple and 40%
gross IRR over the holding period by Bridges, and proceeds from
the disposal have been distributed to investors post period end, to
be recallable for re-investment into new impactful investments.
BEH’s impact performance remains strong: the portfolio provides
a range of essential services including 98 affordable homes
provided to 222 people moving from poor-quality accommodation
or insecure tenancy agreements, of whom 59% were homeless or at
risk of homelessness when applying, and 19,439 days of quality
care, education and therapy in the year for young people with
complex needs.
The Charity Bond Portfolio managed by Rathbones supports larger
UK charities seeking to raise capital via the public and private bond
markets, providing an alternative source of funding to bank finance.
As of 30 June 2024, the Company’s investment was valued at
£14.5 million (17% of NAV). The portfolio is invested in nine bonds
(both listed and unlisted) issued by charities and social enterprises
through the Allia C&C and Triodos Crowdfunding platforms,
predominantly delivering care and housing services with
government revenue. The portfolio delivered a 4.38% yield for the
period delivering a 0.34p contribution to Company NAV per share.
One bond in the portfolio, for Thera Trust, agreed a new repayment
schedule due to cash flow challenges, and as a result we have taken
a partial provision against the holding which adjusted it to 0.5p per
share, and reduced the Company’s NAV by 0.4 pence per share – the
charity has continued to pay the coupon on its bonds as due. Other
bonds in the portfolio continue to perform to plan. Impact
performance across the Charity Bond Portfolio companies in the
year included over 10,000 affordable homes provided, intensive
support including care, education, training, employability and
housing provision to more than 3,200 people with health conditions
or special educational needs, as well as 10,000 rural properties
connected with broadband.
The Community Investment Fund (CIF) managed by Social and
Sustainable Capital provides secured loans to charities and social
enterprises focused on community renewable energy, social
housing, and family support in the community. A high proportion of
revenue comes from government mandated sources. As of 30 June
2024, the Company’s investment was valued at £4.9 million (6% of
NAV). During the period the Fund contributed 0.21p to Company
NAV per share from income and capital gains. Impact performance
in the period included 1,004 people reached by 11 social
organisations providing essential services, including housing, care
and training.
The Charity Bank Co-investment Portfolio comprises three secured
loans with a total value as of 30 June 2024 of £3.8 million (4% of
NAV), following the loan repayment from Sue Ryder in the period.
Working with Charity Bank, the portfolio invests in low loan to value
ratio (average 39%) loans to housing and care providers Abbeyfield
South Downs, Uxbridge United Welfare Trust and Abbeyfield York.
All loans are priced at a margin over the Bank of England base rate
and delivered a 0.45p contribution to Company NAV per share over
the period under review. Impact performance in the year includes
the provision of 89 units of accommodation for the elderly at
social rents.
CETL is a community renewable energy project company,
contributing to a ‘Just Transition to Net Zero’. The investment is in
the form of a junior loan of £3.6 million, alongside Better Society
Capital and Power to Change. The Loan has a five-year term and
targets an internal rate of return of 8.2% (fixed coupon of 7% p.a.
and additional rolled up interest paid at exit). The investment is
strongly aligned with the Company’s investment thesis, delivering
positive social outcomes for communities alongside a good risk
Portfolio Manager’s Report
continued
Child Dynamix, Community Investment Fund
Asset class: Debt and Equity for Social
Enterprises
Many impact-led social enterprises need capital to grow and
increase their impact, as well as to satisfy their existing working
capital requirements. The Company’s portfolio is designed to include
a diversified set of investments, including charity bonds, asset-
backed lending and portfolios of secured loans, and funds that
invest in established social enterprises via mezzanine debt and/or
equity. The underlying charities and social enterprises deliver
interventions to support the most disadvantaged or vulnerable
members of society, in areas such as health and social care, and
often benefit from government backed revenue streams.
As of 30 June 2024, the value of investments in this asset class was
£40.9 million (47% of 30 June 2024 NAV). The Company has
committed £41.5 million (48% of NAV) to investments in this asset
class, £0.58 million (1% of NAV) of which remains undrawn at the
year end.
BEH run by Bridges Fund Management, is a long-term capital
vehicle that makes equity investments into highly impactful
businesses. Post period end, the fund was converted from an
evergreen to a closed ended structure, to be re-named as the
Bridges Inclusive Growth Fund. The fund will continue its strategy of
providing patient, flexible capital to impact-led businesses that
deliver measurable social outcomes for vulnerable groups in the UK.
As of 30 June 2024, the Company’s investment was valued at £11.5m
(13% of NAV) and was 100% drawn, funding investments into the
Ethical Housing Company & New Reflexions (following the AgilityEco
exit earlier in the year). BEH’s financial performance was below
target driven by valuation losses following the AgilityEco exit,
resulting in a 1p decline in the Company’s NAV per share in the
period. While the write-down was disappointing, the sale of the
AgilityEco investment delivered a 3.4x money multiple and 40%
gross IRR over the holding period by Bridges, and proceeds from
the disposal have been distributed to investors post period end, to
be recallable for re-investment into new impactful investments.
BEH’s impact performance remains strong: the portfolio provides
a range of essential services including 98 affordable homes
provided to 222 people moving from poor-quality accommodation
or insecure tenancy agreements, of whom 59% were homeless or at
risk of homelessness when applying, and 19,439 days of quality
care, education and therapy in the year for young people with
complex needs.
The Charity Bond Portfolio managed by Rathbones supports larger
UK charities seeking to raise capital via the public and private bond
markets, providing an alternative source of funding to bank finance.
As of 30 June 2024, the Company’s investment was valued at
£14.5 million (17% of NAV). The portfolio is invested in nine bonds
(both listed and unlisted) issued by charities and social enterprises
through the Allia C&C and Triodos Crowdfunding platforms,
predominantly delivering care and housing services with
government revenue. The portfolio delivered a 4.38% yield for the
period delivering a 0.34p contribution to Company NAV per share.
One bond in the portfolio, for Thera Trust, agreed a new repayment
schedule due to cash flow challenges, and as a result we have taken
a partial provision against the holding which adjusted it to 0.5p per
share, and reduced the Company’s NAV by 0.4 pence per share – the
charity has continued to pay the coupon on its bonds as due. Other
bonds in the portfolio continue to perform to plan. Impact
performance across the Charity Bond Portfolio companies in the
year included over 10,000 affordable homes provided, intensive
support including care, education, training, employability and
housing provision to more than 3,200 people with health conditions
or special educational needs, as well as 10,000 rural properties
connected with broadband.
The Community Investment Fund (CIF) managed by Social and
Sustainable Capital provides secured loans to charities and social
enterprises focused on community renewable energy, social
housing, and family support in the community. A high proportion of
revenue comes from government mandated sources. As of 30 June
2024, the Company’s investment was valued at £4.9 million (6% of
NAV). During the period the Fund contributed 0.21p to Company
NAV per share from income and capital gains. Impact performance
in the period included 1,004 people reached by 11 social
organisations providing essential services, including housing, care
and training.
The Charity Bank Co-investment Portfolio comprises three secured
loans with a total value as of 30 June 2024 of £3.8 million (4% of
NAV), following the loan repayment from Sue Ryder in the period.
Working with Charity Bank, the portfolio invests in low loan to value
ratio (average 39%) loans to housing and care providers Abbeyfield
South Downs, Uxbridge United Welfare Trust and Abbeyfield York.
All loans are priced at a margin over the Bank of England base rate
and delivered a 0.45p contribution to Company NAV per share over
the period under review. Impact performance in the year includes
the provision of 89 units of accommodation for the elderly at
social rents.
CETL is a community renewable energy project company,
contributing to a ‘Just Transition to Net Zero’. The investment is in
the form of a junior loan of £3.6 million, alongside Better Society
Capital and Power to Change. The Loan has a five-year term and
targets an internal rate of return of 8.2% (fixed coupon of 7% p.a.
and additional rolled up interest paid at exit). The investment is
strongly aligned with the Company’s investment thesis, delivering
positive social outcomes for communities alongside a good risk
Portfolio Manager’s Report
continued
Schroder BSC Social Impact Trust plc
19
Introduction Strategic Report Governance Financial Other Information (Unaudited)
All Child, Bridges SOF II
adjusted financial return. CETL is a partnership of five community
organisations that have acquired seven cross-collateralised solar
farm assets across the UK. These solar farms benefit from
government backed subsidies (Feed-in-Tariffs and Renewables
Obligation Certificate schemes) and the assets are funded on
a cross-collateralised basis for scale and risk-sharing. As of 30 June
2024, the Company’s investment was valued at £3.7 million (4% of
NAV) and was 100% drawn. During the period, the investment
contributed 0.20p to Company NAV per share. On impact, CETL is
forecast to generate total community benefit funds in the region of
£20m over the assets’ lifetime of 20-25 years.
The Company’s investment in a private bond issued by Triodos Bank
UK Ltd was valued as of 30 June 2024 at £2.5 million (3% of NAV).
Triodos Bank is a leading lender to sustainability and social impact
focused organisations. This includes social housing, healthcare,
education, renewable energy, arts and culture, and community
projects. The bond issue enables Triodos Bank to continue to grow
its loan book and contribute to the resilience and growth of charities
and social enterprises. Triodos Bank UK remains well capitalised and
with good liquidity (Equity Ratio of 22.4% and a total capital ratio of
23.0% as of 31 December 2023). The bond contributed 0.12p to
Company NAV per share. The impact performance included
135 housing projects financed in year.
Asset class: High Impact Housing
The portfolio is invested in affordable and social housing, which is
intended to address the housing needs of a wide spectrum of
people, who are often those on the lowest incomes and the most
vulnerable. We invest across a range of asset types, from long-term
inflation-linked lease contracts with high-quality counterparties to
shorter leases to address specific issues, such as homelessness or
the housing needs of survivors of domestic abuse. Counterparties
include Registered Providers of social housing (such as housing
associations) and charities with long-standing track records, deep
expertise in addressing specific issues, and strong local
relationships with authorities and beneficiaries.
In addressing these needs, we seek to deliver returns that are often
supported by the government-backed housing benefit system. This
has led to a lower historical correlation to mainstream markets and
insulation from the sharper price movements in the private housing
market. The portfolio has a diversified exposure to rental streams
and is experiencing a mix of increases in the current environment.
The UK Affordable Housing and the Man GPM RI Community Housing
funds have mainly seen rents increase driven by index-linked leases
(capped at 7% for social rent for the fiscal year from April 2023 to April
2024). This cap was removed in April 2024, and the funds will benefit
from rent increases of 7.7% until April 2025. The Social and
Sustainable Housing (SASH) portfolio is primarily “Exempt
Accommodation” for high need groups which has seen rents
increasing in line with inflation. The Real Lettings Portfolio is primarily
Local Housing Allowance income, which has been increased by an
average of 13% across the fund’s portfolio, following several years of
being frozen. Furthermore, we note some of the challenges being
experienced by listed Social Property REITs – often linked to the short
operating history and limited delivery experience of property
counterparties. We are not seeing any comparable issues in our High
Impact Housing investments – with 100% of rent due by June 2024
collected.
As of 30 June 2024, the value of investments in this asset class is
£33.8 million (39% of 30 June 2024 NAV). The Company has
committed £41.3 million (48% of NAV) to investments in this asset
class, £7.5 million (9% of NAV) of which remains undrawn at the year
end, including £5 million committed to Simply Affordable Homes.
The UK Affordable Housing Fund, managed by CBRE Investment
Management, aims to increase the supply of sustainable and
affordable homes in the UK for people unable to purchase or rent in
the open market. The fund targets a total return greater than 6%
(with an annual target income distribution yield of 4% from income
producing assets) net of all costs over the long term. The Company’s
investment is fully deployed and valued at £10.4 million (12% of
NAV). The fund contributed 0.34p to Company NAV per share
growth due to a greater proportion of assets becoming income
producing, as well as property valuations increasing through rent
review uplifts. In terms of impact performance as of Q2 2024, the
Fund has so far delivered over 2,500 homes, potentially housing
over 8,500 people.
The Real Lettings Property Fund, managed by Resonance Impact
Investments Limited, provides high quality accommodation and
support for people previously homeless or at risk of homelessness,
in its 259 homes across London. The fund leases the properties to
experienced housing partners (Notting Hill Genesis, Capital Letter
and St. Mungo’s) who manage the tenancies and support tenants,
helping them access support services and become part of local
communities. The fund has an overall target return of 6% and
a 3.5% annual cash yield. Following the uplift of LHA rates to match
the lowest 30% of private rents as of 1 April 2024, the fund’s annual
rental income is expected to increase by 13%. As of 30 June, the
Company’s investment was valued at £5.8 million (7% of NAV).
During the period the fund contributed 0.55p to Company NAV per
share from rental income and capital gains. On impact performance,
as of the end of June 2024, 630 people (358 adults and 272 children)
were being housed by the fund. Furthermore, research by
Introduction Strategic Report Governance Financial Other Information (Unaudited)
All Child, Bridges SOF II
adjusted financial return. CETL is a partnership of five community
organisations that have acquired seven cross-collateralised solar
farm assets across the UK. These solar farms benefit from
government backed subsidies (Feed-in-Tariffs and Renewables
Obligation Certificate schemes) and the assets are funded on
a cross-collateralised basis for scale and risk-sharing. As of 30 June
2024, the Company’s investment was valued at £3.7 million (4% of
NAV) and was 100% drawn. During the period, the investment
contributed 0.20p to Company NAV per share. On impact, CETL is
forecast to generate total community benefit funds in the region of
£20m over the assets’ lifetime of 20-25 years.
The Company’s investment in a private bond issued by Triodos Bank
UK Ltd was valued as of 30 June 2024 at £2.5 million (3% of NAV).
Triodos Bank is a leading lender to sustainability and social impact
focused organisations. This includes social housing, healthcare,
education, renewable energy, arts and culture, and community
projects. The bond issue enables Triodos Bank to continue to grow
its loan book and contribute to the resilience and growth of charities
and social enterprises. Triodos Bank UK remains well capitalised and
with good liquidity (Equity Ratio of 22.4% and a total capital ratio of
23.0% as of 31 December 2023). The bond contributed 0.12p to
Company NAV per share. The impact performance included
135 housing projects financed in year.
Asset class: High Impact Housing
The portfolio is invested in affordable and social housing, which is
intended to address the housing needs of a wide spectrum of
people, who are often those on the lowest incomes and the most
vulnerable. We invest across a range of asset types, from long-term
inflation-linked lease contracts with high-quality counterparties to
shorter leases to address specific issues, such as homelessness or
the housing needs of survivors of domestic abuse. Counterparties
include Registered Providers of social housing (such as housing
associations) and charities with long-standing track records, deep
expertise in addressing specific issues, and strong local
relationships with authorities and beneficiaries.
In addressing these needs, we seek to deliver returns that are often
supported by the government-backed housing benefit system. This
has led to a lower historical correlation to mainstream markets and
insulation from the sharper price movements in the private housing
market. The portfolio has a diversified exposure to rental streams
and is experiencing a mix of increases in the current environment.
The UK Affordable Housing and the Man GPM RI Community Housing
funds have mainly seen rents increase driven by index-linked leases
(capped at 7% for social rent for the fiscal year from April 2023 to April
2024). This cap was removed in April 2024, and the funds will benefit
from rent increases of 7.7% until April 2025. The Social and
Sustainable Housing (SASH) portfolio is primarily “Exempt
Accommodation” for high need groups which has seen rents
increasing in line with inflation. The Real Lettings Portfolio is primarily
Local Housing Allowance income, which has been increased by an
average of 13% across the fund’s portfolio, following several years of
being frozen. Furthermore, we note some of the challenges being
experienced by listed Social Property REITs – often linked to the short
operating history and limited delivery experience of property
counterparties. We are not seeing any comparable issues in our High
Impact Housing investments – with 100% of rent due by June 2024
collected.
As of 30 June 2024, the value of investments in this asset class is
£33.8 million (39% of 30 June 2024 NAV). The Company has
committed £41.3 million (48% of NAV) to investments in this asset
class, £7.5 million (9% of NAV) of which remains undrawn at the year
end, including £5 million committed to Simply Affordable Homes.
The UK Affordable Housing Fund, managed by CBRE Investment
Management, aims to increase the supply of sustainable and
affordable homes in the UK for people unable to purchase or rent in
the open market. The fund targets a total return greater than 6%
(with an annual target income distribution yield of 4% from income
producing assets) net of all costs over the long term. The Company’s
investment is fully deployed and valued at £10.4 million (12% of
NAV). The fund contributed 0.34p to Company NAV per share
growth due to a greater proportion of assets becoming income
producing, as well as property valuations increasing through rent
review uplifts. In terms of impact performance as of Q2 2024, the
Fund has so far delivered over 2,500 homes, potentially housing
over 8,500 people.
The Real Lettings Property Fund, managed by Resonance Impact
Investments Limited, provides high quality accommodation and
support for people previously homeless or at risk of homelessness,
in its 259 homes across London. The fund leases the properties to
experienced housing partners (Notting Hill Genesis, Capital Letter
and St. Mungo’s) who manage the tenancies and support tenants,
helping them access support services and become part of local
communities. The fund has an overall target return of 6% and
a 3.5% annual cash yield. Following the uplift of LHA rates to match
the lowest 30% of private rents as of 1 April 2024, the fund’s annual
rental income is expected to increase by 13%. As of 30 June, the
Company’s investment was valued at £5.8 million (7% of NAV).
During the period the fund contributed 0.55p to Company NAV per
share from rental income and capital gains. On impact performance,
as of the end of June 2024, 630 people (358 adults and 272 children)
were being housed by the fund. Furthermore, research by
20
Schroder BSC Social Impact Trust plc
Portfolio Manager’s Report
continued
North East RISE, Bridges SOF II
Alma Economics commissioned by BSC estimated that the fund
generated £12.1m of public value in 2023
12
, through reduced costs
of public services, temporary accommodation and through
improved tenant well-being.
The Man GPM RI Community Housing Fund aims to help address
the UK’s housing crisis through the provision of new affordable
rental and shared ownership homes. The fund has a target of 70%
of homes to be affordable and delivered in mixed-tenure
communities, and is currently on track to achieve 90% of its homes
being affordable. These homes will be predominantly leased to local
housing associations to deliver customer and asset management
services. The fund seeks to achieve returns driven by long-term
inflation-linked income streams, with a stabilised yield of 5% from
income producing assets. During the period, the fund drew down
£0.72 million and as of 30 June 2024 the Company’s investment was
valued at £8.2 million (9% of NAV). The fund had a net breakeven
contribution to Company NAV per share performance in the period,
mainly due to income and capital gains from stabilised assets in the
portfolio being offset by higher costs due to developer insolvencies.
The fund is now substantially committed, which is ahead of schedule
– 3 years since the fund’s first close in April 2021 versus the forecast
investment period of five years. On impact performance, 318 homes
have been completed as of December 2023, with an estimated
1,242 people housed to date.
The Social and Sustainable Housing LP (SASH), managed by Social
and Sustainable Capital, provides investment to high-performing
social sector organisations with local knowledge and networks, and
a strong track record of managing transitional supported housing
for vulnerable individuals. They may include survivors of domestic
violence, children leaving the care system, ex-offenders, asylum
seekers, people with complex mental health issues and people with
addiction issues. SASH makes flexible secured loans which
participate in changes in property prices and rental incomes –
generated from government-backed rental payments with a target
net return of 6%. During the period, the fund drew down
£0.86 million and as of 30 June 2024, the Company’s investment was
valued at £9.5 million (11% of NAV). The fund contributed 0.38p to
Company NAV per share growth during the period with the fund still
in its investment period and deployment on track. On impact
performance the fund has supported 888 adults and 236 children in
the year into housing while contributing more consistent and higher
quality service provision.
Simply Affordable Homes (SAH), managed by Savills Investment
Management, seeks to deliver affordable homes across the UK, by
using its established strategic partnerships with high quality
housing associations, developers, and housebuilders, through a mix
of acquiring existing stock and delivering new build homes. The
fund will invest in and manage a diversified portfolio of affordable
housing, comprising both affordable and social-rent homes as well
as shared-ownership homes, generating government-backed and
inflation-linked income streams. The fund aims to deliver strong
impact in line with the Company’s Impact Thesis and Theory of
Change: properties will be affordable rented (20% or higher
discount to market rates), social-rent or shared ownership homes,
with a focus on areas with high local authority waiting lists and
delivering high quality well-built sustainable homes. Furthermore,
the fund operates under enhanced governance frameworks and
a sustainable investment strategy, targeting high environmental
standards and progressing towards Net Zero Carbon by 2040. As
a new commitment in the period, the fund had its first drawdown
post period end, with the fund still in its investment period.
Asset class: Social Outcomes Contracts
Social outcomes contracts (SOCs) aim to help the government
achieve better life outcomes for vulnerable people and better value
for public funds. They are public sector contracts designed to
overcome challenges in the way that public services have
traditionally been managed. The providers of these services are
being paid for achieving specified and measurable outcomes rather
than prescribed inputs. Investment is used to cover the upfront
costs incurred to deliver the service, which ultimately produces the
desired social outcomes. We look to invest in a pool of outcomes
contracts that is diversified across central and local government
commissioners and different policy areas. As of 30 June 2024, the
value of investments in this asset class was £2.7 million (3% of NAV).
The Company received distributions of £1.9 million during the year.
Following these distributions, the Company’s remaining exposure to
assets in this asset class is £6.8 million (8% of NAV), of which
£4.1 million (5% of NAV) is undrawn at year end. Bridges Social
Outcomes Fund II, managed by Bridges Fund Management and
Bridges Outcomes Partnerships, invests in social outcomes
contracts, receiving payments when outcomes are delivered and
thereby ensuring that payment is aligned with measurable
improvements in the lives of participants. The fund has a mid-single
digit return target. During the period, the fund drew down a further
£0.22 million. The fund contributed 0.56p to Company NAV per
share performance during the period with overall achievement of
outcomes and outcomes payments running in line with plan. So far,
the fund has supported 30,233 people across homelessness
prevention, education, employment and family care services,
achieving £87 million outcomes payments to date.
12
Resonance Homelessness Property Funds Impact, Alma Economics.
Portfolio Manager’s Report
continued
North East RISE, Bridges SOF II
Alma Economics commissioned by BSC estimated that the fund
generated £12.1m of public value in 2023
12
, through reduced costs
of public services, temporary accommodation and through
improved tenant well-being.
The Man GPM RI Community Housing Fund aims to help address
the UK’s housing crisis through the provision of new affordable
rental and shared ownership homes. The fund has a target of 70%
of homes to be affordable and delivered in mixed-tenure
communities, and is currently on track to achieve 90% of its homes
being affordable. These homes will be predominantly leased to local
housing associations to deliver customer and asset management
services. The fund seeks to achieve returns driven by long-term
inflation-linked income streams, with a stabilised yield of 5% from
income producing assets. During the period, the fund drew down
£0.72 million and as of 30 June 2024 the Company’s investment was
valued at £8.2 million (9% of NAV). The fund had a net breakeven
contribution to Company NAV per share performance in the period,
mainly due to income and capital gains from stabilised assets in the
portfolio being offset by higher costs due to developer insolvencies.
The fund is now substantially committed, which is ahead of schedule
– 3 years since the fund’s first close in April 2021 versus the forecast
investment period of five years. On impact performance, 318 homes
have been completed as of December 2023, with an estimated
1,242 people housed to date.
The Social and Sustainable Housing LP (SASH), managed by Social
and Sustainable Capital, provides investment to high-performing
social sector organisations with local knowledge and networks, and
a strong track record of managing transitional supported housing
for vulnerable individuals. They may include survivors of domestic
violence, children leaving the care system, ex-offenders, asylum
seekers, people with complex mental health issues and people with
addiction issues. SASH makes flexible secured loans which
participate in changes in property prices and rental incomes –
generated from government-backed rental payments with a target
net return of 6%. During the period, the fund drew down
£0.86 million and as of 30 June 2024, the Company’s investment was
valued at £9.5 million (11% of NAV). The fund contributed 0.38p to
Company NAV per share growth during the period with the fund still
in its investment period and deployment on track. On impact
performance the fund has supported 888 adults and 236 children in
the year into housing while contributing more consistent and higher
quality service provision.
Simply Affordable Homes (SAH), managed by Savills Investment
Management, seeks to deliver affordable homes across the UK, by
using its established strategic partnerships with high quality
housing associations, developers, and housebuilders, through a mix
of acquiring existing stock and delivering new build homes. The
fund will invest in and manage a diversified portfolio of affordable
housing, comprising both affordable and social-rent homes as well
as shared-ownership homes, generating government-backed and
inflation-linked income streams. The fund aims to deliver strong
impact in line with the Company’s Impact Thesis and Theory of
Change: properties will be affordable rented (20% or higher
discount to market rates), social-rent or shared ownership homes,
with a focus on areas with high local authority waiting lists and
delivering high quality well-built sustainable homes. Furthermore,
the fund operates under enhanced governance frameworks and
a sustainable investment strategy, targeting high environmental
standards and progressing towards Net Zero Carbon by 2040. As
a new commitment in the period, the fund had its first drawdown
post period end, with the fund still in its investment period.
Asset class: Social Outcomes Contracts
Social outcomes contracts (SOCs) aim to help the government
achieve better life outcomes for vulnerable people and better value
for public funds. They are public sector contracts designed to
overcome challenges in the way that public services have
traditionally been managed. The providers of these services are
being paid for achieving specified and measurable outcomes rather
than prescribed inputs. Investment is used to cover the upfront
costs incurred to deliver the service, which ultimately produces the
desired social outcomes. We look to invest in a pool of outcomes
contracts that is diversified across central and local government
commissioners and different policy areas. As of 30 June 2024, the
value of investments in this asset class was £2.7 million (3% of NAV).
The Company received distributions of £1.9 million during the year.
Following these distributions, the Company’s remaining exposure to
assets in this asset class is £6.8 million (8% of NAV), of which
£4.1 million (5% of NAV) is undrawn at year end. Bridges Social
Outcomes Fund II, managed by Bridges Fund Management and
Bridges Outcomes Partnerships, invests in social outcomes
contracts, receiving payments when outcomes are delivered and
thereby ensuring that payment is aligned with measurable
improvements in the lives of participants. The fund has a mid-single
digit return target. During the period, the fund drew down a further
£0.22 million. The fund contributed 0.56p to Company NAV per
share performance during the period with overall achievement of
outcomes and outcomes payments running in line with plan. So far,
the fund has supported 30,233 people across homelessness
prevention, education, employment and family care services,
achieving £87 million outcomes payments to date.
12
Resonance Homelessness Property Funds Impact, Alma Economics.
Schroder BSC Social Impact Trust plc
21
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Liquidity Assets
The Company manages its committed but uncalled capital through Liquidity Assets, which aim to provide sufficient liquidity to meet impact
investment commitments while earning commensurate returns. This allocation can be held as cash or invested in money market funds, bond
funds, real assets investment trusts and other liquidity investments that align with the Company’s liquidity requirements, meet high
sustainability standards and comply with the Company’s investment policy. As of 30 June 2024, the Company held £9.5 million in Liquidity
Assets, with one redemption in the period (highlighted in grey), as detailed in the table below.
*Totals may not sum due to rounding.
Our Liquidity Assets portfolio, representing 11% of NAV, contributed 0.55p per share to the Company’s total NAV during the period. The
positive performance was achieved by robust dividend and interest income from underlying investments, as the portfolio benefited from
overweighting floating rate credit. During the financial year, partial withdrawals from the portfolio were made to fund High Impact portfolio
drawdowns.
The existing portfolio at year end continues to reflect a focus on generating positive real returns by capturing spreads over cash returns
through dividends from investments with strong sustainability credentials. As interest rate cuts approach and the economic cycle matures,
the existing portfolio continues to maintain flexibility through diversified duration exposures while managing immediate liquidity needs
through money market funds and cash.
Hermina Popa, Jeremy Rogers
Better Society Capital
23 October 2024
Liquidity Assets Inception Year Value at
30 June 2024
(£)
Value
as % of
NAV
Contribution to
SBSI total return
(last 12 months)
(pps)
Total return
(last 12 months)
Interest rate
duration
TwentyFour Sustainable Enhanced Income ABS
Fund 2021 1,640,516 1.90% 0.33 12.14% 0.13
Bluefield Solar Income Fund Ltd 2021 2,063,538 2.39% (0.14) (5.31%) 4.68
Greencoat UK Wind Plc 2021 1,336,694 1.55% (0.01) (0.60%) 8.82
Rathbone Ethical Bond Fund 2021 886,769 1.03% 0.15 11.06% 6.35
Vontobel Fund TwentyFour Sustainable Short
Term Bond Income Fund 2021 – 0.00% 0.03 7.66% 1.94
HSBC Sterling ESG Liquidity Fund 2022 3,106,118 3.59% 0.17 5.10% 0.09
Cash 2020 514,163 0.59% 0.02 2.65% 0.00
Total Liquidity Asset Investments* 9,547,797 11.04% 0.55 4.13% 4.60
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Liquidity Assets
The Company manages its committed but uncalled capital through Liquidity Assets, which aim to provide sufficient liquidity to meet impact
investment commitments while earning commensurate returns. This allocation can be held as cash or invested in money market funds, bond
funds, real assets investment trusts and other liquidity investments that align with the Company’s liquidity requirements, meet high
sustainability standards and comply with the Company’s investment policy. As of 30 June 2024, the Company held £9.5 million in Liquidity
Assets, with one redemption in the period (highlighted in grey), as detailed in the table below.
*Totals may not sum due to rounding.
Our Liquidity Assets portfolio, representing 11% of NAV, contributed 0.55p per share to the Company’s total NAV during the period. The
positive performance was achieved by robust dividend and interest income from underlying investments, as the portfolio benefited from
overweighting floating rate credit. During the financial year, partial withdrawals from the portfolio were made to fund High Impact portfolio
drawdowns.
The existing portfolio at year end continues to reflect a focus on generating positive real returns by capturing spreads over cash returns
through dividends from investments with strong sustainability credentials. As interest rate cuts approach and the economic cycle matures,
the existing portfolio continues to maintain flexibility through diversified duration exposures while managing immediate liquidity needs
through money market funds and cash.
Hermina Popa, Jeremy Rogers
Better Society Capital
23 October 2024
Liquidity Assets Inception Year Value at
30 June 2024
(£)
Value
as % of
NAV
Contribution to
SBSI total return
(last 12 months)
(pps)
Total return
(last 12 months)
Interest rate
duration
TwentyFour Sustainable Enhanced Income ABS
Fund 2021 1,640,516 1.90% 0.33 12.14% 0.13
Bluefield Solar Income Fund Ltd 2021 2,063,538 2.39% (0.14) (5.31%) 4.68
Greencoat UK Wind Plc 2021 1,336,694 1.55% (0.01) (0.60%) 8.82
Rathbone Ethical Bond Fund 2021 886,769 1.03% 0.15 11.06% 6.35
Vontobel Fund TwentyFour Sustainable Short
Term Bond Income Fund 2021 – 0.00% 0.03 7.66% 1.94
HSBC Sterling ESG Liquidity Fund 2022 3,106,118 3.59% 0.17 5.10% 0.09
Cash 2020 514,163 0.59% 0.02 2.65% 0.00
Total Liquidity Asset Investments* 9,547,797 11.04% 0.55 4.13% 4.60
22
Schroder BSC Social Impact Trust plc
Carrying Total
Listed/ Country of value
1
investments
Holding Nature of interest unlisted incorporation Industry sector £'000 %
UK Affordable Housing Fund Equity Shares Unlisted United Kingdom Investor in Affordable 10,291 11.9
and Social Housing
Social and Sustainable Housing LP Limited Partnership Interest Unlisted United Kingdom Investor in Affordable and 9,494 11.0
Social Housing
Man GPM RI Community Housing 1 LP Limited Partnership Interest Unlisted United Kingdom Investor in Affordable and 8,168 9.5
Social Housing
Resonance Real Lettings Property Fund LP Limited Partnership Interest Unlisted United Kingdom Investor in Affordable and 5,779 6.7
Social Housing
High Impact Housing 33,732 39.1
Bridges Evergreen Capital LP Limited Partnership Interest Unlisted United Kingdom Investor in Profit-With- 11,482 13.3
Purpose Organisations
Community Investment Fund Limited Partnership Interest Unlisted United Kingdom Investor in Communities 4,917 5.7
Supporting Social
Inclusion and Change
Community Energy Together Limited Debt Investment Unlisted United Kingdom Renewable Energy 3,540 4.1
Triodos Bank UK Limited 2020 Bond 4% 23/12/2030 Fixed Income Security Unlisted United Kingdom Ethical Banking 2,500 2.9
Rathbones Bond Portfolio: Hightown Housing Association Fixed Income Security Listed United Kingdom Charity (Affordable and 2,483 2.9
4% 31/10/2027 Social Housing)
Rathbones Bond Portfolio: Dolphin Square Charitable Fixed Income Security Listed United Kingdom Charity (Affordable and 2,450 2.9
Foundation 4.25% 06/07/2026 Social Housing)
Rathbones Bond Portfolio: Greensleeves Homes Trust Fixed Income Security Listed United Kingdom Charity (Care Services) 2,357 2.7
4.25% 30/03/2026
Rathbones Bond Portfolio: RCB Bonds PLC 3.5% 08/12/2031 Fixed Income Security Listed United Kingdom Ethical Banking 2,223 2.6
Charity Bank Co-Invest Portfolio: Abbeyfield York Fixed Income Security Unlisted United Kingdom Charity (Care Services) 2,000 2.3
3.6% 12/05/2049
Charity Bank Co-Invest Portfolio: Uxbridge United Welfare Fixed Income Security Unlisted United Kingdom Charity (Community and 1,576 1.8
Trust 2.85% 20/12/2033 Social Housing)
Rathbones Bond Portfolio: Alnwick Garden Trust 5% 27/03/2030 Fixed Income Security Listed United Kingdom Charity (Public Gardens) 1,500 1.7
Rathbones Bond Portfolio: Thera Trust 5.5% 31/03/2024 Fixed Income Security Unlisted United Kingdom Charity (Care Services) 1,237 1.4
Rathbones Bond Portfolio: Golden Lane Housing 3.9% Fixed Income Security Listed United Kingdom Charity (Affordable and 952 1.1
23/11/2027 Social Housing)
Rathbones Bond Portfolio: B4RN (Broadband for Rural North Fixed Income Security Unlisted United Kingdom Communications for Rural 865 1.0
Limited) 4.5% 30/04/2026 Communities
Rathbones Bond Portfolio: Coigach Community CIC 5.248% Fixed Income Security Unlisted United Kingdom Renewable Energy 202 0.2
31/03/2030
Charity Bank Co-Invest Portfolio: Abbeyfield Southdowns 3.35% Fixed Income Security Unlisted United Kingdom Charity (Care Services) 187 0.2
26/7/2044
Debt and Equity for Social Enterprises 40,471 46.8
Bridges Social Outcomes Fund II LP Limited Partnership Interest Unlisted United Kingdom Social Outcomes Contracts 2,722 3.1
Social Outcomes Contracts 2,722 3.1
Bluefield Solar Income Fund Equity Shares Listed Guernsey Renewable Energy
Infrastructure 2,064 2.4
TwentyFour Sustainable Enhanced Income ABS Fund Equity Shares Listed Luxembourg Diversified 1,641 1.9
Greencoat UK Wind Plc Fund Equity Shares Listed United Kingdom Renewable Energy
Infrastructure 1,336 1.5
Rathbone Ethical Bond Fund Equity Shares Listed United Kingdom Diversified 887 1.0
Liquidity Assets 5,928 6.8
Total investments
2
82,853 95.8
Cash at bank and in hand 514* 0.6
Money market funds 3,106 3.6
Other net liabilities (14) –
Total Shareholder’s funds 86,459 100.0
1
Fixed income securities amounting to £20,532,000 are included at amortised cost, excluding any accrued interest. These include investments amounting to £11,965,000 which are listed, but
traded in inactive markets.
2
Total investments comprise:
£’000 %
Unquoted 64,960 78.4
Listed in the UK 14,188 17.1
Listed on a recognised stock exchange overseas 3,705 4.5
Total 82,853 100.0
Investment Portfolio
at 30 June 2024
Carrying Total
Listed/ Country of value
1
investments
Holding Nature of interest unlisted incorporation Industry sector £'000 %
UK Affordable Housing Fund Equity Shares Unlisted United Kingdom Investor in Affordable 10,291 11.9
and Social Housing
Social and Sustainable Housing LP Limited Partnership Interest Unlisted United Kingdom Investor in Affordable and 9,494 11.0
Social Housing
Man GPM RI Community Housing 1 LP Limited Partnership Interest Unlisted United Kingdom Investor in Affordable and 8,168 9.5
Social Housing
Resonance Real Lettings Property Fund LP Limited Partnership Interest Unlisted United Kingdom Investor in Affordable and 5,779 6.7
Social Housing
High Impact Housing 33,732 39.1
Bridges Evergreen Capital LP Limited Partnership Interest Unlisted United Kingdom Investor in Profit-With- 11,482 13.3
Purpose Organisations
Community Investment Fund Limited Partnership Interest Unlisted United Kingdom Investor in Communities 4,917 5.7
Supporting Social
Inclusion and Change
Community Energy Together Limited Debt Investment Unlisted United Kingdom Renewable Energy 3,540 4.1
Triodos Bank UK Limited 2020 Bond 4% 23/12/2030 Fixed Income Security Unlisted United Kingdom Ethical Banking 2,500 2.9
Rathbones Bond Portfolio: Hightown Housing Association Fixed Income Security Listed United Kingdom Charity (Affordable and 2,483 2.9
4% 31/10/2027 Social Housing)
Rathbones Bond Portfolio: Dolphin Square Charitable Fixed Income Security Listed United Kingdom Charity (Affordable and 2,450 2.9
Foundation 4.25% 06/07/2026 Social Housing)
Rathbones Bond Portfolio: Greensleeves Homes Trust Fixed Income Security Listed United Kingdom Charity (Care Services) 2,357 2.7
4.25% 30/03/2026
Rathbones Bond Portfolio: RCB Bonds PLC 3.5% 08/12/2031 Fixed Income Security Listed United Kingdom Ethical Banking 2,223 2.6
Charity Bank Co-Invest Portfolio: Abbeyfield York Fixed Income Security Unlisted United Kingdom Charity (Care Services) 2,000 2.3
3.6% 12/05/2049
Charity Bank Co-Invest Portfolio: Uxbridge United Welfare Fixed Income Security Unlisted United Kingdom Charity (Community and 1,576 1.8
Trust 2.85% 20/12/2033 Social Housing)
Rathbones Bond Portfolio: Alnwick Garden Trust 5% 27/03/2030 Fixed Income Security Listed United Kingdom Charity (Public Gardens) 1,500 1.7
Rathbones Bond Portfolio: Thera Trust 5.5% 31/03/2024 Fixed Income Security Unlisted United Kingdom Charity (Care Services) 1,237 1.4
Rathbones Bond Portfolio: Golden Lane Housing 3.9% Fixed Income Security Listed United Kingdom Charity (Affordable and 952 1.1
23/11/2027 Social Housing)
Rathbones Bond Portfolio: B4RN (Broadband for Rural North Fixed Income Security Unlisted United Kingdom Communications for Rural 865 1.0
Limited) 4.5% 30/04/2026 Communities
Rathbones Bond Portfolio: Coigach Community CIC 5.248% Fixed Income Security Unlisted United Kingdom Renewable Energy 202 0.2
31/03/2030
Charity Bank Co-Invest Portfolio: Abbeyfield Southdowns 3.35% Fixed Income Security Unlisted United Kingdom Charity (Care Services) 187 0.2
26/7/2044
Debt and Equity for Social Enterprises 40,471 46.8
Bridges Social Outcomes Fund II LP Limited Partnership Interest Unlisted United Kingdom Social Outcomes Contracts 2,722 3.1
Social Outcomes Contracts 2,722 3.1
Bluefield Solar Income Fund Equity Shares Listed Guernsey Renewable Energy
Infrastructure 2,064 2.4
TwentyFour Sustainable Enhanced Income ABS Fund Equity Shares Listed Luxembourg Diversified 1,641 1.9
Greencoat UK Wind Plc Fund Equity Shares Listed United Kingdom Renewable Energy
Infrastructure 1,336 1.5
Rathbone Ethical Bond Fund Equity Shares Listed United Kingdom Diversified 887 1.0
Liquidity Assets 5,928 6.8
Total investments
2
82,853 95.8
Cash at bank and in hand 514* 0.6
Money market funds 3,106 3.6
Other net liabilities (14) –
Total Shareholder’s funds 86,459 100.0
1
Fixed income securities amounting to £20,532,000 are included at amortised cost, excluding any accrued interest. These include investments amounting to £11,965,000 which are listed, but
traded in inactive markets.
2
Total investments comprise:
£’000 %
Unquoted 64,960 78.4
Listed in the UK 14,188 17.1
Listed on a recognised stock exchange overseas 3,705 4.5
Total 82,853 100.0
Investment Portfolio
at 30 June 2024
Schroder BSC Social Impact Trust plc
23
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Material unquoted holdings (comprising more than 5% of the portfolio and/or included in
the top ten) Income
receivable
Cost of the Fair in the
investment value year
Holding Description of the business £’000 £’000 £’000
Bridges Evergreen Capital LP 10,434 11,482 427
UK Affordable Housing Fund 9,906 10,291 181
Social and Sustainable Housing LP 9,411 9,494 237
Man GPM RI Community Housing 1 LP 8,006 8,168 39
Resonance Real Lettings Property Fund LP 4,831 5,779 148
Community Investment Fund 3,922 4,917 146
Community Energy Together Limited 3,540 3,540 160
Bridges Social Outcomes Fund II LP 2,056 2,722 317
Triodos Bank UK Limited 2020 Bond 2,500 2,500 100
4% 23/12/2030
Charity Bank Co-Invest Portfolio: Abbeyfield 2,000 2,000 153
York 3.6% 12/05/2049
Section 82 of the AIC SORP requires the Company to disclose turnover, pre-tax profits and Net Assets attributable to shareholders at the
valuation date. Where such information is not publicly available, this has not been disclosed. Please refer to the financial statements on
pages 63 to 78 for these disclosures.
Provides long term, large (£5m+) investment
(mix of debt and equity) and support to
established mission-led organisations.
Delivering affordable and sustainable homes for
those unable to purchase or rent in the open
market.
Secured lending to leading charities supporting
vulnerable people through housing.
Mixed tenure affordable homes benefiting more
disadvantaged groups leased to local authorities
and housing associations.
Homes for families and individuals at risk of
homelessness leased to large charities
delivering support services.
An evergreen fund that makes majority secured
loans to charities and social enterprises across
the UK.
A partnership of five community
organisations that own solar farm assets
across the UK.
Direct investment in a private bond supporting
growth of the leading secured lender to
sustainability and social impact organisations.
Co-investments into secured floating rate loans
to charities benefiting more disadvantaged
groups
Investments in social outcomes contracts across
the areas of homelessness, children's services,
education and training and health.
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Material unquoted holdings (comprising more than 5% of the portfolio and/or included in
the top ten) Income
receivable
Cost of the Fair in the
investment value year
Holding Description of the business £’000 £’000 £’000
Bridges Evergreen Capital LP 10,434 11,482 427
UK Affordable Housing Fund 9,906 10,291 181
Social and Sustainable Housing LP 9,411 9,494 237
Man GPM RI Community Housing 1 LP 8,006 8,168 39
Resonance Real Lettings Property Fund LP 4,831 5,779 148
Community Investment Fund 3,922 4,917 146
Community Energy Together Limited 3,540 3,540 160
Bridges Social Outcomes Fund II LP 2,056 2,722 317
Triodos Bank UK Limited 2020 Bond 2,500 2,500 100
4% 23/12/2030
Charity Bank Co-Invest Portfolio: Abbeyfield 2,000 2,000 153
York 3.6% 12/05/2049
Section 82 of the AIC SORP requires the Company to disclose turnover, pre-tax profits and Net Assets attributable to shareholders at the
valuation date. Where such information is not publicly available, this has not been disclosed. Please refer to the financial statements on
pages 63 to 78 for these disclosures.
Provides long term, large (£5m+) investment
(mix of debt and equity) and support to
established mission-led organisations.
Delivering affordable and sustainable homes for
those unable to purchase or rent in the open
market.
Secured lending to leading charities supporting
vulnerable people through housing.
Mixed tenure affordable homes benefiting more
disadvantaged groups leased to local authorities
and housing associations.
Homes for families and individuals at risk of
homelessness leased to large charities
delivering support services.
An evergreen fund that makes majority secured
loans to charities and social enterprises across
the UK.
A partnership of five community
organisations that own solar farm assets
across the UK.
Direct investment in a private bond supporting
growth of the leading secured lender to
sustainability and social impact organisations.
Co-investments into secured floating rate loans
to charities benefiting more disadvantaged
groups
Investments in social outcomes contracts across
the areas of homelessness, children's services,
education and training and health.
24
Schroder BSC Social Impact Trust plc
Environmental, Social and Governance Risk Management
Key SBSI processes for ensuring ESG alignment and performance Portfolio status 2024
Signal Clear signalling that ESG factors are
important by publishing and sharing
from the outset the Portfolio Manager’s
Responsible Business Principles (RBPs).
All managers of underlying funds are
signed up to the Responsible Business
Principles or a carefully assessed
equivalent. These are signalled to fund
managers during due diligence kick-off
presentations and included as part of legal
agreements.
Screening Negative screening applied to ensure the
investment opportunity will not invest in
any excluded sectors at time of
investment. Investees are required to
adopt the RBPs (including the negative
screen) and provide an annual
compliance certificate confirming that
BSC’s negative exclusions have been
adhered to or a carefully assessed
equivalent (since 2021).
No underlying investments within excluded
sectors.
Assessment Risk-based assessment of the fund
manager’s ESG approach to ensure it is
appropriate and will identify and manage
material ESG risk in frontline investees.
Initial risk-based assessments have been
undertaken on all of the Company’s
investments with no material ESG risks
identified that are not being sufficiently
managed. A property-specific ESG Due
Diligence Questionnaire was rolled out
across new investments in 2023 to better
identify ESG risks material to the property
sector and provide reference points for ESG
best practice.
Engagement and stewardship Building trusted relationships with fund
managers that enable the Portfolio
Manager to influence their approach,
including ESG risk management, and
agreeing appropriate metrics for ESG
reporting.
Established and trusted relationships with
all fund managers in place, including
providing advice on regulation and ESG
resources on a one-on-one basis. Additional
ESG reporting requirements are included in
legal agreements for new investments.
Monitoring The Portfolio Manager maintains an
ongoing dialogue about ESG with fund
managers and, where appropriate,
monitors any ESG-related action plans
that respond to material ESG risks.
Clear frameworks for impact measurement
within core portfolio. ESG management
processes also applied across core portfolio
and liquid investments in ethical Bond
Funds and Renewables Funds.
Annual impact conversations include open
discussions of experience in implementing
ESG management and alignment to
evolving ESG regulatory frameworks.
Learning and market
engagement
Engage with peer organisations and
wider sectoral bodies to share insights
and support the development of
standards and best practices.
BSC engaging actively with FCA
Sustainability Disclosure Requirements
(UK SDR). Contributed to roundtables and
discussions hosted by Impact Investing
Institute, Global Impact Investing Network
(GIIN), VentureESG, the UN Principles for
Responsible Investments (“PRI”), and British
Venture Capital Association (BVCA).
Continued sectoral engagement with the
Equity Impact Project in social housing.
The Company aims to maximise its positive impact on people and the planet. To ensure this happens, we must also invest responsibly by
considering ESG risks and opportunities and manage potential negative impacts from our investments. These responsibilities are set out in
BSC’s Responsible Investment Policy, which forms the basis for the Company’s ESG management approach.
Portfolio ESG risk management summary
Environmental, Social and Governance Risk Management
Key SBSI processes for ensuring ESG alignment and performance Portfolio status 2024
Signal Clear signalling that ESG factors are
important by publishing and sharing
from the outset the Portfolio Manager’s
Responsible Business Principles (RBPs).
All managers of underlying funds are
signed up to the Responsible Business
Principles or a carefully assessed
equivalent. These are signalled to fund
managers during due diligence kick-off
presentations and included as part of legal
agreements.
Screening Negative screening applied to ensure the
investment opportunity will not invest in
any excluded sectors at time of
investment. Investees are required to
adopt the RBPs (including the negative
screen) and provide an annual
compliance certificate confirming that
BSC’s negative exclusions have been
adhered to or a carefully assessed
equivalent (since 2021).
No underlying investments within excluded
sectors.
Assessment Risk-based assessment of the fund
manager’s ESG approach to ensure it is
appropriate and will identify and manage
material ESG risk in frontline investees.
Initial risk-based assessments have been
undertaken on all of the Company’s
investments with no material ESG risks
identified that are not being sufficiently
managed. A property-specific ESG Due
Diligence Questionnaire was rolled out
across new investments in 2023 to better
identify ESG risks material to the property
sector and provide reference points for ESG
best practice.
Engagement and stewardship Building trusted relationships with fund
managers that enable the Portfolio
Manager to influence their approach,
including ESG risk management, and
agreeing appropriate metrics for ESG
reporting.
Established and trusted relationships with
all fund managers in place, including
providing advice on regulation and ESG
resources on a one-on-one basis. Additional
ESG reporting requirements are included in
legal agreements for new investments.
Monitoring The Portfolio Manager maintains an
ongoing dialogue about ESG with fund
managers and, where appropriate,
monitors any ESG-related action plans
that respond to material ESG risks.
Clear frameworks for impact measurement
within core portfolio. ESG management
processes also applied across core portfolio
and liquid investments in ethical Bond
Funds and Renewables Funds.
Annual impact conversations include open
discussions of experience in implementing
ESG management and alignment to
evolving ESG regulatory frameworks.
Learning and market
engagement
Engage with peer organisations and
wider sectoral bodies to share insights
and support the development of
standards and best practices.
BSC engaging actively with FCA
Sustainability Disclosure Requirements
(UK SDR). Contributed to roundtables and
discussions hosted by Impact Investing
Institute, Global Impact Investing Network
(GIIN), VentureESG, the UN Principles for
Responsible Investments (“PRI”), and British
Venture Capital Association (BVCA).
Continued sectoral engagement with the
Equity Impact Project in social housing.
The Company aims to maximise its positive impact on people and the planet. To ensure this happens, we must also invest responsibly by
considering ESG risks and opportunities and manage potential negative impacts from our investments. These responsibilities are set out in
BSC’s Responsible Investment Policy, which forms the basis for the Company’s ESG management approach.
Portfolio ESG risk management summary
Schroder BSC Social Impact Trust plc
25
Introduction Strategic Report Governance Financial Other Information (Unaudited)
ESG standards and benchmarks
The Company has been closely monitoring the evolving landscape of
ESG regulatory frameworks, with the most notable development in
the last 12 months being the publication of the FCA’s Sustainability
Disclosure Requirements and anti-greenwashing rule which came
into effect in 2024.
BSC and Schroders have been closely engaged with the requirements
of the regulatory regime and welcome its publication, which we
believe will bring clarity and accountability to investment product
labelling and improve impact market practice through the
requirement for a coherent theory of change and emphasis on
intentionality of the impact, as well as robust measurement.
BSC has published voluntary Task Force on Climate-related Financial
Disclosures (“TCFD”) for three consecutive years and is currently
engaging with external consultants to improve this through
measurement of Scope 1–2 emissions and some Scope 3 emissions.
The 2023 TCFD disclosures for BSC and Schroders are available on
their respective websites.
The Company currently reports greenhouse gas emissions data for
97% of the portfolio (from c. 50% last year). We increased coverage of
emissions data across almost all the portfolio with 54% of
investments by value reporting data directly by fund managers and
46% of data estimated using the Partnership for Carbon Accounting
Financials (PCAF) methodology.
BSC became a Principles for Responsible Investment (PRI) signatory in
2023. The organisation also participates in asset class-wide initiatives,
for example, the Equity Impact Project and Sustainability Reporting
Standards with respect to housing funds.
Equity, diversity and inclusion (“EDI”)
Tackling inequality is at the heart of the Company’s mission. Over the
last year, the Portfolio Manager has improved the integration of EDI
into the investment process, particularly in how EDI is assessed across
potential fund managers at point of investment. Through this work,
the Company aims to contribute towards improving the EDI practices
and representation of its fund managers, so their organisations are
more inclusive and psychologically safe for diverse groups, and
impact outcomes are experienced by a broader and more diverse
group of people.
EDI considerations are embedded into the Company’s investment
strategy, process, portfolio management and reporting. The Portfolio
Manager collected diversity and gender pay gap data from underlying
portfolio fund managers and developed an EDI assessment
framework for due diligence which was tested in new investments.
Our approach includes:
1. Setting specific EDI goals within our asset classes.
2. Understanding a manager’s EDI practices before we invest, and
crucially how they can improve them.
3. Continuing to engage with our managers once we have invested
in EDI in portfolio monitoring and data collection.
In 2023, Better Society Capital repeated its survey of fund managers
on the representation of their teams. The findings include the
responses from 70% of the Company’s portfolio, representing an
increase of 10 percentage points in portfolio coverage compared to
last year. The survey methodology can be found at
https://bsc.cdn.ngo/media/documents/About-the-data-in-impact-
report.pdf.
The AIFM’s 2023 Inclusion Report can be accessed via this link at:
https://mybrand.schroders.com/m/33c134215aeeabb4/original/Schro
ders-Inclusion-Report-2023.pdf
Introduction Strategic Report Governance Financial Other Information (Unaudited)
ESG standards and benchmarks
The Company has been closely monitoring the evolving landscape of
ESG regulatory frameworks, with the most notable development in
the last 12 months being the publication of the FCA’s Sustainability
Disclosure Requirements and anti-greenwashing rule which came
into effect in 2024.
BSC and Schroders have been closely engaged with the requirements
of the regulatory regime and welcome its publication, which we
believe will bring clarity and accountability to investment product
labelling and improve impact market practice through the
requirement for a coherent theory of change and emphasis on
intentionality of the impact, as well as robust measurement.
BSC has published voluntary Task Force on Climate-related Financial
Disclosures (“TCFD”) for three consecutive years and is currently
engaging with external consultants to improve this through
measurement of Scope 1–2 emissions and some Scope 3 emissions.
The 2023 TCFD disclosures for BSC and Schroders are available on
their respective websites.
The Company currently reports greenhouse gas emissions data for
97% of the portfolio (from c. 50% last year). We increased coverage of
emissions data across almost all the portfolio with 54% of
investments by value reporting data directly by fund managers and
46% of data estimated using the Partnership for Carbon Accounting
Financials (PCAF) methodology.
BSC became a Principles for Responsible Investment (PRI) signatory in
2023. The organisation also participates in asset class-wide initiatives,
for example, the Equity Impact Project and Sustainability Reporting
Standards with respect to housing funds.
Equity, diversity and inclusion (“EDI”)
Tackling inequality is at the heart of the Company’s mission. Over the
last year, the Portfolio Manager has improved the integration of EDI
into the investment process, particularly in how EDI is assessed across
potential fund managers at point of investment. Through this work,
the Company aims to contribute towards improving the EDI practices
and representation of its fund managers, so their organisations are
more inclusive and psychologically safe for diverse groups, and
impact outcomes are experienced by a broader and more diverse
group of people.
EDI considerations are embedded into the Company’s investment
strategy, process, portfolio management and reporting. The Portfolio
Manager collected diversity and gender pay gap data from underlying
portfolio fund managers and developed an EDI assessment
framework for due diligence which was tested in new investments.
Our approach includes:
1. Setting specific EDI goals within our asset classes.
2. Understanding a manager’s EDI practices before we invest, and
crucially how they can improve them.
3. Continuing to engage with our managers once we have invested
in EDI in portfolio monitoring and data collection.
In 2023, Better Society Capital repeated its survey of fund managers
on the representation of their teams. The findings include the
responses from 70% of the Company’s portfolio, representing an
increase of 10 percentage points in portfolio coverage compared to
last year. The survey methodology can be found at
https://bsc.cdn.ngo/media/documents/About-the-data-in-impact-
report.pdf.
The AIFM’s 2023 Inclusion Report can be accessed via this link at:
https://mybrand.schroders.com/m/33c134215aeeabb4/original/Schro
ders-Inclusion-Report-2023.pdf
26
Schroder BSC Social Impact Trust plc
Environmental, Social and Governance Risk Management Summary
Underlying portfolio fund managers’ EDI survey results
The Portfolio Manager’s EDI action plan
Following a detailed independent review conducted by the executive search consultants, Inclusive Boards, into BSC’s diversity and inclusion
approach in 2021, BSC adopted a framework to guide its EDI action plan. The framework identifies three key priority areas and how these are
intrinsically linked to BSC’s mission and vision, in addition to its governance. This action plan applies to SBSI operations, allocation and portfolio
management.
0
1
0
0
1
0
0
0
2
1
1
4
0
0
0
0
0 2 4
2
3
1
0
2
0
0
0
4
0
4
0
1
0
0
0
0 2 4
Proportion of the organisation
Board 0
0
5
0
2
0
0
1
0
1
3
2
0
0
0
Executive team
Investment
committee
Investment
team/All staff
None
Up to a quarter
Quarter to half
Over half
None
Up to a quarter
Quarter to half
Over half
None
Up to a quarter
Quarter to half
Over half
None
Up to a quarter
Quarter to half
Over half
6
0 2 4 6
Number of organisations
m r e t - g n o l , y t i l i b a s i D y t i r o n i m c i n h t E e l a m e F
health condition or other
Priority areas People and culture Investment and portfolio Engagement and market building
Progress
2023/2024
Embedding Equity, Diversity and Inclusion into
BSC’s culture, policies and practices. We want
to ensure we live our values, demonstrating
this through our behaviours and how we
respect and value each other and the
partners and organisations we work with.
There is no such thing as an equality ‘neutral’
investor or investment. In our investment
strategy we want to embed Equity, Diversity
and Inclusion considerations intentionally,
reflecting these in how we articulate our
impact approach where it is meaningful
wherever possible.
We will work with partners to build our
shared capacity and understanding of how to
improve Equity, Diversity and Inclusion in the
wider sector. Focusing on breaking down
barriers, we will develop shared tools and
resources with users at the heart of design to
support this and collaborate share and
amplify the best practice of others.
– Psychological safety training for all BSC
teams and included in annual staff survey
– Piloting the use of culture reps as advisers in
recruitment for senior roles – Changes to
BSC Family-Friendly Policy, giving parents
freedom over when they take their
maternity, shared parental or adoption
enhanced pay
– Developing an Equal Opportunities policy to
provide a safe, fair and inclusive working
environment
– Developing a Reasonable Procurement
policy setting out the approach to making
reasonable procurement decisions
– Collected diversity and gender pay gap data
from fund managers and published results
in January 2024
– Developed EDI assessment framework for
due diligence and tested in new investments
– Supported Diversity Data collection project
led by Diversity Forum
– Contributed to Equality Impact Investing
Taskforce, Diversity Forum and DiversityVC
– BSC became the third LP signatory to the
Investing in Women Code
– Contributed to JRF’s Living Wage
Roundtable, VentureESG’s White Paper #3
– Hosted Addressing Imbalance Hackathon
in partnership with the Diversity Forum
– Launched Investment Committees of the
Future programme
– Introduced bursaries for training on social
investment to support under-represented
leaders
– Developing language guides to ensure
inclusive use of language, images and
design
Environmental, Social and Governance Risk Management Summary
Underlying portfolio fund managers’ EDI survey results
The Portfolio Manager’s EDI action plan
Following a detailed independent review conducted by the executive search consultants, Inclusive Boards, into BSC’s diversity and inclusion
approach in 2021, BSC adopted a framework to guide its EDI action plan. The framework identifies three key priority areas and how these are
intrinsically linked to BSC’s mission and vision, in addition to its governance. This action plan applies to SBSI operations, allocation and portfolio
management.
0
1
0
0
1
0
0
0
2
1
1
4
0
0
0
0
0 2 4
2
3
1
0
2
0
0
0
4
0
4
0
1
0
0
0
0 2 4
Proportion of the organisation
Board 0
0
5
0
2
0
0
1
0
1
3
2
0
0
0
Executive team
Investment
committee
Investment
team/All staff
None
Up to a quarter
Quarter to half
Over half
None
Up to a quarter
Quarter to half
Over half
None
Up to a quarter
Quarter to half
Over half
None
Up to a quarter
Quarter to half
Over half
6
0 2 4 6
Number of organisations
m r e t - g n o l , y t i l i b a s i D y t i r o n i m c i n h t E e l a m e F
health condition or other
Priority areas People and culture Investment and portfolio Engagement and market building
Progress
2023/2024
Embedding Equity, Diversity and Inclusion into
BSC’s culture, policies and practices. We want
to ensure we live our values, demonstrating
this through our behaviours and how we
respect and value each other and the
partners and organisations we work with.
There is no such thing as an equality ‘neutral’
investor or investment. In our investment
strategy we want to embed Equity, Diversity
and Inclusion considerations intentionally,
reflecting these in how we articulate our
impact approach where it is meaningful
wherever possible.
We will work with partners to build our
shared capacity and understanding of how to
improve Equity, Diversity and Inclusion in the
wider sector. Focusing on breaking down
barriers, we will develop shared tools and
resources with users at the heart of design to
support this and collaborate share and
amplify the best practice of others.
– Psychological safety training for all BSC
teams and included in annual staff survey
– Piloting the use of culture reps as advisers in
recruitment for senior roles – Changes to
BSC Family-Friendly Policy, giving parents
freedom over when they take their
maternity, shared parental or adoption
enhanced pay
– Developing an Equal Opportunities policy to
provide a safe, fair and inclusive working
environment
– Developing a Reasonable Procurement
policy setting out the approach to making
reasonable procurement decisions
– Collected diversity and gender pay gap data
from fund managers and published results
in January 2024
– Developed EDI assessment framework for
due diligence and tested in new investments
– Supported Diversity Data collection project
led by Diversity Forum
– Contributed to Equality Impact Investing
Taskforce, Diversity Forum and DiversityVC
– BSC became the third LP signatory to the
Investing in Women Code
– Contributed to JRF’s Living Wage
Roundtable, VentureESG’s White Paper #3
– Hosted Addressing Imbalance Hackathon
in partnership with the Diversity Forum
– Launched Investment Committees of the
Future programme
– Introduced bursaries for training on social
investment to support under-represented
leaders
– Developing language guides to ensure
inclusive use of language, images and
design
Schroder BSC Social Impact Trust plc
27
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Business Review
Purpose, values and culture
The Company’s purpose is to create long term shareholder value.
The Company’s culture is driven by its values: Transparency,
Engagement and Rigour, with collegial behaviour and constructive,
robust challenge. These values are centred on achieving returns for
shareholders in line with the Company’s investment objective. The
Board also promotes the effective management or mitigation of risks
faced by the Company and, to the extent it does not conflict with the
investment objective, aims to structure the Company’s operations
with regard to all its stakeholders and takes into account the impact
of the Company’s operations on the environment and the community.
As the Company has no employees and acts through its service
providers, its culture is represented by the values and behaviour of
the Board and the third parties to whom it delegates. The Board aims
to fulfil the Company’s investment objective by encouraging a culture
of constructive challenge with all key suppliers and openness with all
stakeholders. The Board is responsible for embedding the Company’s
culture in the Company‘s operations.
Strategy and business model
The Company is a listed investment trust and has outsourced its
operations to third party service providers.
The Board has appointed the Manager, Schroder Unit Trusts Limited,
to act as the Company’s AIFM for the purposes of the AIFM Rules. The
Board believes that Schroders’ institutional risk management
capabilities and infrastructure provide the stable and robust platform
needed for the efficient management of the Company. The AIFM is
responsible for providing administrative, company secretarial and
marketing services to the Company. These include general fund
administration services (including calculation of the NAV based on the
data provided by the Portfolio Manager), bookkeeping, and accounts
preparation.
The Company and the AIFM have appointed Better Society Capital
Limited (the “Portfolio Manager”) to provide portfolio management
and related services in respect of the Company’s portfolio. The terms
of the appointments are described more completely in the Directors’
Report. The Manager also promotes the Company using its sales and
marketing teams. The Board, Manager and Portfolio Manager work
together to deliver the Company’s investment objective, as
demonstrated in the diagram above. The investment and promotion
processes set out in the diagram are described in more detail below.
Investment objective
The Company’s investment objective is to deliver measurable positive
social impact as well as long term capital growth and income, through
investing in a diversified portfolio of private market Impact Funds,
co-investments alongside impact investors and direct investments in
order to gain exposure to private market Social Impact Investments.
The Company aims to provide a Net Asset Value total return of CPI
plus 2% per annum (once the portfolio is fully invested and averaged
over a rolling three- to five- year period, net of fees) with low
correlation to traditional quoted markets while helping to address
significant social issues in the UK.
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.
d r
providers to achieve
and other service
Portfolio Manager
Appoint Manager, •
Boa
management
Oversee portfolio •
strategy and KPIs
Set objectives,
B
in
R •
c
re
S •
in
t s
im
P
•
Strategy
•
nvestment
B d
nteraction with the
Regular reporting and
ontrol environment
esearch and risk
Supported by strong
nvestment process
ategy by following an r t
mplements the investment
Portfolio Manager
I
Board is
Compe
nvestors
ains attractive
the Company
mpetitive
rges remain
Ongoing
the fees
g:
Impact
Social
Value and
s focused on
etitiveness
Investor
investment objective
providers to achieve
impact
and positive social
shareholder value
the creation of
Activities centred on •
risk management
Managers including
oversight of
overall strategy and
Responsible for •
d
in
s
C
P
S •
M
ca
M issuance or buybacks
liquidity through share
and the provision of
premium management
Oversee discount/ •
of KPIs
Monitor achievement • B
•
to in
rem
that •
com
Char
and
that •
iscount/premium
ntervention to support
econdary market
Corporate Broker for
Portfolio Manager and
upport from the
Manager
apability of the
Board
Marketing and sales
Promotion
ensurin
management
p
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Business Review
Purpose, values and culture
The Company’s purpose is to create long term shareholder value.
The Company’s culture is driven by its values: Transparency,
Engagement and Rigour, with collegial behaviour and constructive,
robust challenge. These values are centred on achieving returns for
shareholders in line with the Company’s investment objective. The
Board also promotes the effective management or mitigation of risks
faced by the Company and, to the extent it does not conflict with the
investment objective, aims to structure the Company’s operations
with regard to all its stakeholders and takes into account the impact
of the Company’s operations on the environment and the community.
As the Company has no employees and acts through its service
providers, its culture is represented by the values and behaviour of
the Board and the third parties to whom it delegates. The Board aims
to fulfil the Company’s investment objective by encouraging a culture
of constructive challenge with all key suppliers and openness with all
stakeholders. The Board is responsible for embedding the Company’s
culture in the Company‘s operations.
Strategy and business model
The Company is a listed investment trust and has outsourced its
operations to third party service providers.
The Board has appointed the Manager, Schroder Unit Trusts Limited,
to act as the Company’s AIFM for the purposes of the AIFM Rules. The
Board believes that Schroders’ institutional risk management
capabilities and infrastructure provide the stable and robust platform
needed for the efficient management of the Company. The AIFM is
responsible for providing administrative, company secretarial and
marketing services to the Company. These include general fund
administration services (including calculation of the NAV based on the
data provided by the Portfolio Manager), bookkeeping, and accounts
preparation.
The Company and the AIFM have appointed Better Society Capital
Limited (the “Portfolio Manager”) to provide portfolio management
and related services in respect of the Company’s portfolio. The terms
of the appointments are described more completely in the Directors’
Report. The Manager also promotes the Company using its sales and
marketing teams. The Board, Manager and Portfolio Manager work
together to deliver the Company’s investment objective, as
demonstrated in the diagram above. The investment and promotion
processes set out in the diagram are described in more detail below.
Investment objective
The Company’s investment objective is to deliver measurable positive
social impact as well as long term capital growth and income, through
investing in a diversified portfolio of private market Impact Funds,
co-investments alongside impact investors and direct investments in
order to gain exposure to private market Social Impact Investments.
The Company aims to provide a Net Asset Value total return of CPI
plus 2% per annum (once the portfolio is fully invested and averaged
over a rolling three- to five- year period, net of fees) with low
correlation to traditional quoted markets while helping to address
significant social issues in the UK.
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.
d r
providers to achieve
and other service
Portfolio Manager
Appoint Manager, •
Boa
management
Oversee portfolio •
strategy and KPIs
Set objectives,
B
in
R •
c
re
S •
in
t s
im
P
•
Strategy
•
nvestment
B d
nteraction with the
Regular reporting and
ontrol environment
esearch and risk
Supported by strong
nvestment process
ategy by following an r t
mplements the investment
Portfolio Manager
I
Board is
Compe
nvestors
ains attractive
the Company
mpetitive
rges remain
Ongoing
the fees
g:
Impact
Social
Value and
s focused on
etitiveness
Investor
investment objective
providers to achieve
impact
and positive social
shareholder value
the creation of
Activities centred on •
risk management
Managers including
oversight of
overall strategy and
Responsible for •
d
in
s
C
P
S •
M
ca
M issuance or buybacks
liquidity through share
and the provision of
premium management
Oversee discount/ •
of KPIs
Monitor achievement • B
•
to in
rem
that •
com
Char
and
that •
iscount/premium
ntervention to support
econdary market
Corporate Broker for
Portfolio Manager and
upport from the
Manager
apability of the
Board
Marketing and sales
Promotion
ensurin
management
p
Investment policy
The Company will invest in a diversified portfolio of private market
Impact Funds and Co-Investments alongside such funds or other
impact investors (including the Portfolio Manager), which in turn
support charities and social enterprises, with a focus on the United
Kingdom. The Company may also make Direct Investments. The
Company will make Social Impact Investments that seek to deliver
a positive social outcome together with a financial return, including
but not limited to Investments in:
• High Impact Housing – Including property funds that either
acquire or develop high quality affordable housing, from more
specialist housing for vulnerable groups (for example, transition
accommodation for people who were formerly homeless or
fleeing domestic violence) to housing for low income renters
currently living in poor quality or insecure accommodation.
• Debt and Equity for Social Enterprises – Including charity
bonds, portfolios of secured loans and funds that invest in
established social enterprises via mezzanine debt and/or equity.
• Social Outcomes Contracts – Contracts between a public
sector or government body and a delivery organisation whereby
an external investor provides upfront capital to the delivery
organisation and is repaid by the income stream from the public
sector body based upon social outcomes delivered rather than
on a fee for service basis.
The market for Social Impact Investments in the United Kingdom is
a rapidly evolving market and the Company retains the flexibility to
invest in Social Impact Investments other than those in the three
categories set out above.
The Company will typically obtain exposure to Social Impact
Investments through investing in Impact Funds and Co- Investments.
The Company will usually make investments on a commitment basis,
expected to be called over a period of time. The Company will
generally hold minority interests in Impact Funds, but may hold
majority interests where appropriate including, for example, where
the Company may be a cornerstone investor alongside the Portfolio
Manager. Co-Investments would be made alongside third party
impact investors, including the Portfolio Manager. It is expected that
the Company will invest in Impact Funds and Co-Investments
alongside the Portfolio Manager, benefitting from the broad range of
opportunities sourced by the Portfolio Manager. Direct Investments
are not expected to comprise a material proportion of the Company’s
portfolio.
The portfolio composition at any one time will reflect the
opportunities available to the Portfolio Manager, based on the
performance, social impact and maturity of the Impact Funds,
Co-Investments and Direct Investments.
Investment process
Better Society Capital begins by identifying and framing solutions to
deep rooted social issues where investment could play a role, seeking
to understand the available revenue models and their financial and
social impact potential and risks. Better Society Capital also receives
inbound proposals to address these social issues and, where
investment products are not currently available, aims to design these
proposals with suitable partners.
Better Society Capital then undertakes robust investment analysis to
test a proposed investment’s hypothesis for both financial returns
and social impact. Better Society Capital leverages proprietary tools
and tests to analyse the context of a proposal, the impact outcomes
and financial drivers and their associated risks, including ESG-related
risks, and to analyse the delivery risk by conducting due diligence on
the operational and management aspects of the proposal. There is
a strong learning culture at Better Society Capital that is reflected
throughout the investment process to ensure that lessons learned
from Better Society Capital’s existing portfolio and the team’s diverse
experience are reflected in its analysis and recommendations.
In selecting investments, Better Society Capital analyses the revenue
streams of the underlying investments. Government funding may be
available to address significant social issues in the UK, but the
innovation or delivery to best tackle the issues lies in the charity and
social enterprise sector. From a financial perspective these businesses
have demand, risk and return characteristics that are distinct from
mainstream financial markets given the government revenue
streams.
When building the Company’s portfolio, Better Society Capital aims to
use the team’s financial and impact understanding to produce an
optimal, diversified portfolio to deliver the target financial and impact
outcomes and to manage risk. It is anticipated the Company will
invest in the more proven investment models and managers that
have been developed within the existing Better Society Capital
portfolio.
28 Schroder BSC Social Impact Trust plc
Business Review
continued
The Company will invest in a diversified portfolio of private market
Impact Funds and Co-Investments alongside such funds or other
impact investors (including the Portfolio Manager), which in turn
support charities and social enterprises, with a focus on the United
Kingdom. The Company may also make Direct Investments. The
Company will make Social Impact Investments that seek to deliver
a positive social outcome together with a financial return, including
but not limited to Investments in:
• High Impact Housing – Including property funds that either
acquire or develop high quality affordable housing, from more
specialist housing for vulnerable groups (for example, transition
accommodation for people who were formerly homeless or
fleeing domestic violence) to housing for low income renters
currently living in poor quality or insecure accommodation.
• Debt and Equity for Social Enterprises – Including charity
bonds, portfolios of secured loans and funds that invest in
established social enterprises via mezzanine debt and/or equity.
• Social Outcomes Contracts – Contracts between a public
sector or government body and a delivery organisation whereby
an external investor provides upfront capital to the delivery
organisation and is repaid by the income stream from the public
sector body based upon social outcomes delivered rather than
on a fee for service basis.
The market for Social Impact Investments in the United Kingdom is
a rapidly evolving market and the Company retains the flexibility to
invest in Social Impact Investments other than those in the three
categories set out above.
The Company will typically obtain exposure to Social Impact
Investments through investing in Impact Funds and Co- Investments.
The Company will usually make investments on a commitment basis,
expected to be called over a period of time. The Company will
generally hold minority interests in Impact Funds, but may hold
majority interests where appropriate including, for example, where
the Company may be a cornerstone investor alongside the Portfolio
Manager. Co-Investments would be made alongside third party
impact investors, including the Portfolio Manager. It is expected that
the Company will invest in Impact Funds and Co-Investments
alongside the Portfolio Manager, benefitting from the broad range of
opportunities sourced by the Portfolio Manager. Direct Investments
are not expected to comprise a material proportion of the Company’s
portfolio.
The portfolio composition at any one time will reflect the
opportunities available to the Portfolio Manager, based on the
performance, social impact and maturity of the Impact Funds,
Co-Investments and Direct Investments.
Investment process
Better Society Capital begins by identifying and framing solutions to
deep rooted social issues where investment could play a role, seeking
to understand the available revenue models and their financial and
social impact potential and risks. Better Society Capital also receives
inbound proposals to address these social issues and, where
investment products are not currently available, aims to design these
proposals with suitable partners.
Better Society Capital then undertakes robust investment analysis to
test a proposed investment’s hypothesis for both financial returns
and social impact. Better Society Capital leverages proprietary tools
and tests to analyse the context of a proposal, the impact outcomes
and financial drivers and their associated risks, including ESG-related
risks, and to analyse the delivery risk by conducting due diligence on
the operational and management aspects of the proposal. There is
a strong learning culture at Better Society Capital that is reflected
throughout the investment process to ensure that lessons learned
from Better Society Capital’s existing portfolio and the team’s diverse
experience are reflected in its analysis and recommendations.
In selecting investments, Better Society Capital analyses the revenue
streams of the underlying investments. Government funding may be
available to address significant social issues in the UK, but the
innovation or delivery to best tackle the issues lies in the charity and
social enterprise sector. From a financial perspective these businesses
have demand, risk and return characteristics that are distinct from
mainstream financial markets given the government revenue
streams.
When building the Company’s portfolio, Better Society Capital aims to
use the team’s financial and impact understanding to produce an
optimal, diversified portfolio to deliver the target financial and impact
outcomes and to manage risk. It is anticipated the Company will
invest in the more proven investment models and managers that
have been developed within the existing Better Society Capital
portfolio.
28 Schroder BSC Social Impact Trust plc
Business Review
continued
Schroder BSC Social Impact Trust plc
29
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Investment restrictions
The Company will manage its assets with the objective of spreading
risk through the following investment restrictions that limit the
Company’s exposure to not more than:
• 60% of Net Assets in High Impact Housing;
• 60% of Net Assets in Debt and Equity for Social Enterprises, of
which, not more than 30% of Net Assets will be held in equity
interests via funds;
• 40% of Net Assets in Social Outcomes Contracts;
• 30% of Net Assets in Social Impact Investments other than High
Impact Housing, Debt and Equity for Social Enterprises and
Social Outcomes Contracts;
• 10% of Net Assets to a single Investment, held directly or
indirectly on a look-through basis;
• 20% of Net Assets to any one Impact Fund;
• 25% of Net Assets to Impact Funds managed or advised by the
same investment management and advisory group; and
• 15% of Net Assets to non-UK Investments.
Each of the above restrictions will be calculated at the time of
commitment and where the Company’s exposure will be the
aggregate of the value of the Company’s Investments plus its
outstanding commitments. Where the Company makes an
Investment otherwise than on a commitment basis, the time of
commitment will be the time of investment.
The Company will not be required to dispose of any investment or to
rebalance the portfolio as a result of a change in the respective
valuations of its assets. However, the Portfolio Manager will regularly
monitor the portfolio and may make adjustments from time to time
consistent with the objective of spreading risk. Where the calculation
of an investment restriction requires an analysis of underlying
Investments held by an Impact Fund in which the Company is
invested, such calculation will be based on the information reasonably
available to the Portfolio Manager at the relevant time.
As a result of managing its assets and spreading investment risk in
accordance with the above restrictions, the Company expects to have
diversified exposure across its various counterparties and
co-investors.
Hedging and derivatives
The Company will not employ derivatives of any kind for investment
purposes.
Whilst the Company may use derivatives for currency hedging
purposes, non-Sterling exposures are expected to be limited and, to
the extent there are such exposures, the Company currently
anticipates that these will not be hedged.
Performance Monitoring and Valuation
1. V aluation Committee – meets half yearly to
consider and approve for recommendation to the
Board.
2 . Performance Committee – meets half yearly to
compare against original investment thesis and
identify any actions required and what lessons
can be drawn.
Idea Generation
Deal Origination
Significant reach in sourcing investments through:
1) B etter Society Capital’s strong reputation; 2) support
of e x isting managers to develop new proposals;
3) actively seek out new managers to develop new
proposals; and 4) maximise the team’s network.
Pre – Due Diligence
Idea is formally tested against investment and
portfolio allocation objectives.
Due Diligence
Investment Approval
Debate and challenge. The deal team submits a
proposal to an investment committee dedicated to
the Company’s portfolio. The proposal focusses on
clarity, testable theses, key performance indicators
and risk.
Deal Structuring and execution
Transaction structures and documentation
created to mitigate risks identified during due
diligence while maintaining incentives for the
investee. During documentation the deal team
will work with the investee company to agree an
implementation plan. For example an ‘impact
canvas’ is developed and agreed, which is a tool
that summarises the key objectives of the
investment and the resulting KPIs that will be
monitored over the life of the investment.
Exit
Portfolio Management
1. Managing investment performance across
impact on people and financial return.
2. Supporting fund managers and investee companies
development providing structured support where they
face common challenges e.g. impact management.
3. Engaging with fund managers and investee companies
to support delivery of impact.
After working to an exit to best deliver financial and
impact returns the team will reflect on lesson learned
during the life of the investment and prepare a
report for B etter Society Capital’s learning database.
Range of proprietary tools used throughout the process,
including management DD, DD toolkits across impact,
financial and operational due diligence, model and
review templates and deal structuring guidelines.
Actively search for new investment opportunities.
Better Society Capital starts with the social issue and
then designs and improves routes to bring together
the needs of enterprises and investors.
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Investment restrictions
The Company will manage its assets with the objective of spreading
risk through the following investment restrictions that limit the
Company’s exposure to not more than:
• 60% of Net Assets in High Impact Housing;
• 60% of Net Assets in Debt and Equity for Social Enterprises, of
which, not more than 30% of Net Assets will be held in equity
interests via funds;
• 40% of Net Assets in Social Outcomes Contracts;
• 30% of Net Assets in Social Impact Investments other than High
Impact Housing, Debt and Equity for Social Enterprises and
Social Outcomes Contracts;
• 10% of Net Assets to a single Investment, held directly or
indirectly on a look-through basis;
• 20% of Net Assets to any one Impact Fund;
• 25% of Net Assets to Impact Funds managed or advised by the
same investment management and advisory group; and
• 15% of Net Assets to non-UK Investments.
Each of the above restrictions will be calculated at the time of
commitment and where the Company’s exposure will be the
aggregate of the value of the Company’s Investments plus its
outstanding commitments. Where the Company makes an
Investment otherwise than on a commitment basis, the time of
commitment will be the time of investment.
The Company will not be required to dispose of any investment or to
rebalance the portfolio as a result of a change in the respective
valuations of its assets. However, the Portfolio Manager will regularly
monitor the portfolio and may make adjustments from time to time
consistent with the objective of spreading risk. Where the calculation
of an investment restriction requires an analysis of underlying
Investments held by an Impact Fund in which the Company is
invested, such calculation will be based on the information reasonably
available to the Portfolio Manager at the relevant time.
As a result of managing its assets and spreading investment risk in
accordance with the above restrictions, the Company expects to have
diversified exposure across its various counterparties and
co-investors.
Hedging and derivatives
The Company will not employ derivatives of any kind for investment
purposes.
Whilst the Company may use derivatives for currency hedging
purposes, non-Sterling exposures are expected to be limited and, to
the extent there are such exposures, the Company currently
anticipates that these will not be hedged.
Performance Monitoring and Valuation
1. V aluation Committee – meets half yearly to
consider and approve for recommendation to the
Board.
2 . Performance Committee – meets half yearly to
compare against original investment thesis and
identify any actions required and what lessons
can be drawn.
Idea Generation
Deal Origination
Significant reach in sourcing investments through:
1) B etter Society Capital’s strong reputation; 2) support
of e x isting managers to develop new proposals;
3) actively seek out new managers to develop new
proposals; and 4) maximise the team’s network.
Pre – Due Diligence
Idea is formally tested against investment and
portfolio allocation objectives.
Due Diligence
Investment Approval
Debate and challenge. The deal team submits a
proposal to an investment committee dedicated to
the Company’s portfolio. The proposal focusses on
clarity, testable theses, key performance indicators
and risk.
Deal Structuring and execution
Transaction structures and documentation
created to mitigate risks identified during due
diligence while maintaining incentives for the
investee. During documentation the deal team
will work with the investee company to agree an
implementation plan. For example an ‘impact
canvas’ is developed and agreed, which is a tool
that summarises the key objectives of the
investment and the resulting KPIs that will be
monitored over the life of the investment.
Exit
Portfolio Management
1. Managing investment performance across
impact on people and financial return.
2. Supporting fund managers and investee companies
development providing structured support where they
face common challenges e.g. impact management.
3. Engaging with fund managers and investee companies
to support delivery of impact.
After working to an exit to best deliver financial and
impact returns the team will reflect on lesson learned
during the life of the investment and prepare a
report for B etter Society Capital’s learning database.
Range of proprietary tools used throughout the process,
including management DD, DD toolkits across impact,
financial and operational due diligence, model and
review templates and deal structuring guidelines.
Actively search for new investment opportunities.
Better Society Capital starts with the social issue and
then designs and improves routes to bring together
the needs of enterprises and investors.
Borrowing policy
The Company may, from time to time, use borrowings for working
capital and portfolio management purposes, including for the
purpose of satisfying capital calls and the short term funding of
investments. Borrowings will not exceed 20% of the Company’s Net
Assets, calculated at the time of borrowing.
Cash and liquidity management
The Company may hold cash on deposit and may invest in cash
equivalent investments, which may include short-term investments in
money market type funds and tradeable debt securities. In order to
efficiently allocate the Company’s funds whilst it may otherwise hold
significant levels of cash, the Company may also make short and
medium term liquid investments, including in social bond funds,
closed-ended listed funds and other liquid ESG investments, that the
Portfolio Manager considers are consistent with the Company’s
liquidity requirements, investment policy, investment guidelines and
risk profile while also meeting high ESG criteria (“Liquidity Assets”).
The Company may invest up to 30% of Net Assets in Liquidity Assets,
measured at the time of investment. The Company intends to only
utilise the full 30% allocation immediately after a fundraise and at
most times no more than 20% of Net Assets shall be invested in
Liquidity Assets.
The Company will seek to ensure the Liquidity Assets target the
Portfolio Manager’s responsible investment policy, which is
underpinned by nine core responsible business principles, including:
• ‘Do No Harm’ – To minimise negative impacts on target
beneficiaries and communities, the environment, employees, and
all stakeholders.
• ‘Protect the Environment’ – To promote and practice the efficient
use of natural resources and protect the environment wherever
possible.
• ‘Inclusive Practices’ – To promote equality, diversity and inclusion
practices through good corporate governance and decision
making, employment, organisational culture and values, and
operational delivery.
When identifying key ESG risks, the Portfolio Manager aims to be
proportionately compliant with its responsible investment policy,
based on an assessment of the materiality of the ESG risks and best
practice within the target industry.
The policy is integrated into the Portfolio Manager’s investment
approach. For example, material ESG risks that are identified will be
reported to the SBSI Investment Committee when a recommendation
paper is presented for decision.
Co-Investments would be made alongside third party impact
investors, including the Portfolio Manager. It is expected that the
Company will invest in Impact Funds and Co-Investments alongside
the Portfolio Manager, benefitting from the broad range of
opportunities sourced by the Portfolio Manager. Direct Investments
are not expected to comprise a material proportion of the Company’s
portfolio.
The portfolio composition at any one time will reflect the
opportunities available to the Portfolio Manager, based on the
performance, social impact and maturity of the Impact Funds,
Co-Investments and Direct Investments. There may be times when it
is appropriate for the Company to have a significant cash or cash
equivalent position instead of being fully or near fully invested,
including for the purpose of seeking to satisfy expected capital calls
on commitments to Impact Funds and to manage the working capital
requirements of the Company.
There is no restriction on the amount of cash or cash equivalent
investments that the Company may hold. Cash and certain cash
equivalents will be held with approved counterparties and in line with
prudent cash management guidelines agreed between the Board,
AIFM and Portfolio Manager.
Changes to the investment policy
No material change will be made to the investment policy without the
approval of Shareholders by ordinary resolution. Non-material
changes to the investment policy may be approved by the Board.
A proposed new investment objective and policy will be put to
shareholders at an EGM to align with SDR principles and guidance.
Please see the Chair’s Statement on pages 8 to 10 for further details.
In the event of a breach of the investment policy set out above and
the investment and gearing restrictions set out therein, the Portfolio
Manager shall inform the AIFM and the Board upon becoming aware
of the same and if the AIFM and/or the Board considers the breach to
be material, notification will be made to a Regulatory Information
Service.
Promotion and shareholder relations
The Company promotes its shares to a broad range of investors who
have the potential to be long-term supporters of the investment
strategy. The Company seeks to achieve this through its Manager and
corporate broker, which promote the shares of the Company through
regular contact with both current and potential shareholders.
Promotion is focused via two channels:
– Discretionary fund managers. The Manager promotes the
Company via both London and regional sales teams.
– Retail end investors. The Company promotes its shares via
engaging with platforms, via the press, and through its
webpages.
These activities consist of investor meetings, one-on-one meetings,
regional road shows and attendance at conferences for professional
investors. In addition, the Company’s shares are supported by the
Manager’s wider marketing of investment companies targeted at all
types of investors; this includes maintaining close relationships with
advisers and execution-only platforms, advertising in the trade press,
maintaining relationships with financial journalists and the provision
of digital information on Schroders’ website. The Board also seeks
active engagement with investors, and meetings with the Chair are
offered to professional investors where appropriate. Shareholders are
also encouraged to sign up to the Manager’s Investment Trusts
update, to receive information on the Company directly.
Details of the Board’s approach to discount management and share
issuance may be found in the Annual General Meeting
Recommendations on page 80.
Shareholder relations are given high priority by both the Board and
the Manager. In addition to the engagement and meetings held
during the year described on page 45, the chairs of the Board and
committees and the other directors, usually attend the AGM and are
available to respond to queries and concerns from shareholders. The
Board is keen to hear from shareholders and can do so by writing to
the Company Secretary (Company Secretary, Schroder BSC Social
Impact Trust plc, 1 London Wall Place, London EC2Y 5AU), or emailing
amcompanysecretary@schroders.com.
30 Schroder BSC Social Impact Trust plc
Business Review
continued
The Company may, from time to time, use borrowings for working
capital and portfolio management purposes, including for the
purpose of satisfying capital calls and the short term funding of
investments. Borrowings will not exceed 20% of the Company’s Net
Assets, calculated at the time of borrowing.
Cash and liquidity management
The Company may hold cash on deposit and may invest in cash
equivalent investments, which may include short-term investments in
money market type funds and tradeable debt securities. In order to
efficiently allocate the Company’s funds whilst it may otherwise hold
significant levels of cash, the Company may also make short and
medium term liquid investments, including in social bond funds,
closed-ended listed funds and other liquid ESG investments, that the
Portfolio Manager considers are consistent with the Company’s
liquidity requirements, investment policy, investment guidelines and
risk profile while also meeting high ESG criteria (“Liquidity Assets”).
The Company may invest up to 30% of Net Assets in Liquidity Assets,
measured at the time of investment. The Company intends to only
utilise the full 30% allocation immediately after a fundraise and at
most times no more than 20% of Net Assets shall be invested in
Liquidity Assets.
The Company will seek to ensure the Liquidity Assets target the
Portfolio Manager’s responsible investment policy, which is
underpinned by nine core responsible business principles, including:
• ‘Do No Harm’ – To minimise negative impacts on target
beneficiaries and communities, the environment, employees, and
all stakeholders.
• ‘Protect the Environment’ – To promote and practice the efficient
use of natural resources and protect the environment wherever
possible.
• ‘Inclusive Practices’ – To promote equality, diversity and inclusion
practices through good corporate governance and decision
making, employment, organisational culture and values, and
operational delivery.
When identifying key ESG risks, the Portfolio Manager aims to be
proportionately compliant with its responsible investment policy,
based on an assessment of the materiality of the ESG risks and best
practice within the target industry.
The policy is integrated into the Portfolio Manager’s investment
approach. For example, material ESG risks that are identified will be
reported to the SBSI Investment Committee when a recommendation
paper is presented for decision.
Co-Investments would be made alongside third party impact
investors, including the Portfolio Manager. It is expected that the
Company will invest in Impact Funds and Co-Investments alongside
the Portfolio Manager, benefitting from the broad range of
opportunities sourced by the Portfolio Manager. Direct Investments
are not expected to comprise a material proportion of the Company’s
portfolio.
The portfolio composition at any one time will reflect the
opportunities available to the Portfolio Manager, based on the
performance, social impact and maturity of the Impact Funds,
Co-Investments and Direct Investments. There may be times when it
is appropriate for the Company to have a significant cash or cash
equivalent position instead of being fully or near fully invested,
including for the purpose of seeking to satisfy expected capital calls
on commitments to Impact Funds and to manage the working capital
requirements of the Company.
There is no restriction on the amount of cash or cash equivalent
investments that the Company may hold. Cash and certain cash
equivalents will be held with approved counterparties and in line with
prudent cash management guidelines agreed between the Board,
AIFM and Portfolio Manager.
Changes to the investment policy
No material change will be made to the investment policy without the
approval of Shareholders by ordinary resolution. Non-material
changes to the investment policy may be approved by the Board.
A proposed new investment objective and policy will be put to
shareholders at an EGM to align with SDR principles and guidance.
Please see the Chair’s Statement on pages 8 to 10 for further details.
In the event of a breach of the investment policy set out above and
the investment and gearing restrictions set out therein, the Portfolio
Manager shall inform the AIFM and the Board upon becoming aware
of the same and if the AIFM and/or the Board considers the breach to
be material, notification will be made to a Regulatory Information
Service.
Promotion and shareholder relations
The Company promotes its shares to a broad range of investors who
have the potential to be long-term supporters of the investment
strategy. The Company seeks to achieve this through its Manager and
corporate broker, which promote the shares of the Company through
regular contact with both current and potential shareholders.
Promotion is focused via two channels:
– Discretionary fund managers. The Manager promotes the
Company via both London and regional sales teams.
– Retail end investors. The Company promotes its shares via
engaging with platforms, via the press, and through its
webpages.
These activities consist of investor meetings, one-on-one meetings,
regional road shows and attendance at conferences for professional
investors. In addition, the Company’s shares are supported by the
Manager’s wider marketing of investment companies targeted at all
types of investors; this includes maintaining close relationships with
advisers and execution-only platforms, advertising in the trade press,
maintaining relationships with financial journalists and the provision
of digital information on Schroders’ website. The Board also seeks
active engagement with investors, and meetings with the Chair are
offered to professional investors where appropriate. Shareholders are
also encouraged to sign up to the Manager’s Investment Trusts
update, to receive information on the Company directly.
Details of the Board’s approach to discount management and share
issuance may be found in the Annual General Meeting
Recommendations on page 80.
Shareholder relations are given high priority by both the Board and
the Manager. In addition to the engagement and meetings held
during the year described on page 45, the chairs of the Board and
committees and the other directors, usually attend the AGM and are
available to respond to queries and concerns from shareholders. The
Board is keen to hear from shareholders and can do so by writing to
the Company Secretary (Company Secretary, Schroder BSC Social
Impact Trust plc, 1 London Wall Place, London EC2Y 5AU), or emailing
amcompanysecretary@schroders.com.
30 Schroder BSC Social Impact Trust plc
Business Review
continued
Schroder BSC Social Impact Trust plc
31
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Key performance indicators
The Board measures the development and success of the Company’s
business through the achievement of the Company’s investment
objective. Comments on performance against the investment
objective can be found under Key Performance Indicators, in the
Chair’s Statement and in the Portfolio Manager’s Report.
Ongoing charges
The Board continues to review the Company’s Ongoing Charges to
ensure that the total costs incurred by shareholders in the running of
the Company remain fair and competitive when measured against
peer group funds and other market factors. An analysis of the
Company’s costs, including management fees, directors’ fees and
general expenses, is submitted to each Board meeting. Management
fees are reviewed at least annually. Costs incurred within the
Company’s investments are not included in the Company’s ongoing
charges.
Corporate and social responsibility
The Board recognises the Company’s responsibilities with respect to
corporate and social responsibility and engages with its outsourced
service providers to safeguard the Company’s interests. As part of this
ongoing monitoring, the Board receives reporting from its service
providers with respect to their anti-bribery and corruption policies,
Modern Slavery Act 2015 statements, diversity policies, and
greenhouse gas and energy usage reporting.
Further disclosures
EDI policy
The Board has adopted an EDI policy which seeks to promote
diversity of gender, social and ethnic backgrounds, cognitive and
personal strengths. The Board recognises that its debates and
decision-making are greatly enriched by a wider range of perspectives
and thinking.
The Board will encourage any recruitment agencies it engages to find
a range of candidates that meet the objective criteria agreed for each
appointment. Appointments will always be based on merit and
objective criteria, and within this context, promote diversity, inclusion,
and equal opportunity. Candidates for Board vacancies are selected
based on their skills and experience, which are matched against the
balance of skills and experience of the overall Board taking into
account the criteria for the role being offered. The Board also
considers the EDI policies of its service providers.
Implementation of EDI policy
The Board has adopted the target set out in the UK Listing Rules in
relation to diversity which requires that:
(i) at least 40% of individuals on the Board are women;
(ii) at least one of the senior Board positions is held by a woman;
and
(iii) at least one individual on the Board is from a minority ethnic
background.
As an investment trust with no executive officers and no senior
independent director. The Board has reflected the senior position of
the Chair in its diversity tables below.
The Board has chosen to align its diversity reporting reference date
with the Company’s financial year end and proposes to maintain this
alignment for future reporting periods.
The Company has met all but the target for one individual to be from
a minority ethnic background at its chosen reference date, 30 June
2024, but this target was met before the date of publication of the
annual report and accounts.
The data as at 30 June 2024 is set out in the tables below.
N umber
N umber of Percentage of senior
Board of the positions on Listing
members Board the B oard Rules Target
Men 2 50% 0
Women 2 50% 1
N umber
N umber of Percentage of senior
Board of the positions on Listing
members Board the B oard Rules Target
White British or other 4 100% 1
White (including
minority-white groups)
Mixed/Multiple Ethnic 0 0% 0
Groups
Asian/Asian British 0 0% 0
Black/African/Caribbean/ 0 0% 0
Black British
Other ethnic group, 0 0% 0
including Arab
Not specified/prefer 0 0% 0
not to say
Given that the Company is an investment trust with no executive
Board members, the columns and references regarding executive
management have not been included in the above table.
Financial crime policy
The Company continues to be committed to carrying out its business
fairly, honestly and openly and operates a financial crime policy
(available on the Company’s website), covering bribery and
corruption, tax evasion, money laundering, terrorist financing and
sanctions, as well as seeking confirmations that the Company’s
service providers’ policies are operating soundly.
Modern Slavery Act 2015
As an investment trust, the Company does not provide goods or
services in the normal course of business and does not have
customers. Accordingly, the directors consider that the Company is
not required to make any slavery or human trafficking statement
under the Modern Slavery Act 2015.
Greenhouse gas emissions and energy usage
The Company qualifies as a low energy user and is exempt from
reporting under the Streamlined Energy & Carbon Reporting
requirements. It has no significant greenhouse gas emissions, energy
consumption or energy efficiency action to report.
Responsible investment
The Company delegates to its Portfolio Manager the responsibility for
taking ESG issues into account when assessing the selection,
retention and realisation of investments. The Board expects the
Portfolio Manager to engage with investee companies on social,
environmental and governance issues and to promote best practice.
Women should make
up at least 40% of
the Board and hold
at least one of the
senior positions
At least one member
of the Board should
be from an ethnic
minority background
excluding white
ethnic groups (as set
out in categories
used by the Office
for National
Statistics)
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Key performance indicators
The Board measures the development and success of the Company’s
business through the achievement of the Company’s investment
objective. Comments on performance against the investment
objective can be found under Key Performance Indicators, in the
Chair’s Statement and in the Portfolio Manager’s Report.
Ongoing charges
The Board continues to review the Company’s Ongoing Charges to
ensure that the total costs incurred by shareholders in the running of
the Company remain fair and competitive when measured against
peer group funds and other market factors. An analysis of the
Company’s costs, including management fees, directors’ fees and
general expenses, is submitted to each Board meeting. Management
fees are reviewed at least annually. Costs incurred within the
Company’s investments are not included in the Company’s ongoing
charges.
Corporate and social responsibility
The Board recognises the Company’s responsibilities with respect to
corporate and social responsibility and engages with its outsourced
service providers to safeguard the Company’s interests. As part of this
ongoing monitoring, the Board receives reporting from its service
providers with respect to their anti-bribery and corruption policies,
Modern Slavery Act 2015 statements, diversity policies, and
greenhouse gas and energy usage reporting.
Further disclosures
EDI policy
The Board has adopted an EDI policy which seeks to promote
diversity of gender, social and ethnic backgrounds, cognitive and
personal strengths. The Board recognises that its debates and
decision-making are greatly enriched by a wider range of perspectives
and thinking.
The Board will encourage any recruitment agencies it engages to find
a range of candidates that meet the objective criteria agreed for each
appointment. Appointments will always be based on merit and
objective criteria, and within this context, promote diversity, inclusion,
and equal opportunity. Candidates for Board vacancies are selected
based on their skills and experience, which are matched against the
balance of skills and experience of the overall Board taking into
account the criteria for the role being offered. The Board also
considers the EDI policies of its service providers.
Implementation of EDI policy
The Board has adopted the target set out in the UK Listing Rules in
relation to diversity which requires that:
(i) at least 40% of individuals on the Board are women;
(ii) at least one of the senior Board positions is held by a woman;
and
(iii) at least one individual on the Board is from a minority ethnic
background.
As an investment trust with no executive officers and no senior
independent director. The Board has reflected the senior position of
the Chair in its diversity tables below.
The Board has chosen to align its diversity reporting reference date
with the Company’s financial year end and proposes to maintain this
alignment for future reporting periods.
The Company has met all but the target for one individual to be from
a minority ethnic background at its chosen reference date, 30 June
2024, but this target was met before the date of publication of the
annual report and accounts.
The data as at 30 June 2024 is set out in the tables below.
N umber
N umber of Percentage of senior
Board of the positions on Listing
members Board the B oard Rules Target
Men 2 50% 0
Women 2 50% 1
N umber
N umber of Percentage of senior
Board of the positions on Listing
members Board the B oard Rules Target
White British or other 4 100% 1
White (including
minority-white groups)
Mixed/Multiple Ethnic 0 0% 0
Groups
Asian/Asian British 0 0% 0
Black/African/Caribbean/ 0 0% 0
Black British
Other ethnic group, 0 0% 0
including Arab
Not specified/prefer 0 0% 0
not to say
Given that the Company is an investment trust with no executive
Board members, the columns and references regarding executive
management have not been included in the above table.
Financial crime policy
The Company continues to be committed to carrying out its business
fairly, honestly and openly and operates a financial crime policy
(available on the Company’s website), covering bribery and
corruption, tax evasion, money laundering, terrorist financing and
sanctions, as well as seeking confirmations that the Company’s
service providers’ policies are operating soundly.
Modern Slavery Act 2015
As an investment trust, the Company does not provide goods or
services in the normal course of business and does not have
customers. Accordingly, the directors consider that the Company is
not required to make any slavery or human trafficking statement
under the Modern Slavery Act 2015.
Greenhouse gas emissions and energy usage
The Company qualifies as a low energy user and is exempt from
reporting under the Streamlined Energy & Carbon Reporting
requirements. It has no significant greenhouse gas emissions, energy
consumption or energy efficiency action to report.
Responsible investment
The Company delegates to its Portfolio Manager the responsibility for
taking ESG issues into account when assessing the selection,
retention and realisation of investments. The Board expects the
Portfolio Manager to engage with investee companies on social,
environmental and governance issues and to promote best practice.
Women should make
up at least 40% of
the Board and hold
at least one of the
senior positions
At least one member
of the Board should
be from an ethnic
minority background
excluding white
ethnic groups (as set
out in categories
used by the Office
for National
Statistics)
32
Schroder BSC Social Impact Trust plc
Stakeholder reporting and promoting the success of the Company, section 172 of the
Companies Act 2006
The directors are required to include in the annual report a statement which describes how they have discharged their duties under section 172
of the Companies Act 2006 in promoting the success of the Company for the benefit of its members as a whole having regard to certain
matters. This includes the likely consequences of the decisions in the longer term and how wider stakeholders’ needs have been taken into
account.
As an externally managed investment trust, the Company has no employees, operations or premises. The Board has identified its key
stakeholders as the Company’s shareholders, the Manager and the Portfolio Manager, other service providers and the investee companies/
social impact managers.
The following disclosure explains how the directors have engaged with stakeholders, how stakeholders’ needs have been taken into account,
the outcome of this engagement and the impact that it has had on the Board’s decisions. Key activities undertaken during the reporting period
are also outlined.
Stakeholder Engagement
Shareholders The Board recognises the importance of engaging with shareholders on a regular basis in order to maintain a high level of
transparency and accountability. The Board receives regular reports from the Manager and broker on shareholder
engagement, and the Manager and Portfolio Manager maintain regular and open dialogue with shareholders. The
Manager also has a dedicated client services team which maintains regular contact with the Company’s shareholders and
reports regularly to the Board.
Shareholders can also contact the Chair and directors throughout the year via the Company Secretary or the Corporate
Broker. The Chair is also available to meet major shareholders to understand their views and to help inform the Board’s
decision making process. During the year under review a number of meetings and correspondence of this nature took
place.
The Company maintains a website from which copies of the annual and half year reports along with factsheets and other
relevant materials are available. Shareholders are also invited to attend the AGM at which they have the opportunity to
speak directly with the directors and Portfolio Manager.
The Board is responsible for formulating the strategy to manage the discount or premium at which the Company’s shares
trade to NAV. The strategy is designed to contain discount volatility, provide liquidity to the market and enhance returns to
shareholders.
Manag er and
Portfolio
Manag er
The Board’s main working relationships are with the Manager and the Portfolio Manager. The Manager is responsible for
providing administrative, company secretarial, accounting and marketing services to the Company. Together with the
Company, the Manager has appointed the Portfolio Manager to perform portfolio management and related services in
respect of the Company’s portfolio.
The Board maintains a constructive and collaborative relationship with the Manager and Portfolio Manager, encouraging
open discussion.
The Board invites the Portfolio Manager to attend all Board and certain committee meetings and receives regular reports
on the performance of the portfolio and the implementation of the investment strategy, policy and objective. The portfolio
activities undertaken by the Portfolio Manager and the impact of decisions affecting investment performance are set out in
the Portfolio Manager’s Review on pages 11 to 21.
The Management Engagement Committee reviews the performance of the Manager and Portfolio Manager, their
remuneration and the discharge of their contractual obligations at least annually.
Other service
providers,
includin g :
– depositary and
custodian
– reg istrar
– corporate
broker
– leg al counsel
– third- party
research
provider
The Board maintains regular contact with its key service providers, both at Board and committee meetings, and through ad
hoc communication during the year. The need to foster business relationships with key service providers is central to the
directors’ decision-making as the Board of an externally managed investment trust.
During the year, the Management Engagement Committee undertook reviews of the third-party service providers and
agreed that their continued appointment remained in the best interests of the Company and its Shareholders. Directors
attended a meeting during the year to assess the internal controls of certain service providers including the Company’s
Depositary HSBC Bank, the registrar, Equiniti and Schroder’s Group Internal Audit. These meetings enable the Board to
conduct due diligence on operations and IT risks amongst service providers; and to receive up to date information on
changes to regulation and market practice in the industry.
Business Review
continued
Stakeholder reporting and promoting the success of the Company, section 172 of the
Companies Act 2006
The directors are required to include in the annual report a statement which describes how they have discharged their duties under section 172
of the Companies Act 2006 in promoting the success of the Company for the benefit of its members as a whole having regard to certain
matters. This includes the likely consequences of the decisions in the longer term and how wider stakeholders’ needs have been taken into
account.
As an externally managed investment trust, the Company has no employees, operations or premises. The Board has identified its key
stakeholders as the Company’s shareholders, the Manager and the Portfolio Manager, other service providers and the investee companies/
social impact managers.
The following disclosure explains how the directors have engaged with stakeholders, how stakeholders’ needs have been taken into account,
the outcome of this engagement and the impact that it has had on the Board’s decisions. Key activities undertaken during the reporting period
are also outlined.
Stakeholder Engagement
Shareholders The Board recognises the importance of engaging with shareholders on a regular basis in order to maintain a high level of
transparency and accountability. The Board receives regular reports from the Manager and broker on shareholder
engagement, and the Manager and Portfolio Manager maintain regular and open dialogue with shareholders. The
Manager also has a dedicated client services team which maintains regular contact with the Company’s shareholders and
reports regularly to the Board.
Shareholders can also contact the Chair and directors throughout the year via the Company Secretary or the Corporate
Broker. The Chair is also available to meet major shareholders to understand their views and to help inform the Board’s
decision making process. During the year under review a number of meetings and correspondence of this nature took
place.
The Company maintains a website from which copies of the annual and half year reports along with factsheets and other
relevant materials are available. Shareholders are also invited to attend the AGM at which they have the opportunity to
speak directly with the directors and Portfolio Manager.
The Board is responsible for formulating the strategy to manage the discount or premium at which the Company’s shares
trade to NAV. The strategy is designed to contain discount volatility, provide liquidity to the market and enhance returns to
shareholders.
Manag er and
Portfolio
Manag er
The Board’s main working relationships are with the Manager and the Portfolio Manager. The Manager is responsible for
providing administrative, company secretarial, accounting and marketing services to the Company. Together with the
Company, the Manager has appointed the Portfolio Manager to perform portfolio management and related services in
respect of the Company’s portfolio.
The Board maintains a constructive and collaborative relationship with the Manager and Portfolio Manager, encouraging
open discussion.
The Board invites the Portfolio Manager to attend all Board and certain committee meetings and receives regular reports
on the performance of the portfolio and the implementation of the investment strategy, policy and objective. The portfolio
activities undertaken by the Portfolio Manager and the impact of decisions affecting investment performance are set out in
the Portfolio Manager’s Review on pages 11 to 21.
The Management Engagement Committee reviews the performance of the Manager and Portfolio Manager, their
remuneration and the discharge of their contractual obligations at least annually.
Other service
providers,
includin g :
– depositary and
custodian
– reg istrar
– corporate
broker
– leg al counsel
– third- party
research
provider
The Board maintains regular contact with its key service providers, both at Board and committee meetings, and through ad
hoc communication during the year. The need to foster business relationships with key service providers is central to the
directors’ decision-making as the Board of an externally managed investment trust.
During the year, the Management Engagement Committee undertook reviews of the third-party service providers and
agreed that their continued appointment remained in the best interests of the Company and its Shareholders. Directors
attended a meeting during the year to assess the internal controls of certain service providers including the Company’s
Depositary HSBC Bank, the registrar, Equiniti and Schroder’s Group Internal Audit. These meetings enable the Board to
conduct due diligence on operations and IT risks amongst service providers; and to receive up to date information on
changes to regulation and market practice in the industry.
Business Review
continued
Stakeholder
Engagement
Please refer to the Impact Highlights on pages 4 and 5 and the Company’s Impact Report 2024 in relation to the impact of the Company’s
operations on the community and Environmental, Social and Governance Risk Management on page 25 in relation to the impact of the
Company's operations on the environment.
Specific examples of stakeholder consideration during the year:
The directors were particularly mindful of stakeholder considerations in reaching the following key decisions during the year ended 30 June
2024, accordingly:
– the Board has declared an interim dividend made up wholly of an interest distribution of 2.94p per ordinary share (2023: 2.30p) to be paid
on 20 December 2024 to shareholders on the register as at 15 November 2024;
– The Company continued to buy back a limited number of shares with the aim of managing the discount at which the shares were trading to
NAV, with a continued focus on sales and marketing efforts;
– the Chair has actively engaged with current and prospective shareholders who may have a desire, or mandate, to allocate or further
allocate to social impact;
– webinars and forums have been held to educate and inform investors; and
– ongoing work to adopt the SDR “Sustainability Impact” label.
Investee
companies/
Social impact
manag ers
The Board recognises the importance of good stewardship and communication with investee companies/social impact
managers to whom assets are allocated in meeting the Company’s investment objective and strategy. The Portfolio
Management team conducts face-to-face and/or virtual meetings with all portfolio companies’ management teams to
understand current trading and prospects for their funds and businesses, and to ensure that their ESG investment
principles and approach are understood.
The Portfolio Manager, where available, has representatives in governance bodies of investee companies (such as Board
seats, voting or observer roles in investment committees, or representation in Advisory Committees). The Portfolio Manager
reports to the Board on stewardship issues and the Board will question the rationale for decisions made. Through
engagement and exercising governance rights, the Portfolio Manager actively works with companies to improve corporate
standards, transparency and accountability.
Schroder BSC Social Impact Trust plc 33
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Please refer to the Impact Highlights on pages 4 and 5 and the Company’s Impact Report 2024 in relation to the impact of the Company’s
operations on the community and Environmental, Social and Governance Risk Management on page 25 in relation to the impact of the
Company's operations on the environment.
Specific examples of stakeholder consideration during the year:
The directors were particularly mindful of stakeholder considerations in reaching the following key decisions during the year ended 30 June
2024, accordingly:
– the Board has declared an interim dividend made up wholly of an interest distribution of 2.94p per ordinary share (2023: 2.30p) to be paid
on 20 December 2024 to shareholders on the register as at 15 November 2024;
– The Company continued to buy back a limited number of shares with the aim of managing the discount at which the shares were trading to
NAV, with a continued focus on sales and marketing efforts;
– the Chair has actively engaged with current and prospective shareholders who may have a desire, or mandate, to allocate or further
allocate to social impact;
– webinars and forums have been held to educate and inform investors; and
– ongoing work to adopt the SDR “Sustainability Impact” label.
Investee
companies/
Social impact
manag ers
The Board recognises the importance of good stewardship and communication with investee companies/social impact
managers to whom assets are allocated in meeting the Company’s investment objective and strategy. The Portfolio
Management team conducts face-to-face and/or virtual meetings with all portfolio companies’ management teams to
understand current trading and prospects for their funds and businesses, and to ensure that their ESG investment
principles and approach are understood.
The Portfolio Manager, where available, has representatives in governance bodies of investee companies (such as Board
seats, voting or observer roles in investment committees, or representation in Advisory Committees). The Portfolio Manager
reports to the Board on stewardship issues and the Board will question the rationale for decisions made. Through
engagement and exercising governance rights, the Portfolio Manager actively works with companies to improve corporate
standards, transparency and accountability.
Schroder BSC Social Impact Trust plc 33
Introduction Strategic Report Governance Financial Other Information (Unaudited)
34
Schroder BSC Social Impact Trust plc
Principal and emerging risks and uncertainties
The Board, through its delegation to the Audit and Risk Committee, is responsible for the Company’s system of risk management and internal
control and for reviewing its effectiveness. The Board has adopted a detailed matrix of principal risks affecting the Company’s business as an
investment trust and has established associated policies and processes designed to manage and, where possible, mitigate those risks, which
are monitored by the Audit and Risk Committee on an ongoing basis. This system assists the Board in determining the nature and extent of the
risks it is willing to take in achieving the Company’s strategic objectives. Both principal and emerging risks and the monitoring system are
subject to robust assessment at least annually.
Risk assessment and internal controls review by the Board
Risk assessment includes consideration of the scope and quality of the systems of internal control operating within key service providers, and
ensures regular communication of the results of monitoring by such providers to the Audit and Risk Committee, including the incidence of
significant control failings or weaknesses that have been identified at any time and the extent to which they have resulted in unforeseen
outcomes or contingencies that may have a material impact on the Company’s performance or condition. The internal control environment of
the Manager, Portfolio Manager, depositary and the registrar are tested annually by independent external auditors. The reports are reviewed by
the Audit and Risk Committee.
During the year, the Board discussed and monitored a number of risks which could potentially impact the Company’s ability to meet its strategic
objectives. The Board received updates from the Manager, Portfolio Manager, Company Secretary and other service providers on emerging
risks that could affect the Company, where appropriate.
Although the Board believes that it has a robust framework of internal control in place this can provide only reasonable, and not absolute,
assurance against material financial misstatement or loss and is designed to manage, not eliminate, risk. Actions taken by the Board and, where
appropriate, its Committees, to manage and mitigate the Company’s principal and emerging risks and uncertainties are set out in the table
below. Both the principal and emerging risks and uncertainties and the monitoring system are subject to robust assessment at least annually.
The most recent assessment took place in October 2024. The Committee concluded that the Company’s risk management and internal control
systems remain effective with no significant control failings or weaknesses identified.
The “Change” column on the right highlights the Audit and Risk Committee's assessment of any increases or decreases in risk during the year
after mitigation and management. The arrows show the risks as increased or decreased, and sideway arrows show risks as stable.
Risk Mitigation and management Change
The appropriateness of the Company’s investment remit
is regularly reviewed and the success of the Company in
meeting its stated objectives is monitored.
Market feedback and share price information is
monitored with regular communication with the
Company’s broker.
The Board actively supports continued marketing and
promotional activities. Such activities are the result of
a collaboration of the Board and the Company’s Manager
as well as the Portfolio Manager. A target list of potential
shareholders is monitored and updated.
The Board monitors the Company’s share price relative to
its NAV and will buy back shares when the Company
trades at a discount. Commensurately, the Board will
issue shares when it trades as a premium to NAV.
Strategic risk
Investment objective is out of line with the requirements
of investors or demand for the shares is not as great as
the supply leading to a persistently large discount.
The Portfolio Manager has extensive experience and
a track record in accurately timing the exits of private
equity investments. The Board will regularly monitor the
position to ensure that any alternative proposals to be
made to shareholders, which will add value to investors,
are put forward at an appropriate time.
The Board is in regular contact with BSC and Schroders
and would make a judgement ahead of the vote on the
best course to be navigated.
If the Continuation Resolution is not passed, the directors
will put forward proposals for the reconstruction or
reorganisation of the Company, bearing in mind the
liquidity of the Company’s investments, as soon as
reasonably practicable following the date on which the
Continuation Resolution is not passed.
Continuity risk
If in the two-year period ending on 31 December 2023,
and in any two-year period following such date, the
Company’s ordinary shares have traded, on average, at
a discount in excess of 10% to Net Asset Value per Share,
the directors will propose an ordinary resolution at the
Company’s next annual general meeting that the
Company continues its business as presently constituted
(the “Continuation Resolution”).
The current period under assessment is the two-year
period to 31 December 2025. In the event that a vote was
triggered shareholders would be provided with the
opportunity to vote on whether the Company should
continue in its present form at the AGM in 2026.
Business Review
continued
Principal and emerging risks and uncertainties
The Board, through its delegation to the Audit and Risk Committee, is responsible for the Company’s system of risk management and internal
control and for reviewing its effectiveness. The Board has adopted a detailed matrix of principal risks affecting the Company’s business as an
investment trust and has established associated policies and processes designed to manage and, where possible, mitigate those risks, which
are monitored by the Audit and Risk Committee on an ongoing basis. This system assists the Board in determining the nature and extent of the
risks it is willing to take in achieving the Company’s strategic objectives. Both principal and emerging risks and the monitoring system are
subject to robust assessment at least annually.
Risk assessment and internal controls review by the Board
Risk assessment includes consideration of the scope and quality of the systems of internal control operating within key service providers, and
ensures regular communication of the results of monitoring by such providers to the Audit and Risk Committee, including the incidence of
significant control failings or weaknesses that have been identified at any time and the extent to which they have resulted in unforeseen
outcomes or contingencies that may have a material impact on the Company’s performance or condition. The internal control environment of
the Manager, Portfolio Manager, depositary and the registrar are tested annually by independent external auditors. The reports are reviewed by
the Audit and Risk Committee.
During the year, the Board discussed and monitored a number of risks which could potentially impact the Company’s ability to meet its strategic
objectives. The Board received updates from the Manager, Portfolio Manager, Company Secretary and other service providers on emerging
risks that could affect the Company, where appropriate.
Although the Board believes that it has a robust framework of internal control in place this can provide only reasonable, and not absolute,
assurance against material financial misstatement or loss and is designed to manage, not eliminate, risk. Actions taken by the Board and, where
appropriate, its Committees, to manage and mitigate the Company’s principal and emerging risks and uncertainties are set out in the table
below. Both the principal and emerging risks and uncertainties and the monitoring system are subject to robust assessment at least annually.
The most recent assessment took place in October 2024. The Committee concluded that the Company’s risk management and internal control
systems remain effective with no significant control failings or weaknesses identified.
The “Change” column on the right highlights the Audit and Risk Committee's assessment of any increases or decreases in risk during the year
after mitigation and management. The arrows show the risks as increased or decreased, and sideway arrows show risks as stable.
Risk Mitigation and management Change
The appropriateness of the Company’s investment remit
is regularly reviewed and the success of the Company in
meeting its stated objectives is monitored.
Market feedback and share price information is
monitored with regular communication with the
Company’s broker.
The Board actively supports continued marketing and
promotional activities. Such activities are the result of
a collaboration of the Board and the Company’s Manager
as well as the Portfolio Manager. A target list of potential
shareholders is monitored and updated.
The Board monitors the Company’s share price relative to
its NAV and will buy back shares when the Company
trades at a discount. Commensurately, the Board will
issue shares when it trades as a premium to NAV.
Strategic risk
Investment objective is out of line with the requirements
of investors or demand for the shares is not as great as
the supply leading to a persistently large discount.
The Portfolio Manager has extensive experience and
a track record in accurately timing the exits of private
equity investments. The Board will regularly monitor the
position to ensure that any alternative proposals to be
made to shareholders, which will add value to investors,
are put forward at an appropriate time.
The Board is in regular contact with BSC and Schroders
and would make a judgement ahead of the vote on the
best course to be navigated.
If the Continuation Resolution is not passed, the directors
will put forward proposals for the reconstruction or
reorganisation of the Company, bearing in mind the
liquidity of the Company’s investments, as soon as
reasonably practicable following the date on which the
Continuation Resolution is not passed.
Continuity risk
If in the two-year period ending on 31 December 2023,
and in any two-year period following such date, the
Company’s ordinary shares have traded, on average, at
a discount in excess of 10% to Net Asset Value per Share,
the directors will propose an ordinary resolution at the
Company’s next annual general meeting that the
Company continues its business as presently constituted
(the “Continuation Resolution”).
The current period under assessment is the two-year
period to 31 December 2025. In the event that a vote was
triggered shareholders would be provided with the
opportunity to vote on whether the Company should
continue in its present form at the AGM in 2026.
Business Review
continued
Risk
Mitigation and management
Change
The Board monitors investment performance, investment
risk and portfolio activity at each quarterly meeting.
The AIFM and Portfolio Manager are subject to an annual
review of their suitability as conducted by the
Management Engagement Committee, alongside an
annual presentation by the AIFM’s Risk and internal audit
functions.
The Portfolio Manager has extensive experience in
selecting private Social Impact Investments and has
a robust investment process.
The Portfolio Manager makes investments according to
a tested and robust process and based on the goal of
achieving the target return. A pipeline of opportunities
is vetted and reviewed, and significant care is taken in
selecting high-quality investments. The Portfolio Manager
receives regular management information and engages
regularly with investees to monitor and ensure
performance to plan.
If performance is unsatisfactory over a prolonged period
the Board will seek to replace the AIFM and/or the
Portfolio Manager.
Whilst the stated investment return objective has yet to
be met, it remains the ambition of the Board, the
Manager, and the Portfolio Manager to achieve this.
Investment management risks
Poor investment performance against objective.
Poor social impact performance against objective. The Board reviews impact and publishes an annual
impact report.
The AIFM and Portfolio Manager are subject to an annual
review of their suitability as conducted by the
Management Engagement Committee.
The Portfolio Manager has extensive experience in
selecting private social impact investments and has
a robust investment process which ensures that the
anticipated positive impact of investee companies is
realistic and achievable.
The Portfolio Manager undertakes robust investment
analysis on the context of proposals, impact outcomes,
financial drivers, and associated risks. The Portfolio
Manager receives regular management information and
engages regularly with investees to monitor and ensure
performance to plan.
If performance is unsatisfactory over a prolonged period
the Board will seek to replace the AIFM and/or the
Portfolio Manager.
The Portfolio Manager is experienced in managing social
impact investments and seeks to accurately time the
realisation of Company’s investments.
Concentration limits imposed on single investments to
minimise the size of positions.
The Portfolio Manager can sell Liquidity Assets to meet
investment commitments and capital calls. The Portfolio
Manager will monitor and manage cash flows and
expected capital calls.
The Portfolio Manager will seek to manage cash-flow such
that the Company will be able to participate in follow-on
fund-raises where appropriate.
Liquidity risk
Liquidity risks which include those risks resulting from
holding private equity investments as well as not being
able to participate in follow-on fund-raises through lack of
available capital which could result in dilution of an
investment as well as risks relating to investment
commitments and capital calls.
Schroder BSC Social Impact Trust plc 35
Introduction Strategic Report Governance Financial Other Information (Unaudited)
The Board monitors investment performance, investment
risk and portfolio activity at each quarterly meeting.
The AIFM and Portfolio Manager are subject to an annual
review of their suitability as conducted by the
Management Engagement Committee, alongside an
annual presentation by the AIFM’s Risk and internal audit
functions.
The Portfolio Manager has extensive experience in
selecting private Social Impact Investments and has
a robust investment process.
The Portfolio Manager makes investments according to
a tested and robust process and based on the goal of
achieving the target return. A pipeline of opportunities
is vetted and reviewed, and significant care is taken in
selecting high-quality investments. The Portfolio Manager
receives regular management information and engages
regularly with investees to monitor and ensure
performance to plan.
If performance is unsatisfactory over a prolonged period
the Board will seek to replace the AIFM and/or the
Portfolio Manager.
Whilst the stated investment return objective has yet to
be met, it remains the ambition of the Board, the
Manager, and the Portfolio Manager to achieve this.
Investment management risks
Poor investment performance against objective.
Poor social impact performance against objective. The Board reviews impact and publishes an annual
impact report.
The AIFM and Portfolio Manager are subject to an annual
review of their suitability as conducted by the
Management Engagement Committee.
The Portfolio Manager has extensive experience in
selecting private social impact investments and has
a robust investment process which ensures that the
anticipated positive impact of investee companies is
realistic and achievable.
The Portfolio Manager undertakes robust investment
analysis on the context of proposals, impact outcomes,
financial drivers, and associated risks. The Portfolio
Manager receives regular management information and
engages regularly with investees to monitor and ensure
performance to plan.
If performance is unsatisfactory over a prolonged period
the Board will seek to replace the AIFM and/or the
Portfolio Manager.
The Portfolio Manager is experienced in managing social
impact investments and seeks to accurately time the
realisation of Company’s investments.
Concentration limits imposed on single investments to
minimise the size of positions.
The Portfolio Manager can sell Liquidity Assets to meet
investment commitments and capital calls. The Portfolio
Manager will monitor and manage cash flows and
expected capital calls.
The Portfolio Manager will seek to manage cash-flow such
that the Company will be able to participate in follow-on
fund-raises where appropriate.
Liquidity risk
Liquidity risks which include those risks resulting from
holding private equity investments as well as not being
able to participate in follow-on fund-raises through lack of
available capital which could result in dilution of an
investment as well as risks relating to investment
commitments and capital calls.
Schroder BSC Social Impact Trust plc 35
Introduction Strategic Report Governance Financial Other Information (Unaudited)
36
Schroder BSC Social Impact Trust plc
Risk Mitigation and management Change
Economic, policy, and market risk
Changes in general economic and market conditions,
such as interest rates, inflation rates, industry conditions,
tax laws, political events and trends can substantially and
adversely affect the value of investments.
Market risk includes the potential impact of events which
are outside the Company’s control, such as pandemics,
civil unrest and wars.
Policy risk includes the potential negative impact of
changes in UK government policies that affect the
business models, revenue streams or have other material
implications for investees.
The risk profile of the portfolio is considered and
appropriate strategies to mitigate any negative impact of
substantial changes in markets and government policies
are discussed with the Portfolio Manager.
Policy risk is mitigated by working with organisations that
have been successfully operating for several decades,
navigating different policy environments, and making
investments that benefit from some element of asset
backing and engagement with all major political parties
on social impact investments through the Portfolio
Manager.
Risk assessment and internal controls review by the Board
Risk assessment includes consideration of the scope and q uality of the systems of internal control operating within key service
providers, and ensures regular communication of the results of monitoring by such providers to the Audit and Risk Committee. This
includes the incidence of significant control failings or weaknesses that have been identified at any time and the ex tent to which they
have resulted in unforeseen outcomes or contingencies that may have a material impact on the Company’s performance or condition.
No significant control failings or weaknesses were identified from the Audit and Risk Committee’s ongoing risk assessment which has
been in place throughout the financial year and up to the date of this report. The B oard is satisfied that it has undertaken a detailed
review of the risks facing the Company.
A full analysis of the financial risks facing the Company is set out in note 20 to the accounts on pages 7 5 to 77 .
The Board receives controls reports from its key service
providers which describe the protective measures they
take as well as their business recovery plans. In addition,
the Board receives an annual presentation from the
Manager on cyber risk.
Cybersecurity risks
Each of the Company’s service providers is at risk of cyber
attack, data theft or disruption to their infrastructure
which could have an effect on the services they provide to
the Company.
While the risk of financial loss by the Company is probably
small, the risk of reputational damage and the risk of loss
of control of sensitive information is more significant, for
instance a GDPR breach. Many of the Company’s service
providers and the Board often have sensitive information
regarding transactions or pricing and information
regarded as inside information in regulatory terms. Data
theft or data corruption per se is regarded as a lower
order risk as relevant data is held in multiple locations.
Contracts with investee companies and funds are drafted
to include obligations to provide information to the
Portfolio Manager in a timely manner, where possible.
The Portfolio Manager and AIFM have extensive track
records of valuing privately held investments.
A valuation policy has been agreed by the AIFM and
Portfolio Manager and includes a robust process for the
valuation of assets, including consideration of the
valuations provided by investee companies and the
methodologies they have used. Any changes to this policy
must be approved by the Audit and Risk Committee.
The Audit and Risk Committee reviews all valuations of
unlisted investments and challenges the methodologies
used by the Portfolio Manager and AIFM. The Audit and
Risk Committee may also appoint an independent party
to complete a valuation of the Company’s assets.
Valuation of investments is a focus for BDO, the external
auditor.
Valuation risk
Private equity investments are more difficult to value than
publicly traded securities.
A lack of open market data and reliance on investee
company projections may also make it more difficult to
estimate fair value on a timely basis.
Business Review
continued
Risk Mitigation and management Change
Economic, policy, and market risk
Changes in general economic and market conditions,
such as interest rates, inflation rates, industry conditions,
tax laws, political events and trends can substantially and
adversely affect the value of investments.
Market risk includes the potential impact of events which
are outside the Company’s control, such as pandemics,
civil unrest and wars.
Policy risk includes the potential negative impact of
changes in UK government policies that affect the
business models, revenue streams or have other material
implications for investees.
The risk profile of the portfolio is considered and
appropriate strategies to mitigate any negative impact of
substantial changes in markets and government policies
are discussed with the Portfolio Manager.
Policy risk is mitigated by working with organisations that
have been successfully operating for several decades,
navigating different policy environments, and making
investments that benefit from some element of asset
backing and engagement with all major political parties
on social impact investments through the Portfolio
Manager.
Risk assessment and internal controls review by the Board
Risk assessment includes consideration of the scope and q uality of the systems of internal control operating within key service
providers, and ensures regular communication of the results of monitoring by such providers to the Audit and Risk Committee. This
includes the incidence of significant control failings or weaknesses that have been identified at any time and the ex tent to which they
have resulted in unforeseen outcomes or contingencies that may have a material impact on the Company’s performance or condition.
No significant control failings or weaknesses were identified from the Audit and Risk Committee’s ongoing risk assessment which has
been in place throughout the financial year and up to the date of this report. The B oard is satisfied that it has undertaken a detailed
review of the risks facing the Company.
A full analysis of the financial risks facing the Company is set out in note 20 to the accounts on pages 7 5 to 77 .
The Board receives controls reports from its key service
providers which describe the protective measures they
take as well as their business recovery plans. In addition,
the Board receives an annual presentation from the
Manager on cyber risk.
Cybersecurity risks
Each of the Company’s service providers is at risk of cyber
attack, data theft or disruption to their infrastructure
which could have an effect on the services they provide to
the Company.
While the risk of financial loss by the Company is probably
small, the risk of reputational damage and the risk of loss
of control of sensitive information is more significant, for
instance a GDPR breach. Many of the Company’s service
providers and the Board often have sensitive information
regarding transactions or pricing and information
regarded as inside information in regulatory terms. Data
theft or data corruption per se is regarded as a lower
order risk as relevant data is held in multiple locations.
Contracts with investee companies and funds are drafted
to include obligations to provide information to the
Portfolio Manager in a timely manner, where possible.
The Portfolio Manager and AIFM have extensive track
records of valuing privately held investments.
A valuation policy has been agreed by the AIFM and
Portfolio Manager and includes a robust process for the
valuation of assets, including consideration of the
valuations provided by investee companies and the
methodologies they have used. Any changes to this policy
must be approved by the Audit and Risk Committee.
The Audit and Risk Committee reviews all valuations of
unlisted investments and challenges the methodologies
used by the Portfolio Manager and AIFM. The Audit and
Risk Committee may also appoint an independent party
to complete a valuation of the Company’s assets.
Valuation of investments is a focus for BDO, the external
auditor.
Valuation risk
Private equity investments are more difficult to value than
publicly traded securities.
A lack of open market data and reliance on investee
company projections may also make it more difficult to
estimate fair value on a timely basis.
Business Review
continued
Viability statement
The directors have assessed the viability of the Company over
a five year period, taking into account the Company’s position at
30 June 2024 and the potential impact of the principal risks and
uncertainties it faces for the review period. The directors have
assessed the Company’s operational resilience and they are satisfied
that the Company’s outsourced service providers will continue to
operate effectively.
A period of five years has been chosen as the Board believes that this
reflects a suitable time horizon for strategic planning, taking into
account the investment policy, the continuation vote, liquidity of
investments, payment of commitments, potential impact of economic
cycles, nature of operating costs, dividends and availability of funding.
This time period also reflects the average holding period of an
investment.
In its assessment of the viability of the Company, the directors have
considered each of the Company’s principal risks and uncertainties
detailed on pages 34 to 36. The directors have also considered the
Company’s income and expenditure projections, liquid investments,
cash balances as well as commitments to provide further funding to
the Company’s private equity investee companies and that the
Company currently has no borrowings. A substantial proportion of
the Company’s expenditure varies with the value of the investment
portfolio. In the event that there is insufficient cash to meet the
Company’s liabilities, the liquid investments in the portfolio may be
realised.
The Company has additionally performed stress tests which confirm
that a 50% fall in the market prices of the portfolio would not affect
the Board’s conclusions in respect of going concern.
The Board monitors the portfolio risk profile, limits imposed on
gearing, counterparty exposure, liquidity risk and financial controls at
its quarterly meetings. Although there continue to be regulatory
changes which could increase costs or impact revenue, the directors
do not believe that this would be sufficient to affect its viability.
The Board has assumed that the business model of a closed ended
investment company, as well as the Company’s investment objective,
will continue to be attractive to investors. The directors also
considered the beneficial tax treatment the Company is eligible for as
an investment trust. If changes to these taxation arrangements were
to be made it would affect the viability of the Company to act as an
effective investment vehicle.
The Board sought information from the broker and engaged in
discussions with Better Society Capital and Schroders, who in
aggregate hold 51% of the Company’s total voting rights as at
30 September 2024. Therefore, the Board anticipates that
shareholders will be supportive should a Continuation Resolution be
put forward at the AGM in 2026.
Therefore, directors have concluded that there is a reasonable
expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due over the five year period of their
assessment.
Going concern
The directors have assessed the principal risks, the impact of the
emerging risks and uncertainties and the matters referred to in the
viability statement. Based on the work the directors have performed,
they have not identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast significant
doubt on the Company’s ability to continue as a going concern for the
period assessed by the directors, being the period to 31 October
2025 which is at least twelve months from the date the financial
statements were authorised for issue.
In forming this opinion, the directors have taken into consideration:
the controls and monitoring processes in place; the Company’s level
of debt, undrawn commitments and other payables; the low level of
operating expenses, comprising largely variable costs which would
reduce pro rata in the event of a market downturn; the Company’s
cash flow forecasts and the liquidity of the Company's investments.
In forming this opinion, the directors have also considered any
potential impact of climate change, and the risk/impact of elevated
and sustained inflation and interest rates on the viability of the
Company. The Company has additionally performed stress tests
which confirm that a 50% fall in the market prices of the portfolio
would not affect the Board’s conclusions in respect of viability.
By order of the Board
Schroder Investment Management Limited
Company Secretary
23 October 2024
Schroder BSC Social Impact Trust plc 37
Introduction Strategic Report Governance Financial Other Information (Unaudited)
The directors have assessed the viability of the Company over
a five year period, taking into account the Company’s position at
30 June 2024 and the potential impact of the principal risks and
uncertainties it faces for the review period. The directors have
assessed the Company’s operational resilience and they are satisfied
that the Company’s outsourced service providers will continue to
operate effectively.
A period of five years has been chosen as the Board believes that this
reflects a suitable time horizon for strategic planning, taking into
account the investment policy, the continuation vote, liquidity of
investments, payment of commitments, potential impact of economic
cycles, nature of operating costs, dividends and availability of funding.
This time period also reflects the average holding period of an
investment.
In its assessment of the viability of the Company, the directors have
considered each of the Company’s principal risks and uncertainties
detailed on pages 34 to 36. The directors have also considered the
Company’s income and expenditure projections, liquid investments,
cash balances as well as commitments to provide further funding to
the Company’s private equity investee companies and that the
Company currently has no borrowings. A substantial proportion of
the Company’s expenditure varies with the value of the investment
portfolio. In the event that there is insufficient cash to meet the
Company’s liabilities, the liquid investments in the portfolio may be
realised.
The Company has additionally performed stress tests which confirm
that a 50% fall in the market prices of the portfolio would not affect
the Board’s conclusions in respect of going concern.
The Board monitors the portfolio risk profile, limits imposed on
gearing, counterparty exposure, liquidity risk and financial controls at
its quarterly meetings. Although there continue to be regulatory
changes which could increase costs or impact revenue, the directors
do not believe that this would be sufficient to affect its viability.
The Board has assumed that the business model of a closed ended
investment company, as well as the Company’s investment objective,
will continue to be attractive to investors. The directors also
considered the beneficial tax treatment the Company is eligible for as
an investment trust. If changes to these taxation arrangements were
to be made it would affect the viability of the Company to act as an
effective investment vehicle.
The Board sought information from the broker and engaged in
discussions with Better Society Capital and Schroders, who in
aggregate hold 51% of the Company’s total voting rights as at
30 September 2024. Therefore, the Board anticipates that
shareholders will be supportive should a Continuation Resolution be
put forward at the AGM in 2026.
Therefore, directors have concluded that there is a reasonable
expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due over the five year period of their
assessment.
Going concern
The directors have assessed the principal risks, the impact of the
emerging risks and uncertainties and the matters referred to in the
viability statement. Based on the work the directors have performed,
they have not identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast significant
doubt on the Company’s ability to continue as a going concern for the
period assessed by the directors, being the period to 31 October
2025 which is at least twelve months from the date the financial
statements were authorised for issue.
In forming this opinion, the directors have taken into consideration:
the controls and monitoring processes in place; the Company’s level
of debt, undrawn commitments and other payables; the low level of
operating expenses, comprising largely variable costs which would
reduce pro rata in the event of a market downturn; the Company’s
cash flow forecasts and the liquidity of the Company's investments.
In forming this opinion, the directors have also considered any
potential impact of climate change, and the risk/impact of elevated
and sustained inflation and interest rates on the viability of the
Company. The Company has additionally performed stress tests
which confirm that a 50% fall in the market prices of the portfolio
would not affect the Board’s conclusions in respect of viability.
By order of the Board
Schroder Investment Management Limited
Company Secretary
23 October 2024
Schroder BSC Social Impact Trust plc 37
Introduction Strategic Report Governance Financial Other Information (Unaudited)
38
Governance
Schroder Asian Total Return Investment Company plc 39
Governance
Board of Directors 40
Directors’ Report 42
Audit and Risk Committee Report 46
Management Engagement Committee Report 49
Nomination Committee Report 50
Directors’ Remuneration Report 52
Statement of Directors’ Responsibilities 55
Schroder Asian Total Return Investment Company plc 39
Governance
Board of Directors 40
Directors’ Report 42
Audit and Risk Committee Report 46
Management Engagement Committee Report 49
Nomination Committee Report 50
Directors’ Remuneration Report 52
Statement of Directors’ Responsibilities 55
James B. Broderick
Status: Independent non-executive
director and Chair of Management
Engagement Committee
Length of service: appointed a director in
November 2020.
Experience: James B. Broderick is deputy
chair of the Impact Investing Institute, with
primary responsibility for leading the
engagement with UK pension funds. He also
worked in 2016-2019 with the Institute’s
predecessor bodies, the Implementation
Taskforce on Growing a Culture of Social
Impact Investing, and the Advisory Group,
both sponsored by the Cabinet Office. He is
currently a trustee of Philanthropy Impact,
which works with advisors, philanthropists
and charities to promote philanthropy and
social impact investing.
James was head of UBS Wealth Management
in the UK & Jersey for five years before
retiring in 2018, in which position he also
served as chair of UBS Optimus Foundation
(UK). Before that, he worked for 19 years at
JPMorgan Asset Management, latterly as
head of its EMEA business. In that position,
he was CEO and/or director of the firm’s
principal asset management and insurance
subsidiaries in the UK, and a director of the
principal affiliated mutual fund investment
and management companies in continental
Europe.
Committee membership: Audit and Risk,
Management Engagement (Chair) and
Nomination.
Current remuneration: £30,000 per
annum.
Number of shares held: 500,000*
40 Schroder BSC Social Impact Trust plc
Board of Directors
*Shareholdings are as at 30 June 2024, full details of directors’ shareholdings are set out in the Directors’ Remuneration Report on page 54.
Susannah Nicklin
Status: Independent non-executive
Chair
Length of service: appointed a director and
Chair in November 2020.
Experience: Susannah Nicklin, CFA, is an
investment and financial services
professional with 25 years of experience in
executive roles at Goldman Sachs and
Alliance Bernstein in the US, Australia and
the UK. She has also previously been
involved in the social impact private equity
sector with Bridges Ventures, the Global
Impact Investing Network and Impact
Ventures UK. She was previously
a non-executive director of Baronsmead
Venture Trust plc, Pantheon International plc
and Amati AIM VCT plc. She is currently
non-executive director of The North
American Income Trust plc, Ecofin Global
Utilities and Infrastructure Trust plc, and
chair of Frog Capital LLC. Susannah is also
serving on the AIC ESG Forum.
Committee membership: Audit and Risk,
Management Engagement and Nomination.
Current remuneration: £40,000 per
annum
Number of shares held: 25,412*
Mike Balfour
Status: Independent non-executive
director and Chair of Audit and Risk
Committee
Length of service: appointed a director in
November 2020.
Experience: Mike Balfour is chair of
Fidelity China Special Situations plc and
a non-executive director and chair of the
audit committee of abrdn Property Income
Trust plc. He also chairs TPT Investment
Management. He has over 35 years’
experience in financial services. He was chief
executive of Thomas Miller Investment Ltd
until 2016 and prior senior appointments
included chief executive at Glasgow
Investment Managers and chief investment
officer at Edinburgh Fund Managers Limited.
He is a member of the Institute of Chartered
Accountants of Scotland.
Committee membership: Audit and Risk
(Chair), Management Engagement and
Nomination.
Current remuneration: £35,000 per
annum
Number of shares held: 30,000*
Status: Independent non-executive
director and Chair of Management
Engagement Committee
Length of service: appointed a director in
November 2020.
Experience: James B. Broderick is deputy
chair of the Impact Investing Institute, with
primary responsibility for leading the
engagement with UK pension funds. He also
worked in 2016-2019 with the Institute’s
predecessor bodies, the Implementation
Taskforce on Growing a Culture of Social
Impact Investing, and the Advisory Group,
both sponsored by the Cabinet Office. He is
currently a trustee of Philanthropy Impact,
which works with advisors, philanthropists
and charities to promote philanthropy and
social impact investing.
James was head of UBS Wealth Management
in the UK & Jersey for five years before
retiring in 2018, in which position he also
served as chair of UBS Optimus Foundation
(UK). Before that, he worked for 19 years at
JPMorgan Asset Management, latterly as
head of its EMEA business. In that position,
he was CEO and/or director of the firm’s
principal asset management and insurance
subsidiaries in the UK, and a director of the
principal affiliated mutual fund investment
and management companies in continental
Europe.
Committee membership: Audit and Risk,
Management Engagement (Chair) and
Nomination.
Current remuneration: £30,000 per
annum.
Number of shares held: 500,000*
40 Schroder BSC Social Impact Trust plc
Board of Directors
*Shareholdings are as at 30 June 2024, full details of directors’ shareholdings are set out in the Directors’ Remuneration Report on page 54.
Susannah Nicklin
Status: Independent non-executive
Chair
Length of service: appointed a director and
Chair in November 2020.
Experience: Susannah Nicklin, CFA, is an
investment and financial services
professional with 25 years of experience in
executive roles at Goldman Sachs and
Alliance Bernstein in the US, Australia and
the UK. She has also previously been
involved in the social impact private equity
sector with Bridges Ventures, the Global
Impact Investing Network and Impact
Ventures UK. She was previously
a non-executive director of Baronsmead
Venture Trust plc, Pantheon International plc
and Amati AIM VCT plc. She is currently
non-executive director of The North
American Income Trust plc, Ecofin Global
Utilities and Infrastructure Trust plc, and
chair of Frog Capital LLC. Susannah is also
serving on the AIC ESG Forum.
Committee membership: Audit and Risk,
Management Engagement and Nomination.
Current remuneration: £40,000 per
annum
Number of shares held: 25,412*
Mike Balfour
Status: Independent non-executive
director and Chair of Audit and Risk
Committee
Length of service: appointed a director in
November 2020.
Experience: Mike Balfour is chair of
Fidelity China Special Situations plc and
a non-executive director and chair of the
audit committee of abrdn Property Income
Trust plc. He also chairs TPT Investment
Management. He has over 35 years’
experience in financial services. He was chief
executive of Thomas Miller Investment Ltd
until 2016 and prior senior appointments
included chief executive at Glasgow
Investment Managers and chief investment
officer at Edinburgh Fund Managers Limited.
He is a member of the Institute of Chartered
Accountants of Scotland.
Committee membership: Audit and Risk
(Chair), Management Engagement and
Nomination.
Current remuneration: £35,000 per
annum
Number of shares held: 30,000*
Schroder BSC Social Impact Trust plc
41
Other Information (Unaudited) Introduction Strategic Report Governance Financial
*Shareholdings are as at 30 June 2024, full details of directors’ shareholdings are set out in the Directors’ Remuneration Report on page 54.
Alice Chapple
Status: Independent non-executive
director and Chair of Nomination
Committee
Length of service: appointed a director in
November 2020.
Experience: Alice Chapple is an economist
and a specialist in impact investment and
impact assessment. She established Impact
Value, a consultancy advising on impact
investment, in October 2012. Before
establishing Impact Value, Alice worked as
director of sustainable financial markets at
Forum for the Future.
Prior to Forum for the Future, she worked at
UK development finance institution CDC
(now BII) as financial analyst, fund manager
and social and environmental advisor. In the
late 1990s, she established a programme for
evaluation of development impact and in the
2000s she designed processes for fund
managers to assess the ESG aspects of their
investments.
Alice’s current roles include chair of the
Tracker Group (which seeks to align capital
markets with a sustainable future through
Carbon Tracker and Planet Tracker), chair of
the Walcot Foundation, trustee of the Shell
Foundation, director of i(x) Net Zero and
member of the Advisory Boards of Acre
Impact Fund, WHEB Asset Management,
Frontier Finance Solutions. Alice has also
developed the University of Cambridge
Institute of Sustainability Leadership’s course
on sustainable finance.
Committee membership: Audit and Risk,
Management Engagement and Nomination
(Chair).
Current remuneration: £30,000 per
annum.
Number of shares held: 10,000*
Ranjan Ramparia
Status: Independent non-executive
director
Length of service: appointed a director in
October 2024.
Experience: Ms Ramparia is a qualified
Chartered Accountant and experienced
business professional. Her background is in
corporate finance and investment
management. She started her career in 1992
with PricewaterhouseCoopers working in the
financial services audit, valuations and
corporate finance divisions. Her early career
was as a fund manager with Knox D’Arcy
Investment Management, and she has over
14 years’ experience of investing in UK
equities, including investment trusts and
private equity. She has significant experience
of regulatory and compliance matters having
worked in the asset management sector and
served on the boards of regulated
companies.
Ms Ramparia is an independent adviser and
finance professional. She is a non-executive
director of Northern 2 VCT PLC where she
serves as the chair of the audit committee
and is a member of the nomination and
management engagement committees. She
is also a non-executive director of JPMorgan
Global Emerging Markets Income Trust PLC
where she is a member and chair designate
of the audit and risk committee. She also
serves as a member of the nomination and
remuneration committee and management
engagement committee.
Committee membership: Audit and Risk,
Management Engagement and Nomination.
Current remuneration: £30,000 per
annum.
Number of shares held: Nil
Other Information (Unaudited) Introduction Strategic Report Governance Financial
*Shareholdings are as at 30 June 2024, full details of directors’ shareholdings are set out in the Directors’ Remuneration Report on page 54.
Alice Chapple
Status: Independent non-executive
director and Chair of Nomination
Committee
Length of service: appointed a director in
November 2020.
Experience: Alice Chapple is an economist
and a specialist in impact investment and
impact assessment. She established Impact
Value, a consultancy advising on impact
investment, in October 2012. Before
establishing Impact Value, Alice worked as
director of sustainable financial markets at
Forum for the Future.
Prior to Forum for the Future, she worked at
UK development finance institution CDC
(now BII) as financial analyst, fund manager
and social and environmental advisor. In the
late 1990s, she established a programme for
evaluation of development impact and in the
2000s she designed processes for fund
managers to assess the ESG aspects of their
investments.
Alice’s current roles include chair of the
Tracker Group (which seeks to align capital
markets with a sustainable future through
Carbon Tracker and Planet Tracker), chair of
the Walcot Foundation, trustee of the Shell
Foundation, director of i(x) Net Zero and
member of the Advisory Boards of Acre
Impact Fund, WHEB Asset Management,
Frontier Finance Solutions. Alice has also
developed the University of Cambridge
Institute of Sustainability Leadership’s course
on sustainable finance.
Committee membership: Audit and Risk,
Management Engagement and Nomination
(Chair).
Current remuneration: £30,000 per
annum.
Number of shares held: 10,000*
Ranjan Ramparia
Status: Independent non-executive
director
Length of service: appointed a director in
October 2024.
Experience: Ms Ramparia is a qualified
Chartered Accountant and experienced
business professional. Her background is in
corporate finance and investment
management. She started her career in 1992
with PricewaterhouseCoopers working in the
financial services audit, valuations and
corporate finance divisions. Her early career
was as a fund manager with Knox D’Arcy
Investment Management, and she has over
14 years’ experience of investing in UK
equities, including investment trusts and
private equity. She has significant experience
of regulatory and compliance matters having
worked in the asset management sector and
served on the boards of regulated
companies.
Ms Ramparia is an independent adviser and
finance professional. She is a non-executive
director of Northern 2 VCT PLC where she
serves as the chair of the audit committee
and is a member of the nomination and
management engagement committees. She
is also a non-executive director of JPMorgan
Global Emerging Markets Income Trust PLC
where she is a member and chair designate
of the audit and risk committee. She also
serves as a member of the nomination and
remuneration committee and management
engagement committee.
Committee membership: Audit and Risk,
Management Engagement and Nomination.
Current remuneration: £30,000 per
annum.
Number of shares held: Nil
42
Schroder BSC Social Impact Trust plc
Directors’ Report
The directors submit their annual report and accounts of the
Company for the year ended 30 June 2024.
Directors and officers
Biographies for the Board of directors are set out on pages 40 and
41.
Chair
The Chair is an independent non-executive director who is
responsible for leadership of the Board and ensuring its effectiveness
in all aspects of its role. The Chair’s other significant commitments are
detailed on page 40. She has no conflicting relationships.
Company Secretary
Schroder Investment Management Limited (“SIM”) provides company
secretarial support to the Board and is responsible for assisting the
Chair with Board meetings and advising the Board with respect to
governance. The Company Secretary also manages the relationship
with the Company’s service providers, except for the Manager.
Shareholders wishing to lodge questions in advance of the AGM are
invited to do so by writing to the Company Secretary at the address
given on the outside back cover or by email to:
amcompanysecretary@schroders.com.
Role and operation of the Board
The Board is the Company’s governing body; it sets the Company’s
strategy and is collectively responsible to shareholders for its
long-term success. The Board is responsible for appointing and
subsequently monitoring the activities of the Manager, Portfolio
Manager and other service providers to seek to ensure that the
investment objective of the Company continues to be met. The Board
also ensures that the Portfolio Manager adheres to the investment
restrictions set by the Board and acts within the parameters set by it
in respect of any gearing. This is also monitored by the Manager as
part of its responsibilities as AIFM. The Strategic Report on pages 4 to
37 sets out further detail of how the Board reviews the Company’s
strategy, risk management and internal controls and also includes
other information required for the Directors’ Report, and is
incorporated by reference.
A formal schedule of matters specifically reserved for decision by the
Board has been defined and a procedure adopted for directors, in the
furtherance of their duties, to take independent professional advice at
the expense of the Company.
The Chair ensures that all directors receive relevant management,
regulatory and financial information in a timely manner and that they
are provided, on a regular basis, with key information on the
Company’s policies, regulatory requirements and internal controls.
The Board meets at least quarterly and receives and considers
reports regularly from the Portfolio Manager and other key advisers,
as well as ad hoc reports and information supplied to the Board as
required.
Four Board meetings are usually scheduled each year to cover
matters including: the setting and monitoring of investment strategy;
approval of borrowings and/or cash positions; review of investment
performance; the level of premium or discount of the Company’s
shares to NAV per share; promotion of the Company and services
provided by third parties. Additional meetings of the Board are
arranged as required.
The Board is satisfied that it is of sufficient size with an appropriate
balance of diverse skills and experience, independence and
knowledge of the Company, its sector and the wider investment trust
industry, to enable it to discharge its duties and responsibilities
effectively and that no individual or group of individuals dominates
decision making.
The Board has approved a policy on directors’ conflicts of interest.
Under this policy, directors are required to disclose all actual and
potential conflicts of interest to the Board as they arise for
consideration and approval. The Board may impose restrictions or
refuse to authorise such conflicts if deemed appropriate. No directors
have any connections with the Manager or Portfolio Manager, shared
directorships with other directors or material interests in any contract
which is significant to the Company’s business.
Key service providers
The Board has adopted an outsourced business model and has
appointed the following key service providers:
Manager
The Company is an Alternative Investment Fund as defined by the
AIFM Directive and has appointed Schroder Unit Trusts Limited
(“SUTL”) as the Manager in accordance with the terms of an AIFM
agreement. The AIFM agreement, which is governed by the laws of
England and Wales, can be terminated by either party on six months’
notice or on immediate notice in the event of certain breaches or the
insolvency of either party. As at the date of this report no such notice
had been given by either party.
SUTL is authorised and regulated by the Financial Conduct Authority
(“FCA”) and provides portfolio management, risk management,
accounting and company secretarial services to the Company under
the AIFM agreement. Part of the fund accounting and administration
activities are currently performed by HSBC Securities Services (UK)
Limited. The Manager also provides general marketing support for
the Company and manages relationships with key investors, in
conjunction with the Chair, other Board members or the corporate
broker as appropriate. The Manager has delegated investment
management, accounting, administration and company secretarial
services to another wholly owned subsidiary of Schroders plc, SIM.
The Manager has appropriate professional indemnity cover in place.
The Schroders Group manages £773.7 billion (as at 30 June 2024) on
behalf of institutional and retail investors, financial institutions and
high net worth clients from around the world, invested in a broad
range of asset classes across equities, fixed income, multi-asset and
alternatives.
Portfolio Manager
Better Society Capital is the delegated Portfolio Manager. It uses its
social impact expertise to source deals, perform robust due diligence
and manage the portfolio. As at 30 June 2024, Better Society Capital is
also the Company’s largest shareholder, with a 27% stake.
Management fee
The AIFM is entitled to receive from the Company in respect of its
AIFM, administration and company secretarial services, a
management fee calculated and paid bi-annually in arrears at an
annual rate of 0.80% per annum of “chargeable assets”, of which 50%
is payable to the Portfolio Manager.
For this purpose, “chargeable assets” shall be calculated as the
cum-income Net Asset Value of the Company adding back any loans,
less any cash, money market instruments and Liquidity Asset, and any
investments in funds which are managed by the Manager, the
Portfolio Manager or any member of their respective groups.
For the purpose of calculating “chargeable assets” only, “Liquidity
Asset” means:
Directors’ Report
The directors submit their annual report and accounts of the
Company for the year ended 30 June 2024.
Directors and officers
Biographies for the Board of directors are set out on pages 40 and
41.
Chair
The Chair is an independent non-executive director who is
responsible for leadership of the Board and ensuring its effectiveness
in all aspects of its role. The Chair’s other significant commitments are
detailed on page 40. She has no conflicting relationships.
Company Secretary
Schroder Investment Management Limited (“SIM”) provides company
secretarial support to the Board and is responsible for assisting the
Chair with Board meetings and advising the Board with respect to
governance. The Company Secretary also manages the relationship
with the Company’s service providers, except for the Manager.
Shareholders wishing to lodge questions in advance of the AGM are
invited to do so by writing to the Company Secretary at the address
given on the outside back cover or by email to:
amcompanysecretary@schroders.com.
Role and operation of the Board
The Board is the Company’s governing body; it sets the Company’s
strategy and is collectively responsible to shareholders for its
long-term success. The Board is responsible for appointing and
subsequently monitoring the activities of the Manager, Portfolio
Manager and other service providers to seek to ensure that the
investment objective of the Company continues to be met. The Board
also ensures that the Portfolio Manager adheres to the investment
restrictions set by the Board and acts within the parameters set by it
in respect of any gearing. This is also monitored by the Manager as
part of its responsibilities as AIFM. The Strategic Report on pages 4 to
37 sets out further detail of how the Board reviews the Company’s
strategy, risk management and internal controls and also includes
other information required for the Directors’ Report, and is
incorporated by reference.
A formal schedule of matters specifically reserved for decision by the
Board has been defined and a procedure adopted for directors, in the
furtherance of their duties, to take independent professional advice at
the expense of the Company.
The Chair ensures that all directors receive relevant management,
regulatory and financial information in a timely manner and that they
are provided, on a regular basis, with key information on the
Company’s policies, regulatory requirements and internal controls.
The Board meets at least quarterly and receives and considers
reports regularly from the Portfolio Manager and other key advisers,
as well as ad hoc reports and information supplied to the Board as
required.
Four Board meetings are usually scheduled each year to cover
matters including: the setting and monitoring of investment strategy;
approval of borrowings and/or cash positions; review of investment
performance; the level of premium or discount of the Company’s
shares to NAV per share; promotion of the Company and services
provided by third parties. Additional meetings of the Board are
arranged as required.
The Board is satisfied that it is of sufficient size with an appropriate
balance of diverse skills and experience, independence and
knowledge of the Company, its sector and the wider investment trust
industry, to enable it to discharge its duties and responsibilities
effectively and that no individual or group of individuals dominates
decision making.
The Board has approved a policy on directors’ conflicts of interest.
Under this policy, directors are required to disclose all actual and
potential conflicts of interest to the Board as they arise for
consideration and approval. The Board may impose restrictions or
refuse to authorise such conflicts if deemed appropriate. No directors
have any connections with the Manager or Portfolio Manager, shared
directorships with other directors or material interests in any contract
which is significant to the Company’s business.
Key service providers
The Board has adopted an outsourced business model and has
appointed the following key service providers:
Manager
The Company is an Alternative Investment Fund as defined by the
AIFM Directive and has appointed Schroder Unit Trusts Limited
(“SUTL”) as the Manager in accordance with the terms of an AIFM
agreement. The AIFM agreement, which is governed by the laws of
England and Wales, can be terminated by either party on six months’
notice or on immediate notice in the event of certain breaches or the
insolvency of either party. As at the date of this report no such notice
had been given by either party.
SUTL is authorised and regulated by the Financial Conduct Authority
(“FCA”) and provides portfolio management, risk management,
accounting and company secretarial services to the Company under
the AIFM agreement. Part of the fund accounting and administration
activities are currently performed by HSBC Securities Services (UK)
Limited. The Manager also provides general marketing support for
the Company and manages relationships with key investors, in
conjunction with the Chair, other Board members or the corporate
broker as appropriate. The Manager has delegated investment
management, accounting, administration and company secretarial
services to another wholly owned subsidiary of Schroders plc, SIM.
The Manager has appropriate professional indemnity cover in place.
The Schroders Group manages £773.7 billion (as at 30 June 2024) on
behalf of institutional and retail investors, financial institutions and
high net worth clients from around the world, invested in a broad
range of asset classes across equities, fixed income, multi-asset and
alternatives.
Portfolio Manager
Better Society Capital is the delegated Portfolio Manager. It uses its
social impact expertise to source deals, perform robust due diligence
and manage the portfolio. As at 30 June 2024, Better Society Capital is
also the Company’s largest shareholder, with a 27% stake.
Management fee
The AIFM is entitled to receive from the Company in respect of its
AIFM, administration and company secretarial services, a
management fee calculated and paid bi-annually in arrears at an
annual rate of 0.80% per annum of “chargeable assets”, of which 50%
is payable to the Portfolio Manager.
For this purpose, “chargeable assets” shall be calculated as the
cum-income Net Asset Value of the Company adding back any loans,
less any cash, money market instruments and Liquidity Asset, and any
investments in funds which are managed by the Manager, the
Portfolio Manager or any member of their respective groups.
For the purpose of calculating “chargeable assets” only, “Liquidity
Asset” means:
Schroder BSC Social Impact Trust plc
43
Other Information (Unaudited) Introduction Strategic Report Governance Financial
(a) any security that is admitted to trading on (i) any “regulated
market” as defined in MiFID II and as listed in the register of
regulated markets within the EEA maintained by the European
Securities and Markets Authority from time to time; or (ii) any
“recognised investment exchange” as recognised by the FCA
under Part XVIII of FSMA; or (iii) any “recognised overseas
investment exchange” as recognised by the FCA under Part XVIII
of FSMA; or
(b) any unit, share or other security issued by a collective investment
scheme that has been authorised and regulated by the FCA and
which has trading on a monthly or more frequent basis,
in each case being investments intended to benefit stakeholders
using ESG frameworks to ensure a variety of stakeholders
beyond just shareholders’ interests are addressed.
Depositary
HSBC Bank plc, (“HSBC Bank”) which is authorised by the Prudential
Regulation Authority and regulated by the FCA and the Prudential
Regulation Authority, carries out certain duties of a depositary
specified in the AIFM Directive including, in relation to the Company:
– safekeeping of the assets of the Company which are entrusted to
it;
– cash monitoring; and
– oversight of the Company and the Manager to the extent
described in the AIFM Directive.
HSBC Bank is liable to the Company for losses suffered by it as
a result of any negligence, wilful default, fraud or fraudulent
misrepresentation on its part.
The Company, the Manager and HSBC Bank may terminate the
depositary agreement at any time by giving 90 days’ notice in writing.
HSBC Bank may only be removed from office when a new depositary
is appointed by the Company.
Registrar
Equiniti Limited (“Equiniti”) has been appointed as the Company’s
registrar. Equiniti’s services to the Company include share register
maintenance (including the issuance, transfer and cancellation of
shares as necessary), acting as agent for the payment of dividends,
management of general meetings (including the registering of proxy
votes and scrutineer services as necessary), handling shareholder
queries, correspondence and processing corporate actions.
Corporate Governance Statement
The Financial Conduct Authority requires all UK listed companies to
disclose how they have applied the principles and complied with the
provisions of the UK Corporate Governance Code 2018 (the “UK
Code”) issued by the Financial Reporting Council (“FRC”). The Board is
also mindful of the updated UK Corporate Governance Code 2024,
the majority of its provisions will apply to the financial years ending
30 June 2026 for the Company.
The Board of the Company has considered the principles and
provisions of the AIC Code of Corporate Governance (the “AIC Code”).
The AIC Code addresses the Principles and Provisions set out in the
Financial Reporting Council’s (“FRC”) UK Corporate Governance Code
(the “UK Code”), as well as setting out additional Provisions on issues
that are of specific relevance to the Company as an investment
company. The Board considers that reporting against the Principles
and Provisions of the AIC Code, which has been endorsed by the FRC
provides more relevant information to shareholders.
The AIC Code is available on the AIC website
https://www.theaic.co.uk/aic-code-of-corporate-governance. It
includes an explanation of how the AIC Code adopts the Principles
and Provisions set out in the UK Code to make them relevant for
investment companies. The UK Code is available from the FRC’s
website at www.frc.org.uk.
The Board is satisfied that the Company’s current governance
framework is compliant with the AIC Code with the exception of
forming a remuneration committee and that a senior independent
director was not appointed. Given the Company has no chief
executive or other executive directors, the size of the Board and the
infrequent nature at which it is expected that directors’ fees will need
to be changed, the Board believe a separate committee responsible
for reviewing and determining fees is not necessary but will be
considered in future. As permitted under the AIC Code, the Chair is
a member of the Audit and Risk Committee. An explanation as to why
this is considered appropriate is set out in the Audit and Risk
Committee Report on page 46.
The Board has also determined that given its size, it is appropriate
that all directors are members of the Audit and Risk, Management
Engagement and Nomination Committees and the appointment of
a Senior Independent Director is not considered necessary. However,
the Chair of the Audit and Risk Committee effectively acts as the
Senior Independent Director, leads the evaluation of the performance
of the Chair and is available to directors and/or shareholders if they
have concerns which cannot be resolved through discussion with the
Chair.
As all of the Company’s day-to-day management and administrative
functions are outsourced to third parties, it has no executive directors,
employees or internal operations and therefore has not reported in
respect of the following UK Code Provisions:
• the role of the executive directors and senior management;
• the need for an internal audit function; and
• executive directors’ remuneration.
Revenue and interim dividend
The net revenue return for the year under review, after finance costs
and taxation, was £2,650,000, equivalent to a revenue return per
ordinary share of 3.16 pence. As stated in the Company’s prospectus,
the Company will use the investment trust interest streaming regime.
This enables an investment trust which receives “qualifying interest
income” to treat the whole or part of a dividend distribution as an
interest distribution. The effect of streaming is to move the point of
taxation in respect of the Company’s qualifying interest income, from
the Company to its investors and the Company may treat the
streamed payment as a loan relationship deduction in its tax
computation.
For investors within the charge to UK corporation tax, the distribution
will be taxed in the normal way as interest under a creditor
relationship. For UK income taxpayers it will be taxed as interest
received on the date the distribution was made. The potential benefit
is to any investor who is not liable to taxation.
The Board has declared the payment of an interim dividend made up
wholly of an interest distribution of 2.94 pence per share payable on
20 December 2024 to shareholders on the register on 15 November
2024. The ex dividend date is 14 November 2024.
The Board’s policy is to pay out substantially all the Company’s normal
revenue. The Company may be required to pay a second dividend
distribution in respect of the year ended 30 June 2024, in order to
comply with the investment trust qualifying rules in section 1158 of
the Corporation Tax Act 2010. The income retention test in section
1158 is based on income receivable in the corporation tax
computation, and income receivable from the Company’s holdings in
limited partnerships will be taxed on a “look through” basis, sourced
Other Information (Unaudited) Introduction Strategic Report Governance Financial
(a) any security that is admitted to trading on (i) any “regulated
market” as defined in MiFID II and as listed in the register of
regulated markets within the EEA maintained by the European
Securities and Markets Authority from time to time; or (ii) any
“recognised investment exchange” as recognised by the FCA
under Part XVIII of FSMA; or (iii) any “recognised overseas
investment exchange” as recognised by the FCA under Part XVIII
of FSMA; or
(b) any unit, share or other security issued by a collective investment
scheme that has been authorised and regulated by the FCA and
which has trading on a monthly or more frequent basis,
in each case being investments intended to benefit stakeholders
using ESG frameworks to ensure a variety of stakeholders
beyond just shareholders’ interests are addressed.
Depositary
HSBC Bank plc, (“HSBC Bank”) which is authorised by the Prudential
Regulation Authority and regulated by the FCA and the Prudential
Regulation Authority, carries out certain duties of a depositary
specified in the AIFM Directive including, in relation to the Company:
– safekeeping of the assets of the Company which are entrusted to
it;
– cash monitoring; and
– oversight of the Company and the Manager to the extent
described in the AIFM Directive.
HSBC Bank is liable to the Company for losses suffered by it as
a result of any negligence, wilful default, fraud or fraudulent
misrepresentation on its part.
The Company, the Manager and HSBC Bank may terminate the
depositary agreement at any time by giving 90 days’ notice in writing.
HSBC Bank may only be removed from office when a new depositary
is appointed by the Company.
Registrar
Equiniti Limited (“Equiniti”) has been appointed as the Company’s
registrar. Equiniti’s services to the Company include share register
maintenance (including the issuance, transfer and cancellation of
shares as necessary), acting as agent for the payment of dividends,
management of general meetings (including the registering of proxy
votes and scrutineer services as necessary), handling shareholder
queries, correspondence and processing corporate actions.
Corporate Governance Statement
The Financial Conduct Authority requires all UK listed companies to
disclose how they have applied the principles and complied with the
provisions of the UK Corporate Governance Code 2018 (the “UK
Code”) issued by the Financial Reporting Council (“FRC”). The Board is
also mindful of the updated UK Corporate Governance Code 2024,
the majority of its provisions will apply to the financial years ending
30 June 2026 for the Company.
The Board of the Company has considered the principles and
provisions of the AIC Code of Corporate Governance (the “AIC Code”).
The AIC Code addresses the Principles and Provisions set out in the
Financial Reporting Council’s (“FRC”) UK Corporate Governance Code
(the “UK Code”), as well as setting out additional Provisions on issues
that are of specific relevance to the Company as an investment
company. The Board considers that reporting against the Principles
and Provisions of the AIC Code, which has been endorsed by the FRC
provides more relevant information to shareholders.
The AIC Code is available on the AIC website
https://www.theaic.co.uk/aic-code-of-corporate-governance. It
includes an explanation of how the AIC Code adopts the Principles
and Provisions set out in the UK Code to make them relevant for
investment companies. The UK Code is available from the FRC’s
website at www.frc.org.uk.
The Board is satisfied that the Company’s current governance
framework is compliant with the AIC Code with the exception of
forming a remuneration committee and that a senior independent
director was not appointed. Given the Company has no chief
executive or other executive directors, the size of the Board and the
infrequent nature at which it is expected that directors’ fees will need
to be changed, the Board believe a separate committee responsible
for reviewing and determining fees is not necessary but will be
considered in future. As permitted under the AIC Code, the Chair is
a member of the Audit and Risk Committee. An explanation as to why
this is considered appropriate is set out in the Audit and Risk
Committee Report on page 46.
The Board has also determined that given its size, it is appropriate
that all directors are members of the Audit and Risk, Management
Engagement and Nomination Committees and the appointment of
a Senior Independent Director is not considered necessary. However,
the Chair of the Audit and Risk Committee effectively acts as the
Senior Independent Director, leads the evaluation of the performance
of the Chair and is available to directors and/or shareholders if they
have concerns which cannot be resolved through discussion with the
Chair.
As all of the Company’s day-to-day management and administrative
functions are outsourced to third parties, it has no executive directors,
employees or internal operations and therefore has not reported in
respect of the following UK Code Provisions:
• the role of the executive directors and senior management;
• the need for an internal audit function; and
• executive directors’ remuneration.
Revenue and interim dividend
The net revenue return for the year under review, after finance costs
and taxation, was £2,650,000, equivalent to a revenue return per
ordinary share of 3.16 pence. As stated in the Company’s prospectus,
the Company will use the investment trust interest streaming regime.
This enables an investment trust which receives “qualifying interest
income” to treat the whole or part of a dividend distribution as an
interest distribution. The effect of streaming is to move the point of
taxation in respect of the Company’s qualifying interest income, from
the Company to its investors and the Company may treat the
streamed payment as a loan relationship deduction in its tax
computation.
For investors within the charge to UK corporation tax, the distribution
will be taxed in the normal way as interest under a creditor
relationship. For UK income taxpayers it will be taxed as interest
received on the date the distribution was made. The potential benefit
is to any investor who is not liable to taxation.
The Board has declared the payment of an interim dividend made up
wholly of an interest distribution of 2.94 pence per share payable on
20 December 2024 to shareholders on the register on 15 November
2024. The ex dividend date is 14 November 2024.
The Board’s policy is to pay out substantially all the Company’s normal
revenue. The Company may be required to pay a second dividend
distribution in respect of the year ended 30 June 2024, in order to
comply with the investment trust qualifying rules in section 1158 of
the Corporation Tax Act 2010. The income retention test in section
1158 is based on income receivable in the corporation tax
computation, and income receivable from the Company’s holdings in
limited partnerships will be taxed on a “look through” basis, sourced
44
Schroder BSC Social Impact Trust plc
Directors’ Report
continued
from accounting information which may not be available until after
the year end.
Committees
In order to assist the Board in fulfilling its governance responsibilities,
it has delegated certain functions to committees. The roles and
responsibilities of these committees, together with details of work
undertaken during the year under review, are outlined in the next few
pages.
The reports of the Audit and Risk, Management Engagement and
Nomination Committees are incorporated into and form part of the
Directors’ Report.
Other required Directors’ Report disclosures
under laws, regulations, and the UK Code
Status
The Company has been incorporated with an unlimited life. The
Company carries on business as an investment trust. Its shares are
listed and admitted to trading on the 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 not a “close” company for taxation purposes.
The Company is domiciled in the UK and is an investment company
within the meaning of section 833 of the Companies Act 2006.
If in the two-year period ending on 31 December 2023, and in any
two-year period following such date, the Ordinary Shares have traded,
on average, at a discount in excess of 10% to Net Asset Value per
Share, the directors will propose an ordinary resolution at the
Company’s next annual general meeting that the Company continues
its business as presently constituted (the “Continuation Resolution”).
If the Continuation Resolution is not passed, the directors will put
forward proposals for the reconstruction or reorganisation of the
Company, bearing in mind the liquidity of the Company’s Investments,
as soon as reasonably practicable following the date on which the
Continuation Resolution is not passed. These proposals may or may
not involve winding up the Company and, accordingly, failure to pass
the Continuation Resolution will not necessarily result in the winding
up of the Company.
The discount prevailing on each business day will be determined by
reference to the closing market price of Ordinary Shares on that day
and the last announced Net Asset Value per Share (adjusted for
dividends).
Information included in Strategic Report
The Company’s disclosures on future developments, engagement
with suppliers, customers and others in a business relationship with
the company, culture, and carbon emissions are included in the
Strategic Report. The Chair’s Statement and Portfolio Manager’s
Report form part of the Strategic Report.
Financial risk management
Details of the Company’s financial risk management objectives and
exposure to risk can be found in note 20 on pages 75 to 77.
Share capital
Details of the Company’s issued share capital are given in note 12 to
the accounts on page 72. Details of the voting rights in the
Company’s shares as at 23 October 2024 are given in note 7 to the
Notice of Annual General Meeting on page 83.
The ordinary shares carry the right to receive dividends and have one
voting right per ordinary share. There are no restrictions on the
voting rights of the ordinary shares or on the transfer of the ordinary
shares. There are no shares which carry specific rights with regard to
the control of the Company. At 30 June 2024, the Company’s issued
share capital was 83,029,661 ordinary shares, excluding 2,286,925
shares held in treasury.
Share repurchases
The Company has authority to purchase its ordinary shares in the
market to be held in treasury or for cancellation. During the year the
Company bought back 1,575,205 ordinary shares and since the year
end and up to 23 October 2024, a further 496,486 ordinary shares
have been repurchased.
The latest buy back authority was granted to directors on
15 December 2023 and expires at the conclusion of the Annual
General Meeting on 18 December 2024. The directors are proposing
that their authority to buy back shares be renewed at the forthcoming
Annual General Meeting.
Substantial share interests
The Company has received notifications in accordance with the
Financial Conduct Authority’s (“FCA”) Disclosure Guidance and
Transparency Rule 5.1.2R of the below interests in 3% or more of the
voting rights attaching to the Company’s issued share capital.
The Company is reliant on investors to comply with these regulations,
and certain investors may be exempted from providing these. As
such, this should not be relied on as an exhaustive list of shareholders
holding above 3% or more of the Company’s voting rights.
Latest notifications
received
as at 30 June 2024
%
of total
Number of voting
shares rig hts
Better Society Capital Limited 22,425,000 26.28
Schroders plc 1
17,531,914 21.01
East Riding of Yorkshire Council
2
7,500,000 10.00
EQ Investors Limited 4,589,341 5.48
Newton Investment Management
Limited 4,215,408 4.96
Stichting Juridisch Eigendom Privium
Sustainable Impact Fund 4,000,000 4.69
1
15.06% of the holding is held by clients of Cazenove Capital Management.
2
Notification based on an issued share capital of 75,000,000 shares and
received prior to the increase in share capital in November 2021.
The Company also received a notification on 5 August 2021 from
Pentwater Capital Management LP for a holding of 3,550,000 shares
and 4.73% of total voting rights. Based on information received, the
Company believes that Pentwater Capital Management LP is no
longer a shareholder of the Company.
Since the year end and the date of the notice of AGM, Better Society
Capital has notified the Company on 1 July 2024 that its holding was
22,425,000 shares and 27.01% of total voting rights, Schroders plc
has notified the Company on 12 July 2024 that its holding was
15,839,745 shares and 19.10% of total voting rights and on 28 August
2024 that its holding was 15,683,192 shares and 18.97% of total
voting rights. Ruffer LLP has notified the Company on 6 September
2024 that its holding has reached 4,177,011 shares and 5.05% of total
voting rights.
Directors’ Report
continued
from accounting information which may not be available until after
the year end.
Committees
In order to assist the Board in fulfilling its governance responsibilities,
it has delegated certain functions to committees. The roles and
responsibilities of these committees, together with details of work
undertaken during the year under review, are outlined in the next few
pages.
The reports of the Audit and Risk, Management Engagement and
Nomination Committees are incorporated into and form part of the
Directors’ Report.
Other required Directors’ Report disclosures
under laws, regulations, and the UK Code
Status
The Company has been incorporated with an unlimited life. The
Company carries on business as an investment trust. Its shares are
listed and admitted to trading on the 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 not a “close” company for taxation purposes.
The Company is domiciled in the UK and is an investment company
within the meaning of section 833 of the Companies Act 2006.
If in the two-year period ending on 31 December 2023, and in any
two-year period following such date, the Ordinary Shares have traded,
on average, at a discount in excess of 10% to Net Asset Value per
Share, the directors will propose an ordinary resolution at the
Company’s next annual general meeting that the Company continues
its business as presently constituted (the “Continuation Resolution”).
If the Continuation Resolution is not passed, the directors will put
forward proposals for the reconstruction or reorganisation of the
Company, bearing in mind the liquidity of the Company’s Investments,
as soon as reasonably practicable following the date on which the
Continuation Resolution is not passed. These proposals may or may
not involve winding up the Company and, accordingly, failure to pass
the Continuation Resolution will not necessarily result in the winding
up of the Company.
The discount prevailing on each business day will be determined by
reference to the closing market price of Ordinary Shares on that day
and the last announced Net Asset Value per Share (adjusted for
dividends).
Information included in Strategic Report
The Company’s disclosures on future developments, engagement
with suppliers, customers and others in a business relationship with
the company, culture, and carbon emissions are included in the
Strategic Report. The Chair’s Statement and Portfolio Manager’s
Report form part of the Strategic Report.
Financial risk management
Details of the Company’s financial risk management objectives and
exposure to risk can be found in note 20 on pages 75 to 77.
Share capital
Details of the Company’s issued share capital are given in note 12 to
the accounts on page 72. Details of the voting rights in the
Company’s shares as at 23 October 2024 are given in note 7 to the
Notice of Annual General Meeting on page 83.
The ordinary shares carry the right to receive dividends and have one
voting right per ordinary share. There are no restrictions on the
voting rights of the ordinary shares or on the transfer of the ordinary
shares. There are no shares which carry specific rights with regard to
the control of the Company. At 30 June 2024, the Company’s issued
share capital was 83,029,661 ordinary shares, excluding 2,286,925
shares held in treasury.
Share repurchases
The Company has authority to purchase its ordinary shares in the
market to be held in treasury or for cancellation. During the year the
Company bought back 1,575,205 ordinary shares and since the year
end and up to 23 October 2024, a further 496,486 ordinary shares
have been repurchased.
The latest buy back authority was granted to directors on
15 December 2023 and expires at the conclusion of the Annual
General Meeting on 18 December 2024. The directors are proposing
that their authority to buy back shares be renewed at the forthcoming
Annual General Meeting.
Substantial share interests
The Company has received notifications in accordance with the
Financial Conduct Authority’s (“FCA”) Disclosure Guidance and
Transparency Rule 5.1.2R of the below interests in 3% or more of the
voting rights attaching to the Company’s issued share capital.
The Company is reliant on investors to comply with these regulations,
and certain investors may be exempted from providing these. As
such, this should not be relied on as an exhaustive list of shareholders
holding above 3% or more of the Company’s voting rights.
Latest notifications
received
as at 30 June 2024
%
of total
Number of voting
shares rig hts
Better Society Capital Limited 22,425,000 26.28
Schroders plc 1
17,531,914 21.01
East Riding of Yorkshire Council
2
7,500,000 10.00
EQ Investors Limited 4,589,341 5.48
Newton Investment Management
Limited 4,215,408 4.96
Stichting Juridisch Eigendom Privium
Sustainable Impact Fund 4,000,000 4.69
1
15.06% of the holding is held by clients of Cazenove Capital Management.
2
Notification based on an issued share capital of 75,000,000 shares and
received prior to the increase in share capital in November 2021.
The Company also received a notification on 5 August 2021 from
Pentwater Capital Management LP for a holding of 3,550,000 shares
and 4.73% of total voting rights. Based on information received, the
Company believes that Pentwater Capital Management LP is no
longer a shareholder of the Company.
Since the year end and the date of the notice of AGM, Better Society
Capital has notified the Company on 1 July 2024 that its holding was
22,425,000 shares and 27.01% of total voting rights, Schroders plc
has notified the Company on 12 July 2024 that its holding was
15,839,745 shares and 19.10% of total voting rights and on 28 August
2024 that its holding was 15,683,192 shares and 18.97% of total
voting rights. Ruffer LLP has notified the Company on 6 September
2024 that its holding has reached 4,177,011 shares and 5.05% of total
voting rights.
Provision of information to the auditor
The directors at the date of approval of this report confirm that, so far
as each of them is aware, there is no relevant audit information of
which the Company’s auditor is unaware; and each director has taken
all the steps that he or she ought to have taken as a director in order
to make himself or herself aware of any relevant audit information
and to establish that the Company’s auditor is aware of that
information.
Directors’ attendance at meetings
The number of scheduled meetings of the Board and its committees
held during the year under review and the attendance of individual
directors is shown below. Whenever possible all directors attend the
AGM.
Audit Manag ement
and Risk En g a g ement Nomination
Director Board Committee Committee Committee
Susannah Nicklin 6/6 4/4 2/2 2/2
Mike Balfour 6/6 4/4 2/2 2/2
James B. Broderick 6/6 4/4 2/2 2/2
Alice Chapple 6/6 4/4 2/2 2/2
Ranjan Ramparia
1
0/0 0/0 0/0 0/0
1
Ranjan Ramparia was appointed as a director on 16 October 2024.
The Board and committees meet more frequently, between
scheduled meetings, when business needs require.
Directors’ and officers’ liability insurance
and indemnities
Directors’ and officers’ liability insurance cover was in place for the
directors throughout the year. The Company’s articles of association
provide, subject to the provisions of the Companies Act 2006, an
indemnity for directors in respect of costs which they may incur
relating to the defence of any judgement that is given in their favour
by the court. This is a qualifying third party indemnity policy and was
in place throughout the year under review for each director and to
the date of this report.
By order of the Board
Schroder Investment Management Limited
Company Secretary
23 October 2024
Schroder BSC Social Impact Trust plc 45
Other Information (Unaudited) Introduction Strategic Report Governance Financial
The directors at the date of approval of this report confirm that, so far
as each of them is aware, there is no relevant audit information of
which the Company’s auditor is unaware; and each director has taken
all the steps that he or she ought to have taken as a director in order
to make himself or herself aware of any relevant audit information
and to establish that the Company’s auditor is aware of that
information.
Directors’ attendance at meetings
The number of scheduled meetings of the Board and its committees
held during the year under review and the attendance of individual
directors is shown below. Whenever possible all directors attend the
AGM.
Audit Manag ement
and Risk En g a g ement Nomination
Director Board Committee Committee Committee
Susannah Nicklin 6/6 4/4 2/2 2/2
Mike Balfour 6/6 4/4 2/2 2/2
James B. Broderick 6/6 4/4 2/2 2/2
Alice Chapple 6/6 4/4 2/2 2/2
Ranjan Ramparia
1
0/0 0/0 0/0 0/0
1
Ranjan Ramparia was appointed as a director on 16 October 2024.
The Board and committees meet more frequently, between
scheduled meetings, when business needs require.
Directors’ and officers’ liability insurance
and indemnities
Directors’ and officers’ liability insurance cover was in place for the
directors throughout the year. The Company’s articles of association
provide, subject to the provisions of the Companies Act 2006, an
indemnity for directors in respect of costs which they may incur
relating to the defence of any judgement that is given in their favour
by the court. This is a qualifying third party indemnity policy and was
in place throughout the year under review for each director and to
the date of this report.
By order of the Board
Schroder Investment Management Limited
Company Secretary
23 October 2024
Schroder BSC Social Impact Trust plc 45
Other Information (Unaudited) Introduction Strategic Report Governance Financial
46
Schroder BSC Social Impact Trust plc
Audit and Risk Committee Report
The responsibilities and work carried out by the Audit and Risk Committee during the year under review are set out in the following report. The
duties and responsibilities of the Committee, which include monitoring the integrity of the Company’s financial reporting and internal controls,
are set out in further detail, and may be found in the terms of reference which are set out on the Company’s website, www.schroders.com/sbsi.
All directors are members of the Committee. Mike Balfour is the Chair of the Committee. The AIC Code permits the Chair of the Board to be
a member of the audit committee of an investment trust. Recognising Susannah Nicklin’s significant experience, the Committee considered it
appropriate for the Chair to be a member of the Audit and Risk Committee. The Board has satisfied itself that at least one of the Committee’s
members has recent and relevant financial experience and that the Committee as a whole has competence relevant to the sector in which the
Company operates. The Committee’s effectiveness was assessed, and considered to be satisfactory, as part of the directors’ annual review of the
Board and its committees.
Approach
The committee’s key roles and responsibilities are set out below.
Risk Management and Internal Financial Reporting Audit
Controls
The following table sets out how the Committee discharged its duties during the year. The Committee met twice during the year under review.
Further details on attendance can be found on page 45. In addition, an evaluation of the committee’s effectiveness and review of its terms of
reference were also completed during the year.
Ongoing risk review
Half year
report
Audit
planning Audit Annual
report
Post-audit
review
Principal and emerging risks and
uncertainties
To establish a process for identifying,
assessing, managing and monitoring the
Company’s emerging and principal risks
and uncertainties and identifying how these
are being managed or mitigated.
Financial statements
To monitor the integrity of the financial
statements of the Company and any formal
announcements relating to the Company’s
financial performance and valuation. To
review the annual and half year reports.
An explanation of the Company’s accounting
policies can be found at note 1 of the
financial statements on page 67.
Audit results
To discuss any matters arising from the
audit and consider recommendations
made by the auditor.
Internal controls
To keep under review the adequacy and
effectiveness of the Company’s systems of
internal control and risk management, and
review the annual report disclosures
relating to this.
To monitor the Company’s accounting and
financial internal control systems.
To consider the need and appropriateness
for having an internal auditor, given the
Company outsources substantially all of its
functions to third parties, it also requires its
service providers to report on their internal
controls.
Going concern and viability
To review the capital and liquidity position of
the Company and make recommendations to
the Board in relation to whether it considers
it appropriate to adopt the going concern
basis of accounting in preparing its annual
and half-yearly report and accounts.
The Committee is also responsible for
reviewing the disclosures made in the viability
statement.
Auditor appointment, independence
and performance
To make recommendations to the Board,
in relation to the appointment,
re-appointment, effectiveness and removal
of the external auditor together with any
non-audit services. To review auditor
independence, and to approve their
remuneration and terms of engagement.
To review the audit plan and engagement
letter.
In relation to these matters, the committee
will take into consideration provisions of the
Audit Committees and the External Audit:
Minimum Standard.
Audit and Risk Committee Report
The responsibilities and work carried out by the Audit and Risk Committee during the year under review are set out in the following report. The
duties and responsibilities of the Committee, which include monitoring the integrity of the Company’s financial reporting and internal controls,
are set out in further detail, and may be found in the terms of reference which are set out on the Company’s website, www.schroders.com/sbsi.
All directors are members of the Committee. Mike Balfour is the Chair of the Committee. The AIC Code permits the Chair of the Board to be
a member of the audit committee of an investment trust. Recognising Susannah Nicklin’s significant experience, the Committee considered it
appropriate for the Chair to be a member of the Audit and Risk Committee. The Board has satisfied itself that at least one of the Committee’s
members has recent and relevant financial experience and that the Committee as a whole has competence relevant to the sector in which the
Company operates. The Committee’s effectiveness was assessed, and considered to be satisfactory, as part of the directors’ annual review of the
Board and its committees.
Approach
The committee’s key roles and responsibilities are set out below.
Risk Management and Internal Financial Reporting Audit
Controls
The following table sets out how the Committee discharged its duties during the year. The Committee met twice during the year under review.
Further details on attendance can be found on page 45. In addition, an evaluation of the committee’s effectiveness and review of its terms of
reference were also completed during the year.
Ongoing risk review
Half year
report
Audit
planning Audit Annual
report
Post-audit
review
Principal and emerging risks and
uncertainties
To establish a process for identifying,
assessing, managing and monitoring the
Company’s emerging and principal risks
and uncertainties and identifying how these
are being managed or mitigated.
Financial statements
To monitor the integrity of the financial
statements of the Company and any formal
announcements relating to the Company’s
financial performance and valuation. To
review the annual and half year reports.
An explanation of the Company’s accounting
policies can be found at note 1 of the
financial statements on page 67.
Audit results
To discuss any matters arising from the
audit and consider recommendations
made by the auditor.
Internal controls
To keep under review the adequacy and
effectiveness of the Company’s systems of
internal control and risk management, and
review the annual report disclosures
relating to this.
To monitor the Company’s accounting and
financial internal control systems.
To consider the need and appropriateness
for having an internal auditor, given the
Company outsources substantially all of its
functions to third parties, it also requires its
service providers to report on their internal
controls.
Going concern and viability
To review the capital and liquidity position of
the Company and make recommendations to
the Board in relation to whether it considers
it appropriate to adopt the going concern
basis of accounting in preparing its annual
and half-yearly report and accounts.
The Committee is also responsible for
reviewing the disclosures made in the viability
statement.
Auditor appointment, independence
and performance
To make recommendations to the Board,
in relation to the appointment,
re-appointment, effectiveness and removal
of the external auditor together with any
non-audit services. To review auditor
independence, and to approve their
remuneration and terms of engagement.
To review the audit plan and engagement
letter.
In relation to these matters, the committee
will take into consideration provisions of the
Audit Committees and the External Audit:
Minimum Standard.
Schroder BSC Social Impact Trust plc
47
Other Information (Unaudited) Introduction Strategic Report Governance Financial
Significant issues identified during the year under review and key matters communicated by the auditor during the audit are included below.
Application during the year
Risks and Internal Controls Financial reports and valuation Audit
Principal and emerging risks and
uncertainties
Reviewed the principal and emerging risks
faced by the Company together with the
systems, processes and oversight in place
to manage and mitigate the risks.
Valuation and existence of holdings
The Company’s accounting policy for valuing
unquoted investments is set out in note 1 on
page 67 of the notes to the accounts.
The Committee reviewed the valuations
taking account of the latest available
information about the Company’s
investments and the Portfolio Manager’s
knowledge of the underlying investments.
The auditor also attended the Portfolio
Manager’s valuation committee meetings.
Meetings with the auditor
Met the auditor without representatives of
the Manager present. Representatives of the
auditor attended the committee meeting at
which the draft annual report and accounts
were considered and presented a report on
the findings of the audit.
The Committee also evaluated the
effectiveness of the audit firm prior to
making a recommendation that it should
be re-appointed at the forthcoming AGM.
This included consideration of the auditor’s
knowledge, expertise, resources and
process, alongside feedback from the
Manager on the audit process. Professional
scepticism of the auditor was questioned
and the committee was satisfied with the
auditor’s replies.
In July 2024 the FRC published its annual
assessment of quality among the Tier 1
audit firms. Our external auditor, BDO is
one of the six Tier 1 audit firms, and was
therefore subject to a review by the FRC’s
Audit Quality Review team. The FRC’s report
identified a number of areas for
improvement for the auditor, and in
response to these findings, the auditor has
implemented an action plan.
The Committee discussed the FRC’s
findings along with the auditor’s action plan
in detail with BDO. BDO have confirmed
that they are committed to the highest
standards of audit quality and will continue
to work closely with the FRC to address any
areas of concern.
The Committee will continue to monitor
auditor's progress.
Auditor independence
On 16 October 2020, BDO LLP was
appointed as auditor to the Company.
This is the fourth year that BDO LLP will be
undertaking the Company’s audit.
The auditor is required to rotate the senior
statutory auditor every five years. This is the
fourth year that the senior statutory
auditor, Vanessa- Jayne Bradley has
conducted the audit of the Company’s
annual report and accounts.
There are no contractual obligations
restricting the choice of external auditor.
The next tender is expected to take place
in 2030.
The Committee received confirmation
from the auditor that they remained
independent and that it had implemented
policies and procedures to meet the
requirements of the Auditing Practices
Board’s Ethical Standards.
Accounting policies and judgements
Consideration of the accounting policies
used in preparing the accounts of the
Company.
The management fee is calculated in
accordance with the contractual terms
contained in the AIFM agreement.
The Committee reviewed the calculation of
the management fee.
Internal controls
Consideration of several key aspects of
internal control and risk management
operating within the Manager, Portfolio
Manager, depositary and registrar,
including assurance reports and
presentations on these controls.
Reviewed the operational controls reports
provided by the Manager, depositary and
registrar and received quarterly reports
covering the operations of the service
providers.
In July 2024, met with the key service
providers at an annual review meeting.
Following a review of the Company’s risk
management and internal controls
framework, the Committee noted that these
remain effective as at the end of the
financial year ended 30 June 2024.
Other Information (Unaudited) Introduction Strategic Report Governance Financial
Significant issues identified during the year under review and key matters communicated by the auditor during the audit are included below.
Application during the year
Risks and Internal Controls Financial reports and valuation Audit
Principal and emerging risks and
uncertainties
Reviewed the principal and emerging risks
faced by the Company together with the
systems, processes and oversight in place
to manage and mitigate the risks.
Valuation and existence of holdings
The Company’s accounting policy for valuing
unquoted investments is set out in note 1 on
page 67 of the notes to the accounts.
The Committee reviewed the valuations
taking account of the latest available
information about the Company’s
investments and the Portfolio Manager’s
knowledge of the underlying investments.
The auditor also attended the Portfolio
Manager’s valuation committee meetings.
Meetings with the auditor
Met the auditor without representatives of
the Manager present. Representatives of the
auditor attended the committee meeting at
which the draft annual report and accounts
were considered and presented a report on
the findings of the audit.
The Committee also evaluated the
effectiveness of the audit firm prior to
making a recommendation that it should
be re-appointed at the forthcoming AGM.
This included consideration of the auditor’s
knowledge, expertise, resources and
process, alongside feedback from the
Manager on the audit process. Professional
scepticism of the auditor was questioned
and the committee was satisfied with the
auditor’s replies.
In July 2024 the FRC published its annual
assessment of quality among the Tier 1
audit firms. Our external auditor, BDO is
one of the six Tier 1 audit firms, and was
therefore subject to a review by the FRC’s
Audit Quality Review team. The FRC’s report
identified a number of areas for
improvement for the auditor, and in
response to these findings, the auditor has
implemented an action plan.
The Committee discussed the FRC’s
findings along with the auditor’s action plan
in detail with BDO. BDO have confirmed
that they are committed to the highest
standards of audit quality and will continue
to work closely with the FRC to address any
areas of concern.
The Committee will continue to monitor
auditor's progress.
Auditor independence
On 16 October 2020, BDO LLP was
appointed as auditor to the Company.
This is the fourth year that BDO LLP will be
undertaking the Company’s audit.
The auditor is required to rotate the senior
statutory auditor every five years. This is the
fourth year that the senior statutory
auditor, Vanessa- Jayne Bradley has
conducted the audit of the Company’s
annual report and accounts.
There are no contractual obligations
restricting the choice of external auditor.
The next tender is expected to take place
in 2030.
The Committee received confirmation
from the auditor that they remained
independent and that it had implemented
policies and procedures to meet the
requirements of the Auditing Practices
Board’s Ethical Standards.
Accounting policies and judgements
Consideration of the accounting policies
used in preparing the accounts of the
Company.
The management fee is calculated in
accordance with the contractual terms
contained in the AIFM agreement.
The Committee reviewed the calculation of
the management fee.
Internal controls
Consideration of several key aspects of
internal control and risk management
operating within the Manager, Portfolio
Manager, depositary and registrar,
including assurance reports and
presentations on these controls.
Reviewed the operational controls reports
provided by the Manager, depositary and
registrar and received quarterly reports
covering the operations of the service
providers.
In July 2024, met with the key service
providers at an annual review meeting.
Following a review of the Company’s risk
management and internal controls
framework, the Committee noted that these
remain effective as at the end of the
financial year ended 30 June 2024.
48
Schroder BSC Social Impact Trust plc
Audit and Risk Committee Report
continued
Application during the year (continued)
Risks and Internal Controls Financial reports and valuation Audit
Mike Balfour
Audit and Risk Committee Chair
23 October 2024
Fair, balanced and understandable
Reviewed the annual report and accounts to
advise the Board whether it was fair,
balanced and understandable.
Provision of non-audit services by the
Auditor
The Committee has reviewed the FRC’s
Guidance on Audit Committees and has
formulated a policy on the provision of
non-audit services by the Company’s
auditor.
The Committee has determined that the
Company’s appointed auditor will not be
considered for the provision of certain
non-audit services, such as accounting and
preparation of the financial statements,
internal audit and custody. The auditor may,
if required, provide other non-audit services
which will be judged on a case-by-case
basis.
The Committee was satisfied that this did
not affect the independence or objectivity
of the auditor.
Going concern and viability
Reviewed the impact of risks on going
concern and longer-term viability, as
described further in page 37.
Consent to continue as Auditor
BDO LLP indicated to the Committee their
willingness to continue to act as auditor.
Recommendations made to, and approved by, the Board:
• As a result of the work performed, the Committee concluded that the annual report for the year ended 30 June 202 4, 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 B oard. The B oard’s conclusions in
this respect are set out in the Statement of Directors’ Responsibilities on page 55.
• The Committee recommended that the B oard approve the report and accounts.
• The Committee recommended that the annual report and the half year report be prepared on a going concern basis in accordance
with the ex planations set out in the viability statement.
• Having reviewed the performance of the auditor and discussed the FRC’s findings with the auditor as described above, the
Committee considered it appropriate to recommend the firm’s re-appointment. Resolutions to re-appoint B DO LL P as auditor to the
Company, and to authorise the directors to determine their remuneration will be proposed at the AGM.
Compliance with the investment trust
qualifying rules in S1158 of the
Corporation Tax Act 2010
Consideration of the Manager’s report
confirming compliance.
Overall accuracy of the report and
accounts
Consideration of the draft report and
accounts and the letter of comfort from the
Manager in support of the letter of
representation to the auditor.
Audit results
The Committee met with and reviewed
a comprehensive report from the auditor
which detailed: the results of the audit;
compliance with regulatory requirements;
safeguards that have been established; and
their own internal quality control
procedures.
Audit and Risk Committee Report
continued
Application during the year (continued)
Risks and Internal Controls Financial reports and valuation Audit
Mike Balfour
Audit and Risk Committee Chair
23 October 2024
Fair, balanced and understandable
Reviewed the annual report and accounts to
advise the Board whether it was fair,
balanced and understandable.
Provision of non-audit services by the
Auditor
The Committee has reviewed the FRC’s
Guidance on Audit Committees and has
formulated a policy on the provision of
non-audit services by the Company’s
auditor.
The Committee has determined that the
Company’s appointed auditor will not be
considered for the provision of certain
non-audit services, such as accounting and
preparation of the financial statements,
internal audit and custody. The auditor may,
if required, provide other non-audit services
which will be judged on a case-by-case
basis.
The Committee was satisfied that this did
not affect the independence or objectivity
of the auditor.
Going concern and viability
Reviewed the impact of risks on going
concern and longer-term viability, as
described further in page 37.
Consent to continue as Auditor
BDO LLP indicated to the Committee their
willingness to continue to act as auditor.
Recommendations made to, and approved by, the Board:
• As a result of the work performed, the Committee concluded that the annual report for the year ended 30 June 202 4, 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 B oard. The B oard’s conclusions in
this respect are set out in the Statement of Directors’ Responsibilities on page 55.
• The Committee recommended that the B oard approve the report and accounts.
• The Committee recommended that the annual report and the half year report be prepared on a going concern basis in accordance
with the ex planations set out in the viability statement.
• Having reviewed the performance of the auditor and discussed the FRC’s findings with the auditor as described above, the
Committee considered it appropriate to recommend the firm’s re-appointment. Resolutions to re-appoint B DO LL P as auditor to the
Company, and to authorise the directors to determine their remuneration will be proposed at the AGM.
Compliance with the investment trust
qualifying rules in S1158 of the
Corporation Tax Act 2010
Consideration of the Manager’s report
confirming compliance.
Overall accuracy of the report and
accounts
Consideration of the draft report and
accounts and the letter of comfort from the
Manager in support of the letter of
representation to the auditor.
Audit results
The Committee met with and reviewed
a comprehensive report from the auditor
which detailed: the results of the audit;
compliance with regulatory requirements;
safeguards that have been established; and
their own internal quality control
procedures.
Schroder BSC Social Impact Trust plc
49
Other Information (Unaudited) Introduction Strategic Report Governance Financial
Management Engagement Committee Report
The Management Engagement Committee is responsible for: (1) the monitoring and oversight of the Manager’s and Portfolio Manager’s
performance and fees, and confirming their ongoing suitability; and (2) reviewing and assessing the Company’s other service providers,
including reviewing their fees. All directors are members of the Committee. James B. Broderick is the Chair of the Committee. The Committee’s
terms of reference are available on the Company’s website, www.schroders.com/sbsi. The Committee’s effectiveness was assessed, and judged
to be satisfactory, as part of the directors’ annual review of the Board and its committees.
Approach
Oversight of the Manager and the Portfolio Manager Oversight of other service providers
Application during the year
The Committee:
• reviews the Portfolio Manager’s performance, over the short
and long term, against the Company’s target investment return,
peer group and the market and considers the social impact
performance of investments made on behalf of the Company.
• considers the reporting it has received from the Manager and
Portfolio Manager throughout the year, and the reporting from
the Manager and Portfolio Manager to shareholders.
• assesses management fees on an absolute and relative basis,
receiving input from the Company’s broker, including peer
group and industry figures, as well as the structure of the fees.
• reviews the appropriateness of the Manager’s and Portfolio
Manager’s contracts, including terms such as notice period.
• assesses whether the Company receives appropriate
administrative, accounting, company secretarial and marketing
support from the Manager.
The Committee reviews the performance and competitiveness of
the following service providers on at least an annual basis:
• Depositary and custodian
• Corporate broker
• Registrar
The Committee also receives a report from the Company
Secretary on ancillary service providers, and considers any
recommendations.
The Committee noted the Audit and Risk Committee’s review of
the Auditor.
The Committee undertook a detailed review of the Portfolio
Manager’s performance and agreed that it has the appropriate
depth and quality of resource to deliver superior returns over the
longer term.
The Committee also reviewed the terms of the AIFM and portfolio
management agreements, including fee structures, and agreed
they remained fit for purpose.
The Committee reviewed the other services provided by the
Manager and agreed they were satisfactory.
The annual review of each of the service providers was
satisfactory.
The Committee noted that the Audit and Risk Committee had
undertaken a detailed evaluation of the Manager, registrar, and
safekeeping agents’ internal controls.
Recommendations made to, and approved by, the Board:
• That the ongoing appointment of the Manager and Portfolio Manager on the terms of their agreements with the Company,
including fees, was in the best interests of shareholders as a whole.
• That the Company’s service providers’ performance remained satisfactory.
Other Information (Unaudited) Introduction Strategic Report Governance Financial
Management Engagement Committee Report
The Management Engagement Committee is responsible for: (1) the monitoring and oversight of the Manager’s and Portfolio Manager’s
performance and fees, and confirming their ongoing suitability; and (2) reviewing and assessing the Company’s other service providers,
including reviewing their fees. All directors are members of the Committee. James B. Broderick is the Chair of the Committee. The Committee’s
terms of reference are available on the Company’s website, www.schroders.com/sbsi. The Committee’s effectiveness was assessed, and judged
to be satisfactory, as part of the directors’ annual review of the Board and its committees.
Approach
Oversight of the Manager and the Portfolio Manager Oversight of other service providers
Application during the year
The Committee:
• reviews the Portfolio Manager’s performance, over the short
and long term, against the Company’s target investment return,
peer group and the market and considers the social impact
performance of investments made on behalf of the Company.
• considers the reporting it has received from the Manager and
Portfolio Manager throughout the year, and the reporting from
the Manager and Portfolio Manager to shareholders.
• assesses management fees on an absolute and relative basis,
receiving input from the Company’s broker, including peer
group and industry figures, as well as the structure of the fees.
• reviews the appropriateness of the Manager’s and Portfolio
Manager’s contracts, including terms such as notice period.
• assesses whether the Company receives appropriate
administrative, accounting, company secretarial and marketing
support from the Manager.
The Committee reviews the performance and competitiveness of
the following service providers on at least an annual basis:
• Depositary and custodian
• Corporate broker
• Registrar
The Committee also receives a report from the Company
Secretary on ancillary service providers, and considers any
recommendations.
The Committee noted the Audit and Risk Committee’s review of
the Auditor.
The Committee undertook a detailed review of the Portfolio
Manager’s performance and agreed that it has the appropriate
depth and quality of resource to deliver superior returns over the
longer term.
The Committee also reviewed the terms of the AIFM and portfolio
management agreements, including fee structures, and agreed
they remained fit for purpose.
The Committee reviewed the other services provided by the
Manager and agreed they were satisfactory.
The annual review of each of the service providers was
satisfactory.
The Committee noted that the Audit and Risk Committee had
undertaken a detailed evaluation of the Manager, registrar, and
safekeeping agents’ internal controls.
Recommendations made to, and approved by, the Board:
• That the ongoing appointment of the Manager and Portfolio Manager on the terms of their agreements with the Company,
including fees, was in the best interests of shareholders as a whole.
• That the Company’s service providers’ performance remained satisfactory.
Nomination Committee Report
The Nomination Committee is responsible for: (1) the recruitment, selection and induction of directors; (2) their assessment during their tenure
and fees; and (3) the Board’s succession. All directors are members. Alice Chapple is the Chair of the Committee. The Committee’s terms of
reference are available on the Company’s website, www.schroders.com/sbsi. The Committee’s effectiveness was assessed, and judged to be
satisfactory, as part of the directors’ annual review of the Board and its committees.
Oversight of Directors
Approach
Selection and induction Board evaluation and directors’ fees Succession
Application during the year
Selection Induction Annual
evaluation
Annual review
of succession
policy
Application
of succession
policy
• The Committee prepares a job
specification for each role, and an
independent recruitment firm is
appointed following a selection process.
For the Chair and the chairs of
committees, the Committee considers
current Board members too.
• Job specification outlines the knowledge,
professional skills, personal qualities and
experience requirements.
• Potential candidates are assessed
against the Company’s diversity policy.
• The Committee discusses the long list,
invites a number of candidates for
interview and makes a recommendation
to the Board.
• The Committee reviews the induction
and training of new directors.
• The Committee assesses each director
annually.
• Evaluation focuses on whether each
director continues to demonstrate
commitment to their role and provides
a valuable contribution to the Board
during the year, taking into account time
commitment, independence, conflicts and
training needs.
• Following the evaluation, the Committee
provides a recommendation to
shareholders with respect to the annual
re-election of directors at the AGM.
• All directors retire at the AGM and their
election or re-election is subject to
shareholder approval.
• The Committee reviews directors’ fees,
taking into account comparative data and
reports to shareholders in the
Remuneration Report.
• Any proposed changes to the
remuneration policy for directors are
discussed and reported to shareholders.
• The Board’s succession policy is that
directors’ tenure will be for no longer
than nine years, except in exceptional
circumstances, and that each director will
be subject to annual re-election at the
AGM. The policy reflects FRC guidance
that the Chair should not remain in post
beyond nine years from the date of their
first appointment to the Board, and that
serving on the Board for more than nine
years from the date of first appointment
is likely to impair, or could appear to
impair, the independence of directors.
• The Committee reviews the Board’s
current and future needs at least
annually. Should any need be identified
the Committee will initiate the selection
process.
• The Committee oversees the handover
process for retiring directors.
50 Schroder BSC Social Impact Trust plc
The Nomination Committee is responsible for: (1) the recruitment, selection and induction of directors; (2) their assessment during their tenure
and fees; and (3) the Board’s succession. All directors are members. Alice Chapple is the Chair of the Committee. The Committee’s terms of
reference are available on the Company’s website, www.schroders.com/sbsi. The Committee’s effectiveness was assessed, and judged to be
satisfactory, as part of the directors’ annual review of the Board and its committees.
Oversight of Directors
Approach
Selection and induction Board evaluation and directors’ fees Succession
Application during the year
Selection Induction Annual
evaluation
Annual review
of succession
policy
Application
of succession
policy
• The Committee prepares a job
specification for each role, and an
independent recruitment firm is
appointed following a selection process.
For the Chair and the chairs of
committees, the Committee considers
current Board members too.
• Job specification outlines the knowledge,
professional skills, personal qualities and
experience requirements.
• Potential candidates are assessed
against the Company’s diversity policy.
• The Committee discusses the long list,
invites a number of candidates for
interview and makes a recommendation
to the Board.
• The Committee reviews the induction
and training of new directors.
• The Committee assesses each director
annually.
• Evaluation focuses on whether each
director continues to demonstrate
commitment to their role and provides
a valuable contribution to the Board
during the year, taking into account time
commitment, independence, conflicts and
training needs.
• Following the evaluation, the Committee
provides a recommendation to
shareholders with respect to the annual
re-election of directors at the AGM.
• All directors retire at the AGM and their
election or re-election is subject to
shareholder approval.
• The Committee reviews directors’ fees,
taking into account comparative data and
reports to shareholders in the
Remuneration Report.
• Any proposed changes to the
remuneration policy for directors are
discussed and reported to shareholders.
• The Board’s succession policy is that
directors’ tenure will be for no longer
than nine years, except in exceptional
circumstances, and that each director will
be subject to annual re-election at the
AGM. The policy reflects FRC guidance
that the Chair should not remain in post
beyond nine years from the date of their
first appointment to the Board, and that
serving on the Board for more than nine
years from the date of first appointment
is likely to impair, or could appear to
impair, the independence of directors.
• The Committee reviews the Board’s
current and future needs at least
annually. Should any need be identified
the Committee will initiate the selection
process.
• The Committee oversees the handover
process for retiring directors.
50 Schroder BSC Social Impact Trust plc
Schroder BSC Social Impact Trust plc
51
Other Information (Unaudited) Introduction Strategic Report Governance Financial
Application during the year
Selection and induction Board evaluation and directors’ fees Succession
• Following a rigorous selection process
using an independent external
recruitment agency, Sapphire Partners,
Ranjan Ramparia was appointed to the
Board with effect from 16 October 2024.
Sapphire Partners has no connection
with the Company or any of the directors.
• The Committee noted that following her
appointment, Ranjan Ramparia will
engage in an induction programme with
the Portfolio Manager as well as the
Manager and its various operating
functions before the AGM on
18 December 2024.
• Ranjan Ramparia will stand for election as
a director at the forthcoming AGM, as set
out in the Notice of Annual General
Meeting.
• Independent external recruitment
agencies were approached to provide
suitable proposals.
• The Board, Chair and committee
evaluation process was undertaken in June
2024. The evaluation included the
completion of questionnaires, culminating
in written reports being provided to the
Committee. The evaluation of the Board
and its committees was led by the Chair of
the Committee. The evaluation of the Chair
was led by the Chair of the Audit and Risk
Committee.
• The Committee reviewed each director’s
time commitment and independence by
reviewing a complete list of appointments,
including pro bono not for profit roles, to
ensure that each director remained free
from conflict and had sufficient time
available to discharge each of their duties
effectively. All directors were considered to
be independent in character and
judgement.
• The Committee considered each director’s
contributions, and noted that in addition to
extensive experience as professionals and
non-executive directors, each director had
valuable skills and experience, as detailed
in their biographies on pages 40 to 41.
• Based on its assessment, the Committee
provided individual recommendations for
each director’s re-election.
• The Committee reviewed the remuneration
policy for recommendation to the Board
and shareholders, taking into account the
provisions of the Company’s articles of
association and the prevailing
remuneration environment for investment
companies.
• The Committee reviewed directors’ fees,
using external benchmarking, and
recommended that directors’ fees remain
unchanged as detailed in the
remuneration report.
• Ranjan Ramparia will succeed Mike
Balfour as chair of the Audit and Risk
Committee following his retirement at
the Company’s AGM on 18 December
2024.
• The Committee reviewed the succession
policy and agreed it was still fit for
purpose.
• The Committee believes it is important
for the Board to have the appropriate
skills and diversity and has reviewed
composition and succession plans with
these in mind.
• The Board has complied with the UK
Listing Rules in relation to diversity and
provided the relevant disclosures on
page 31.
Recommendations made to, and approved by, the Board:
• That all directors continue to demonstrate commitment to their roles, provide a valuable contribution to the deliberations of the
Board and remain free from conflicts with the Company and its directors, and should all be recommended for re-election by
shareholders at the AGM. B iographies of each director can be found on pages 4 0 to 4 1 . Mike B alfour will retire at the forthcoming
AGM and will not be standing for re-election.
• That the Directors’ Remuneration Report be put to shareholders for approval as an advisory vote at the forthcoming AGM.
• That the Directors’ Remuneration Policy be put to shareholders for approval at the forthcoming AGM.
• That Sapphire Partners L imited be engaged to assist in the search for a successor for Mike B alfour who will retire as a director at the
Company’s AGM on 1 8 December 202 4.
• That Ranj an Ramparia be appointed as a non-e x ecutive director with effect from 16 October 202 4 and that her election as a director
be proposed, and recommended to shareholders for approval at the forthcoming AGM.
Other Information (Unaudited) Introduction Strategic Report Governance Financial
Application during the year
Selection and induction Board evaluation and directors’ fees Succession
• Following a rigorous selection process
using an independent external
recruitment agency, Sapphire Partners,
Ranjan Ramparia was appointed to the
Board with effect from 16 October 2024.
Sapphire Partners has no connection
with the Company or any of the directors.
• The Committee noted that following her
appointment, Ranjan Ramparia will
engage in an induction programme with
the Portfolio Manager as well as the
Manager and its various operating
functions before the AGM on
18 December 2024.
• Ranjan Ramparia will stand for election as
a director at the forthcoming AGM, as set
out in the Notice of Annual General
Meeting.
• Independent external recruitment
agencies were approached to provide
suitable proposals.
• The Board, Chair and committee
evaluation process was undertaken in June
2024. The evaluation included the
completion of questionnaires, culminating
in written reports being provided to the
Committee. The evaluation of the Board
and its committees was led by the Chair of
the Committee. The evaluation of the Chair
was led by the Chair of the Audit and Risk
Committee.
• The Committee reviewed each director’s
time commitment and independence by
reviewing a complete list of appointments,
including pro bono not for profit roles, to
ensure that each director remained free
from conflict and had sufficient time
available to discharge each of their duties
effectively. All directors were considered to
be independent in character and
judgement.
• The Committee considered each director’s
contributions, and noted that in addition to
extensive experience as professionals and
non-executive directors, each director had
valuable skills and experience, as detailed
in their biographies on pages 40 to 41.
• Based on its assessment, the Committee
provided individual recommendations for
each director’s re-election.
• The Committee reviewed the remuneration
policy for recommendation to the Board
and shareholders, taking into account the
provisions of the Company’s articles of
association and the prevailing
remuneration environment for investment
companies.
• The Committee reviewed directors’ fees,
using external benchmarking, and
recommended that directors’ fees remain
unchanged as detailed in the
remuneration report.
• Ranjan Ramparia will succeed Mike
Balfour as chair of the Audit and Risk
Committee following his retirement at
the Company’s AGM on 18 December
2024.
• The Committee reviewed the succession
policy and agreed it was still fit for
purpose.
• The Committee believes it is important
for the Board to have the appropriate
skills and diversity and has reviewed
composition and succession plans with
these in mind.
• The Board has complied with the UK
Listing Rules in relation to diversity and
provided the relevant disclosures on
page 31.
Recommendations made to, and approved by, the Board:
• That all directors continue to demonstrate commitment to their roles, provide a valuable contribution to the deliberations of the
Board and remain free from conflicts with the Company and its directors, and should all be recommended for re-election by
shareholders at the AGM. B iographies of each director can be found on pages 4 0 to 4 1 . Mike B alfour will retire at the forthcoming
AGM and will not be standing for re-election.
• That the Directors’ Remuneration Report be put to shareholders for approval as an advisory vote at the forthcoming AGM.
• That the Directors’ Remuneration Policy be put to shareholders for approval at the forthcoming AGM.
• That Sapphire Partners L imited be engaged to assist in the search for a successor for Mike B alfour who will retire as a director at the
Company’s AGM on 1 8 December 202 4.
• That Ranj an Ramparia be appointed as a non-e x ecutive director with effect from 16 October 202 4 and that her election as a director
be proposed, and recommended to shareholders for approval at the forthcoming AGM.
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
forthcoming AGM and the current policy provisions will continue to
apply until that date. The below Directors’ Remuneration Report is
subject to an annual advisory vote. An ordinary resolution to approve
this report will also be put to shareholders at the forthcoming AGM.
At the AGM held on 3 December 2021, 100% of the votes cast
(including votes cast at the Chair’s discretion) in respect of approval of
the remuneration policy were in favour. 3,000 votes were withheld.
At the AGM held on 15 December 2023, 100% of the votes cast
(including votes cast at the Chair’s discretion) in respect of approval of
the Directors’ Remuneration Report for the year ended 30 June 2023
were in favour. No votes were withheld.
Directors’ remuneration policy
The determination of the directors’ fees is the responsibility of the
Nomination Committee, which makes recommendations to the
Board. All directors are members of the Nomination Committee.
It is the Nomination Committee’s policy to determine the level of
directors’ remuneration having regard to amounts payable to
non-executive directors in the industry generally, the role that
individual directors fulfil, in respect of Board and committee
responsibilities, and time committed to the Company’s affairs, taking
into account the aggregate limit of fees set out in the Company’s
articles of association. This limit of directors’ fees is currently set at
£500,000 per financial year and any increase in this level requires
approval by the Board and the Company’s shareholders.
The Chair of the Board and the Chair of the Audit and Risk Committee
each receive fees at a higher rate than the other directors to reflect
their additional responsibilities. Directors’ fees are set at a level to
recruit and retain individuals of sufficient calibre, with the level of
knowledge, experience and expertise necessary, and to promote the
success of the Company in reaching its short and long-term strategic
objectives.
The Board and its committees exclusively comprise non-executive
directors. No director past or present has an entitlement to a pension
from the Company and the Company has not, and does not intend to,
operate a share scheme for directors or to award any share options
or long-term performance incentives to any director. No director has
a service contract with the Company, however directors have a letter
of appointment. Directors do not receive exit payments and are not
provided with any compensation for loss of office. Any director who
performs services which in the opinion of the directors are outside
the scope of the ordinary duties of a director, may be paid additional
remuneration to be determined by the directors, subject to the
previously mentioned fee cap and in accordance with the Company’s
articles of association. No other payments are made to directors
other than the reimbursement of reasonable out-of-pocket expenses
incurred in attending to the Company’s business.
It is intended that all of the provisions of the last approved directors’
remuneration policy are to continue to apply, subject to an annual
review by the Nomination Committee.
The terms of directors’ letters of appointment are available for
inspection at the Company’s registered office address during normal
business hours and during the AGM at the location of such meeting.
Implementation of policy
The Board did not seek the views of shareholders in setting this
remuneration policy. Any comments on the policy received from
shareholders would be considered on a case by case basis.
As the Company does not have any employees, no employee pay and
employment conditions were taken into account when setting this
remuneration policy and no employees were consulted in its
construction.
Directors’ fees are reviewed annually and take into account research
from third parties on the fee levels of directors of peer group
companies, as well as industry norms, inflation and factors affecting
the time commitment expected of the directors. New directors are
subject to the provisions set out in this remuneration policy.
Directors’ annual report on remuneration
This report sets out how the remuneration policy was implemented
during the year ended 30 June 2024.
Consideration of matters relating to directors’
remuneration
Directors’ remuneration was last reviewed by the Nomination
Committee in June 2024 and no changes were made. The members of
the Committee and Board at the time that remuneration levels were
considered were as set out on pages 40 to 41, apart from Ranjan
Ramparia, who was appointed as a director on 16 October 2024.
Although no external advice was sought in considering the levels of
directors’ fees, information on fees paid to directors of other
investment companies managed by Schroders and peer group
companies provided by the Manager was taken into consideration, as
was independent third party research. Directors’ fees have not
changed since the Company’s IPO.
Following this review, it was determined that directors’ fees would not
be changed and for the year ending 30 June 2025 will be £30,000 per
annum for each director plus an additional annual fee of £5,000 per
annum for the Chair of the Audit and Risk Committee. The Chair’s fee
is £40,000 per annum. Directors’ fees (before expenses) for the year
ending 30 June 2025 are therefore expected to total £143,162
in aggregate.
52 Schroder BSC Social Impact Trust plc
Directors’ Remuneration Report
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
forthcoming AGM and the current policy provisions will continue to
apply until that date. The below Directors’ Remuneration Report is
subject to an annual advisory vote. An ordinary resolution to approve
this report will also be put to shareholders at the forthcoming AGM.
At the AGM held on 3 December 2021, 100% of the votes cast
(including votes cast at the Chair’s discretion) in respect of approval of
the remuneration policy were in favour. 3,000 votes were withheld.
At the AGM held on 15 December 2023, 100% of the votes cast
(including votes cast at the Chair’s discretion) in respect of approval of
the Directors’ Remuneration Report for the year ended 30 June 2023
were in favour. No votes were withheld.
Directors’ remuneration policy
The determination of the directors’ fees is the responsibility of the
Nomination Committee, which makes recommendations to the
Board. All directors are members of the Nomination Committee.
It is the Nomination Committee’s policy to determine the level of
directors’ remuneration having regard to amounts payable to
non-executive directors in the industry generally, the role that
individual directors fulfil, in respect of Board and committee
responsibilities, and time committed to the Company’s affairs, taking
into account the aggregate limit of fees set out in the Company’s
articles of association. This limit of directors’ fees is currently set at
£500,000 per financial year and any increase in this level requires
approval by the Board and the Company’s shareholders.
The Chair of the Board and the Chair of the Audit and Risk Committee
each receive fees at a higher rate than the other directors to reflect
their additional responsibilities. Directors’ fees are set at a level to
recruit and retain individuals of sufficient calibre, with the level of
knowledge, experience and expertise necessary, and to promote the
success of the Company in reaching its short and long-term strategic
objectives.
The Board and its committees exclusively comprise non-executive
directors. No director past or present has an entitlement to a pension
from the Company and the Company has not, and does not intend to,
operate a share scheme for directors or to award any share options
or long-term performance incentives to any director. No director has
a service contract with the Company, however directors have a letter
of appointment. Directors do not receive exit payments and are not
provided with any compensation for loss of office. Any director who
performs services which in the opinion of the directors are outside
the scope of the ordinary duties of a director, may be paid additional
remuneration to be determined by the directors, subject to the
previously mentioned fee cap and in accordance with the Company’s
articles of association. No other payments are made to directors
other than the reimbursement of reasonable out-of-pocket expenses
incurred in attending to the Company’s business.
It is intended that all of the provisions of the last approved directors’
remuneration policy are to continue to apply, subject to an annual
review by the Nomination Committee.
The terms of directors’ letters of appointment are available for
inspection at the Company’s registered office address during normal
business hours and during the AGM at the location of such meeting.
Implementation of policy
The Board did not seek the views of shareholders in setting this
remuneration policy. Any comments on the policy received from
shareholders would be considered on a case by case basis.
As the Company does not have any employees, no employee pay and
employment conditions were taken into account when setting this
remuneration policy and no employees were consulted in its
construction.
Directors’ fees are reviewed annually and take into account research
from third parties on the fee levels of directors of peer group
companies, as well as industry norms, inflation and factors affecting
the time commitment expected of the directors. New directors are
subject to the provisions set out in this remuneration policy.
Directors’ annual report on remuneration
This report sets out how the remuneration policy was implemented
during the year ended 30 June 2024.
Consideration of matters relating to directors’
remuneration
Directors’ remuneration was last reviewed by the Nomination
Committee in June 2024 and no changes were made. The members of
the Committee and Board at the time that remuneration levels were
considered were as set out on pages 40 to 41, apart from Ranjan
Ramparia, who was appointed as a director on 16 October 2024.
Although no external advice was sought in considering the levels of
directors’ fees, information on fees paid to directors of other
investment companies managed by Schroders and peer group
companies provided by the Manager was taken into consideration, as
was independent third party research. Directors’ fees have not
changed since the Company’s IPO.
Following this review, it was determined that directors’ fees would not
be changed and for the year ending 30 June 2025 will be £30,000 per
annum for each director plus an additional annual fee of £5,000 per
annum for the Chair of the Audit and Risk Committee. The Chair’s fee
is £40,000 per annum. Directors’ fees (before expenses) for the year
ending 30 June 2025 are therefore expected to total £143,162
in aggregate.
52 Schroder BSC Social Impact Trust plc
Directors’ Remuneration Report
Schroder BSC Social Impact Trust plc
53
Other Information (Unaudited) Introduction Strategic Report Governance Financial
Fees paid to directors
The following amounts were paid by the Company to directors for their services in respect of the year ended 30 June 2024. Directors’
remuneration is fixed; they do not receive any variable remuneration. The performance of the Company over the period is presented under
Performance Summary on the inside front cover.
Chang e in annual
fee over years
Fees Taxable benefits
1
Total ended 30 June
2024 2023 2024 2023 2024 2023 2024 2023 2022
Director £ £ £ £ £ £ % % %
Suzannah Nicklin (Chair) 40,000 40,000 350 486 40,350 40,486 (0.3) 1.1 (0.4)
Mike Balfour 35,000 35,000 4,100 4,643 39,100 39,643 (1.4) 8.3 2.6
James Broderick 30,000 30,000 – 292 30,000 30,292 (1.0) 0.9 (0.5)
Alice Chapple 30,000 30,000 – 168 30,000 30,168 (0.6) 0.4 (0.5)
Ranjan Ramparia
2
– – – – – – – – –
135,000 135,000 4,450 5,589 139,450 140,589
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
Ranjan Ramparia was appointed in October 2024. The information in the above table has been audited.
The information in the above table has been audited.
Expenditure by the Company on remuneration and distributions to shareholders
The table below compares the remuneration payable to directors, to distributions made to shareholders during the year under review and the
prior year. In considering these figures, shareholders should take into account the Company’s investment objective.
Year ended Year ended
30 June 30 June
2024 2023 %
£’000 £’000 Chang e
Remuneration payable to directors 139 141 (1.4)
Distributions paid to shareholders
– Dividends paid 1,934 1,109
– Share buy backs 1,409 674
Total distributions to shareholders 3,343 1,783 87.5
Performance graph since 22 December 2020 (launch date)
Share price total return versus the FTSE All-Share Index Total Return, for the period from launch on 22 December
2020, to 30 June 2024
1
1
Source: Morningstar. Rebased to 100 at 22 December 2020. The Company is legally required to compare its performance with a broad equity market index. The
Company’s performance is expected to have a low correlation to traditional quoted markets and has no meaningful index comparator. So the FTSE All-Share Index
been chosen as it is reflective of economic conditions in the UK.
Definitions of terms and performance measures are provided on pages 84 to 85.
80
90
100
110
120
130
140
30-Jun-24 30-Jun-23 30-Jun-22 30-Jun-21 22-Dec-20
FTSE All-Share Index Share price
Other Information (Unaudited) Introduction Strategic Report Governance Financial
Fees paid to directors
The following amounts were paid by the Company to directors for their services in respect of the year ended 30 June 2024. Directors’
remuneration is fixed; they do not receive any variable remuneration. The performance of the Company over the period is presented under
Performance Summary on the inside front cover.
Chang e in annual
fee over years
Fees Taxable benefits
1
Total ended 30 June
2024 2023 2024 2023 2024 2023 2024 2023 2022
Director £ £ £ £ £ £ % % %
Suzannah Nicklin (Chair) 40,000 40,000 350 486 40,350 40,486 (0.3) 1.1 (0.4)
Mike Balfour 35,000 35,000 4,100 4,643 39,100 39,643 (1.4) 8.3 2.6
James Broderick 30,000 30,000 – 292 30,000 30,292 (1.0) 0.9 (0.5)
Alice Chapple 30,000 30,000 – 168 30,000 30,168 (0.6) 0.4 (0.5)
Ranjan Ramparia
2
– – – – – – – – –
135,000 135,000 4,450 5,589 139,450 140,589
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
Ranjan Ramparia was appointed in October 2024. The information in the above table has been audited.
The information in the above table has been audited.
Expenditure by the Company on remuneration and distributions to shareholders
The table below compares the remuneration payable to directors, to distributions made to shareholders during the year under review and the
prior year. In considering these figures, shareholders should take into account the Company’s investment objective.
Year ended Year ended
30 June 30 June
2024 2023 %
£’000 £’000 Chang e
Remuneration payable to directors 139 141 (1.4)
Distributions paid to shareholders
– Dividends paid 1,934 1,109
– Share buy backs 1,409 674
Total distributions to shareholders 3,343 1,783 87.5
Performance graph since 22 December 2020 (launch date)
Share price total return versus the FTSE All-Share Index Total Return, for the period from launch on 22 December
2020, to 30 June 2024
1
1
Source: Morningstar. Rebased to 100 at 22 December 2020. The Company is legally required to compare its performance with a broad equity market index. The
Company’s performance is expected to have a low correlation to traditional quoted markets and has no meaningful index comparator. So the FTSE All-Share Index
been chosen as it is reflective of economic conditions in the UK.
Definitions of terms and performance measures are provided on pages 84 to 85.
80
90
100
110
120
130
140
30-Jun-24 30-Jun-23 30-Jun-22 30-Jun-21 22-Dec-20
FTSE All-Share Index Share price
Directors’ share interests
The Company’s articles of association do not require directors to own shares in the Company. The interests of directors, including those of
connected persons, at the beginning and end of the financial year under review, are set out below.
At 30 June At 30 June
Director 2024
1
2023
1
Susannah Nicklin 25,412 21,558
Mike Balfour 30,000 20,000
James Broderick 500,000 500,000
Alice Chapple 10,000 10,000
Ranjan Ramparia 2
N/A N/A
1
Ordinary shares of 1p each.
2
Ranjan Ramparia was appointed as a director on 16 October 2024.
The information in the above table has been audited. There have been no changes in the directors’ interests in the shares of the Company
between 30 June 2024 and the date of this annual report.
On behalf of the Board
Susannah Nicklin
Chair
23 October 2024
54 Schroder BSC Social Impact Trust plc
Directors’ Remuneration Report
continued
The Company’s articles of association do not require directors to own shares in the Company. The interests of directors, including those of
connected persons, at the beginning and end of the financial year under review, are set out below.
At 30 June At 30 June
Director 2024
1
2023
1
Susannah Nicklin 25,412 21,558
Mike Balfour 30,000 20,000
James Broderick 500,000 500,000
Alice Chapple 10,000 10,000
Ranjan Ramparia 2
N/A N/A
1
Ordinary shares of 1p each.
2
Ranjan Ramparia was appointed as a director on 16 October 2024.
The information in the above table has been audited. There have been no changes in the directors’ interests in the shares of the Company
between 30 June 2024 and the date of this annual report.
On behalf of the Board
Susannah Nicklin
Chair
23 October 2024
54 Schroder BSC Social Impact Trust plc
Directors’ Remuneration Report
continued
Schroder BSC Social Impact Trust plc
55
Other Information (Unaudited) Introduction Strategic Report Governance Financial
Statement of Directors’ Responsibilities
Directors’ responsibilities
The directors are responsible for preparing the annual report and
accounts in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements
for each financial period. Under that law the directors have prepared
the financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (FRS: 102 The Financial
Reporting Standard applicable in the UK and Republic of Ireland) and
applicable law. Under company law the directors must not approve
the financial statements unless they are satisfied that they give a true
and fair view of the state of affairs of the Company and of the return
or loss of the Company for that period. In preparing these financial
statements, the directors are required to:
– select suitable accounting policies and then apply them
consistently;
– make judgements and accounting estimates that are reasonable
and prudent;
– state whether applicable UK Accounting Standards, comprising
FRS 102, have been followed, subject to any material departures
disclosed and explained in the financial statements;
– prepare a directors’ report, a strategic report and directors’
remuneration report which comply with the requirements of the
Companies Act 2006; and
– prepare the financial statements on a going concern basis unless
it is inappropriate to presume that the Company will continue in
business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that the
financial statements and the Directors’ Remuneration Report comply
with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and other
irregularities.
The directors are responsible for ensuring the annual report and the
financial statements are made available on a website. Financial
statements are published on the Company’s website in accordance
with legislation in the United Kingdom governing the preparation and
dissemination of financial statements, which may vary from legislation
in other jurisdictions. The maintenance and integrity of the
Company’s website is the responsibility of the Manager. The directors’
responsibilities also extend to the ongoing integrity of the financial
statements contained therein.
Directors’ statement
Each of the directors, whose names and functions are listed on
pages 40 to 41, confirm that to the best of their knowledge:
– the financial statements, which have been prepared in
accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards and applicable
law), give a true and fair view of the assets, liabilities, financial
position and net return of the Company;
– the annual report and accounts includes a fair review of the
development and performance of the business and the financial
position of the Company, together with a description of the
principal risks and uncertainties that it faces; and
– the annual report and accounts, taken as a whole, is fair,
balanced and understandable and provides the information
necessary for shareholders to assess the Company’s position
and performance, business model and strategy.
On behalf of the Board
Susannah Nicklin
Chair
23 October 2024
Other Information (Unaudited) Introduction Strategic Report Governance Financial
Statement of Directors’ Responsibilities
Directors’ responsibilities
The directors are responsible for preparing the annual report and
accounts in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements
for each financial period. Under that law the directors have prepared
the financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (FRS: 102 The Financial
Reporting Standard applicable in the UK and Republic of Ireland) and
applicable law. Under company law the directors must not approve
the financial statements unless they are satisfied that they give a true
and fair view of the state of affairs of the Company and of the return
or loss of the Company for that period. In preparing these financial
statements, the directors are required to:
– select suitable accounting policies and then apply them
consistently;
– make judgements and accounting estimates that are reasonable
and prudent;
– state whether applicable UK Accounting Standards, comprising
FRS 102, have been followed, subject to any material departures
disclosed and explained in the financial statements;
– prepare a directors’ report, a strategic report and directors’
remuneration report which comply with the requirements of the
Companies Act 2006; and
– prepare the financial statements on a going concern basis unless
it is inappropriate to presume that the Company will continue in
business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that the
financial statements and the Directors’ Remuneration Report comply
with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking
reasonable steps for the prevention and detection of fraud and other
irregularities.
The directors are responsible for ensuring the annual report and the
financial statements are made available on a website. Financial
statements are published on the Company’s website in accordance
with legislation in the United Kingdom governing the preparation and
dissemination of financial statements, which may vary from legislation
in other jurisdictions. The maintenance and integrity of the
Company’s website is the responsibility of the Manager. The directors’
responsibilities also extend to the ongoing integrity of the financial
statements contained therein.
Directors’ statement
Each of the directors, whose names and functions are listed on
pages 40 to 41, confirm that to the best of their knowledge:
– the financial statements, which have been prepared in
accordance with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards and applicable
law), give a true and fair view of the assets, liabilities, financial
position and net return of the Company;
– the annual report and accounts includes a fair review of the
development and performance of the business and the financial
position of the Company, together with a description of the
principal risks and uncertainties that it faces; and
– the annual report and accounts, taken as a whole, is fair,
balanced and understandable and provides the information
necessary for shareholders to assess the Company’s position
and performance, business model and strategy.
On behalf of the Board
Susannah Nicklin
Chair
23 October 2024
56
Financial
Financial
Independent Auditor’s Report 58
Income Statement 63
Statement of Changes in Equity 64
Balance Sheet 65
Cash Flow Statement 66
Notes to the Accounts 67
Schroder Asian Total Return Investment Company plc 57
Financial
Independent Auditor’s Report 58
Income Statement 63
Statement of Changes in Equity 64
Balance Sheet 65
Cash Flow Statement 66
Notes to the Accounts 67
Schroder Asian Total Return Investment Company plc 57
58
Schroder BSC Social Impact Trust plc
Independent Auditor’s Report
to the Members of Schroder BSC Social Impact Trust plc
Opinion on the financial statements
In our opinion the financial statements:
• give a true and fair view of the state of the Company’s affairs as at 30 June 2024 and of its return for the year then ended;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Schroder BSC Social Impact Trust (the ‘Company’) for the year ended 30 June 2024 which comprise
the Income Statement, the Statement of Changes in Equity, the Balance Sheet, the Cash Flow Statement and the notes to the financial
statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation
is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard
applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs(UK)) and applicable law. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit opinion is consistent with the
additional report to the audit committee.
Independence
Following the recommendation of the audit committee, we were appointed by the Board of Directors on 16 October 2020 to audit the financial
statements for the year ended 30 June 2021 and subsequent financial periods. The period of total uninterrupted engagement including
retenders and reappointments is four years, covering the years ended 30 June 2021 to 30 June 2024. We remain independent of the Company
in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. The non-audit services prohibited by that standard were not provided to the Company.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of
the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Company’s ability to continue to adopt the going
concern basis of accounting included:
• Evaluating the appropriateness of the Directors’ method of assessing the going concern in light of economic and market conditions by
reviewing the information used by the Directors in completing their assessment; and
• Assessing the appropriateness of the Directors’ assumptions and judgements made in their base case and stress tested forecasts including
consideration of current cash levels, expected cash outflows to fund commitments to Limited Partnerships and financial ratios to ascertain
the ability of the company to meet cash flow requirements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of at least twelve months from when
the financial statements are authorised for issue.
In relation to the Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add or draw
attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it appropriate to adopt
the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
Overview
2024 2023
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the Company and its environment, including the Company’s system of internal control,
and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal
controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement.
Key audit matters – Valuation of unquoted investments
Materiality – Company financial statements as a whole
£1.29m (2023: £1.33m) based on 1.5% (2023: 1.5%) of Net assets (2023: Net assets)
Independent Auditor’s Report
to the Members of Schroder BSC Social Impact Trust plc
Opinion on the financial statements
In our opinion the financial statements:
• give a true and fair view of the state of the Company’s affairs as at 30 June 2024 and of its return for the year then ended;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Schroder BSC Social Impact Trust (the ‘Company’) for the year ended 30 June 2024 which comprise
the Income Statement, the Statement of Changes in Equity, the Balance Sheet, the Cash Flow Statement and the notes to the financial
statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation
is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard
applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs(UK)) and applicable law. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit opinion is consistent with the
additional report to the audit committee.
Independence
Following the recommendation of the audit committee, we were appointed by the Board of Directors on 16 October 2020 to audit the financial
statements for the year ended 30 June 2021 and subsequent financial periods. The period of total uninterrupted engagement including
retenders and reappointments is four years, covering the years ended 30 June 2021 to 30 June 2024. We remain independent of the Company
in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. The non-audit services prohibited by that standard were not provided to the Company.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of
the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Company’s ability to continue to adopt the going
concern basis of accounting included:
• Evaluating the appropriateness of the Directors’ method of assessing the going concern in light of economic and market conditions by
reviewing the information used by the Directors in completing their assessment; and
• Assessing the appropriateness of the Directors’ assumptions and judgements made in their base case and stress tested forecasts including
consideration of current cash levels, expected cash outflows to fund commitments to Limited Partnerships and financial ratios to ascertain
the ability of the company to meet cash flow requirements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of at least twelve months from when
the financial statements are authorised for issue.
In relation to the Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add or draw
attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it appropriate to adopt
the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
Overview
2024 2023
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the Company and its environment, including the Company’s system of internal control,
and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal
controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement.
Key audit matters – Valuation of unquoted investments
Materiality – Company financial statements as a whole
£1.29m (2023: £1.33m) based on 1.5% (2023: 1.5%) of Net assets (2023: Net assets)
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the
current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified,
including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of
the engagement team. This matter was addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on this matter.
Key audit matter How the scope of our audit
addressed the key audit matter
We assessed the design and implementation of controls relating to the
valuation of unquoted investments. This included obtaining an
understanding of the sources of key inputs, judgements and significant
estimates used as well as the oversight and governance structures in
relation to the valuation process.
For 100% of the unquoted investment population, we challenged
whether the valuation methodology was the most appropriate in the
circumstances under the International Private Equity and Venture
Capital Valuation (“IPEV”) Guidelines and FRS 102 and performed the
following procedures:
Unquoted Investment held at fair value
We attended all the Valuation Committee meetings in the year to
observe the Portfolio Manager discussing and challenging the
estimation uncertainty in the valuations and the fair value movements
during the year.
We obtained direct confirmation from the General Partners of the
Funds to confirm the share of the Net Asset Values (‘NAV’) held at the
balance sheet date.
We recalculated the Company’s share of NAV based on the direct
confirmation received and the NAV reported within the June 2024
Investor Report.
We obtained the unaudited June 2024 quarterly reports prepared by
the Investment Manager or General Partners of the underlying fund,
from the Portfolio Manager, which form the starting point of the
Portfolio Manager and the Manager’s period end valuation and used
this to recalculate the value of the investments at the year-end.
Where applicable, we compared the NAV per audited, or draft audited,
financial statements to the NAV reported in the Investor Report for the
same period that the audited financial statements relate to, to ascertain
the accuracy of the NAV reporting the underlying funds.
We reviewed the associated audited financial statements and audit
reports of the Funds to check for each Fund that the audit report was
unmodified and that the respective audit firms have the requisite skills
and knowledge to audit the Funds.
Additionally, we assessed the appropriateness of using the net asset
value as a representation of fair value.
We calculated the NAV movements for each Fund, between the latest
audited financial statements and the June 2024 Investor Reports
(where the Funds and the company do not have co-terminus year
ends). We assessed if there should be movements between the June
2024 Investor reports and the period of the audited financial
statements. Thereafter, we assessed the movements between the date
of the audited financial statements and the June 2024 Investor Reports.
We obtained explanations for any material movements from the
Portfolio Manager and the Manager and looked for corroborating
information in the Investor Reports provided by the General Partners of
the Funds to support any material valuation movements.
Investment held at amortised cost
We obtained direct confirmation from the holders of the loan notes of
the capital amount outstanding at the balance sheet date.
For all the investments held in loan portfolios, we agreed all the inputs
used in the amortisation calculation to the underlying loan agreements.
We also agreed capital and interest repayments to the underlying loan
agreement and to bank statements if amounts were paid in the period.
We recalculated the amortised cost of each of the loans.
We considered whether there were any impairment indicators present
within the loan, such as interest payments not being made or capital
repayments missed. We did this by tracing all payments through bank
statements to confirm these were all made in line with the agreement.
Key observations:
Based on the procedures performed we consider the investment
valuations and ownership to be appropriate.
We consider the valuation of unquoted
investments to be the most significant audit
area.
There is an inherent risk of management
override arising from the unquoted investment
valuations being prepared by the Manager, and
the Portfolio Manager who are remunerated on
the net asset value of the Company.
There is a high level of estimation uncertainty
involved in determining the unquoted
investment valuations.
Unquoted Investments is the most significant
balance in the financial statements and where
we utilise most of our audit resources and was
therefore considered to be a key audit matter.
Valuation and
ownership of
unquoted investments
(Note 1b and 9)
Schroder BSC Social Impact Trust plc 59
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the
current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified,
including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of
the engagement team. This matter was addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on this matter.
Key audit matter How the scope of our audit
addressed the key audit matter
We assessed the design and implementation of controls relating to the
valuation of unquoted investments. This included obtaining an
understanding of the sources of key inputs, judgements and significant
estimates used as well as the oversight and governance structures in
relation to the valuation process.
For 100% of the unquoted investment population, we challenged
whether the valuation methodology was the most appropriate in the
circumstances under the International Private Equity and Venture
Capital Valuation (“IPEV”) Guidelines and FRS 102 and performed the
following procedures:
Unquoted Investment held at fair value
We attended all the Valuation Committee meetings in the year to
observe the Portfolio Manager discussing and challenging the
estimation uncertainty in the valuations and the fair value movements
during the year.
We obtained direct confirmation from the General Partners of the
Funds to confirm the share of the Net Asset Values (‘NAV’) held at the
balance sheet date.
We recalculated the Company’s share of NAV based on the direct
confirmation received and the NAV reported within the June 2024
Investor Report.
We obtained the unaudited June 2024 quarterly reports prepared by
the Investment Manager or General Partners of the underlying fund,
from the Portfolio Manager, which form the starting point of the
Portfolio Manager and the Manager’s period end valuation and used
this to recalculate the value of the investments at the year-end.
Where applicable, we compared the NAV per audited, or draft audited,
financial statements to the NAV reported in the Investor Report for the
same period that the audited financial statements relate to, to ascertain
the accuracy of the NAV reporting the underlying funds.
We reviewed the associated audited financial statements and audit
reports of the Funds to check for each Fund that the audit report was
unmodified and that the respective audit firms have the requisite skills
and knowledge to audit the Funds.
Additionally, we assessed the appropriateness of using the net asset
value as a representation of fair value.
We calculated the NAV movements for each Fund, between the latest
audited financial statements and the June 2024 Investor Reports
(where the Funds and the company do not have co-terminus year
ends). We assessed if there should be movements between the June
2024 Investor reports and the period of the audited financial
statements. Thereafter, we assessed the movements between the date
of the audited financial statements and the June 2024 Investor Reports.
We obtained explanations for any material movements from the
Portfolio Manager and the Manager and looked for corroborating
information in the Investor Reports provided by the General Partners of
the Funds to support any material valuation movements.
Investment held at amortised cost
We obtained direct confirmation from the holders of the loan notes of
the capital amount outstanding at the balance sheet date.
For all the investments held in loan portfolios, we agreed all the inputs
used in the amortisation calculation to the underlying loan agreements.
We also agreed capital and interest repayments to the underlying loan
agreement and to bank statements if amounts were paid in the period.
We recalculated the amortised cost of each of the loans.
We considered whether there were any impairment indicators present
within the loan, such as interest payments not being made or capital
repayments missed. We did this by tracing all payments through bank
statements to confirm these were all made in line with the agreement.
Key observations:
Based on the procedures performed we consider the investment
valuations and ownership to be appropriate.
We consider the valuation of unquoted
investments to be the most significant audit
area.
There is an inherent risk of management
override arising from the unquoted investment
valuations being prepared by the Manager, and
the Portfolio Manager who are remunerated on
the net asset value of the Company.
There is a high level of estimation uncertainty
involved in determining the unquoted
investment valuations.
Unquoted Investments is the most significant
balance in the financial statements and where
we utilise most of our audit resources and was
therefore considered to be a key audit matter.
Valuation and
ownership of
unquoted investments
(Note 1b and 9)
Schroder BSC Social Impact Trust plc 59
Introduction Strategic Report Governance Financial Other Information (Unaudited)
60
Schroder BSC Social Impact Trust plc
Independent Auditor’s Report
to the Members of Schroder BSC Social Impact Trust plc
continued
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider
materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that
are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence,
when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as
follows:
Company financial statements
2024 2023
£m £m
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £64,500 (2023: £66,000). We also
agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report other
than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements, or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in
the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Corporate governance statement
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Company’s compliance with the provisions of the UK Corporate Governance Code specified for our
review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance
Statement is materially consistent with the financial statements, or our knowledge obtained during the audit.
1.29 1.33 Materiality
1.5% of Net assets Basis for determining materiality
As an investment trust, the net asset value is the key measure of performance for users of the
financial statements.
Rationale for the benchmark applied
0.97 1.00 Performance materiality
75% of materiality Basis for determining performance
materiality
The level of performance materiality applied was set after having considered a number of factors
including the expected total value of known and likely misstatements and the level of transactions in
the year.
Rationale for the percentage
applied for performance materiality
Independent Auditor’s Report
to the Members of Schroder BSC Social Impact Trust plc
continued
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider
materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that
are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence,
when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as
follows:
Company financial statements
2024 2023
£m £m
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £64,500 (2023: £66,000). We also
agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report other
than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements, or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in
the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Corporate governance statement
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate
Governance Statement relating to the Company’s compliance with the provisions of the UK Corporate Governance Code specified for our
review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance
Statement is materially consistent with the financial statements, or our knowledge obtained during the audit.
1.29 1.33 Materiality
1.5% of Net assets Basis for determining materiality
As an investment trust, the net asset value is the key measure of performance for users of the
financial statements.
Rationale for the benchmark applied
0.97 1.00 Performance materiality
75% of materiality Basis for determining performance
materiality
The level of performance materiality applied was set after having considered a number of factors
including the expected total value of known and likely misstatements and the level of transactions in
the year.
Rationale for the percentage
applied for performance materiality
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies
Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend
to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but
is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below:
• The Directors' statement with regards to the appropriateness of adopting the going
concern basis of accounting and any material uncertainties identified; and
• The Directors’ explanation as to their assessment of the Company’s prospects, the period
this assessment covers and why the period is appropriate.
Going concern and longer-term viability
• Directors' statement on fair, balanced and understandable;
• Board’s confirmation that it has carried out a robust assessment of the emerging and
principal risks;
• The section of the annual report that describes the review of effectiveness of risk
management and internal control systems; and
• The section describing the work of the Audit Committee.
Other Code provisions
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report for the financial year
for which the financial statements are prepared is consistent with the financial statements;
and
• the Strategic report and the Directors’ report have been prepared in accordance with
applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained
in the course of the audit, we have not identified material misstatements in the strategic report
or the Directors’ report.
Strategic report and Directors’ report
In our opinion, the part of the Directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.
Directors’ remuneration
We have nothing to report in respect of the following matters in relation to which the
Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept, or returns adequate for our audit have
not been received from branches not visited by us; or
• the financial statements and the part of the Directors’ remuneration report to be audited
are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Matters on which we are required to
report by exception
Schroder BSC Social Impact Trust plc 61
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies
Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend
to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but
is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities,
outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below:
• The Directors' statement with regards to the appropriateness of adopting the going
concern basis of accounting and any material uncertainties identified; and
• The Directors’ explanation as to their assessment of the Company’s prospects, the period
this assessment covers and why the period is appropriate.
Going concern and longer-term viability
• Directors' statement on fair, balanced and understandable;
• Board’s confirmation that it has carried out a robust assessment of the emerging and
principal risks;
• The section of the annual report that describes the review of effectiveness of risk
management and internal control systems; and
• The section describing the work of the Audit Committee.
Other Code provisions
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report for the financial year
for which the financial statements are prepared is consistent with the financial statements;
and
• the Strategic report and the Directors’ report have been prepared in accordance with
applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained
in the course of the audit, we have not identified material misstatements in the strategic report
or the Directors’ report.
Strategic report and Directors’ report
In our opinion, the part of the Directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.
Directors’ remuneration
We have nothing to report in respect of the following matters in relation to which the
Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept, or returns adequate for our audit have
not been received from branches not visited by us; or
• the financial statements and the part of the Directors’ remuneration report to be audited
are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Matters on which we are required to
report by exception
Schroder BSC Social Impact Trust plc 61
Introduction Strategic Report Governance Financial Other Information (Unaudited)
62
Schroder BSC Social Impact Trust plc
Independent Auditor’s Report
to the Members of Schroder BSC Social Impact Trust plc
continued
Non-compliance with laws and regulations
Based on:
• Our understanding of the Company and the industry in which it operates;
• Discussion with the Manager and Portfolio Manager, and those charged with governance;
• Obtaining and understanding of the Company’s policies and procedures regarding compliance with laws and regulations.
we considered the significant laws and regulations to be Companies Act 2006, the FCA listing and DTR rules, the principles of the AIC Code of
Corporate Governance, industry practice represented by the AIC SORP, the applicable accounting framework, and qualification as an Investment
Trust under UK tax legislation as any non-compliance of this would lead to the Company losing various deductions and exemptions from
corporation tax.
Our procedures in respect of the above included:
• Agreement of the financial statement disclosures to underlying supporting documentation;
• Enquiries of management and those charged with governance relating to the existence of any non-compliance with laws and regulations;
• Reviewing minutes of meeting of those charged with governance throughout the period for instances of non-compliance with laws and
regulations; and
• Reviewing the calculation in relation to Investment Trust compliance to check that the Company was meeting its requirements to retain
their Investment Trust Status.
Fraud
We assessed the susceptibility of the financial statement to material misstatement including fraud.
Our risk assessment procedures included:
• Enquiry with the Manager, Portfolio Manager and those charged with governance regarding any known or suspected instances of fraud;
• Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud; and
• Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;
Based on our risk assessment, we considered the areas most susceptible to be valuation of unquoted investments and the risk of management
override of controls in relation to the significant judgements made.
Our procedures in respect of the above included:
• In response to the risk of fraud in the valuation of the unquoted investments, we performed the procedures set out in the Key Audit
Matters section of the report;
• Recalculating investment management fees in total;
• Performing an unpredictability test over a judgmental sample of clearly trivial expenses, which would not be normally selected, and agreed
to relevant supporting evidence;
• Considering any indicators of bias in our audit as a whole; and
• Testing all adjustments made in the period end financial reporting process.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, who were deemed
to have the appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and
regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not
detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures
performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial
statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit
work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Vanessa-Jayne Bradley (Senior statutory auditor)
For and on behalf of BDO LLP, Statutory Auditor London, UK
23 October 2024
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Independent Auditor’s Report
to the Members of Schroder BSC Social Impact Trust plc
continued
Non-compliance with laws and regulations
Based on:
• Our understanding of the Company and the industry in which it operates;
• Discussion with the Manager and Portfolio Manager, and those charged with governance;
• Obtaining and understanding of the Company’s policies and procedures regarding compliance with laws and regulations.
we considered the significant laws and regulations to be Companies Act 2006, the FCA listing and DTR rules, the principles of the AIC Code of
Corporate Governance, industry practice represented by the AIC SORP, the applicable accounting framework, and qualification as an Investment
Trust under UK tax legislation as any non-compliance of this would lead to the Company losing various deductions and exemptions from
corporation tax.
Our procedures in respect of the above included:
• Agreement of the financial statement disclosures to underlying supporting documentation;
• Enquiries of management and those charged with governance relating to the existence of any non-compliance with laws and regulations;
• Reviewing minutes of meeting of those charged with governance throughout the period for instances of non-compliance with laws and
regulations; and
• Reviewing the calculation in relation to Investment Trust compliance to check that the Company was meeting its requirements to retain
their Investment Trust Status.
Fraud
We assessed the susceptibility of the financial statement to material misstatement including fraud.
Our risk assessment procedures included:
• Enquiry with the Manager, Portfolio Manager and those charged with governance regarding any known or suspected instances of fraud;
• Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud; and
• Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;
Based on our risk assessment, we considered the areas most susceptible to be valuation of unquoted investments and the risk of management
override of controls in relation to the significant judgements made.
Our procedures in respect of the above included:
• In response to the risk of fraud in the valuation of the unquoted investments, we performed the procedures set out in the Key Audit
Matters section of the report;
• Recalculating investment management fees in total;
• Performing an unpredictability test over a judgmental sample of clearly trivial expenses, which would not be normally selected, and agreed
to relevant supporting evidence;
• Considering any indicators of bias in our audit as a whole; and
• Testing all adjustments made in the period end financial reporting process.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, who were deemed
to have the appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and
regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not
detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures
performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial
statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit
work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Vanessa-Jayne Bradley (Senior statutory auditor)
For and on behalf of BDO LLP, Statutory Auditor London, UK
23 October 2024
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Schroder BSC Social Impact Trust plc
63
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Income Statement
for the year ended 30 June 2024
2024 2023
Revenue Capital Total Revenue Capital Total
Note £’000 £’000 £’000 £’000 £’000 £’000
Losses on investments held at fair value through profit or loss 2 – (833) (833) – (1,020) (1,020)
Impairment provision on investments held at amortised cost – (413) (413) – – –
Income from investments 3 3,320 – 3,320 2,695 – 2,695
Other interest receivable and similar income 3 167 – 167 77 – 77
Gross return/(loss) 3,487 (1,246) 2,241 2,772 (1,020) 1,752
Investment management fees 4 (340) (340) (680) (334) (334) (668)
Administrative expenses 5 (497) – (497) (464) – (464)
Transaction costs – (15) (15) – – –
Net return/(loss) before taxation 2,650 (1,601) 1,049 1,974 (1,354) 620
Taxation 6 – – – – – –
Net return/(loss) after taxation 2,650 (1,601) 1,049 1,974 (1,354) 620
Return/(loss) per share (pence) 7 3.16 (1.91) 1.25 2.32 (1.59) 0.73
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 for the year.
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the
year (2023: none).
The notes on pages 67 to 78 form an integral part of these accounts.
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Income Statement
for the year ended 30 June 2024
2024 2023
Revenue Capital Total Revenue Capital Total
Note £’000 £’000 £’000 £’000 £’000 £’000
Losses on investments held at fair value through profit or loss 2 – (833) (833) – (1,020) (1,020)
Impairment provision on investments held at amortised cost – (413) (413) – – –
Income from investments 3 3,320 – 3,320 2,695 – 2,695
Other interest receivable and similar income 3 167 – 167 77 – 77
Gross return/(loss) 3,487 (1,246) 2,241 2,772 (1,020) 1,752
Investment management fees 4 (340) (340) (680) (334) (334) (668)
Administrative expenses 5 (497) – (497) (464) – (464)
Transaction costs – (15) (15) – – –
Net return/(loss) before taxation 2,650 (1,601) 1,049 1,974 (1,354) 620
Taxation 6 – – – – – –
Net return/(loss) after taxation 2,650 (1,601) 1,049 1,974 (1,354) 620
Return/(loss) per share (pence) 7 3.16 (1.91) 1.25 2.32 (1.59) 0.73
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 for the year.
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the
year (2023: none).
The notes on pages 67 to 78 form an integral part of these accounts.
64
Schroder BSC Social Impact Trust plc
Called - up
share Share Special Capital Revenue
capital premium reserve reserves reserve Total
Note £’000 £’000 £’000 £’000 £’000 £’000
At 30 June 2022 853 10,571 72,993 4,373 1,126 89,916
Repurchase of the Company’s own shares into treasury – – (674) – – (674)
Net (loss)/return after taxation – – – (1,354) 1,974 620
Dividends paid in the year 8 – – – – (1,109) (1,109)
At 30 June 2023 853 10,571 72,319 3,019 1,991 88,753
Repurchase of the Company’s own shares into treasury – – (1,409) – – (1,409)
Net (loss)/return after taxation – – – (1,601) 2,650 1,049
Dividends paid in the year 8 – – – – (1,934) (1,934)
At 30 June 2024 13 853 10,571 70,910 1,418 2,707 86,459
The notes on pages 67 to 78 form an integral part of these accounts.
Statement of Changes in Equity
for the year ended 30 June 2024
Called - up
share Share Special Capital Revenue
capital premium reserve reserves reserve Total
Note £’000 £’000 £’000 £’000 £’000 £’000
At 30 June 2022 853 10,571 72,993 4,373 1,126 89,916
Repurchase of the Company’s own shares into treasury – – (674) – – (674)
Net (loss)/return after taxation – – – (1,354) 1,974 620
Dividends paid in the year 8 – – – – (1,109) (1,109)
At 30 June 2023 853 10,571 72,319 3,019 1,991 88,753
Repurchase of the Company’s own shares into treasury – – (1,409) – – (1,409)
Net (loss)/return after taxation – – – (1,601) 2,650 1,049
Dividends paid in the year 8 – – – – (1,934) (1,934)
At 30 June 2024 13 853 10,571 70,910 1,418 2,707 86,459
The notes on pages 67 to 78 form an integral part of these accounts.
Statement of Changes in Equity
for the year ended 30 June 2024
Schroder BSC Social Impact Trust plc
65
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Balance Sheet
at 30 June 2024
2024 2023
Note £’000 £’000
Fixed assets
Investments held at fair value through profit or loss 9 62,321 64,199
Investments held at amortised cost 9 20,532 22,583
82,853 86,782
Current assets
Debtors 10 562 401
Current asset investments* 3,106 1,715
Cash at bank and in hand* 514 374
4,182 2,490
Current liabilities
Creditors: amounts falling due within one year 11 (576) (519)
Net current assets 3,606 1,971
Total assets less current liabilities 86,459 88,753
Net assets 86,459 88,753
Capital and reserves
Called-up share capital 12 853 853
Share premium 13 10,571 10,571
Special reserve 13 70,910 72,319
Capital reserves 13 1,418 3,019
Revenue reserve 13 2,707 1,991
Total equity shareholders’ funds 86,459 88,753
Net asset value per share (pence) 14 104.13 104.90
*Cash at bank and in hand in the Balance Sheet has been restated to exclude investments in money market funds of £1.7m for the year ended 30 June 2023 and
disclose them separately as current asset investments, to conform with those required by the Companies Act – Statutory format of the Balance Sheet. There is no
impact on other line items in the Balance Sheet nor on total current assets.
These accounts were approved and authorised for issue by the Board of Directors on 23 October 2024 and signed on its behalf by:
Susannah Nicklin
Chair
The notes on pages 67 to 78 form an integral part of these accounts.
Registered in England and Wales as a public company limited by shares
Company reg istration number: 12902443
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Balance Sheet
at 30 June 2024
2024 2023
Note £’000 £’000
Fixed assets
Investments held at fair value through profit or loss 9 62,321 64,199
Investments held at amortised cost 9 20,532 22,583
82,853 86,782
Current assets
Debtors 10 562 401
Current asset investments* 3,106 1,715
Cash at bank and in hand* 514 374
4,182 2,490
Current liabilities
Creditors: amounts falling due within one year 11 (576) (519)
Net current assets 3,606 1,971
Total assets less current liabilities 86,459 88,753
Net assets 86,459 88,753
Capital and reserves
Called-up share capital 12 853 853
Share premium 13 10,571 10,571
Special reserve 13 70,910 72,319
Capital reserves 13 1,418 3,019
Revenue reserve 13 2,707 1,991
Total equity shareholders’ funds 86,459 88,753
Net asset value per share (pence) 14 104.13 104.90
*Cash at bank and in hand in the Balance Sheet has been restated to exclude investments in money market funds of £1.7m for the year ended 30 June 2023 and
disclose them separately as current asset investments, to conform with those required by the Companies Act – Statutory format of the Balance Sheet. There is no
impact on other line items in the Balance Sheet nor on total current assets.
These accounts were approved and authorised for issue by the Board of Directors on 23 October 2024 and signed on its behalf by:
Susannah Nicklin
Chair
The notes on pages 67 to 78 form an integral part of these accounts.
Registered in England and Wales as a public company limited by shares
Company reg istration number: 12902443
66
Schroder BSC Social Impact Trust plc
2024 2023
Note £’000 £’000
Net cash inflow from operating activities 15 1,957 1,116
Investing activities
Purchases of investments (6,415) (7,833)
Sales of investments 9,306 9,279
Net cash inflow from investing activities 2,891 1,446
Net cash inflow before financing 4,848 2,562
Financing activities
Dividend paid (1,934) (1,109)
Repurchase of the Company’s own shares into treasury (1,383) (674)
Net cash outflow from financing activities (3,317) (1,783)
Net cash inflow in the year 1,531 779
Cash and cash equivalents at the beginning of the year 2,089 1,310
Net cash inflow in the year 1,531 779
Cash and cash equivalents at the end of the year 3,620 2,089
Cash and cash equivalents comprise:
Money market funds 3,106 1,715
Cash at bank and in hand 514 374
Cash and cash equivalents at the end of the year 3,620 2,089
Included in net cash inflow from operating activities are dividends received amounting to £1,013,000 (year ended 30 June 2023: £860,000),
income from debt securities amounting to £1,955,000 (year ended 30 June 2023: £1,236,000) and other interest receivable and similar income
amounting to £33,000 (year ended 30 June 2023: £70,000).
The notes on pages 67 to 78 form an integral part of these accounts.
Cash Flow Statement
for the year ended 30 June 2024
2024 2023
Note £’000 £’000
Net cash inflow from operating activities 15 1,957 1,116
Investing activities
Purchases of investments (6,415) (7,833)
Sales of investments 9,306 9,279
Net cash inflow from investing activities 2,891 1,446
Net cash inflow before financing 4,848 2,562
Financing activities
Dividend paid (1,934) (1,109)
Repurchase of the Company’s own shares into treasury (1,383) (674)
Net cash outflow from financing activities (3,317) (1,783)
Net cash inflow in the year 1,531 779
Cash and cash equivalents at the beginning of the year 2,089 1,310
Net cash inflow in the year 1,531 779
Cash and cash equivalents at the end of the year 3,620 2,089
Cash and cash equivalents comprise:
Money market funds 3,106 1,715
Cash at bank and in hand 514 374
Cash and cash equivalents at the end of the year 3,620 2,089
Included in net cash inflow from operating activities are dividends received amounting to £1,013,000 (year ended 30 June 2023: £860,000),
income from debt securities amounting to £1,955,000 (year ended 30 June 2023: £1,236,000) and other interest receivable and similar income
amounting to £33,000 (year ended 30 June 2023: £70,000).
The notes on pages 67 to 78 form an integral part of these accounts.
Cash Flow Statement
for the year ended 30 June 2024
Schroder BSC Social Impact Trust plc
67
Introduction Strategic Report Governance Financial Other Information (Unaudited)
1. Accounting policies
(a) Basis of accounting
Schroder BSC Social Impact Trust plc (“the Company”) is registered in England and Wales as a public company limited by shares. The Company’s
registered office is 1 London Wall Place, London EC2Y 5AU.
The accounts are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice (“UK GAAP”),
in particular in accordance with Financial Reporting Standard (FRS) 102 “The Financial Reporting Standard applicable in the UK and Republic of
Ireland”, and with the Statement of Recommended Practice “Financial Statements of Investment Trust Companies and Venture Capital Trusts”
(the “SORP”) issued by the Association of Investment Companies in July 2022. All of the Company’s operations are of a continuing nature.
The accounts have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of investments
held at fair value. The Directors believe that the Company has adequate resources to continue operating until 31 October 2025, which is at least
12 months from the date of approval of these accounts. In forming this opinion, the Directors have taken into consideration: the controls and
monitoring processes in place; the Company’s level of debt, undrawn commitments and other payables; the low level of operating expenses,
comprising largely variable costs which would reduce pro rata in the event of a market downturn; the Company’s cash flow forecasts and the
liquidity of the Company’s investments. In forming this opinion, the Directors have also considered any potential impact of climate change, and
the risk/impact of elevated and sustained inflation and interest rates on the viability of the Company. The Company has additionally performed
stress tests which confirm that a 50% fall in the market prices of the portfolio would not affect the Board’s conclusions in respect of going
concern.
The accounts are presented in sterling and amounts have been rounded to the nearest thousand.
The accounting policies applied to these accounts are consistent with those applied in the accounts for the year ended 30 June 2023.
Certain judgements, estimates and assumptions have been required in valuing the Company’s investments and these are detailed in note 19 on
page 74.
(b) Valuation of investments
The Company’s business is investing in financial assets with a view to profiting from their total return in the form of income and capital growth.
Investments with a fixed coupon and redemption amount are valued at amortised cost less any impairments in accordance with FRS 102. Other
financial assets are managed and their performance evaluated on a fair value basis, in accordance with a documented investment objective and
information is provided internally on that basis to the Company’s Board of Directors. Upon initial recognition, these investments are designated
by the Company as “held at fair value through profit or loss”, included initially at cost and subsequently at fair value using the methodology
below. This valuation process is consistent with International Private Equity and Venture Capital Guidelines issued in December 2022, which are
intended to set out current best practice on the valuation of Private Capital investments.
(i) Quoted bid prices for investments traded in active markets.
(ii) The price of a recent investment, where there is considered to have been no material change in fair value.
(iii) Where it is felt that a milestone has been reached or a target achieved, the Company may use the price of a recent investment adjusted to
reflect that change.
(iv) Investments in funds may be valued using the NAV per unit with an appropriate discount or premium applied to arrive at a unit price.
(v) Price earning multiples, based on comparable businesses.
(vi) Industry benchmarks, where available.
(vii) Discounted Cash Flow techniques, where reliable estimates of cash flows are available.
The above valuation methodologies are deemed to reflect the impact of climate change risk on the investments held.
Purchases and sales of quoted investments are accounted for on a trade date basis. Purchases and sales of unquoted investments are
recognised when the related contract becomes unconditional.
(c) Accounting for reserves
Gains and losses on sales of investments and the management fee or finance costs allocated to capital, are included in the Income Statement
and dealt with in capital reserves. Increases and decreases in the valuation of investments held at the year end and impairment losses of
investments, are included in the Income Statement and in capital reserves within “Investment holding gains and losses”.
For shares that are repurchased and held in treasury, the full cost is charged to the Special reserve.
(d) Income
Dividends receivable are included in revenue on an ex-dividend basis except where, in the opinion of the Board, the dividend is capital in nature,
in which case it is included in capital.
Income from limited partnerships will be included in revenue on the income declaration date.
Income from fixed interest debt securities is recognised using the effective interest method.
Deposit interest outstanding at the year end is calculated and accrued on a time apportionment basis using market rates of interest.
Notes to the Accounts
Introduction Strategic Report Governance Financial Other Information (Unaudited)
1. Accounting policies
(a) Basis of accounting
Schroder BSC Social Impact Trust plc (“the Company”) is registered in England and Wales as a public company limited by shares. The Company’s
registered office is 1 London Wall Place, London EC2Y 5AU.
The accounts are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice (“UK GAAP”),
in particular in accordance with Financial Reporting Standard (FRS) 102 “The Financial Reporting Standard applicable in the UK and Republic of
Ireland”, and with the Statement of Recommended Practice “Financial Statements of Investment Trust Companies and Venture Capital Trusts”
(the “SORP”) issued by the Association of Investment Companies in July 2022. All of the Company’s operations are of a continuing nature.
The accounts have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of investments
held at fair value. The Directors believe that the Company has adequate resources to continue operating until 31 October 2025, which is at least
12 months from the date of approval of these accounts. In forming this opinion, the Directors have taken into consideration: the controls and
monitoring processes in place; the Company’s level of debt, undrawn commitments and other payables; the low level of operating expenses,
comprising largely variable costs which would reduce pro rata in the event of a market downturn; the Company’s cash flow forecasts and the
liquidity of the Company’s investments. In forming this opinion, the Directors have also considered any potential impact of climate change, and
the risk/impact of elevated and sustained inflation and interest rates on the viability of the Company. The Company has additionally performed
stress tests which confirm that a 50% fall in the market prices of the portfolio would not affect the Board’s conclusions in respect of going
concern.
The accounts are presented in sterling and amounts have been rounded to the nearest thousand.
The accounting policies applied to these accounts are consistent with those applied in the accounts for the year ended 30 June 2023.
Certain judgements, estimates and assumptions have been required in valuing the Company’s investments and these are detailed in note 19 on
page 74.
(b) Valuation of investments
The Company’s business is investing in financial assets with a view to profiting from their total return in the form of income and capital growth.
Investments with a fixed coupon and redemption amount are valued at amortised cost less any impairments in accordance with FRS 102. Other
financial assets are managed and their performance evaluated on a fair value basis, in accordance with a documented investment objective and
information is provided internally on that basis to the Company’s Board of Directors. Upon initial recognition, these investments are designated
by the Company as “held at fair value through profit or loss”, included initially at cost and subsequently at fair value using the methodology
below. This valuation process is consistent with International Private Equity and Venture Capital Guidelines issued in December 2022, which are
intended to set out current best practice on the valuation of Private Capital investments.
(i) Quoted bid prices for investments traded in active markets.
(ii) The price of a recent investment, where there is considered to have been no material change in fair value.
(iii) Where it is felt that a milestone has been reached or a target achieved, the Company may use the price of a recent investment adjusted to
reflect that change.
(iv) Investments in funds may be valued using the NAV per unit with an appropriate discount or premium applied to arrive at a unit price.
(v) Price earning multiples, based on comparable businesses.
(vi) Industry benchmarks, where available.
(vii) Discounted Cash Flow techniques, where reliable estimates of cash flows are available.
The above valuation methodologies are deemed to reflect the impact of climate change risk on the investments held.
Purchases and sales of quoted investments are accounted for on a trade date basis. Purchases and sales of unquoted investments are
recognised when the related contract becomes unconditional.
(c) Accounting for reserves
Gains and losses on sales of investments and the management fee or finance costs allocated to capital, are included in the Income Statement
and dealt with in capital reserves. Increases and decreases in the valuation of investments held at the year end and impairment losses of
investments, are included in the Income Statement and in capital reserves within “Investment holding gains and losses”.
For shares that are repurchased and held in treasury, the full cost is charged to the Special reserve.
(d) Income
Dividends receivable are included in revenue on an ex-dividend basis except where, in the opinion of the Board, the dividend is capital in nature,
in which case it is included in capital.
Income from limited partnerships will be included in revenue on the income declaration date.
Income from fixed interest debt securities is recognised using the effective interest method.
Deposit interest outstanding at the year end is calculated and accrued on a time apportionment basis using market rates of interest.
Notes to the Accounts
68
Schroder BSC Social Impact Trust plc
Notes to the Accounts
continued
1. Accounting policies continued
(e) Expenses
All expenses are accounted for on an accruals basis. Expenses are allocated wholly to the revenue column of the Income Statement with the
following exceptions:
– The management fee is allocated 50% to revenue and 50% to capital in line with the Board’s expected long-term split of revenue and
capital return from the Company’s investment portfolio.
– Expenses incidental to the purchase of an investment are charged to capital. These expenses are commonly referred to as transaction
costs and comprise brokerage commission and stamp duty. Details of transaction costs are given in note 9(c) on page 71.
The underlying costs incurred by the Company’s investments in collective funds are not included in the various expense disclosures.
(f) Finance costs
Finance costs, including any premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis
using the effective interest method and in accordance with FRS 102.
Finance costs are allocated 50% to revenue and 50% to capital in line with the Board’s expected long-term split of revenue and capital return
from the Company’s investment portfolio.
(g) Financial instruments
Cash at bank and in hand comprises cash held in the bank. Current asset investments comprise investments in money market funds and highly
liquid investments which are readily convertible to a known amount of cash and are subject to insignificant risk of changes in value.
Other debtors and creditors do not carry any interest, are short-term in nature and are accordingly stated at nominal value, with debtors
reduced by appropriate allowances for estimated irrecoverable amounts.
Bank loans and overdrafts are initially measured at fair value and subsequently measured at amortised cost. They are recorded at the proceeds
received net of direct issue costs. The Company had no bank loans or overdrafts at 30 June 2024 (2023: nil).
(h) Taxation
Taxation on ordinary activities comprises amounts expected to be received or paid.
Tax relief is allocated to expenses charged to the capital column of the Income Statement on the "marginal basis". On this basis, if taxable
income is capable of being entirely offset by revenue expenses, then no tax relief is transferred to the capital column.
Deferred tax is provided on all timing differences that have originated but not reversed by the accounting date.
Deferred tax liabilities are recognised for all taxable timing differences but deferred tax assets are only recognised to the extent that it is
probable that taxable profits will be available against which those timing differences can be utilised.
Deferred tax is measured at the tax rate which is expected to apply in the periods in which the timing differences are expected to reverse, based
on tax rates that have been enacted or substantively enacted at the balance sheet date and is measured on an undiscounted basis.
As the Company continues to meet the conditions required to retain its status as an Investment Trust, any capital gains or losses arising on the
revaluation or disposal of investments are exempt.
(i) Value added tax (“VAT”)
Expenses are disclosed inclusive of the related irrecoverable VAT.
(j) Dividends payable
In accordance with FRS 102, dividends payable are included in the accounts in the year in which they are paid. Part, or all of any dividend
declared may be designated as an "interest distribution", calculated in accordance with the investment trust income streaming rules and paid
without deduction of any income tax.
2. Losses on investments held at fair value through profit or loss 2024 2023
£’000 £’000
Losses on sales of investments based on historic cost (192) (642)
Amounts recognised in investment holding losses in the previous year in respect of investments sold in the year 304 537
Gains/(losses) on sales of investments based on the carrying value at the previous balance sheet date 112 (105)
Net movement in investment holding losses (945) (915)
Losses on investments held at fair value in the current year through profit and loss (833) (1,020)
Notes to the Accounts
continued
1. Accounting policies continued
(e) Expenses
All expenses are accounted for on an accruals basis. Expenses are allocated wholly to the revenue column of the Income Statement with the
following exceptions:
– The management fee is allocated 50% to revenue and 50% to capital in line with the Board’s expected long-term split of revenue and
capital return from the Company’s investment portfolio.
– Expenses incidental to the purchase of an investment are charged to capital. These expenses are commonly referred to as transaction
costs and comprise brokerage commission and stamp duty. Details of transaction costs are given in note 9(c) on page 71.
The underlying costs incurred by the Company’s investments in collective funds are not included in the various expense disclosures.
(f) Finance costs
Finance costs, including any premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis
using the effective interest method and in accordance with FRS 102.
Finance costs are allocated 50% to revenue and 50% to capital in line with the Board’s expected long-term split of revenue and capital return
from the Company’s investment portfolio.
(g) Financial instruments
Cash at bank and in hand comprises cash held in the bank. Current asset investments comprise investments in money market funds and highly
liquid investments which are readily convertible to a known amount of cash and are subject to insignificant risk of changes in value.
Other debtors and creditors do not carry any interest, are short-term in nature and are accordingly stated at nominal value, with debtors
reduced by appropriate allowances for estimated irrecoverable amounts.
Bank loans and overdrafts are initially measured at fair value and subsequently measured at amortised cost. They are recorded at the proceeds
received net of direct issue costs. The Company had no bank loans or overdrafts at 30 June 2024 (2023: nil).
(h) Taxation
Taxation on ordinary activities comprises amounts expected to be received or paid.
Tax relief is allocated to expenses charged to the capital column of the Income Statement on the "marginal basis". On this basis, if taxable
income is capable of being entirely offset by revenue expenses, then no tax relief is transferred to the capital column.
Deferred tax is provided on all timing differences that have originated but not reversed by the accounting date.
Deferred tax liabilities are recognised for all taxable timing differences but deferred tax assets are only recognised to the extent that it is
probable that taxable profits will be available against which those timing differences can be utilised.
Deferred tax is measured at the tax rate which is expected to apply in the periods in which the timing differences are expected to reverse, based
on tax rates that have been enacted or substantively enacted at the balance sheet date and is measured on an undiscounted basis.
As the Company continues to meet the conditions required to retain its status as an Investment Trust, any capital gains or losses arising on the
revaluation or disposal of investments are exempt.
(i) Value added tax (“VAT”)
Expenses are disclosed inclusive of the related irrecoverable VAT.
(j) Dividends payable
In accordance with FRS 102, dividends payable are included in the accounts in the year in which they are paid. Part, or all of any dividend
declared may be designated as an "interest distribution", calculated in accordance with the investment trust income streaming rules and paid
without deduction of any income tax.
2. Losses on investments held at fair value through profit or loss 2024 2023
£’000 £’000
Losses on sales of investments based on historic cost (192) (642)
Amounts recognised in investment holding losses in the previous year in respect of investments sold in the year 304 537
Gains/(losses) on sales of investments based on the carrying value at the previous balance sheet date 112 (105)
Net movement in investment holding losses (945) (915)
Losses on investments held at fair value in the current year through profit and loss (833) (1,020)
Schroder BSC Social Impact Trust plc
69
3. Income from investments 2024 2023
£’000 £’000
Income from investments
UK dividends 854 1,133
Overseas dividends 173 163
Interest income from debt securities and other financial assets 2,293 1,399
3,320 2,695
Other interest receivable and similar income
Deposit interest 147 37
Other income 20 40
167 77
Total income 3,487 2,772
4. Investment management fees 2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Investment management fees 340 340 680 334 334 668
The bases for calculating the investment management fees are set out in the Report of the Directors on pages 42 to 43 and details of all
amounts payable to the managers are given in note 17 on page 74.
5. Administrative expenses 2024 2023
£’000 £’000
Other administrative expenses 292 261
Directors’ fees
1
139 141
Auditor’s remuneration for the audit of the Company’s annual accounts
2
66 62
497 464
1
Full details are given in the remuneration report on pages 52 to 54.
2
Includes VAT amounting to £12,000 (2023: £12,000).
6. Taxation
(a) Analysis of tax charge for the year
2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Taxation for the year – – – – – –
The Company has no corporation tax liability for the year ended 30 June 2024 (2023: nil).
(b) Factors affecting tax charge for the year
2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Net return/(loss) before taxation 2,650 (1,601) 1,049 1,974 (1,354) 620
Net return/(loss) before taxation multiplied by the Company’s applicable
rate of corporation tax for the year of 25% (2023: 20.5%) 663 (400) 263 405 (278) 127
Effects of:
Capital losses on investments – 311 311 – 210 210
Income not chargeable to corporation tax (225) – (225) – – –
Tax deductible interest distribution (610) – (610) (405) 68 (337)
Expenses not utilised in the current period 172 85 257 – – –
Expenses not deductible for corporation tax purposes – 4 4 – – –
Taxation on ordinary activities – – – – – –
UK Corporation Tax rate has increased from 19% to 25% with effect from 1 April 2023.
Introduction Strategic Report Governance Financial Other Information (Unaudited)
3. Income from investments 2024 2023
£’000 £’000
Income from investments
UK dividends 854 1,133
Overseas dividends 173 163
Interest income from debt securities and other financial assets 2,293 1,399
3,320 2,695
Other interest receivable and similar income
Deposit interest 147 37
Other income 20 40
167 77
Total income 3,487 2,772
4. Investment management fees 2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Investment management fees 340 340 680 334 334 668
The bases for calculating the investment management fees are set out in the Report of the Directors on pages 42 to 43 and details of all
amounts payable to the managers are given in note 17 on page 74.
5. Administrative expenses 2024 2023
£’000 £’000
Other administrative expenses 292 261
Directors’ fees
1
139 141
Auditor’s remuneration for the audit of the Company’s annual accounts
2
66 62
497 464
1
Full details are given in the remuneration report on pages 52 to 54.
2
Includes VAT amounting to £12,000 (2023: £12,000).
6. Taxation
(a) Analysis of tax charge for the year
2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Taxation for the year – – – – – –
The Company has no corporation tax liability for the year ended 30 June 2024 (2023: nil).
(b) Factors affecting tax charge for the year
2024 2023
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Net return/(loss) before taxation 2,650 (1,601) 1,049 1,974 (1,354) 620
Net return/(loss) before taxation multiplied by the Company’s applicable
rate of corporation tax for the year of 25% (2023: 20.5%) 663 (400) 263 405 (278) 127
Effects of:
Capital losses on investments – 311 311 – 210 210
Income not chargeable to corporation tax (225) – (225) – – –
Tax deductible interest distribution (610) – (610) (405) 68 (337)
Expenses not utilised in the current period 172 85 257 – – –
Expenses not deductible for corporation tax purposes – 4 4 – – –
Taxation on ordinary activities – – – – – –
UK Corporation Tax rate has increased from 19% to 25% with effect from 1 April 2023.
Introduction Strategic Report Governance Financial Other Information (Unaudited)
70
Schroder BSC Social Impact Trust plc
6. Taxation continued
(c) Deferred taxation
The Company has an unrecognised deferred tax asset of £590,000 (2023: £333,000) based on a prospective corporation tax rate of 25%
(2023:25%). The main rate of corporation tax increased to 25% for fiscal years beginning on or after 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 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.
7. Return per share 2024 2023
£’000 £’000
Revenue return 2,650 1,974
Capital loss (1,601) (1,354)
Total return 1,049 620
Weighted average number of shares in issue during the year 83,834,790 85,132,892
Revenue return per share (pence) 3.16 2.32
Capital loss per share (pence) (1.91) (1.59)
Total return per share (pence) 1.25 0.73
There are no dilutive instruments, the return per share is actual return.
8. Dividends 2024 2023
£’000 £’000
2023 interim dividend of 2.30p (2022: 1.30p) paid out of revenue profits
1
1,934 1,109
2024 2023
£’000 £’000
2024 interim dividend of 2.94p (2023: 2.30p), to be paid out of revenue profits 2,439 1,946
1
1
The 2023 interim dividend amounted to £1,946,000. However the amount actually paid was £1,934,000, as shares were repurchased into treasury after the
accounting date but prior to the dividend record date.
The 2024 interim dividend is made up wholly of an interest distribution of 2.94p. The 2023 dividend of 2.30p was split between a 2.16p interest
distribution and a 0.14p equity dividend.
The interim dividend amounting to £2,439,000 (2023: £1,946,000) is the amount used for the basis of determining whether the Company has
satisfied the distribution requirements of Section 1158 of the Corporation Tax Act 2010. The revenue available for distribution by way of dividend
for the year is £2,650,000 (2023: £1,974,000).
9. Fixed assets
(a) Movement in investments 2024 2023
Investments Investments
held at Investments held at Investments
fair value held at fair value held at
throug h amortised throug h amortised
profit or loss cost Total profit or loss cost Total
£’000 £’000 £’000 £’000 £’000 £’000
Opening book cost 59,844 22,583 82,427 62,267 21,832 84,099
Opening investment holding gains 4,355 – 4,355 4,733 – 4,733
Opening fair value 64,199 22,583 86,782 67,000 21,832 88,832
Purchases at cost 5,603 1,020 6,623 7,269 980 8,249
Sales proceeds (6,648) (2,658) (9,306) (9,050) (229) (9,279)
Impairment losses on investments held at amortised cost – (413) (413) – – –
Losses on investments held at fair value through profit or loss (833) – (833) (1,020) – (1,020)
Closing fair value 62,321 20,532 82,853 64,199 22,583 86,782
Closing book cost 58,607 20,532 79,139 59,844 22,583 82,427
Closing investment holding gains 3,714 – 3,714 4,355 – 4,355
Closing fair value 62,321 20,532 82,853 64,199 22,583 86,782
The Company received £9,306,000 (2023: £9,279,000) from disposal of investments in the year. The book cost of these investments when they
were purchased was £9,911,000 (2023: £9,921,000). These investments have been revalued over time and until they were sold any unrealised
gains/losses were included in the value of the investments.
Notes to the Accounts
continued
6. Taxation continued
(c) Deferred taxation
The Company has an unrecognised deferred tax asset of £590,000 (2023: £333,000) based on a prospective corporation tax rate of 25%
(2023:25%). The main rate of corporation tax increased to 25% for fiscal years beginning on or after 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 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.
7. Return per share 2024 2023
£’000 £’000
Revenue return 2,650 1,974
Capital loss (1,601) (1,354)
Total return 1,049 620
Weighted average number of shares in issue during the year 83,834,790 85,132,892
Revenue return per share (pence) 3.16 2.32
Capital loss per share (pence) (1.91) (1.59)
Total return per share (pence) 1.25 0.73
There are no dilutive instruments, the return per share is actual return.
8. Dividends 2024 2023
£’000 £’000
2023 interim dividend of 2.30p (2022: 1.30p) paid out of revenue profits
1
1,934 1,109
2024 2023
£’000 £’000
2024 interim dividend of 2.94p (2023: 2.30p), to be paid out of revenue profits 2,439 1,946
1
1
The 2023 interim dividend amounted to £1,946,000. However the amount actually paid was £1,934,000, as shares were repurchased into treasury after the
accounting date but prior to the dividend record date.
The 2024 interim dividend is made up wholly of an interest distribution of 2.94p. The 2023 dividend of 2.30p was split between a 2.16p interest
distribution and a 0.14p equity dividend.
The interim dividend amounting to £2,439,000 (2023: £1,946,000) is the amount used for the basis of determining whether the Company has
satisfied the distribution requirements of Section 1158 of the Corporation Tax Act 2010. The revenue available for distribution by way of dividend
for the year is £2,650,000 (2023: £1,974,000).
9. Fixed assets
(a) Movement in investments 2024 2023
Investments Investments
held at Investments held at Investments
fair value held at fair value held at
throug h amortised throug h amortised
profit or loss cost Total profit or loss cost Total
£’000 £’000 £’000 £’000 £’000 £’000
Opening book cost 59,844 22,583 82,427 62,267 21,832 84,099
Opening investment holding gains 4,355 – 4,355 4,733 – 4,733
Opening fair value 64,199 22,583 86,782 67,000 21,832 88,832
Purchases at cost 5,603 1,020 6,623 7,269 980 8,249
Sales proceeds (6,648) (2,658) (9,306) (9,050) (229) (9,279)
Impairment losses on investments held at amortised cost – (413) (413) – – –
Losses on investments held at fair value through profit or loss (833) – (833) (1,020) – (1,020)
Closing fair value 62,321 20,532 82,853 64,199 22,583 86,782
Closing book cost 58,607 20,532 79,139 59,844 22,583 82,427
Closing investment holding gains 3,714 – 3,714 4,355 – 4,355
Closing fair value 62,321 20,532 82,853 64,199 22,583 86,782
The Company received £9,306,000 (2023: £9,279,000) from disposal of investments in the year. The book cost of these investments when they
were purchased was £9,911,000 (2023: £9,921,000). These investments have been revalued over time and until they were sold any unrealised
gains/losses were included in the value of the investments.
Notes to the Accounts
continued
Schroder BSC Social Impact Trust plc
71
(b) Unquoted investments, including investments quoted in inactive markets
Material revaluations of unquoted investments during the year ended 30 June 2024
Opening Closin g
valuation valuation
at 30 June at 30 June
2023 Purchases Revaluation D istributions 2024
£’000 £’000 £’000 £’000 £’000
Investment
Bridges Evergreen Capital LP 12,750 – (1,268) – 11,482
Resonance Real Lettings Property Fund LP 5,476 – 303 – 5,779
Bridges Social Outcomes Fund II LP 4,271 219 134 (1,902) 2,722
Material revaluations of unquoted investments during the year ended 30 June 2023
Opening Closin g
valuation valuation
at 30 June at 30 June
2022 Purchases Revaluation Distributions 2023
£’000 £’000 £’000 £’000 £’000
Investment
Bridges Evergreen Capital LP 14,451 – (1,701) – 12,750
Man GPM RI Community Housing 1 LP 5,202 2,930 397 (383) 8,146
UK Affordable Housing Fund 9,848 – 351 – 10,199
Material disposals of unquoted investments during the year
2024
Book Sales Realised
cost proceeds gain/(loss)
£’000 £’000 £’000
Investment
Charity Bank Co Invest Portfolio: Sue Ryder FRN 04/12/2043 2,440 2,440 –
Bridges Social Outcomes Fund II LP 1,902 1,902 –
Community Investment Fund 1,220 1,220 –
2023
Book Sales Realised
cost proceeds gain/(loss)
£’000 £’000 £’000
Investment
Resonance Real Lettings Property Fund LP 990 990 –
(c) Transaction costs
The following transaction costs, comprising stamp duty and legal fees, were incurred in the year:
2024 2023
£’000 £’000
On acquisitions 15 –
10. Current assets
Debtors
2024 2023
£’000 £’000
Dividends and interest receivable 545 382
Other debtors 17 19
562 401
The Directors consider that the carrying amount of debtors approximates to their fair value.
Introduction Strategic Report Governance Financial Other Information (Unaudited)
(b) Unquoted investments, including investments quoted in inactive markets
Material revaluations of unquoted investments during the year ended 30 June 2024
Opening Closin g
valuation valuation
at 30 June at 30 June
2023 Purchases Revaluation D istributions 2024
£’000 £’000 £’000 £’000 £’000
Investment
Bridges Evergreen Capital LP 12,750 – (1,268) – 11,482
Resonance Real Lettings Property Fund LP 5,476 – 303 – 5,779
Bridges Social Outcomes Fund II LP 4,271 219 134 (1,902) 2,722
Material revaluations of unquoted investments during the year ended 30 June 2023
Opening Closin g
valuation valuation
at 30 June at 30 June
2022 Purchases Revaluation Distributions 2023
£’000 £’000 £’000 £’000 £’000
Investment
Bridges Evergreen Capital LP 14,451 – (1,701) – 12,750
Man GPM RI Community Housing 1 LP 5,202 2,930 397 (383) 8,146
UK Affordable Housing Fund 9,848 – 351 – 10,199
Material disposals of unquoted investments during the year
2024
Book Sales Realised
cost proceeds gain/(loss)
£’000 £’000 £’000
Investment
Charity Bank Co Invest Portfolio: Sue Ryder FRN 04/12/2043 2,440 2,440 –
Bridges Social Outcomes Fund II LP 1,902 1,902 –
Community Investment Fund 1,220 1,220 –
2023
Book Sales Realised
cost proceeds gain/(loss)
£’000 £’000 £’000
Investment
Resonance Real Lettings Property Fund LP 990 990 –
(c) Transaction costs
The following transaction costs, comprising stamp duty and legal fees, were incurred in the year:
2024 2023
£’000 £’000
On acquisitions 15 –
10. Current assets
Debtors
2024 2023
£’000 £’000
Dividends and interest receivable 545 382
Other debtors 17 19
562 401
The Directors consider that the carrying amount of debtors approximates to their fair value.
Introduction Strategic Report Governance Financial Other Information (Unaudited)
72
Schroder BSC Social Impact Trust plc
11. Current liabilities
Creditors: amounts falling due within one year
2024 2023
£’000 £’000
Repurchase of the Company’s own shares into treasury awaiting settlement 26 –
Other creditors and accruals 550 519
576 519
The Directors consider that the carrying amount of creditors falling due within one year approximates to their fair value.
12. Called-up share capital 2024 2023
£’000 £’000
Ordinary Shares of 1p each, allotted, called up and fully paid:
Opening balance of 84,604,866 (2023: 85,316,586) shares 846 853
Repurchase of 1,575,205 (2023: 711,720) shares into treasury (16) (7)
Subtotal of 83,029,661 (2023: 84,604,866) shares 830 846
2,286,925 (2023: 711,720) shares held in treasury 23 7
Closing balance
1
853 853
1
Represents 85,316,586 (2023: 85,316,586) shares of 1p each, including 2,286,925 (2023: 711,720) held in treasury.
During the year, the Company repurchased 1,575,205 of its own shares, nominal value £15,752 to hold in treasury, representing 1.86% of the
shares outstanding at the beginning of the year. The total consideration paid for these shares amounted to £1,409,000. The reason for these
purchases was to seek to manage the volatility of the share price discount to NAV per share.
13. Reserves
Year ended 30 June 2024 Capital reserves
Gains and Investment
losses on holding
Share Special sales of gains and Revenue
premium
1
reserve 2
investments
3
losses 4
reserve 5
£’000 £’000 £’000 £’000 £’000
Opening balance 10,571 72,319 (1,336) 4,355 1,991
Gains on sales of investments based on the carrying value at the previous
balance sheet date – – 112 – –
Net movement in investment holding losses – – – (945) –
Transfer on disposal of investments – – (304) 304 –
Impairment losses on investments – – (413) – –
Repurchase of the Company’s own shares into treasury – (1,409) – – –
Management fees allocated to capital – – (340) – –
Transaction costs – – (15) – –
Dividends paid – – – – (1,934)
Retained revenue for the year – – – – 2,650
Closing balance 10,571 70,910 (2,296) 3,714 2,707
1
Share premium is a non distributable reserve and represents the amount by which the fair value of the consideration received from shares issued exceeds the
nominal value of shares issued.
2
This is a distributable capital reserve arising from the cancellation of the share premium, and may be distributed as dividends or used to repurchase the Company’s
own shares.
3
This is a realised (distributable) capital reserve and may be distributed as dividends or used to repurchase the Company’s own shares.
4
This is an undistributable reserve which consists of unrealised gains and losses as a result of revaluations of investments held as at year end.
5
The revenue reserve may be distributed as dividends or used to repurchase the Company’s own shares.
Notes to the Accounts
continued
11. Current liabilities
Creditors: amounts falling due within one year
2024 2023
£’000 £’000
Repurchase of the Company’s own shares into treasury awaiting settlement 26 –
Other creditors and accruals 550 519
576 519
The Directors consider that the carrying amount of creditors falling due within one year approximates to their fair value.
12. Called-up share capital 2024 2023
£’000 £’000
Ordinary Shares of 1p each, allotted, called up and fully paid:
Opening balance of 84,604,866 (2023: 85,316,586) shares 846 853
Repurchase of 1,575,205 (2023: 711,720) shares into treasury (16) (7)
Subtotal of 83,029,661 (2023: 84,604,866) shares 830 846
2,286,925 (2023: 711,720) shares held in treasury 23 7
Closing balance
1
853 853
1
Represents 85,316,586 (2023: 85,316,586) shares of 1p each, including 2,286,925 (2023: 711,720) held in treasury.
During the year, the Company repurchased 1,575,205 of its own shares, nominal value £15,752 to hold in treasury, representing 1.86% of the
shares outstanding at the beginning of the year. The total consideration paid for these shares amounted to £1,409,000. The reason for these
purchases was to seek to manage the volatility of the share price discount to NAV per share.
13. Reserves
Year ended 30 June 2024 Capital reserves
Gains and Investment
losses on holding
Share Special sales of gains and Revenue
premium
1
reserve 2
investments
3
losses 4
reserve 5
£’000 £’000 £’000 £’000 £’000
Opening balance 10,571 72,319 (1,336) 4,355 1,991
Gains on sales of investments based on the carrying value at the previous
balance sheet date – – 112 – –
Net movement in investment holding losses – – – (945) –
Transfer on disposal of investments – – (304) 304 –
Impairment losses on investments – – (413) – –
Repurchase of the Company’s own shares into treasury – (1,409) – – –
Management fees allocated to capital – – (340) – –
Transaction costs – – (15) – –
Dividends paid – – – – (1,934)
Retained revenue for the year – – – – 2,650
Closing balance 10,571 70,910 (2,296) 3,714 2,707
1
Share premium is a non distributable reserve and represents the amount by which the fair value of the consideration received from shares issued exceeds the
nominal value of shares issued.
2
This is a distributable capital reserve arising from the cancellation of the share premium, and may be distributed as dividends or used to repurchase the Company’s
own shares.
3
This is a realised (distributable) capital reserve and may be distributed as dividends or used to repurchase the Company’s own shares.
4
This is an undistributable reserve which consists of unrealised gains and losses as a result of revaluations of investments held as at year end.
5
The revenue reserve may be distributed as dividends or used to repurchase the Company’s own shares.
Notes to the Accounts
continued
Schroder BSC Social Impact Trust plc
73
Year ended 30 June 2023 Capital reserves
Gains and Investment
losses on holding
Share Special sales of gains and Revenue
premium
1
reserve
2
investments 3
losses
4
reserve
5
£’000 £’000 £’000 £’000 £’000
Opening balance 10,571 72,993 (360) 4,733 1,126
Losses on sales of investments based on the carrying value
at the previous balance sheet date – – (105) – –
Net movement in investment holding losses – – – (915) –
Transfer on disposal of investments – – (537) 537 –
Repurchase of the Company’s own shares into treasury – (674) – – –
Management fees allocated to capital – – (334) – –
Dividends paid – – – – (1,109)
Retained revenue for the year – – – – 1,974
Closing balance 10,571 72,319 (1,336) 4,355 1,991
The Company’s Articles of Association permit dividend distributions out of realised capital profits. Total distributable reserves as at 30 June 2024
were £71,321,000 (30 June 2023: £72,974,000).
1
Share premium is a non distributable reserve and represents the amount by which the fair value of the consideration received from shares issued exceeds the
nominal value of shares issued.
2
This is a distributable capital reserve arising from the cancellation of the share premium, and may be distributed as dividends or used to repurchase the Company’s
own shares.
3
This is a realised (distributable) capital reserve and may be distributed as dividends or used to repurchase the Company’s own shares.
4
This is an undistributable reserve which consists of unrealised gains and losses as a result of revaluations of investments held as at year end.
5
The revenue reserve may be distributed as dividends or used to repurchase the Company’s own shares.
14. Net asset value per share 2024 2023
Net assets attributable to shareholders (£’000) 86,459 88,753
Shares in issue at the year end 83,029,661 84,604,866
Net asset value per share (pence) 104.13 104.90
15. Reconciliation of total return on ordinary activities before finance costs and taxation
to net cash inflow from operating activities 2024 2023
£’000 £’000
Total return before taxation 1,049 620
Add capital loss before taxation 1,601 1,354
Less accumulation dividends
1
(208) (416)
Increase in accrued income (163) (189)
Decrease/(increase) in other debtors 2 (6)
Increase in other creditors 31 87
Management fee and transaction costs allocated to capital (355) (334)
Net cash inflow from operating activities 1,957 1,116
1
Accumulation dividends are capitalised to investments.
16. Uncalled capital commitments
At 30 June 2024, the Company had uncalled capital commitments amounting to £12,174,000 (2023: £8,749,000) in respect of follow-on
investments, which may be drawn down or called by investee entities, subject to agreed notice periods.
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Year ended 30 June 2023 Capital reserves
Gains and Investment
losses on holding
Share Special sales of gains and Revenue
premium
1
reserve
2
investments 3
losses
4
reserve
5
£’000 £’000 £’000 £’000 £’000
Opening balance 10,571 72,993 (360) 4,733 1,126
Losses on sales of investments based on the carrying value
at the previous balance sheet date – – (105) – –
Net movement in investment holding losses – – – (915) –
Transfer on disposal of investments – – (537) 537 –
Repurchase of the Company’s own shares into treasury – (674) – – –
Management fees allocated to capital – – (334) – –
Dividends paid – – – – (1,109)
Retained revenue for the year – – – – 1,974
Closing balance 10,571 72,319 (1,336) 4,355 1,991
The Company’s Articles of Association permit dividend distributions out of realised capital profits. Total distributable reserves as at 30 June 2024
were £71,321,000 (30 June 2023: £72,974,000).
1
Share premium is a non distributable reserve and represents the amount by which the fair value of the consideration received from shares issued exceeds the
nominal value of shares issued.
2
This is a distributable capital reserve arising from the cancellation of the share premium, and may be distributed as dividends or used to repurchase the Company’s
own shares.
3
This is a realised (distributable) capital reserve and may be distributed as dividends or used to repurchase the Company’s own shares.
4
This is an undistributable reserve which consists of unrealised gains and losses as a result of revaluations of investments held as at year end.
5
The revenue reserve may be distributed as dividends or used to repurchase the Company’s own shares.
14. Net asset value per share 2024 2023
Net assets attributable to shareholders (£’000) 86,459 88,753
Shares in issue at the year end 83,029,661 84,604,866
Net asset value per share (pence) 104.13 104.90
15. Reconciliation of total return on ordinary activities before finance costs and taxation
to net cash inflow from operating activities 2024 2023
£’000 £’000
Total return before taxation 1,049 620
Add capital loss before taxation 1,601 1,354
Less accumulation dividends
1
(208) (416)
Increase in accrued income (163) (189)
Decrease/(increase) in other debtors 2 (6)
Increase in other creditors 31 87
Management fee and transaction costs allocated to capital (355) (334)
Net cash inflow from operating activities 1,957 1,116
1
Accumulation dividends are capitalised to investments.
16. Uncalled capital commitments
At 30 June 2024, the Company had uncalled capital commitments amounting to £12,174,000 (2023: £8,749,000) in respect of follow-on
investments, which may be drawn down or called by investee entities, subject to agreed notice periods.
Introduction Strategic Report Governance Financial Other Information (Unaudited)
74
Schroder BSC Social Impact Trust plc
17. Transactions with the Manager
Under the terms of the Alternative Investment Fund Manager Agreement, the Manager is entitled to receive a management fee. Details of the
basis of the calculation are given in the Directors’ Report on pages 42 to 43.
The fee payable to the Manager in respect of the year ended 30 June 2024 amounted to £624,000 (2023: £614,000), of which £307,000 (2023:
£307,000) was outstanding at the year end. Any investments in funds managed or advised by the Manager or any of its associated companies,
are excluded from the assets used for the purpose of the calculation and therefore incur no fee.
Under the terms of the Investment Management Agreement, the Manager may reclaim from the Company certain expenses paid by the
Manager on behalf of the Company to HSBC in connection with accounting and administrative services provided to the Company. These
charges amounted to £79,000 for the year ended 30 June 2024 (2023: £66,000), of which £66,000 (2023: same) was outstanding at the year end.
No Director of the Company served as a Director of any company within the Schroder Group at any time during the year, or prior period.
In accordance with the terms of a discretionary mandate between the Company, Better Society Capital Limited, Rathbone Investment
Management Limited and The Charity Bank Limited are entitled to receive a management fee for portfolio management services relating to
certain of the Company’s investments.
Details of the basis of the calculation are given in the Directors’ Report on pages 42 to 43. The fee payable to Rathbone in respect of the year
ended 30 June 2024 amounted to £54,000 (2023: £55,000), of which £13,000 (2023: £13,000) was outstanding at the year end. The fee payable
to The Charity Bank Limited in respect of the year ended 30 June 2024 amounted to £2,000 (2023: £nil), of which £nil was outstanding at the
year end (2023: same).
18. Related party transactions
Details of the remuneration payable to Directors are given in the Directors’ Remuneration Report on page 53 and details of Directors’
shareholdings are given in the Directors’ Remuneration Report on page 54. Details of transactions with the Managers are given in note 17
above.
During the year ended 30 June 2024, there has been a smaller related party transaction for the purposes of the Listing Rules as then in force in
relation to the debt investment in CETL. The Company’s debt investment in CETL, valued at £3.5 million and comprising 4.1% of the Company’s
investment portfolio as of 30 June 2024, was made by way of the sale of a £3.6 million direct junior loan to CETL previously owned by the
Portfolio Manager. After the sale, the Portfolio Manager holds a £2.4 million investment in the same entity through a junior loan, compared to
£6.0 million before the sale.
19. Disclosures regarding financial instruments measured at fair value
The Company’s financial instruments within the scope of FRS 102 that are held at fair value comprise certain investments held in its investment
portfolio.
FRS 102 requires that financial instruments held at fair value are categorised into a hierarchy consisting of the three levels below. A fair value
measurement is categorised in its entirety on the basis of the lowest level input that is significant to the fair value measurement.
Level 1 – valued using unadjusted quoted prices in active markets for identical assets.
Level 2 – valued using observable inputs other than quoted prices included within Level 1.
Level 3 – valued using inputs that are unobservable.
Details of the Company’s policy for valuing investments are given in note 1(b) on page 67. Level 3 investments have been valued in accordance
with note 1(b)(ii) to (vii).
The Company’s unlisted investments held at fair value are valued using a variety of techniques consistent with the recommendations set out in
the International Private Equity and Venture Capital guidelines. Investments in third-party managed funds were valued by reference to the most
recent net asset value provided by the relevant manager. The valuation methods adopted by third-party managers include using comparable
company multiples, net asset values, assessment of comparable company performance and assessment of milestone achievement at the
investee. For certain investments, such as High Impact Housing, the third-party manager may appoint external valuers to periodically value the
underlying portfolio of assets. The valuations of third-party managed funds will also be subject to an annual audit. The valuations of all
investments are considered by the Portfolio Manager and recommended to the AIFM, who in turn recommends them to the Company. Where it
is deemed appropriate, the Portfolio Manager may recommend an adjusted valuation to the extent that the adjusted valuation represents the
Portfolio Manager’s view of fair value.
At 30 June, the Company’s investment held at fair value, were categorised as follows:
2024 2023
£’000 £’000
Level 1 5,928 9,342
Level 2 – –
Level 3 56,393 54,857
Total 62,321 64,199
There have been no other transfers between Levels 1, 2 or 3 during the year (2023: nil).
Notes to the Accounts
continued
17. Transactions with the Manager
Under the terms of the Alternative Investment Fund Manager Agreement, the Manager is entitled to receive a management fee. Details of the
basis of the calculation are given in the Directors’ Report on pages 42 to 43.
The fee payable to the Manager in respect of the year ended 30 June 2024 amounted to £624,000 (2023: £614,000), of which £307,000 (2023:
£307,000) was outstanding at the year end. Any investments in funds managed or advised by the Manager or any of its associated companies,
are excluded from the assets used for the purpose of the calculation and therefore incur no fee.
Under the terms of the Investment Management Agreement, the Manager may reclaim from the Company certain expenses paid by the
Manager on behalf of the Company to HSBC in connection with accounting and administrative services provided to the Company. These
charges amounted to £79,000 for the year ended 30 June 2024 (2023: £66,000), of which £66,000 (2023: same) was outstanding at the year end.
No Director of the Company served as a Director of any company within the Schroder Group at any time during the year, or prior period.
In accordance with the terms of a discretionary mandate between the Company, Better Society Capital Limited, Rathbone Investment
Management Limited and The Charity Bank Limited are entitled to receive a management fee for portfolio management services relating to
certain of the Company’s investments.
Details of the basis of the calculation are given in the Directors’ Report on pages 42 to 43. The fee payable to Rathbone in respect of the year
ended 30 June 2024 amounted to £54,000 (2023: £55,000), of which £13,000 (2023: £13,000) was outstanding at the year end. The fee payable
to The Charity Bank Limited in respect of the year ended 30 June 2024 amounted to £2,000 (2023: £nil), of which £nil was outstanding at the
year end (2023: same).
18. Related party transactions
Details of the remuneration payable to Directors are given in the Directors’ Remuneration Report on page 53 and details of Directors’
shareholdings are given in the Directors’ Remuneration Report on page 54. Details of transactions with the Managers are given in note 17
above.
During the year ended 30 June 2024, there has been a smaller related party transaction for the purposes of the Listing Rules as then in force in
relation to the debt investment in CETL. The Company’s debt investment in CETL, valued at £3.5 million and comprising 4.1% of the Company’s
investment portfolio as of 30 June 2024, was made by way of the sale of a £3.6 million direct junior loan to CETL previously owned by the
Portfolio Manager. After the sale, the Portfolio Manager holds a £2.4 million investment in the same entity through a junior loan, compared to
£6.0 million before the sale.
19. Disclosures regarding financial instruments measured at fair value
The Company’s financial instruments within the scope of FRS 102 that are held at fair value comprise certain investments held in its investment
portfolio.
FRS 102 requires that financial instruments held at fair value are categorised into a hierarchy consisting of the three levels below. A fair value
measurement is categorised in its entirety on the basis of the lowest level input that is significant to the fair value measurement.
Level 1 – valued using unadjusted quoted prices in active markets for identical assets.
Level 2 – valued using observable inputs other than quoted prices included within Level 1.
Level 3 – valued using inputs that are unobservable.
Details of the Company’s policy for valuing investments are given in note 1(b) on page 67. Level 3 investments have been valued in accordance
with note 1(b)(ii) to (vii).
The Company’s unlisted investments held at fair value are valued using a variety of techniques consistent with the recommendations set out in
the International Private Equity and Venture Capital guidelines. Investments in third-party managed funds were valued by reference to the most
recent net asset value provided by the relevant manager. The valuation methods adopted by third-party managers include using comparable
company multiples, net asset values, assessment of comparable company performance and assessment of milestone achievement at the
investee. For certain investments, such as High Impact Housing, the third-party manager may appoint external valuers to periodically value the
underlying portfolio of assets. The valuations of third-party managed funds will also be subject to an annual audit. The valuations of all
investments are considered by the Portfolio Manager and recommended to the AIFM, who in turn recommends them to the Company. Where it
is deemed appropriate, the Portfolio Manager may recommend an adjusted valuation to the extent that the adjusted valuation represents the
Portfolio Manager’s view of fair value.
At 30 June, the Company’s investment held at fair value, were categorised as follows:
2024 2023
£’000 £’000
Level 1 5,928 9,342
Level 2 – –
Level 3 56,393 54,857
Total 62,321 64,199
There have been no other transfers between Levels 1, 2 or 3 during the year (2023: nil).
Notes to the Accounts
continued
Schroder BSC Social Impact Trust plc
75
Movements in fair value measurements included in Level 3 during the year are as follows:
2024 2023
£’000 £’000
Opening book cost 49,908 44,693
Opening investment holding gains 4,949 5,460
Opening fair value of Level 3 investments 54,857 50,153
Purchases at cost 5,392 6,957
Sales proceeds (3,193) (1,742)
Net losses on investments (663) (511)
Closing fair value of Level 3 investments 56,393 54,857
Closing book cost 52,107 49,908
Closing investment holding gains 4,286 4,949
Closing fair value of Level 3 investments 56,393 54,857
20. Financial instruments’ exposure to risk and risk management policies
The Company’s objectives are set out on the inside front cover of this report. In pursuing these objectives, the Company is exposed to a variety
of financial risks that could result in a reduction in the Company’s net assets or a reduction in the profits available for dividends.
These financial risks include market risk (comprising interest rate risk and other price risk), liquidity risk and credit risk. The Directors’ policy for
managing these risks is set out below. The Board coordinates the Company’s risk management policy. The Company has no significant exposure
to foreign exchange risk on monetary items.
The Company’s classes of financial instruments may comprise the following:
– investments in collective funds, listed and unlisted bonds, debts, shares of quoted and unquoted companies which are held in accordance
with the Company’s investment objective;
– debtors, creditors, short-term deposit and cash arising directly from its operations;
– bank loans used for investment purposes; and
– derivatives used for efficient portfolio management or currency hedging.
(a) Market risk
The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. This
market risk comprises two elements: interest rate risk and other price risk. Information to enable an evaluation of the nature and extent of these
two elements of market risk is given in parts (i) and (ii) of this note, together with sensitivity analyses where appropriate. The Board reviews and
agrees policies for managing these risks.
The Manager assesses the exposure to market risk when making each investment decision and monitors the overall level of market risk on the
whole of the investment portfolio on an ongoing basis.
(i) Interest rate risk
Interest rate movements may affect the level of income receivable on investments carrying a floating interest rate coupon, cash balances and
interest payable on any loans or overdrafts when interest rates are re-set.
Management of interest rate risk
Liquidity and borrowings are managed with the aim of increasing returns to shareholders. The Company may borrow from time to time, but
gearing will not exceed 20% of net asset value at the time of drawing. Gearing is defined as borrowings less cash, expressed as a percentage of
net assets. The Company has arranged an overdraft facility subject to a limit of £5 million, which expires on 30 November 2024, with HSBC Bank
plc but it has not been utilised during the year or prior year.
Interest rate exposure
The exposure of financial assets and financial liabilities to floating interest rates, giving cash flow interest rate risk when rates are re-set, is shown
below:
2024 2023
£’000 £’000
Exposure to floating interest rates:
Investments carrying a floating interest rate coupon 3,966 5,603
Current asset investments 3,106 1,715
Cash at bank and in hand 514 374
7,586 7,692
Sterling cash balances at call earn interest at floating rates based on the Sterling Overnight Interest Average rates (“SONIA”).
The above period end amounts are broadly representative of the exposure to interest rates during the year and prior year.
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Movements in fair value measurements included in Level 3 during the year are as follows:
2024 2023
£’000 £’000
Opening book cost 49,908 44,693
Opening investment holding gains 4,949 5,460
Opening fair value of Level 3 investments 54,857 50,153
Purchases at cost 5,392 6,957
Sales proceeds (3,193) (1,742)
Net losses on investments (663) (511)
Closing fair value of Level 3 investments 56,393 54,857
Closing book cost 52,107 49,908
Closing investment holding gains 4,286 4,949
Closing fair value of Level 3 investments 56,393 54,857
20. Financial instruments’ exposure to risk and risk management policies
The Company’s objectives are set out on the inside front cover of this report. In pursuing these objectives, the Company is exposed to a variety
of financial risks that could result in a reduction in the Company’s net assets or a reduction in the profits available for dividends.
These financial risks include market risk (comprising interest rate risk and other price risk), liquidity risk and credit risk. The Directors’ policy for
managing these risks is set out below. The Board coordinates the Company’s risk management policy. The Company has no significant exposure
to foreign exchange risk on monetary items.
The Company’s classes of financial instruments may comprise the following:
– investments in collective funds, listed and unlisted bonds, debts, shares of quoted and unquoted companies which are held in accordance
with the Company’s investment objective;
– debtors, creditors, short-term deposit and cash arising directly from its operations;
– bank loans used for investment purposes; and
– derivatives used for efficient portfolio management or currency hedging.
(a) Market risk
The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in market prices. This
market risk comprises two elements: interest rate risk and other price risk. Information to enable an evaluation of the nature and extent of these
two elements of market risk is given in parts (i) and (ii) of this note, together with sensitivity analyses where appropriate. The Board reviews and
agrees policies for managing these risks.
The Manager assesses the exposure to market risk when making each investment decision and monitors the overall level of market risk on the
whole of the investment portfolio on an ongoing basis.
(i) Interest rate risk
Interest rate movements may affect the level of income receivable on investments carrying a floating interest rate coupon, cash balances and
interest payable on any loans or overdrafts when interest rates are re-set.
Management of interest rate risk
Liquidity and borrowings are managed with the aim of increasing returns to shareholders. The Company may borrow from time to time, but
gearing will not exceed 20% of net asset value at the time of drawing. Gearing is defined as borrowings less cash, expressed as a percentage of
net assets. The Company has arranged an overdraft facility subject to a limit of £5 million, which expires on 30 November 2024, with HSBC Bank
plc but it has not been utilised during the year or prior year.
Interest rate exposure
The exposure of financial assets and financial liabilities to floating interest rates, giving cash flow interest rate risk when rates are re-set, is shown
below:
2024 2023
£’000 £’000
Exposure to floating interest rates:
Investments carrying a floating interest rate coupon 3,966 5,603
Current asset investments 3,106 1,715
Cash at bank and in hand 514 374
7,586 7,692
Sterling cash balances at call earn interest at floating rates based on the Sterling Overnight Interest Average rates (“SONIA”).
The above period end amounts are broadly representative of the exposure to interest rates during the year and prior year.
Introduction Strategic Report Governance Financial Other Information (Unaudited)
76
Schroder BSC Social Impact Trust plc
20. Financial instruments’ exposure to risk and risk management policies continued
(a) Market risk continued
(i) Interest rate risk continued
Interest rate sensitivity
The following table illustrates the sensitivity of the return after taxation for the year and net assets to a 0.75% (2023: 0.75%) increase or
decrease in interest rates in regards to the Company’s monetary financial assets and financial liabilities. This level of change is considered to be
a reasonable illustration based on observation of current market conditions. The sensitivity analysis is based on the Company’s monetary
financial instruments held at the accounting date with all other variables held constant.
2024 2023
0.75% 0.75% 0.75% 0.75%
increase decrease increase decrease
in rate in rate in rate in rate
£’000 £’000 £’000 £’000
Income statement – return after taxation
Revenue return 57 (57) 58 (58)
Capital return – – – –
Total return after taxation 57 (57) 58 (58)
Net Assets 57 (57) 58 (58)
(ii) Other price risk
Other price risk includes changes in market prices which may affect the value of investments.
Management of other price risk
The Board meets on at least four occasions each year to consider the asset allocation of the portfolio and the risk associated with particular
industry sectors. The portfolio management team has responsibility for monitoring the portfolio, which is selected in accordance with the
Company’s investment objective and seeks to ensure that individual stocks meet an acceptable risk/reward profile. The Board may authorise the
Manager to enter derivative transactions for the purpose of currency hedging, although non-sterling exposures are expected to be limited.
Market price risk exposure
The Company’s total exposure to changes in market prices at 30 June comprises the following:
2024 2023
£’000 £’000
Investments held at fair value through profit or loss 62,321 64,199
The above data is broadly representative of the exposure to market price risk during the year.
Concentration of exposure to market price risk
An analysis of the Company’s investments is given on page 22. This shows a concentration of exposure to the social housing sector in the
United Kingdom.
Market price risk sensitivity
The following table illustrates the sensitivity of the return after taxation for the year and net assets to an increase or decrease of 10% in the fair
values of the Company’s investments. This level of change is considered to be a reasonable illustration based on observation of current market
conditions. The sensitivity analysis is based on the Company’s exposure to the underlying investments and includes the impact on the
management fee but assumes that all other variables are held constant.
2024 2023
10% increase 10% decrease 10% increase 10% decrease
in fair value in fair value in fair value in fair value
£’000 £’000 £’000 £’000
Income statement – return after taxation
Revenue return (25) 25 (26) 26
Capital return 6,207 (6,207) 6,394 (6,394)
Total return after taxation and net assets 6,182 (6,182) 6,368 (6,368)
Percentage change in net asset value (%) 7.2 (7.2) 7.2 (7.2)
Notes to the Accounts
continued
20. Financial instruments’ exposure to risk and risk management policies continued
(a) Market risk continued
(i) Interest rate risk continued
Interest rate sensitivity
The following table illustrates the sensitivity of the return after taxation for the year and net assets to a 0.75% (2023: 0.75%) increase or
decrease in interest rates in regards to the Company’s monetary financial assets and financial liabilities. This level of change is considered to be
a reasonable illustration based on observation of current market conditions. The sensitivity analysis is based on the Company’s monetary
financial instruments held at the accounting date with all other variables held constant.
2024 2023
0.75% 0.75% 0.75% 0.75%
increase decrease increase decrease
in rate in rate in rate in rate
£’000 £’000 £’000 £’000
Income statement – return after taxation
Revenue return 57 (57) 58 (58)
Capital return – – – –
Total return after taxation 57 (57) 58 (58)
Net Assets 57 (57) 58 (58)
(ii) Other price risk
Other price risk includes changes in market prices which may affect the value of investments.
Management of other price risk
The Board meets on at least four occasions each year to consider the asset allocation of the portfolio and the risk associated with particular
industry sectors. The portfolio management team has responsibility for monitoring the portfolio, which is selected in accordance with the
Company’s investment objective and seeks to ensure that individual stocks meet an acceptable risk/reward profile. The Board may authorise the
Manager to enter derivative transactions for the purpose of currency hedging, although non-sterling exposures are expected to be limited.
Market price risk exposure
The Company’s total exposure to changes in market prices at 30 June comprises the following:
2024 2023
£’000 £’000
Investments held at fair value through profit or loss 62,321 64,199
The above data is broadly representative of the exposure to market price risk during the year.
Concentration of exposure to market price risk
An analysis of the Company’s investments is given on page 22. This shows a concentration of exposure to the social housing sector in the
United Kingdom.
Market price risk sensitivity
The following table illustrates the sensitivity of the return after taxation for the year and net assets to an increase or decrease of 10% in the fair
values of the Company’s investments. This level of change is considered to be a reasonable illustration based on observation of current market
conditions. The sensitivity analysis is based on the Company’s exposure to the underlying investments and includes the impact on the
management fee but assumes that all other variables are held constant.
2024 2023
10% increase 10% decrease 10% increase 10% decrease
in fair value in fair value in fair value in fair value
£’000 £’000 £’000 £’000
Income statement – return after taxation
Revenue return (25) 25 (26) 26
Capital return 6,207 (6,207) 6,394 (6,394)
Total return after taxation and net assets 6,182 (6,182) 6,368 (6,368)
Percentage change in net asset value (%) 7.2 (7.2) 7.2 (7.2)
Notes to the Accounts
continued
Schroder BSC Social Impact Trust plc
77
(b) Liquidity risk
This is the risk that the Company will encounter difficulty in meeting its obligations associated with financial liabilities that are settled by
delivering cash or another financial asset.
Management of the risk
The Portfolio Manager monitors the cash position to ensure sufficient funds are available to meet the Company’s financial obligations. For this
purpose, the Portfolio Manager may retain up to 20% of net assets in Liquid Assets, other liquid investments and a reserve of cash. The
Company has also arranged an overdraft facility with HSBC Bank plc.
Liquidity risk exposure
Contractual maturities of financial liabilities, based on the earliest date on which payment can be required are as follows:
2024 2023
Three Three
months months
or less Total or less Total
£’000 £’000 £’000 £’000
Creditors: amounts falling due within one year
Other creditors and accruals (576) (576) (519) (519)
(576) (576) (519) (519)
(c) Credit risk
Credit risk is the risk that the failure of the counterparty to a transaction to discharge its obligations under that transaction could result in loss to
the Company.
Credit risk exposure
The Company is exposed to credit risk principally from debt securities held, off balance sheet commitments, loans and receivables and cash
deposits.
Portfolio dealing
The credit ratings of broker counterparties are monitored by the AIFM and limits are set on exposure to any one broker.
Exposure to the Custodian
The custodian of the Company’s assets is HSBC Bank plc which has long-term Credit Ratings of AA- with Fitch and Aa3 with Moody’s.
Any assets held by the custodian will be held in accounts which are segregated from the custodian’s own trading assets. If the custodian were to
become insolvent, the Company’s right of ownership of those investments is clear and they are therefore protected. However the Company’s
cash balances are all deposited with the custodian as banker and held on the custodian’s balance sheet. Accordingly, in accordance with usual
banking practice, the Company will rank as a general creditor to the custodian in respect of cash balances.
Exposure to debt securities
The Portfolio Manager’s investment process ensures that potential investments are subject to robust analysis, appropriate due diligence and
approval by an investment committee. Pre-investment checks are made to prevent breach of the Company’s investment limits, which are
designed to ensure a diversified portfolio to manage risk. Debt securities are subject to continuous monitoring and quarterly reports are
presented to the Board.
Credit risk exposure
The following amounts shown in the Balance Sheet, represent the maximum exposure to credit risk at the year end:
2024 2023
Balance Maximum Balance Maximum
sheet exposure sheet exposure
£’000 £’000 £’000 £’000
Fixed assets
Investments held at fair value through profit 62,321 3,540 64,199 –
Investments held at amortised cost (debt securities) 20,532 20,532 22,583 22,583
Current assets
Debtors 562 562 401 401
Current asset investments 3,106 3,106 1,715 1,715
Cash at bank and in hand 514 514 374 374
87,035 28,254 89,272 25,073
At 30 June 2024, the Company had an off-balance sheet credit exposure consisting of uncalled capital commitments which amounted to
£12,174,000 (2023: £8,749,000) in respect of follow-on investments.
(d) Fair values of financial assets and financial liabilities
All financial assets and liabilities are either carried in the balance sheet at fair value, or the balance sheet amount is a reasonable approximation
of fair value.
Introduction Strategic Report Governance Financial Other Information (Unaudited)
(b) Liquidity risk
This is the risk that the Company will encounter difficulty in meeting its obligations associated with financial liabilities that are settled by
delivering cash or another financial asset.
Management of the risk
The Portfolio Manager monitors the cash position to ensure sufficient funds are available to meet the Company’s financial obligations. For this
purpose, the Portfolio Manager may retain up to 20% of net assets in Liquid Assets, other liquid investments and a reserve of cash. The
Company has also arranged an overdraft facility with HSBC Bank plc.
Liquidity risk exposure
Contractual maturities of financial liabilities, based on the earliest date on which payment can be required are as follows:
2024 2023
Three Three
months months
or less Total or less Total
£’000 £’000 £’000 £’000
Creditors: amounts falling due within one year
Other creditors and accruals (576) (576) (519) (519)
(576) (576) (519) (519)
(c) Credit risk
Credit risk is the risk that the failure of the counterparty to a transaction to discharge its obligations under that transaction could result in loss to
the Company.
Credit risk exposure
The Company is exposed to credit risk principally from debt securities held, off balance sheet commitments, loans and receivables and cash
deposits.
Portfolio dealing
The credit ratings of broker counterparties are monitored by the AIFM and limits are set on exposure to any one broker.
Exposure to the Custodian
The custodian of the Company’s assets is HSBC Bank plc which has long-term Credit Ratings of AA- with Fitch and Aa3 with Moody’s.
Any assets held by the custodian will be held in accounts which are segregated from the custodian’s own trading assets. If the custodian were to
become insolvent, the Company’s right of ownership of those investments is clear and they are therefore protected. However the Company’s
cash balances are all deposited with the custodian as banker and held on the custodian’s balance sheet. Accordingly, in accordance with usual
banking practice, the Company will rank as a general creditor to the custodian in respect of cash balances.
Exposure to debt securities
The Portfolio Manager’s investment process ensures that potential investments are subject to robust analysis, appropriate due diligence and
approval by an investment committee. Pre-investment checks are made to prevent breach of the Company’s investment limits, which are
designed to ensure a diversified portfolio to manage risk. Debt securities are subject to continuous monitoring and quarterly reports are
presented to the Board.
Credit risk exposure
The following amounts shown in the Balance Sheet, represent the maximum exposure to credit risk at the year end:
2024 2023
Balance Maximum Balance Maximum
sheet exposure sheet exposure
£’000 £’000 £’000 £’000
Fixed assets
Investments held at fair value through profit 62,321 3,540 64,199 –
Investments held at amortised cost (debt securities) 20,532 20,532 22,583 22,583
Current assets
Debtors 562 562 401 401
Current asset investments 3,106 3,106 1,715 1,715
Cash at bank and in hand 514 514 374 374
87,035 28,254 89,272 25,073
At 30 June 2024, the Company had an off-balance sheet credit exposure consisting of uncalled capital commitments which amounted to
£12,174,000 (2023: £8,749,000) in respect of follow-on investments.
(d) Fair values of financial assets and financial liabilities
All financial assets and liabilities are either carried in the balance sheet at fair value, or the balance sheet amount is a reasonable approximation
of fair value.
Introduction Strategic Report Governance Financial Other Information (Unaudited)
78
Schroder BSC Social Impact Trust plc
21. Capital management policies and procedures
The Company’s capital management objectives are to ensure that it will be able to continue as a going concern, and to maximise the income
and capital return to its equity shareholders.
The Company’s capital structure comprises the following:
2024 2023
£’000 £’000
Equity
Called-up share capital 853 853
Reserves 85,606 87,900
Total equity 86,459 88,753
The Board, with the assistance of the Manager, monitors and reviews the broad structure of the Company’s capital on an ongoing basis. This
review will include:
– the possible use of gearing, which will take into account the Manager’s views on the market;
– the potential benefit of repurchasing the Company’s own shares for cancellation or holding in treasury, which will take into account the
share price discount;
– the opportunity for issue of new shares; and
– the amount of dividend to be paid, in excess of that which is required to be distributed.
22. Events after the accounting date that have not been reflected in the financial
statements
There have been no events we are aware of since the balance sheet date which either require changes to be made to the figures included in the
financial statements or to be disclosed by way of note.
Notes to the Accounts
continued
21. Capital management policies and procedures
The Company’s capital management objectives are to ensure that it will be able to continue as a going concern, and to maximise the income
and capital return to its equity shareholders.
The Company’s capital structure comprises the following:
2024 2023
£’000 £’000
Equity
Called-up share capital 853 853
Reserves 85,606 87,900
Total equity 86,459 88,753
The Board, with the assistance of the Manager, monitors and reviews the broad structure of the Company’s capital on an ongoing basis. This
review will include:
– the possible use of gearing, which will take into account the Manager’s views on the market;
– the potential benefit of repurchasing the Company’s own shares for cancellation or holding in treasury, which will take into account the
share price discount;
– the opportunity for issue of new shares; and
– the amount of dividend to be paid, in excess of that which is required to be distributed.
22. Events after the accounting date that have not been reflected in the financial
statements
There have been no events we are aware of since the balance sheet date which either require changes to be made to the figures included in the
financial statements or to be disclosed by way of note.
Notes to the Accounts
continued
Schroder
Asian Total Return Investment Company plc
79
Other
information
(Unaudited)
Other Information
Annual General Meeting – Recommendations 80
Notice of Annual General Meeting 81
Explanatory Notes to the Notice of Meeting 82
Definitions of Terms and Alternative
Performance Measures 84
Impact Methodology Notes 86
Shareholder Information 88
Information about the Company 90
Other
information
(Unaudited)
Other Information
Annual General Meeting – Recommendations 80
Notice of Annual General Meeting 81
Explanatory Notes to the Notice of Meeting 82
Definitions of Terms and Alternative
Performance Measures 84
Impact Methodology Notes 86
Shareholder Information 88
Information about the Company 90
80
Schroder BSC Social Impact Trust plc
The Annual General Meeting (“AGM”) of the Company will be
held on Wednesday, 18 December 2024 at 12.00 p.m. The formal
Notice of Meeting is set out on page 81.
The following information is important and requires your
immediate attention. If you are in any doubt about the action
you should take, you should consult an independent financial
adviser, authorised under the Financial Services and Markets
Act 2000. If you have sold or transferred all of your ordinary
shares in the Company, please forward this document with its
accompanying form of proxy at once to the purchaser or
transferee, or to the stockbroker, bank or other agent through
whom the sale or transfer was effected, for onward
transmission to the purchaser or transferee.
Ordinary business
Resolutions 1 to 11 are all ordinary resolutions. Resolution 1 is
a required resolution. Resolution 2 concerns the interim dividend as
set out on pages 45 to 46. Resolution 3-4 concern the Directors’
Remuneration Report and Policy, on pages 52 to 54.
Resolutions 5-8 invite shareholders to elect and re-elect directors for
a further year, following the recommendations of the Nomination
Committee, set out on page 50 (their biographies are set out on
pages 40 to 41).
Resolutions 9 and 10 concern the re-appointment and remuneration
of the Company’s Auditor, discussed in the Audit and Risk Committee
Report on pages 46 to 48.
Special business
Resolution 11 – Directors’ authority to allot shares
(ordinary resolution) and resolution 12 – power to
disapply pre-emption rights (special resolution)
The directors are seeking authority to allot a limited number of
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 £82,533 (being 10% of the issued
share capital (excluding any shares held in treasury) as at 23 October
2024).
A special resolution will be proposed to authorise the directors to allot
shares up to a maximum aggregate nominal amount of £82,533
(being 10% of the issued share capital as at 23 October 2024) on
a non pre-emptive basis. This authority includes shares that the
Company sells or transfers that have been held in treasury. The
directors do not intend to allot ordinary shares or sell treasury shares,
on a non pre-emptive basis, pursuant to this authority other than to
take advantage of opportunities in the market as they arise and only if
they believe it to be advantageous to the Company as a whole. Shares
issued or treasury shares reissued, under this authority, will be at
a price that is equal to or greater than the Company’s NAV per share,
plus any applicable costs, as at the latest practicable date before the
allotment of such shares.
If approved, both of these authorities will expire at the conclusion of
the AGM in 2025 unless renewed, varied or revoked earlier.
Resolution 13: authority to make market purchases of
the Company’s own shares (special resolution)
At the AGM held on 15 December 2023, the Company was granted
authority to make market purchases of up to 12,614,826 ordinary
shares for cancellation or holding in treasury. 1,242,137 ordinary
shares were bought back under this authority and the Company
therefore has remaining authority to purchase up to 11,372,689
ordinary shares. This authority will expire at the forthcoming AGM.
The directors believe it is in the best interests of the Company and its
shareholders to have a general authority for the Company to buy
back its ordinary shares in the market as they keep under review the
share price discount to NAV. A special resolution will be proposed at
the forthcoming AGM to give the Company authority to make market
purchases of up to 14.99% of the ordinary shares in issue as at
23 October 2024 (excluding treasury shares). The directors will
exercise this authority to buy back shares only when the share price is
at a discount to the Company’s NAV and only if the directors consider
that any purchase would be for the benefit of the Company and its
shareholders, taking into account relevant factors and circumstances
at the time. Any shares so purchased would be cancelled or held in
treasury for potential reissue.
If renewed, this authority will lapse at the conclusion of the AGM in
2025 unless renewed, varied or revoked earlier.
Resolution 14: notice period for general meetings
(special resolution)
Resolution 14 set out in the Notice of AGM is a special resolution and
will, if passed, allow the Company to hold general meetings (other
than annual general meetings) on a minimum notice period of
14 clear days, rather than 21 clear days as required by the Companies
Act 2006. The approval will be effective until the Company’s next AGM
to be held in 2025. The directors will only call general meetings on
14 clear days’ notice when they consider it to be in the best interests
of the Company’s shareholders and will only do so if the Company
offers facilities for all shareholders to vote by electronic means and
when the matter needs to be dealt with expediently.
Recommendations
The Board considers that the resolutions relating to the above items
of business are in the best interests of shareholders as a whole.
Accordingly, the Board unanimously recommends to shareholders
that they vote in favour of the above resolutions and the other
resolutions to be proposed at the forthcoming AGM, as they intend to
do in respect of their own beneficial holdings.
Annual General Meeting – Recommendations
The Annual General Meeting (“AGM”) of the Company will be
held on Wednesday, 18 December 2024 at 12.00 p.m. The formal
Notice of Meeting is set out on page 81.
The following information is important and requires your
immediate attention. If you are in any doubt about the action
you should take, you should consult an independent financial
adviser, authorised under the Financial Services and Markets
Act 2000. If you have sold or transferred all of your ordinary
shares in the Company, please forward this document with its
accompanying form of proxy at once to the purchaser or
transferee, or to the stockbroker, bank or other agent through
whom the sale or transfer was effected, for onward
transmission to the purchaser or transferee.
Ordinary business
Resolutions 1 to 11 are all ordinary resolutions. Resolution 1 is
a required resolution. Resolution 2 concerns the interim dividend as
set out on pages 45 to 46. Resolution 3-4 concern the Directors’
Remuneration Report and Policy, on pages 52 to 54.
Resolutions 5-8 invite shareholders to elect and re-elect directors for
a further year, following the recommendations of the Nomination
Committee, set out on page 50 (their biographies are set out on
pages 40 to 41).
Resolutions 9 and 10 concern the re-appointment and remuneration
of the Company’s Auditor, discussed in the Audit and Risk Committee
Report on pages 46 to 48.
Special business
Resolution 11 – Directors’ authority to allot shares
(ordinary resolution) and resolution 12 – power to
disapply pre-emption rights (special resolution)
The directors are seeking authority to allot a limited number of
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 £82,533 (being 10% of the issued
share capital (excluding any shares held in treasury) as at 23 October
2024).
A special resolution will be proposed to authorise the directors to allot
shares up to a maximum aggregate nominal amount of £82,533
(being 10% of the issued share capital as at 23 October 2024) on
a non pre-emptive basis. This authority includes shares that the
Company sells or transfers that have been held in treasury. The
directors do not intend to allot ordinary shares or sell treasury shares,
on a non pre-emptive basis, pursuant to this authority other than to
take advantage of opportunities in the market as they arise and only if
they believe it to be advantageous to the Company as a whole. Shares
issued or treasury shares reissued, under this authority, will be at
a price that is equal to or greater than the Company’s NAV per share,
plus any applicable costs, as at the latest practicable date before the
allotment of such shares.
If approved, both of these authorities will expire at the conclusion of
the AGM in 2025 unless renewed, varied or revoked earlier.
Resolution 13: authority to make market purchases of
the Company’s own shares (special resolution)
At the AGM held on 15 December 2023, the Company was granted
authority to make market purchases of up to 12,614,826 ordinary
shares for cancellation or holding in treasury. 1,242,137 ordinary
shares were bought back under this authority and the Company
therefore has remaining authority to purchase up to 11,372,689
ordinary shares. This authority will expire at the forthcoming AGM.
The directors believe it is in the best interests of the Company and its
shareholders to have a general authority for the Company to buy
back its ordinary shares in the market as they keep under review the
share price discount to NAV. A special resolution will be proposed at
the forthcoming AGM to give the Company authority to make market
purchases of up to 14.99% of the ordinary shares in issue as at
23 October 2024 (excluding treasury shares). The directors will
exercise this authority to buy back shares only when the share price is
at a discount to the Company’s NAV and only if the directors consider
that any purchase would be for the benefit of the Company and its
shareholders, taking into account relevant factors and circumstances
at the time. Any shares so purchased would be cancelled or held in
treasury for potential reissue.
If renewed, this authority will lapse at the conclusion of the AGM in
2025 unless renewed, varied or revoked earlier.
Resolution 14: notice period for general meetings
(special resolution)
Resolution 14 set out in the Notice of AGM is a special resolution and
will, if passed, allow the Company to hold general meetings (other
than annual general meetings) on a minimum notice period of
14 clear days, rather than 21 clear days as required by the Companies
Act 2006. The approval will be effective until the Company’s next AGM
to be held in 2025. The directors will only call general meetings on
14 clear days’ notice when they consider it to be in the best interests
of the Company’s shareholders and will only do so if the Company
offers facilities for all shareholders to vote by electronic means and
when the matter needs to be dealt with expediently.
Recommendations
The Board considers that the resolutions relating to the above items
of business are in the best interests of shareholders as a whole.
Accordingly, the Board unanimously recommends to shareholders
that they vote in favour of the above resolutions and the other
resolutions to be proposed at the forthcoming AGM, as they intend to
do in respect of their own beneficial holdings.
Annual General Meeting – Recommendations
Notice is hereby given that the Annual General Meeting of Schroder
BSC Social Impact Trust plc will be held on Wednesday, 18 December
2024 at 12.00 p.m. at 1 London Wall Place, London EC2Y 5AU to
consider the following resolutions, of which resolutions 1 to 11 will be
proposed as ordinary resolutions, and resolutions 12 to 14 will be
proposed as special resolutions:
Ordinary business
1. To receive the Annual Report and Accounts for the year ended
30 June 2024.
2. To authorise the directors of the Company to declare and pay all
dividends of the Company as interim dividends and for the last
dividend referable to a financial year not to be categorised as
a final dividend that is subject to shareholder approval.
3. To approve the Directors’ Remuneration Report for the year
ended 30 June 2024.
4. To approve the Directors’ Remuneration Policy.
5. To approve the election of Ranjan Ramparia as a director of the
Company.
6. To approve the re-election of Susannah Nicklin as a director of
the Company.
7. To approve the re-election of James B. Broderick as a director of
the Company.
8. To approve the re-election of Alice Chapple as a director of the
Company.
9. To re-appoint BDO LLP as auditor to the Company.
10. To authorise the directors to determine the remuneration of
BDO LLP as auditor to the Company.
Special business
11. To consider, and if thought fit, pass the following resolution as an
ordinary resolution:
“THAT in substitution for all existing authorities the directors be
generally and unconditionally authorised pursuant to section 551
of the Companies Act 2006 (the “Act”) to exercise all the powers
of the Company to allot relevant securities (within the meaning of
section 551 of the Act) up to an aggregate nominal amount of
£82,533 (being 10% of the issued ordinary share capital,
excluding treasury shares, at 23 October 2024) for a period
expiring (unless previously renewed, varied or revoked by the
Company in general meeting) at the conclusion of the Annual
General Meeting of the Company in 2025, but that the Company
may make an offer or agreement which would or might require
relevant securities to be allotted after expiry of this authority and
the Board may allot relevant securities in pursuance of that offer
or agreement.”
12. To consider and, if thought fit, to pass the following resolution as
a special resolution:
“THAT, subject to the passing of Resolution 11 set out above, the
directors be and are hereby empowered, pursuant to Section
571 of the Act, to allot equity securities (including any shares held
in treasury) (as defined in section 560(1) of the Act) pursuant to
the authority given in accordance with section 551 of the Act by
the said Resolution 11 and/or where such allotment constitutes
an allotment of equity securities by virtue of section 560(2) of the
Act as if Section 561(1) of the Act did not apply to any such
allotment, provided that this power shall be limited to the
allotment of equity securities up to an aggregate nominal
amount of £82,533 (representing 10% of the aggregate nominal
amount of the share capital, excluding treasury shares, in issue at
23 October 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.”
13. To consider and, if thought fit, to pass the following resolution as
a special resolution:
“THAT the Company be and is hereby generally and
unconditionally authorised in accordance with Section 701 of the
Companies Act 2006 (the “Act”) to make market purchases (within
the meaning of Section 693 of the Act) of ordinary shares of 1p
each in the capital of the Company (“Share”) at whatever discount
the prevailing market price represents to the prevailing net asset
value per Share provided that:
(a) the maximum number of Shares which may be purchased
is 12,371,723, representing 14.99% of the Company’s
issued ordinary share capital as at 23 October 2024
(excluding treasury shares);
(b) the maximum price (exclusive of expenses) which may be
paid for a Share shall not exceed the higher of;
i) 105% of the average of the middle market quotations
for the Shares as taken from the London Stock
Exchange Daily Official List for the five business days
preceding the date of purchase; and
ii) the higher of the last independent bid and the highest
current independent bid on the London Stock
Exchange;
(c) the minimum price (exclusive of expenses) which may be
paid for a Share shall be 1p, being the nominal value per
Share;
(d) this authority hereby conferred shall expire at the
conclusion of the next Annual General Meeting of the
Company in 2025 (unless previously renewed, varied or
revoked by the Company prior to such date);
(e) the Company may make a contract to purchase Shares
under the authority hereby conferred which will or may be
executed wholly or partly after the expiration of such
authority and may make a purchase of Shares pursuant to
any such contract; and
(f) any Shares so purchased will be cancelled or held in
treasury.”
14. To consider and, if thought fit, to pass the following resolution as
a special resolution:
“THAT a general meeting, other than an annual general meeting,
may be called on not less than 14 clear days’ notice.”
Schroder BSC Social Impact Trust plc 81
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Notice of Annual General Meeting
By order of the Board Registered Office:
Schroder Investment Management Limited 1 London Wall Place,
Company Secretary London EC2Y 5AU
23 October 2024 Registered Number: 12892325
BSC Social Impact Trust plc will be held on Wednesday, 18 December
2024 at 12.00 p.m. at 1 London Wall Place, London EC2Y 5AU to
consider the following resolutions, of which resolutions 1 to 11 will be
proposed as ordinary resolutions, and resolutions 12 to 14 will be
proposed as special resolutions:
Ordinary business
1. To receive the Annual Report and Accounts for the year ended
30 June 2024.
2. To authorise the directors of the Company to declare and pay all
dividends of the Company as interim dividends and for the last
dividend referable to a financial year not to be categorised as
a final dividend that is subject to shareholder approval.
3. To approve the Directors’ Remuneration Report for the year
ended 30 June 2024.
4. To approve the Directors’ Remuneration Policy.
5. To approve the election of Ranjan Ramparia as a director of the
Company.
6. To approve the re-election of Susannah Nicklin as a director of
the Company.
7. To approve the re-election of James B. Broderick as a director of
the Company.
8. To approve the re-election of Alice Chapple as a director of the
Company.
9. To re-appoint BDO LLP as auditor to the Company.
10. To authorise the directors to determine the remuneration of
BDO LLP as auditor to the Company.
Special business
11. To consider, and if thought fit, pass the following resolution as an
ordinary resolution:
“THAT in substitution for all existing authorities the directors be
generally and unconditionally authorised pursuant to section 551
of the Companies Act 2006 (the “Act”) to exercise all the powers
of the Company to allot relevant securities (within the meaning of
section 551 of the Act) up to an aggregate nominal amount of
£82,533 (being 10% of the issued ordinary share capital,
excluding treasury shares, at 23 October 2024) for a period
expiring (unless previously renewed, varied or revoked by the
Company in general meeting) at the conclusion of the Annual
General Meeting of the Company in 2025, but that the Company
may make an offer or agreement which would or might require
relevant securities to be allotted after expiry of this authority and
the Board may allot relevant securities in pursuance of that offer
or agreement.”
12. To consider and, if thought fit, to pass the following resolution as
a special resolution:
“THAT, subject to the passing of Resolution 11 set out above, the
directors be and are hereby empowered, pursuant to Section
571 of the Act, to allot equity securities (including any shares held
in treasury) (as defined in section 560(1) of the Act) pursuant to
the authority given in accordance with section 551 of the Act by
the said Resolution 11 and/or where such allotment constitutes
an allotment of equity securities by virtue of section 560(2) of the
Act as if Section 561(1) of the Act did not apply to any such
allotment, provided that this power shall be limited to the
allotment of equity securities up to an aggregate nominal
amount of £82,533 (representing 10% of the aggregate nominal
amount of the share capital, excluding treasury shares, in issue at
23 October 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.”
13. To consider and, if thought fit, to pass the following resolution as
a special resolution:
“THAT the Company be and is hereby generally and
unconditionally authorised in accordance with Section 701 of the
Companies Act 2006 (the “Act”) to make market purchases (within
the meaning of Section 693 of the Act) of ordinary shares of 1p
each in the capital of the Company (“Share”) at whatever discount
the prevailing market price represents to the prevailing net asset
value per Share provided that:
(a) the maximum number of Shares which may be purchased
is 12,371,723, representing 14.99% of the Company’s
issued ordinary share capital as at 23 October 2024
(excluding treasury shares);
(b) the maximum price (exclusive of expenses) which may be
paid for a Share shall not exceed the higher of;
i) 105% of the average of the middle market quotations
for the Shares as taken from the London Stock
Exchange Daily Official List for the five business days
preceding the date of purchase; and
ii) the higher of the last independent bid and the highest
current independent bid on the London Stock
Exchange;
(c) the minimum price (exclusive of expenses) which may be
paid for a Share shall be 1p, being the nominal value per
Share;
(d) this authority hereby conferred shall expire at the
conclusion of the next Annual General Meeting of the
Company in 2025 (unless previously renewed, varied or
revoked by the Company prior to such date);
(e) the Company may make a contract to purchase Shares
under the authority hereby conferred which will or may be
executed wholly or partly after the expiration of such
authority and may make a purchase of Shares pursuant to
any such contract; and
(f) any Shares so purchased will be cancelled or held in
treasury.”
14. To consider and, if thought fit, to pass the following resolution as
a special resolution:
“THAT a general meeting, other than an annual general meeting,
may be called on not less than 14 clear days’ notice.”
Schroder BSC Social Impact Trust plc 81
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Notice of Annual General Meeting
By order of the Board Registered Office:
Schroder Investment Management Limited 1 London Wall Place,
Company Secretary London EC2Y 5AU
23 October 2024 Registered Number: 12892325
82
Schroder BSC Social Impact Trust plc
1. Ordinary shareholders are entitled to attend, ask questions and
vote at the meeting and to appoint one or more proxies, who
need not be a shareholder, as their proxy to exercise all or any
of their rights to attend, speak and vote on their behalf at
the meeting.
A proxy form is attached. Shareholders are encouraged to
appoint the Chair as proxy. If you wish to appoint a person other
than the Chair as your proxy, please insert the name of your
chosen proxy holder in the space provided at the top of the
form. If the proxy is being appointed in relation to less than your
full voting entitlement, please enter in the box next to the proxy
holder’s name the number of shares in relation to which they are
authorised to act as your proxy. If left blank your proxy will be
deemed to be authorised in respect of your full voting
entitlement (or if this proxy form has been issued in respect of
a designated account for a shareholder, the full voting
entitlement for that designated account). Additional proxy forms
can be obtained by contacting the Company’s Registrars, Equiniti
Limited, on +44 (0)800 032 0641, or you may photocopy the
attached proxy form. Please indicate in the box next to the proxy
holder’s name the number of shares in relation to which they are
authorised to act as your proxy. Please also indicate by ticking
the box provided if the proxy instruction is one of multiple
instructions being given. Completion and return of a form of
proxy will not preclude a member from attending the Annual
General Meeting and voting in person.
On a vote by show of hands, every ordinary shareholder who is
present in person has one vote and every duly appointed proxy
who is present has one vote. On a poll vote, every ordinary
shareholder who is present in person or by way of a proxy has
one vote for every share of which he/she is a holder. Voting will
be by poll.
The “Vote Withheld” option on the proxy form is provided to
enable you to abstain on any particular resolution. However it
should be noted that a “Vote Withheld” is not a vote in law and
will not be counted in the calculation of the proportion of the
votes ‘For’ and ‘Against’ a resolution. A proxy form must be
signed and dated by the shareholder or his or her attorney duly
authorised in writing. In the case of joint holdings, any one
holder may sign this form. The vote of the senior joint holder
who tenders a vote, whether in person or by proxy, will be
accepted to the exclusion of the votes of the other joint holder
and for this purpose seniority will be determined by the order in
which the names appear on the Register of Members in respect
of the joint holding. To be valid, proxy form(s) must be completed
and returned to the Company’s Registrars, Equiniti Limited,
Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA, in
the enclosed envelope together with any power of attorney or
other authority under which it is signed or a copy of such
authority certified notarially, to arrive no later than 48 hours
before the time fixed for the meeting, or an adjourned meeting.
You may also submit your proxy votes via the internet. You can
do so by visiting www.shareview.co.uk. You will need to create an
online portfolio using your Shareholder Reference Number and
follow the on-screen instructions. This information can be found
under your name on your form of proxy. Alternatively,
shareholders who have already registered with Equiniti’s online
portfolio service, Shareview, can appoint their proxy electronically
by logging on to their portfolio at www.shareview.co.uk using
their user ID and password. Once logged in, click “view” on the
“My Investments” page. Click on the link to vote and follow the on
screen instructions. Please note that to be valid, your proxy
instructions must be received by the Company’s Registrar no
later than 12.00 pm (GMT) on 16 December 2024. If you have
any difficulties with online voting, you should contact the
shareholder helpline on +44(0)800 032 0641. Please use the
country code when calling from outside the UK. Lines are open
between 08:30 – 17:30, Monday to Friday excluding public
holidays in England and Wales.
If an ordinary shareholder submits more than one valid proxy
appointment, the appointment received last before the latest
time for receipt of proxies will take precedence. Shareholders
may not use any electronic address provided either in this Notice
of Annual General Meeting or any related documents to
communicate with the Company for any purposes other than
expressly stated.
Representatives of shareholders that are corporations will have
to produce evidence of their proper appointment when
attending the Annual General Meeting.
2. Any person to whom this notice is sent who is a person
nominated under section 146 of the Companies Act 2006 to
enjoy information rights (a “Nominated Person”) may, under an
agreement between him or her and the shareholder by whom
he or she was nominated, have a right to be appointed (or to
have someone else appointed) as a proxy for the Annual General
Meeting. If a Nominated Person has no such proxy appointment
right or does not wish to exercise it, he or she may, under any
such agreement, have a right to give instructions to the
shareholder as to the exercise of voting rights.
The statement of the rights of ordinary shareholders in relation
to the appointment of proxies in note 1 above does not apply to
Nominated Persons. The rights described in that note can only
be exercised by ordinary shareholders of the Company.
3. Pursuant to Regulation 41 of the Uncertificated Securities
Regulations 2001, the Company has specified that only those
shareholders registered in the Register of members of the
Company at 6.30 p.m. on 16 December 2024, or 6.30 p.m.
two days prior to the date of an adjourned meeting, shall be
entitled to attend and vote at the meeting in respect of the
number of shares registered in their name at that time. Changes
to the Register of Members after 6.30 p.m. on 16 December
2024 shall be disregarded in determining the right of any person
to attend and vote at the meeting.
4. CREST members who wish to appoint a proxy or proxies through
the CREST electronic proxy appointment service may do so by
using the procedures described in the CREST manual. The CREST
manual can be viewed at www.euroclear.com. A CREST message
appointing a proxy (a “CREST proxy instruction”) regardless of
whether it constitutes the appointment of a proxy or an
amendment to the instruction previously given to a previously
appointed proxy must, in order to be valid, be transmitted so as
to be received by the issuer’s agent (ID RA19) by the latest time
for receipt of proxy appointments. If you are an institutional
investor you may be able to appoint a proxy electronically via the
Proxymity platform, a process which has been agreed by the
Company and approved by the Registrar. For further information
regarding Proxymity, please go to www.proxymity.io. Your proxy
must be lodged by 12 noon on 16 December 2024 in order to be
considered valid. Before you can appoint a proxy via this process
you will need to have agreed to Proxymity’s associated terms and
conditions. It is important that you read these carefully as you
will be bound by them and they will govern the electronic
appointment of your proxy.
Explanatory Notes to the Notice of Meeting
1. Ordinary shareholders are entitled to attend, ask questions and
vote at the meeting and to appoint one or more proxies, who
need not be a shareholder, as their proxy to exercise all or any
of their rights to attend, speak and vote on their behalf at
the meeting.
A proxy form is attached. Shareholders are encouraged to
appoint the Chair as proxy. If you wish to appoint a person other
than the Chair as your proxy, please insert the name of your
chosen proxy holder in the space provided at the top of the
form. If the proxy is being appointed in relation to less than your
full voting entitlement, please enter in the box next to the proxy
holder’s name the number of shares in relation to which they are
authorised to act as your proxy. If left blank your proxy will be
deemed to be authorised in respect of your full voting
entitlement (or if this proxy form has been issued in respect of
a designated account for a shareholder, the full voting
entitlement for that designated account). Additional proxy forms
can be obtained by contacting the Company’s Registrars, Equiniti
Limited, on +44 (0)800 032 0641, or you may photocopy the
attached proxy form. Please indicate in the box next to the proxy
holder’s name the number of shares in relation to which they are
authorised to act as your proxy. Please also indicate by ticking
the box provided if the proxy instruction is one of multiple
instructions being given. Completion and return of a form of
proxy will not preclude a member from attending the Annual
General Meeting and voting in person.
On a vote by show of hands, every ordinary shareholder who is
present in person has one vote and every duly appointed proxy
who is present has one vote. On a poll vote, every ordinary
shareholder who is present in person or by way of a proxy has
one vote for every share of which he/she is a holder. Voting will
be by poll.
The “Vote Withheld” option on the proxy form is provided to
enable you to abstain on any particular resolution. However it
should be noted that a “Vote Withheld” is not a vote in law and
will not be counted in the calculation of the proportion of the
votes ‘For’ and ‘Against’ a resolution. A proxy form must be
signed and dated by the shareholder or his or her attorney duly
authorised in writing. In the case of joint holdings, any one
holder may sign this form. The vote of the senior joint holder
who tenders a vote, whether in person or by proxy, will be
accepted to the exclusion of the votes of the other joint holder
and for this purpose seniority will be determined by the order in
which the names appear on the Register of Members in respect
of the joint holding. To be valid, proxy form(s) must be completed
and returned to the Company’s Registrars, Equiniti Limited,
Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA, in
the enclosed envelope together with any power of attorney or
other authority under which it is signed or a copy of such
authority certified notarially, to arrive no later than 48 hours
before the time fixed for the meeting, or an adjourned meeting.
You may also submit your proxy votes via the internet. You can
do so by visiting www.shareview.co.uk. You will need to create an
online portfolio using your Shareholder Reference Number and
follow the on-screen instructions. This information can be found
under your name on your form of proxy. Alternatively,
shareholders who have already registered with Equiniti’s online
portfolio service, Shareview, can appoint their proxy electronically
by logging on to their portfolio at www.shareview.co.uk using
their user ID and password. Once logged in, click “view” on the
“My Investments” page. Click on the link to vote and follow the on
screen instructions. Please note that to be valid, your proxy
instructions must be received by the Company’s Registrar no
later than 12.00 pm (GMT) on 16 December 2024. If you have
any difficulties with online voting, you should contact the
shareholder helpline on +44(0)800 032 0641. Please use the
country code when calling from outside the UK. Lines are open
between 08:30 – 17:30, Monday to Friday excluding public
holidays in England and Wales.
If an ordinary shareholder submits more than one valid proxy
appointment, the appointment received last before the latest
time for receipt of proxies will take precedence. Shareholders
may not use any electronic address provided either in this Notice
of Annual General Meeting or any related documents to
communicate with the Company for any purposes other than
expressly stated.
Representatives of shareholders that are corporations will have
to produce evidence of their proper appointment when
attending the Annual General Meeting.
2. Any person to whom this notice is sent who is a person
nominated under section 146 of the Companies Act 2006 to
enjoy information rights (a “Nominated Person”) may, under an
agreement between him or her and the shareholder by whom
he or she was nominated, have a right to be appointed (or to
have someone else appointed) as a proxy for the Annual General
Meeting. If a Nominated Person has no such proxy appointment
right or does not wish to exercise it, he or she may, under any
such agreement, have a right to give instructions to the
shareholder as to the exercise of voting rights.
The statement of the rights of ordinary shareholders in relation
to the appointment of proxies in note 1 above does not apply to
Nominated Persons. The rights described in that note can only
be exercised by ordinary shareholders of the Company.
3. Pursuant to Regulation 41 of the Uncertificated Securities
Regulations 2001, the Company has specified that only those
shareholders registered in the Register of members of the
Company at 6.30 p.m. on 16 December 2024, or 6.30 p.m.
two days prior to the date of an adjourned meeting, shall be
entitled to attend and vote at the meeting in respect of the
number of shares registered in their name at that time. Changes
to the Register of Members after 6.30 p.m. on 16 December
2024 shall be disregarded in determining the right of any person
to attend and vote at the meeting.
4. CREST members who wish to appoint a proxy or proxies through
the CREST electronic proxy appointment service may do so by
using the procedures described in the CREST manual. The CREST
manual can be viewed at www.euroclear.com. A CREST message
appointing a proxy (a “CREST proxy instruction”) regardless of
whether it constitutes the appointment of a proxy or an
amendment to the instruction previously given to a previously
appointed proxy must, in order to be valid, be transmitted so as
to be received by the issuer’s agent (ID RA19) by the latest time
for receipt of proxy appointments. If you are an institutional
investor you may be able to appoint a proxy electronically via the
Proxymity platform, a process which has been agreed by the
Company and approved by the Registrar. For further information
regarding Proxymity, please go to www.proxymity.io. Your proxy
must be lodged by 12 noon on 16 December 2024 in order to be
considered valid. Before you can appoint a proxy via this process
you will need to have agreed to Proxymity’s associated terms and
conditions. It is important that you read these carefully as you
will be bound by them and they will govern the electronic
appointment of your proxy.
Explanatory Notes to the Notice of Meeting
5.
Copies of the terms of appointment of the non-executive
directors and a statement of all transactions of each director and
of their family interests in the shares of the Company, will be
available for inspection by any member of the Company at the
registered office of the Company during normal business hours
on any weekday (English public holidays excepted) and at the
Annual General Meeting by any attendee, for at least 15 minutes
prior to, and during, the Annual General Meeting. None of the
directors has a contract of service with the Company.
6. The biographies of the directors offering themselves for
re-election are set out on pages 40 to 41 of the Company’s
Annual Report and Accounts for the year ended 30 June 2024.
7. As at 23 October 2024, 85,316,586 ordinary shares of 1 pence
each were in issue (2,783,411 were held in treasury). Therefore
the total number of voting rights of the Company as at
23 October 2024 was 82,533,175.
8. A copy of this Notice of meeting, which includes details of
shareholder voting rights, together with any other information
as required under Section 311A of the Companies Act 2006, is
available from the Company’s website, www.schroders.co.uk/sbsi.
9. Pursuant to Section 319A of the Companies Act 2006, the
Company must cause to be answered at the Annual General
Meeting any question relating to the business being dealt with
at the AGM which is put by a member attending the meeting,
except in certain circumstances, including if it is undesirable in
the interests of the Company or the good order of the meeting
that the question be answered or if to do so would involve the
disclosure of confidential information.
10. Members satisfying the thresholds in section 527 of the
Companies Act 2006 can require the Company to publish
a statement on its website setting out any matter relating to:
(a) the audit of the Company’s Accounts (including the auditor’s
report and the conduct of the audit) that are to be laid
before the Meeting; or
(b) any circumstance connected with an auditor of the
Company ceasing to hold office since the last AGM, that the
members propose to raise at the Meeting. The Company
cannot require the members requesting the publication to
pay its expenses. Any statement placed on the website must
also be sent to the Company’s auditors no later than the
time it makes its statement available on the website. The
business which may be dealt with at the meeting includes
any statement that the Company has been required to
publish on its website.
11. The Company’s privacy policy is available on its website.
Shareholders can contact Equiniti for details of how Equiniti
processes their personal information as part of the AGM.
Schroder BSC Social Impact Trust plc 83
Introduction Strategic Report Governance Financial Other Information (Unaudited)
directors and a statement of all transactions of each director and
of their family interests in the shares of the Company, will be
available for inspection by any member of the Company at the
registered office of the Company during normal business hours
on any weekday (English public holidays excepted) and at the
Annual General Meeting by any attendee, for at least 15 minutes
prior to, and during, the Annual General Meeting. None of the
directors has a contract of service with the Company.
6. The biographies of the directors offering themselves for
re-election are set out on pages 40 to 41 of the Company’s
Annual Report and Accounts for the year ended 30 June 2024.
7. As at 23 October 2024, 85,316,586 ordinary shares of 1 pence
each were in issue (2,783,411 were held in treasury). Therefore
the total number of voting rights of the Company as at
23 October 2024 was 82,533,175.
8. A copy of this Notice of meeting, which includes details of
shareholder voting rights, together with any other information
as required under Section 311A of the Companies Act 2006, is
available from the Company’s website, www.schroders.co.uk/sbsi.
9. Pursuant to Section 319A of the Companies Act 2006, the
Company must cause to be answered at the Annual General
Meeting any question relating to the business being dealt with
at the AGM which is put by a member attending the meeting,
except in certain circumstances, including if it is undesirable in
the interests of the Company or the good order of the meeting
that the question be answered or if to do so would involve the
disclosure of confidential information.
10. Members satisfying the thresholds in section 527 of the
Companies Act 2006 can require the Company to publish
a statement on its website setting out any matter relating to:
(a) the audit of the Company’s Accounts (including the auditor’s
report and the conduct of the audit) that are to be laid
before the Meeting; or
(b) any circumstance connected with an auditor of the
Company ceasing to hold office since the last AGM, that the
members propose to raise at the Meeting. The Company
cannot require the members requesting the publication to
pay its expenses. Any statement placed on the website must
also be sent to the Company’s auditors no later than the
time it makes its statement available on the website. The
business which may be dealt with at the meeting includes
any statement that the Company has been required to
publish on its website.
11. The Company’s privacy policy is available on its website.
Shareholders can contact Equiniti for details of how Equiniti
processes their personal information as part of the AGM.
Schroder BSC Social Impact Trust plc 83
Introduction Strategic Report Governance Financial Other Information (Unaudited)
84
Schroder BSC Social Impact Trust plc
Terms as defined in the Prospectus dated
23 November 2020
AIFM or Manager Schroder Unit Trusts Limited or Alternative
Investment Fund Manager
AIFM Directive the Directive on Alternative Investment Fund
Managers, 2011/61/EU
Co-Investments co-investments made by the Company
alongside Impact Funds or other impact
investors (which may include the Portfolio
Manager).
Direct Investments investments of the Company that are neither
interests in Impact Funds nor Co-
Investments.
Eligible Social organisations such as community interest
Sector companies and community benefit societies
Organisations or other forms of organisation where there
is a mission and asset lock in place.
Impact Funds private market impact funds, however
structured, and other accounts managed by
third party asset managers
Liquidity Assets Assets that can easily be converted into cash
in a short amount of time.
NAV or Net Assets the value of the assets of the Company less
or Net Asset Value its liabilities, determined in accordance with
the accounting principles adopted by the
Company from time to time
NAV per Share or the NAV attributable to any class of Shares
Net Asset Value divided by the number of Shares of the
per Share relevant class in issue (other than any Shares
of the relevant class held in treasury), and
“NAV per Ordinary Share” shall be construed
accordingly
Portfolio Manager, Better Society Capital Limited
Better Society
Capital or BSC
Social Impact investments intended to have a positive
Investments social impact on people in the UK while
providing a financial return to investors,
including, but not limited to, High Impact
Housing, Debt for Social Enterprises and
Social Outcome Contracts, and with the
expectation that such investments will
predominantly be further invested in Eligible
Social Sector Organisations.
SBSI Investment the investment committee of the Portfolio
Committee Manager established for the purpose of
approving Social Impact Investments to be
made by the Company
Schroders the AIFM‘s ultimate holding company and its
subsidiaries and affiliates worldwide
The terms and performance measures below are those
commonly used by investment companies to assess values,
investment performance and operatin g costs. Numerical
calculations are g iven where relevant. Some of the financial
measures below are classified as Alternative Performance
Measures (“APMs”) as defined by the E uropean Securities and
Markets Authority. Under this definition, APMs include a
financial measure of historical financial performance or financial
position, other than a financial measure defined or specified in
the applicable financial reporting framework. APMs have been
marked with an asterisk.
Net asset value (“NAV”) per share
The NAV per share of 104.13p (2023: 104.90p) represents the Net
Assets attributable to equity shareholders of £86,459,000 (2023:
£88,753,000) divided by the 83,029,661 (2023: 84,604,866) shares in
issue at the year end.
Total return*
The combined effect of any dividends paid, together with the rise or
fall in the share price or NAV per share. Total return statistics enable
the investor to make performance comparisons between investment
companies with different dividend policies. Any dividends received by
a shareholder are assumed to have been reinvested in either the
assets of the Company at its NAV per share at the time the shares
were quoted ex-dividend (to calculate the NAV per share total return)
or in additional shares of the Company (to calculate the share price
total return).
The NAV total return for the year ended 30 June 2024 is calculated as
follows:
Opening NAV at 30/06/23 104.90p
Closing NAV at 30/06/24 104.13p
NAV on
Dividend received XD date XD date Factor
2.30p 09/11/23 104.22p 1.0221
NAV total return, being the closing NAV,
multiplied by the factor, expressed as a
percentage change in the opening NAV: 1.5%
The NAV total return for the year ended 30 June 2023 is calculated as
follows:
Opening NAV at 30/06/22 105.39p
Closing NAV at 30/06/23 104.90p
NAV on
Dividend received XD date XD date Factor
1.30p 03/11/22 104.29p 1.0124
NAV total return, being the closing NAV,
multiplied by the factor, expressed as a
percentage change in the opening NAV: 0.8%
Definitions of Terms and Alternative Performance Measures
Terms as defined in the Prospectus dated
23 November 2020
AIFM or Manager Schroder Unit Trusts Limited or Alternative
Investment Fund Manager
AIFM Directive the Directive on Alternative Investment Fund
Managers, 2011/61/EU
Co-Investments co-investments made by the Company
alongside Impact Funds or other impact
investors (which may include the Portfolio
Manager).
Direct Investments investments of the Company that are neither
interests in Impact Funds nor Co-
Investments.
Eligible Social organisations such as community interest
Sector companies and community benefit societies
Organisations or other forms of organisation where there
is a mission and asset lock in place.
Impact Funds private market impact funds, however
structured, and other accounts managed by
third party asset managers
Liquidity Assets Assets that can easily be converted into cash
in a short amount of time.
NAV or Net Assets the value of the assets of the Company less
or Net Asset Value its liabilities, determined in accordance with
the accounting principles adopted by the
Company from time to time
NAV per Share or the NAV attributable to any class of Shares
Net Asset Value divided by the number of Shares of the
per Share relevant class in issue (other than any Shares
of the relevant class held in treasury), and
“NAV per Ordinary Share” shall be construed
accordingly
Portfolio Manager, Better Society Capital Limited
Better Society
Capital or BSC
Social Impact investments intended to have a positive
Investments social impact on people in the UK while
providing a financial return to investors,
including, but not limited to, High Impact
Housing, Debt for Social Enterprises and
Social Outcome Contracts, and with the
expectation that such investments will
predominantly be further invested in Eligible
Social Sector Organisations.
SBSI Investment the investment committee of the Portfolio
Committee Manager established for the purpose of
approving Social Impact Investments to be
made by the Company
Schroders the AIFM‘s ultimate holding company and its
subsidiaries and affiliates worldwide
The terms and performance measures below are those
commonly used by investment companies to assess values,
investment performance and operatin g costs. Numerical
calculations are g iven where relevant. Some of the financial
measures below are classified as Alternative Performance
Measures (“APMs”) as defined by the E uropean Securities and
Markets Authority. Under this definition, APMs include a
financial measure of historical financial performance or financial
position, other than a financial measure defined or specified in
the applicable financial reporting framework. APMs have been
marked with an asterisk.
Net asset value (“NAV”) per share
The NAV per share of 104.13p (2023: 104.90p) represents the Net
Assets attributable to equity shareholders of £86,459,000 (2023:
£88,753,000) divided by the 83,029,661 (2023: 84,604,866) shares in
issue at the year end.
Total return*
The combined effect of any dividends paid, together with the rise or
fall in the share price or NAV per share. Total return statistics enable
the investor to make performance comparisons between investment
companies with different dividend policies. Any dividends received by
a shareholder are assumed to have been reinvested in either the
assets of the Company at its NAV per share at the time the shares
were quoted ex-dividend (to calculate the NAV per share total return)
or in additional shares of the Company (to calculate the share price
total return).
The NAV total return for the year ended 30 June 2024 is calculated as
follows:
Opening NAV at 30/06/23 104.90p
Closing NAV at 30/06/24 104.13p
NAV on
Dividend received XD date XD date Factor
2.30p 09/11/23 104.22p 1.0221
NAV total return, being the closing NAV,
multiplied by the factor, expressed as a
percentage change in the opening NAV: 1.5%
The NAV total return for the year ended 30 June 2023 is calculated as
follows:
Opening NAV at 30/06/22 105.39p
Closing NAV at 30/06/23 104.90p
NAV on
Dividend received XD date XD date Factor
1.30p 03/11/22 104.29p 1.0124
NAV total return, being the closing NAV,
multiplied by the factor, expressed as a
percentage change in the opening NAV: 0.8%
Definitions of Terms and Alternative Performance Measures
Schroder BSC Social Impact Trust plc
85
Introduction Strategic Report Governance Financial Other Information (Unaudited)
The share price total return for the year ended 30 June 2024 is
calculated as follows:
Opening share price at 30/06/23 93.50p
Closing share price at 30/06/24 86.75p
Share
price on
Dividend received XD date XD date Factor
2.30p 09/11/23 90.00p 1.0256
Share price total return, being the closing share
price, multiplied by the factor, expressed as a
percentage change in the opening share price: (4.8%)
The share price total return for the year ended 30 June 2023 is
calculated as follows:
Opening share price at 30/06/22 106.50p
Closing share price at 30/06/23 93.50p
Share
price on
Dividend received XD date XD date Factor
1.30p 03/11/22 96.50p 1.0135
Share price total return, being the closing share
price, multiplied by the factor, expressed as a
percentage change in the opening share price: (11.0%)
Discount/premium*
The amount by which the share price of an investment trust is lower
(discount) or higher (premium) than the NAV per share. The discount
or premium is expressed as a percentage of the NAV per share. The
discount at the year end amounted to 16.7% (2023: 10.9% discount),
as the closing share price at 86.75p (2023: 93.50p) was 16.7% lower
(2023: 10.9% lower) than the closing NAV of 104.13p (2023 :104.90p).
Gearing/(net cash)*
The gearing percentage reflects the amount of borrowings (that is,
bank loans or overdrafts) that the Company has used to invest in the
market. This figure is indicative of the extra amount by which
shareholders’ funds would move if the Company’s investments were
to rise or fall. Gearing is defined as: borrowings used for investment
purposes, less cash and cash equivalents and money market funds,
expressed as a percentage of Net Assets. A negative figure so
calculated is termed a “net cash” position.
At the year end, the Company had no loans or overdrafts, and thus
was in a net cash position, calculated as follows:
2024 2023
£’000 £’000
Borrowings/(net cash) used for
investment purposes (3,620) (2,089)
Net assets 86,459 88,753
Net cash (%) (4.2) (2.4)
Ongoing Charges*
Ongoing Charges (OGC) is calculated in accordance with the AIC’s
recommended methodology and represents total annualised
operating expenses payable including any management fee, but
excluding any finance costs and transaction costs, expressed as a
percentage of the average daily net asset values during the year. The
operating expenses calculated as above amounted to £1,177,000
(2023: £1,132,000) for the year. This amount, expressed as a
percentage of the average net asset values during the year of
£86.5 million (2023: £89.4 million), gives an OGC figure of 1.36%
(2023:1.27%).
Leverage*
For the purpose of the Alternative Investment Fund Managers (AIFM)
Directive, leverage is any method which increases the Company’s
exposure, including the borrowing of cash and the use of derivatives.
It is expressed as the ratio of the Company’s exposure to its net asset
value and is required to be calculated both on a “Gross” and a
“Commitment” method. Under the Gross method, exposure
represents the sum of the absolute values of all positions, so as to
give an indication of overall exposure. Under the Commitment
method, exposure is calculated in a similar way, but after netting off
hedges which satisfy certain strict criteria. The leverage ratios and
limits are presented on page 88 under Shareholder Information.
*Alternative Performance Measures.
Introduction Strategic Report Governance Financial Other Information (Unaudited)
The share price total return for the year ended 30 June 2024 is
calculated as follows:
Opening share price at 30/06/23 93.50p
Closing share price at 30/06/24 86.75p
Share
price on
Dividend received XD date XD date Factor
2.30p 09/11/23 90.00p 1.0256
Share price total return, being the closing share
price, multiplied by the factor, expressed as a
percentage change in the opening share price: (4.8%)
The share price total return for the year ended 30 June 2023 is
calculated as follows:
Opening share price at 30/06/22 106.50p
Closing share price at 30/06/23 93.50p
Share
price on
Dividend received XD date XD date Factor
1.30p 03/11/22 96.50p 1.0135
Share price total return, being the closing share
price, multiplied by the factor, expressed as a
percentage change in the opening share price: (11.0%)
Discount/premium*
The amount by which the share price of an investment trust is lower
(discount) or higher (premium) than the NAV per share. The discount
or premium is expressed as a percentage of the NAV per share. The
discount at the year end amounted to 16.7% (2023: 10.9% discount),
as the closing share price at 86.75p (2023: 93.50p) was 16.7% lower
(2023: 10.9% lower) than the closing NAV of 104.13p (2023 :104.90p).
Gearing/(net cash)*
The gearing percentage reflects the amount of borrowings (that is,
bank loans or overdrafts) that the Company has used to invest in the
market. This figure is indicative of the extra amount by which
shareholders’ funds would move if the Company’s investments were
to rise or fall. Gearing is defined as: borrowings used for investment
purposes, less cash and cash equivalents and money market funds,
expressed as a percentage of Net Assets. A negative figure so
calculated is termed a “net cash” position.
At the year end, the Company had no loans or overdrafts, and thus
was in a net cash position, calculated as follows:
2024 2023
£’000 £’000
Borrowings/(net cash) used for
investment purposes (3,620) (2,089)
Net assets 86,459 88,753
Net cash (%) (4.2) (2.4)
Ongoing Charges*
Ongoing Charges (OGC) is calculated in accordance with the AIC’s
recommended methodology and represents total annualised
operating expenses payable including any management fee, but
excluding any finance costs and transaction costs, expressed as a
percentage of the average daily net asset values during the year. The
operating expenses calculated as above amounted to £1,177,000
(2023: £1,132,000) for the year. This amount, expressed as a
percentage of the average net asset values during the year of
£86.5 million (2023: £89.4 million), gives an OGC figure of 1.36%
(2023:1.27%).
Leverage*
For the purpose of the Alternative Investment Fund Managers (AIFM)
Directive, leverage is any method which increases the Company’s
exposure, including the borrowing of cash and the use of derivatives.
It is expressed as the ratio of the Company’s exposure to its net asset
value and is required to be calculated both on a “Gross” and a
“Commitment” method. Under the Gross method, exposure
represents the sum of the absolute values of all positions, so as to
give an indication of overall exposure. Under the Commitment
method, exposure is calculated in a similar way, but after netting off
hedges which satisfy certain strict criteria. The leverage ratios and
limits are presented on page 88 under Shareholder Information.
*Alternative Performance Measures.
86
Schroder BSC Social Impact Trust plc
1. Number of beneficiaries
The Company reports on the total number of beneficiaries reached
directly by frontline organisations within the portfolio, and also
reports on the subset of the total that is attributable to the
Company’s investment.
Total beneficiaries:
This is an aggregation of the beneficiaries reached across the three
asset classes in which the Company invests:
– Housing – the total number of people provided with homes by
housing initiatives financed by organisations supported by the
Company.
– Debt and Equity for Social Enterprises – the total number of
people provided with services or products by organisations and
projects financed by organisations supported by the Company.
– Social Outcomes Contracts – the total number of people
provided with services by partnerships financed by the Bridges
Social Outcomes Fund II.
The total figure includes:
– Where the finance is targeted at a specific project (e.g. full
finance for a frontline organisation to use for a specific purpose
such as development of a new housing asset) the total number
of beneficiaries reached by the project.
– Where the finance is targeted towards an organisation’s
resilience and/or growth, the total number served by an
organisation since investment.
Approach for the Company’s investment in the Triodos Bank Bond:
The £5.7 million Triodos Bank Bond contributes to Triodos Bank’s
capitalisation, enabling the bank to leverage by eight times to provide
at least £45.6 million in loans, within a larger loanbook. Triodos Bank
reports to the Company on social impact for its entire loanbook,
however the Company’s calculation for total beneficiaries reached by
the Bank Bond is based only on the Company’s proportionate share
of loans made possible by the Bond.
Share of beneficiaries attributed to the Company:
This report includes the attributed share of total beneficiaries and
other key impact metrics, based on the Company’s investment as
a proportion of the frontline investee’s total capital.
2. Reporting on contribution to impact
Investment and non-financial support provided through the Company
and underlying fund managers makes a significant contribution
towards positive impact: however we recognise this as one set of
inputs among many that are instrumental in portfolio organisations
achieving positive outcomes for people. The contribution of an
investment towards the outcomes achieved by investee organisations
is highly variable and may depend on the size and purpose of the
investment, the effect this has on a fund, a frontline organisation’s
ability to raise capital from other sources, and the nature of
non-financial support provided to fund managers and frontline
organisations. Given the wide range of variables, this report focuses
on providing a clear picture of the impact achieved by organisations
with contribution from the Company, and offers the Company
attributed figures as a proxy based indicative estimate to support
investor requirements for aggregation and onward reporting.
3. Disadvantaged and Vulnerable
Beneficiaries
The number of people served who are from disadvantaged or
vulnerable backgrounds is a key performance indicator for the
Company. We define this as people or groups who are at risk of harm
or disadvantage, including:
– People living in poverty and/or financial exclusion
– People experiencing homelessness and people at risk of
homelessness
– People with long-term health and disability conditions
– Vulnerable children and vulnerable young people
– People with learning disabilities and other neurodivergences
– People with mental health needs
– Victims of domestic violence/abuse
– Refugees, asylum seekers, undocumented and other migrants
– Ex-offenders
– Voluntary carers
– Vulnerable parents (e.g. single parents)
– Older people with acute conditions
4. Partner track record/age
The track record of frontline organisations is a high-level indicator
used to assess impact risk across the Company’s portfolio. The
average track record for the portfolio is based on weighted average
(by the Company’s commitment) of the age of all frontline
organisations financed through the Company’s investments, taken
from the date of the organisation’s formal registration to the current
reporting period.
5. UN Sustainable Development Goal
(SDG) alignment
The frontline organisations in the Company’s portfolio are generally
aligned with multiple SDGs (on average, each frontline organisation is
aligned with three SDGs). Alignment is assessed by fund managers
and validated as part of the Portfolio Manager’s annual review. Social
organisations frequently take a multi-tiered holistic approach to
impact, recognising multiple dimensions of exclusion or need for
disadvantaged and vulnerable groups. This combined approach is
a major driver for positive impact performance and reduced financial
and impact risk.
Combining housing (SDG 11) services with education (SDG 4), care
(SDG 3) and energy efficiency technology (SDGs 7 and 13) can
drastically improve a tenant’s financial and personal well-being,
reducing risks of defaults and enhancing prospects of sustained
positive outcomes. The Company therefore recognises where
frontline organisations are aligned to multiple SDGs.
The Company’s approach to due diligence and monitoring also
ensures that the risk of any of the portfolio companies having
a negative impact on any of the SDGs is assessed and mitigated.
Impact Methodology Notes
1. Number of beneficiaries
The Company reports on the total number of beneficiaries reached
directly by frontline organisations within the portfolio, and also
reports on the subset of the total that is attributable to the
Company’s investment.
Total beneficiaries:
This is an aggregation of the beneficiaries reached across the three
asset classes in which the Company invests:
– Housing – the total number of people provided with homes by
housing initiatives financed by organisations supported by the
Company.
– Debt and Equity for Social Enterprises – the total number of
people provided with services or products by organisations and
projects financed by organisations supported by the Company.
– Social Outcomes Contracts – the total number of people
provided with services by partnerships financed by the Bridges
Social Outcomes Fund II.
The total figure includes:
– Where the finance is targeted at a specific project (e.g. full
finance for a frontline organisation to use for a specific purpose
such as development of a new housing asset) the total number
of beneficiaries reached by the project.
– Where the finance is targeted towards an organisation’s
resilience and/or growth, the total number served by an
organisation since investment.
Approach for the Company’s investment in the Triodos Bank Bond:
The £5.7 million Triodos Bank Bond contributes to Triodos Bank’s
capitalisation, enabling the bank to leverage by eight times to provide
at least £45.6 million in loans, within a larger loanbook. Triodos Bank
reports to the Company on social impact for its entire loanbook,
however the Company’s calculation for total beneficiaries reached by
the Bank Bond is based only on the Company’s proportionate share
of loans made possible by the Bond.
Share of beneficiaries attributed to the Company:
This report includes the attributed share of total beneficiaries and
other key impact metrics, based on the Company’s investment as
a proportion of the frontline investee’s total capital.
2. Reporting on contribution to impact
Investment and non-financial support provided through the Company
and underlying fund managers makes a significant contribution
towards positive impact: however we recognise this as one set of
inputs among many that are instrumental in portfolio organisations
achieving positive outcomes for people. The contribution of an
investment towards the outcomes achieved by investee organisations
is highly variable and may depend on the size and purpose of the
investment, the effect this has on a fund, a frontline organisation’s
ability to raise capital from other sources, and the nature of
non-financial support provided to fund managers and frontline
organisations. Given the wide range of variables, this report focuses
on providing a clear picture of the impact achieved by organisations
with contribution from the Company, and offers the Company
attributed figures as a proxy based indicative estimate to support
investor requirements for aggregation and onward reporting.
3. Disadvantaged and Vulnerable
Beneficiaries
The number of people served who are from disadvantaged or
vulnerable backgrounds is a key performance indicator for the
Company. We define this as people or groups who are at risk of harm
or disadvantage, including:
– People living in poverty and/or financial exclusion
– People experiencing homelessness and people at risk of
homelessness
– People with long-term health and disability conditions
– Vulnerable children and vulnerable young people
– People with learning disabilities and other neurodivergences
– People with mental health needs
– Victims of domestic violence/abuse
– Refugees, asylum seekers, undocumented and other migrants
– Ex-offenders
– Voluntary carers
– Vulnerable parents (e.g. single parents)
– Older people with acute conditions
4. Partner track record/age
The track record of frontline organisations is a high-level indicator
used to assess impact risk across the Company’s portfolio. The
average track record for the portfolio is based on weighted average
(by the Company’s commitment) of the age of all frontline
organisations financed through the Company’s investments, taken
from the date of the organisation’s formal registration to the current
reporting period.
5. UN Sustainable Development Goal
(SDG) alignment
The frontline organisations in the Company’s portfolio are generally
aligned with multiple SDGs (on average, each frontline organisation is
aligned with three SDGs). Alignment is assessed by fund managers
and validated as part of the Portfolio Manager’s annual review. Social
organisations frequently take a multi-tiered holistic approach to
impact, recognising multiple dimensions of exclusion or need for
disadvantaged and vulnerable groups. This combined approach is
a major driver for positive impact performance and reduced financial
and impact risk.
Combining housing (SDG 11) services with education (SDG 4), care
(SDG 3) and energy efficiency technology (SDGs 7 and 13) can
drastically improve a tenant’s financial and personal well-being,
reducing risks of defaults and enhancing prospects of sustained
positive outcomes. The Company therefore recognises where
frontline organisations are aligned to multiple SDGs.
The Company’s approach to due diligence and monitoring also
ensures that the risk of any of the portfolio companies having
a negative impact on any of the SDGs is assessed and mitigated.
Impact Methodology Notes
6.
UN Sustainable Development Goal
(SDG) contribution
SDG sub-indicators and/or national action plans can provide
a benchmark for where we currently are, and an indicator of the
potential value of investments as a contribution towards meeting
targets. The Company’s Impact Report provides assessment of the
Company’s portfolio against SDGs where relevant SDG sub-indicators
have been identified and UK level targets recognised. SDG targets
and sub indicators are sourced primarily from the UK Office for
National Statistics and the Open SDG Platform,
https://sdgdata.gov.uk/, and from the UK Government Corporate
Report on Implementing the SDGs.
https://www.gov.uk/government/publications/implementing-the-
sustainable-development-goals/implementing-the-sustainable-
development-goals--2
7. Savings and short term value to
government
The Company invests in initiatives seeking to provide benefits to
society in innovative and cost-effective ways. The Company’s Impact
Report includes quantification of value generated for 12% of the
portfolio, where we have high- quality data on the global cost of
provision, comparable data on existing alternative provision models
as counterfactuals, and high quality data on medium to long term
outcomes for beneficiaries and government. This is primarily
applicable in investments that operate at comparatively large scale, in
well-established and data rich sectors, and with business models that
require quantification of value generated for payment.
Social Outcomes Contracts: Short term value to government is
calculated using one of three methodologies:
a. Delivering against a public ”rate card”. For projects delivering
against a public ‘rate card’, the value to government is the price
of outcomes that Government was prepared to pay according to
the rate card. Where this is higher than the amount actually paid,
this signifies that the project offered a discount to the rate card
prices, or achieved more outcomes above the contract cap, or
both.
b. Short term savings: For local projects targeting short term
savings for a local authority, the value to government is the gross
value of these savings during the tracking period (from
investment to the latest available report).
c. Valued at cost: Where there is no public outcomes rate card or
a definitive short-term saving created at the level of the
commissioning authority, no additional value has been assigned
to the outcomes over and above that which government has
been willing to pay.
For more information on SOCs, please see
https://www.bridgesfundmanagement.com/outcomescontracts/
Debt and Equity for Social Enterprises, AgilityEco: Calculated
based on the average annual savings generated through reduction in
energy bills as a result of energy efficiency improvements per
household.
For more information, please see AgilityEco’s annual impact report
https://www.agilityeco.co.uk/news/agilityeco-launches-its-
impactreport-20212022.
In addition, the total figure for this asset class includes community
benefit funds generated by renewable energy assets. Investments
also include small scale social organisations that have limited capacity
for measurement, and organisations such as social housing providers
where a lack of consistent measurement standards makes
comparison of costs and benefits challenging. The Company’s
Portfolio Manager is currently exploring methods for assessing
savings generated through housing services and other enterprise
models, however there is not currently sufficiently reliable data to
report on this.
8. Data quality
The impact data presented in this report is taken from the latest
available fund manager impact reports submitted to the Company.
The report also draws on annual impact reports from frontline
investee organisations where available.
9. Reporting on contribution to impact
Investment and non-financial support provided through the Company
and portfolio fund managers makes a significant contribution towards
positive impact: however we recognise this as one set of inputs
among many that are instrumental in portfolio organisations
achieving positive outcomes for people. The contribution of an
investment towards the outcomes achieved by investee organisations
is highly variable and may depend on the size and purpose of the
investment, the effect this has on a fund, frontline organisations’
ability to raise capital from other sources, and the nature of
non-financial support provided to fund managers and frontline
organisations. Given the wide range of variables, this report focuses
on providing a clear picture of the impact achieved by organisations
with contribution from the Company but does not seek to attribute
a share of impact directly to the Company.
Schroder BSC Social Impact Trust plc 87
Introduction Strategic Report Governance Financial Other Information (Unaudited)
(SDG) contribution
SDG sub-indicators and/or national action plans can provide
a benchmark for where we currently are, and an indicator of the
potential value of investments as a contribution towards meeting
targets. The Company’s Impact Report provides assessment of the
Company’s portfolio against SDGs where relevant SDG sub-indicators
have been identified and UK level targets recognised. SDG targets
and sub indicators are sourced primarily from the UK Office for
National Statistics and the Open SDG Platform,
https://sdgdata.gov.uk/, and from the UK Government Corporate
Report on Implementing the SDGs.
https://www.gov.uk/government/publications/implementing-the-
sustainable-development-goals/implementing-the-sustainable-
development-goals--2
7. Savings and short term value to
government
The Company invests in initiatives seeking to provide benefits to
society in innovative and cost-effective ways. The Company’s Impact
Report includes quantification of value generated for 12% of the
portfolio, where we have high- quality data on the global cost of
provision, comparable data on existing alternative provision models
as counterfactuals, and high quality data on medium to long term
outcomes for beneficiaries and government. This is primarily
applicable in investments that operate at comparatively large scale, in
well-established and data rich sectors, and with business models that
require quantification of value generated for payment.
Social Outcomes Contracts: Short term value to government is
calculated using one of three methodologies:
a. Delivering against a public ”rate card”. For projects delivering
against a public ‘rate card’, the value to government is the price
of outcomes that Government was prepared to pay according to
the rate card. Where this is higher than the amount actually paid,
this signifies that the project offered a discount to the rate card
prices, or achieved more outcomes above the contract cap, or
both.
b. Short term savings: For local projects targeting short term
savings for a local authority, the value to government is the gross
value of these savings during the tracking period (from
investment to the latest available report).
c. Valued at cost: Where there is no public outcomes rate card or
a definitive short-term saving created at the level of the
commissioning authority, no additional value has been assigned
to the outcomes over and above that which government has
been willing to pay.
For more information on SOCs, please see
https://www.bridgesfundmanagement.com/outcomescontracts/
Debt and Equity for Social Enterprises, AgilityEco: Calculated
based on the average annual savings generated through reduction in
energy bills as a result of energy efficiency improvements per
household.
For more information, please see AgilityEco’s annual impact report
https://www.agilityeco.co.uk/news/agilityeco-launches-its-
impactreport-20212022.
In addition, the total figure for this asset class includes community
benefit funds generated by renewable energy assets. Investments
also include small scale social organisations that have limited capacity
for measurement, and organisations such as social housing providers
where a lack of consistent measurement standards makes
comparison of costs and benefits challenging. The Company’s
Portfolio Manager is currently exploring methods for assessing
savings generated through housing services and other enterprise
models, however there is not currently sufficiently reliable data to
report on this.
8. Data quality
The impact data presented in this report is taken from the latest
available fund manager impact reports submitted to the Company.
The report also draws on annual impact reports from frontline
investee organisations where available.
9. Reporting on contribution to impact
Investment and non-financial support provided through the Company
and portfolio fund managers makes a significant contribution towards
positive impact: however we recognise this as one set of inputs
among many that are instrumental in portfolio organisations
achieving positive outcomes for people. The contribution of an
investment towards the outcomes achieved by investee organisations
is highly variable and may depend on the size and purpose of the
investment, the effect this has on a fund, frontline organisations’
ability to raise capital from other sources, and the nature of
non-financial support provided to fund managers and frontline
organisations. Given the wide range of variables, this report focuses
on providing a clear picture of the impact achieved by organisations
with contribution from the Company but does not seek to attribute
a share of impact directly to the Company.
Schroder BSC Social Impact Trust plc 87
Introduction Strategic Report Governance Financial Other Information (Unaudited)
88
Schroder BSC Social Impact Trust plc
Web pages and share price information
The Company has a dedicated website, which may be found at
www.schroders.com/sbsi. The website has been designed to be used
as the Company’s primary method of electronic communication with
shareholders. They contain details of the Company’s share price and
copies of annual report and other documents published by the
Company as well as information on the directors, terms of reference
of committees and other governance arrangements. In addition, the
website contain links to announcements made by the Company to the
market, Equiniti’s shareview service and Schroders’ website. There is
also a section entitled “How to Invest”.
The Company releases its NAV per share on both a cum and
ex-income basis, diluted where applicable, to the market on a daily
basis.
Share price information may also be found in the Financial Times and
at the Company’s website.
Association of Investment Companies
The Company is a member of the Association of Investment
Companies. Further information on the Association can be found on
its website, www.theaic.co.uk.
Individual Savings Account (“ISA”) status
The Company’s shares are eligible for stocks and shares ISAs.
Non-Mainstream Pooled Investments status
The Company currently conducts its affairs so that its shares can be
recommended by IFAs to ordinary retail investors in accordance with
the FCA’s rules in relation to non-mainstream investment products
and intends to continue to do so for the foreseeable future. The
Company’s shares are excluded from the FCA’s restrictions which
apply to non-mainstream investment products because they are
shares in an investment trust.
Financial calendar
Annual results announced October
Annual General Meeting December
Half-year results announced March
Financial year end June
Alternative Investment Fund Managers
Directive (“AIFMD”) disclosures
The AIFMD UK regulation, transposed AIFMD into the FCA Handbook
in the UK and requires that certain pre-investment information be
made available to investors in Alternative Investment Funds (such as
the Company) and also that certain regular and periodic disclosures
are made. This information and these disclosures may be found
either below, elsewhere in this annual report, or in the Company’s
AIFMD information disclosure document published on the Company’s
web pages.
Leverage
The Company’s leverage policy and details of its leverage ratio
calculation and exposure limits as required by the AIFMD are
published on the Company’s web pages and within this report. The
Company is also required to periodically publish its actual leverage
exposures. As at 30 June 2024 these were:
Leverag e exposure Maximum ratio Actual ratio
Gross method 150.0% 100.2%
Commitment method 150.0% 100.0%
Illiquid assets
As at the date of this report, none of the Company’s assets are subject
to special arrangements arising from their illiquid nature.
Remuneration disclosures
Quantitative remuneration disclosures to be made in this annual
report in accordance with FCA Handbook rule FUND3.3.5 may also be
found in the Company’s AIFMD information disclosure document
published on the Company’s website.
Publication of Key Information Document
(“KID”) by the AIFM
Pursuant to the Packaged Retail and Insurance-based Products
(“PRIIPs”) Regulation, the Manager, as the Company’s AIFM, is
required to publish a short KID on the Company. KIDs are designed to
provide certain prescribed information to retail investors, including
details of potential returns under different performance scenarios
and a risk/reward indicator. The Company’s KID is available on its
website.
Complaints
The Company has adopted a policy on complaints and other
shareholder communications which ensures that shareholder
complaints and communications addressed to the Company
Secretary, the Chair or the Board are, in each case, considered by the
Chair and the Board.
Shareholder Information
Web pages and share price information
The Company has a dedicated website, which may be found at
www.schroders.com/sbsi. The website has been designed to be used
as the Company’s primary method of electronic communication with
shareholders. They contain details of the Company’s share price and
copies of annual report and other documents published by the
Company as well as information on the directors, terms of reference
of committees and other governance arrangements. In addition, the
website contain links to announcements made by the Company to the
market, Equiniti’s shareview service and Schroders’ website. There is
also a section entitled “How to Invest”.
The Company releases its NAV per share on both a cum and
ex-income basis, diluted where applicable, to the market on a daily
basis.
Share price information may also be found in the Financial Times and
at the Company’s website.
Association of Investment Companies
The Company is a member of the Association of Investment
Companies. Further information on the Association can be found on
its website, www.theaic.co.uk.
Individual Savings Account (“ISA”) status
The Company’s shares are eligible for stocks and shares ISAs.
Non-Mainstream Pooled Investments status
The Company currently conducts its affairs so that its shares can be
recommended by IFAs to ordinary retail investors in accordance with
the FCA’s rules in relation to non-mainstream investment products
and intends to continue to do so for the foreseeable future. The
Company’s shares are excluded from the FCA’s restrictions which
apply to non-mainstream investment products because they are
shares in an investment trust.
Financial calendar
Annual results announced October
Annual General Meeting December
Half-year results announced March
Financial year end June
Alternative Investment Fund Managers
Directive (“AIFMD”) disclosures
The AIFMD UK regulation, transposed AIFMD into the FCA Handbook
in the UK and requires that certain pre-investment information be
made available to investors in Alternative Investment Funds (such as
the Company) and also that certain regular and periodic disclosures
are made. This information and these disclosures may be found
either below, elsewhere in this annual report, or in the Company’s
AIFMD information disclosure document published on the Company’s
web pages.
Leverage
The Company’s leverage policy and details of its leverage ratio
calculation and exposure limits as required by the AIFMD are
published on the Company’s web pages and within this report. The
Company is also required to periodically publish its actual leverage
exposures. As at 30 June 2024 these were:
Leverag e exposure Maximum ratio Actual ratio
Gross method 150.0% 100.2%
Commitment method 150.0% 100.0%
Illiquid assets
As at the date of this report, none of the Company’s assets are subject
to special arrangements arising from their illiquid nature.
Remuneration disclosures
Quantitative remuneration disclosures to be made in this annual
report in accordance with FCA Handbook rule FUND3.3.5 may also be
found in the Company’s AIFMD information disclosure document
published on the Company’s website.
Publication of Key Information Document
(“KID”) by the AIFM
Pursuant to the Packaged Retail and Insurance-based Products
(“PRIIPs”) Regulation, the Manager, as the Company’s AIFM, is
required to publish a short KID on the Company. KIDs are designed to
provide certain prescribed information to retail investors, including
details of potential returns under different performance scenarios
and a risk/reward indicator. The Company’s KID is available on its
website.
Complaints
The Company has adopted a policy on complaints and other
shareholder communications which ensures that shareholder
complaints and communications addressed to the Company
Secretary, the Chair or the Board are, in each case, considered by the
Chair and the Board.
Shareholder Information
Schroder BSC Social Impact Trust plc
89
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Shareholder Information
Warning to shareholders
Companies are aware that their shareholders have received
unsolicited telephone calls or correspondence concerning investment
matters. These are typically from overseas-based ‘brokers’ who target
UK shareholders, offering to sell them what often turn out to be
worthless or high risk shares or investments.
These operations are commonly known as ‘boiler rooms’. These
‘brokers’ can be very persistent and extremely persuasive.
Shareholders are advised to be wary of any unsolicited advice, offers
to buy shares at a discount or offers of free company reports. If you
receive any unsolicited investment advice:
• Make sure you get the correct name of the person and
organisation
• Check that they are properly authorised by the FCA before getting
involved by visiting https://register.fca.org.uk.
• Report the matter to the FCA by calling 0800 111 6768 or visiting
www.fca.org.uk/consumers/report-scam-unauthorised- firm.
• Do not deal with any firm that you are unsure about.
If you deal with an unauthorised firm, you will not be eligible to
receive payment under the Financial Services Compensation Scheme.
The FCA provides a list of unauthorised firms of which it is aware,
which can be accessed at
https://www.fca.org.uk/consumers/unauthorised-firms-
individuals#list.
More detailed information on this or similar activity can be found on
the FCA website at https://www.fca.org.uk/consumers/protect-
yourself-scams.
Dividends
Paying dividends into a bank or building society account helps reduce
the risk of fraud and will provide you with quicker access to your
funds than payment by cheque.
Applications for an electronic mandate can be made by contacting the
Registrar, Equiniti.
This is the most secure and efficient method of payment and ensures
that you receive any dividends promptly.
If you do not have a UK bank or building society account, please
contact Equiniti for details of their overseas payment service.
Further information can be found at www.shareview.co.uk, including
how to register with Shareview Portfolio and manage your
shareholding online.
Introduction Strategic Report Governance Financial Other Information (Unaudited)
Shareholder Information
Warning to shareholders
Companies are aware that their shareholders have received
unsolicited telephone calls or correspondence concerning investment
matters. These are typically from overseas-based ‘brokers’ who target
UK shareholders, offering to sell them what often turn out to be
worthless or high risk shares or investments.
These operations are commonly known as ‘boiler rooms’. These
‘brokers’ can be very persistent and extremely persuasive.
Shareholders are advised to be wary of any unsolicited advice, offers
to buy shares at a discount or offers of free company reports. If you
receive any unsolicited investment advice:
• Make sure you get the correct name of the person and
organisation
• Check that they are properly authorised by the FCA before getting
involved by visiting https://register.fca.org.uk.
• Report the matter to the FCA by calling 0800 111 6768 or visiting
www.fca.org.uk/consumers/report-scam-unauthorised- firm.
• Do not deal with any firm that you are unsure about.
If you deal with an unauthorised firm, you will not be eligible to
receive payment under the Financial Services Compensation Scheme.
The FCA provides a list of unauthorised firms of which it is aware,
which can be accessed at
https://www.fca.org.uk/consumers/unauthorised-firms-
individuals#list.
More detailed information on this or similar activity can be found on
the FCA website at https://www.fca.org.uk/consumers/protect-
yourself-scams.
Dividends
Paying dividends into a bank or building society account helps reduce
the risk of fraud and will provide you with quicker access to your
funds than payment by cheque.
Applications for an electronic mandate can be made by contacting the
Registrar, Equiniti.
This is the most secure and efficient method of payment and ensures
that you receive any dividends promptly.
If you do not have a UK bank or building society account, please
contact Equiniti for details of their overseas payment service.
Further information can be found at www.shareview.co.uk, including
how to register with Shareview Portfolio and manage your
shareholding online.
90
Schroder BSC Social Impact Trust plc
Information about the Company
Directors
Susannah Nicklin (Chair)
Mike Balfour
James B. Broderick
Alice Chapple
Ranjan Ramparia
Registered Office
1 London Wall Place
London EC2Y 5AU
Advisers and service providers
Alternative Investment Fund Manager
(the “Manager”)
Schroder Unit Trusts Limited
1 London Wall Place
London EC2Y 5AU
Portfolio Manager
Better Society Capital Limited
New Fetter Place
8-10 New Fetter Lane
London EC4A 1AZ
Company Secretary
Schroder Investment Management Limited
1 London Wall Place
London EC2Y 5AU
Telephone: 020 7658 6000
Email address: AMCompanySecretary@schroders.com
Depositary and custodian
HSBC Bank plc
8 Canada Square
London E14 5HQ
Corporate broker
Winterflood Securities Limited
Riverbank House
2 Swan Lane
London EC4R 3GA
Independent auditors
BDO LLP
55 Baker Street
London W1U 7EU
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Shareholder helpline: 0800 032 0641
Website: www.shareview.co.uk
1
Calls to this number are free of charge from UK landlines.
Communications with shareholders are mailed to the address
held on the register. Any notifications and enquiries relating to
shareholdings, including a change of address or other
amendment should be directed to Equiniti Limited at the above
address and telephone number above.
Shareholder enquiries
General enquiries about the Company should be addressed
to the Company Secretary at the address set out above.
Dealing Codes
ISIN: GB00BF781319
SEDOL: BF78131
Ticker: SBSI
Global Intermediary Identification Number (GIIN)
PXF89P.99999.SL.826
Legal Entity Identifier (LEI)
549300PG5MF2NY4ZRM86
Privacy notice
The Company’s privacy notice can be found on its web pages.
www.schroders.com/sbsi
Information about the Company
Directors
Susannah Nicklin (Chair)
Mike Balfour
James B. Broderick
Alice Chapple
Ranjan Ramparia
Registered Office
1 London Wall Place
London EC2Y 5AU
Advisers and service providers
Alternative Investment Fund Manager
(the “Manager”)
Schroder Unit Trusts Limited
1 London Wall Place
London EC2Y 5AU
Portfolio Manager
Better Society Capital Limited
New Fetter Place
8-10 New Fetter Lane
London EC4A 1AZ
Company Secretary
Schroder Investment Management Limited
1 London Wall Place
London EC2Y 5AU
Telephone: 020 7658 6000
Email address: AMCompanySecretary@schroders.com
Depositary and custodian
HSBC Bank plc
8 Canada Square
London E14 5HQ
Corporate broker
Winterflood Securities Limited
Riverbank House
2 Swan Lane
London EC4R 3GA
Independent auditors
BDO LLP
55 Baker Street
London W1U 7EU
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex BN99 6DA
Shareholder helpline: 0800 032 0641
Website: www.shareview.co.uk
1
Calls to this number are free of charge from UK landlines.
Communications with shareholders are mailed to the address
held on the register. Any notifications and enquiries relating to
shareholdings, including a change of address or other
amendment should be directed to Equiniti Limited at the above
address and telephone number above.
Shareholder enquiries
General enquiries about the Company should be addressed
to the Company Secretary at the address set out above.
Dealing Codes
ISIN: GB00BF781319
SEDOL: BF78131
Ticker: SBSI
Global Intermediary Identification Number (GIIN)
PXF89P.99999.SL.826
Legal Entity Identifier (LEI)
549300PG5MF2NY4ZRM86
Privacy notice
The Company’s privacy notice can be found on its web pages.
www.schroders.com/sbsi
Schroder Investment Management Limited
1 London Wall Place, London EC2Y 5AU, United Kingdom
T +44 (0) 20 7658 6000
Important information: This document is intended to be for information purposes
only and it is not intended as promotional material in any respect. The material is not
intended as an offer or solicitation for the purchase or sale of any financial
instrument. The material is not intended to provide, and should not be relied on for,
accounting, legal or tax advice, or investment recommendations. Information herein
is believed to be reliable but Schroders does not warrant its completeness or accuracy.
No responsibility can be accepted for errors of fact or opinion. Reliance should not be
placed on the views and information in the document when taking individual
investment and/ or strategic decisions. Past performance is not a reliable indicator of
future results, prices of shares and the income from them may fall as well as rise and
investors may not get back the amount originally invested. Schroders has ex pressed
its own views in this document and these may change. Issued by Schroder Investment
Management L imited, 1 London Wall Place, London EC2Y 5AU, which is authorised
and regulated by the Financial Conduct Authority. For your security, communications
may be taped or monitored.
@schroders
schroders.com
1 London Wall Place, London EC2Y 5AU, United Kingdom
T +44 (0) 20 7658 6000
Important information: This document is intended to be for information purposes
only and it is not intended as promotional material in any respect. The material is not
intended as an offer or solicitation for the purchase or sale of any financial
instrument. The material is not intended to provide, and should not be relied on for,
accounting, legal or tax advice, or investment recommendations. Information herein
is believed to be reliable but Schroders does not warrant its completeness or accuracy.
No responsibility can be accepted for errors of fact or opinion. Reliance should not be
placed on the views and information in the document when taking individual
investment and/ or strategic decisions. Past performance is not a reliable indicator of
future results, prices of shares and the income from them may fall as well as rise and
investors may not get back the amount originally invested. Schroders has ex pressed
its own views in this document and these may change. Issued by Schroder Investment
Management L imited, 1 London Wall Place, London EC2Y 5AU, which is authorised
and regulated by the Financial Conduct Authority. For your security, communications
may be taped or monitored.
@schroders
schroders.com