Managed Balanced Fund

Schroder Managed Balanced Fund Final Report and Accounts February 2018

Contents Schroder Managed Balanced Fund Fund Information 1...............................................3 Investment objective and policy......................................3 Financial highlights................................................3 Fund information..................................................3 Ongoing charges figure.............................................4 Review of Investment Activities 1...................................5 Risk Profile 1....................................................6 Risk and reward indicator...........................................6 Specific risks.....................................................6 Statement of the Manager s Responsibilities.........................7 Report of the Trustee.............................................8 Independent Auditors Report to the Unitholders of Schroder Managed Balanced Fund..............................10 Comparative Tables 1............................................14 Portfolio Statement 1............................................21 Summary of Portfolio Transactions 1...............................25 Largest purchases...............................................25 Largest sales...................................................25 Statement of Total Return........................................26 Statement of Change in Net Assets Attributable to Unitholders........26 Balance Sheet.................................................27 Notes to the Accounts...........................................28 1 Accounting policies...........................................28 2 Net capital gains.............................................30 3 Revenue....................................................30 4 Expenses...................................................31 5 Taxation....................................................31 6 Distributions.................................................32 7 Fair value hierarchy............................................33 8 Debtors....................................................33 9 Cash and bank balances.......................................34 10 Other creditors...............................................34 11 Contingent liabilities...........................................34 12 Related party transactions......................................34 13 Unit classes.................................................35 14 Derivative and other financial instruments...........................36 15 Direct transaction costs........................................40 16 Units in issue reconciliation......................................41 17 Counterparty exposure.........................................41 Remuneration..................................................43 Distribution Table...............................................44 Final distribution for the year ended 23 February 2018....................44 Corporate unitholders (unaudited)....................................44 Equalisation....................................................44 General Information 1............................................45 Authorisation....................................................45 Other information................................................45 1 Collectively these comprise the Manager s report.

Fund Information Investment objective and policy The Schroder Managed Balanced Fund s (the fund ) investment objective is to give a balanced exposure to UK and overseas equities and fixed income securities through a range of underlying authorised unit trusts, recognised schemes and collective investment schemes. The proportionate percentage to be invested in each underlying scheme will be decided by the investment adviser in light of current economic and other circumstances and may include a proportion in cash. Efficient portfolio management techniques will be utilised when considered appropriate. Financial highlights Dealing price 23.2.18 23.2.17 % change A Accumulation units 187.30p 178.30p 5.05 H Income units 83.67p 80.26p 4.25 H Accumulation units 97.01p 91.59p 5.92 I Income units 602.90p 578.30p 4.25 I Accumulation units 1,028.00p 970.70p 5.90 Z Income units 63.59p 61.01p 4.23 Z Accumulation units 66.91p 63.34p 5.64 23.4.18 23.4.17 Final distribution per I Income unit 12.0045p 9.2683p Fund information Launch date 17 July 1998 Launch price 281.24p per I Income unit 346.22p per I Accumulation unit Launch date 13 November 2006 Launch price 100.00p per A Accumulation unit Launch date 2 January 2007 Launch price 50.00p per H Income unit 50.00p per H Accumulation unit Launch date 25 October 2013 Launch price 50.00p per Z Income unit 50.00p per Z Accumulation unit Interim Final Accounting dates 23 August 23 February Revenue allocation date 23 April 3

Fund Information (continued) Ongoing charges figure For the year For the year to 23.2.18 to 23.2.17 A Accumulation units 1.69% 1.70% H Income units 1 0.62% 0.62% H Accumulation units 1 0.62% 0.62% I Income units 0.60% 0.61% I Accumulation units 0.60% 0.61% Z Income units 0.94% 0.95% Z Accumulation units 0.94% 0.95% 1 The expenses of H Income unit class and H Accumulation unit class have been capped during the year (Note 4). 4

Review of Investment Activities From 23 February 2017 to 23 February 2018, the price of I Accumulation units on a dealing price to dealing price basis rose 5.90%. In comparison, the Investment Association Mixed Investment 40-85% Shares Sector Average generated a total return of 4.75%¹. 1 Source: Lipper for Investment Management. Equity markets produced strong gains over the period as optimism over the global economic outlook more than offset some ongoing political uncertainty, North Korea related tensions and three US interest rate increases. Mixed returns from US Treasuries, with short dated bonds performing poorly during the second half of the year, capped returns from investment grade credit. However, ongoing demand for attractive levels of yield underpinned lower rated credit markets. Against this backdrop, the portfolio s overweight equity positions posted positive returns across all regions. Our exposure to European focused holdings delivered the greatest contribution to performance. Regionally, we continued to have overweight positions in emerging markets, both equity and debt, which performed strongly amid growing confidence in the global economic outlook and a renewed appetite for risk assets. In fixed income, our allocation to government bonds ended the period in negative territory, reflecting rising short term interest rates in the US and the return of risk on investor sentiment. We have been underweight government debt versus the sector in line with our sentiment in this area. All in all, we remain positioned for a reflationary environment with an emphasis on emerging market assets which look relatively cheap. At some point in 2018, however, synchronised global recovery will morph into concerns about synchronised liquidity withdrawal. The real surprise for 2018 could be that we end the year with government bond yields lower than today. Please remember that past performance is not a guide to future performance and it might not be repeated. The value of investments and the revenue from them may go down as well as up and investors may not get back the amount originally invested. Because of this, you are not certain to make a profit on your investments and you may lose money. Global Head of Multi-Asset Investments: Johanna Kyrklund Joined Schroders in March 2007 and is based in London Johanna leads the Multi-Asset Investments division and chairs the Global Asset Allocation Committee Responsible for investments on behalf of Multi- Asset clients globally and is one of the lead portfolio managers of the Schroder Managed Balanced Fund Prior to joining Schroders, Johanna specialised in tactical asset allocation strategies From 2005 she worked at Insight Investment where she managed an unconstrained global macro absolute return fund. From 1997 to 2005 she worked at Deutsche Asset Management where she was Head of Asset Allocation in the UK and fund manager of the Deutsche tactical asset allocation fund CFA Charterholder Degree in Philosophy, Politics & Economics from Oxford University Johanna is a member of the Cambridge University Investment Board Multi-Asset Fund Manager: Remi Olu-Pitan Joined Schroders in 2006 Responsible for investments on behalf of Multi- Asset clients globally and is one of the lead portfolio managers of the Schroder Managed Balanced Fund Member of the Global Asset Allocation Committee Heads the Equity risk premia research team of the Strategic Investment Group Multi-Asset (SIGMA) Investment career commenced in 2006 upon joining Schroders CFA Charterholder Masters in Statistics, London School of Economics. Bachelors in Business Finance, Durham University 5

Risk Profile Risk and reward indicator The risk category was calculated using historical performance data and may not be a reliable indicator of the fund s future risk profile. The fund is in this category because it can take higher risks in search of higher rewards and its price may rise and fall accordingly. The fund s risk category is not guaranteed to remain fixed and may change over time. A fund in the lowest category does not mean a risk free investment. Specific risks The fund invests in assets which are exposed to currencies other than sterling. Exchange rates may cause the value of overseas investments and the revenue from them to rise or fall. The fund invests in emerging markets and the Far East. This involves a high degree of risk and should be seen as long term in nature. The fund is index unconstrained and has the potential for greater volatility. The fund may invest in unregulated collective investment schemes, which involves a higher degree of risk as they are not regulated by the Financial Conduct Authority (FCA). The funds may not be readily realisable and priced less frequently than listed shares or authorised unit trusts, and therefore price swings may be more volatile. The fund may invest in a wide range of derivatives in order to meet its investment objectives. For these reasons, the purchase of units should not normally be regarded as a short term investment. 6

Statement of the Manager s Responsibilities The FCA s Collective Investment Schemes sourcebook (COLL) requires the Manager to prepare accounts for each annual and half yearly accounting period, in accordance with United Kingdom Generally Accepted Accounting Practice, which give a true and fair view of the financial position of the fund and of its net revenue and the net capital gains on the property of the fund for the year. In preparing the accounts the Manager is required to: select suitable accounting policies and then apply them consistently; comply with the disclosure requirements of the Statement of Recommended Practice (SORP) for UK Authorised Funds issued by the Investment Management Association (IMA (now the Investment Association (IA))) in May 2014; follow generally accepted accounting principles and applicable accounting standards; prepare the accounts on the basis that the fund will continue in operation unless it is inappropriate to do so; keep proper accounting records which enable it to demonstrate that the accounts as prepared comply with the above requirements; make judgements and estimates that are prudent and reasonable. The Manager is responsible for the management of the fund in accordance with its Trust Deed, the Prospectus and the COLL, and for taking reasonable steps for the prevention and detection of fraud, error and non-compliance with law or regulations. The Manager s report and accounts for the year ended 23 February 2018 were signed on 16 May 2018 on behalf of the Manager by: J.A. Walker-Hazell Directors P. Chislett 7

Report of the Trustee Statement of the Trustee s responsibilities in respect of the Scheme and report of the Trustee to the unitholders of the Schroder Managed Balanced Fund ( the fund ) for the year ended 23 February 2018 The Trustee of Schroder Managed Balanced Fund must ensure that the fund is managed in accordance with the Financial Conduct Authority s Collective Investment Schemes Sourcebook, the Financial Services and Markets Act 2000, as amended, (together the regulations ), the Trust Deed and Prospectus (together the Scheme documents ) as detailed below. The Trustee must in the context of its role act honestly, fairly, professionally, independently and in the interests of the fund and its investors. The Trustee is responsible for the safekeeping of all custodial assets and maintaining a record of all other assets of the fund in accordance with the regulations. The Trustee must ensure that: the fund s cash flows are properly monitored and that cash of the fund is booked in cash accounts in accordance with the regulations; the sale, issue, repurchase, redemption and cancellation of units are carried out in accordance with the regulations; the value of units of the fund are calculated in accordance with the regulations; any consideration relating to transactions in the fund s assets is remitted to the fund within the usual time limits; the fund s income is applied in accordance with the regulations; and the instructions of the Authorised Fund Manager ( the Manager ), which is the UCITS Management Company, are carried out (unless they conflict with the regulations). The Trustee also has a duty to take reasonable care to ensure that the fund is managed in accordance with the regulations and the Scheme documents of the fund in relation to the investment and borrowing powers applicable to the fund. 8

Report of the Trustee (continued) Having carried out such procedures as we considered necessary to discharge our responsibilities as Trustee of the fund, it is our opinion, based on the information available to us and the explanations provided, that, in all material respects the fund, acting through the Manager: (i) has carried out the issue, sale, redemption and cancellation, and calculation of the price of the fund s units and the application of the fund s income in accordance with the regulations and the Scheme documents of the fund; and (ii) has observed the investment and borrowing powers and restrictions applicable to the fund in accordance with the regulations and the Scheme documents of the fund. J.P. Morgan Europe Limited Trustee Bournemouth 16 March 2018 9

Independent Auditors Report to the Unitholders of Schroder Managed Balanced Fund Report on the audit of the financial statements Opinion In our opinion, Schroder Managed Balanced Fund s financial statements: give a true and fair view of the financial position of the fund as at 23 February 2018 and of the net revenue and net capital gains on its scheme property for the year then ended; and have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland, and applicable law), the Statement of Recommended Practice for UK Authorised Funds, the Collective Investment Schemes sourcebook and the Trust Deed. We have audited the financial statements, included within the Final Report and Accounts (the Annual Report ), which comprise: the balance sheet as at 23 February 2018; the statement of total return and the statement of change in net assets attributable to unitholders for the year then ended; the notes to the financial statements, which include a description of the significant accounting policies, and the distribution tables. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) ( ISAs (UK) ) and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We remained independent of the fund in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the Financial Reporting Council s (FRC) Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. 10

Independent Auditors Report to the Unitholders of Schroder Managed Balanced Fund (continued) Conclusions relating to going concern We have nothing to report in respect of the following matters in relation to which ISAs (UK) require us to report to you when: the Manager s use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or the Manager has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the fund s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the fund s ability to continue as a going concern. Reporting on other information The other information comprises all of the information in the Annual Report other than the financial statements and our Auditors Report thereon. The Manager is responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on these responsibilities. Manager s Report In our opinion, the information given in the Manager s Report for the financial year for which the financial statements are prepared is consistent with the financial statements. 11

Independent Auditors Report to the Unitholders of Schroder Managed Balanced Fund (continued) Responsibilities for the financial statements and the audit Responsibilities of the Manager for the financial statements As explained more fully in the Statement of the Manager s Responsibilities set out on page 7, the Manager is responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The Manager is also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Manager is responsible for assessing the fund s ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the Manager either intend to wind up or terminate the fund, or have no realistic alternative but to do so. Auditors responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities for the audit of the financial statements is located on the FRC s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors Report. Use of this report This report, including the opinions, has been prepared for and only for the fund s unitholders as a body in accordance with paragraph 4.5.12 of the Collective Investment Schemes sourcebook and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. 12

Independent Auditors Report to the Unitholders of Schroder Managed Balanced Fund (continued) Other required reporting Opinion on matter required by the Collective Investment Schemes sourcebook In our opinion, we have obtained all the information and explanations we consider necessary for the purposes of the audit. Collective Investment Schemes sourcebook exception reporting Under the Collective Investment Schemes sourcebook we are also required to report to you if, in our opinion: proper accounting records have not been kept; or the financial statements are not in agreement with the accounting records and returns. We have no exceptions to report arising from this responsibility. PricewaterhouseCoopers LLP Chartered Accountants and Statutory Auditors Edinburgh 16 May 2018 13

Comparative Tables A Accumulation units 2018 2017 2016 Financial year to 23 February p per unit p per unit p per unit Change in net asset value Opening net asset value 177.81 146.27 157.04 Return before operating charges 12.69 34.33 (8.17) Operating charges (3.13) (2.79) (2.60) Return after operating charges* 9.56 31.54 (10.77) Distributions 1 (2.11) (1.29) (1.19) Retained distributions 1 2.11 1.29 1.19 Closing net asset value 187.37 177.81 146.27 *after direct transaction costs of 0.00 0.00 (0.02) Performance Return after charges (%) 5.38 21.56 (6.86) Other information Closing net asset value ( 000 s) 6,491 7,598 6,618 Closing number of units 3,464,225 4,272,917 4,524,410 Operating charges (%) 1.69 1.70 1.70 Direct transaction costs (%)** 0.00 0.00 0.01 Prices Highest dealing price (p) 194.50 178.30 164.20 Lowest dealing price (p) 176.70 146.00 138.90 14

Comparative Tables (continued) H Income units 2018 2017 2016 Financial year to 23 February p per unit p per unit p per unit Change in net asset value Opening net asset value 78.76 65.24 70.66 Return before operating charges 5.45 15.25 (3.88) Operating charges (0.51) (0.45) (0.43) Return after operating charges* 4.94 14.80 (4.31) Distributions 1 (1.63) (1.28) (1.11) Closing net asset value 82.07 78.76 65.24 *after direct transaction costs of 0.00 0.00 (0.01) Performance Return after charges (%) 6.27 22.69 (6.10) Other information Closing net asset value ( 000 s) 2,062 2,049 1,770 Closing number of units 2,512,663 2,601,582 2,713,018 Operating charges (%) 0.62 0.62 0.62 Direct transaction costs (%)** 0.00 0.00 0.01 Prices Highest dealing price (p) 86.83 80.26 73.94 Lowest dealing price (p) 78.38 65.14 62.93 15

Comparative Tables (continued) H Accumulation units 2018 2017 2016 Financial year to 23 February p per unit p per unit p per unit Change in net asset value Opening net asset value 91.32 74.44 79.28 Return before operating charges 6.32 17.40 (4.36) Operating charges (0.59) (0.52) (0.48) Return after operating charges* 5.73 16.88 (4.84) Distributions 1 (1.91) (1.46) (1.24) Retained distributions 1 1.91 1.46 1.24 Closing net asset value 97.05 91.32 74.44 *after direct transaction costs of 0.00 0.00 (0.01) Performance Return after charges (%) 6.27 22.68 (6.10) Other information Closing net asset value ( 000 s) 759,830 676,242 499,639 Closing number of units 782,912,790 740,548,669 671,197,468 Operating charges (%) 0.62 0.62 0.62 Direct transaction costs (%)** 0.00 0.00 0.01 Prices Highest dealing price (p) 100.70 91.59 82.96 Lowest dealing price (p) 90.88 74.27 70.60 16

Comparative Tables (continued) I Income units 2018 2017 2016 Financial year to 23 February p per unit p per unit p per unit Change in net asset value Opening net asset value 567.34 469.96 509.06 Return before operating charges 39.36 109.85 (27.95) Operating charges (3.58) (3.20) (2.98) Return after operating charges* 35.78 106.65 (30.93) Distributions 1 (12.00) (9.27) (8.17) Closing net asset value 591.12 567.34 469.96 *after direct transaction costs of 0.00 0.00 (0.05) Performance Return after charges (%) 6.31 22.69 (6.08) Other information Closing net asset value ( 000 s) 22,698 20,322 17,494 Closing number of units 3,839,939 3,581,997 3,722,492 Operating charges (%) 0.60 0.61 0.60 Direct transaction costs (%)** 0.00 0.00 0.01 Prices Highest dealing price (p) 625.60 578.30 532.80 Lowest dealing price (p) 564.80 469.30 453.80 17

Comparative Tables (continued) I Accumulation units 2018 2017 2016 Financial year to 23 February p per unit p per unit p per unit Change in net asset value Opening net asset value 967.78 788.80 839.83 Return before operating charges 67.01 184.35 (46.10) Operating charges (6.10) (5.37) (4.93) Return after operating charges* 60.91 178.98 (51.03) Distributions 1 (20.33) (15.55) (13.47) Retained distributions 1 20.33 15.55 13.47 Closing net asset value 1,028.69 967.78 788.80 *after direct transaction costs of 0.00 0.00 (0.08) Performance Return after charges (%) 6.29 22.69 (6.08) Other information Closing net asset value ( 000 s) 681,810 670,792 593,975 Closing number of units 66,279,231 69,312,177 75,301,278 Operating charges (%) 0.60 0.61 0.60 Direct transaction costs (%)** 0.00 0.00 0.01 Prices Highest dealing price (p) 1,067.00 970.70 879.10 Lowest dealing price (p) 963.10 787.60 748.60 18

Comparative Tables (continued) Z Income units 2018 2017 2016 Financial year to 23 February p per unit p per unit p per unit Change in net asset value Opening net asset value 60.00 49.70 53.83 Return before operating charges 4.20 11.66 (2.95) Operating charges (0.59) (0.53) (0.49) Return after operating charges* 3.61 11.13 (3.44) Distributions 1 (1.12) (0.83) (0.69) Closing net asset value 62.49 60.00 49.70 *after direct transaction costs of 0.00 0.00 (0.01) Performance Return after charges (%) 6.02 22.39 (6.39) Other information Closing net asset value ( 000 s) 1,638 830 707 Closing number of units 2,620,939 1,384,027 1,421,857 Operating charges (%) 0.94 0.95 0.95 Direct transaction costs (%)** 0.00 0.00 0.01 Prices Highest dealing price (p) 66.00 61.01 56.32 Lowest dealing price (p) 59.73 49.62 47.83 19

Comparative Tables (continued) Z Accumulation units 2018 2017 2016 Financial year to 23 February p per unit p per unit p per unit Change in net asset value Opening net asset value 63.15 51.60 55.11 Return before operating charges 4.41 12.10 (3.00) Operating charges (0.62) (0.55) (0.51) Return after operating charges* 3.79 11.55 (3.51) Distributions 1 (1.14) (0.86) (0.71) Retained distributions 1 1.14 0.86 0.71 Closing net asset value 66.94 63.15 51.60 *after direct transaction costs of 0.00 0.00 (0.01) Performance Return after charges (%) 6.00 22.38 (6.37) Other information Closing net asset value ( 000 s) 19,576 17,799 16,156 Closing number of units 29,242,145 28,183,106 31,310,126 Operating charges (%) 0.94 0.95 0.95 Direct transaction costs (%)** 0.00 0.00 0.01 Prices Highest dealing price (p) 69.45 63.34 57.66 Lowest dealing price (p) 62.82 51.52 48.98 1 These figures have been rounded to 2 decimal places. ** Direct transaction costs have been stated after deducting the proportion of the amounts collected from dilution adjustments. Please remember that past performance is not a guide to future performance and it might not be repeated. The value of investments and the revenue from them may go down as well as up and investors may not get back the amount originally invested. Because of this, you are not certain to make a profit on your investments and you may lose money. 20

Portfolio Statement Collective Investment Schemes 91.65% (93.69%) Absolute Return Funds 1.81% (2.08%) Holding at Market Value % of net 23.2.18 000 s assets Schroder Multi-Asset Strategies Fund I Accumulation USD ^ 336,725 26,975 1.81 26,975 1.81 Asia Pacific ex Japan Equity Funds 5.17% (4.50%) Schroder Asian Alpha Plus Fund A Accumulation^ 51,734,690 77,261 5.17 77,261 5.17 Cash Funds 2.28% (2.44%) Schroder Offshore Cash Fund A Accumulation^ 18,855,701 34,072 2.28 34,072 2.28 Emerging Markets Equity Funds 3.53% (2.45%) Schroder Global Emerging Markets Fund A Income^ 26,202,978 52,786 3.53 52,786 3.53 Emerging Markets Fixed Interest Funds 5.54% (5.09%) Schroder Emerging Markets Debt Absolute Return Fund I Accumulation USD^ 2,896,081 82,647 5.54 82,647 5.54 Emerging Markets Multi-Asset Funds 1.50% (1.53%) Schroder Emerging Multi-Asset Income Fund I Accumulation USD^ 272,380 22,426 1.50 22,426 1.50 European Equity Funds 14.42% (9.92%) Schroder European Fund I Accumulation^ 8,581,094 186,321 12.48 Schroder European Large Cap Fund I Accumulation EUR^ 92,945 29,022 1.94 215,343 14.42 Global Equity Funds 8.09% (12.23%) Schroder Global Equity Fund I Accumulation^ 6,243,121 61,607 4.12 21

Portfolio Statement (continued) Global Equity Funds (continued) Holding at Market Value % of net 23.2.18 000 s assets Schroder QEP Global Active Value Fund I Accumulation USD^ 306,747 59,297 3.97 120,904 8.09 Global Fixed Interest Funds 8.65% (11.36%) Schroder Global Corporate Bond Fund I Accumulation USD^ 6,483,595 62,226 4.16 Schroder Global High Yield Fund I Accumulation USD^ 1,752,495 67,115 4.49 129,341 8.65 Global Property Funds 1.85% (2.16%) Schroder Global Cities Real Estate Fund I Accumulation USD^ 203,730 27,679 1.85 27,679 1.85 Japanese Equity Funds 3.47% (3.55%) Schroder Tokyo Fund A Accumulation^ 14,232,886 51,779 3.47 51,779 3.47 UK Equity Funds 22.82% (23.35%) Schroder Income Fund A Income^ 11,279,999 135,980 9.10 Schroder UK Alpha Plus Fund A Income^ 67,995,619 117,020 7.83 Schroder UK Equity Fund A Income^ 9,982,064 88,042 5.89 341,042 22.82 UK Fixed Interest Funds 2.65% (2.82%) Schroder All Maturities Corporate Bond Fund I Accumulation^ 14,107,500 39,603 2.65 39,603 2.65 US Equity Funds 9.87% (10.21%) Vanguard S&P 500 UCITS ETF 3,977,987 147,537 9.87 147,537 9.87 Collective Investment Schemes total 1,369,395 91.65 22

Portfolio Statement (continued) Government Bonds 5.12% (3.63%) United Kingdom 5.12% (3.63%) Holding at Market Value % of net 23.2.18 000 s assets UK Treasury Bill 0% 09/04/2018 26,000,000 25,988 1.74 UK Treasury Bill 0% 11/06/2018 16,100,000 16,080 1.08 UK Treasury Bill 0% 09/07/2018 34,500,000 34,444 2.30 76,512 5.12 Government Bonds total 76,512 5.12 Forward Foreign Currency Contracts (0.26)% (0.37%) Buy JPY 2,355,616,000 Sell EUR 17,743,487 27/03/2018 JPY 2,355,616,000 153 0.02 Buy JPY 2,216,804,000 Sell USD 20,793,498 27/03/2018 JPY 2,216,804,000 (6) 0.00 Sell EUR 16,707,000 Buy GBP 14,839,157 27/03/2018 EUR (16,707,000) 121 0.01 Sell JPY 5,226,572,000 Buy GBP 34,987,854 27/03/2018 JPY (5,226,572,000) (35) 0.00 Sell USD 556,187,000 Buy GBP 393,334,653 27/03/2018 USD (556,187,000) (4,158) (0.29) Forward Foreign Currency Contracts total (3,925) (0.26) Futures (0.01)% ((0.02)%) EURO STOXX 50 Index March 2018 1 (1) 0.00 Long Gilt March 2018 694 (10) 0.00 MSCI Emerging Markets Index March 2018 346 352 0.02 Nikkei 225 Index March 2018 94 (517) (0.03) Futures total (176) (0.01) 23

Portfolio Statement (continued) Market Value % of net 000 s assets Portfolio of investments 1,441,806 96.50 Net other assets 52,299 3.50 Net assets attributable to unitholders 1,494,105 100.00 The comparative percentage figures in brackets are as at 23 February 2017. Unless otherwise stated, all securities are admitted to official stock exchange listings or are permitted collective investment schemes. ^ Unlisted, suspended or delisted security A related party to the Fund 24

Summary of Portfolio Transactions Largest purchases Largest sales Cost For the year ended 23 February 2018 000 s UK Treasury Bill 0% 08/01/2018 34,462 UK Treasury Bill 0% 09/07/2018 34,425 UK Treasury Bill 0% 11/12/2017 30,985 Schroder European Fund I Accumulation 30,248 Schroder European Large Cap Fund I Accumulation EUR 30,013 Schroder Global Equity Fund I Accumulation 26,053 UK Treasury Bill 0% 09/10/2017 25,987 UK Treasury Bill 0% 09/04/2018 25,951 Schroder Global Emerging Markets Fund A Income 19,313 Schroder QEP Global Active Value Fund I Accumulation USD 18,878 Proceeds For the year ended 23 February 2018 000 s Schroder QEP Global Active Value Fund I Accumulation USD 66,135 UK Treasury Bill 0% 08/01/2018 34,500 UK Treasury Bill 0% 10/07/2017 34,470 UK Treasury Bill 0% 11/12/2017 30,998 Schroder Global Equity Fund I Accumulation 30,300 UK Treasury Bill 0% 09/10/2017 26,000 UK Treasury Bill 0% 10/04/2017 16,250 Schroder Global Corporate Bond Fund I Accumulation USD 14,146 Schroder Global Emerging Markets Fund A Income 7,304 Schroder Global High Yield Fund I Accumulation USD 7,073 A related party to the fund (Note 12). 25

Statement of Total Return For the year ended 23 February 2018 Income 2018 2017 Notes 000 s 000 s 000 s 000 s Net capital gains 2 59,018 235,125 Revenue 3 39,388 31,092 Expenses 4 (7,750) (6,733) Net revenue before taxation 31,638 24,359 Taxation 5 (2,774) (2,513) Net revenue after taxation 28,864 21,846 Total return before distributions 87,882 256,971 Distributions 6 (29,281) (22,210) Change in net assets attributable to unitholders from investment activities 58,601 234,761 Statement of Change in Net Assets Attributable to Unitholders For the year ended 23 February 2018 2018 2017 000 s 000 s 000 s 000 s Opening net assets attributable to unitholders 1,395,632 1,136,359 Amounts receivable on issue of units 77,623 72,378 Amounts payable on cancellation of units (66,592) (69,741) 11,031 2,637 Dilution adjustment 1 (1) Change in net assets attributable to unitholders from investment activities 58,601 234,761 Retained distribution on Accumulation units 28,840 21,876 Closing net assets attributable to unitholders 1,494,105 1,395,632 26

Balance Sheet As at 23 February 2018 2018 2017 Notes 000 s 000 s Assets Investments 1,446,533 1,369,208 Current assets Debtors 8 7,044 4,722 Cash and bank balances 9 52,918 33,218 Total assets 1,506,495 1,407,148 Liabilities Investment liabilities (4,727) (6,130) Creditors Distributions payable (531) (377) Other creditors 10 (7,132) (5,009) Total liabilities (12,390) (11,516) Net assets attributable to unitholders 1,494,105 1,395,632 27

Notes to the Accounts 1 Accounting policies Basis of preparation The accounts have been prepared under the historical cost basis, as modified by the revaluation of investments, and in accordance with the SORP for UK Authorised Funds issued by the IMA in May 2014 and in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 (The Financial Reporting Standard Applicable in the UK and Republic of Ireland (FRS 102)). Revenue Distributions receivable from authorised unit trusts and other collective investment schemes are recognised net of attributable tax credits and are credited to revenue when they are first quoted ex-dividend. Interest receivable from bank balances is accounted for on an accruals basis. Interest receivable from debt securities is accounted for on an effective yield basis. The Annual management charge and Administration charge in respect of the Schroder funds in which the fund invests are rebated to the fund so that no double charging occurs. All rebates are treated as revenue or capital based on the underlying fund s treatment. Special dividends Special dividends are treated as revenue or capital depending on the facts of each particular case. Equalisation Equalisation on distributions received by the fund is deducted from the cost of investments. As such the equalisation on distributions received by the fund does not form part of the fund s distributions. Interest on debt securities bought or sold Interest on debt securities bought or sold is excluded from the capital cost of securities, and is dealt with as part of the revenue of the fund. Expenses Expenses of the fund are charged against revenue except for costs associated with the purchase and sale of investments which are allocated to the capital of the fund. 28

Notes to the Accounts (continued) Taxation Corporation tax is provided for on the revenue liable to corporation tax less deductible expenses. The tax effect of different items of revenue or expenses is allocated between revenue and capital using the marginal basis. This includes any gains made on non-reporting offshore funds. Deferred taxation is provided for on all timing differences that have originated but not reversed by the balance sheet date, other than those differences regarded as permanent. Any liability to deferred taxation is provided for at the average rate of taxation expected to apply. Deferred tax assets and liabilities are not discounted to reflect the time value of money. Distributions The revenue available for distribution is the total revenue earned by the fund, less deductible expenses and taxation charged to revenue. The revenue is distributed annually on 23 April to Income unitholders. For Accumulation units this revenue is not distributed but automatically reinvested in the fund and is reflected in the value of these units. Dilution adjustment In certain circumstances the Manager may apply a dilution adjustment on subscriptions and redemptions of units. If applied, the dilution adjustment is paid to the fund. See Prospectus for further details. Valuation Listed investments of the fund have been valued at market value, dual priced authorised unit trusts have been valued at cancellation price, single priced authorised unit trusts have been valued at the dealing price and open ended investment companies have been valued at the latest available bid price at 18:00 on the balance sheet date. Market value is defined by the SORP as fair value which generally is the bid value of each security and the offer value for short positions. Forward foreign exchange contracts Open forward foreign exchange contracts are shown in the Portfolio Statement at market value and the net gains/(losses) are reflected under Net capital gains in the Notes to the Accounts. Futures contracts Open futures contracts are shown in the Portfolio Statement at market value and the net gains are reflected within Derivative contracts under Net capital gains in the Notes to the Accounts. Other returns are included within Net revenue return from derivative contracts under Revenue in the Notes to the Accounts. 29

Notes to the Accounts (continued) Foreign currencies Transactions in foreign currencies are translated into sterling at the exchange rate prevailing on the date of the transaction. Assets and liabilities valued in foreign currencies have been translated into sterling at the exchange rates prevailing at the balance sheet date and the net (losses)/gains are reflected under Net capital gains in the Notes to the Accounts. 2 Net capital gains The net capital gains during the year comprise: 2018 2017 000 s 000 s Non-derivative securities 22,881 270,489 Derivative contracts 2,059 615 Forward foreign exchange contracts 35,318 (38,012) Foreign currency (losses)/gains (3,308) 183 Transaction costs (7) (5) Annual management charge rebates 2,074 1,855 Administration charge rebates 1 0 Net capital gains 59,018 235,125 3 Revenue 2018 2017 000 s 000 s Franked distributions 19,779 13,578 Interest distributions 11,206 9,941 Interest on debt securities 159 211 Bank interest 28 60 Net revenue return from derivative contracts 1,076 1,388 Annual management charge rebates 7,125 5,900 Administration charge rebates 15 14 Total revenue 39,388 31,092 30

Notes to the Accounts (continued) 2018 2017 4 Expenses 000 s 000 s Payable to the Manager, associates of the Manager and agents of either of them: Annual management charge 1 7,565 6,571 Administration charge 41 36 Payable to the Trustee, associates of the Trustee and agents of either of them: 7,606 6,607 Trustee s fees 89 87 Safe custody fees 18 16 Interest payable 23 8 Other expenses: 130 111 Audit fee 14 15 Total expenses 7,750 6,733 1 The Annual management charge has been reduced by 24,129 (2017 131,998) to ensure the fund does not exceed the expenses cap. 5 Taxation (a) Analysis of the tax charge for the year 2018 2017 000 s 000 s Corporation tax 2,786 2,527 Overseas withholding tax (12) (14) 1 Total current tax (Note 5(b)) 2,774 2,513 Corporation tax has been provided for at a rate of 20% (2017 20%). 31

Notes to the Accounts (continued) (b) Factors affecting the current tax charge for the year The tax assessed for the year is different from that calculated when the standard rate of corporation tax for authorised unit trusts of 20% (2017 20%) is applied to the net revenue before taxation. The differences are explained below. 2018 2017 000 s 000 s Net revenue before taxation 31,638 24,359 Net revenue for the year before taxation multiplied by the standard rate of corporation tax 6,328 4,872 Effects of: Revenue not subject to corporation tax (3,956) (2,716) Irrecoverable overseas withholding tax (12) (14) 1 Tax on capital gains 414 371 Current tax charge for the year (Note 5(a)) 2,774 2,513 1 Includes prior period adjustments. 6 Distributions Distributions The distribution takes account of revenue received on the issue of units and revenue deducted on the cancellation of units, and comprises: 2018 2017 000 s 000 s Final Dividend distribution 29,371 22,252 Add: Revenue deducted on cancellation of units 773 417 Deduct: Revenue received on issue of units (863) (459) Distributions 29,281 22,210 Net revenue after taxation 28,864 21,846 Tax relief on capital gains 415 364 Equalisation on conversions 2 0 Distributions 29,281 22,210 Details of the distribution per unit are set out in the Distribution Table on page 44. 32

Notes to the Accounts (continued) 7 Fair value hierarchy Instruments held at the year end are presented in line with amendments to FRS 102 the Financial Reporting Standard applicable in the UK and Republic of Ireland Fair value hierarchy disclosures. 2018 2017 Assets Liabilities Assets Liabilities Basis of valuation 000 s 000 s 000 s 000 s Level 1: Quoted prices 224,402 (528) 145,826 (3,601) Level 2: Observable market data 1,222,131 (4,199) 1,223,382 (2,529) Level 3: Unobservable data 0 0 0 0 Total 1,446,533 (4,727) 1,369,208 (6,130) Level 1: Unadjusted quoted price in an active market for an identical instrument. Level 2: Valuation techniques using observable inputs other than quoted prices within level 1. Level 3: Valuation techniques using unobservable inputs. Unobservable data Unobservable data has been used only where relevant observable market data is not available. Where there was no reputable price source for an investment, the Manager has assessed information available from internal and external sources in order to arrive at an estimated fair value. The fair value is established by using measures of value such as the price of recent transactions, earnings multiple and net assets. The Manager of the fund also makes judgements and estimates based on their knowledge of recent investment performance, historical experience and other assumptions that are considered reasonable under the circumstances. The estimates and the assumptions used are under continuous review by the Manager with particular attention paid to the carrying value of the investments. 8 Debtors 2018 2017 000 s 000 s Amounts receivable for issue of units 1,705 1,828 Accrued franked distributions 0 672 Accrued unfranked distributions 0 863 Accrued bank interest 3 0 Accrued Annual management charge rebates 5,311 1,225 Accrued administration charge rebates 1 2 Prepaid expenses 24 132 Total debtors 7,044 4,722 33

Notes to the Accounts (continued) 9 Cash and bank balances 2018 2017 000 s 000 s Cash and bank balances 44,539 22,751 Amounts held at futures clearing houses and brokers 8,379 10,467 Total cash and bank balances 52,918 33,218 10 Other creditors 2018 2017 000 s 000 s 000 s 000 s Amounts payable for cancellation of units 994 261 Purchases awaiting settlement 0 1,535 Amounts payable on derivative contracts 0 12 Accrued expenses Manager and Agents Annual management charge 5,013 1,055 Administration charge 2 6 5,015 1,061 Trustee and Agents Trustee s fees 13 13 Safe custody fees 5 3 Transaction costs 2 1 20 17 Other accrued expenses 14 14 Corporation tax payable 1,089 2,109 Total other creditors 7,132 5,009 11 Contingent liabilities There were no contingent liabilities at the balance sheet date (2017 Nil). 12 Related party transactions The Manager exercises control over the fund and is therefore a related party by virtue of its controlling influence. Amounts paid during the year or due to the Manager at the balance sheet date are disclosed under Expenses and Other creditors in the Notes to the Accounts. Annual management charge rebates received or receivable from the Manager of 9,199,029 (2017 7,755,433) are disclosed under Net capital gains and Revenue in the Notes to the Accounts. Amounts due from the Manager at the balance sheet date of 5,310,959 (2017 1,224,750) are disclosed under Debtors in the Notes to the Accounts. 34

Notes to the Accounts (continued) Administration charge rebates received or receivable from the Manager of 15,920 (2017 14,319) are disclosed under Net capital gains and Revenue in the Notes to the Accounts. Amounts due from the Manager at the balance sheet date of 1,053 (2017 2,149) are disclosed under Debtors in the Notes to the Accounts. The Manager acts as principal on all transactions of units in the fund. The aggregate monies received through the issue and cancellation of units are disclosed in the Statement of Change in Net Assets Attributable to Unitholders and Distributions in the Notes to the Accounts. Amounts due from or to the Manager in respect of unit transactions at the balance sheet date are disclosed under Debtors and Other creditors in the Notes to the Accounts. Units held or managed by the Manager or associates of the Manager as a percentage of the fund s net asset value at the balance sheet date were 0.15% (2017 0.10%). Related party holdings are disclosed in the Portfolio Statement, with any significant purchases and sales disclosed in Summary of Portfolio Transactions. The revenue earned from these investments of 28,571,812 (2017 21,501,063) is included under Revenue in the Notes to the Accounts. 13 Unit classes The fund currently has seven unit classes: A Accumulation units, H Income units, H Accumulation units, I Income units, I Accumulation units, Z Income units and Z Accumulation units. The Annual management charge is based on the average value of the fund, calculated on a daily basis, and covers the remuneration of the Manager, the Investment Adviser and their overhead expenses and for each unit class is as follows: A Accumulation units 1.50% H Income units 0.80% H Accumulation units 0.80% I Income units 0.50% I Accumulation units 0.50% Z Income units 0.75% Z Accumulation units 0.75% The fund may invest up to 100% of its net asset value in units of collective investment schemes. The maximum level of annual management fee that may be charged to the fund for these underlying funds is 3% of its net asset value. The closing net asset value of each unit class, the closing net asset value per unit and the closing number of units in issue are given in the Comparative Tables on pages 14 to 20. The distribution per unit class is given in the Distribution Table on page 44. All classes have the same rights on winding up. 35

Notes to the Accounts (continued) 14 Derivative and other financial instruments In accordance with the investment objective, the fund may hold certain financial instruments. These comprise: securities held in accordance with the investment objective and policy; cash and short term debtors and creditors arising directly from operations. Under normal circumstances, the Manager would expect substantially all of the assets of the fund to be invested in securities appropriate to the fund s investment objective. Cash and near cash may only be held in order to assist in the redemption of units, the efficient management of the fund or purposes regarded as ancillary to the fund. The main risks arising from the fund s financial instruments are market price, foreign currency, liquidity, credit and interest rate risks. The Manager s policies for managing these risks are summarised below and have been applied throughout the year and the prior year. Market price risk The fund s investment portfolio is exposed to market price fluctuations which are monitored by the Manager in pursuance of the investment objective and policy. Adherence to investment guidelines and to investment and borrowing powers set out in the Trust Deed, the Prospectus and in the COLL mitigates the risk of excessive exposure to any particular type of security or issuer. Foreign currency risk Collective investment schemes valued in foreign currencies and underlying funds investing in overseas securities may cause the balance sheet to be significantly affected by movements in foreign exchange rates. The Manager seeks to manage exposure to currency movements by using forward foreign exchange contracts. Revenue received in other currencies is translated to sterling on or near the date of receipt. The fund does not hedge or otherwise seek to avoid currency movement risk on accrued revenue. 36