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Schroder UK Public Private Trust plc

Report and Accounts

For the year ended 31 December 2021

Schroder UK Public Private Trust plc (the "Company") hereby submits its Annual Report for the year ended 31 December 2021 as required by the Financial Conduct Authority's Disclosure Guidance and Transparency Rule 4.1.

The Company's Annual Report and Accounts for the year ended 31 December 2021 are being published in hard copy format and an electronic copy will shortly be available to download from the Company's webpage www.schroders.com/publicprivatetrust

It can also be viewed at the following link:

http://www.rns-pdf.londonstockexchange.com/rns/8221I_1-2022-4-20.pdf

The Company has submitted its Annual Report and Accounts to the National Storage Mechanism and it will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism 

Enquiries:

Gareth Faith

Schroder Investment Management Limited

Tel: 020 7658 5264

HIGHLIGHTS

· NAV of 48.08p per share as of 31 December 2021, a 37.4% relative increase to the NAV as of 31 December 2020 (35.00p per share). 

· Performance primarily driven by the successful initial public offering Oxford Nanopore Technologies, which resulted in fair value gain of £104.6 million, as well as the sales of Inivata, Kuur Therapeutics and the IPO of Immunocore.

· Bank debt fully repaid during the year with net debt reduced from 31.6% as of 31 December 2020 to 0.7% as of 31 December 2021.

· Completed first seven new investments since Schroders' appointment as Portfolio Manager, including four new private equity investments (Tessian, Revolut, Attest and Ada Health) as well as three new public investments. 

· After year end, further progress was achieved in repositioning the portfolio with the eighth and ninth new investments in leading private businesses, Back Market and Epsilogen. 

· Subject to shareholder approval the Board are proposing to remove the geographic restrictions from the investment policy, in order to enable the Portfolio Manager to invest globally, and provide investors access to great venture and growth companies.

CHAIR'S STATEMENT

Performance

During the year ended 31 December 2021, the Company's net asset value produced strong returns, and the Company continued to make significant progress in rebalancing the portfolio and reducing debt. This progress was made against the backdrop of a second year of COVID-19 related uncertainty for markets, particularly in November and December with the advent of the omicron variant.

Compared to the prior year end, the net asset value per share rose by 37.4% from 35.00p to 48.08p per share. The recovery in the NAV this year, driven by a number of positive developments within the Company's portfolio, is encouraging. The successful initial public offering ("IPO") of Oxford Nanopore resulted in a fair value gain of £104.6 million over the full year period. Other positive developments included sales of businesses such as Inivata and Kuur Therapeutics, amongst others, and the IPO of Immunocore.

The Portfolio Manager made significant progress in rebalancing the portfolio during the year, with several new private investments being completed. These investments have been focused in key sector positions in technology (Tessian), financials (Revolut), business services (Attest) and healthcare (Ada Health). The Board is encouraged by this fast pace of investment, which has continued after the year end with additional purchases of private companies in consumer (Back Market) and healthcare (Epsilogen). Further information on portfolio activity and valuation reviews may be found in the Portfolio Manager's Review on pages 8 to 13.

Frustratingly, this progress has not yet been reflected in the Company's share price, which rose more modestly from 31.00p to 33.10 per share, standing at a discount of 31.2% to the NAV per share at the end of the year. The Board continues to review various initiatives to improve this situation including the possible use of share buy-backs.

Revised investment strategy

The Company has traditionally focused its attention on venture and growth stage UK companies and we continue to see significant opportunity in the UK in terms of quantum and quality of investments. At the same time, Schroders has global insight, presence and investment experience with a strong track record of investing across the world, not just in the UK.

Currently, the Company is limited in its ability to invest into opportunities that are located outside of the UK. The Board is proposing to remove this restriction to enable the Portfolio Manager to invest into the best companies, when viewed on a risk/return basis, no matter where such companies are located in the world. The Portfolio Manager has unparalleled access to a global universe of top-quality opportunities and we want to be able to leverage this to give our investors exposure to the best venture and growth companies in the world.

Subject to shareholder approval, the Company plans to consider global investment opportunities in private equity that, typically have the potential to deliver greater than 2x returns over the medium term, broadening its existing investment focus beyond UK companies.

- The Board notes that the Portfolio Manager has a strong track record in delivering excellent returns from investing on a global basis delivering 3.0x net realised multiple on direct/co-investments as of Q3 2021.1

1 Source: Schroders Capital, 2022 "Global Co-investment Track Record".

The Company will continue to focus on direct investment and co-investments in the venture/growth space where we see strong potential returns.

- Smaller, earlier stage businesses typically have the potential to outperform larger more established companies, exhibiting superior growth and seeing a larger potential uplift in valuation multiples as they scale. The Company's strategy will be to make future investments in such businesses alongside a strong syndicate of experienced, credible co-investors or investor syndicates, and target those businesses with clear future funding requirements to reach profitability.

- We expect the Portfolio Manager to continue to source deals for the Company both from its own network and via its relationships with many of the world's leading venture capital firms as a result of its 25 year history of investing in venture capital funds in the US, Europe and Asia.

The Company will target around 75% of the portfolio to be in private equity, with around 25% in public equities. The majority of public holdings are expected to be a consequence of private holdings going on to IPO.

- This enables the Company to capture the full lifetime value of a portfolio company and avoids the need to sell post IPO. We have seen significant value continue to build in many investments post-IPO so plan to take advantage of such opportunities.

A resolution has therefore been included in the notice of the Annual General Meeting to seek shareholder approval to changes in the Company's investment objective and policy. Further details of the proposed changes may be found in the Annual Report under "Annual General Meeting-Recommendations" on pages 79 and 80.

Discount management

As mentioned earlier, the share price discount to net asset value at the year-end was 31.2% and volatility was high throughout the year. The Board is seeking to renew the authorities to purchase up to 14.99% of its issued share capital, to be cancelled or held in treasury for future reissuance, at the forthcoming Annual General Meeting.

The Board has been hampered in its efforts to buy back shares by a shortage of cash available for this purpose over the last year, created by our central objectives to reduce debt and to rebalance the portfolio into a more sustainable shape. As a result, the authorities given by shareholders at the last Annual General Meeting have not been utilised. In view of the progress made on the repayment of debt over the last year, we are now better placed to utilise powers given by these authorities to buy back shares and the Board considers buybacks a useful mechanism to assist in reducing volatility in the discount of the share price.

Any use of cash for buy-backs will continue to be weighed against the opportunities being found by our Portfolio Manager for further investment.

Environmental, Social & Governance ('ESG') Matters

The Board believes that the Company has an important role to play in helping to reduce the impact of climate change in its portfolio, and acknowledges the broad expectation from our investors of having the Company pay due attention to ESG issues when selecting and retaining investments. ESG principles are embedded into our investment process.

You can read more about the Portfolio Manager's approach to Sustainability and how it has engaged with investee companies on pages 13 to 17.

Gearing

Since assuming management of the portfolio, Schroders has worked closely with the Board to reduce the level of gearing in the Company's portfolio and I am pleased to report that in the year to 31 December 2021, the Company's gearing was reduced to 0.7% compared to 31.6% at the prior year end. The Company retains access to a £40 million revolving credit facility which will continue to be used in accordance with the Portfolio Manager's prudent use of gearing as a method of smoothing cash flows and providing operational liquidity on a short-term basis, and only when there is visibility of the Company's ability to pay down debt within a 12 month period. The reduction in amount also meaningfully reduces the cost of the facility and the Portfolio Manager increasingly has the ability to generate liquidity for new investments by reducing positions in the Company's quoted holdings.

Board composition

The Board believes that it is important for appropriate new skills to be brought to the Board and will continue to look to refresh one Director every two to three years. All Directors will continue to be subject to re-election each year at the AGM and will not serve for a period over nine years.

Outlook

The tragic events in Ukraine and the human catastrophe unfolding there continue to create greater uncertainty and may continue to cause volatility in public markets across the world. This situation could also impact private markets.

Notwithstanding headwinds, 2021 has been a year during which the Company has again made good progress. The fact that this has not yet been reflected in the share price is a major focus of the Board.

The proposed change to widen our investment policy, if approved by shareholders at the Annual General Meeting, will open additional exciting opportunities for our Portfolio Managers to explore and help to attract new investors to the Company whilst our greater ability to utilise share buybacks will help in reducing volatility in the discount.

AGM

The AGM will be held at noon on Wednesday, 18 May 2022 at Schroders' offices at 1 London Wall Place, London EC2Y 5AU. Following two years where attendance was restricted by the pandemic, the Board looks forward to welcoming shareholders to attend and participate in the meeting. Please also note that proxy votes can be submitted electronically through the registrar's portal and we encourage all shareholders to do so. Details are on the Company's webpages.

In the event that shareholders have a question for the Board, please email amcompanysecretary@schroders.com and we will respond.

Web Conference - Update from Schroders

Please join the Portfolio Manager for a webinar in which they will report on the year ended 31 December 2021 and outline their thoughts on the future direction of the portfolio. The presentation will be followed by a live Q&A session. The webinar will take place on 27 April 2022 at 9.00am.Register for the event at http://www.schroders.com/publicprivatetrust/updates.

Tim EdwardsChair

20 April 2022

PORTFOLIO MANAGER'S REVIEW

Summary

‒ The Company reported a net asset value ("NAV") of 48.08p per share as of 31 December 2021, an increase of 2.0% relative to the NAV as of 30 September 2021 (47.13p per share) and 37.4% relative to the NAV as of 31 December 2020 (35.00p per share).

‒ Performance primarily driven by the successful initial public offering ("IPO") of Oxford Nanopore Technologies ("ONT") which resulted in a fair value gain of £104.6 million.

‒ Considerable progress achieved in repositioning the portfolio with £166.0 million of realisations enabling full repayment of the bank loan1.

‒ Completed first seven new investments since our appointment as Portfolio Manager, totalling £51.7 million - four new private equity investments (£29.9 million) and three new public equity investments (£21.8 million).

- Bank debt fully repaid during the year with net debt reduced from 31.6% as of 31 December 2020 to 0.7% as of 31 December 2021.

1Intra-period and prior to new investments funded by the bank overdraft.

INTRODUCTION

Markets

UK equities overall performed well in 2021 as vaccination programmes were rolled out, social distancing measures were broadly relaxed and economic activity recovered. Many lowly valued and economically sensitive areas of the market outperformed in the first half of the year in anticipation of a strong global recovery. Later in the year there was rotation back towards more defensive areas of the market due to a combination of factors. These factors included expectations that central banks would look to tighten monetary policy in response to rising inflation, ongoing supply chain issues, and fears around COVID-19 variants leading to further waves of the pandemic and lockdowns. Equities were particularly volatile towards the period end amid increasingly hawkish commentary from the major central banks.

Portfolio composition and valuation reviews

As of 31 December 2020, the Company had 38 portfolio holdings1 including 8 quoted holdings and 30 unquoted holdings. During the period, the number and composition of holdings was impacted by the following events:

‒ Immunocore's completed initial public offering ("IPO").

‒ Sale of four holdings and three partial holdings to Rosetta Capital.

‒ Sale of Kymab Ltd ("Kymab") (with the remaining contingent payments still held in the portfolio).

‒ Sale of Inivata Ltd ("Inivata") to NeoGenomics Inc. ("NeoGenomics").

‒ Sale of Kuur Therapeutics Ltd ("Kuur Therapeutics") to Athenex, Inc ("Athenex").

‒ Sale of Netscientific plc.

‒ New investment in Tessian Ltd ("Tessian").

‒ New investment in Johnson Matthey plc ("Johnson Matthey").

‒ New investment in Revolut.

‒ New investment in Spirent Communications plc ("Spirent").

‒ New investment in Petershill Partners plc ("Petershill Partners").

‒ ONT's completed IPO.

‒ New investment in Attest Technologies Ltd ("Attest").

‒ New investment in Ada Health GmbH ("Ada Health").

‒ Sale of Athenex.

As of 31 December 2021, the Company ended the period with 35 holdings2 including 11 quoted holdings and 24 unquoted holdings. All the Company's quoted holdings were valued using unadjusted quoted prices except Rutherford Health3 which continued to be fair value priced by Link Fund Solutions Limited ("LFS"), the Company's Alternative Investment Fund Manager (AIFM). For the unquoted holdings, the AIFM conducted a full valuation review to determine the fair value of the portfolio as of 31 December 2021.

1Excluding 7 holdings with no value. 2Excluding 9 holdings with no value. 3Since year end Rutherford Health has delisted and will be fair value priced with other unquoted holdings.

Recent developments

After year end, further progress was achieved in repositioning the portfolio with the eighth and ninth new investments in leading private businesses, Back Market and Epsilogen. Further details regarding these new investments are contained in the Investment Activity section.

In addition, on 24 January 2022, Rutherford Health plc announced the withdrawal of its shares from trading on the AQSE Growth Market.

While we are of course aghast at events in Ukraine, we would note that the Company has limited exposure to Ukraine and Russia. The only portfolio company impacted is Revolut, which despite being a British company, has some staff based in Ukraine. At the onset of the crisis, Revolut focused on doing all it could to safeguard its people in Ukraine, and to support them and their families. As matters intensified, they offered relocation support to all its Ukraine-based employees, if they wished to move, either within Ukraine or internationally. In addition, Revolut engaged a global security solutions partner to provide its people with guidance, emergency logistical support and the latest security updates in the country. Finally, in March, Revolut launched payment services for refugees fleeing Ukraine, so that individuals displaced by the invasion have quick and easy access to their money. In just over a week, the company onboarded over 19,000 new users.

Financial Performance*

Source: Link Fund Solutions, the Company's AIFM, as of 31 December 2021.

*Numbers have been rounded.

The NAV as of 31 December 2021 was £436.9 million or 48.08p per share. This reflects an increase of 2.0% compared with the NAV as of 30 September 2021 and an increase of 37.4% since 31 December 2020.

The full year NAV return of +37.4% comprised:

‒ Quoted holdings: -6.7%

‒ Unquoted holdings: +46.0%

‒ Foreign exchange: -0.3%

‒ Costs and other movements: -1.7%

The Company's quoted holdings saw a decline in value of 32.1% contributing -6.7% to the full year increase in NAV. The largest single downwards contributor to performance was Rutherford Health. The company is reported as a quoted holding, however trading on the relevant exchange is limited so it is valued independently by Link Fund Solutions Limited (LFS), the Company's AIFM. The holding was revalued to £21.3 million, a decline of £14.1 million when compared with the holding value of £33.9 million as of 31 December 20201. The valuation was reduced to reflect developments at the company including the heightened financing risk. The only other large negative contributor was Autolus Therapeutics which declined 21% in the fourth quarter and 41% over the full year period.

On the other hand, Idex Biometrics ASA increased 31% in the fourth quarter and 5% over the full year.

The Company's unquoted holdings saw an increase in value of 41.3% contributing +46.0% to the full year increase in NAV. The largest positive contributor to performance was ONT which completed its IPO in September 2021. Over the year, ONT's fair value increased by £104.6 million taking the holding to £162.6 million, representing 36.9% of total investments, as of 31 December 2021. After accounting for its partial sale to Rosetta Capital, the second largest positive contributor was Inivata. The fair value of the holding was increased by £15.1 million prior to its acquisition by NeoGenomics. Immunocore also provided a positive contribution to performance increasing in fair value by £8 million2, including 31% appreciation in its share price after its listing in February.

The other unquoted holdings that experienced a fair value gain or loss of greater than £5 million over the full year included:

‒ Atom Bank was revalued up in the fourth quarter to reflect the pricing of an internal financing round.

‒ BenevolentAI was revalued up in the fourth quarter to reflect the pricing of its prospective business combination with Odyssey Acquisition S.A. ("Odyssey"), a Euronext Amsterdam-listed investment company.

‒ HP Environmental Technologies Fund was revalued up to reflect progress across its portfolio.

‒ Mafic was revalued down to reflect disappointing progress.

Foreign exchange

Over the year, the fair value of investments denominated in USD benefited from the depreciation in the relative value of GBP, whereas investments denominated in CHF, NOK and AUD were negatively impacted by the appreciation of GBP. Overall, changes in foreign exchange rates contributed -0.3% to the full year increase in NAV.

Cash and debt

As of 31 December 2021, the Company held £19.1 million in cash with £22.0 million drawn from the bank overdraft.

1After accounting for a follow-on investment completed during the year and outlined in the Investment Activity section of this report.

2After accounting for its partial sale to Rosetta Capital.

Top 10 Holdings

The Company's top ten holdings as of 31 December 2021 compared with the respective holdings as of 31 December 2020.

Source: Link Fund Solutions, the Company's AIFM, as of 31 December 2021.

Oxford Nanopore Technologies

During 2021, Oxford Nanopore Technologies ("ONT"), the company behind a new generation of nanopore-based sensing technology, had a successful year. Most notably, on 30th September 2021, ONT announced the successful pricing of its initial public offering on the main market of the London Stock Exchange raising gross proceeds of approximately £350 million at 425p pence per share, equivalent to a market capitalisation of £3.4 billion.

Shortly after listing, ONT reported that the significant increase in demand seen in the first half of the year to 30 June 2021 had continued through the third quarter, and September saw the strongest ever trading month in the Group's history. ONT saw continued demand for products for sequencing the SARS-CoV-2 virus, increasing demand for products for large-scale human genomics programmes and the addition of new customers across other areas of genomics research. As such, ONT issued three separate upgrades to revenue guidance during the period October 2021 to January 2022. At the time of writing, ONT expects to report annual revenue growth of 83% growth for its Life Sciences Research Tools taking total revenue above £126 million for the year to 31 December 2021.

Atom Bank

During 2021, Atom Bank ("Atom"), the UK's first bank built exclusively for mobile, made great underlying operational progress and transitioned towards run-rate profitability. In August, Atom released its annual report outlining progress over the 12 months to March 2021, including narrowing its losses, commissioning its new banking technology stack, diversifying its savings range by introducing its Instant Access Saver, completing its largest mortgage securitisation transaction to date (£0.8 billion), and placing a strong focus on business lending which saw balances grow from £240 million to £662 million. Over the 3 months to June 2021, Atom achieved a NIM of 1.3% (up from 0.1% in March of 2020), reaching £3 billion of mortgage completions, passing £1 billion of deposits into its Instant Access Saver product, growing total customer deposits 16% to £2.5 billion and delivering its first month of operating profit.

Rutherford Health

Rutherford operates four innovative cancer treatment centres in Newport, Northumberland, Thames Valley, and Liverpool and one diagnostics center in Taunton. The service offering covers imaging, chemotherapy, immunotherapy, radiotherapy, and high energy proton therapy.

In 2021, Rutherford continued to launch a variety of organic growth initiatives including the expansion of proton therapy training for oncologists working in the NHS. In addition, Rutherford opened The Rutherford Diagnostic Centre Somerset in Taunton, the first community diagnostics centre run by the independent sector in partnership with the NHS. The Rutherford Diagnostic Centre Somerset offers magnetic resonance imaging, computed tomography, ultrasound, and x-ray to patients. In December 2021, Rutherford announced that it has received new funding of £10 million by its shareholders, including the Company. The new funding was provided in the context of a wider reorganisation including the appointment of a new Chairman, Dr Mark Jackson, as well as the replacement of the CEO with an experienced interim, Sean Sullivan. As part of the reorganisation, Rutherford also announced the withdrawal of its shares from trading on the AQSE Growth Market.

In April 2022, Rutherford secured commitments from the Company and other shareholders for new funding at an amount of £4.5 million. The funding was provided to Rutherford in order to extend its runway while Rutherford is in the process of securing long-term funding. Should Rutherford's efforts to secure long-term funding prove unsuccessful, there is a material risk that the company will need to file for administration.

BenevolentAI

During 2021, BenevolentAI, the clinical-stage artificial intelligence ("AI") drug discovery company, made good progress across its various business activities. In February 2021, BenevolentAI announced dosing of the first patient in its randomised first-in-human clinical trial for BEN-2293, a molecule designed and developed to treat Atopic Dermatitis. BenevolentAI also made good progress in its collaboration with Astrazeneca with two novel targets, for both chronic kidney disease ("CKD") and idiopathic pulmonary fibrosis ("IPF"), which were identified, validated, and selected for the AstraZeneca portfolio. After the period end, BenevolentAI announced a three-year expansion of its collaboration with AstraZeneca, doubling the number of disease areas being explored to add systemic lupus erythematosus (SLE) and heart failure (HF).

Most significantly, in December, BenevolentAI announced that it has entered into a definitive agreement for a business combination with Odyssey Acquisition S.A. ("Odyssey"), a Euronext Amsterdam-listed investment company. The Combination will be affected by way of a share exchange. BenevolentAI shareholders will receive Class A ordinary shares of Odyssey in exchange for their shares of BenevolentAI. The terms of the Combination value BenevolentAI at post-money valuation of up to €1.5 billion (prior to any redemptions). The board of directors of Odyssey and the board of directors of BenevolentAI have both unanimously approved the proposed transaction, although closing remains subject to customary closing conditions which are expected to be completed in Q2 2022.

Immunocore

Immunocore is a pioneering T cell receptor biotechnology company, working to develop and commercialise a new generation of transformative medicines to address unmet needs. The company's most advanced programmes are in oncology, and it has a rich pipeline of programmes in infectious and autoimmune diseases.

During 2021, Immunocore continued to develop its ImmTAC (Immune mobilizing monoclonal T-cell receptors Against Cancer) clinical portfolio for multiple tumour types and has 5 clinical stage programmes under way. In January 2022, the company received FDA approval for its lead therapeutic, tebentafusp, to be used in treatment of a rare form of cancer, metastatic uveal melanoma.

In February 2021, Immunocore successfully completed an initial public offering and listing on Nasdaq, raising gross proceeds of $297m.

Source: Portfolio companies including information disclosed publicly on their websites.

Investment Activity

Realisations

A key part of the work undertaken since our appointment has been to sell holdings to reposition the portfolio and pay down the outstanding debt. During the year, we are pleased with the progress achieved against this objective having realised £166.0 million from the portfolio as of 31 December 2020. Key realisations during the year included:

In March, the sale of a basket of assets1 to Rosetta Capital generating initial proceeds of £52.9 million2.

In April, the sale of Kymab to Sanofi generating initial proceeds of $87 million (£63.6 million) with the potential for additional contingent payments of up to $33 million subject to a deferred purchase price release and Kymab achieving certain development and regulatory Milestones. As of 31 December 2021, the Company has a holding of £4.2m attributable to these remaining contingent payments.

In May, the sale of Kuur Therapeutics to publicly listed Athenex in return for Athenex common stock valued at $9.6 million (£7.0 million) as of 30 June 2021.The resulting holding in Athenex was then sold in its entirety in the fourth quarter.

In June, the sale of Inivata to NeoGenomics generating proceeds of $38.6 million (£28.0 million).

In December 2021, the Company announced that it had reached an agreement for the sale of its holding in Seedrs Limited ("Seedrs") to a global institutional investment management firm, for £12 million in cash. The sale was subsequently completed in April 2022.

1The entire holdings in Carrick Therapeutics, Mission Therapeutics, PsiOxus Therapeutics and Mereo BioPharma and partial holdings in Inivata, Immunocore and ReNeuron.

2After accounting the value of £2.9m follow-on investments made by the Company with respect to holdings contained in the Sale Portfolio during January 2021.

New Investments

In 2021, we achieved considerable progress in the repositioning of the portfolio with the first new investments since our appointment as Portfolio Manager. The Company made seven new investments totalling £51.7 million, four new private equity investments (£29.9 million) and three new public equity investments (£21.8 million).

Tessian

In May, the Company invested $6.75 million (£4.8 million) into cybersecurity company, Tessian Limited ("Tessian"), as part of its $65 million Series C funding round to accelerate its mission of quantifying and preventing human risk in enterprises across the globe. Tessian's Series C round was led by March Capital, a U.S.-based venture growth firm, with participation from existing shareholders including Sequoia Capital, Accel, Balderton Capital and Latitude. The deal valued Tessian at $500m.

Tessian is pioneering a novel approach to cybersecurity and is defining a new category of security software called Human Layer Security. For decades, cybersecurity software has focused on the machine layer - the networks, endpoints, and devices of an organization - but not the people. But employees are the gatekeepers to companies' most sensitive systems and according to a CybSafe analysis of data from the UK Information Commissioner's Office (ICO), human error was the cause of approximately 90 percent of data breaches in 2019. To overcome the so-called "people problem" in security, Tessian uses machine learning to stop security threats and data breaches caused by people, without disrupting their workflow. It builds Behavioral Intelligence Models, tailored to every employee, by understanding each individual's communication patterns and behaviours online. Tessian uses the models automatically to detect security threats and prevent them from turning into breaches by notifying the employee in-the-moment. Today, Tessian secures people on email and can automatically prevent threats such as phishing, business email compromise, data exfiltration and accidental data loss.

Selected SDG(s) 16 Peace, Justice and Strong Institutions

Target(s) 16.4 By 2030, significantly reduce illicit financial and arms flows, strengthen the recovery and return of stolen assets and combat all forms of organized crime

JM Johnson Matthey

In June and July, the Company invested £7.5 million into publicly listed Johnson Matthey plc ("Johnson Matthey"). Johnson Matthey is a global leader in the applied materials chemistry, producing materials that are used in a wide range of industrial processes from automotive exhaust catalysts to the production of industrial gases. Johnson Matthey is set to be an important facilitator of the process of decarbonisation over the coming decade, with its materials being critical to the production of hydrogen, and the emerging use of hydrogen as a clean energy fuel. Existing emission control catalysts used in transport are likely to continue to be in demand as regulations and standards tighten across the world and revenues from this activity will provide a valuable source of funding for the development of new technologies. The investment fits with the Company's philosophy of supporting innovative, world leading technologies, that showcase the best of British entrepreneurial spirit and will help positively impact society and the planet.

Selected SDG(s) 3 Ensure healthy lives and promote well-being for all at all ages

7 Ensure access to affordable, reliable, sustainable and modern energy for all

12 Ensure sustainable consumption and production patterns

13 Take urgent action to combat climate change and its impacts

Revolut

In August, the Company invested $13.7 million (£9.9 million) into leading disruptive global neobank, Revolut alongside its $800 million Series E funding round led by new investors, SoftBank Vision Fund 2 and Tiger Global Management, valuing the business at $33 billion. Revolut, the ambitious neobank with more than 16 million customers worldwide, plans to use the significant primary investment to further its growth plans, in particular its ongoing product innovation aimed at meeting customers' everyday financial needs and aspirations, from quick and easy global transfers, to managing everything from savings to insurance, to democratising wealth and trading activities. It will also support the expansion of Revolut's offering to US customers and its entry into the Indian market and other international markets.

Selected SDG(s) 8 Decent Work and Economic Growth

Target(s) 8.2 Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors

Spirent

In September, the Company invested £7 million into publicly listed Spirent Communications plc ("Spirent"), a leading provider of automated test and assurance solutions for telecom networks and datacentres. As ethernet speeds are upgraded and 5G networks are rolled out, new uses and services are developed. The testing products and services that Spirent offers are a critical component enabling the development and ongoing monitoring of the performance of these networks.

The upcoming cycle of capital expenditure for the rollout of 5G is expected to be an extended one because of the proliferation of applications that will be made possible. We believe that Spirent can therefore expect robust growth in demand for its services over the coming years.

Selected SDG(s) 9 Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation

11 Make cities and human settlements inclusive, safe, resilient and sustainable

Petershill Partners

In September, the Company participated in the IPO of Petershill Partners plc ("Petershill Partners"), a capital provider to alternative investment managers, making a £7 million investment. Alternatives (including private equity, private credit, and infrastructure investment) are a fast-growing area of asset management, and there are a limited number of specialist providers of growth capital for firms in this space. Petershill has built a diversified portfolio of managers, and with the capital raised as part of the IPO, it will seek to make investments in other alternative managers over the coming years. We are therefore invested in both the strong underlying asset growth of the existing managed portfolios, and an additional source of growth through new investments. We expect Petershill to see an attractive rate of earnings growth over the coming years.

Attest 

In November, the Company invested $7.0 million (£5.2 million) into leading market research technology platform, Attest Technologies ("Attest"), as part of its $64 million Series B funding round. Attest's Series B funding was led by an undisclosed growth investor with participation from specialist tech investment firm Kismet and existing investor, leading global venture capital firm NEA. Attest is the first business services sector investment to enter the portfolio.

Attest has built an intuitive software as a service platform which aims to make checking ideas and actions with target consumers as second nature as checking the time, so every business decision can be grounded in data. Using Attest's technology, surveys can be created and distributed to target consumers in as little as 90 seconds and results are significantly higher-quality, more reliable, representative, and delivered faster than ever previously possible. This self-serve technology is supported by Attest's in-house team of research experts, leading to trustworthy data that brands can rely on.

During the pandemic, Attest has achieved record revenue growth and continued to support and grow its client base, including Microsoft, Santander, Walgreens/Boots, Wise, Klarna, Organic Valley and Fabletics. Attest's consumer reach has also increased, with brands now able to access more than 110 million people in 49 countries. This latest financing round is intended to help further accelerate Attest's expansion in both Europe and North America, as well as the company's mission to make high quality research simple, fast, and powerful for everyone on a continuous basis.

Selected SDG(s) 8 Decent Work and Economic Growth

Target(s) 8.2 Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors

Ada

In December, the Company invested €11.8 million (£10.0 million) in digital health company Ada Health GmbH ("Ada Health"). Ada Health has developed a powerful Artificial Intelligence ("AI")-based health assessment and care navigation platform that helps users to understand their symptoms, to identify and differentiate conditions with a high degree of medical accuracy, and to navigate safely to the right care, at the right time. The Company acquired secondary shares on the back of Ada Health's successful Series B financing led by Leaps by Bayer completed in May 2021. Additional investors participating in the round include Vitruvian Partners, Samsung Catalyst Fund, Inteligo Bank, F4 and Mutschler Ventures.

Ada Health was founded in Berlin, Germany, in 2010 by British native Dr. Claire Novorol, PhD, together with Daniel Nathrath and Dr. Martin Hirsch, PhD, combining diverse medical, scientific, and commercial backgrounds. Ada Health was established with the aim to develop a reliable and safe health assessment and care navigation platform which fulfils the requirements for deployment as a clinical decision support system. Today, Ada Health can help shorten time to diagnosis by providing medical guidance that is relevant, actionable, and effective, and will increasingly leverage personalized data insights to support the prediction and prevention of diseases.

Ada Health's core technology is available in a suite of AI-driven enterprise solutions. The company is collaborating with a range of leading health systems, insurers, life sciences companies, and global non-profit organizations to integrate its symptom assessment and care navigation solutions into a range of digital care journeys to improve outcomes for patients and healthcare providers. Ada Health is experiencing strong momentum in the commercialisation of its solution; has closed several important partnerships and has a strong pipeline ahead. In addition, Ada Health's consumer app has become the world's most popular and highest-rated symptom assessment app, with over 11 million users since its global launch in 2016 of which more than 1 million are based in the UK.

Selected SDG(s) 3 Ensure healthy lives and promote well-being for all at all ages

Target(s) 3.4 By 2030 reduce by one-third pre-mature mortality from non-communicable diseases (NCDs) through prevention and treatment, and promote mental health and wellbeing

3.8 Achieve universal health coverage, including financial risk protection, access to quality essential health care services, and access to safe, effective, quality, and affordable essential medicines and vaccines for all

3.D Strengthen the capacity of all countries, in particular developing countries, for early warning, risk reduction and management of national and global health risks

After year end, further progress has been achieved in repositioning the portfolio with the fifth and sixth new private equity investments.

Back Market

In January 2022, the Company invested €12.0 million (£10.0 million) in leading renewed electronics marketplace, Back Market (incorporated as Jung S.A.S.), as part of its $510 million Series E funding round. The round was led by Sprints Capital, together with Eurazeo Growth, Aglaé Ventures, General Atlantic, and Generation Investment Management. The Company invested alongside its co-investment partner, Sprints Capital, via a single asset fund, Sprints Capital Ellison LP.

Launched in 2014, Back Market is the leading dedicated renewed technology marketplace. The company brings high-quality professionally refurbished electronic devices and appliances to customers in 16 countries including the United Kingdom, the United States, France, Germany, Italy, Spain, Belgium, Austria, the Netherlands, and more recently, Portugal, Japan, Finland, Ireland, Greece, Slovakia, and Sweden. The Series E round underpins Back Market's ambitious vision and allows the company to build on its position as the leading marketplace exclusively dedicated to the sale of expertly refurbished electronics. Back Market is determined to make circular technology mainstream by delivering an experience even better than buying new.

Selected SDG(s) 11 Make cities and human settlements inclusive, safe, resilient and sustainable

12 Ensure sustainable consumption and production patterns

13 Take urgent action to combat climate change and its impacts

Target(s) 11.6 By 2030, reduce the adverse per capita environmental impact of cities

12.5 By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse

Epsilogen 

In March 2022, the Company invested £3.0 million in leading immunoglobulin E ("IgE") antibodies developer, Epsilogen, as part of its £30.75 million Series B funding round. The round was led by a new investor, Novartis Venture Fund, and joined by new investors 3B Future Health Fund, British Patient Capital and Caribou Property. The new syndicate joins founding Series A investor Epidarex Capital and Series A investor ALSA Ventures both of whom also committed further capital in the Series B fundraising.

Epsilogen is a global leader in the development of immunoglobulin E (IgE) antibodies to treat cancer. IgE's natural function is to provide immunological defence against certain parasites. This functionality makes it an ideal treatment of solid tumours due to its strong potency, enhanced tumour access and long tissue half-life. Epsilogen's lead product candidate, MOv18 IgE, is the first therapeutic IgE antibody to enter the clinic and encouraging data from a phase I trial demonstrated MOv18 IgE to be safe and well tolerated with early signs of clinical activity also seen. Epsilogen is also developing a proprietary IGEGTM antibody platform combining elements from both IgE and IgG antibodies into novel and proprietary antibody molecules with enhanced functionality.

Selected SDG(s) 3 Ensure healthy lives and promote well-being for all at all ages

Target(s) 3.4 By 2030 reduce by one-third pre-mature mortality from non-communicable diseases (NCDs) through prevention and treatment, and promote mental health and wellbeing

3.B Support research, development and universal access to affordable vaccines and medicines

Follow-on investments

During the year, the Company made a select number of small follow-investments in its existing private equity holdings totalling £9.1 million.1

In January, the Company made follow-on investments of £2.9 million in companies contained within the basket of assets sold to Rosetta Capital which was immediately reimbursed upon the successful sale.

In March, the Company exercised its pre-emption rights to acquire additional shares in Cequr at a discount to the valuation implied by its $115m funding round.

During the year, the Company invested a total of $1.7 million in Mafic as part of internal fundraisings structured to resolve legacy governance issues and marginally extend the cash runway.

Finally, in December, the Company committed £3 million to Rutherford Health ("Rutherford") as part of new funding package totalling £10 million, including £8 million in the form of a bridge loan ("Loan") and £2 million in a convertible loan facility. The Company committed to the Loan in two equal size tranches which accrue interest at the rate of 15% per annum. The first tranche was drawn immediately, and the second tranche was drawn, subject to certain conditions, in January 2022.

The Loan was provided in the context of a wider reorganisation of Rutherford whereby Mark Jackson was appointed as the new Non-executive Chairman. In addition, Mike Moran stepped down as Chief Executive Officer with a replacement due to be recruited in early 2022. An experienced interim, Sean Sullivan, was appointed as a Chief Restructuring Officer to bridge the intervening period with a strategic advisory firm appointed to support business planning. Finally, In April 2022 the Company committed an additional £1.5 million to Rutherford as part of a £4.5 million to extend its runway while Rutherford is in the process of securing long-term funding. The new commitment was made at similar terms to the commitment made in December 2021 and structured in two equal size tranches with the first tranche drawn immediately and the second tranche, subject to certain conditions, potentially to be drawn in May 2022.

Source: Portfolio companies including information disclosed publicly on their websites.

Engagement

During the year, the investment team of the Portfolio Manager consisted of nine investment professionals - six covering the private equity holdings and three covering the public equity holdings. This core team then draws on the extensive capabilities of the Schroders organisation more broadly.

The private equity team engage with each of the Company's underlying portfolio companies on a regular basis. The frequency and depth of this engagement typically depends on a range of factors including the Company's shareholder rights, size of the position, risk profile, value creation potential and strength of the shareholder syndicate. As an example, for most private companies in the Top 20 holdings where the Company's share rights allow, the team will attend the company board meetings as an observer on the board. These meetings serve as an essential source of information about the progress of the business, but also present an opportune moment to support strategic planning and engage with the management team, board members and co-investors on topics such as sustainability.

The public equities team are required to take a different approach suited to the companies' listed status. As part of Schroders' broader engagement process, they meet executive management regularly to discuss financial and operational performance, as well as the companies' broader stakeholder commitments. These meetings may be supplemented by direct engagement with the Chair and board subcommittee Chairs to discuss specific governance and other issues, where appropriate. Overall, in 2021 Schroders initiated over 2,100 specialist ESG engagements involving our Sustainable Investment team and our investment teams with companies across 58 countries globally. In 2021, we also voted on approximately 99% of total resolutions at 7,492 meetings and instructed a vote against management at 44% of meetings.

Approach to Sustainability

At Schroders, we adopt sustainability and impact investing practices as an integral part of identifying, assessing, and monitoring its portfolio companies. We believe that responsible investment enhances the long-term value of private equity investments and benefits all stakeholders including shareholders, employees, clients, and the communities in which we operate. Our commitment to responsible investment applies to all private equity investments, including direct and indirect holdings, and the firms we partner with.

In our private equity investment process, environmental, social and governance (ESG) factors are a central consideration for our investment decisions. Our sustainability and impact approach requires proactive identification of ESG factors that pose investment risk and opportunity. Prudently and proactively assessing these factors should lead to emphasizing investments with positive ESG elements, excluding investments that pose ESG risk and engaging where further impact is feasible.

Private equity investors are well positioned to adhere to responsible investing principles and drive a positive impact due to private equity's long-term orientation, ability to conduct extensive due diligence and the opportunity for private equity investors to make a strategic impact on their portfolio companies.

Schroders seeks to identify investments with favourable sustainability prospects and conversely avoid investments where ESG risk exposures are meaningful. Schroders believes that businesses with strong ESG credentials and/or alignment with the United Nations Sustainable Development Goals ("SDGs") are well positioned to capitalize on sustainability as a global megatrend, which is an indication of strong positioning for the future.

Sustainable Development Goals

In 2015, the United Nations launched its Sustainable Development Goals (SDGs) defining the biggest challenges facing global societies. These challenges comprise 17 discrete goals, each targeting distinct threats and underpinned by a comprehensive range of metrics to help policy makers quantify progress. They have galvanised the worldwide focus of policy makers, companies, and investors.

Schroders has committed to integrating UN SDGs into enhanced ESG reporting across its private equity portfolios. However, we believe our approach is more conservative than most others because the link between an investment and an SDG may only be acknowledged when the company's business model specifically addresses one of the 169 targets which underly the 17 goals.

Furthermore, we are continuing to develop our proactive approach towards SDG alignment for portfolio companies and intend to use the 17 goals and 169 targets to form the basis of further engagement. As part of this process we will seek to provide input to, and expedite the adoption of, internal policies to ensure simultaneous contribution to the most relevant goals. We will also utilise the expertise of the Sustainability team at Schroders to enhance this engagement where we see opportunities to add further value. We believe that such an approach embodies the spirit of the SDGs, and goes beyond a pure asset allocation consideration, towards a value-added contribution. As we progress with our repositioning of the portfolio, we intend to improve our disclosures in relation to our engagement activities on this topic.

While not all the companies within the existing portfolio have SDGs embedded in their business models, many have. The Company's focus on early-stage innovative businesses, addressing some of the biggest challenges facing global societies, leaves a considerable proportion of the portfolio aligned to those goals. As an illustration of the Company's current positioning in relation to SDG's, the investment activity section of this Portfolio Manager's review includes the relevant goals and underlying targets associated with each of the new investments.

We have identified the SDGs associated with each of the Company's new investments in the Investment Activity section of this report.

Sustainability Insights: Atom Bank

In 2021, Atom announced how it had decided to re-examine how its team works while maintaining a high quality of service and experience for its customers.

Starting from 1st November, Atom began trialling a four-day working week. The team has been working a shortened 34-hour week over four days, with no impact on their salary. This is optional, and anyone can choose to opt out and continue to work a five-day week if they wish. The ambition being that this will bring great benefit to its business, its people and, ultimately, its customers. As the largest company to introduce a four-day week for everyone, and one of the first to make this move, they are determined to make this a success and challenge traditional and antiquated working practices.

"Why are Atom moving to a four-day week?

Atom believes that work as we know it has changed, and the patterns that served us in the past may no longer be the right fit. People are looking for something more from their roles, work practices have changed, and they believe that switching to a four-day working week can deliver a variety of benefits that have the potential to be life-changing for their team.

As an example, here are just a few of the benefits that the team hope a four-day week will deliver:

• An improved work-life balance

• A greater focus on health and wellbeing

• A reduced environmental impact

• An increase in efficiency and productivity

Schroders Perspective

At Schroders, we are closely monitoring the progress of this interesting and forward-thinking initiative. The findings of the trial have potentially significant implications for working practices across our entire private and public equity portfolios - from recruiting and retaining key talent, to improving efficiency and reducing our burden on the environment. We are delighted to see the progress at Atom and the continued focus that the bank has in relation to Environmental, Social and Governance issues facing the financial sector.

Outlook

Market conditions

We are of course shocked and saddened by events in Ukraine, and acknowledge that this is a human crisis with awful consequences for millions of people.

That said, there are also significant market consequences and considerable uncertainty remains about the future path of events. However, it is already clear that there will be material secondary consequences from the rise in energy prices, and from the inflationary impacts due to rising agricultural commodity prices and supply chain interruptions.

We expect that public markets may be more volatile than normal in the near term as markets adjust to changed conditions, and this may also have an impact on the pace of activity in private markets.

Portfolio

The Company enters 2022 in a far stronger position than when we started the year having successfully repaid its debt facility and made its first new investments. We are very encouraged by progress to date, however in addition to the macroeconomic challenges highlighted above, there are still several stock specific situations in the inherited portfolio where we continue to focus our time to maximise return potential.

Schroder Investment Management Limited

20 April 2022

PRINCIPAL RISKS AND UNCERTAINTIES

The Audit, Risk and Valuation Committee has carried out a robust assessment of the Company's principal and emerging risks during the period under review, including those that would threaten its business model, future performance, solvency, liquidity or reputation. The process involves the maintenance of a risk register, which identifies the risks facing the Company and assesses each risk on a scale, classifying the likelihood of the risk and the potential impact of each risk to the Company. This helps the Board focus on any identified risk of particular concern and aids the development of the Board's risk appetite. In developing the risk management process, the Board took into consideration the Guidance on Risk Management, Internal Control and Related Financial and Business Reporting issued by the Financial Reporting Council (FRC). The Board has established controls to mitigate the risks faced by the Company, which are reviewed on a regular basis to ascertain the effectiveness of each control.

The principal risks and uncertainties faced by the Company are set out below. The risks arising from the Company's financial instruments are set out in note 20 on pages 73 to 78.

Risk assessment and internal controls review by the Board

Risk assessment includes consideration of the scope and quality of the systems of internal control operating within key service providers, and ensures regular communication of the results of monitoring by such providers to the Audit, Risk and Valuation Committee, including the incidence of significant control failings or weaknesses that have been identified at any time and the extent to which they have resulted in unforeseen outcomes or contingencies that may have a material impact on the Company's performance or condition.

No significant control failings or weaknesses were identified from the Audit, Risk and Valuation Committee's ongoing risk assessment which has been in place throughout the financial year and up to the date of this report or the controls reports that were received from all service providers and reviewed by the Committee. The Board is therefore satisfied that it has undertaken a detailed review of the risks facing the Company.

Going Concern

The Board has considered the Company's principal risks and uncertainties (including whether there are any emerging risks); has scrutinised the detailed cash flow forecast prepared by the Portfolio Manager; and considered their assessment of the likelihood and quantum of funds which could be raised from sales of investments. The Portfolio Manager has also performed a range of stress tests, and demonstrated to the Board that even in an adverse scenario of depressed markets and restrictions on sales in the private equity market, the Company could still generate sufficient funds from sales of investments to meet its liabilities over the next twelve months. As a result, the Board is comfortable that the Company will have sufficient liquid funds to pay operating expenses.

The Board has also considered the provisions in the new revolving credit facility, and have taken into account the modest utilisation of the facility during the year and up to the date of this report.

On this basis, the Board considers it appropriate to adopt the going concern basis of accounting in the Company's accounts, and has not identified any material uncertainties to the Company's ability to continue as a going concern over a period of at least twelve months from the date of approval of these financial statements.

Viability Statement

The Board has assessed the prospects of the Company over the five-year period ending 31 December 2026. The Board considers a five-year period to be appropriate because it is the minimum holding period that it would recommend to a prospective investor considering purchasing shares in the Company.

The Board has considered the principal risks set out on pages 29 to 33 and detailed cash flow forecasts prepared by the Portfolio Manager, and stress case scenarios, including the possibility of breach of its loan covenants.

The Board believes that the portfolio will provide shareholders with satisfactory returns from the investment portfolio over a five-year period and that there will be continued demand for the Company's shares.

Having considered all of the Company's resources, strategy, risks and probabilities, the Board has a reasonable expectation that the Company will continue to operate and meet its liabilities as they fall due, during the five year period to 31 December 2026.

By order of the Board

Schroder Investment Management Limited

Company Secretary

20 April 2022

Board of Directors

Tim Edwards (independent non-executive Chair)

Raymond Abbott (independent non-executive director)

Scott Brown (independent non-executive director)

Stephen Cohen (independent non-executive director)

Jane Tufnell (senior independent non-executive director)

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the annual report and the financial statements in accordance with applicable laws and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have elected to prepare the financial statements in accordance with UK Accounting Standards and applicable law, including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland". Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company as at the end of each financial year and of the profit or loss of the Company for that period.

In preparing these financial statements, the Directors are required to:

- present fairly the financial position, financial performance and cash flows of the Company;

- select suitable accounting policies in accordance with United Kingdom Generally Accepted Accounting Practice (UK GAAP) and then apply them consistently;

- present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

- make judgements and estimates that are reasonable and prudent;

- state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

- prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements 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 also responsible for preparing the Strategic Report, the Directors' Report, the Directors' Remuneration Report and the report of the Audit, Risk and Valuation Committee in accordance with the Companies Act 2006 and applicable regulations, including the requirements of the Listing Rules and the Disclosure Guidance and Transparency Rules.

The Directors have delegated responsibility to the Portfolio Manager for the maintenance of the Company's corporate and financial information included on its web pages. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the Directors, whose names are listed on pages 35 and 36, confirms that, to the best of their knowledge:

- the financial statements, prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and profit/loss of the Company; and

- the Strategic Report contained in the annual report and financial statements include a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

The AIC Code of Corporate Governance requires directors to ensure that the annual report and financial statements are fair, balanced and understandable. In order to reach a conclusion on this matter, the Board has requested that the Audit, Risk and Valuation Committee advises on whether it considers that the annual report and financial statements fulfil these requirements. The process by which the Audit, Risk and Valuation Committee has reached these conclusions is set out in its report on pages 41 to 43. As a result, the Board has concluded that the annual report and financial statements for the year ended 31 December 2021, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

Signed on behalf of the Board of Directors by:

Tim EdwardsChair

20 April 2022

INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2021

The "Total" column of this statement is the income statement account of the Company. The "Revenue" and "Capital" columns represent supplementary information prepared under guidance issued by The Association of Investment Companies. The Company has no other items of other comprehensive income, and therefore the net return/(loss) after taxation is also the total comprehensive income for the year, therefore no separate Statement of Comprehensive Income has been prepared.

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 78 form an integral part of these accounts.

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2021

The notes on pages 64 to 78 form an integral part of these accounts.

STATEMENT OF FINANCIAL POSITION AT 31 DECEMBER 2021

These accounts were approved and authorised for issue by the Board of Directors on 20 April 2022 and signed on its behalf by:

Tim Edwards

Chair

The notes on pages 64 to 78 form an integral part of these accounts.

CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2021

The notes on pages 64 to 78 form an integral part of these accounts.

NOTES TO THE ACCOUNTS

1. Accounting Policies

(a) Basis of accounting

Schroder UK Public Private Trust plc ("the Company") is registered in England and Wales as a public company limited by shares. The Company's registered office is 1 London Wall Place, London EC2Y 5AU.

The accounts are prepared in accordance with the Companies Act 2006, United Kingdom Generally Accepted Accounting Practice ("UK GAAP"), in particular in accordance with Financial Reporting Standard (FRS) 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland", and with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" (the "SORP") issued by the Association of Investment Companies in April 2021, except for certain details about private assets. In particular, the Company has not disclosed the proportion of the share class held in each of its material private asset holdings, and other information from investees accounts which is not publicly available. All of the Company's operations are of a continuing nature.

The accounts have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of investments and derivative financial instruments 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 accounts. In forming this opinion, the directors have taken into consideration: 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; the Company's cash flow forecasts and the liquidity of the Company's investments. Further details of the Directors' considerations in forming this opinion are given on page 34. The financial statements have been prepared on the assumption that approval as an investment trust will continue to be granted. The Company has been approved by HM Revenue & Customs ("HMRC") as an investment trust in accordance with Sections 1158 and 1159 of The Corporation Tax Act 2010, subject to the Company continuing to meet the eligibility condition.

The Company has adopted the provisions of Sections 11 and 12 of FRS 102 for measuring and disclosing its financial instruments.

The accounts are presented in sterling and amounts have been rounded to the nearest thousand.

The accounting policies applied to these accounts are consistent with those applied in the accounts for the year ended 31 December 2020.

Certain judgements, estimates and assumptions have been required in valuing the Company's investments and these are detailed below.

(b) Valuation of investments

Investments that are quoted on an exchange are valued using closing bid prices. If there has been no material trading in an investment, it will be valued using the process for unquoted investments, described below.

Investments in shares that are not quoted on any Stock Exchange (unquoted investments) represent a significant part of the Company's portfolio.

Such investments are held at fair value, which requires significant estimation in concluding on their fair value. While there is a robust and consistent valuation process undertaken by the AIFM, it is recognised that in stating these assets at fair value there is a significant element of estimation uncertainty. Central to this uncertainty is the assumption that such assets will continue to progress in line with their stated business plan and will be held for the longer term until exit, generally where either the company is sold to an interested party or lists on an appropriate exchange. The core to that estimation judgement is the potential failure of any individual unquoted investment to progress in accordance with their business plan and such failure could result in a material change to the fair valuation of that company. In line with the LFS Fair Value Policy for reviewing investment valuations, the assumptions and estimates made in determining the fair value of each unquoted investment are considered at least each six months or sooner if there is a triggering event. An example of where a valuation would be considered out of the six-month cycle is the failure of a drug under development to meet an anticipated outcome of its trial, or other performance against tangible development milestones. A full valuation review is undertaken by LFS in June and December, with a review undertaken in March and September. In the event of a triggering event being identified intra the valuation review process, an ad hoc valuation will be undertaken.

The judgements to the estimations of fair value are considered on an ongoing basis including considering impact of events in the wider market. In making these estimates, appropriate care is taken to consider the nature and inherent uncertainties of market events and their impact on the fair value of unquoted assets.

While there may be market speculation about potential transaction activity in portfolio companies, such matters are not taken into account in the valuation process until the information is public and can be considered as an observable market transaction.

In determining the fair value of the unquoted investments, the AIFM, as set out in the unquoted securities valuation policy above, has done so in accordance with the following principles, which are consistent with the IPEVCV guidelines. It should be noted that the IPEVCV guidelines were revised in December 2018, which was made to reinforce the premise that fair value must be estimated at each measurement date, which ensures a level of consistency with applicable accounting standards.

1. the following factors will be considered in determining the fair value of an asset:

(i) the price of a recent investment, whilst an indicator of fair value, is not a default that would preclude re-estimating the valuation at the valuation date. However, if the price of recent investment is determined to be fair value then it is used to calibrate inputs to the valuation model(s); or

(ii) where a value is indicated by a recent material arms-length transaction by an independent third party in the shares of a company, and after it is established that this is fair then this value will be used, unless the rights attributable to the shares impact the overall capital structure and rights of existing investors; or

(iii) in the absence of (i) and (ii), and depending upon both the subsequent trading performance and investment structure of an investee company, the valuation basis will usually move to an earnings multiple basis or, if appropriate, other valuation models such as:

(a) Probability-weighted expected return method (PWERM), which considers on a probability weighted basis the future outcomes for the investment.

(b) Option priced modelling (OPM) is used to value early stage companies where outcomes are uncertain.

(c) Adjusted recent transaction prices (which consider the company's performance against key milestones and the complexity of the capital structure) are also used.

(d) Discounted cash flow model which values a business based on estimates of future cash-flows with an appropriate discount rate

(iv) if the investment is in a fund then the valuation will be based on the NAV of the fund (which is invariably comprised of early-stage unquoted investments), or on an adjusted basis to recognise the underlying performance of the investments.

Where models are used in valuing an investment, significant judgements are made in estimating the various inputs into the models and recognising the sensitivity of such estimates, especially in early-stage pre-revenue enterprises. Examples of the factors where significant judgement is made include, but are not limited to - the probability assigned to the relative success or failure of an enterprise; the probable future outcome paths; discount rates; growth rates; terminal value; selection of appropriate market comparable companies, the reliability of future revenue and growth forecasts and the likely exit scenarios for the investor company, for example, IPO or trade sale. In making judgements in regard to the probability of an investee outcome, it must be noted that due to the nature of the investee company's activity, its future outcome may, to a greater or lesser extent, be binary, for example, if an investee company is developing one particular drug and that fails its required trials then the outcome may be terminal for that enterprise. It should be noted that the most significant event that will drive valuation change in investee companies are company-specific events that would give rise to a valuation inflexion point (known also as a 'triggering event'). An example of a material inflexion point in a bio-pharma company would be the successful completion of a drug trial or its approval by a regulatory authority.

These valuation methods may lead to a company being valued on a suitable price-earnings ratio to that company's historic, current or forecast post-tax earnings before interest and amortisation (the ratio used being based on a comparable sector but the resulting value being adjusted to reflect points of difference identified when compared to the market sector (which the investment would reside in were it listed) including, inter alia, a lack of marketability).

At 31 December 2021, 24.2% (2020: nil %) of the NAV was valued in accordance with 1(i); 59.9% (2020: 43.6%) in accordance with 1(ii); 14.4% (2020: 77.0%) in accordance with 1(iii); and 2.4% (2020: 2.1%) in accordance with 1(iv).

(c) Accounting for reserves

Capital reserve

The capital reserve reflects any:

- gains and losses on disposals of investments;

- exchange differences of a capital nature;

- increase and decreases in the fair value of investments which have been recognised in the capital column of the Income Statement; and

- expenses which are capital in nature

Any gains in the fair value of investments that are not readily convertible to cash are treated as unrealised gains in the capital reserve.

Revenue reserve

The revenue reserve reflects all income and expenditure recognised in the revenue column of the Income Statement and any surplus is distributable by way of dividend.

(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.

Overseas dividends are included gross of any withhholding tax.

Deposit interest outstanding at the year-end is calculated and accrued on a time apportionment basis using market rates of interest.

(e) Expenses

All expenses are accounted for on an accruals basis. Expenses are allocated wholly to revenue, except that:

- Any performance fee is charged wholly to capital.

- Expenses incidental to the purchase or sale of an investment are charged to capital. These expenses are commonly referred to as transaction costs and mainly comprise brokerage commission. Details of transaction costs are given in note 9 on page 70.

(f) Finance costs

Finance costs, comprising loan and overdraft interest, are charged wholly to revenue.

(g) Financial instruments

Cash at bank and in hand may comprise cash and demand deposits which are readily convertible to a known amount of cash and are subject to insignificant risk of changes in value. Financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs and are subsequently measured at amortised cost using the effective interest method. Bank overdrafts and loans are included in current liabilities, or creditors falling due after more than one year, depending on the terms of the facility agreement.

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.

Any derivative financial instruments held at the year end, including forward foreign currency contracts, are included in current assets or current liabilities in the Statement of Financial Position at fair value, using market prices. Forward foreign currency contracts are valued at the gain or loss if the contracts had been closed out at the accounting date, at prevailing market rates.

Gains or losses on derivative financial instruments are treated as capital or revenue depending on the motive and circumstances of the transaction. Where positions are undertaken to protect or enhance capital, the returns are capital and where they are generating or protecting revenue, the returns are revenue.

(h) Taxation

The tax charge for the year includes a provision for all amounts expected to be received or paid. Deferred tax is provided on all timing differences that have originated but not reversed by the accounting date. Deferred tax liabilities are recognised for all taxable timing differences but deferred tax assets are only recognised to the extent that it is probable that taxable profits will be available against which those timing differences can be utilised. Deferred tax is measured at the tax rate which is expected to apply in the periods in which the timing differences are expected to reverse, based on tax rates that have been enacted or substantively enacted at the balance sheet date and is measured on an undiscounted basis.

(i) Value added tax ("VAT")

Expenses are disclosed inclusive of any related irrecoverable VAT.

(j) Foreign currency

In accordance with FRS 102, the Company is required to nominate a functional currency, being the currency in which the Company predominantly operates. The Board, having regard to the currency of the Company's share capital and the predominant currency in which its shareholders operate, has determined that sterling is the functional currency and the currency in which the accounts are presented.

Transactions denominated in foreign currencies are converted at actual exchange rates as at the date of the transaction.

(k) Share issues

Shares issued are recognised based on the proceeds or fair value received, with the excess of the amount received over their nominal value being credited to the share premium account. Direct issue costs are deducted from share premium.

2. Income

3. Portfolio management fee

The Company appointed Schroder Investment Management Limited (SIML) as Portfolio Manager, effective from 13 December 2019. Under the terms of the new management agreement, SIML is entitled to a management fee, effective from 13 March 2020 and a performance fee, subject to achieving performance targets. Details of these calculations are set out in the Directors' Report on page 38. No performance fee is payable for the current or prior year and no provision is required at 31 December 2021.

Details of all transactions with the Portfolio Manager are given in note 17 on page 72.

4. Other administrative expenses

1Full details are given in the remuneration report on pages 47 to 49.2Includes VAT amounting to £23,000 (2020: £25,000).

5. Finance costs

6. Taxation

(a) Analysis of tax charge for the year

The Company has no corporation tax liability for the year ended 31 December 2021 (2020: nil).

(b) Factors affecting tax charge for the year

(c) Deferred taxation

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.

The Company has an unrecognised deferred tax asset £6,027,000 (2020: £3,731,000) arising from unutilised tax losses of £24,106,000 (2020: £19,639,000) based on a prospective corporation tax rate of 25.0% (2020: 19%). In its 2021 budget, the government announced that the main rate of corporation tax would increase to 25% for the fiscal year beginning on 1 April 2023. This deferred tax asset has arisen due to the cumulative excess of deductible expenses over taxable income. Given the composition of the Company's portfolio, it is not likely that this asset will be utilised in the foreseeable future and therefore no asset has been recognised in the accounts.

7. Dividends

No dividends have been paid or proposed in respect of the year ended 31 December 2021 (2020: nil).

8. Basic and diluted loss per share

The basic and diluted loss per share is the same because there are no dilutive instruments in issue.

9. Investments held at fair value through profit or loss

(a) Movement in investments

The Company received £193,516,000 (2020: £25,723,000) from investments sold in the year. The book cost of the investments when they were purchased was £225,538,000 (2020: £72,366,000). These investments have been revalued over time and, until they were sold, any unrealised gains/losses were included in the fair value of the investments.

Purchases and sales include non-cash transactions in relation to Athenex and Kuur (2020: Ombu and RateSetter).

(b) Unquoted investments, including investments quoted in inactive markets

Material revaluations of unquoted investments during the year

1Based on the closing holding at opening prices.

Material disposals of unquoted investments during the year

(c) Transaction costs

The following transaction costs, comprising stamp duty and brokerage commission, were incurred in the year:

10. Current assets

The Directors consider that the carrying amount of accrued income and debtors approximate to their fair value.

Cash at bank and in hand

The carrying amount of cash at bank, amounting to £19,077,000 (2020: £6,379,000) represents its fair value.

11. Creditors: amounts falling due within one year

The bank loan at the prior year end was drawn on the Company's previous facility with The Northern Trust Company, and which expired on 15 January 2021.

The Directors consider that the carrying amount of creditors falling due within one year approximates to their fair value.

12. Creditors: amounts falling due after more than one year

The Company arranged a new, amended loan facility agreement with The Northern Trust Company, effective from 15 January 2021, and fully paid down the amount outstanding out of the proceeds of sales transactions. Under the terms of the new loan facility agreement, following the above repayment, the arrangement changes to a "Revolving Facility Commitment", and the principal terms of this are as follows:

- The facility limit was reduced to £55 million, and further reduced to £40 million following an amendment dated 22 October 2021;

- The termination date is 30 January 2023;

- Interest on any drawings will accrue daily and will be calculated at the aggregate of The Bank of England base rate, a 2% margin; and

- Drawings on the facility are secured on all of the Company's assets.

The Directors consider that the carrying amount of the bank loan approximates to its fair value.

13. Called-up share capital

14. Reserves

The Company's articles of association permit dividend distributions out of realised capital profits.

1The share premium is a non distributable reserve and represents the amount by which the fair value of the consideration received from shares issued exceeds the nominal value of shares issued.

2This is a realised (distributable) capital reserve and a positive balance may be used to repurchase the Company's own shares or distributed as dividends. However, the Company is not currently in a position to make such a distribution as the balance is negative.

3This reserve may include some holding gains on liquid investments (which may be deemed to be realised) and other amounts which are unrealised. An analysis has not been made between those amounts that are realised (and may be distributed as dividends or used to repurchase the Company's own shares) and those that are unrealised. The Company is not currently in a position to make any distributions due to total net negative balances on its distributable reserves.

4A positive balance on the revenue reserve may be distributed as dividends or used to repurchase the Company's own shares. However the Company is not currently in a position to make such a distribution as the balance is negative.

15. Net asset value per share

16. Financial commitments

The Company had nil (2020: £2,900,000) uncalled capital commitments at the year end.

17. Transactions with the Portfolio Manager and Alternative Investment Fund Manager (AIFM)

A management fee amounting to £3,019,000 (2020: £1,923,000) is payable to Schroder Investment Management Limited for the year ended 31 December 2021, of which £765,000 (2020: £1,923,000) was outstanding at the year end.

Fees amounting to £88,000 (2020: £88,000) were payable to Link Fund Solutions Limited for services as AIFM, of which £22,000 (2020: £22,000) was outstanding at the year end.

Fees amounting to nil (2020: £44,000) were payable to Link Company Matters Limited for company secretarial services, of which nil (2020: nil) was outstanding at the year end.

No Director of the Company served as a director of any member of the Schroder Group, Link Fund Solutions Limited or its affiliates at any time during the year.

18. Related party transactions

Details of the remuneration payable to directors and details of directors' shareholdings are given in the Directors' Remuneration Report on page 48. Details of transactions with the Portfolio Manager, the AIFM and its associated companies are given in note 17 above. There have been no other transactions with related parties during the year (2020: 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 and derivative financial instruments.

FRS 102 requires that financial instruments held at fair value are categorised into a hierarchy consisting of the three levels below. A fair value measurement is categorised in its entirety on the basis of the lowest level input that is significant to the fair value measurement.

Level 1 - valued using unadjusted quoted prices in active markets for identical assets.

Level 2 - valued using observable inputs other than quoted prices included within Level 1.

Level 3 - valued using inputs that are unobservable.

Details of the Company's policy for valuing investments and derivative instruments are given in note 1(b) on page 64 and 1(g) on page 66. Level 3 investments have been valued in accordance with note 1(b) (i) - (iv).

At 31 December, the Company's investment portfolio and any derivative financial instruments were categorised as follows:

Immunocore £21,044,000 (2020: £25,570,000) and Oxford Nanopore £162,641,000 (2020: £68,707,000) transferred from Level 3 to Level 1 during the year following their respective IPOs on NASDAQ and London Stock Exchange. There were no transfers between Levels 1, 2 or 3 during the year ended 31 December 2020.

Movements in fair value measurements included in Level 3 during the year are as follows:

The company received £185,825,000 (2020: £11,654,000) from Level 3 investments sold in the year. The book cost of the investments when they were purchased was £154,047,000 (2020: £49,087,000). These investments have been revalued overtime until they were sold, any unrealised gains/losses were included in the fair value of the investments.

20. Financial instruments exposure to risk and risk management policies

The investment objective is set out on the inside front cover of this report. 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 currency risk, interest rate risk and market 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 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 may comprise the following:

- investments in shares of quoted and unquoted companies which are held in accordance with the Company's investment objective;

- short-term debtors, creditors and cash arising directly from its operations;

- a bank loan from Northern Trust Company, the purpose of which is to assist in financing the Company's operations; and

- forward foreign currency contracts, the purpose of which is to manage the currency risk arising from the Company's investment activities.

(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 three elements: currency risk, interest rate risk and other price risk. Information to enable an evaluation of the nature and extent of these three elements of market risk is given in parts (i) to (iii) 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) Currency risk

Certain of the Company's assets, liabilities and income are denominated in currencies other than sterling, which is the Company's functional currency and the presentational currency of the accounts. As a result, movements in exchange rates will affect the sterling value of those items.

Management of currency risk

The AIFM monitors the Company's exposure to foreign currencies on a daily basis and reports to the Board, which meets on at least four occasions each year. The Manager measures the risk to the Company of the foreign currency exposure by considering the effect on the Company's net asset value and income of a movement in the rates of exchange to which the Company's assets, liabilities, income and expenses are exposed.

Income denominated in foreign currencies is converted into sterling on receipt.

It is currently not the Company's policy to hedge against currency risk, but the Portfolio Manager may, with the Board's consent and oversight, hedge against specific currencies, depending on their longer term view.

Foreign currency exposure

The fair value of the Company's monetary items that have foreign currency exposure at 31 December are shown below. The Company's investments (which are not monetary items) have been included separately in the analysis so as to show the overall level of exposure.

The above year end amounts are broadly representative of the exposure to foreign currency risk during the current and comparative year.

Foreign currency sensitivity

The following tables illustrate the sensitivity of net profit for the year and net assets with regard to the Company's monetary financial assets and financial liabilities and exchange rates. The sensitivity analysis is based on the Company's monetary currency financial instruments held at each accounting date and assumes a 10% (2020: 10%) appreciation or depreciation in sterling against all the currencies to which the Company is exposed, which is considered to be a reasonable illustration based on the volatility of exchange rates during the year.

If sterling had weakened by 10% this would have had the following effect:

Conversely if sterling had strengthened by 10% this would have had the following effect:

In the opinion of the directors, the above sensitivity analysis with respect to monetary financial assets and liabilities is broadly representative of the whole of the current and comparative year.

(ii) Interest rate risk

Interest rate movements may affect the level of income receivable on cash balances and the interest payable on the bank overdraft 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 would not normally expect gearing to exceed 20% where gearing is defined as borrowings used for investment purposes, less cash, expressed as a percentage of net assets.

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:

Interest receivable on cash balances is at a margin below LIBOR (2020: same).

The Company has a loan facility with The Northern Trust company on which £22,000,000 had been drawn down at the year end. Interest payable on any drawings will be calculated at the aggregate of The Bank of England base rate and a 2% margin. At the prior year end, the Company's had drawn down £107,032,000 on the previous facility with The Northern Trust Company which expired on 15 January 2021. Interest payable on that facility was calculated at LIBOR for one month, or other agreed loan period, plus a margin of 1.5%.

The above year end amounts are broadly representative of the exposure to interest rates during the year.

Interest rate sensitivity

The following table illustrates the sensitivity of the return after taxation for the year and net assets to a 0.25% (2020: 0.25%) increase or decrease in interest rates in regards to the Company's monetary financial assets and financial liabilities. This level of change is considered to be a reasonable illustration based on observation of current market conditions. The sensitivity analysis is based on the Company's monetary financial instruments held at the accounting date with all other variables held constant.

(iii) Market price risk

Market price risk includes changes in market prices, other than those arising from interest rate risk, which may affect the value of investments.

Management of other price risk

The Board meets on at least four occasions each year to consider the asset allocation of the portfolio and the risk associated with particular countries and industry sectors. The investment management team has responsibility for monitoring the portfolio, which is selected in accordance with the Company's investment objective and seeks to ensure that individual stocks meet an acceptable risk/reward profile. The Board may authorise the Portfolio Manager to enter derivative transactions for the purpose of protecting the portfolio against falls in market prices.

Market risk exposure

The Company's total exposure to changes in market prices at 31 December comprises the following:

The above data is broadly representative of the exposure to market price risk during the year.

Concentration of exposure to market price risk

A sector and geographical analysis of the Company's investments is given on page 18. This shows a concentration of exposure to economic conditions in the United Kingdom and predominantly to the healthcare sector.

In addition, the Company holds six investments amounting to approx £91.7m, representing 20.9% of NAV whose valuation is deemed to be potentially volatile, as it is dependent on a number of factors including future funding and meeting of anticipated milestones.

Additionally, as highlighted in the Portfolio Manager's Review on page 8, Rutherford Health's valuation may be impacted negatively or positively depending on the outcome of the ongoing process to secure long-term funding for the business.

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% (2020: 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.

(b) Liquidity Risk

This is the risk that the Company will encounter difficulty in meeting its obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

Management of the risk

The Company had drawn down £22,000,000 on its facility with Northern Trust Company as at 31 December 2021. The loan drawn down at the prior year end was rolled over into a new facility with Northern Trust Company and repaid in full.

The Company's assets include readily realisable securities amounting to £222,031,000 (2020: £32,697,000), which can be sold to meet ongoing funding requirements. Additionally, the company has level 3 investments which are illiquid but can be realised to generate proceeds to pay down the loan. At 31 December 2021, the total level 3 securities are valued at £218,868,000 (2020: £388,455,000).

Liquidity risk exposure

Contractual maturities of financial liabilities, based on the earliest date on which payment can be required are as follows:

(c) Credit risk

Credit risk is the risk that the failure of the counterparty to a transaction to discharge its obligations under that transaction could result in loss to the Company.

Management of credit risk

This risk is not significant and is managed as follows:

Portfolio dealing

The credit ratings of broker counterparties is monitored by the AIFM and limits are set on exposure to any one broker.

Exposure to the custodian

The custodian of the Company's assets is Northern Trust Company which has Long-Term Credit Ratings of AA with Fitch and Aa2 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.

(d) Fair values of financial assets and financial liabilities

All financial assets and liabilities are either carried in the balance sheet at fair value, or the balance sheet amount is a reasonable approximation of fair value.

21. Analysis of changes in net debt

22. 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:

Status of announcement

2020 Financial Information

The figures and financial information for 2020 are extracted from the published Annual Report and Accounts for the year ended 31 December 2020 and do not constitute the statutory accounts for that year. The 2020 Annual Report and Accounts have been delivered to the Registrar of Companies and included the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

2021 Financial Information

The figures and financial information for 2021 are extracted from the Annual Report and Accounts for the year ended 31 December 2021 and do not constitute the statutory accounts for the year. The 2021 Annual Report and Accounts include the Report of the Independent Auditors which is unqualified and does not contain a statement under either section 498(2) or section 498(3) of the Companies Act 2006. The 2021 Annual Report and Accounts will be delivered to the Registrar of Companies in due course.

Neither the contents of the Company's webpages nor the contents of any website accessible from hyperlinks on the Company's webpages (or any other website) is incorporated into, or forms part of, this announcement.