Schroder UK Mid Cap Trust plc ## Schroder UK Mid Cap Fund plc | Annual Report and Financial Statements 2025 ### Annual Report and Financial Statements ### for the year ended 30 September 2025 ## Investment objective The investment objective of Schroder UK Mid Cap Fund plc (the “Company”) is to invest in mid cap equities with the aim of providing a total return in excess of the FTSE 250 ex Investment Trusts Index (“the Benchmark”). ## Why invest in the Company? ### UK mid caps offer extraordinary value The Company provides access to an undervalued part of the UK stock market. Valuations among UK mid-caps look unusually low relative to UK large-caps as well as mid-caps from elsewhere in the world. This may bode well for future performance. ### An excellent performance history Since Schroders became Manager in 2003, the Company has outperformed its Benchmark, the FTSE 250 ex Investment Trust index, returning 1,275%, or a 418% outperformance.¹ Meanwhile, its dividend has grown by a factor of 11.2x in the same period, from 2p to 22.4p in 2025.² ### Decades of expertise and a proven approach With more than 60 years of combined investing experience, the investment team looks to select a portfolio of around 50 of the most attractively valued companies, resulting in a high quality portfolio capable of delivering dependable long-term growth in a fast-changing world. ![img-0.jpeg](img-0.jpeg) Scan this QR code on your smartphone camera to sign up to receive regular updates on **Schroder UK Mid Cap Fund plc** The investment objective of the Company is set out above. For details on the Company’s investment policy please see the Key Information Document (“KID”). This report includes the investment policy which you should read in conjunction with the KID before investing; these are also available on our Schroders website. **Past performance is not a guide to future performance and may not be repeated.** The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of investments to fall as well as rise. Performance data does not take into account any commissions and costs, if any, charged when units or shares of any fund, as applicable, are issued and redeemed. Relevant risks as associated with this Company are shown on page 87 and should be carefully considered before making any investment. 1 NAV Ex Income figures shown as with income unavailable pre 2008. NAV Ex Income excludes any accrued income yet to paid while with income includes income that has been earned but not yet paid out. Figures shown are net of fees from 1 May 2003 (close) to 30 September 2025. Outperformance is relative to the FTSE 250 ex Investment Trusts index. 2 The dividend history of the Company is available on the AIC website: https://www.theaic.co.uk/. ## Contents Section 1: Overview Performance Summary 5 Chair’s Statement 6 Ten-Year Financial Record 8 Section 2: Investment Manager’s Review Investment Manager’s Review 12 Investment Approach and Process 17 Investment Portfolio 20 Section 3: Strategic Report The Company 24 Stakeholder Engagement – Section 172 Report 28 Risk Report 31 Conclusion 34 Section 4: Governance Board of Directors 38 Directors’ Report 40 Audit and Risk Committee Report 43 Management Engagement Committee Report 46 Nomination Committee Report 47 Remuneration Committee Report 49 Directors’ Remuneration Report 50 Statement of Directors’ Responsibilities in respect of the Annual Report and Financial Statements 53 Section 5: Financials Independent Auditor’s Report 56 Statement of Comprehensive Income 61 Statement of Changes in Equity 62 Statement of Financial Position 63 Notes to the Financial Statements 64 Section 6: Other Information (Unaudited) Annual General Meeting – Recommendations 78 Notice of Annual General Meeting 79 Explanatory Notes to the Notice of Meeting 80 Definitions of Terms and Alternative Performance Measures 82 Information about the Company 84 Risk Disclosures 87 This is not a sustainable product for the purposes of the Financial Conduct Authority (“FCA”) rules. References to the consideration of sustainability factors and environment, social and governance (“ESG”) integration should not be construed as a representation that the Company seeks to achieve any particular sustainability outcome. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 1 ### Section 1: Overview ### Edinburgh Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 2 ### Section 1: Overview ## Section 1: Overview Performance Summary 5 Chair’s Statement 6 Ten-Year Financial Record 8 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 3 ### Section 1: Overview ### Manchester Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 4 ### Section 1: Overview ## Performance Summary As at 30 September 2025 ### Net Asset Value (“NAV”) | per share total return* | Share price total return* | Benchmark total return | | --- | --- | --- | | +10.8% | +18.0% | +6.7% | | 30 September 2024: +17.3% | 30 September 2024: +17.5% | 30 September 2024: +21.4% | ### Share price discount | Share price | to NAV per share* | Dividend per share | | --- | --- | --- | | 702p | 7.0% | 22.4p | | 30 September 2024: 616.00p | 30 September 2024: 12.3% | 30 September 2024: 21.5p | | Net Gearing* | Ongoing charges ratio* | Revenue return per share | | --- | --- | --- | | 4.8% | 0.92% | 25.03p | | 30 September 2024: 9.5% | 30 September 2024: 1.05% | 30 September 2024: 20.54p | ### Net revenue return ### after taxation ## £8.65m 30 September 2024: £7.10m Some of the financial measures are classified as Alternative Performance Measures (“APMs”), as defined by the European Securities and Markets Authority and are indicated with an asterisk (*). Definitions of these performance measures, and other terms used in this report, are given on pages 82 and 83 together with supporting calculations where appropriate. Mid caps refer to the constituents of the FTSE 250 ex Investment Trusts Index throughout this document. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 5 Section 1: Overview ## Chair's Statement ![img-1.jpeg](img-1.jpeg) Harry Morley *“These excellent results underscore the enduring strengths of the UK mid cap market and the benefits of a disciplined, high-conviction strategy led by experienced managers with a strong track record in stock selection.”* This is my first Annual Report as Chair of the Company, having succeeded Robert Talbut following the Company’s Annual General Meeting (“AGM”) on 24 February 2025. On behalf of the Board, I would like to thank Robert for his valuable contribution to the Company during his nine-year tenure. I would also like to welcome Richard Curling, who joined the Board as an independent non-executive Director immediately following the AGM. ### Investment and share price performance I am delighted that during the year to 30 September 2025 our Investment Manager has delivered a NAV total return of 10.8%, outperforming the Benchmark (FTSE 250 ex Investment Trust Index) by 4.1%, which itself was up by 6.7%. The share price also rose by 18.0%, reflecting a narrowing of the discount to NAV and a positive response to the strategic initiatives announced by the Board in March, which are covered in more detail below. The Company has therefore outperformed its Benchmark over the last one, three, and ten years, both in terms of NAV and share price. These excellent results underscore the enduring strengths of the UK mid cap market and the benefits of a disciplined, high-conviction strategy led by experienced managers with a strong track record in stock selection. Your Investment Manager’s strategy continues to focus on long-term growth companies. The Board remains confident that our emphasis on resilient, cash generative businesses, positions the portfolio well for long-term shareholder value creation. ### Strategic initiatives In March, your Board announced a number of strategic initiatives designed to further strengthen the Company’s investment proposition and deliver value for all of the Company’s shareholders. ### Management fee reduction The Board agreed a management fee reduction with Schroder Unit Trusts Limited. The previous management fees were (1) 0.65% per annum on net assets plus short term borrowings, less cash up to £250 million and; (2) 0.60% per annum of any such amount in excess of £250 million. With effect from 1 April 2025, the reduced management fee has been calculated based on the lower of (1) 0.60% per annum of market capitalisation; or (2) the net asset value-based fee arrangement. ### Continuation vote The Board introduced a continuation vote to be proposed at the 2028 AGM, and, if passed, every three years thereafter to ensure that the Company remains relevant to its shareholders and in-line with best corporate governance practice. The continuation vote will be proposed as an ordinary resolution requiring a simple majority of those voting to be passed. ### Buyback policy The Board has used its authority to buy back shares more actively to inhibit a wide discount to NAV from developing in the Company’s shares in the future. The Company’s authority to repurchase up to 14.99% of its issued share capital (being 5,183,720 ordinary shares) was refreshed at the AGM held on 24 February 2025. The Board will continue to monitor the discount closely and will take appropriate action as required. ### Dividends In June 2025, the Board announced an increased interim dividend of 6.3 pence per share, representing a 5% increase on the prior year’s interim dividend. We have declared a final dividend of 16.1 pence per share for the year ended 30 September 2025. Together, the proposed final dividend and the interim dividend already paid bring total dividends for the year to 22.4 pence per share. This amount is covered by current year earnings and represents a 4.2% increase on the previous year. Based on a share price of 666 pence as at 25 November 2025, this equates 6 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 Section 1: Overview to a yield of 3.4%. While it is not an objective of the Company for its dividends to grow in excess of the Consumer Price Index, the Board notes that this has been the case over the last one, three, five, and ten years. A resolution to approve the payment of the final dividend will be proposed at the forthcoming AGM. Subject to shareholder approval, the dividend will be paid on 27 February 2026 to shareholders on the register as at 30 January 2026. ### Gearing At year end, net gearing stood at 4.8% (2024: 9.5%), with £17 million drawn from the Company's Revolving Credit Facility. The ability to deploy gearing is a distinctive advantage of the investment trust structure. The Board expects the Investment Manager to continue using gearing proactively to enhance long-term returns and to capitalise on new investment opportunities as they arise. ### Discount management The discount to NAV moved from 12.3% at the previous year end to 7.0% this year end. During the year the Board exercised its buy-back authority to acquire 269,000 shares into treasury. Since the year end a further 406,500 shares have been bought back. The Board believes that a variety of reasons have contributed to this reduction in the discount, including the positive trading performance and the strategic initiatives announced earlier this year. The Board remains vigilant in monitoring the discount and will continue to utilise share buy-backs to inhibit a wide discount to NAV from developing. ### Marketing initiatives The Company continues to broaden its reach and deepen engagement with existing and prospective investors, across both retail and professional audiences. This includes media engagement, helping to raise awareness of the Company's strategy, and positioning. In addition, a diverse range of content – including podcasts, video interviews, live events, and written articles – have been delivered across key digital platforms such as Boring Money, AssetTV, This is Money (Daily Mail), and Kepler Trust Intelligence. These initiatives aim to deepen investor understanding and provide valuable insights into the Company's investment universe. Another ongoing initiative in this regard is the Mid-250 podcast, hosted by Jean Roche, your Investment Manager. Now in its third year, the podcast has featured CEOs from across the FTSE 250 and showcases the diversity and performance of the UK mid cap market. Investors can listen to the podcast here: https://www.schroders.com/en-gb/uk/individual/insights/mid-250-podcast/. ### Board changes and succession During the year, we were pleased to welcome Richard Curling to the Board as a non-executive Director and Chair of the Remuneration Committee. Richard's wealth of experience and insight will be of great value to the Board and our shareholders. ### AGM Your Company's next AGM will be held at 12.00pm on Wednesday, 25 February 2026 at 1 London Wall Place, London, EC2Y 5AU. Your Board hopes that as many shareholders as possible will attend the AGM. It provides a great opportunity for shareholders to meet your Investment Manager, Jean Roche, and the Company's Directors, and for us to meet you and to hear your views. We very much hope to see you at 1 London Wall Place on 25 February 2026. Everyone who is there will have the opportunity to hear a presentation from Jean Roche and then to ask her questions, and light refreshments will be served. All voting will be conducted by poll. Shareholders are encouraged to register their vote with your Company's registrar, either online or via paper proxy forms, and to appoint the Chair of the meeting as their proxy. Even if you are unable to attend the AGM in person, you are still able to have your say by submitting your vote in advance. Further details on voting procedures can be found in the Notice of Meeting on page 79. Any questions for your Board may be submitted by email to amcompanysecretary@schroders.com prior to the AGM. ### Results webinar Shareholders are invited to join your Investment Manager, Jean Roche, for a webinar reporting on the year ended 30 September 2025 and to discuss the outlook for your Company's portfolio. The presentation will be followed by a live Q&A session. The webinar will take place at 9.00 am on Tuesday, 13 January 2026. Registration is available at https://www.schroders.events/SCPFY25 or by scanning the QR code below: ![img-2.jpeg](img-2.jpeg) ### Shareholder communication and engagement The Board is committed to exercising the highest standard of corporate governance and accordingly, regularly considers the views of its shareholders, offering to meet with major shareholders annually. We also seek to engage with all shareholders where possible and should you wish to contact me, you can do so via the Company Secretary whose details are set out on page 86. For ongoing updates about your Company, shareholders are invited to sign up to the Manager's investment trusts update, available at https://schro.link/scp_subscriber. ### Outlook Looking ahead, the Board remains confident in the long-term opportunity presented by UK mid caps. This part of the market continues to offer a compelling blend of structural growth potential, corporate resilience and valuation support. The broader environment remains complex with the global economy facing geopolitical tensions and the ever-present threat of tariffs. At the time of writing this report, the Chancellor has just announced the Autumn Budget. The Board remains confident in the long-term prospects for the UK market and invites shareholders to read more about the market outlook in the Investment Manager's Review. However, the Board believes that the portfolio is well-positioned to navigate these challenges. The Investment Manager's selective, research-driven approach and proven stock selection capabilities should help the Company to continue to deliver attractive returns for shareholders over time. ### Harry Morley Chair 26 November 2025 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 7 ### Section 1: Overview ## Ten-Year Financial Record At 30 September 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Shareholders’ funds (£’000) 192,718 226,577 229,734 226,424 199,524 277,569 187,393 213,823 242,966 258,870 NAV per share (pence) 533.2 632.0 640.8 633.5 569.0 791.6 541.9 618.3 702.6 754.5 Share price (pence) 435.4 524.5 538.0 540.0 458.5 730.0 480.0 544.0 616.0 702.0 Share price discount to NAV per share* (%) 18.3 17.0 16.0 14.8 19.4 7.8 11.4 12.0 12.3 7.0 Gearing/(net cash)* (%) 1.5 (0.5) (3.0) 4.3 5.3 7.7 10.8 6.8 9.5 4.8 For the year ended 30 September 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Net revenue return after taxation (£’000) 4,455 5,031 6,015 7,325 3,155 5,322 7,823 7,842 7,102 8,648 Revenue return per share (pence) 12.33 13.96 16.78 20.43 8.92 15.18 22.43 22.68 20.54 25.03 Dividends per share (pence) 11.25 13.10 16.00 18.50 13.30 14.80 19.00 20.50 21.50 22.4 2 Ongoing Charges* (%) 0.95 0.92 0.9 0.9 0.90 0.90 0.89 0.97 1.05 0.92 1 Performance 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 NAV total return* (%) 6.5 21.0 3.5 1.8 (7.7) 41.8 (30.0) 17.6 17.3 10.7 Share price total return* (%) (4.0) 23.6 5.0 4.0 (12.5) 62.6 (32.5) 17.4 17.5 18.0 Benchmark (%) 8.6 14.2 4.2 0.2 (15.3) 40.9 (26.8) 13.6 21.4 6.7 | 1 Source: Morningstar. | | --- | | 2 If the current management fee structure had been in place for the entire reporting period, the ongoing charges figure would be 0.84%. | | * Alternative performance measures. | NAV per share, share price, and Benchmark total returns for the 10 years ended 30 September 2025 250 200 150 100 50 30 Sep 2016 30 Sep 2017 30 Sep 2018 30 Sep 2019 30 Sep 2020 30 Sep 2021 30 Sep 2022 30 Sep 2023 30 Sep 2024 30 Sep 2025 NAV total return Share price total return Benchmark total return Source: Morningstar/Thomson Reuters. Rebased to 100 at 30 September 2015. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 8 30 Sep 2015 ### Section 1: Overview ### London Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 9 ### Section 2: Investment Manager’s Review ### Belfast Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 10 ### Section 2: Investment Manager’s Review ## Section 2: Investment Manager’s Review Investment Manager’s Review 12 Investment Approach and Process 17 Investment Portfolio 20 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 11 Section 2: Investment Manager's Review ## Investment Manager's Review ![img-3.jpeg](img-3.jpeg) Jean Roche ![img-4.jpeg](img-4.jpeg) Andy Brough *“UK mid caps remain fertile ground for specialist, active investors – a growth sweet spot of companies mature enough to offer resilience yet nimble enough to deliver premium rates of growth.”* The Company's return for the 12 months to 30 September 2025 was 10.8%, compared to 6.7% from the FTSE 250 ex Investment Trusts Total Return Index. The share price total return was 18.0%, reflecting a steady narrowing of the discount to NAV, driven by both performance and strategic initiatives announced by the Board in March 2025. ### Market background UK equities rose over the period, despite bouts of volatility linked to rising geopolitical risks and renewed trade tensions. As outlined in our interim report, the first half saw UK mid cap equities deliver a negative return and underperform their larger counterparts. The second half opened with a sharp and globally co-ordinated sell-off, as fears of a trade-related recession took hold following President Trump's 'Liberation Day' tariff announcements. Markets subsequently recovered strongly as these concerns subsided, with many regional equity indices ending the period at or near to all-time highs, the UK included. Large caps outperformed mid caps over the period, although the difference narrowed in the second half. Over the twelve months, the FTSE 100 delivered a total return of 17.5%, more than double the 6.7% return from the FTSE 250 (source: Morningstar on a total return basis in UK sterling). This came despite reported earnings growth from larger, international-facing companies being held back in sterling terms by a weaker dollar. The result has been a widening valuation gap between large and mid caps. For example, mid caps now yield roughly 1.0% more than large caps – this is very unusual and highlights the relative value available further down the market spectrum. It's interesting to note, also, that mid cap dividends grew at a faster pace than large cap dividends during calendar Q3 (July-September 2025), a trend that we have not seen for some time. The UK economy posted modest growth over the period, a performance that compared favourably with most of its developed market peers. Hopes of further interest rate cuts diminished as the year progressed, which may help to explain the more subdued performance of mid and small caps. Nevertheless, there are growing signs that global investors are waking up to the opportunity that exists in UK equities. While large caps have benefited most so far, closing some of the valuation gap between UK and international peers, UK mid and small caps potentially stand to gain more over time, given their, still marked, relative valuation appeal. ### Portfolio performance The portfolio posted a positive return during the period under review, outperforming its Benchmark Index by 4.1%, with both stock selection and sector allocation contributing positively. The portfolio's exposure to industrials was the standout contributor to performance. Our increased overweight to aerospace and defence proved particularly beneficial. We view this sector as providing exposure to advanced technology and innovation, but with less valuation risk than many technology sub-sectors. It is also an area in which the UK continues to punch above its weight. Until relatively recently, few investors shared this view, but the sector has become increasingly favoured over the past 18 months amid heightened geopolitical tensions and a growing recognition that European nations must raise defence spending and reduce reliance on the US. The sector's attractions also include excellent earnings visibility, supported by long-term contracts and deep relationships with its government customers. In terms of stock specifics, all three of our positions in the sector performed well. **Chemring** was the portfolio's strongest contributor, with a strengthening order book underpinning continued earnings momentum. In recent years, steady operational delivery has helped shift perceptions of the company from a cyclical munitions supplier to a technology-focused defence business with durable growth prospects. That progress attracted private equity interest during the period, contributing to a further re-rating of the shares. Meanwhile, **Babcock International** also performed well. A period of contractual issues and rising debt concerns saw the company drop into the FTSE 250 in 2021. Since then, it has been reshaped under new management, resulting in a stronger balance sheet, improved margins and a growing order book. Alongside improving sector sentiment, this continued progress helped drive a higher share price during the period. Elsewhere, defence services and technology business **QinetiQ** also contributed positively. Following this period of outperformance from aerospace and defence, we have maintained an overweight exposure to the sector, albeit at a more modest level. Babcock's continued Past performance is not a guide to future performance and may not be repeated. For illustrative purposes only and not a recommendation to buy or sell shares or sectors. 12 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ### Section 2: Investment Manager’s Review recovery has led to its re-entry into the FTSE 100 index, so that have seen significant share price appreciation in recent months, position was sold towards the end of the period, in line with our which has been challenging in a relative sense. However, we philosophy. prefer to gain our financials exposure through other companies with less geopolitical risk exposure. Merger and acquisition (“M&A”) activity continued in the year, with the portfolio particularly benefiting from two agreed bids. Spectris, Elsewhere in the sector, not owning the insurance group Direct a provider of precision measurement instruments and software, was Line, which was another bid target during the period, detracted from the subject of a two-way bidding war between private equity groups performance. This was also the case for mono brand luxury goods before agreeing to KKR’s offer, which valued it at close to a 100% company Burberry, whose shares benefited from the market’s premium to its share price prior to the first bid. Meanwhile, Just enthusiasm for the new management team’s turnaround strategy. Group, the UK retirement-income specialist, agreed to a takeover by These negatives were largely offset by not owning consumer-facing Canadian investment giant, Brookfield Wealth Solutions, at a premium companies such as Greggs, Ocado and B&M European Value. We of 75% to its undisturbed share price. have been highly selective in our consumer exposure, preferring By contrast, our holding in 4imprint detracted from performance businesses such as Currys and Dunelm, where we prefer the sub during the year. The direct marketing and promotional products sector exposures (electricals and homewares, which are highly group, which has been a long-term winner for the portfolio, faced fragmented) and the associated customer demographics. a tougher backdrop as uncertainty around the US economy, tariff policy and currency movements weighed on sentiment. Stocks not held - significant positive and negative While these factors led to some moderation in earnings growth contributions versus the benchmark forecasts, much of the share price decline reflected a meaningful de-rating. With a strong balance sheet and a consistent record of Weight Portfolio relative Relative delivery, the company remains well placed for long-term growth. Positive weight 1 to index performance 2 Impact 3 We have therefore maintained the position. contributor (%) (%) (%) (%) Trustpilot, the online reviews platform connecting consumers Greggs – -1.0 -53.3 +0.8 with businesses, also detracted from performance. After a very strong 2024, the shares have come under pressure this year RS Group – -1.4 -33.9 +0.6 despite solid underlying trading, with good customer retention, Ocado Group – -0.9 -48.2 +0.5 improving margins and progress in developing relationships with large “enterprise” companies and new revenue streams. The B&M European – -1.0 -28.3 +0.5 Value company remains cash-positive and continues to repurchase shares, and we have maintained the holding in the portfolio. Tate & Lyle – -1.1 -38.6 +0.5 Stocks held - significant positive and negative contributions versus the benchmark Weight Portfolio relative Relative Negative weight 1 to index performance 2 Impact 3 Weight | | Portfolio | | relative | | | Relative | | | | contributor | (%) | (%) | (%) | (%) | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Positive | weight | 1 | to index | | performance | | 2 | Impact | 3 | | | | | | | contributor | | (%) | | (%) | | | (%) | | (%) | Burberry – -1.7 +54.7 -0.7 | | | | | | Chemring Group 3.1 +2.5 +56.6 +1.6 | | | | | | | | | | Direct Line – -1.2 +59.1 -0.7 | | | | | | Spectris 3.2 +1.8 +49.1 +1.4 | | | | | | | | | | Lion Finance Group – -1.0 +110.1 -0.7 | | | | | | Babcock | | | | | | | | | | Balfour Beatty – -1.2 +47.5 -0.5 | | | | | 1.8 +1.2 +45.6 +1.3 International Carnival – -1.2 +56.7 -0.5 Just Group 3.4 +2.7 +48.1 +1.3 Source: Schroders, Aladdin, close 30 September 2024 to close 30 September 2025. 1 Weights are averages. Games Workshop 2.3 +1.8 +15.1 +1.0 2 Performance of the stock in the index relative to the FTSE 250 (ex. ITs) Index return. 3 Impact is the contribution to performance relative to the FTSE 250 (ex. ITs) | | | | Weight | | | | | | | Index. | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Portfolio | | relative | | | Relative | | | | | | Negative | | 1 | | | | | 2 | | 3 | Portfolio activity | | | weight | | to index | | performance | | | Impact | | | | contributor | | (%) | | (%) | | | (%) | | (%) | In terms of portfolio activity, several new positions were added | during the year under review. Among these were the industrial 4Imprint Group 2.2 +1.7 -33.9 -0.7 businesses Hill & Smith, a manufacturer of infrastructure Trustpilot Group 0.9 +0.5 -6.5 -0.5 products such as road safety barriers and bridge components, which has significant exposure to the US, and Kier, which Ibstock Group 0.8 +0.5 -30.0 -0.5 provides construction and infrastructure services across building, Future 0.9 +0.5 -41.7 -0.5 transport and utilities projects in the UK. Regular readers of these reports will know that we group holdings into two broad Johnson Matthey 0.8 -0.5 +32.0 -0.5 categories: ‘unique’ stocks, which are high-conviction positions in Source: Schroders, Aladdin, close 30 September 2024 to close 30 September 2025. companies with distinct and enduring competitive strengths, and 1 Weights are averages. ‘flex’ stocks, which are positioned to benefit from change such as 2 Performance of the stock in the index relative to the FTSE 250 (ex. ITs) Index a new management strategy or a cyclical upswing. Hill & Smith return. 3 Impact is the contribution to performance relative to the FTSE 250 (ex. ITs) and Kier are both classified as ‘flex’ holdings, though for different Index. reasons: Kier is exposed to what could be a ‘golden age’ for UK construction amid an acute shortage of capacity and strong pent- In terms of stocks not held in the portfolio, the two UK-listed but up demand, while Hill & Smith offers more diversified exposure to Georgian-based banks, Lion Finance (formerly Bank of Georgia) global infrastructure investment and safety markets. and TBC Bank, detracted from performance. Both businesses Past performance is not a guide to future performance and may not be repeated. For illustrative purposes only and not a recommendation to buy or sell shares or sectors. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 13 Section 2: Investment Manager's Review # How we characterise stocks... Characteristics of # Unique stocks - Market position/pricing power leads to relatively higher returns on capital - Very strong business franchise - Scarcity value, only way to get exposure to this niche - Quality management - Ability to finance growth internally - Balance sheet strength - FTSE 100 stock of future? Characteristics of # Flex stocks - Industry undergoing change, for example where capacity reducing - Company undergoing change, for example change of management /strategy - Cyclical upturn or re-rating in prospect - Supply of shares in these companies reducing possibly via buybacks - Valuation reflective Characteristics of # Stocks to avoid - Industry overcapacity - Experiencing long-term decline - Not providing investors with successful growth opportunities - Management team destroying value - Inadequate profitability or returns on capital - Significant accounting concerns ![img-5.jpeg](img-5.jpeg) # Our portfolio combines attractively priced Unique and Flex stocks Source: Schroders for illustrative purposes Within consumer discretionary, we added a holding in Frasers Group, whose portfolio spans sports retail, premium fashion and luxury brands. Consumer-facing stocks remain out of favour, weighing on valuations and creating selective opportunities. While there are early signs of improvement in parts of the premium and luxury goods market, Frasers also offers growth potential through plans to expand its Sports Direct brand in Australia, New Zealand and the Gulf region. We also started a new position in digital technology business Kainos following the return of its former CEO, Brendan Mooney, after a difficult period for the company. Kainos enjoyed strong growth under Mooney's leadership from 2001 to 2023, expanding from a small Belfast-based IT services provider into a leading digital transformation and software consultancy with a unique partnership with the US software giant Workday. With Mooney reinstated, we have seen early positive results. In terms of disposals, we sold WH Smith in April, following the disposal of its high street business at a disappointing price. The business is now focused on travel retail, but our preference in this area is for international airport and railway station food and beverage operator SSP Group, which operates stores for M&S for example in UK railway stations, and owns brands such as Upper Crust, as well as operating international foodservice brands in international airports. The core business is trading at very attractive levels (under 2.0x Enterprise value to EBITDA)¹, based on the market cap (£1.5bn) of its recently floated Indian joint venture TFS. Elsewhere, we exited several other positions, including Oxford Instruments, a manufacturer of scientific instruments and systems for the research sector, following a change of management, gas explorer and producer Energean, following a strong run and rising geopolitical risk, and Babcock International, following its readmission to the FTSE 100. # Outlook At the time of writing, the UK is preparing for its Autumn Budget against a backdrop of rising fiscal pressure. While budget deficits and changing political dynamics are not unique to the UK, the scale of the domestic fiscal challenge is significant. The government faces a difficult balancing act: delivering a more sustainable budget position while also supporting economic growth. With bond markets increasingly attuned to fiscal credibility, there is limited room for missteps. Meanwhile, discretionary spending remains fragile, with subdued real income growth and patchy consumer confidence. Sterling strength has added further complexity for internationally exposed businesses, while domestically focused companies continue to navigate uneven demand. Green shoots we could point to include better than expected September retail sales, the fact that GDP growth estimates, while anaemic, have been steadily revised upwards over the last six months back to March 2025 levels (see graph below), and the October release of September's steady inflation numbers, which came as a surprise to the market and resulted in a small UK mid cap rally. Market moves such as this are a reminder of how little it would take to see this oversold part of the market begin to significantly outperform, before anticipating any changes the government might make as part of the Autumn statement, for example to ISAs or pension rules, to encourage buying of shares in UK listed companies. We have even seen a handful of UK IPOs post the Company's financial year end, after a very fallow period. Finally, earnings momentum has turned mildly positive. # UK consensus growth outlook: forecast real Gross Domestic Product (GDP) in 2025, % ![img-6.jpeg](img-6.jpeg) Source: Peel Hunt, Bloomberg. % year-on-year in real GDP, weekly data from 3 January to 3 November 2025. Overseas investors are beginning to wake up to the opportunity in UK equities. Global asset allocators, private equity buyers and industry consolidators have been particularly active, drawn by relatively low valuations for high-quality assets. In contrast, domestic investors have continued to be marked net sellers of UK assets. Returns from large cap UK equities have already started to improve over the last 1-2 years, and, in particular, year-to-date, despite this domestic exodus. Therefore, even a modest shift in sentiment among UK investors could prove powerful. ¹ Enterprise value to EBITDA divides a company's enterprise value by its earnings before interest, taxes, depreciation, and amortization. This metric is useful for comparing the value of different companies by providing a snapshot of a company's value relative to its operating profitability. Past performance is not a guide to future performance and may not be repeated. For illustrative purposes only and not a recommendation to buy or sell shares or sectors. 14 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 Section 2: Investment Manager's Review Perhaps this is why 2024's wave of M&A activity – 10% of the Mid 250 by value was acquired in 2024 – has only gathered pace during 2025. This underscores not just the low valuation of many UK companies, but the attraction of their business models to potential acquirers. The Investment Manager would therefore like to remind readers that the UK is still punching above its weight in terms of multi-baggers relative to the US. Indeed, we have had the great pleasure of interviewing several mid cap CEOs for our UK Mid 250 multi-bagger podcast. Most recently we met Telecom Plus CEO Stuart Burnett, who talked to us about how this bundled utility provider became a multi-bagger, outperforming the world's favourite large cap tech and tech-adjacent stocks, Magnificent Seven, over the four years from July 2021 to July 2025. #### The Mid 250 CEO podcast, showcasing Mid Cap successes ![img-7.jpeg](img-7.jpeg) Schroders, fund manager Jean Roche together with Telecom Plus CEO Stuart Burnett and fellow Schroders fund manager James Goodman. UK mid caps remain fertile ground for specialist, active investors. This part of the market represents a "growth sweet spot", with companies that are both mature enough to offer resilience and yet nimble enough to deliver premium rates of growth. The FTSE 250 Index is constantly refreshed through takeovers, promotions and relegations, and, in certain market conditions, initial public offerings ("IPOs"). This creates a dynamic and evolving opportunity set. Meanwhile, there is a better balance to the sector mix than for large caps, with less concentration risk, and a wealth of companies operating in high growth niches. Collectively, around half of mid cap revenues come from the UK economy, with the other half stemming from overseas – this also provides better balance than among large caps which are much more internationally focused and macro driven, and it means we can flex domestic exposure up or down as the investment environment evolves. #### The UK's Mid 250 index is not the same as the UK economy ![img-8.jpeg](img-8.jpeg) Around half of Mid 250 companies aggregate revenues are ex UK, on average, which allows flexibility in portfolio allocation. Positioning shown is for illustrative purposes and are not a recommendation to buy or sell. Source: Schroders, Factset. As at 31 October 2025. Data shown for the FTSE Mid 250 ex Investment Trusts index. All of this has led to the FTSE 250 Index delivering long-term outperformance over the FTSE 100 Index. Indeed, the FTSE 250 Index has also outperformed most other major stock market indices, delivering a return that even outpaces the mighty S&P 500 Index so far this century in local currency terms. #### FTSE 250 ex Investment Trusts vs Large developed markets, Total Return, % ![img-9.jpeg](img-9.jpeg) Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Source: Schroders, LSEG Datastream, rebased to 100 at 1 January 2000 data to 30 September 2025. $^{1}$ FTSE 250 ex Investment Trusts index is shown. Currencies are base currencies for individual indices. Past performance is not a guide to future performance and may not be repeated. For illustrative purposes only and not a recommendation to buy or sell shares or sectors. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 15 ### Section 2: Investment Manager’s Review In this environment, selectivity remains critical. Our approach is rooted in detailed company-level analysis, with a focus on balance sheet strength, pricing power and management quality. We continue to favour businesses that are well positioned to withstand external pressures and deliver through the cycle. The portfolio remains tilted towards companies with valuation support, low financial leverage and strong cash generation — offering the potential to participate in long-term growth, while providing meaningful downside protection in a more uncertain environment. Schroder Investment Management Limited 26 November 2025 Past performance is not a guide to future performance. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. This information is not an offer, solicitation or recommendation to buy or sell any financial instrument or to adopt any investment strategy. For help in understanding any terms used, please visit https://www.schroders.com/en/insights/invest-iq/investiq/ education-hub/glossary/ Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 16 ### Section 2: Investment Manager’s Review ## Investment Approach and Process Stock selection and portfolio construction Investment process In order to meet the investment objective, the Investment Manager applies a high conviction approach, managing a focused portfolio of high-quality companies that are all capable of delivering excess risk-adjusted returns with rising cash flows and earnings. The investment process is based on a common-sense investment philosophy, fundamental analysis of company accounts and a subjective evaluation of management and prospects. Fundamental research As third-party coverage on mid-sized companies is limited in scope, and often in quality, company meetings and visits are a vital part of the research process. The team seek to meet with companies multiple times each year with the aim of understanding and evaluating the strategies being pursued by management as well as the characteristics and competitive dynamics of industries and sectors. Their relationship with company management and this intensive programme of company contacts ensure that they are fully aware of all relevant issues. The knowledge that their company contacts and visits provide, and the extent of resources that Schroders dedicate to the product, gives the team an advantage over their competitors. Their research works through their accounting and risk checklist: Quantitative – the numbers Quantitative – behind the numbers Proprietary accounting checklist focusing on Does the management team have a demonstrable track record of success: – Accruals Is this too good to be true? – Cost capitalisation – Are margins or returns on capital way ahead of the industry? – Hidden leverage – Why does the business deserve to earn these returns: – Audit tenure/fees – Is this a fad? – Accounting policies compared to industry peers Do all stakeholders benefit? Third party risk and accounting screens – Do customers have an affinity with the business that makes Appropriate management incentives them choose it over competititors? Valuation – Price Earnings Growth (PEG) ratios, multiple vs. history – Are employees well-treated, enjoy working at the company and and international peers appropriately paid? Aversion to companies with debt. Invest in companies that are in – Is management shareholder friendly? Share dilution? How do control of their destiny they think about growth? Buybacks vs. dividends? This provides a consistent structure to assess balance sheet strength, management quality, how management’s interests and remuneration are aligned with those of shareholders and the strength of the company’s market position and pricing power. A key focus is the ability of companies to finance growth internally and the team avoid heavily indebted businesses. As a result of their fundamental research, they classify the companies and industries in the investment universe, within a framework of unique stocks, flex stocks and stocks to avoid. Unique stocks operate in industries where demand for their goods or services exceeds supply, which gives them pricing power and drives organic growth, and strong cash flow. These sectors are typically concentrated so that the demand for shares in the constituent companies exceeds the supply of stock, which appreciates in value as investors ascribe a higher rating to the company and its prospects. Flex stocks are usually cyclical stocks or franchises in transition, among which the team look for trading opportunities depending on valuation. The balance of supply and demand for these shares shifts over time as companies reduce capacity and shrink the amount of equity on the market by buying back shares. Stocks to avoid operate in industries where supply exceeds demand, which are typically experiencing long-term decline and which will not provide investors with successful growth opportunities. The supply of shares in these companies will typically exceed demand, leading to downward pressure on share prices. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 17 ### Section 2: Investment Manager’s Review Using these classifications, the team invests in a portfolio of attractively priced Unique and Flex stocks. An overview of the investment process can be seen in the diagram below: Source: Schroders. For illustrative purposes only, process subject to change. Portfolio construction Bottom up stock selection is the primary influence on the portfolio. Individual stock weightings reflect a combination of investment conviction and the team’s assessment of the stock’s likely volatility. Individual stock decisions shape sector weightings, resulting in a portfolio of around 50 of the most attractively valued companies capable of delivering dependable long-term growth in a fast-changing world. Sell discipline The team are disciplined in selling companies on their promotion to the FTSE 100. Other reasons for selling are shown below, highlighting red flags that can trigger an exit from the portfolio together with the investment thesis playing out or the share price 1 reaching peak margins or high price to earnings ratio. Promotion to the FTSE 100 Increases Frequent or in industry expensive capacity acquisitions 100 Corp Investment governance, key thesis ### people lost, or Sell played out sustainability ### challenges discipline Company Quality of acquired accounting ## SScchhrrooddeerr UUKK MMiidd CCaapp FFuunndd ppllcc Valuation – Failing to peak margin/ respond to high P/E disruption ## The selling part Investment process in action 1 The price/earnings to growth ratio (PEG ratio) is a stock’s price-to-earnings (P/E) ratio divided by the growth rate of its earnings for a specified time period. Active management The team actively engages with company management to help protect and grow clients’ capital. The team has outstanding access to the management of mid-sized UK companies because of Schroders’ scale as a large and independent asset manager, which aids their active ownership approach. Together with Schroders’ active ownership specialists the team consistently engage with boards on their policies and propose changes which emphasise shareholder alignment, a long-term view and the investment in the company by management. The team are prepared to vote against management and at times seek to effect management change, where they are unable to achieve sufficient shareholder alignment. Should engagement be unsuccessful on material issues, the team will consider adjusting position sizing or selling their position. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 18 Source: Schroders. 0 ### Section 2: Investment Manager’s Review The next table shows the number of shareholder resolutions the Company has voted on in the last year and over three years. Year ended 3 years to 2025 2025 Meetings 63 191 Resolutions 1077 3221 Votes against management 25 56 Did not vote 0 0 Source: Schroders Data shown for Company financial years ending 30 September. Responsible investment The Company delegates to its Manager the responsibility for taking ESG issues into account when assessing the selection, retention and realisation of investments. The Board expects the Manager to engage with investee companies on social, environmental and governance issues and to promote best practice. The Board expects the Manager to exercise the Company’s voting rights in consideration of these issues. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 19 ### Section 2: Investment Manager’s Review ## Investment Portfolio As at 30 September 2025 Stocks in bold are the 20 largest investments, which by value account for 55.6% (30 September 2024: 58.3%) of total investments. Investment are all equities. | | Portfolio Exposure | | Portfolio Exposure | | --- | --- | --- | --- | | | £’000 % | | £’000 % | | Industrials | | Consumer Staples | | | QinetiQ 9,891 3.7 | | Cranswick 10,291 3.9 | | | Chemring 8,541 3.2 | | Total Consumer Staples 10,291 3.9 | | Grafton 7,979 3.0 | Kier 7,658 2.9 | Healthcare | | --- | --- | | Bodycote International 7,079 2.6 | Genus 7,095 2.7 | | Mitie 6,473 2.4 | Spire Healthcare 5,343 2.0 | | Renishaw 5,350 2.0 | Puretech Health 1,097 0.4 | | Zigup 4,980 1.9 | Total Healthcare 13,535 5.1 | Clarkson 4,294 1.6 | Keller 4,222 1.6 | Basic Materials | | --- | --- | | Ibstock 3,619 1.4 | Hill & Smith 6,528 2.5 | | Paypoint 2,996 1.1 | Victrex 4,884 1.8 | | Spectris 1,434 0.5 | Elementis 2,712 1.0 | | Total Industrials 74,516 27.9 | Ecora resources 1,972 0.7 | Total Basic Materials 16,096 6.0 Financials | Man Group 6,851 2.6 | Technology | | --- | --- | | IG Group 6,785 2.5 | Mony Group 6,937 2.6 | | Paragon 6,416 2.4 | Kainos 4,526 1.7 | | Just Group 6,028 2.3 | Trustpilot 3,034 1.1 | | Lancashire 5,940 2.2 | Total Technology 14,497 5.4 | OSB 5,386 2.0 | Rathbones 4,925 1.8 | Utilities | | --- | --- | | Ip Group 3,793 1.4 | Telecom Plus 10,296 3.8 | | Ashmore 2,807 1.0 | Total Utilities 10,296 3.8 | Pollen Street 2,581 1.0 Chesnara 2,208 0.8 Oil & Gas Total Financials 53,720 20.0 Harbour Energy 3,626 1.4 Total Oil & Gas 3,626 1.4 Consumer Discretionary | Dunelm 9,209 3.4 | Real Estate | | --- | --- | | SSP Group 7,049 2.6 | Sirius Real Estate 4,399 1.6 | | Inchcape 6,198 2.3 | Savills 4,197 1.6 | | ME Group 5,556 2.1 | Safestore 3,452 1.3 | | Currys 5,026 1.9 | Workspace Group REIT 2,613 1.0 | | 4Imprint 4,063 1.5 | Total Real Estate 14,661 5.5 | Playtech 3,980 1.5 Frasers 3,824 1.4 Total investments 267,652 100 Future 3,272 1.2 Games Workshop 2,906 1.1 On the Beach Group 2,658 1.0 Crest Nicholson 2,325 0.9 Pets At Home 348 0.1 Total Consumer Discretionary 56,414 21.0 ### Edinburgh Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 20 ### Section 2: Investment Manager’s Review ### London Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 21 ### Section 3: Strategic Report ### Edinburgh Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 22 ### Section 3: Strategic Report ## Section 3: Strategic Report The Company 24 Stakeholder Engagement – Section 172 Report 28 Risk Report 31 Conclusion 34 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 23 ### Section 3: Strategic Report ## The Company ## Purpose, values, and culture The Company’s purpose is to create long-term shareholder value, account all its stakeholders and their impact on the environment in line with the investment objective. and community. The Company’s culture is driven by its values: transparency, As the Company has no employees and acts through its service engagement and rigour, with collegiate behaviour and providers, its culture is represented by the values and behaviour constructive, robust challenge. The values are all centred on of the Board and third parties to which it delegates. The Board achieving returns for shareholders in line with the Company’s aims to fulfil the Company’s investment objective by encouraging investment objective. The Board also promotes the effective a culture of constructive challenge with all key suppliers and management or mitigation of the risks faced by the Company and, openness with all stakeholders. The Board is responsible for to the extent it does not conflict with the investment objective, embedding the Company’s culture in the Company’s operations. aims for the Company’s operations to be structured, taking into ## Business model The Board has appointed Schroder Unit Trusts Limited (“SUTL” The terms of the appointment of the Manager, and the delegation or the “Manager”), to implement the investment strategy and by the Manager of investment management services to Schroder to manage the Company’s assets in line with the appropriate Investment Management Limited (“SIM” or the “Investment restrictions placed on it by the Board, including limits on the type Manager”) are described more completely in the Directors’ and relative size of holdings which may be held in the portfolio Report. The Manager also promotes the Company using its sales and on the use of gearing, cash, derivatives, and other financial and marketing teams. The Board and Manager work together to instruments as appropriate. deliver the Company’s investment objective, as demonstrated in the diagram below. ### Board OversightStrategy • Set objectives, strategy • Portfolio and risk and key performance management indicators (KPIs) • Achievement of KPIs • Appoints the Manager • Use of gearing and other service • Discount/premium and providers to achieve liquidity management objectives SHAREHOLDER through share issuance VALUE and repurchase PromotionInvestment • The Investment Manager • Marketing, PR and sales implements the investment capability of the Manager strategy by following an Competitiveness • Support from the investment process corporate broker with • Supported by strong The Board is focused on ensuring that: secondary market research and risk intervention to support • the Company remains attractive to environment discount/premium investors management • Regular reporting and • the fees and ongoing charges interaction with the Board remain competitive Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 24 ### Section 3: Strategic Report ## Investment trust status The Company is an investment trust whose Ordinary Shares are continue to conduct its affairs in a manner which will enable it to listed on the London Stock Exchange. It has been approved by retain this status. HM Revenue & Customs as an investment trust in accordance The Company is domiciled in the UK and is an investment company with section 1158 of the Corporation Tax Act 2010, by way of within the meaning of section 833 of the Companies Act 2006. The a one-off application and it is intended that the Company will Company is not a “close” company for taxation purposes. ## Continuation vote It is not intended that the Company should have a limited life The continuation vote will be proposed as an ordinary resolution but the Directors consider it desirable that the shareholders requiring a simple majority of those voting to be passed. If any should have the opportunity to review the future of the Company continuation vote is not passed, the Directors will put forward at appropriate intervals. As such, the Board has introduced a proposals for the reconstruction or winding-up of the Company continuation vote to be proposed at the AGM to be held in 2028, to shareholders for their approval within six months following the and, if passed, every three years thereafter to ensure that the date on which the continuation vote is not passed. Company remains relevant to its shareholders and in-line with best corporate governance practice. ## Investment model Investment objective investment decision taken by the Manager. The Company will The Company’s investment objective is to invest in mid cap predominantly invest in companies from the FTSE 250 Index equities with the aim of providing a total return in excess of the but may hold up to 20% of its portfolio in equities and collective FTSE 250 ex Investment Trusts Index. investment vehicles outside the benchmark index which may include equities in companies outside of the UK. The Company Investment policy may also invest in other collective investment vehicles where desirable, for example to provide exposure to specialist areas The Manager applies a high conviction approach, managing a within the universe. The Company has the ability to use gearing focused portfolio of resilient companies that are all capable of for investment purposes up to 25% of total assets. delivering excess risk-adjusted returns with rising cash flows and earnings. Fundamental research forms the basis of each ## Investment restrictions and spread of investment risk Risk in relation to the Company’s investments is spread as a result (e) no holding may represent 20% or more of the equity capital of of the Manager monitoring the Company’s portfolio with a view to any company. ensuring that the portfolio retains an appropriate balance to meet No breaches of these investment restrictions took place during the Company’s investment objective. The key restrictions imposed the financial year. on the Manager include: The investment portfolio on page 20 demonstrates that, as at (a) no more than 15% of the Company’s total net assets, at 30 September 2025, the Company held 54 investments spread the date of acquisition, may be invested in any one single over a range of industry sectors. The Board therefore believes company; that the objective of spreading investment risk has been achieved (b) no more than 10% of the value of the Company’s gross assets and will continue to be achieved as the Manager moves towards may be invested in other listed investment companies unless its target focused portfolio of around 40-50 investments. such companies have a stated investment policy not to invest The Company’s financial instruments comprise its investment more than 15% of their gross assets in other listed investment portfolio, cash balances, including those held in money market companies; funds, bank borrowings and debtors and creditors that arise (c) no more than 15% of the Company’s gross assets may be directly from its operations such as sales and purchases awaiting invested in other listed investment companies (including listed settlement and accrued income. The financial risk management investment trusts); objectives and policies arising from its financial instruments and the exposure of the Company to risk are disclosed in note 20 on (d) no more than 15% of the Company’s total net assets may be pages 71 to 74. invested in open-ended funds; and Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 25 Section 3: Strategic Report ## Key performance indicators (“KPIs”) ### The investment objective The Board measures the development and success of the Company’s business through achievement of the Company’s investment objective, which is considered to be the most significant key performance indicator for the Company. At each meeting, the Board considers a number of performance indicators to assess the Company’s success in achieving its investment objective. These are as follows: NAV total return; share price total return; share price discount/premium to NAV per share; and ongoing charges. These are classed as Alternative Performance Measures and their calculations are explained in more detail on pages 82 and 83. Performance against these indicators is reported on page 8. ### NAV and share price total return At each meeting, the Board reviews the performance of the portfolio in detail and discusses the views of the Investment managers with them. ### Share price discount/premium to NAV per share The Board reviews the level of share price discount to NAV at and between each Board meeting and buys back shares where appropriate. ### Ongoing charges The Board reviews the Company’s ongoing charges to ensure that the total costs incurred by shareholders in the running of the Company remain competitive when measured against peer group funds. An analysis of the Company’s costs, including management fees, Directors’ fees and general expenses, is submitted to each Board meeting. ### Revenue and dividend policy The Board considers the payment of an interim and final dividend annually, taking into account revenue generated during the year. The net revenue return for the year, after finance costs and taxation, was £8,648,000 (2024: £7,102,000), equivalent to a revenue return per share of 25.03 pence (2024: 20.54 pence). The Board was pleased to announce on 30 June 2025 an interim dividend of 6.3 pence per share for the year ending 30 September 2025. The Directors have recommended the payment of a final dividend for the year of 16.1 pence per share (2024: 15.5 pence) payable on 27 February 2026. The dividend will be payable to shareholders on the register on 30 January 2026 and the ex-dividend date will be 29 January 2026. ## Gearing The Company currently has in place a £30 million revolving credit facility, of which £17 million was drawn down at 30 September 2025. The facility expires on 25 February 2026. The Board of Directors expect to renew the revolving credit facility subject to this being in shareholders’ interests at the time of renewal. In rising markets the gearing amplifies increases in the NAV and in falling markets any reduction in NAV would be amplified by the gearing. The Company’s gearing continues to be operated within pre-agreed limits so that it does not exceed 25% of total assets. The flexibility to utilise gearing remains an important tool in allowing the Manager to pursue investment opportunities when appropriate. ## Promotion The Company promotes its shares to a broad range of investors including discretionary wealth managers, private investors, financial advisers and institutions which have the potential to be long-term supporters of the investment strategy. The Board seeks to achieve this through its Manager and corporate broker, which promote the shares of the Company through regular contact with both current and potential shareholders. These activities consist of investor lunches, one-on-one meetings, webinars, regional road shows and attendances at conferences. In addition, the Company’s shares are supported by the Manager’s wider marketing of investment companies targeted at all types of investors. This includes maintaining close relationships with adviser and execution-only platforms, advertising in the trade press, maintaining relationships with financial journalists and the provision of digital information on Schroders’ website. Shareholder relations are given high priority by both the Board and the Manager. The Board also seeks active engagement with investors and meetings with the Chair are offered where appropriate. Shareholders are also encouraged to sign up to the Manager’s investment trusts update, to receive information on the Company directly: http://www.schroders.com/trust-updates/. 26 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ### Section 3: Strategic Report • at least one individual on the Board is from a minority ethnic ## Corporate and social responsibility background. The Board recognises the Company’s responsibilities with The FCA defines senior Board positions as Chair, Chief Executive respect to corporate and social responsibility and engages with Officer (“CEO”), Chief Financial Officer (“CFO”) or Senior its outsourced service providers to safeguard the Company’s Independent Director (“SID”). As an investment trust with no interests. As part of this ongoing monitoring, the Board receives executive officers, the Company has no CEO or CFO. The Board reporting from its service providers with respect to their anti- has reflected the senior positions of the Chair of the Board, and bribery and corruption policies; Modern Slavery Act 2015 the SID in its diversity tables. statements; diversity policies; financial crime policies; greenhouse gas and energy usage reporting. The Board has chosen to align its diversity reporting reference date with the Company’s financial year end and proposes Diversity policy to maintain this alignment for future reporting periods. The The Board has adopted a diversity and inclusion policy. following information has been provided by each Director through Appointments and succession plans will always be based on merit the completion of a questionnaire. and objective criteria and, within this context, the Board seeks As at 30 September 2025, the Company met two of the three to promote diversity of gender, social and ethnic backgrounds, criteria including the target in relation to the number of women cognitive and personal strengths. The Board will encourage any on the Board and for at least one senior Board position to be held recruitment agencies it engages to find a range of candidates by a woman. The target for at least one individual on the Board to that meet the objective criteria agreed for each appointment. be from a minority ethnic background was not met, and the Board Candidates for Board vacancies are selected based on their is conscious that while the Directors are all independent and have skills and experience, which are matched against the balance of a diverse range of views and experience, its small composition will skills and experience of the overall Board taking into account the make these targets challenging to fully implement. Recognising criteria for the role being offered. the benefits of a diverse Board, it is intended that improving diversity will continue to be a key consideration for the Board. Statement on Board diversity – gender and ethnic There have been no changes since 30 September 2025 to the background date of publication of the annual report and financial statements. The Board has made a commitment to consider diversity when The below tables set out the gender and ethnic diversity reviewing its composition of the Board and notes the Listing Rules composition of the Board as at 30 September 2025 and at the requirements (UK LR 6.6.6(9) and (10)) regarding the targets on date of this report: Board diversity: • at least 40% of individuals on the Board are women; • at least one senior Board position is held by a woman; and Gender identity Number of senior Number Percentage positions of Board of the on the members Board Board Men 2 50% 1 Women 2 50% 1 Not specified/prefer not to say – – – Ethnic background Number of senior Number Percentage positions of Board of the on the members Board Board White British or other White groups 4 100% 2 Mixed/Multiple Ethnic Groups – – – Asian/Asian British – – – Black/African/Caribbean/Black British – – – Other ethnic group, including Arab – – – Financial crime policy Modern Slavery Act 2015 The Company continues to be committed to carrying out its As an investment trust, the Company does not provide goods business fairly, honestly and openly. The Company operates or services in the normal course of business and does not a financial crime policy, covering bribery and corruption, tax have customers. Accordingly, the Directors consider that the evasion, money laundering, terrorist financing and sanctions, Company is not required to make any slavery or human trafficking as well as seeking confirmations that the Company’s service statement under the Modern Slavery Act 2015. providers’ policies are operating soundly. Greenhouse gas emissions and energy usage As the Company outsources its operations to third parties, it has no significant greenhouse gas emissions and energy usage to report. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 27 ### Section 3: Strategic Report ## Stakeholder engagement – Section 172 Report ### During the year under review to 30 September 2025, the Board discharged its duty under ### Section 172 of the Companies Act 2006 to promote the success of the Company for the ### benefit of its members as a whole, having regard to the interests of all stakeholders. 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 Investment Manager, other service providers, investee companies, and the Company’s lender. The table below explains how the Directors have engaged with all stakeholders during the year and outlines the key activities undertaken. Shareholders | Significance | Engagement | 2024/2025 application | | --- | --- | --- | | Continued shareholder support | AGM: The Company welcomes attendance | During the year, the Board met with a number of | | and engagement are critical | and participation from shareholders at the | shareholders and in March 2025, the Company | | to the continuing existence of | AGM. Shareholders have the opportunity | announced the following measures to support | | the business and the delivery | to meet the Directors and the Investment | shareholders: | | of the long-term strategy of its | Manager and to ask questions. The Board | | • Management fee reduction | business. | values the feedback it receives from | | | --- | --- | --- | | | shareholders which is incorporated into | With effect from 1 April 2025, the fee will be | | | Board discussions. | calculated based on the lower of (1) 0.60% per | annum of market capitalisation; or (2) the net asset Publications: The annual and half year value-based fee arrangement. Please refer to the results presentations, as well as factsheets, Chair’s Statement on page 6 for further details. are available on the Company’s web pages | with their availability announced via the | • Buyback policy | | --- | --- | | London Stock Exchange. Feedback and/ | The Board has used its authority to buy back shares | | or questions received from shareholders | more actively to inhibit a wide discount to NAV from | | enable the Company to evolve its reporting | developing in the Company’s shares in the future. | | which, in turn, helps to deliver transparent | The Company repurchased 269,000 ordinary shares | | and understandable updates. | during the financial year to be held in treasury. The | Board will continue to monitor the discount closely Shareholder communication: The and will take appropriate action as required. Since Investment Manager communicates with the year end, the Company repurchased a further shareholders periodically. All investors 232,500 ordinary shares to be held in treasury. are offered the opportunity to meet the Chair, Senior Independent Director, or • Continuation Vote other Board members without using The Board introduced a continuation vote to be the Manager or Company Secretary as proposed at the AGM to be held in 2028, and, if a conduit, by writing to the Company’s passed, every three years thereafter to ensure that registered office. The Board also the Company remains relevant to its shareholders corresponds with shareholders by letter and in-line with best corporate governance practice. and email. The Board receives regular feedback from its broker on investor At the AGM in 2025, questions and feedback from engagement and sentiment. shareholders were welcomed. The Board, along with the Investment Manager, look forward to meeting Investor Relations updates: At every and interacting with more shareholders at the Board meeting, the Directors receive forthcoming AGM in February 2026. updates on share trading activity, share price performance and any shareholders’ The Company’s web pages continued to be refreshed feedback, as well as any publications and enhanced during the year to optimise the or comments in the press. To gain a user experience for shareholders and investors. deeper understanding of the views of Shareholders can, via the Company’s web pages, its shareholders and potential investors, subscribe to the Schroders investment trusts the Manager also undertakes investor newsletter to receive regular updates on the Company. roadshows. The Investment Manager engaged with a number of the Company’s shareholders and investors during the year and regular feedback was provided to the Board. A number of promotional activities were undertaken during the year including Investment Manager interviews, webinars, and coverage in key publications. The Board continued to work with Kepler on promoting the Company through its research notes which are published once a year. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 28 ### Section 3: Strategic Report The Investment Manager | Significance | Engagement | 2024/2025 application | | --- | --- | --- | | Holding the Company’s shares | Maintaining a close and constructive | Representatives of the Investment Manager attended | | offers investors a liquid | working relationship with the Investment | each Board meeting to provide an update on the | | investment vehicle through | Manager is crucial as the Board and the | investment portfolio along with presenting on | | which they can obtain exposure | Investment Manager both aim to continue | macroeconomic issues. | | to the Company’s diversified | to achieve consistent, long-term returns | | The portfolio activities undertaken by the Investment portfolio of investments. in line with the investment objective. The Manager and the impact of decisions affecting Board invites the Investment Manager to The Investment Manager’s investment performance are set out in the attend all Board and certain Committee performance is critical for Investment Manager’s Review on pages 12 to 16. meetings in order to update the Directors the Company to deliver its on the performance of the investments investment strategy successfully and the implementation of the investment and meet its objective. strategy and objective. Important components in the Board’s collaboration with the Investment Manager are: • Encouraging open discussion with the Board; • Recognising that the interests of shareholders and the Investment Manager (as well as of its other clients) are, for the most part, well aligned, adopting a tone of constructive challenge, balanced when those interests are not fully congruent by robust negotiation of the Investment Manager’s terms of engagement; and • Drawing on Directors’ individual experience to support the Manager in its monitoring and change management of portfolio companies, for the benefit of all of the Investment Manager’s clients. The Management Engagement Committee reviews the performance of the Investment Manager, its remuneration, and the discharge of its contractual obligations at least annually. Investee companies | Significance | Engagement | 2024/2025 application | | --- | --- | --- | | The Board is committed to | The Investment Management team | The Board received regular updates on engagement | | responsible investing and | conducts face-to-face and/or virtual | with investee companies from the Investment | | actively monitors the activities | meetings with the management teams | Manager at its Board meetings. | | of investee companies through | of all investee companies to understand | | During the year, the Investment Manager engaged its delegation to the Investment current trading and prospects for their with many of its investee companies and voted at Manager. businesses, and to ensure that their ESG shareholder meetings (further details can be found investment principles and approach are on page 19). understood. The Investment Manager has discretionary powers to exercise the Company’s voting rights on resolutions proposed by the investee companies within the Company’s portfolio. The Investment Manager report to the Board on stewardship (including voting) issues and the Board will question the rationale for voting decisions made. By active engagement and exercising voting rights, the Investment Manager actively works with companies to improve corporate standards, transparency and accountability. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 29 ### Section 3: Strategic Report Lender | Significance | Engagement | 2024/2025 application | | --- | --- | --- | | Availability of funding and | Considering how important the availability | Gearing is monitored and strict restrictions on | | liquidity are crucial to the | of funding is, the Company aims to | borrowings are imposed: gearing continues to | | Company’s ability to take | demonstrate to lenders that it is a well | operate within pre-agreed limits so as not to exceed | | advantage of investment | managed business and, in particular, that | 25% of total assets. | | opportunities as they arise. | the Board focuses regularly and carefully on | | The Board entered into a renewed revolving credit the management of risk. facility agreement with the Bank of Nova Scotia on The Manager manages the relationship 26 February 2025. with the Company’s lender and reports to the Board at each meeting as and when required for renewals of terms or negotiation of loan covenants. The Manager provides a monthly statement of compliance of the loan covenants to the lender. Other service providers | Significance | Engagement | 2024/2025 application | | --- | --- | --- | | In order to operate as an | The Board maintains regular contact with | Under delegated authority from the Board, the | | investment trust with a listing | its key external providers, both through | Management Engagement Committee reviewed all | | on the London Stock Exchange, | the Board and Committee meetings, as | material third party service providers. | | the Company relies on a diverse | well as outside of the regular meeting | | During the year the Board considered the potential range of advisers to support cycle. Their advice, as well as their needs benefits of changing the Company’s provider of meeting all relevant obligations. and views, are routinely taken into account. depositary and custodian services. The Board met with and reviewed J.P. Morgan Europe Limited and agreed that it was in the best interest of the Company to change provider to J.P. Morgan Europe Limited with effect from 3 October 2025. The Board considered the ongoing appointments of its other service providers to be in the best interests of the Company and its shareholders as a whole and will continue to monitor their progress in the year ahead. Wider society and the environment | Significance | Engagement | 2024/2025 application | | --- | --- | --- | | Whilst strong long-term | The Board maintains regular contact with | Further details of the ESG practices can be found in | | investment performance is | its key external providers, both through | the Investment Process and Approach section of this | | essential for an investment trust, | the Board and Committee meetings, as | report. | | the Board recognises that to | well as outside of the regular meeting | | | provide an investment vehicle | cycle. Their advice, as well as their needs | | | that is sustainable over the long- | and views, are routinely taken into account. | | term, both it and the Investment Manager must have regard to ethical and environmental issues that impact society. Hence ESG considerations are integrated into the Investment Manager’s investment process and will continue to evolve. 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 September 2025: • Announcing a number of strategic initiatives in March 2025, designed to further strengthen the Company’s investment proposition and deliver value for all of the Company’s shareholders. • Resolving that the ongoing appointment of the Manager on the terms of the AIFM agreement, including the fee reduction, was in the best interests of shareholders as a whole. • Appointing J.P. Morgan Europe Limited as the Company’s provider of depositary and custodian service, after considering how the potential benefits would best serve the Company’s interests. The transition was approved to take place following the financial year end, with the migration of depositary and custodian services commencing on 3 October 2025. • The Board has declared a final dividend of 16.1 pence per share for the year ended 30 September 2025. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 30 ### Section 3: Strategic Report ## Risk Report ### 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 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. Risk assessment and internal controls review the year; and the risks posed by volatile markets, and inflation by the Board and corresponding interest levels which could affect the asset class. However, these are not factors which explicitly impacted the Risk assessment includes consideration of the scope and Company’s performance. These risks are seen as exacerbating quality of the systems of internal control operating within key existing risks and have been incorporated in the macro factors, service providers, and ensures regular communication of the including the geopolitical/economic environment and climate results of monitoring by such providers to the Audit and Risk change risk section in the table on the following pages. Committee, including the incidence of significant control failings or weaknesses that have been identified at any time and the The Board considered in detail whether there were any material extent to which they have resulted in unforeseen outcomes or emerging risks and has included the development of artificial contingencies that may have a material impact on the Company’s intelligence as emerging risk. performance or condition. No significant control failings or weaknesses were identified Although the Board believes that it has a robust framework of from the Audit and Risk Committee’s ongoing risk assessment internal controls in place this can provide only reasonable, and throughout the financial year and up to the date of this report. not absolute, assurance against material financial misstatement The Board is satisfied that it has undertaken a detailed review or loss and is designed to manage, not eliminate, risk. of the risks facing the Company and that the internal control environment continues to operate effectively. Both the principal risks and uncertainties and the monitoring system are also subject to robust review at least annually. The last Actions taken by the Board and, where appropriate, its assessment took place in November 2025. Committees, to manage and mitigate the Company’s principal risks and uncertainties are set out in the table below. The During the year, the Board discussed and monitored a number “Change” column on the right highlights at a glance the Board’s of risks that could potentially impact the Company’s ability to assessment of any increases or decreases in risk during the year meet its strategic objectives. The Board receives updates from after mitigation and management. The arrows show the risks as the Investment Manager, Company Secretary, and other service increased, decreased, or unchanged. providers on emerging risks that could affect the Company. The Board was mindful of the evolving global environment during Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 31 ### Section 3: Strategic Report Risk Mitigation and management Change Strategy Market and Economic The Board, in conjunction with the Manager, considers Changing economic, monetary, and market changes in economic and monetary conditions and market conditions, leading to a significant fall in equity valuations relative to history and other assets. markets, could adversely impact the value of the The Board reviews the use (and cost and availability) of Company’s underlying investments. The use of gearing, with strict restrictions on borrowing imposed so as gearing (borrowing) can amplify both gains and not to exceed 25% of total assets. losses. Political and Policy The Board receives regular updates of political/policy risks Political risks, such as diplomatic tensions, trade wars, from the Manager, and considers relevant issues and UK and military conflict, and changes in UK public policy, public policy changes, to the extent that they apply to the could impact the Company’s strategy, objectives, and Company. performance. Company Objective The Board continually monitors the Company’s success in Risk that the Company’s investment objective, key meeting its stated objectives and periodically reviews the performance indicators, marketing strategy, and cost appropriateness of the Company’s investment remit. base are not aligned with shareholders’ objectives, During the year, the Board introduced strategic initiatives resulting in the Company being unattractive to to strengthen and align the Company’s objectives with the investors and a wide discount in the share price to interests of shareholders. NAV per share. The Manager’s and Corporate Broker’s marketing and distribution activities are reviewed at each meeting. Share price discount to NAV per share and liquidity are monitored daily by the Board, and the use of buyback authorities is regularly reviewed. Service provider fees are subject to periodic benchmarking to ensure competitiveness. Annual consideration of the management fee is undertaken by the MEC. The cost and use of gearing is continually monitored with strict restrictions on borrowing imposed. Investment Investment Performance The Board reviews the Manager’s compliance with agreed Investment performance may underperform the investment restrictions and guidelines, the portfolio’s risk Company’s investment objective, the market, and/or profile, portfolio activity, performance against investment the peer group. objectives, strategy and peers; and whether appropriate strategies are employed to mitigate any negative impact of substantial changes in markets. The Board routinely evaluates thematic and factor risks, stock selection, performance attribution, and considers ESG issues and the impact of gearing and buybacks on performance. Shareholder Register and Engagement The Board and Manager regularly consider shareholders’ The Company is unable to communicate directly views and look to implement initiatives that benefit all with shareholders, who hold shares via platforms, or shareholders. encourage them to vote at general meetings. If these Through general communications in Company documents, shareholders do not vote, results may represent the the Board seeks to encourage voting and identify ways view of a small number of shareholders, and any of assisting shareholders to vote through platforms, for decisions reached may not reflect the views of, or be example, by referring shareholders to guidance made in the best interests of, the majority of the Company’s available by the Association of Investment Companies. shareholders. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 32 ### Section 3: Strategic Report Risk Mitigation and management Change Operational Third Party Service Providers The Board agrees contractual arrangements with service The Company relies on external service providers providers and reviews annual audited internal controls for key functions. Risks include control failures, poor reports from key service providers, including confirmation of performance, and business disruption. business continuity arrangements and IT controls. All Board members may attend the Manager’s Internal Controls Day to meet directly with third-party service providers. Cyber Security The Board receives updates from the Manager’s internal The Company’s operational structure means all cyber security team covering the cyber security framework, cyber risk arises at its third-party service providers. staff resources and training, security system testing and any Cyber-attacks could lead to operational disruption issues of concern. and the misplacement or loss of assets, personal and Cyber-security is monitored as part of the annual review of confidential information. the internal controls of its service providers. Key Personnel and Succession The Board considers the Manager’s key man risk and Loss of the Investment Manager or other key succession plans and requests the Manager to confirm personnel could negatively impact investor sentiment succession planning arrangements as part of the annual and widen the discount to NAV. evaluation of the Manager by the Management Engagement Committee (“MEC”). Regulatory Regulatory, Legal, and Tax Compliance The Board monitors compliance through reports from the Failure to comply with UK Listing Rules, Companies Manager and other service providers. Act, investment trust tax status (section 1158 The Board reviews financial information at each board of the Corporation Tax Act 2010), or maintain meeting and receives regular presentations by the proper accounting records could have adverse Manager’s Risk and internal audit function. consequences. Financial Reporting and Information Errors or omissions by the Manager or other service Errors or irregularities in published information (e.g., providers are brought to the attention of the Board as soon NAVs, reports) may occur, especially during transitions as they are identified. between service providers. Risks arising from the transition between service providers were mitigated by dual-running and testing of systems prior to handover, and regular communications with the Board. Half Year and Annual Reports are subject to intensive review by the Audit and Risk Committee and the Board. Emerging risks Artificial Intelligence (“AI”) The development of AI presents potential risks and opportunities to businesses in almost every sector. The Board acknowledges that the risks associated with AI are challenging to quantify at this stage; however, AI is regarded as an emerging risk, particularly given its potential to distort asset valuations. The Board, together with the Manager and Investment Manager, will continue to monitor developments in this area. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 33 ### Section 3: Strategic Report ## Conclusion Viability statement The Board monitors the portfolio risk profile, limits imposed The Directors have assessed the viability of the Company over a on gearing, counterparty exposure, liquidity risk and financial five year period, taking into account the Company’s position as at controls at its quarterly meetings. 30 September 2025 and the potential impact of the principal and Although there continue to be regulatory changes which could emerging risks and uncertainties it faces for the review period. increase costs or impact revenue, the Directors do not believe The Directors have assessed the Company’s operational resilience that this would be sufficient to affect its viability. and they are satisfied that the Company’s outsourced service providers will continue to operate effectively. It is not intended that the Company should have a limited life but the Directors consider it desirable that the shareholders A period of five years has been chosen as the Board believes should have the opportunity to review the future of the Company that this reflects a suitable time horizon for strategic planning, at appropriate intervals. As such, the Board has introduced a taking into account the investment policy, liquidity of investments, continuation vote to be proposed at the AGM to be held in 2028, potential impact of economic cycles, nature of operating costs, and, if passed, every three years thereafter to ensure that the dividends and availability of funding. This time period also reflects Company remains relevant to its shareholders and in-line with the average holding period of an investment. best corporate governance practice. The continuation vote will be In its assessment of the viability of the Company, the Directors proposed as an ordinary resolution requiring a simple majority of have considered each of the Company’s principal risks and those voting to be passed. If any continuation vote is not passed, uncertainties detailed on pages 32 and 33 and in particular the Directors will put forward proposals for the reconstruction or the impact of a significant fall in regional equity markets on winding-up of the Company to shareholders for their approval the value of the Company’s investment portfolio. The Directors within six months following the date on which the continuation have also considered the Company’s income and expenditure vote is not passed. In concluding on the viability, the Directors projections and the fact that the Company’s investments comprise have made the assumption that shareholders will vote to continue readily realisable securities which can be sold to meet funding the Company. requirements if necessary. The Board has assumed that the business model of a closed The Directors have also considered a stress test which represents ended investment company, as well as the Company’s investment a severe but plausible scenario along with movement in foreign objective, will continue to be attractive to investors. The Directors exchange rates. This scenario assumes a severe stock market also considered the beneficial tax treatment the Company is collapse and/or exchange rate movements at the beginning eligible for as an investment trust. If changes to these taxation of the five year period, resulting in a 50% fall in the value of arrangements were to be made it would affect the viability of the the Company’s investments and investment income and no Company to act as an effective investment vehicle. subsequent recovery in either prices or income in the following Based on the above the Directors have concluded that there is a five years. It is assumed that the Company continues to pay an reasonable expectation that the Company will be able to continue annual dividend in line with current levels and that the borrowing in operation and meet its liabilities as they fall due over the five facility is repaid through the proceeds of equity sales. year period of their assessment. The Company’s investments comprise highly liquid, large, listed companies and so its assets are readily realisable securities and Going concern could be sold to meet funding requirements or the repayment of The Directors have assessed the principal risks, the impact of any the gearing facility should the need arise. There is no expectation emerging risks and uncertainties and the matters referred to that the nature of the investments held within the portfolio will be in the viability statement. Based on the work the Directors have materially different in the future. performed, they have not identified any material uncertainties relating to events or conditions that, individually or collectively, The Company’s loan facility is due to expire in February 2026. may cast significant doubt on the Company’s ability to continue as If acceptable terms are available from the existing lenders, a going concern for a period of at least 12 months from the date or any alternative, the Company would expect to continue to the financial statements were authorised for issue. access an equivalent facility. However, should these terms not be forthcoming, the outstanding borrowing attributable to this By order of the Board facility would be repaid through the proceeds of equity sales. The operating costs of the Company are predictable and modest in comparison with the assets and there are no Schroder Investment Management Limited capital commitments foreseen which would alter that position. Company Secretary Furthermore, the Company has no employees and consequently 26 November 2025 no redundancy or other employment related liabilities. The Board reviews the performance of the Company’s service providers regularly, including the Manager, along with internal controls reports to provide assurance regarding the effective operation of internal controls as reported on by their reporting accountants. The Board also considers the business continuity arrangements of the Company’s key service providers. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 34 ### Section 3: Strategic Report ### London Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 35 ### Section 4: Governance ### London Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 36 ### Section 4: Governance ## Section 4: Governance Board of Directors 38 Directors’ Report 40 Audit and Risk Committee Report 43 Management Engagement Committee Report 46 Nomination Committee Report 47 Remuneration Committee Report 49 Directors’ Remuneration Report 50 Statement of Directors’ Responsibilities in respect of the Annual Report and Financial Statements 53 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 37 ### Section 4: Governance ## Board of Directors ## All Directors are Wendy ColquhounHarry Morley ### non-executive and Status: Senior Independent DirectorStatus: Chair of the Board ### independent of the ### Manager. All Directors ### are members of the Audit Length of service: two years - appointed as a Length of service: five years – appointed as Director in September 2023. a Director in January 2020. ### and Risk Committee, the ### Management Engagement Experience: Mr Morley was CEO of Armajaro Experience: Ms Colquhoun is Senior Asset Management LLP and was the Independent Director of Capital Gearing ### Committee, the co-founder and CFO of Tragus Holdings Trust plc, Senior Independent Director ### Remuneration Committee, Ltd, owner of Café Rouge and Bella Italia of Murray International Trust plc, and restaurant chains. He also worked in the an independent non-executive Director ### and the Nomination shipping industry for P&O. He qualified as a of Temple Bar Investment Trust Plc. She ### Committee. chartered accountant with Price Waterhouse. was formerly a qualified solicitor and a He is a Trustee of the Ascot Authority and a senior corporate partner at CMS Cameron non-executive Director of Cadogan Group McKenna Nabarro Olswang LLP where she Limited and related companies. specialised in financial services. She has extensive experience of investment trusts having advised investment trust clients for over 25 years. Committee membership: Audit and Risk Committee membership: Audit and Risk Committee, Management Engagement Committee, Management Engagement Committee (Chair), Nomination Committee Committee, Nomination Committee, (Chair), Remuneration Committee. Remuneration Committee. Contribution to the Board and its Contribution to the Board and its Committees: Mr Morley enhances the Board Committees: Ms Colquhoun brings extensive with his diverse executive experience. He has expertise to the Board with over two decades extensive retail and consumer knowledge and of experience advising investment trust significant financial and commercial expertise. boards. Her background as a qualified His experience as a non-executive Director solicitor and senior corporate partner at provides the Board with valuable strategic and CMS Cameron McKenna Nabarro Olswang operational insights. LLP, specialising in financial services, further equips her with invaluable legal and transactional insights for the Board. | Remuneration for the year ended | | Remuneration for the year ended | | | --- | --- | --- | --- | | 30 September 2025: £43,750 per annum. | | 30 September 2025: £29,500 per annum. | | | | 1,2 | | 1 | | Number of shares held: 17,500 | | Number of shares held: 2,000 | | 1 Shareholdings are as at 30 September 2025. Full details of Directors’ shareholdings are set out in the Directors’ Remuneration Report on page 52. 2 Mr Morley’s shareholdings as at 30 September 2025 includes the holding of a connected person. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 38 ### Section 4: Governance ## Helen Galbraith Richard Curling Status: Director and Chair of the Audit Status: Director and Chair of the and Risk Committee Remuneration Committee | Length of service: three years – appointed | Length of service: less than one year – | | --- | --- | | as a Director in April 2022. | appointed as a Director in February 2025. | | Experience: Ms Galbraith is Audit Chair of | Experience: Mr Curling is a highly | | CT UK High Income Trust plc, Audit Chair of | experienced investment trust Director | | Invesco Global Equity Income Trust plc, and | and fund manager, who has specialised in | | Chair of Orwell Housing Association. She was | investment companies for over 10 years. | | formerly Head of Investor Relations at Aviva | During his career in fund management, | | plc, Head of Global Equities at Aviva Investors | Richard has managed many different types | | and has over 20 years’ experience in the | of portfolios including global equities, | | insurance and asset management industry. | income funds, small cap funds and UK equity | | She is a Chartered Financial Analyst and a | funds for a variety of retail, institutional | | passionate advocate of financial education | and governmental clients both in the UK | | for children having established an online | and overseas. Mr Curling is currently the | | platform. | Chairman of Montanaro European Smaller | Companies Trust plc, and a non-executive Director of The Monks Investment Trust PLC. Committee membership: Audit and Risk Committee membership: Audit and Risk Committee (Chair), Management Engagement Committee, Management Engagement Committee, Nomination Committee, Committee, Nomination Committee, Remuneration Committee. Remuneration Committee (Chair). Contribution to the Board and its Contribution to the Board and its Committees: Ms Galbraith brings to the Board Committees: Mr Curling brings extensive extensive asset management knowledge. experience in investment trusts and fund Her roles as Audit Chair and Chair at other management to the Board, drawing on over a organisations provide her with significant decade of industry expertise. His oversight of experience and expertise when Chairing the a wide range of portfolios and his leadership Audit and Risk Committee for the Company. as both a Chairman and non-executive Her previous roles, coupled with her Chartered Director provide valuable perspective to Board Financial Analyst qualification, enhance the and Committee discussions. Board’s financial and strategic capabilities. Additionally, her involvement in the social housing sector underscores her dedication to societal impact. | Remuneration for the year ended | | Remuneration for the year ended | | | --- | --- | --- | --- | | 30 September 2025: £35,500 per annum. | | 30 September 2025: £29,500 per annum. | | | | 1 | | 1 | | Number of shares held: 5,500 | | Number of shares held: 5,000 | | 1 Shareholdings are as at 30 September 2025. Full details of Directors’ shareholdings are set out in the Directors’ Remuneration Report on page 52. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 39 ### Section 4: Governance ## Directors’ Report ## The Directors submit their report and the audited Financial Statements of the ## Company for the year ended 30 September 2025. Directors and officers Role and operation of the Board The Board of Directors, listed on pages 38 and 39, is the Chair Company’s governing body; it sets the Company’s strategy and The Chair is an independent non-executive Director who is collectively responsible to shareholders for the Company’s is responsible for leadership of the Board and ensuring its long-term success. The Board is responsible for appointing and effectiveness in all aspects of its role. The other significant subsequently monitoring the activities of the Investment Manager commitments of both are detailed on pages 38 and 39. and other service providers to ensure that the investment objective of the Company continues to be met. The Board also Senior Independent Director (“SID”) ensures that the Manager adheres to the investment restrictions The SID acts as a sounding board for the Chair, meets with set by the Board and acts within the parameters set by it in major shareholders as appropriate, provides a channel for any respect of any gearing. The Strategic Report on pages 24 to 33 shareholder concerns regarding the Chair and takes the lead in sets out further detail of how the Board reviews the Company’s the annual evaluation of the Chair by the independent Directors. strategy, risk management and internal controls and also includes other information required for the Directors’ Report, and is Company Secretary incorporated by reference. Schroder Investment Management Limited provides company secretarial support to the Board and is responsible for assisting A formal schedule of matters specifically reserved for decision the Chair with Board meetings and advising the Board with by the Board has been defined and a procedure adopted for respect to governance. The Company Secretary also manages the Directors, in the furtherance of their duties, to take independent relationship with the Company’s service providers, except for the professional advice at the expense of the Company. Manager. Shareholders wishing to lodge questions in advance of The Chair ensures that all Directors receive relevant management, the AGM are invited to do so by writing to the Company Secretary regulatory and financial information in a timely manner and that at the address given on the outside back cover, or by email to: they are provided, on a regular basis, with key information on the amcompanysecretary@schroders.com. Company’s policies, regulatory requirements and internal controls. The Board meets at least quarterly and receives and considers Corporate Governance Statement reports regularly from the Manager and other key advisers and ad The Company is committed to high standards of corporate hoc reports and information are supplied to the Board as required. governance and has implemented a framework for corporate governance which it considers to be appropriate for an Four Board meetings are usually scheduled each year to deal investment trust. with matters including: the setting and monitoring of investment strategy; approval of borrowings and/or cash positions; review The Financial Conduct Authority (“FCA”) requires all UK listed of investment performance; the level of premium or discount companies to disclose how they have applied the principles and of the Company’s shares to NAV per share and promotion of complied with the provisions of the UK Corporate Governance the Company; and services provided by third parties. Additional Code 2018 (the “UK Code”) issued by the Financial Reporting meetings of the Board are arranged as required. Council (“FRC”). The Board has approved a policy on Directors’ conflicts of interest. The Board has considered the principles and provisions of the Under this policy, Directors are required to disclose all actual Association of Investment Companies (“AIC”) Code of Corporate and potential conflicts of interest to the Board as they arise for Governance 2019 (the “AIC Code”) which addresses those set out consideration and approval. The Board may impose restrictions or in the UK Code, as well as setting out additional provisions on refuse to authorise such conflicts if deemed appropriate. issues that are of specific relevance to the Company. No Directors have any connections with the Manager, shared The Board considers that reporting against the principles and directorships with other Directors or material interests in any provisions of the AIC Code, which has been endorsed by the FRC, contract which is significant to the Company’s business. provides more relevant information to shareholders. The AIC Code is available on the AIC website (www.theaic.co.uk). Committees In order to assist the Board in fulfilling its governance It includes an explanation of how the AIC Code adopts the responsibilities, it has delegated certain functions to Committees. principles and provisions set out in the UK Code to make them The roles and responsibilities of these Committees, together with relevant for investment companies. details of work undertaken during the year under review, are The Board confirms that the Company has complied with the outlined over the next few pages. AIC Code, in so far as they apply to the Company’s business, The reports of the Audit and Risk, Management Engagement, throughout the year under review. As all of the Company’s day-to- Nomination, and Remuneration Committees are incorporated day management and administrative functions are outsourced to into and form part of the Directors’ Report. Each Committee’s third parties, it has no executive directors, employees or internal effectiveness was assessed, and judged to be satisfactory, as part operations and therefore has not reported in respect of the of the Board’s annual review of the Board and its Committees. following UK Code Provisions: • the role of the executive Directors and senior management; • the need for an internal audit function; and • executive Directors’ remuneration. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 40 ### Section 4: Governance Directors’ attendance at meetings The number of scheduled meetings of the Board and its Committees held during the financial year and the attendance of individual Directors is shown below. Whenever possible, all Directors attend the AGM. Audit Management and Risk Engagement Nomination Remuneration Board Board Committee Committee Committee Committee Harry Morley (Chair) 4/4 2/2 1/1 1/1 1/1 Wendy Colquhoun 4/4 2/2 1/1 1/1 1/1 1 Richard Curling 3/4 1/2 1/1 1/1 1/1 Helen Galbraith 4/4 2/2 1/1 1/1 1/1 2 | Robert Talbut | 2/4 1/2 0/1 0/1 0/1 | | --- | --- | | 1 Richard Curling was appointed to the Board on 24 February 2025. | | | 2 Robert Talbut retired from the Board on 24 February 2025. | | In addition to the above meetings, the Board met several times on an ad-hoc basis during the year. Key service providers The management fee payable in respect of the year ended 30 September 2025 amounted to £1,520,000 (2024: £1,650,000), The Board has adopted an outsourced business model and has paid quarterly in arrears. appointed the following key service providers: The Manager is also entitled to receive a fee for providing Manager administrative, accounting and company secretarial The Company is an alternative investment fund as defined by the services to the Company. For these services, for the year AIFM Directive and has appointed Schroder Unit Trusts Limited ended 30 September 2025, it received a fee of £181,000 (“SUTL”) as the Manager in accordance with the terms of an (2024: £176,000). The fee continues to be subject to annual alternative investment fund manager (“AIFM”) agreement. The adjustment in line with changes in the Retail Prices Index. AIFM agreement, which is governed by the laws of England and Details of all amounts payable to the Manager are set out in note Wales, can be terminated by either party on 12 months’ notice 4 on page 66. 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 The Board has reviewed the performance of the Manager for the notice had been given by either party. year under review. The Board is satisfied that the Manager has the appropriate depth and quality of resource to deliver good SUTL is authorised and regulated by the FCA and provides returns over the longer term and that the continued appointment portfolio management, risk management, accounting and of the Manager on the terms agreed is in the best interest of the company secretarial services to the Company under the AIFM Company and its shareholders. agreement. Part of the fund accounting and administration activities are currently performed by HSBC Securities Services Depositary (UK) Limited. The Manager also provides general marketing With effect from 3 October 2025, J.P. Morgan Europe Limited support for the Company and manages relationships with key were appointed to provide depositary and custodian services to investors, in conjunction with the Chair, other Board members or the Company, replacing HSBC Bank plc who had provided these the corporate broker as appropriate. The Manager has delegated services for the year under review and up until 3 October 2025. investment management, marketing, administrative, accounting J.P. Morgan Europe Limited, which is authorised by the Prudential and company secretarial services to another wholly owned Regulation Authority and regulated by the FCA and the Prudential subsidiary of Schroders plc. Regulation Authority, carries out certain duties of a depositary The Manager has in place appropriate professional indemnity specified in the AIFM Directive including, in relation to the cover. Company: The Schroders Group manages £816.7 billion (as at 30 September • safekeeping of the assets of the Company which are entrusted 2025) on behalf of institutional and retail investors, financial to it; institutions and high net worth clients from around the world, • cash monitoring; and invested in a broad range of asset classes across equities, fixed • oversight of the Company and the Manager to the extent income, multi-asset and alternatives. described in the AIFM Directive. Fees payable to the Manager The Company, the Manager and the depositary may terminate During the year, the Board agreed a management fee reduction the depositary agreement at any time by giving 90 days’ notice in with Schroder Unit Trusts Limited. The previous management writing. The depositary may only be removed from office when a fees were (1) 0.65% per annum on net assets plus short term new depositary is appointed by the Company. borrowings, less cash up to £250 million and; (2) 0.60% per annum of any such amount in excess of £250 million. With Registrar effect from 1 April 2025, the reduced management fee will be Equiniti Limited (“Equiniti”) has been appointed as the Company’s calculated based on the lower of (1) 0.60% per annum of market registrar. Equiniti’s services to the Company include share register capitalisation; or (2) the net asset value-based fee arrangement. maintenance (including the issuance, transfer and cancellation Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 41 ## Section 4: Governance of shares as necessary), acting as agent for the payment of any dividends, management of company meetings (including the registering of proxy votes and scrutineer services as necessary), handling shareholder queries and correspondence and processing corporate actions. ### Share capital and substantial share interests As at the date of this report, the Company had 36,143,690 Ordinary Shares of 25p in issue. 2,238,000 shares were held in treasury. Accordingly, the total number of voting rights in the Company at the date of this report is 33,905,690. Details of changes to the Company's share capital during the year under review are given in note 14 on page 69. All shares in issue rank equally with respect to voting, dividends and any distribution on winding up. There are no restrictions concerning the transfer of securities in the Company; no special rights with regard to control attached to securities; no restrictions on voting rights; no agreements between holders of securities regarding their transfer known to the Company; and no agreements to which the Company is a party that might change or fall away on a change of control or trigger any compensatory payments for Directors following a successful takeover bid. As at 30 September 2025, the Company has received notifications in accordance with the FCA Disclosure Guidance and Transparency Rule 5.1.28 of the following interests in 3% or more of the voting rights attached to the Company's issued share capital. The Company is reliant on investors to comply with these regulations, and certain investors may be exempted from providing these. As such, this should not be relied on as an exhaustive list of shareholders holding above 3% of the Company's voting rights. | Board | Number of shares held^{1} | % of voting rights^{2} | | --- | --- | --- | | Hargreaves Lansdown, stockbrokers | 4,322,751 | 12.50 | | Interactive Investor | 3,116,152 | 9.01 | | Saba Capital Management^{2} | 5,161,594 | 7.60 | | Evelyn Partners (Retail) | 2,584,069 | 7.47 | | Redmayne Bentley, stockbrokers | 1,987,412 | 5.75 | | Charles Stanley | 1,724,654 | 4.98 | | AJ Bell, stockbrokers (EO) | 1,414,414 | 4.09 | | Rathbones | 1,191,291 | 3.44 | | Allspring Global Investments | 1,108,303 | 3.20 | $^{1}$ As at date of notification. $^{2}$ As of the 15 September 2025, Saba Capital Management LP held 7.60% by way of direct shareholdings, and a further 7.44% through financial instruments. There have been no changes to the major interests in the Company's shares since year end. ### Provision of information to the auditor The Directors at the date of approval of this report confirm that, so far as each of them is aware, there is no relevant audit information of which the Company's auditors are 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 auditors are aware of that information. ### Directors' and officers' liability insurance and indemnities Directors' and officers' liability insurance cover was in place for the Directors throughout the year. The Company's Articles of Association provide, subject to the provisions of UK legislation, an indemnity for Directors in respect of costs which they may incur relating to the defence of any proceedings brought against them arising out of their positions as Directors, in which they are acquitted or judgement is given in their favour by the court. This is a qualifying third party indemnity 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 26 November 2025 42 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ### Section 4: Governance ## 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 below: Half year Audit Audit Annual Review of external report planning report auditors All Directors are members of the Committee. Helen Galbraith 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. 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 activities of the Committee were considered as part of the internally facilitated board appraisal process completed in accordance with standard governance arrangements. The evaluation found that the Committee functioned well, with the right balance of membership, skills and experience. The Committee’s Terms of Reference are available on the Company’s web pages: www.schroders.co.uk/midcap. Approach The Committee’s key roles and responsibilities are set out in the table below. Risk management and internal Financial reports and valuation Audit controls Principal and emerging risks and Financial statements Audit results uncertainties To monitor the integrity of the financial To discuss any matters arising from the To establish a process for identifying, statements of the Company and any audit and recommendations made by the assessing, managing and monitoring formal announcements relating to the auditor. the principal and emerging risks of the Company’s financial performance and Company and to explain how these are valuation. To also review the Half Year managed or mitigated. Report. Internal controls Going concern and viability Auditor appointment, independence The Committee is responsible for To review the position and make and performance reviewing the adequacy and effectiveness recommendations to the Board in relation To make recommendations to the of the Company’s internal controls and the to whether it considers it appropriate Board, in relation to the appointment, whistleblowing procedures operated by to adopt the going concern basis of re-appointment, effectiveness, any non- the AIFM and other services providers. accounting in preparing its Annual and audit services by the auditor and removal Half Year Report. of the external auditor. To review their independence, and to approve their The Committee is also responsible for remuneration and terms of engagement. reviewing the disclosures made by the To review the audit plan and engagement Company in the viability statement. letter. For application see following page. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 43 ### Section 4: Governance Application during the year The Committee met twice during the year under review and the below table sets out how the Committee discharged its duties during the year under review and up until the approval of this report. Further details on attendance can be found on page 41. Risk management and internal Financial reports and valuation Audit controls Principal and emerging risks and Recognition of investment income Meetings with the auditor uncertainties Considered dividends received against The auditor attended meetings to present Reviewed the principal and emerging risks forecast and the allocation of special their audit plan and the findings of the and uncertainties faced by the Company dividends to income or capital. audit. The Committee met the auditor together with the systems, processes and without representatives of the Manager oversight in place to manage and mitigate present. them. Service provider controls Valuation and existence of holdings Effectiveness of the independent audit Consideration of the operational controls The Company’s assets are principally process and auditor performance maintained by the Manager, depositary, invested in quoted equities. The Board Evaluated the effectiveness of the and registrar. reviews detailed reports on portfolio independent audit firm and process holdings on a quarterly basis. prior to making a recommendation that it should be re-appointed at the forthcoming AGM. Evaluated the auditor’s performance against agreed criteria including: qualification; knowledge, expertise and resources; independence policies; effectiveness of audit planning; adherence to auditing standards; and overall competence, 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. | Internal controls and risk | Calculation of the investment | Auditor independence | | --- | --- | --- | | management | management fee and performance fee | This is the second year that BDO LLP has | | Consideration of several key aspects of | Consideration of methodology used to | provided audit services to the Company, | | internal control and risk management | calculate the fees, matched against the | since their appointment on 19 July 2024. | | operating within the Manager, | criteria set out in the AIFM agreement. | | The auditor is required to rotate the senior administrator depositary and registrar, statutory auditor every five years. This is including assurance reports and the second year that the senior statutory presentations on these controls. auditor, Peter Smith, has conducted The Committee has begun considering the audit of the Company’s Financial the AIC Code requirement for boards Statements. to declare the effectiveness of material The Committee was satisfied that there internal controls as at the balance were no circumstances that affected the sheet date. The new rules will apply to independence or objectivity of the auditor. accounting periods commencing on or after 1 January 2026. | Compliance with the investment | Allocation rate of indirect expenses to | Provision of non-audit services by the | | --- | --- | --- | | trust qualifying rules in S1158 of the | capital | auditor | | Corporation Tax Act 2010 | Consideration of policy of allocating certain | The Committee has reviewed the FRC’s | | Consideration of the Manager’s report | indirect expenses to capital. Further details | Guidance on Audit Committees and has | | confirming compliance. | in note 1(e). | 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 auditor did not provide any non-audit services to the Company during the year under review. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 44 ### Section 4: Governance Risk management and internal Financial reports and valuation Audit controls Overall accuracy of the report and Consent to continue as auditor financial statements BDO LLP indicated to the Committee its Consideration of the Annual Report and willingness to continue to act as auditor. Financial Statements and the letter from the Manager in support of the letter of representation to the auditor. Fair, balanced and understandable Reviewed the Annual Report and Financial Statements to advise the Board whether it was fair, balanced, and understandable. Reviewed whether performance measures were reflective of the business, whether there was adequate commentary on the Company’s strengths and weaknesses and that the annual report and financial statements, taken as a whole was consistent with the Board’s view of the operation of the Company. Going concern and viability Reviewed the position and made recommendations to the Board in relation to whether it considered it appropriate to adopt the going concern basis of accounting in preparing its annual and half year report, including the consideration of the upcoming continuation vote. The Committee is also responsible for reviewing the disclosures made by the Company in the viability statement. Recommendations made to, and approved by, the Board: • The Committee recommended that the Board approve the Half Year and Annual Report and Financial Statements. • The Committee recommended that the going concern assumption be adopted in the Annual Report and Financial Statements and the explanations set out in the viability statement. • As a result of the work performed, the Committee concluded that the Annual Report and Financial Statements for the year ended 30 September 2025, taken as a whole, is fair, balanced, and understandable and provides the information necessary for shareholders to assess the Company’s position, performance, business model and strategy, and has reported on these findings to the Board. The Board’s conclusions in this respect are set out in the Statement of Directors’ Responsibilities on page 53. • Having reviewed the performance of the auditor as described above, the Committee considered it appropriate to recommend the auditor’s re-appointment. Resolutions to re-appoint BDO LLP as auditor to the Company, and to authorise the Directors to determine their remuneration, will be proposed at the forthcoming AGM. Helen Galbraith Chair of the Audit and Risk Committee 26 November 2025 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 45 ### Section 4: Governance ## Management Engagement Committee Report ### The Management Engagement Committee is responsible for (1) the monitoring and oversight ### of the Manager’s performance and fees, and confirming the Manager’s ongoing suitability, and ### (2) reviewing and assessing the Company’s other service providers, including reviewing their ### fees. All Directors are members of the Committee. Harry Morley is Chair of the Committee. The activities of the Committee were considered as part of the internally facilitated Board appraisal process completed in accordance with standard governance arrangements. The evaluation found that the Committee functioned well, with the right balance of membership, skills and experience. Its Terms of Reference are available on the Company’s web pages: www.schroders.co.uk/ukmidcap. Approach The Committee’s key roles and responsibilities are set out in the table below. Oversight of the Manager Oversight of other service providers The Committee: The Committee reviews the performance and competitiveness of the following service providers on at least an annual basis: • reviews the Manager’s performance, over the short and long term, against the reference index, peer group and the market. • Depositary and custodian • considers the reporting it has received from the Manager • Corporate broker throughout the year, and the reporting from the Manager to • Registrar the shareholders. • assesses management fees on an absolute and relative basis, • Lender receiving input from the Company’s broker, including peer The Committee also receives a report from the Company group and industry figures, as well as the structure of the fees. Secretary on ancillary service providers, and considers any • reviews the appropriateness of the Manager’s contract, recommendations. including terms such as notice period. The Committee notes the Audit and Risk Committee’s review of • assesses whether the Company receives appropriate the auditor. administrative, accounting, company secretarial and marketing support from the Manager. Application during the year Oversight of the Manager Oversight of other service providers The Committee undertook a detailed review of the Investment The annual review of each of the service providers was Manager’s performance and agreed that there was the satisfactory. appropriate depth and quality of resource to deliver superior The Committee noted that the Audit and Risk Committee had returns over the longer term. undertaken a detailed evaluation of the internal controls of the The Committee reviewed the terms of the AIFM agreement Manager, registrar, depositary and custodian. and agreed they remained fit for purpose. The Committee also engaged with the Manager and agreed a reduction in the investment management services fee. The Committee reviewed the other services provided by the Manager and agreed they were satisfactory. Recommendations made to, and approved by, the Board: • That the ongoing appointment of the Manager on the terms of the AIFM agreement was in the best interests of shareholders as a whole. • That the Company’s service providers’ performance remained satisfactory. • That with effect from 1 April 2025, the investment management fee be reduced, and the basis for its calculation be amended. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 46 ### Section 4: Governance ## Nomination Committee Report ### The Nomination Committee is responsible for (1) the recruitment, selection and induction of ### Directors, (2) their assessment during their tenure, and (3) the Board’s succession. All Directors ### are members of the Committee. All Directors are members of the Committee. Harry Morley is the Chair of the Committee. The activities of the Committee were considered as part of the internally facilitated Board appraisal process completed in accordance with standard governance arrangements. The evaluation found that the Committee functioned well, with the right balance of membership, skills and experience. Its Terms of Reference are available on the Company’s web pages: www.schroders.co.uk/ukmidcap. Selection and ongoing assessment of Directors Selection Induction Annual Annual review of Application of evaluation succession policy succession policy Approach The Committee’s key roles and responsibilities are set out in the table below. Selection and induction Board evaluation Succession • The Committee prepares a job • The Committee assesses each Director • Taking into consideration diversity specification for each role and considers annually and considers if an external and the need for regular refreshment the use of an independent recruitment evaluation should take place. and orderly succession, the Board’s firm. For the Chair and Chairs of the policy is that Directors’ tenure will be • Evaluation focuses on whether each Committees, the Committee also for no longer than nine years, with the Director continues to demonstrate considers current Board members. exception of the Chair of the Board, who commitment to their role and provides should not serve longer than nine years, • Job specification outlines the knowledge, a valuable contribution to the Board in ordinary circumstances and that each professional skills, personal qualities and during the year, taking into account time Director will be subject to annual re- experience requirements. commitment, independence, conflicts election at the AGM. and training needs. • Potential candidates are assessed • The Committee reviews the Board’s against the Company’s diversity policy. • Following the evaluation, the Committee current and future needs at least provides a recommendation to • The Committee discusses the long annually. Should any need be identified shareholders with respect to the annual list, invites a number of candidates for the Committee will initiate the selection re-election of Directors at the AGM. interview and makes a recommendation process. to the Board. • All Directors retire at the AGM and their • The Committee oversees the handover re-election is subject to shareholder • The Committee reviews the induction process for retiring Directors. approval. and training of new Directors. For application see following page. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 47 ### Section 4: Governance Application during the year Selection and induction Board evaluation and Directors’ fees Succession | • Following Richard Curling’s appointment, | • The annual Board evaluation, including | • The Committee reviewed the succession | | --- | --- | --- | | subsequent to a rigorous selection | evaluation of its Committees, was | policy and agreed it remains fit for | | process using independent search firm | undertaken in September 2025 and | purpose. | | Trust Associates, Richard engaged in an | concluded that the Board and its | | • Following a rigorous selection process, induction programme with the Manager Committees functioned well, with the Richard Curling was appointed to the and its various operating functions. He right balance of membership, skills and Board as a non-executive Director with will stand for election as a Director at experience. For the year under review, effect from 24 February 2025 and will the forthcoming AGM. the evaluation was undertaken internally stand for election as a non-executive by the completion of questionnaires. Director at the forthcoming AGM. • The Committee also reviewed each • Following the retirement of Robert Director’s time commitment and Talbut and the appointment of Harry independence by reviewing a complete Morley as Chair, Richard Curling list of appointments, including pro bono, succeeded Harry Morley as Chair of the not for profit roles, to ensure that each Remuneration Committee. Director remained free from conflict and had sufficient time available to discharge each of their duties effectively. During the review, the Committee was also mindful of the concept of ‘overboarding’ and considered the time, nature and complexity of each Director’s other roles and concluded that it did not believe that any of the Directors were overboarded. • 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 38 and 39. • All Directors were considered to be independent in character and judgement and the Committee reviews this information annually. • Based on its assessment, the Committee provided individual recommendations for each Director’s re-election at the AGM to be held in February 2026, with the exception of Richard Curling, who will seek election, having been appointed as a Director in February 2025. Recommendations made to, and approved by, the Board: • That Richard Curling be appointed to the Board as a non-executive Director with effect from 24 February 2025 and that his election as a Director be proposed, and recommended to shareholders for approval at the 2026 AGM. • That with effect from 24 February 2025, Richard Curling be appointed as Chair of the Remuneration Committee. • That all Directors remain independent, continue to demonstrate commitment to their roles, provide a valuable contribution to the deliberations of the Board, contribute towards the Company’s long-term, sustainable success, and remain free from conflicts with the Company and its Directors; therefore they should all be recommended for re-election by shareholders at the AGM, with the exception of Richard Curling, who having been appointed as a non-executive Director in February 2025, would seek election by shareholders at the AGM. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 48 ### Section 4: Governance ## Remuneration Committee Report ### The Remuneration Committee is responsible for making recommendations to the Board about ### the remuneration of the Directors. All Directors are members of the Committee, which is considered appropriate by the Directors given that all members are independent non-executive Director. Richard Curling is Chair of the Committee. Its Terms of Reference are available on the Company’s web pages: www.schroders.co.uk/ukmidcap. Approach The Committee’s key roles and responsibilities are set out in the table below. Directors’ fees • The Committee determines and agrees with the Board the framework or broad policy for the remuneration of the Directors. The objective of the policy shall be to ensure that members of the Board are, in a fair and responsible manner, rewarded for their individual contributions to the success of the Company. No Director shall be involved in any decisions as to their own remuneration outcome. • The Committee reviews the ongoing appropriateness and relevance of the remuneration policy. • The Committee reviews Director remuneration annually and makes recommendations on the fees paid to non-executive Directors in light of Directors’ workloads, levels of responsibility and industry norms. • The Committee ensures that each year the Remuneration Report is put to shareholders for approval as an advisory vote at the AGM, and the remuneration policy is put to shareholders for approval every three years at the AGM. Application during the year Directors’ fees • The remuneration framework, as set out in the Directors’ Remuneration Report, was unchanged during the year. • The Committee concluded that the remuneration policy remained appropriate and relevant. • The Committee reviewed Directors’ fees, using external benchmarking, and recommended that Directors’ fees be increased with effect from 1 October 2025. • The Remuneration Report and Remuneration Policy will be put to shareholders for approval at the forthcoming AGM. Recommendations made to, and approved by, the Board: • That the remuneration framework and remuneration policy remained appropriate. • That the Remuneration Report should be put to shareholders for approval as an advisory vote at the forthcoming AGM. • That Directors’ fees be increased to the following with effect from 1 October 2025: Chair £45,500, Audit and Risk Committee Chair £36,750, and other Directors £31,000. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 49 Section 4: Governance # Directors' Remuneration Report ## Introduction The following remuneration policy is currently in force and is subject to a binding vote every three years. The next vote will take place at the AGM to be held in February 2026 and the current policy provisions will apply until that date. The Directors' annual report on remuneration below is subject to an annual advisory vote. An ordinary resolution to approve this report will be put to shareholders at the forthcoming AGM. At the AGM held on 21 February 2023 when the policy was last voted on by shareholders, 97.06% of the votes cast (including votes cast at the Chair's discretion) in respect of approval of the Directors' remuneration policy were in favour, while 2.94% were against. 9,568 votes were withheld. At the AGM held on 24 February 2025, 99.43% 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 September 2024 were in favour, while 0.49% were against. 687 votes were withheld. ## Directors' remuneration policy The determination of the Directors' fees is a matter dealt with by the Remuneration Committee and the Board. It is the Remuneration 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 (currently £200,000). Any increase in the level set out therein 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 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, although Directors have a letter of appointment. Directors do not receive exit payments and are not provided with any compensation for loss of office. No other payments are made to Directors other than the reimbursement of reasonable out-of-pocket expenses incurred in attending to the Company's business. ## Implementation of policy The terms of Directors' letters of appointment are available for inspection at the Company's registered office address during normal business hours and during the AGM at the location of such meeting. 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 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 September 2025. ## Consideration of matters relating to Directors' remuneration Directors' remuneration was last reviewed by the Remuneration Committee in October 2025. Although no external advice was sought in considering the levels of Directors' fees, information on fees paid to Directors of other investment trusts managed by Schroders and peer group companies was provided by the Manager and corporate broker and was taken into consideration. Following this review, the Remuneration Committee recommended that Directors' fees be increased to the following with effect from 1 October 2025: Chair £45,500, Audit and Risk Committee Chair £36,750, and other Directors £31,000. 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. 50 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ### Section 4: Governance Fees paid to Directors The following amounts were paid by the Company to Directors for their services in respect of the year ended 30 September 2025 and the preceding financial year. Directors’ remuneration is all fixed; they do not receive any variable remuneration. The performance of the Company over the financial year is presented on page 5, under the heading “Performance Summary”. | | | | Fees Taxable benefits | | | | | 1 | | | Total | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | 2025 | | 2024 | | 2025 | | 2024 | | 2025 | | 2024 | | | Directors | | £ | | £ | | £ | | £ | | £ | | £ | 2 Harry Morley (Chair) 38,032 28,350 210 572 38,242 28,922 Wendy Colquhoun 29,500 28,350 206 3,533 29,706 31,883 3 Richard Curling 17,776 – 230 – 18,006 – Helen Galbraith 35,500 31,593 – – 35,500 31,593 4 Robert Talbut (Chair) 17,276 42,000 47 – 17,323 42,000 5 Andrew Page – 15,006 – 1,456 – 16,462 138,083 145,299 693 5,561 138,776 150,861 | 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 Appointed as a Director on 1 September 2023. Appointed as Chair on 24 February 2025. | | 3 Appointed as a Director on 24 February 2025. | | 4 Retired from the Board on 24 February 2025. | | 5 Retired from the Board on 8 March 2024. | The information in the above table has been audited. Change in annual remuneration payable | | 30 September | | 30 September | | | 30 September | | 30 September | | 30 September | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 2025 | | 2024 | | | 2023 | | 2022 | | 2021 | | | Directors | | % | | | % | | % | | % | | | % | 1 Harry Morley (Chair) 32.2 1,099.6 N/a N/a N/a Wendy Colquhoun -6.8 10.9 7.4 7.1 33.3 2 Richard Curling N/a N/a N/a N/a N/a Helen Galbraith 12.4 17.0 115.3 N/a N/a 3 Robert Talbut -58.8 4.2 3.6 18.6 29.0 4 Andrew Page N/a N/a 4.0 4.2 (0.3) 5 Clare Dobie N/a N/a N/a N/a (0.6) 6 | Eric Sanderson | N/a N/a N/a N/a (64.5) | | --- | --- | | 1 Appointed as a Director on 1 September 2023. Appointed as Chair on 24 February 2025. | | | 2 Appointed as a Director on 24 February 2025 | | | 3 Retired from the Board on 24 February 2025. | | | 4 Retired from the Board on 8 March 2024. | | | 5 Retired from the Board on 15 September 2022. | | | 6 Retired from the Board on 8 February 2021. | | The table below compares the remuneration payable to Directors, to distributions made to shareholders during the year under review and the prior period. In considering these figures, shareholders should take into account the Company’s investment objective. Distributions to shareholders vs Directors’ remuneration | Year ended | | Year ended | | | --- | --- | --- | --- | | 30 September | | 30 September | | | | 2025 | | 2024 Change | £’000 £’000 % Remuneration payable to Directors 139 151 (7.9) Distributions paid to shareholders – Dividends 7,538 7,262 Total distributions paid to shareholders 7,538 7,262 3.8 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 51 ### Section 4: Governance 10 Year share price and Benchmark total returns A graph showing the Company’s share price total return compared with the FTSE 250 ex Investment Trust Index, over the last ten years, is set out below, per Schedule 8, section 18, 4(c) of the Companies Act 2006. 250 200 150 100 50 30 Sep 2016 30 Sep 2017 30 Sep 2018 30 Sep 2019 30 Sep 2020 30 Sep 2021 30 Sep 2022 30 Sep 2023 30 Sep 2024 30 Sep 2025 Share Price Total Return Benchmark Source: Morningstar/Thomson Reuters. Rebased to 100 at 30 September 2015. Definitions of terms and Alternative Performance Measures are given on pages 82 and 83. Directors’ share interests (audited) 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 September At 30 September 2025 1 2024 1 2 Harry Morley (Chair) 17,500 17,500 Wendy Colquhoun 2,000 2,000 3 Richard Curling 5,000 n/a Helen Galbraith 5,500 5,500 4 | Robert Talbut | n/a 8,176 | | --- | --- | | 1 Ordinary Shares of 25p each. | | | 2 Mr Morley’s shareholdings as at 30 September 2025 includes the holding of a connected person. | | | 3 Appointed on 24 February 2025. | | | 4 Retired from the Board on 24 February 2025. | | There have been no changes notified to the Company since the year end. On behalf of the Board Richard Curling Chair of the Remuneration Committee 26 November 2025 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 52 30 Sep 2015 ### Section 4: Governance ## Statement of Directors’ Responsibilities in respect of ## the Annual Report and Financial Statements Directors’ responsibilities Directors’ statement The Directors are responsible for preparing the Annual Report Each of the Directors, whose names and functions are listed on and the Financial Statements in accordance with applicable law pages 38 and 39, confirm that to the best of their knowledge: and regulations. • the Financial Statements, which have been prepared in Company law requires the Directors to prepare financial accordance with United Kingdom Generally Accepted statements for each financial year. Under that law, the Directors Accounting Practice (United Kingdom Accounting Standards have elected to prepare the financial statements in accordance and applicable law), give a true and fair view of the assets, with United Kingdom Generally Accepted Accounting Practice liabilities, financial position and net return of the Company; (United Kingdom Accounting Standards, comprising Financial • the Annual Report includes a fair review of the development Reporting Standard (“FRS”) 102 “The Financial Reporting Standard and performance of the business and the financial position applicable in the UK and Republic of Ireland” and applicable law). of the group and company, together with a description of the Under company law, the Directors must not approve the financial principal risks and uncertainties that they face; and statements unless they are satisfied that they give a true and fair • the Annual Report and Financial Statements, taken as a view of the state of affairs of the Company and of the profit or whole, is fair, balanced and understandable and provides loss of the Company for that period. In preparing these financial the information necessary for shareholders to assess the statements, the Directors are required to: Company’s position and performance, business model and • select suitable accounting policies and then apply them strategy. consistently; • make judgements and accounting estimates that are reasonable and prudent; On behalf of the Board • state whether they have been prepared in accordance with UK adopted international accounting standards, subject to any Harry Morley material departures disclosed and explained in the financial statements; Chair 26 November 2025 • prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the company will continue in business; • prepare a Directors’ report, a strategic report and Directors’ remuneration report which comply with the requirements of the Companies Act 2006. 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 Directors. The Directors’ responsibility also extends to the ongoing integrity of the financial statements contained therein. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 53 ### Section 5: Financials ### London Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 54 ### Section 5: Financials ## Section 5: Financials Independent Auditor’s Report 56 Statement of Comprehensive Income 61 Statement of Changes in Equity 62 Statement of Financial Position 63 Notes to the Financial Statements 64 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 55 Section 5: Financials # Independent Auditor's Report ## 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 September 2025 and of its profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and - have been prepared in accordance with the requirements of the Companies Act 2006. We have audited the financial statements of Schroder UK Mid Cap Fund Plc (the 'Company') for the year ended 30 September 2025 which comprise the Statement of Comprehensive Income, the Statement of Changes in Equity, the Statement of Financial Position and 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 United Kingdom 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 and Risk Committee. ## Independence Following the recommendation of the Audit and Risk Committee, we were appointed by the Board of Directors on 19 July 2024 to audit the financial statements for the year ended 30 September 2024 and subsequent financial periods. The period of total uninterrupted engagement including retenders and reappointments is 2 years, covering the year ended 30 September 2025. 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; - Assessing the appropriateness of the Directors' assumptions and judgements made in their stress tested forecasts including consideration of the available cash resources relative to forecast expenditure and commitments; - Performing an independent analysis of the liquidity of the portfolio; - Reviewing the loan agreements to identify the covenants and assessing the likelihood of them being breached based on the Directors' forecasts and our sensitivity analysis; and - Assessing the completeness and accuracy of the going concern disclosures. 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 | **Key audit matters** | 2025 | 2024 | | --- | --- | --- | | Valuation and ownership of listed investments | ✓ | ✓ | | **Materiality** | *Company financial statements as a whole* 2025: £2.5m based on 1% of Net assets. 2024: £2.4m based on 1% of Net assets. | | --- | --- | ## An overview of the scope of our audit Our audit was scoped by obtaining an understanding of the Company and its environment, including the Company's system of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement. ## Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These matters were 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 these matters. 56 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ### Section 5: Financials How the scope of our audit addressed the key | Key audit matter | | audit matter | | --- | --- | --- | | Valuation and | The investment portfolio at the year-end | We responded to this matter by testing the | | ownership of listed | comprised of listed equity investments held at fair | valuation and ownership of the whole portfolio of | | investments | value through profit or loss as disclosed in Note | listed investments. We performed the following | | | 10. | procedures: | (Note 1b and 10) There is a risk that the prices used for the listed • Confirmed the year-end bid price used by investments held by the Company are not agreeing to externally quoted prices; reflective of fair value. • Assessed if there were contra indicators, such There is also a risk of error in the recording of as liquidity considerations, to suggest bid price investment holdings such that those recorded do is not the most appropriate indication of fair not appropriately reflect the investments owned value by considering the realisation period for by the Company. individual holdings; • Recalculated the valuation by multiplying the We considered the valuation and ownership number of shares held per the statement of investments to be a significant audit area obtained from the custodian by the valuation as investments represent the most significant per share; and balance in the financial statements and underpins the principal activity of the entity. • Obtained direct confirmation of the number of shares held per equity investment from the For these reasons, we considered this to be a key custodian regarding all investments held at the area for our overall audit strategy and allocation of balance sheet date. our resources and hence a Key Audit Matter. Key observations: Based on our procedures performed we did not identify any matters to suggest the valuation or ownership of the listed investments was not appropriate. Our application of materiality We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements. In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole. Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows: Company financial statements 2025 2024 £m £m Materiality 2.5 2.4 Basis for determining materiality 1% of Net assets 1% of Net assets As an investment trust, the net asset value is the key measure of performance for users Rationale for the benchmark applied of the financial statements. Performance materiality 1.9m 1.7m Basis for determining performance 75% of materiality 70% of materiality materiality The level of performance materiality applied was increased from 70% to 75% in the Rationale for the percentage applied current year after having considered a number of factors including the knowledge for performance materiality gained in the prior year audit, likelihood of misstatements, and the level of transactions in the year. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 57 ### Section 5: Financials Reporting threshold We agreed with the Audit and Risk Committee that we would report to them all individual audit differences in excess of £129k (2024: £121k). 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 and Financial Statements 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 UK Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Company’s compliance with the provisions of the UK Corporate Governance Code specified for our review. Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements, or our knowledge obtained during the audit. Going concern and • The Directors’ statement with regards to the appropriateness of adopting the going concern basis of longer-term viability accounting and any material uncertainties identified set out on page 34; and • The Directors’ explanation as to their assessment of the Company’s prospects, the period this assessment covers and why the period is appropriate set out on page 34. Other Code provisions • Directors’ statement on fair, balanced and understandable set out on page 53; • Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on pages 31 to 33; • The section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on page 31; and • The section describing the work of the Audit and Risk Committee set out on pages 43 to 45. Other Companies Act 2006 reporting Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below. Strategic report and In our opinion, based on the work undertaken in the course of the audit: Directors’ report • the information given in the Strategic report and the Directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and • the Strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements. In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the Directors’ report. Directors’ In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in remuneration accordance with the Companies Act 2006. Matters on which We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 we are required to requires us to report to you if, in our opinion: report by exception • 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. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 58 ### Section 5: Financials Statement of Directors’ Responsibilities in respect of • Reviewing minutes of meeting of those charged with the Annual Report and Financial Statements governance throughout the period for instances of non- compliance with laws and regulations; and As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation • Reviewing the calculation in relation to Investment Trust of the financial statements and for being satisfied that they give compliance to check that the Company was meeting its a true and fair view, and for such internal control as the Directors requirements to retain their Investment Trust Status. This determine is necessary to enable the preparation of financial included a review of other qualitative factors and ensuring statements that are free from material misstatement, whether compliance with these. due to fraud or error. Fraud In preparing the financial statements, the Directors are We assessed the susceptibility of the financial statements to responsible for assessing the Company’s ability to continue as a material misstatement including fraud. going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Our risk assessment procedures included: the Directors either intend to liquidate the Company or to cease • Enquiry with the Investment Manager, the Administrator and operations, or have no realistic alternative but to do so. Those Charged With Governance regarding any known or suspected instances of fraud; Auditor’s responsibilities for the audit of the • Review of minutes of meeting of those charged with financial statements governance for any known or suspected instances of fraud; and Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material • Discussion amongst the engagement team as to how and misstatement, whether due to fraud or error, and to issue an where fraud might occur in the financial statements. auditor’s report that includes our opinion. Reasonable assurance Based on our risk assessment, we considered the areas most is a high level of assurance but is not a guarantee that an audit susceptible to be management override of controls. conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise Our procedures in respect of the above included: from fraud or error and are considered material if, individually or • In addressing the risk of management override of control, we: in the aggregate, they could reasonably be expected to influence – Performed a review of estimates and judgements applied the economic decisions of users taken on the basis of these by management in the financial statements to assess their financial statements. appropriateness and the existence of any systematic bias; Extent to which the audit was capable of detecting – Considered the opportunity and incentive to manipulate irregularities, including fraud accounting entries and target tested relevant adjustments Irregularities, including fraud, are instances of non-compliance made in the period end financial reporting process; with laws and regulations. We design procedures in line with our – Reviewed for significant transactions outside the normal responsibilities, outlined above, to detect material misstatements course of business; and in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including – Performed a review of unadjusted audit differences, if any, fraud is detailed below: for indications of bias or deliberate misstatement. Non-compliance with laws and regulations We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, Based on: who were all deemed to have the appropriate competence and • Our understanding of the Company and the industry in which capabilities and remained alert to any indications of fraud or non- it operates; compliance with laws and regulations throughout the audit. • Discussion with the Investment Manager, the Administrator and Our audit procedures were designed to respond to risks of Those Charged With Governance; and material misstatement in the financial statements, recognising • Obtaining and understanding of the Company’s policies and that the risk of not detecting a material misstatement due to procedures regarding compliance with laws and regulations. fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for We considered the significant laws and regulations to be example, forgery, misrepresentations or through collusion. There the Companies Act 2006, the FCA listing and DTR rules, the are inherent limitations in the audit procedures performed and principles of the AIC Code of Corporate Governance, industry the further removed non-compliance with laws and regulations practice represented by the AIC SORP, the applicable accounting is from the events and transactions reflected in the financial framework, and qualification as an Investment Trust under statements, the less likely we are to become aware of it. UK tax legislation as any non-compliance of this would lead to the Company losing various deductions and exemptions from A further description of our responsibilities is available on corporation tax. the Financial Reporting Council’s website at: www.frc.org.uk/ auditorsresponsibilities. This description forms part of our Our procedures in respect of the above included: auditor’s report. • 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; Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 59 ### Section 5: Financials 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. Peter Smith (Senior Statutory Auditor) For and on behalf of BDO LLP, Statutory Auditor London, UK 26 November 2025 BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127). Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 60 Section 5: Financials # Statement of Comprehensive Income for the year ended 30 September 2025 | | Note | 2025 | | | 2024 | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | | Gains on investments held at fair value through profit or loss | 2 | – | 14,398 | 14,398 | – | 31,395 | 31,395 | | Realised exchange (losses) on currency balances | | – | (73) | (73) | – | – | – | | Income from investments | 3 | 10,135 | 4,288 | 14,423 | 8,614 | – | 8,614 | | Other interest receivable and similar income | 3 | 186 | – | 186 | 123 | – | 123 | | **Gross return** | | **10,321** | **18,613** | **28,934** | **8,737** | **31,395** | **40,132** | | Investment management fee | 4 | (456) | (1,064) | (1,520) | (495) | (1,155) | (1,650) | | Administrative expenses | 5 | (827) | – | (827) | (738) | – | (738) | | **Net return before finance costs and taxation** | | **9,038** | **17,549** | **26,587** | **7,504** | **30,240** | **37,744** | | Finance costs | 6 | (390) | (910) | (1,300) | (402) | (937) | (1,339) | | **Net return before taxation** | | **8,648** | **16,639** | **25,287** | **7,102** | **29,303** | **36,405** | | Taxation | 7 | – | – | – | – | – | – | | **Net return after taxation** | | **8,648** | **16,639** | **25,287** | **7,102** | **29,303** | **36,405** | | **Return per share (pence)** | 9 | **25.03** | **48.15** | **73.18** | **20.54** | **84.74** | **105.28** | The "Total" column of this statement is the profit and loss account of the Company. The "Revenue" and "Capital" columns represent supplementary information prepared under guidance issued by The Association of Investment Companies. The Company has no other items of other comprehensive income, and therefore the net return after taxation is also the total comprehensive income for the year. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. The notes on pages 64 to 74 form an integral part of these financial statements. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 61 ### Section 5: Financials ## Statement of Changes in Equity for the year ended 30 September 2025 | | Called-up | | | | | Capital | | | Share | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | share | | Shar | e redemption | | Merger | purchase | | Capital | Revenue | | | | | | capital | premium | | | reserve | reserve | reserve | | reserves | reserve | | Total | | Note | | £’000 | | £’000 | | £’000 | £’000 | | £’000 | £’000 | | £’000 | £’000 | At 30 September 2023 9,036 13,971 220 2,184 7,233 170,960 10,219 213,823 Net return after taxation – – – – – 29,303 7,102 36,405 Dividends paid in the year 8 – – – – – – (7,262) (7,262) At 30 September 2024 9,036 13,971 220 2,184 7,233 200,263 10,059 242,966 Net return after taxation – – – – – 16,639 8,648 25,287 Cost of share buybacks – – – – (1,845) – – (1,845) Dividends paid in the year 8 – – – – – – (7,538) (7,538) At 30 September 2025 9,036 13,971 220 2,184 5,388 216,902 11,169 258,870 The notes on pages 64 to 74 form an integral part of these financial statements. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 62 Section 5: Financials # Statement of Financial Position at 30 September 2025 | | Note | 2025 £'000 | 2024 £'000 | | --- | --- | --- | --- | | **Fixed assets** | | | | | Investments held at fair value through profit or loss | 10 | 267,652 | 261,421 | | **Current assets** | | | | | Debtors | 11 | 4,518 | 7,469 | | Current asset investments | 12 | 2,905 | 116 | | Cash at bank and in hand | | 1,775 | 1,845 | | | | **9,198** | **9,430** | | **Current liabilities** | | | | | Creditors: amounts falling due within one year | 13 | (17,980) | (27,885) | | **Net current liabilities** | | **(8,782)** | **(18,455)** | | **Total assets less current liabilities** | | **258,870** | **242,966** | | **Net assets** | | **258,870** | **242,966** | | **Capital and reserves** | | | | | Called-up share capital | 14 | 9,036 | 9,036 | | Share premium | 15 | 13,971 | 13,971 | | Capital redemption reserve | 15 | 220 | 220 | | Merger reserve | 15 | 2,184 | 2,184 | | Share purchase reserve | 15 | 5,388 | 7,233 | | Capital reserves | 15 | 216,902 | 200,263 | | Revenue reserve | 15 | 11,169 | 10,059 | | **Total equity shareholders' funds** | | **258,870** | **242,966** | | **Net asset value per share (pence)** | 16 | **754.45** | **702.60** | These Financial Statements were approved and authorised for issue by the Board of Directors on 26 November 2025 and signed on its behalf by: **Harry Morley** Chair The notes on pages 64 to 74 form an integral part of these financial statements. Registered in Scotland as a public company limited by shares Company registration number: SC082551 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 63 ### Section 5: Financials ## Notes to the Financial Statements for the year ended 30 September 2025 ### 1. Accounting Policies (a) Basis of accounting Schroder UK Mid Cap Fund plc (“the Company”) is registered in Scotland as a public company limited by shares. The Company’s registered office is 9 Haymarket Square, Edinburgh EH3 8FY. The financial statements are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice (“UK GAAP”), in particular in accordance with Financial Reporting Standard (FRS) 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, 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 financial statements have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of investments held at fair value through profit or loss. The Directors believe that the Company has adequate resources to continue operating for at least 12 months from the date of approval of these financial statements. In forming this opinion, the Directors have taken into consideration: stress testing prepared by the Manager which modelled a 50% decline in valuation of investments and investment income and demonstrated the Company’s ability to comply with the covenants of its borrowing agreements and pay its operating expenses; the controls and monitoring processes in place; the Company’s level of debt 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; and that the Company’s assets comprise cash and readily realisable securities quoted in active markets. In forming this opinion, the Directors have also considered the loan currently in place which expires on 26 February 2026. Further details of Directors’ considerations regarding this are given in the Chair’s Statement, Investment Manager’s Review, Going Concern Statement, Viability Statement and under the Principal Emerging Risks and uncertainties in the Strategic Report. The Company has not presented a statement of cash flows, as it is not required under section 7 of FRS 102 for an investment fund whose investments are highly liquid, carried at market value and which presents a statement of changes in equity. The financial statements are presented in sterling and amounts have been rounded to the nearest thousand. The accounting policies applied to these Financial Statements are consistent with those applied in the Financial Statements for the year ended 30 September 2024. No significant judgements, estimates or assumptions have been required in the preparation of the financial statements for the current or preceding financial year. (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. This portfolio of financial assets is managed and its performance evaluated on a fair value basis, in accordance with a documented investment objective and information is provided internally on that basis to the Company’s Board of Directors. Accordingly, upon initial recognition the investments are designated by the Company as “held at fair value through profit or loss”. They are included initially at fair value which is taken to be their cost, excluding expenses incidental to purchase which are written off to capital at the time of acquisition. Subsequently the investments are valued at fair value, which are quoted bid prices. Any investments that are unlisted or not actively traded would be valued using a variety of techniques to determine their fair value; any such valuations would be reviewed by both the AIFM’s fair value pricing committee and by the Directors. All purchases and sales are accounted for on a trade date basis. (c) Accounting for reserves Gains and losses on sales of investments and increases and decreases in the valuation of investments are included in the statement of comprehensive income and in capital reserves within “gains on investments held at fair value through profit or loss”. (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. Where the Company has elected to receive scrip dividends in the form of additional shares rather than in cash, the amount of the cash dividend foregone is recognised in revenue. Any excess in the value of the shares received over the amount of the cash dividend is recognised in capital. Dividends from UK REITs are split into PID (Property Income Distributions) and Non-PID components for tax purposes. Revenue arising from UK REITs tax exempt rental business is colloquially known as PID revenue and is taxable in the hands if the Trust. A UK REIT may also carry out activities that give rise to taxable profits and gains, it is from these that the REIT will make a Non-PID distribution, these are treated for tax purposes in the same way as dividends from UK companies. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 64 Section 5: Financials # **(e) Expenses** All expenses are accounted for on an accruals basis. 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 30% to revenue and 70% to capital (2024: same) 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 or sale 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 10 on page 68. # **(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 30% to revenue and 70% to capital (2024: same) in line with the Board's expected long-term split of revenue and capital return from the Company's investment portfolio. # **(g) Other financial instruments** Cash at bank and in hand compromises 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 at amortised cost. They are recorded at the proceeds received net of direct issue costs. # **(h) Taxation** Taxation comprises amounts expected to be received or paid. Deferred tax is provided on all timing differences that have originated but not reversed by the balance sheet 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. 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 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 accounting date and is measured on an undiscounted basis. # **(i) Value added tax (VAT)** Expenses are disclosed inclusive of the related irrecoverable VAT. # **(j) Dividends payable** In accordance with FRS 102, the final dividend is included in the financial statements in the year in which it is approved by shareholders. # **(k) Repurchases of shares into treasury and subsequent reissues** The cost of repurchasing shares into treasury, including the related stamp duty and transaction costs is dealt with in the Statement of Changes in Equity and charged to 'Share purchase reserve'. Share repurchase transactions are accounted for on a trade date basis. The sales proceeds of treasury shares reissued are treated as a realised profit up to the amount of the purchase price of those shares and is transferred to capital reserves. The excess of the sales proceeds over the purchase price is transferred to 'share premium'. # **2. Gains on investments held at fair value through profit or loss** | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | Gains/(losses) on sales of investments based on historic cost | 26,084 | 4,542 | | Amounts recognised in investment holding gains and losses in the previous year in respect of investments sold in the year | (15,094) | 5,878 | | **Gains on sales of investments based on the carrying value at the previous balance sheet date** | **10,990** | **10,420** | | Net movement in investment holding gains and losses | 3,408 | 20,975 | | **Gains on investments held at fair value through profit or loss** | **14,398** | **31,395** | Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 65 Section 5: Financials ### 3. Income | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | **Income from investments** | | | | UK dividends | 9,875 | 8,247 | | UK property income distributions | 260 | 359 | | Other income | – | 8 | | | **10,135** | **8,614** | | **Other interest receivable and similar income** | | | | Deposit interest | 186 | 123 | | | **10,321** | **8,737** | | **Capital** | | | | Special dividends allocated to capital | 4,288 | – | The special dividend allocated to capital during the year arose from the disposal of a subsidiary of the Playtech Group. ### 4. Investment management fee | | 2025 | | | 2024 | | | | --- | --- | --- | --- | --- | --- | --- | | | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | | Management fee | 456 | 1,064 | 1,520 | 495 | 1,155 | 1,650 | The bases for calculating the investment management fee and performance fee are set out in the Directors' Report on page 41 and details of all amounts payable to the Manager are given in note 17 on page 71. ### 5. Administrative expenses | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | Other administrative expenses^{1} | 440 | 351 | | Secretarial fee | 181 | 176 | | Directors' fees | 138 | 145 | | Auditor's remuneration for audit services^{2} | 68 | 66 | | | **827** | **738** | $^{1}$ Included within other administrative expenses are one off amounts totaling £144,000 in relation to legal and other advisory services as a result of the proposed requisition of the Company by a shareholder during the year. $^{2}$ Includes £11,000 (2024: £11,000) irrecoverable VAT. ### 6. Finance costs | | 2025 | | | 2024 | | | | --- | --- | --- | --- | --- | --- | --- | | | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | | Interest on bank loans and overdrafts | 390 | 910 | 1,300 | 402 | 937 | 1,339 | 66 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 Section 5: Financials ## 7. Taxation ### (a) Analysis of tax charge for the year | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | Taxation for the year | – | – | ### (b) Factors affecting tax charge for the year The tax assessed for the year is lower (2024: lower) than the Company's applicable rate of corporation tax in for the year of 25% (2024: 25%). The factors affecting the current tax charge for the year are as follows: | | 2025 | | | 2024 | | | | --- | --- | --- | --- | --- | --- | --- | | | Revenue £'000 | Capital £'000 | Total £'000 | Revenue £'000 | Capital £'000 | Total £'000 | | Net return on ordinary activities before taxation | 8,648 | 16,639 | 25,287 | 7,102 | 29,303 | 36,405 | | Net return on ordinary activities before taxation multiplied by the Company's applicable rate of corporation tax for the year of 25% (2024: 25%) | 2,162 | 4,160 | 6,322 | 1,775 | 7,326 | 9,101 | | Effects of: | | | | | | | | Capital returns on investments | – | (3,581) | (3,581) | – | (7,849) | (7,849) | | Income not chargeable to corporation tax | (2,459) | (1,072) | (3,531) | (2,062) | – | (2,062) | | Unrelieved expenses for the period | 297 | 493 | 790 | 287 | 523 | 810 | | **Taxation for the year** | – | – | – | – | – | – | ### (c) Deferred taxation At 30 September 2025, the Company had surplus management expenses of £39,862,000 (2024: £37,833,000) and a non-trade loan relationship deficit of £6,412,000 (2024: £5,278,000). A deferred tax asset has not been recognised in respect of these losses because the investment portfolio of the Company is not expected to generate taxable income in future periods in excess of the deductible expenses of those future periods and, accordingly, it is unlikely that the Company will be able to reduce future tax liabilities through the use of existing tax losses. Accordingly, the deferred tax asset has been calculated based on the corporation tax rate in effect from 1 April 2023 of 25%, as enacted by the Finance Act 2021. Given the Company's intention to meet the conditions required to retain its status as an Investment Trust Company, no provision has been made for deferred tax on any capital gains or losses arising on the revaluation or disposal of investments. ## 8. Dividends ### (a) Dividends paid and declared | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | 2024 final dividend of 15.5p (2023: 15.0p) | 5,360 | 5,187 | | Interim dividend of 6.3p (2024: 6.0p) | 2,178 | 2,075 | | **Total dividends paid in the year** | **7,538** | **7,262** | | | 2025 £'000 | 2024 £'000 | | 2025 final dividend declared of 16.1p (2024: 15.5p) to be paid out of revenue profits | 5,524 | 5,360 | ### (b) Dividends for the purposes of Section 1158 of the Corporation Tax Act 2010 ("Section 1158') The requirements of Section 1158 are considered on the basis of dividends declared in respect of the financial year as shown below. The revenue available for distribution by way of dividend for the year is £8,648,000 (2024: £7,102,000). | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | Interim dividend of 6.3p (2024: 6.0p) | 2,178 | 2,075 | | Final dividend of 16.1p (2024: 15.5p) | 5,524 | 5,360 | | | **7,702** | **7,435** | Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 67 Section 5: Financials ## 9. Return per share | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | Revenue return | 8,648 | 7,102 | | Capital return | 16,639 | 29,303 | | **Total return** | **25,287** | **36,405** | | Weighted average number of shares in issue during the year | 34,553,960 | 34,581,190 | | Revenue return per share (pence) | 25.03 | 20.54 | | Capital return per share (pence) | 48.15 | 84.74 | | **Total return per share (pence)** | **73.18** | **105.28** | ## 10. Investments held at fair value through profit or loss ### (a) Movement in investments | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | Opening book cost | 222,578 | 215,960 | | Opening investment holding gains/(losses) | 38,843 | 11,990 | | **Opening fair value** | **261,421** | **227,950** | | **Analysis of transactions made during the year** | | | | Purchases at cost | 92,098 | 90,533 | | Sales proceeds | (100,265) | (88,457) | | Gains on investments held at fair value | 14,398 | 31,395 | | **Closing fair value** | **267,652** | **261,421** | | Closing book cost | 240,495 | 222,578 | | Closing investment holding gains | 27,157 | 38,843 | | **Closing fair value** | **267,652** | **261,421** | Sales proceeds amounting to £100,265,000 (2024: £88,457,000) were receivable from disposals of investments in the year. The book cost of these investments when they were purchased was £74,180,000 (2024: £83,914,000). These investments have been revalued over time and until they were sold any unrealised gains and losses were included in the fair value of the investments. All investments are listed on a recognised stock exchange. The following transaction costs, comprising stamp duty and brokerage commission were incurred during the year: | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | On acquisitions | 449 | 409 | | On disposals | 46 | 43 | | | **495** | **452** | 68 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 Section 5: Financials ## 11. Debtors | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | Securities sold awaiting settlement | 3,977 | 6,907 | | Dividends and interest receivable | 523 | 552 | | Other debtors | 18 | 10 | | | **4,518** | **7,469** | ## 12. Current asset investments | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | Money market funds | **2,905** | **116** | As at 30 September 2025, the Company held HSBC Sterling Liquidity fund with a market value of £2,905,000 (30 September 2024: £116,000). ## 13. Creditors: amounts falling due within one year | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | Bank loan | 17,000 | 25,000 | | Securities purchased awaiting settlement | 443 | 1,815 | | Other creditors and accruals | 537 | 1,070 | | | **17,980** | **27,885** | The bank loan comprises a £30 million revolving credit facility agreement with Bank of Nova Scotia, London Branch expiring on 25 February 2026, of which, £17 million has been drawn down. The Directors consider that the carrying amount of creditors falling due within one year approximates to their fair value. ## 14. Called-up share capital | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | **Allotted, called-up and fully paid:** | | | | Ordinary shares of 25p each: | | | | Opening balance of 34,312,190 (2024: 34,581,190) shares, excluding shares held in treasury | 8,578 | 8,645 | | **Subtotal of 34,312,190 (2024: 34,581,190) shares** | **8,578** | **8,645** | | 1,831,500 (2024: 1,562,500) shares held in treasury | 458 | 391 | | **Closing balance^{1}** | **9,036** | **9,036** | $^{1}$ Represents 36,143,690 (2024: same) shares of 25p each, including 1,831,500 (2024: 1,562,500) shares held in treasury. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 69 ### Section 5: Financials ### 15. Reserves Capital reserves | | | | | | | | | | | | | Gains and | | Investment | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | Capital | | | | | Share | | | losses on | | | holding | | | | | | | | Share | redemption | | | Merger | | purchase | | | | sales of | | | gains and | | Revenue | | | | | premium | | 1 reserve | | 1 reserve | | 1 reserve | | | 2 | investments | | | 2 | losses | 3 | reserve | | 4 | | Year ended 30 September 2025 | | £’000 | | £’000 | | £’000 | | | £’000 | | | | £’000 | £’000 | | | | £’000 | | Opening balance at 30 September 2024 13,971 220 2,184 7,233 161,420 38,843 10,059 Gains on sales of investments based on the carrying value at the previous balance sheet date – – – – 10,990 – – Net movement in investment holding gains and losses – – – – – 3,408 – Cost of share buybacks – – – (1,845) – – – Exchange rate movement – – – – (73) – – Transfer on disposal of investments – – – – 15,094 (15,094) – Management fee allocated to capital – – – – (1,064) – – Finance costs allocated to capital – – – – (910) – – Special dividend allocated to capital – – – – 4,288 – – Dividends paid – – – – – – (7,538) Retained revenue for the year – – – – – – 8,648 Closing balance at 30 September 2025 13,971 220 2,184 5,388 189,745 27,157 11,169 Capital reserves | | | | | | | | | | | | | Gains and | | Investment | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | Capital | | | | | Share | | | losses on | | | holding | | | | | | | | Share | redemption | | | Merger | | purchase | | | | sales of | | | gains and | | Revenue | | | | | premium | | 1 reserve | | 1 reserve | | 1 reserve | | | 2 | investments | | | 2 | losses | 3 | reserve | | 4 | | Year ended 30 September 2024 | | £’000 | | £’000 | | £’000 | | | £’000 | | | | £’000 | £’000 | | | | £’000 | | Opening balance at 30 September 2023 13,971 220 2,184 7,233 158,970 11,990 10,219 Gains on sales of investments based on the carrying value at the previous balance sheet date – – – – 10,420 – – Net movement in investment holding gains and losses – – – – – 20,975 – Transfer on disposal of investments – – – – (5,878) 5,878 – Management fee allocated to capital – – – – (1,155) – – Finance costs allocated to capital – – – – (937) – – Dividends paid – – – – – – (7,262) Retained revenue for the year – – – – – – 7,102 Closing balance at 30 September 2024 13,971 220 2,184 7,233 161,420 38,843 10,059 1 These reserves are not distributable. The “Merger reserve” represents the premium over the nominal value of shares issued following a merger in 1989. 2 These are realised (distributable) capital reserves which may be used to repurchase the Company’s own shares or distributed as dividends. The “Share purchase reserve” is for the purpose of financing share buy-backs and was created following the cancellation of the “Warrant reserve” in 2003. 3 This reserve comprises holding gains on liquid investments (which may be deemed to be realised) and other amounts which are unrealised. An analysis has not been made between those amounts that are realised (and may be distributed as dividends or used to repurchase the Company’s own shares) and those that are unrealised. 4 The revenue reserve may be distributed as dividends or used to repurchase the Company’s own shares. The total of distributable reserves for the year ended 30 September 2025 are £206,302,000 (2024: £178,712,000). The total of non-distributable reserves for the year ended 30 September 2025 are £43,532,000 (2024: £55,218,000). ### 1 6. Net asset value per share 2025 2024 Net assets attributable to the Ordinary shareholders (£’000) 258,870 242,966 Shares in issue at the year end, excluding shares held in treasury 34,312,190 34,581,190 Net asset value per share (pence) 754.45 702.60 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 70 Section 5: Financials ## 17. Transactions with the Manager Under the terms of the AIFM Agreement, the Manager is entitled to receive a management fee and a company secretarial fee. Details of the basis of these calculations are given in the Directors' Report on page 41. 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 management fee calculation and therefore incur no fee. The management fee payable in respect of the year ended 30 September 2025 amounted to £1,520,000 (2024: £1,650,000) of which £181,000 (2024: £854,000) was outstanding at the year end. The secretarial fee payable for the year amounted to £181,000 (2024: £176,000), of which £45,000 (2024: £88,000) was outstanding at the year end. No Director of the Company served as a Director of any member of the Schroder Group, at any time during the year. ## 18. Related party transactions Details of the remuneration payable to Directors are given in the Remuneration Report on page 50 and details of Directors' shareholdings are given in the Remuneration Report on page 52. Details of transactions with the Manager are given in note 17 above. There have been no other transactions with related parties during the year (2024: nil). ## 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 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 an active market for identical assets. Level 2: valued using inputs other than quoted prices included within Level 1, that are observable (i.e. developed using market data). Level 3: valued using inputs that are unobservable (i.e. for which market data is unavailable). Details of the Company's valuation policy are given in note 1(b) on page 64. At 30 September 2025, the Company's investments were all categorised in Level 1 (2024: same). ## 20. Financial instruments' exposure to risk and risk management policies The Company's investment objective is to invest in mid cap equities with the aim of providing a total return in excess of the FTSE 250 (ex-Investment Companies) Index. In pursuing this objective, 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. The objectives, policies and processes for managing the risks and the methods used to measure the risks that are set out below, have not changed from those applying in the comparative year. The Company's classes of financial instruments are as follows: - investments in shares which are held in accordance with the Company's investment objective; - short-term debtors, creditors and cash arising directly from its operations; and - sterling revolving credit facilities with Scotiabank, the purpose of which are to assist with financing the Company's operations. ### (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 and these policies have remained unchanged from those applying in the comparative year. The Manager assesses the exposure to market risk when making each investment decision and monitors the overall level of market risk on the whole of the investment portfolio on an ongoing basis. ### (i) Interest rate risk Interest rate movements may affect the level of income receivable on cash deposits and the interest payable on any variable rate borrowings 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 Board's policy is to permit gearing up to 25%, where gearing is defined as borrowings used for investment purposes less cash, expressed as a percentage of net assets. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 71 ### Section 5: Financials 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: 2025 2024 £’000 £’000 Exposure to floating interest rates: Cash at bank and in hand and current asset investments 4,680 1,961 Total exposure 4,680 1,961 Cash balances earn interest at a floating rate based on the Sterling Overnight Index Average. The Company’s 364 day, £30 million credit facility with The Bank of Nova Scotia, London Branch expires on 25 February 2026. The facility is unsecured but subject to covenants and restrictions which are customary for a facility of this nature. Interest is payable at a rate of Sterling Overnight Interest Average (2024: same), or its replacement reference rate, as quoted in the market for the loan period, plus a margin, plus Mandatory Costs, which are the lender’s costs of complying with certain regulatory requirements of the Bank of England. At 30 September 2025, the Company had drawn down £17 million. The above year end amounts are not representative of the exposure to interest rates during the year due to fluctuations in the level of cash and cash asset investment balances. The maximum and minimum exposure during the year was as follows: 2025 2024 £’000 £’000 Minimum interest rate exposure during the year - net debt (11,605) (16,803) Maximum interest rate exposure during the year - net debt (24,870) (23,927) Interest rate sensitivity The following table illustrates the sensitivity of the return after taxation for the year and net assets to a 1.0% (2024: 1.0%) 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. 2025 2024 | | | 1.0% | | 1.0% | | 1.0% | | 1.0% | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | increase | | decrease | | increase | | decrease | | | | | in rate | | in rate | in rate | | | in rate | | Income statement – return after taxation | | £’000 | | £’000 | | £’000 | | £’000 | Revenue return 47 (47) 20 (20) Capital return – – – – Total return after taxation 47 (47) 20 (20) Net assets 47 (47) 20 (20) In the opinion of the Directors, this sensitivity analysis may not be representative of the Company’s future exposure to interest rate changes due to fluctuations in the level of cash balances and drawings on the credit facility. (ii) Other price risk Other price risk includes changes in market prices, other than those arising from interest rate risk, which may affect the value of investments. Management of interest rate risk The Board meets on at least four occasions each year to consider the asset allocation of the portfolio and the risk associated with particular industry sectors. The investment management team has responsibility for monitoring the portfolio, which is selected in accordance with the Company’s investment objective and seeks to ensure that individual stocks meet an acceptable risk/reward profile. Market price risk exposure The Company’s total exposure to changes in market prices at 30 September comprises the following: 2025 2024 £’000 £’000 Investments held at fair value through profit or loss 267,652 261,421 The above data is broadly representative of the exposure to market price risk during the year. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 72 ### Section 5: Financials Concentration of exposure to market price risk An analysis of the Company’s investments is given on page 20. The Company’s investments are all listed in the United Kingdom. Accordingly there is a concentration of exposure to this country. However it should be noted that an investment may not be entirely exposed to the economic conditions in its country of listing. Market price risk sensitivity The following table illustrates the sensitivity of the return after taxation for the year and net assets to an increase or decrease of 20% (2024: 20%) in the fair values of the Company’s investments. This level of change is considered to be a reasonable illustration based on observation of current market conditions. The sensitivity analysis is based on the Company’s exposure through its investments and includes the impact on the management fee, but assumes that all other variables are held constant. 2025 2024 | | | 20% | | 20% | | 20% | | 20% | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | increase in | | decrease in | | increase in | | decrease in | | | | fair value | | fair value | | fair value | | fair value | | | Income statement – return after taxation | | £’000 | | £’000 | | £’000 | | £’000 | Revenue return (104) 104 (102) 102 Capital return 53,287 (53,287) 52,046 (52,046) Total return after taxation and net assets 53,183 (53,183) 51,944 (51,944) Percentage change in net asset value 20.5 (20.5) 21.4 (21.4) (b) Liquidity risk This is the risk that the Company will encounter difficulty in meeting its obligations associated with financial liabilities that are settled by delivering cash or another financial asset. Management of the risk Liquidity risk is not significant as the Company’s assets comprise mainly readily realisable securities, which can be sold to meet funding requirements if necessary. Liquidity risk exposure Contractual maturities of financial liabilities, based on the earliest date on which payment can be required are as follows: 2025 2024 | | Within | | Within | | | --- | --- | --- | --- | --- | | | one year | Total | one year | Total | | Creditors: amounts falling due within one year | £’000 | £’000 | £’000 | £’000 | Securities purchased awaiting settlement 443 443 1,815 1,815 Other creditors and accruals 537 537 1,070 1,070 Other payables: drawings on the revolving credit facility (including interest) 17,895 17,895 26,625 26,625 18,875 18,875 29,510 29,510 (c) Credit risk Credit risk is the risk that the failure of the counterparty to a transaction to discharge its obligations under that transaction could result in loss to the Company. Management of credit risk This risk is not significant and is managed as follows: Portfolio dealing The Company invests in markets that operate a “Delivery Versus Payment” settlement process which mitigates the risk of losing the principal of a trade during settlement. The Manager continuously monitors dealing activity to ensure best execution, which involves measuring various indicators including the quality of trade settlement and incidence of failed trades. Counterparties must be pre- approved by the Manager’s credit committee. 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. The Company’s investments are held in accounts which are segregated from the custodian’s own trading assets. If the custodian were to become insolvent, the Company’s right of ownership of its investments is clear and they are therefore protected. However the Company’s cash balances are all deposited with the custodian as banker and held on the custodian’s balance sheet. Accordingly, in accordance with usual banking practice, the Company will rank as a general creditor to the custodian in respect of cash balances. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 73 ### Section 5: Financials Credit risk exposure The following amounts shown in the Statement of Financial Position, represent the maximum exposure to credit risk at the current and comparative year end. 2025 2024 | | Balance | | Maximum | | Balance | | Maximum | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | sheet | exposure | | | sheet | exposure | | | Current assets | | £’000 | | £’000 | | £’000 | | £’000 | Debtors – securities sold awaiting settlement, dividends and interest receivable and other debtors 4,518 4,500 7,469 7,459 Cash at bank and in hand and current asset investments 4,680 4,680 1,961 1,961 9,198 9,180 9,430 9,420 No debtors are past their due date and none have been written down or deemed to be impaired. (d) Fair values of financial assets and financial liabilities All financial assets and liabilities are either carried in the Statement of Financial Position at fair value or the amount is a reasonable approximation of fair value. ### 21. Capital management policies and procedures The Company’s objectives, policies and processes for managing capital are unchanged from the preceding year. The Company’s debt and capital structure comprises the following: 2025 2024 £’000 £’000 Debt Bank loan 17,000 25,000 Equity Called-up share capital 9,036 9,036 Reserves 249,834 233,930 258,870 242,966 Total debt and equity 275,870 267,966 The Company’s capital management objectives are to ensure that it will continue as a going concern and to maximise the capital return to its equity shareholders through an appropriate level of gearing. The Board’s policy is to permit gearing up to 25% where gearing is defined as borrowings used for investment purposes less cash, expressed as a percentage of net assets. If the figure so calculated were to be negative, this would be shown as a “net cash” position. 2025 2024 £’000 £’000 Borrowings used for investment purposes, less Cash at bank and in hand and current asset investments 12,320 23,039 Net assets 258,870 242,966 Gearing 4.8% 9.5% 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 includes: • the planned level of gearing, which takes into account the Manager’s views on the market; • the need to buy back the Company’s own shares for cancellation or to hold in treasury, which takes into account the share price discount; • the opportunities for issues of new shares; and • the amount of dividends to be paid, in excess of that which is required to be distributed. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 74 ### Section 5: Financials ### Liverpool Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 75 ### Section 6: Other Information (Unaudited) ### Newcastle Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 76 ### Section 6: Other Information (Unaudited) ## Section 6: Other Information (Unaudited) Annual General Meeting – Recommendations 78 Notice of Annual General Meeting 79 Explanatory Notes to the Notice of Meeting 80 Definitions of Terms and Alternative Performance Measures 82 Information about the Company 84 Risk Disclosures 87 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 777777 77 Section 6: Other Information (Unaudited) # Annual General Meeting – Recommendations **The Annual General Meeting (“AGM”) of the Company will be held on Wednesday, 25 February 2026 at 12.00 pm. The formal Notice of Meeting is set out on page 79.** **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 10 are all proposed as ordinary resolutions Resolution 1 is a required resolution. Resolution 2 invites shareholders to approve the final dividend. Resolutions 3 and 4 concerns the Directors’ Remuneration Policy and the Directors’ Remuneration Report on pages 50 to 52. Resolutions 5 to 8 invite shareholders to elect or re-elect each of the Directors who have put themselves forward for election or re-election for another year, following the recommendations of the Nomination Committee, set out on page 47 (their biographies are set out on pages 38 and 39). Resolutions 9 and 10 concern the appointment and remuneration of the Company’s auditor, discussed in the Audit and Risk Committee Report on pages 43 to 45. ## 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 preemption 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 £847,642.25 (being 10% of the issued share capital (excluding any shares held in treasury) as at the date of the Notice of the AGM). A special resolution will also be proposed to give the Directors authority to allot securities for cash on a non preemptive basis up to a maximum aggregate nominal amount of £847,642.25 (being 10% of the Company’s issued share capital (excluding any shares held in treasury) as at the date of the Notice of the AGM). This authority includes shares that the Company sells or transfers that have been held in treasury. The Board has established guidelines for treasury shares and will only reissue shares held in treasury at a price equal to or greater than the Company’s NAV (inclusive of current year income) plus any applicable costs. The Directors do not intend to allot shares pursuant to these authorities 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’s existing shareholders to do so and when it would not result in any dilution of NAV per share. If approved, both of these authorities will expire at the conclusion of the AGM in 2027 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 24 February 2025, the Company was granted authority to make market purchases of up to 5,183,720 ordinary shares of 25p each for cancellation or holding in treasury. 2,238,000 shares have been brought back under this authority and the Company therefore has remaining authority to purchase up to 2,945,720 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 net asset value and the purchase of ordinary shares. 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 the date of the Notice of the AGM. The Directors will exercise this authority 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, the authority to be given at the 2026 AGM will lapse at the conclusion of the AGM in 2027 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 2027. The Directors will only call general meetings on 14 clear days’ notice when they consider it to be in the best interests of the Company’s shareholders and will only do so if the Company offers facilities for all shareholders to vote by electronic means and when the matter needs to be dealt with expediently. ## Recommendations The Board considers that the resolutions relating to the above items of business are in the best interests of shareholders as a whole. Accordingly, the Board unanimously recommends to shareholders that they vote in favour of the resolutions to be proposed at the forthcoming AGM, as they intend to do in respect of their own beneficial holdings. 78 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 Section 6: Other Information (Unaudited) # Notice of Annual General Meeting Notice is hereby given that the Annual General Meeting of Schroder UK Mid Cap Fund plc will be held at 1 London Wall Place, London EC2Y 5AU on Wednesday, 25 February 2026 at 12.00 pm 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 Report of the Directors and the audited accounts for the year ended 30 September 2025. 2. To approve a final dividend of 16.1p pence per share for the financial year ended 30 September 2025. 3. To approve the Remuneration Policy. 4. To approve the Directors' Remuneration Report for the year ended 30 September 2025. 5. To re-elect Harry Morley as a Director of the Company. 6. To elect Richard Curling as a Director of the Company. 7. To re-elect Wendy Colquhoun as a Director of the Company. 8. To re-elect Helen Galbraith 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 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 £847,642.25 (being 10% of the issued ordinary share capital at the date of this Notice, excluding shares held in treasury) for a period expiring (unless previously renewed, varied or revoked by the Company in general meeting) at the conclusion of the next Annual General Meeting of the Company, 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 £847,642.25 (representing 10% of the aggregate nominal amount of the share capital in issue at the date of this Notice, excluding shares held in treasury); 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 Act to make market purchases (within the meaning of Section 693 of the Act) of ordinary shares of 25p each in the capital of the Company ("Shares") 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 5,082,463 representing 14.99% of the Company's issued ordinary share capital as at the date of this Notice, excluding shares held in treasury; (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 25p, 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 2027 (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 for potential reissue." 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." By order of the Board For and on behalf of ## Schroder Investment Management Limited Company Secretary 26 November 2025 Registered Office: 9 Haymarket Square Edinburgh Scotland EH3 8FY Registered Number: SC082551 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 79 ### Section 6: Other Information (Unaudited) ## Explanatory Notes to the Notice of Meeting 1. Ordinary shareholders are entitled to attend and vote at is important that you register for a Shareview Portfolio with the meeting and to appoint one or more proxies, who need enough time to complete the registration and authentication not be a shareholder, as their proxy to exercise all or any of processes. Please note that to be valid, your proxy instructions their rights to attend, speak and vote on their behalf at the must be received by Equiniti no later than 12.00 pm on meeting. 23 February 2026. If you have any difficulties with online voting, you should contact the shareholder helpline on +44 (0) A proxy form is attached. If you wish to appoint a person 371 384 0641. other than the Chair as your proxy, please insert the name of your chosen proxy holder in the space provided at the top If an ordinary shareholder submits more than one valid proxy of the form. If the proxy is being appointed in relation to less appointment, the appointment received last before the latest than your full voting entitlement, please enter in the box next time for receipt of proxies will take precedence. to the proxy holder’s name the number of shares in relation Shareholders may not use any electronic address provided to which they are authorised to act as your proxy. If left blank either in this Notice of Annual General Meeting or any related your proxy will be deemed to be authorised in respect of your documents to communicate with the Company for any full voting entitlement (or if this proxy form has been issued purposes other than expressly stated. in respect of a designated account for a shareholder, the full voting entitlement for that designated account). Representatives of shareholders that are corporations will have to produce evidence of their proper appointment when Additional proxy forms can be obtained by contacting attending the Annual General Meeting. the Company’s Registrars, Equiniti Limited, on +44 (0) 371 384 0641, or you may photocopy the attached 2. Any person to whom this notice is sent who is a person proxy form. Please indicate in the box next to the proxy nominated under section 146 of the Companies Act 2006 to holder’s name the number of shares in relation to which they enjoy information rights (a “Nominated Person”) may, under are authorised to act as your proxy. an agreement between him or her and the shareholder by whom he or she was nominated, have a right to be appointed Please also indicate by ticking the box provided if the proxy (or to have someone else appointed) as a proxy for the Annual instruction is one of multiple instructions being given. General Meeting. If a Nominated Person has no such proxy Completion and return of a form of proxy will not preclude appointment right or does not wish to exercise it, he or she may, a member from attending the Annual General Meeting and under any such agreement, have a right to give instructions to voting in person. the shareholder as to the exercise of voting rights. On a vote by show of hands, every ordinary shareholder who The statement of the rights of ordinary shareholders in is present in person has one vote and every duly appointed relation to the appointment of proxies in note 1 above does proxy who is present has one vote. On a poll vote, every not apply to Nominated Persons. The rights described in that ordinary shareholder who is present in person or by way of a note can only be exercised by ordinary shareholders of the proxy has one vote for every share of which he/she is a holder. Company. The “Vote Withheld” option on the proxy form is provided to 3. Pursuant to Regulation 41 of the Uncertificated Securities enable you to abstain on any particular resolution. Regulations 2001, the Company has specified that only those shareholders registered in the Register of members of the However it should be noted that a “Vote Withheld” is not a Company at 6.30 pm on 23 February 2026, or 6.30 pm two vote in law and will not be counted in the calculation of the days prior to the date of an adjourned meeting, excluding proportion of the votes “For” and “Against” a resolution. non-working days, shall be entitled to attend and vote at the A proxy form must be signed and dated by the shareholder meeting in respect of the number of shares registered in or his or her attorney duly authorised in writing. In the case their name at that time. Changes to the Register of Members of joint holdings, any one holder may sign this form. The after 6.30 pm on 23 February 2026 shall be disregarded in vote of the senior joint holder who tenders a vote, whether determining the right of any person to attend and vote at the in person or by proxy, will be accepted to the exclusion of the meeting. votes of the other joint holder and for this purpose seniority 4. CREST members who wish to appoint a proxy or proxies will be determined by the order in which the names appear through the CREST electronic proxy appointment service on the Register of Members in respect of the joint holding. may do so by using the procedures described in the To be valid, proxy form(s) must be completed and returned CREST manual. The CREST manual can be viewed at to the Company’s Registrars, Equiniti Limited, Aspect House, www.euroclear.com. A CREST message appointing a proxy (a Spencer Road, Lancing, West Sussex BN99 6DA, in the “CREST proxy instruction”) regardless of whether it constitutes enclosed envelope together with any power of attorney or the appointment of a proxy or an amendment to the other authority under which it is signed or a copy of such instruction previously given to a previously appointed proxy authority certified notarially, to arrive no later than 48 hours must, in order to be valid, be transmitted so as to be received before the time fixed for the meeting, or an adjourned by the issuer’s agent (ID RA19) by the latest time for receipt of meeting, excluding non-working days. Shareholders may proxy appointments. also appoint a proxy to vote on the resolutions being put to the meeting electronically by going to Equiniti’s Shareview If you are an institutional investor, you may be able to appoint website, www.shareview.co.uk, and logging in to your a proxy electronically via the Proxymity platform, a process Shareview Portfolio. Once you have logged in, simply click which has been agreed by the Company and approved by ‘View’ on the ‘My Investments’ page and then click on the the Registrar. For further information regarding Proxymity, link to vote and follow the on-screen instructions. If you please go to www.proxymity.io. Your proxy must be lodged have not yet registered for a Shareview Portfolio, go to by 12.00 pm on 23 February 2026 in order to be considered www.shareview.co.uk and enter the requested information. It valid. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 80 Section 6: Other Information (Unaudited) Before you can appoint a proxy via this process you will need to have agreed to Proximity's associated terms and conditions. It is important that you read these carefully as you will be bound by them, and they will govern the electronic appointment of your proxy. 5. Copies of the terms of appointment of the non-executive Directors and a statement of all transactions of each Director and of his family interests in the shares of the Company, will be available for inspection by any member of the Company at the registered office of the Company during normal business hours on any weekday (English public holidays excepted) and at the Annual General Meeting by any attendee, for at least 15 minutes prior to, and during, the Annual General Meeting. None of the Directors has a contract of service with the Company. 6. The biographies of the Directors offering themselves for election or re-election are set out on pages 38 and 39 of the Company's annual report and financial statements for the year ended 30 September 2025. 7. As at 26 November 2025, 36,143,690 ordinary shares of 25p each were in issue and 2,238,000 shares were held in treasury. Therefore the total number of voting rights of the Company as at 26 November 2025 was 33,905,690. 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 website dedicated to the Company: www.schroders.co.uk/ukmidcap. 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. Members satisfying the thresholds in section 338 of the Companies Act 2006 may require the Company to give, to members of the Company entitled to receive notice of the Annual General Meeting, notice of a resolution which those members intend to move (and which may properly be moved) at the Annual General Meeting. A resolution may properly be moved at the Annual General Meeting unless (i) it would, if passed, be ineffective (whether by reason of any inconsistency with any enactment or the Company's constitution or otherwise); (ii) it is defamatory of any person; or (iii) it is frivolous or vexatious. A request made pursuant to this right may be in hard copy or electronic form, must identify the resolution of which notice is to be given, must be authenticated by the person(s) making it and must be received by the Company not later than six weeks before the date of the Annual General Meeting. 12. Members satisfying the thresholds in section 338A of the Companies Act 2006 may request the Company to include in the business to be dealt with at the Annual General Meeting any matter (other than a proposed resolution) which may properly be included in the business at the Annual General Meeting. A matter may properly be included in the business at the Annual General Meeting unless: (i) it is defamatory of any person; or (ii) it is frivolous or vexatious. A request made pursuant to this right may be in hard copy or electronic form, must identify the matter to be included in the business, must be accompanied by a statement setting out the grounds for the request, must be authenticated by the person(s) making it and must be received by the Company not later than six weeks before the date of the Annual General Meeting. 13. The Company's privacy policy is available on its website: www.schroders.co.uk/ukmidcap. Shareholders can contact Equiniti for details of how Equiniti processes their personal information as part of the AGM. 14. If you hold your shares on a platform via a nominee, please note that the Association of Investment Companies ("AIC") has provided helpful information on how to vote investment company shares held on some of the major platforms. This information can be found at www.theaic.co.uk/how-to-vote-your-shares. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 81 ### Section 6: Other Information (Unaudited) ## Definitions of Terms and Alternative Performance Measures ### The terms and performance measures below are those commonly used by investment ### companies to assess values, investment performance and operating costs. Numerical ### calculations are given where relevant. Some of the financial measures below are classified ### as APMs as defined by the European Securities and Markets Authority. Under this definition, ### APMs include a financial measure of historical financial performance or financial position, other ### than a financial measure defined or specified in the applicable financial reporting framework. ### APMs have been marked with an asterisk (*). ### Net asset value (“NAV”) per share The NAV per share of 754.45p (2024: 702.60p) represents the net assets attributable to equity shareholders of £258,870,000 (2024: £242,966,000) divided by the number of shares in issue, excluding any shares held in treasury, of 34,312,190 (2024: 34,581,190). The change in the NAV amounted to 6.5% (2024: 13.6%) over the year. However, this performance measure excludes the positive impact of dividends paid out by the Company during the year. When these dividends are factored into the calculation, the resulting performance measure is termed the “total return”. Total return calculations and definitions are given below. ## Total return* Total return is 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 September 2025 is | | | | The share price total return for the year ended 30 September | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | calculated as follows: | | | | 2025 is calculated as follows: | | | | | Opening NAV at 30/9/24 702.60p | | | | Share price at 30/9/24 616.00p | | | | | Closing NAV at 30/9/25 754.45p | | | | Share price at 30/9/25 702.00p | | | | | Dividend | NAV on | Cumulative | | Dividend | NAV on | Cumulative | | | received XD date | XD date Factor | | Factor | received XD date | XD date Factor | | Factor | | 15.50p 30/1/2025 679.24p 1.0228 1.0228 | | | | 15.50p 30/1/2025 608.00p 1.0255 1.0255 | | | | | 6.30p 10/7/2025 732.56p 1.0086 1.0316 | | | | 6.30p 10/7/2025 678.00p 1.0093 1.0350 | | | | | NAV total return, being the closing NAV, multiplied | | | | Share price total return, being the closing share price, | | | | | by the factor, expressed as a percentage change | | | | multiplied by the factor, expressed as a percentage | | | | | in the opening NAV: 10.8% | | | | change in the opening share price: 18.0% | | | | | The NAV total return for the year ended 30 September 2024 is | | | | The share price total return for the year ended 30 September | | | | | calculated as follows: | | | | 2024 is calculated as follows: | | | | | Opening NAV at 30/9/23 618.32p | | | | Opening Share price at 30/9/23 544.00p | | | | | Closing NAV at 30/9/24 702.60p | | | | Closing Share price at 30/9/24 616.00p | | | | | Dividend | NAV on | Cumulative | | Dividend | NAV on | Cumulative | | | received XD date | XD date Factor | | Factor | received XD date | XD date Factor | | Factor | | 15.00p 15/2/2024 625.90p 1.0240 1.0240 | | | | 15.00p 15/2/2024 542.00p 1.0277 1.0277 | | | | | 6.00p 11/7/2024 710.57p 1.0084 1.0326 | | | | 6.00p 11/7/2024 632.00p 1.0095 1.0374 | | | | | NAV Total return, being the closing NAV, multiplied by the | | | | Share price total return, being the closing share price, | | | | | factor, expressed as a percentage change in the opening | | | | multiplied by the factor, expressed as a percentage | | | | | NAV: 17.3% | | | | change in the opening share price: 17.5% | | | | Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 82 Section 6: Other Information (Unaudited) ## Annualised total return\* The annualised total return is the compound annual rate of return which equates to the total return as calculated above, for a period of more than one year. ## Benchmark A measure against which the performance of an investment company is compared, or against which it sets its objective. The Company's benchmark is the FTSE 250 (ex-Investment Trust) Index. ## Discount/premium\* The amount by which the share price of an investment trust is lower (discount) or higher (premium) than the NAV per share. If the shares are trading at a discount, investors would be paying less than the value attributable to the shares by reference to the underlying assets. A premium or discount is generally the consequence of supply and demand for the shares on the stock market. The discount of premium is expressed as a percentage of the NAV per share. The discount at the year end amounted to 7.0% (2024: 12.3%), as the closing share price at 702.00p (2024: 616.00p) was lower than the closing NAV of 754.45p (2024: 702.60p). ## Gearing\* The gearing percentage reflects the amount of borrowings (i.e. bank loans or overdrafts) which the Company has drawn down and invested in the market. This figure is indicative of the extra amount by which shareholders' funds would move if the Company's investments were to rise or fall. Gearing is defined as: borrowings used for investment purposes, less cash, expressed as a percentage of net assets. The gearing figure at the relevant year end is calculated as follows: | | 2025 | 2024 | | --- | --- | --- | | Borrowings used for investment purposes, less cash | 12,320 | 23,082 | | Net assets | 258,870 | 242,966 | | Gearing | 4.8% | 9.5% | ## Leverage\* For the purpose of the Alternative Investment Fund Managers (AIFM) Regulations, 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. ## Ongoing Charges\* Ongoing Charges is calculated in accordance with the AIC's recommended methodology and represents the management fee and all other operating expenses excluding finance costs and transaction costs, amounting to £2,203,000 (2024: £2,388,000), expressed as a percentage of the average daily net asset values during the period of £238.6million (2024: £227.5million). Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 83 ### Section 6: Other Information (Unaudited) ## Information about the Company ### Web pages and share price information Alternative Investment Fund Managers ### The Company has dedicated web pages, which may be found Directive (AIFMD) disclosures at www.schroders.co.uk/ukmidcap. The web pages are the The UK AIFMD, as transposed into the FCA Handbook in the Company’s primary method of electronic communication with UK, requires that certain pre-investment information be made shareholders. They contain details of the Company’s share available to investors in Alternative Investment Funds (such as the price and copies of the annual report and financial statements Company) and also that certain regular and periodic disclosures and other documents published by the Company as well as are made. This information and these disclosures may be found information on the Directors, Terms of Reference of committees either below, elsewhere in this annual report, or in the Company’s and other governance arrangements. In addition, the web pages UK AIFMD information disclosure document published on the contain links to announcements made by the Company to the Company’s web pages. market and Schroders’ website. There is also a section entitled “How to Invest”. ### Leverage The Company releases its NAV per share on both a cum and ex-income basis to the market on a daily basis. The Company’s leverage policy and details of its leverage ratio calculation and exposure limits as required by the AIFMD are Share price information may also be found in the Financial Times published on the Company’s web pages and within this report. and on the Company’s web pages. A description of leverage can be found on page 83. The Company is also required to periodically publish its actual leverage exposures. As at 30 September 2025 these were: ### Association of Investment Companies % of net asset value The Company is a member of the Association of Investment Leverage exposure Maximum Actual Companies. Further information on the Association can be found Gross method 200.0 104.3 on its website: www.theaic.co.uk. Commitment method 200.0 108.6 ### Individual Savings Account (“ISA”) status The Company’s shares are eligible for stocks and shares ISAs. ### Illiquid assets ### Non-Mainstream Pooled Investments status As at the date of this report, none of the Company’s assets are subject to special arrangements arising from their illiquid nature. The Company currently conducts its affairs so that its shares can be recommended by independent financial advisers to ordinary ### retail investors in accordance with the FCA’s rules in relation to Remuneration disclosures non-mainstream investment products and intends to continue Quantitative remuneration disclosures to be made in this annual to do so for the foreseeable future. The Company’s shares report in accordance with FCA Handbook rule FUND3.3.5 may be are excluded from the FCA’s restrictions which apply to non- found in the Company’s AIFMD information disclosure document mainstream investment products because they are shares in an published on the Company’s web pages. investment trust. ### Publication of Key Information Document ### Financial calendar ### (KID) by the AIFM Annual General Meeting February/March KIDs are designed to provide certain prescribed information to retail investors, including details of potential returns under Final dividend paid February/March different performance scenarios and a risk/reward indicator. The Half year results announced May/June Company’s KID is available on its web page. Interim dividend paid August Financial year end 30 September Annual results announced November/December Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 84 ### Section 6: Other Information (Unaudited) ### How to invest Dividends There are a number of ways to easily invest in Paying dividends into a bank or building society account helps the Company. The Manager has set these out at reduce the risk of fraud and will provide you with quicker access www.schroders.com/invest-in-a-trust/. to your funds than payment by cheque. Applications for an electronic mandate can be made by contacting ### Warning to shareholders the Registrar, Equiniti. This is the most secure and efficient method of payment and ensures that you receive any dividends Companies are aware that their shareholders have received promptly. unsolicited telephone calls or correspondence concerning investment matters. These are typically from overseas-based If you do not have a UK bank or building society account, please ‘brokers’ who target UK shareholders, offering to sell them what contact Equiniti for details of their overseas payment service. often turn out to be worthless or high risk shares or investments. Further information can be found at www.shareview.co.uk, These operations are commonly known as ‘boiler rooms’. These including how to register with Shareview Portfolio and manage ‘brokers’ can be very persistent and extremely persuasive. your shareholding online. Shareholders are advised to be wary of any unsolicited advice, offers to buy shares at a discount or offers of free company reports. If you receive any unsolicited investment advice: • Make sure you get the correct name of the person and organisation. • Check that they are properly authorised by the FCA before getting involved by visiting https://register.fca.org.uk. • Report the matter to the FCA by calling 0800 111 6768 or visiting https://fca.org.uk/consumers/report-scam- unauthorised-firm. • Do not deal with any firm that you are unsure about. If you deal with an unauthorised firm, you will not be eligible to receive payment under the Financial Services Compensation Scheme. The FCA provides a list of unauthorised firms of which it is aware, which can be accessed at https://fca.org.uk/consumers/warning- list-unauthorised-firms#list. More detailed information on this or similar activity can be found on the FCA website at https://fca.org.uk/consumers/protect- yourself-scams. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 85 Section 6: Other Information (Unaudited) www.schroders.co.uk/midcap Directors Harry Morley (Chair) Wendy Colquhoun Richard Curling Helen Galbraith Registered office 9 Haymarket Square Edinburgh Scotland EH3 8FY Advisers and service providers Alternative Investment Fund Manager (the “Manager” or “AIFM”) Schroder Unit Trusts Limited 1 London Wall Place London EC2Y 5AU Investment Manager and Company Secretary Schroder Investment Management Limited 1 London Wall Place London EC2Y 5AU Telephone: 020 7658 6000 Email: amcompanysecretary@schroders.com Depository and custodian J.P. Morgan Europe Limited¹ 25 Bank Street London E14 5JP Lending bank Bank of Nova Scotia 201 Bishopsgate London EC2M 3NS Corporate broker Panmure Liberum Ltd 25 Ropemaker Street London EC2Y 9LY ¹ With effect from 3 October 2025, J.P. Morgan were appointed to provide depository and custodian services to the Company. Registrar Equiniti Limited Aspect House Spencer Road Lancing West Sussex BN99 6DA Shareholder Helpline: +44 (0) 800 384 0641* Website: www.shareview.co.uk *Calls to this number are free of charge from UK landlines. Communications with shareholders are mailed to the address held on the register. Any notifications and enquiries relating to shareholdings, including a change of address or other amendment should be directed to Equiniti Limited at the above address and telephone number. Independent auditor BDO LLP 55 Baker Street London W1U 7EU AIFM Directive disclosures Certain pre-sale, regular and periodic disclosures required by the Alternative Investment Fund Managers (“AIFM”) Directive may be found on its web page required under the AIFM Directive are published on its web pages. Other information Company number SC082551 Dealing codes ISIN: GB0006108418 SEDOL: 0610841 Ticker: SCP Global Intermediary Identification Number (GIIN) 9GN3DU.99999.SL.826 Legal Entity Identifier (LEI) 549300SOEWCYZTK2SP87 Privacy notice The Company’s privacy notice is available on its web pages. 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 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 fca.org.uk/consumers/unauthorisedfirmsindividualslist. More detailed information on this or similar activity can be found on the FCA website at fca.org.uk/consumers/protect-yourself-scams. 86 Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ### Section 6: Other Information (Unaudited) ## Risk Disclosures Capital erosion Where fees are charged to capital instead of income, or a fixed distribution amount is paid regardless of the Company’s performance, there is the potential that performance or capital value may be eroded. Concentration risk The Company may be concentrated in a limited number of geographical regions, industry sectors, markets and/or individual positions. This may result in large changes in the value of the Company, both up or down. Counterparty risk The fund may have contractual agreements with counterparties. If a counterparty is unable to fulfil their obligations, the sum that they owe to the fund may be lost in part or in whole. Gearing risk The Company may borrow money to make further investments, this is known as gearing. Gearing will increase returns if the value of the investments purchased increase by more than the cost of borrowing, or reduce returns if they fail to do so. In falling markets, the whole of the value in such investments could be lost, which would result in losses to the Company. Liquidity risk The price of shares in the Company is determined by market supply and demand, and this may be different to the net asset value of the Company. In difficult market conditions, investors may not be able to find a buyer for their shares or may not get back the amount that they originally invested. Certain investments of the Company, in particular the unquoted investments, may be less liquid and more difficult to value. In difficult market conditions, the Company may not be able to sell an investment for full value or at all and this could affect performance of the Company. Market risk The value of investments can go up and down and an investor may not get back the amount initially invested. Operational risk Operational processes, including those related to the safekeeping of assets, may fail. This may result in losses to the Company. Performance risk Investment objectives express an intended result but there is no guarantee that such a result will be achieved. Depending on market conditions and the macro economic environment, investment objectives may become more difficult to achieve. Share price risk The price of shares in the Company is determined by market supply and demand, and this may be different to the net asset value of the Company. This means the price may be volatile, meaning the price may go up and down to a greater extent in response to changes in demand. Smaller companies risk Smaller companies generally carry greater liquidity risk than larger companies, meaning they are harder to buy and sell, and they may also fluctuate in value to a greater extent. Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 87 ### Section 6: Other Information (Unaudited) Schroder UK Mid Cap Fund plc Annual Report and Financial Statements 2025 ## 88 Schroder UK Mid Cap Trust plc | Annual Report and Financial Statements 2025 ### Schroder Investment Management Limited ### 1 London Wall Place, London EC2Y 5AU, United Kingdom ### T +44 (0) 20 7658 6000 ## schroders.com ## @schroders Important information: This document is intended to be for information purposes investment and/or strategic decisions. Past performance is not a reliable indicator of only and it is not intended as promotional material in any respect. The material future results, prices of shares and the income from them may fall as well as rise and is not intended as an offer or solicitation for the purchase or sale of any financial investors may not get back the amount originally invested. Schroders has expressed instrument. The material is not intended to provide, and should not be relied on for, its own views in this document and these may change. Issued by Schroder Investment accounting, legal or tax advice, or investment recommendations. Information herein Management Limited, 1 London Wall Place, London EC2Y 5AU, which is authorised and is believed to be reliable but Schroders does not warrant its completeness or accuracy. regulated by the Financial Conduct Authority. For your security, communications may No responsibility can be accepted for errors of fact or opinion. Reliance should not be taped or monitored. be placed on the views and information in the document when taking individual