Annual Financial Report

Brown Advisory US Smaller Cos. PLC

23 September 2026

 

BROWN ADVISORY US SMALLER COMPANIES PLC

Annual Report and Financial Statements for the year ended 30 June 2026

FINANCIAL HIGHLIGHTS FOR THE YEAR ENDED 30 JUNE 2026
Ordinary Share Performance

Net asset value (pence)*

1,764.0

+24.5% (2025:  1,416.7)

Closing price (pence)

1,620.0

+27.6% (2025:  1,270.0)

Russell 2000 Total Return Index (sterling adjusted)

12,583.0

+45.7% (2025:  8,637.0)

Discount to net asset value (%)*

(8.2)

(2025: (10.4))

Ongoing charges ratio (%)*

0.99

(2025: 1.01)

* For definitions of the above Alternative Performance Measures please refer to the Glossary of Terms within the Annual Report.

Year ended 30 June	Net assets £’000	Net asset value per Ordinary share p	Year-on-year change in net asset value per Ordinary share %	Year-on-year change in Benchmark Index %
2017	181,687	911.1	+15.7	+28.2
2018	163,339	1,103.4	+21.1	+15.7
2019	161,520	1,152.7	+4.5	+0.3
2020	145,011	1,116.3	(3.2)	(3.8)
2021	181,426	1,516.3	+35.8	+45.1
2022	155,840	1,303.9	(14.0)	(15.2)
2023	171,147	1,431.9	+9.8	+7.5
2024	174,544	1,471.4	+2.8	+10.7
2025	163,399	1,416.7	(3.7)	(0.7)
2026	195,006	1,764.0	+24.5	+45.7
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Enquiries:

Brown Advisory US Smaller Companies PLC  

Via Lansons

Stephen White (Chairman)

Singer Capital Markets (Corporate Broker)       020 7496 3000

Mark Bloomfield / James Fischer (Investment Banking)

Alan Geeves / Sam Greatrex / William Gumpel (Sales)

Lansons     

Ed Hooper    07783 387713 

[e-mail] 

CHAIR’S STATEMENT

Dear Fellow Shareholder,

For the twelve months and financial year ended 30 June 2026, your Company’s net asset value (NAV) per share rose from 1416.7p to 1764.0p, an increase in absolute terms of 24.5%. US equity markets continued their strong performance, drawing encouragement from the ongoing resilience of the US economy, strong corporate reports, particularly from the technology sector, and hopes of cuts in interest rates. It was also a good period for US smaller companies which benefited from a return of investor interest and a broadening in their buying activity. This was reflected in the performance of our benchmark, the sterling-adjusted Russell 2000 index, which returned an impressive 45.7%, well ahead of all the large cap indices.

Our own portfolio of US smaller companies did not keep pace with the broader market as our Portfolio Manager’s rigorous approach of focussing on quality companies and avoiding those with weaker fundamentals was less in tune with market dynamics. An explanation of specific portfolio factors in relation to performance can be found further on in this statement as well as in the Portfolio Manager’s review within the Annual Report.

Over the twelve-month period, the Company’s share price rose from 1270.0p to 1620.0p, an increase of 27.6%. This resulted in a small narrowing of the discount to NAV from 10.4% on 30 June 2025 to 8.2% on 30 June 2026. A steady number of shares were bought in over the course of the year in accordance with our established buyback policy.

Strategic Review

On 8 July 2026, the Board announced it was conducting a Strategic Review of the future of the Company.

The Board noted it continued to have confidence in the Portfolio Manager’s philosophy and process, and in their ability to deliver positive results over the long term, as demonstrated historically. However, the Board also recognised that more recent performance, despite being positive in absolute terms, has lagged the Company’s benchmark by a wide margin.

In the past 18 months, the Board has taken a number of actions aimed at enhancing the attractiveness of the Company and delivering value for shareholders (see below).

The Board is cognisant of the Company’s forthcoming three-yearly continuation vote, currently due to be held at this year’s Annual General Meeting (‘AGM’) and has been actively engaging with shareholders to understand their views.

Feedback from shareholders has been broadly supportive of the Company’s investment objective and policy, as well as the processes and resources of the Investment Manager. There is also significant support for the Company’s existing discount control mechanisms, including the three-yearly continuation vote, the five-year performance-related tender offer, scheduled for 2028, and the use of buybacks.

However, a number of larger shareholders have indicated a preference for a liquidity opportunity in the shorter term. In addition, some shareholders have raised concerns regarding the scale of the Company and its future appeal to a broader investor base.

Against this backdrop, the Board is considering a range of strategic options, including the potential provision of a significant cash exit opportunity for shareholders. In evaluating these options, the Board will also have regard to the scale of the Company following any such transaction.

The Strategic Review remains ongoing and there can be no certainty as to its outcome. The Viability Statement, set out within the Annual Report, contains information on the potential implications of the Strategic Review for the Company.

Market Review

Having moved largely sideways in the first six months of our financial year, as reported previously, US equity markets picked up steam again in the second half. This was despite a further deterioration in the geopolitical situation as the US and Israel launched hostilities on Iran, prompting the latter to close the Strait of Hormuz, one of the world’s most critical maritime chokepoints that carries around a quarter of seaborne oil trade and significant volumes of liquefied natural gas and fertilizers. At the same time, there was no let-up in Russia’s war on Ukraine, nor improvement in relations between China and Taiwan.

Despite this volatile geopolitical backdrop, the US markets closed the period around their all-time highs. Highly noticeable within the markets during this frothier second half was the heavy rotation as investors sought to take profits in areas that had done well, such as technology and AI and switch into other underperforming areas such as consumer stocks, out of ‘growth’ and into ‘value’ and out of large cap stocks, such as the ‘Magnificent Seven’ and into US smaller companies.

Over the year, in US dollar terms, the Russell 2000 returned 40.8%, the S&P Composite returned 22.2% and the Nasdaq Composite returned 29.5%. The pound fell a little against the US dollar, moving from 1.370 to 1.327, as a result of which sterling-based shareholders enjoyed a small additional gain from their weaker home currency.

Detailed coverage on the development of the US smaller company sector over the past twelve months and our activity and performance is included in the Portfolio Manager’s Review within the Annual Report.

Portfolio Manager Oversight

The Board monitors closely investment performance and, in accordance with the Portfolio Management Agreement (PMA), carries out a detailed formal appraisal of the Portfolio Manager annually, as well as regular portfolio reviews at its quarterly investment meetings. Notwithstanding its view that Brown Advisory LLC had consistently applied a disciplined long-term investment approach, supported by a highly experienced and skilled investment team, it concluded that it was appropriate to initiate a Strategic Review.

Steps already taken prior to the announcement of the Strategic Review

In the last two years, the Board has implemented the following:

       A conditional tender offer such that, should the NAV performance of the Company not outperform the Company’s benchmark (Sterling-adjusted Russell 2000 Total Return Index) for the period 1 July 2023 to 30 June 2028 (i.e. a total period of five years with under two remaining), a one-off opportunity is to be made to shareholders to tender some or all their shares at close to the prevailing NAV, less costs;

      A reduction in management fees

o These are now calculated based on the lower of the Company’s market capitalisation and net asset value (NAV), rather than NAV as previously, and

o The management fee on the first £200m was reduced to 0.65%, down from 0.7%, and will continue to be calculated on a tiered basis.

A continuation vote continues to be offered to shareholders every 3 years, with the next due to take place at the AGM expected to be held later in 2026.

Share Price and Discount

The Board has continued with its buyback policy updated a couple of years ago and is committed to using share buybacks with the aim of reducing discount volatility and working to reduce any discount to the extent that it is significantly wider than those of similar investment trusts.

Over the period under review, the discount to NAV per share over the year tightened from 10.4% on 30 June 2025 to 8.2% on 30 June 2026. For much of the period the discount was within our tolerated range and we repurchased 479,080 shares. They were bought at an average price of 1417.8p per share.

As of 30 June 2026, the number of shares held in Treasury was 7,168,706 (2025: 6,689,626) and the number in public hands was 11,054,707 (2025: 11,533,787).

Gearing

With interest rates holding firm, an unsettled political background and limited investor interest in small cap assets, neither the Board nor the Portfolio Manager saw good reason to deploy any gearing over the year and indeed preferred to hold some cash in hand in case of market setbacks.

Revenue and Capital Returns

The net return per Ordinary share was 338.2p, allocated 343.3p to Capital and (5.1p) to Revenue. Dividend income and management expenses were both largely unchanged.

Board Composition

There were no changes to the Board over the past year, having been fully refreshed since I took over as chair in October 2021. All four directors will be presenting themselves for re-election at the AGM which will take place later in 2026. As we have noted before, we are a small Board, but we believe appropriate for the size and complexity of our Company with all the necessary skill sets represented.

Directors’ Fees

The Board undertakes an annual fee review to ensure that the remuneration paid to directors remains attractive, competitive and in line with its peers in order to attract and retain the best candidates. Since 1 January 2026, the Directors’ base is £31,800 and the remuneration of the Chair is £41,600. The supplement for the Chair of the Audit and Risk Committee is £6,000.

These fee levels will remain unchanged from 1 January 2027.

The maximum level currently provided for in the Company’s Articles of Association for total directors’ fees is £185,000 which provides headroom for succession planning and appointment overlap should it be necessary.

Annual General Meeting

No date or venue has yet been set for the 2026 AGM, as the outcome of the Strategic Review is likely to influence its timing. The Board will provide a further update regarding the 2026 AGM following any announcement of the conclusions of the Strategic Review.

The Notice of the AGM, containing full details of the business to be conducted at the meeting as well as information on how to vote, will be published in due course.

Shareholder Communications

The Board encourages shareholders to visit the Company’s website (www.brownadvisory.com/basc) for the latest information, podcasts and monthly factsheets.

US Smaller Companies Outlook

As noted earlier, having moved largely sideways for much of our past financial year, US smaller companies rallied with gusto in the final quarter. As a result, they outperformed their larger peers over the twelve-month period under review, for the first time in ten years. Looking at where they are today, with the benefit of another strong start to the year, 2026 looks as though it may prove to be another double-digit positive year for US equities, and again for small cap as well as large cap.

Most importantly, the US economy remains in good shape. Consumer spending continues to hold up well given renewed jobs growth, some firming in wages in key industries and a generally confident consumer. At the same time, investment spending is soaring with the massive capex spend on AI by the so-called ‘hyperscalers’ and the government-encouraged reshoring of supply chains. Sentiment in the markets has also been boosted by the inflation numbers which were steady in the review period but are now predicted to rise. Hopes of cuts in interest rates and the success of several massive IPOs, such as SpaceX also boosted sentiment towards the end of the period.

That said, there are risks. First, interest rates may not fall as quickly as many investors hope. Indeed, the money markets are now looking for an increase in interest rates before the year end and not a cut. Secondly, there is a risk that the massive capex spend underway generates nothing like the returns hoped for and some of it will soon have to be written off. Finally, the geopolitical background remains unhelpful. The war in Ukraine continues unresolved, hostilities between the US and Israel and Iran look set to resume and at home in the US tensions are rising in the run-up to the mid-term elections.

In summary, we still see a favourable outlook for US smaller companies. The macro background remains supportive, valuations are undemanding and many investors are looking to revisit the asset class as they take profits in other sectors in their portfolios that have done well.

Stephen White

Chair of the Board

22 September 2026

PORTFOLIO MANAGER’S REVIEW

Performance review

During the year ended 30 June 2026, the Company’s net asset value total return was 24.5%, compared with 45.7% for the Russell 2000® Total Return Index. The portfolio delivered a positive absolute return but did not keep pace with a benchmark that continued to be driven by a relatively small number of companies benefiting from investor enthusiasm surrounding artificial intelligence (AI) and related technologies.

Despite the challenging backdrop for relative performance, the underlying progress of many portfolio companies remained encouraging. Several holdings delivered strong earnings growth, improved profitability or gained market share during the year, while merger and acquisition activity remained elevated, with eight portfolio companies acquired. These outcomes reinforce our conviction that the intrinsic value of many businesses within the portfolio continues to exceed prevailing public market valuations.

Market Overview

Artificial intelligence remained the defining investment theme throughout the year and was the principal driver of returns within the small-cap growth universe. Companies exposed to semiconductor equipment, AI infrastructure, optical networking and data centre construction generated exceptional returns, accounting for a disproportionate share of benchmark performance. In many cases, expanding valuations, rather than improving fundamentals and earnings growth, drove share prices.

Outside these areas, the market became increasingly selective. Many businesses delivered resilient operational performance but struggled to attract investor attention if they lacked a direct AI narrative. At the same time, higher-quality companies continued to lag more speculative peers, extending one of the longest periods of relative underperformance for quality small-cap investing in recent decades.

The market environment also evolved as the year progressed. Early uncertainty surrounding geopolitical tensions and global trade policy gave way to renewed optimism as corporate earnings remained resilient and AI-related investment accelerated further. The annual Russell reconstitution added another important dimension, with several of the strongest-performing AI-related businesses graduating into larger-cap indices while biopharma and software became a larger proportion of the benchmark.

Our Strategy’s Performance

Against this backdrop, we remained focused on the investment philosophy that has guided the Strategy for nearly two decades. Rather than positioning the portfolio around the market’s most popular themes, we continue to seek businesses that fit our “3G” profile: companies with durable Growth, sound Governance and scalable Go-To-Market strategies. These characteristics underpin our assessment of whether a business can sustainably compound earnings and intrinsic value over the long term.

Our process is deliberately bottom-up and research driven. Every investment begins with a simple question: why will this business be worth materially more in three to five years than it is today? We look for companies with strong competitive positions, capable management teams, attractive reinvestment opportunities and business models that can continue creating value through different economic and market environments.

That approach proved challenging while benchmark returns remained concentrated in a narrow group of AI beneficiaries. However, the operational performance of many portfolio companies remained strong. Holdings including Establishment Labs, Lattice Semiconductor and AAON all delivered encouraging business results during the year, demonstrating the strength of the underlying companies despite periods where share prices did not fully reflect that progress.

Key Factors Impacting Performance

AI remained the dominant market driver

AI continued to shape market performance throughout the year, with leadership becoming increasingly concentrated. In the portfolio, we sought exposure where we believed continued proliferation of AI improved the long-term earnings opportunity rather than simply a valuation story. This benefited holdings such as Lattice Semiconductor and SiTime, whose exposure to AI-related applications strengthened during the year. At the same time, we remained disciplined where valuations appeared to move materially ahead of underlying fundamentals.

Quality remained out of favour

Higher-quality businesses with resilient earnings, attractive returns on capital and strong balance sheets continued to lag lower-quality, higher-beta companies. While this created a difficult environment for quality-oriented active managers, it has not altered our conviction that these characteristics remain the strongest foundation for long-term value creation. Market leadership changes over time, but business quality endures.

Benchmark changes and improving breadth

The 2026 Russell reconstitution was one of the largest FTSE Russell rebalancing in its history, leading to significant turnover and impacts to underlying Russell Index composition. Historic levels of concentration within the small-cap indices prior to the reconstitution led to material shifts in sector and thematic exposure after Russell made its annual adjustments. Prior to these changes, we began to see encouraging signs that market leadership was beginning to broaden, and the graduation of a handful of large AI levered weights out of the small-cap benchmark should bolster that trend. In the most recent earnings season, companies delivering strong operational performance increasingly received more favourable market reactions, suggesting investors were once again placing greater emphasis on business fundamentals alongside thematic growth opportunities.

Strong fundamentals continued to attract buyers

Strategic buyers and private equity firms remained active throughout the year, recognising value where we believed public market valuations remained disconnected from business fundamentals. The acquisition of eight portfolio holdings reinforced our view that a number of companies within the portfolio continued to trade below their intrinsic value despite delivering strong operational execution.

Additions and Disposals

Market volatility continued to create opportunities to invest in businesses we had followed for many years but where valuations had become increasingly attractive.

Among the most notable additions was Guardant Health, where increasing confidence in its blood-based cancer diagnostics platform and several identifiable product catalysts strengthened our long-term conviction. We also initiated a position in ACV Auctions following a significant share price decline, believing the market had become overly focused on near-term growth moderation while underappreciating the structural shift towards digital vehicle auctions. Later in the year, we added Plexus, attracted by its engineering-led business model and growing exposure to semiconductor equipment and aerospace markets.

On the disposal side, we recycled capital where investment theses had matured or where more attractive opportunities emerged elsewhere. We exited Mueller Water Products following several years of strong share price appreciation and sold Mirion Technologies as our conviction in management’s execution diminished. Acquisition activity also contributed to portfolio turnover.

Outlook

Many of the themes that shaped the past year remain firmly in place. AI is likely to continue driving investment across multiple industries, although we believe the opportunity set will continue to broaden beyond the relatively small group of companies that have dominated recent returns. At the same time, many high-quality growth businesses continue to trade at attractive valuations relative to their long-term earnings potential.

Our investment philosophy remains unchanged. We will continue to focus on businesses with durable competitive advantages, capable management teams and the ability to compound earnings over many years, while maintaining the discipline to avoid chasing areas of the market where valuations no longer provide an attractive balance of risk and reward.

Periods of unusually narrow market leadership have occurred before and have ultimately given way to broader participation. We believe the portfolio is well-positioned for that environment and remain confident that a disciplined, long-term approach to investing in high-quality growth businesses will continue to create value for shareholders over time.

Portfolio Manager

Brown Advisory LLC

22 September 2026

Key Performance Indicators

At Board meetings, the Directors consider a number of performance indicators to assess the extent to which the Company is meeting its objective. The key performance indicators used to measure the performance of the Company over time are as follows:

• Net Asset Value changes;
• The discount or premium of share price to Net Asset Value;
• A comparison of the absolute and relative performance of the Ordinary share price and the Net Asset Value per share relative to the return on the Company’s Benchmark Index and of its peers;
• Ordinary share price movement; and
• The Company’s ongoing charges ratio.

A history of the Net Asset Value, Ordinary share price and Benchmark Index are shown on the monthly factsheets which can be viewed on the Portfolio Manager website www.brownadvisory.com/basc

Information on performance against Key Performance Indicators can also be found within the Chair’s Statement within the Annual Report.

Viability Statement

The Board has assessed the viability of the Company over a three-year period, taking into account the Company’s position at 30 June 2026. A period of three years has been chosen for the purposes of the assessment of viability as the Board believes that this reflects a suitable time horizon for reviewing the Company’s circumstances and strategy, taking into account the investment objective and policy, liquidity of investments, nature of operating costs, potential impact of economic cycles and the availability of funding.

As part of the viability assessment, the Board has considered a range of downside scenarios and stress tests. Having reviewed these scenarios, the Directors have concluded that the Company possesses sufficient liquidity, financial resources and operational support to meet its liabilities as they fall due throughout the assessment period.

In accordance with the Company’s constitution, a continuation vote is due at the 2026 AGM, which is within the three-year viability assessment period. The outcome of the continuation vote remains uncertain, and the Board therefore has taken into consideration the possibility that shareholders would vote against continuation later in 2026 as part of its going concern and viability assessment.

Most importantly, the Board has taken into account the ongoing Strategic Review which it announced on 8 July 2026, recognising that the Review together with the continuation vote create uncertainty regarding the Company’s future structure and prospects.

The Strategic Review announcement was made as a result of the Board’s assessment that recent performance has lagged the Company’s benchmark by a significant margin and also as a result of feedback from some larger shareholders. Feedback from shareholders has been broadly supportive of the Company’s investment objective and policy, as well as the processes and resources of the Portfolio Manager. There was also significant support for other initiatives pursued by the Company, including its discount control mechanisms such as the three-yearly continuation vote, the five-year performance-related tender offer scheduled for 2028, and the use of share buybacks. However, some shareholders indicated a preference for a liquidity opportunity in the shorter term. Against this backdrop and for these reasons, the Board opted to consider a range of strategic options, including the provision of a significant cash exit opportunity for shareholders.

The Strategic Review is being undertaken to evaluate options available to shareholders and to ensure the Company remains structured in a manner consistent with shareholder interests. In evaluating these options, the Board will also have regard to the scale of the Company following any such transaction, specifically because this has implications for the ongoing cost of running a company and also because the shares of smaller companies tend to be less attractive to institutional shareholders.

While the outcome of the Strategic Review remains subject to further consideration and shareholder consultation, the Board does not believe that the review itself creates uncertainty regarding the Company’s ability to continue operations while the Strategic Review is underway.

Accordingly, the Board considers that there is a material uncertainty as to whether the Company will continue as a commercially viable investment trust within 12 months of the date of this report.

Notwithstanding this material uncertainty, the Directors have a reasonable expectation that the Company will continue to meet its liabilities as they fall due to the extent that it continues to operate during the viability assessment period.

Principal and Emerging Risks and Uncertainties

The Board, through the Audit and Risk Committee, carries out a regular review of the risk environment in which the Company operates, changes to the environment and individual risks. The Board also considers emerging risks which might affect the Company.

On 8 July 2026, the Company announced it was conducting a Strategic Review of the future of the Company, which remains ongoing. The impact of the Strategic Review on the going concern assessment is detailed in the Viability Statement contained within the Strategic Report above.

Under the Company’s constitution, the Company is also required to table a continuation vote to the AGM which is expected to take place later in 2026.

Geopolitical uncertainties caused mainly by continuing wars and conflicts around the world have remained a threat and have increased market risk and volatility. There are a number of other risks which, if realised, could have a material adverse effect on the Company and its financial condition, performance and prospects. The Board has carried out a robust assessment of the Company’s principal and emerging risks, which include those that would threaten its business model, future performance, solvency, liquidity or reputation.

In addition to those principal risks and uncertainties documented below, the Board considers that the development of artificial intelligence (AI) presents potential risks to businesses in almost every sector. The extent of the risk presented by AI continues to be extremely hard to assess, but the Board also considers that it is an emerging risk and, together with the Manager, will monitor developments in this area.

The principal risks and uncertainties facing the Company at the current time, together with a description of the mitigating actions the Board has taken, are set out in the table below.

Risk	Mitigating Action
Investment performance: the appointment or continuing appointment of a portfolio manager with inadequate resources, skills or expertise, or which makes poor investment decisions could result in poor investment performance, a loss of value for shareholders and a widening discount.	Monitoring of performance: the Portfolio Manager reports to the Board on a quarterly basis and the Board and the Portfolio Manager discuss potential causes for over or under-performance at every Board meeting. The Board keeps under review (inter alia) the resources of the Portfolio Manager and its adherence to investment guidelines. The Board also keeps under review the adequacy of risk controls. A detailed formal appraisal of the Portfolio Manager is carried out annually by the Management Engagement Committee and was last conducted in June 2026. On 8 July 2026, the Company announced a Strategic Review, details of which are set out within the Viability Statement within the Annual Report.
Investment strategies: the Company adopts inappropriate investment strategies in pursuit of its objective which could result in decreased demand for the Company’s shares, leading to a widening of the discount and poor investment performance.	Adherence to investment guidelines: the Board sets investment guidelines and restrictions which the Portfolio Manager follows, covering matters such as asset allocation, diversification, gearing and currency exposure. These guidelines are reviewed regularly and reports on compliance with them are reviewed at Board meetings. In order to ensure adequate diversification, the Board has set absolute limits on minimum holdings and maximum exposures in the portfolio at the time of investment, which are set out within the Annual Report.
Investment objective: the Company’s objective becomes unattractive to investors which could result in a lack of demand for the Company’s shares.	Board review: the Board formally reviews the Company’s objective and related strategies on an annual basis, or more regularly if appropriate. The Board announced in July 2026 that it will conduct a Strategic Review of the future of the Company.
Share price trading at a discount to NAV: a protracted discount to NAV could reduce the attractiveness of the Company’s shares.	Discount monitoring: the Board, through the Portfolio Manager and AIFM, keeps the level of discount under constant review. The Board is responsible for the Company’s share buyback policy and is prepared to authorise the use of share buybacks to provide liquidity to the market and to try to limit any widening of the discount, to the extent that it is wider than those of similar investment trusts.
Engagement with shareholders: insufficient or inappropriate marketing of the Company’s shares, and liaison between the Company and shareholders is weak.	Proactive engagement: the Board is cognisant of the importance of regular communication with shareholders. The Chair offers meetings with the Company’s largest shareholders, and the Board meets with shareholders at the AGM. Additionally, a shareholder presentation with questions and answers is available at the AGM. The Board reviews shareholder correspondence and investor relations reports and also receives feedback from the Company’s broker. Prior to the announcement of the Strategic Review, the Company’s broker conducted market soundings with a number of institutional investors.
Financial/market: insufficient oversight or controls over financial risks, including foreign currency risk, market price risk, interest rate risk, liquidity risk, credit and counterparty risk, and insufficient revenue forecasting and monitoring, could result in losses to the Company.	Management controls: the Portfolio Manager has a range of procedures and controls relating to the Company’s financial instruments and maintains a closed ‘approved broker’ list. Board review: as stated above, the Board sets investment guidelines and restrictions which are reviewed regularly, and the Portfolio Manager reports on compliance with them at Board meetings. Revenue forecasting and monitoring: the AIFM presents detailed forecasts of income and expenditure covering both the current and subsequent financial years at all Board meetings. Further details of the Company’s financial instruments and associated risk management are included in Note 14 to the Financial Statements.
Regulatory compliance: failure to comply with relevant regulations (including the Companies Act, the Financial Services and Markets Act, the Alternative Investment Fund Managers Directive, accounting standards, investment trust regulations, the FCA Listing Rules, Disclosure Guidance and Transparency Rules and Prospectus Rules) could result in fines, loss of reputation, reduced demand for the Company’s shares and potentially the loss of an advantageous tax regime.	Board awareness: the Directors have an awareness of the more important regulations and are provided with information on changes both through its six-monthly teach-ins with its legal counsel and by the Association of Investment Companies. In terms of day-to-day compliance with regulations, the Board is reliant on the knowledge and expertise of the AIFM and Company Secretary. However, where necessary, the Board engages the services of external advisers. Management controls: the Company Secretary and accounting teams use checklists to aid compliance and these are supported by the AIFM’s compliance monitoring programme and risk-based internal audit investigations.
Operational: the Company is reliant on services provided by third parties (in particular those of the Portfolio Manager, AIFM, custodian and depositary) and any control gaps and failures in their operations could expose the Company to loss or damage.	Agreements: written agreements are in place defining the roles and responsibilities of all third-party service providers. Internal control systems of the AIFM and Portfolio Manager: the Board receives reports on the operation and efficacy of IT and control systems, including those relating to internal audit and compliance functions. Safekeeping of assets: the depositary is ultimately responsible for the safekeeping of the Company’s assets and holds cash and securities in segregated accounts with J.P. Morgan Chase Bank N.A. The depositary reconciles these accounts daily against the records of the Portfolio Manager. Monitoring of other third-party service providers: the AIFM closely monitors the control environments and quality of services provided by third parties, including those of the depositary. This is conducted through service level agreements, regular meetings and key performance indicators. The Directors review reports on the AIFM’s monitoring of third-party service providers on a periodic basis. There are coded limits within the Portfolio Manager’s dealing systems. A detailed formal appraisal of the AIFM, Portfolio Manager and other key third party providers is carried out annually by the Management Engagement Committee, with the last appraisal occurring in June 2026.
Cyber security: Malicious or unauthorised attempts may be made to access the IT systems and data used by the Portfolio Manager, AIFM, Administrator, Custodian, Registrar and other service providers resulting in financial loss and/or a negative impact on the Company’s reputation.	Internal control systems of the AIFM and Portfolio Manager: the Portfolio Manager, J.P. Morgan and the Company’s AIFM use cyber security tools. Monitoring of other third-party service providers: the Company’s AIFM conducts ongoing reviews of service providers include assessment of cyber risk and security.
Liquidity: the Company’s shares become insufficiently liquid which could result in a lack of demand for the Company’s shares.	Internal control systems of the AIFM and Portfolio Manager: liquidity and trading volumes are monitored on a daily basis by the Portfolio Manager and the Company’s Broker. The AIFM carries out regular liquidity stress testing.
Geopolitical: the impact of geopolitical events (including the new administration in the US, climate change, wars or pandemic) could result in losses to the Company.	Board and Portfolio Manager awareness: geopolitical events over which the Company has no control are always a risk. The Board and Portfolio Manager regularly horizon scan and consider what they can do to address these risks.

Going Concern

The Financial Statements have been prepared on a going concern basis. The Directors consider that this is the appropriate basis as they have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. In considering this, the Directors took into account the Company’s investment objective, risk management policies and capital management policies, the diversified portfolio of readily realisable securities which can be used to meet short-term funding commitments and the ability of the Company to meet all of its liabilities and ongoing expenses.

In determining the appropriateness of the going concern basis, the Directors gave particular focus to the operational resilience and ongoing viability of the Portfolio Manager, the AIFM and other key third-party suppliers.

However, based on the factors as detailed in the Viability Statement contained within the Strategic Report within the Annual Report, the Directors believe that at the date of this report, there is a material uncertainty as to whether the Company will continue as a commercially viable investment trust for the entire going concern assessment period.

Statement in Respect of the Annual Report and Financial Statements

Having taken all available information into consideration, the Board has concluded that the Annual Report and Financial Statements for the year ended 30 June 2026, 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.

The Board’s conclusions in this respect are set out in the Statement of Directors’ Responsibilities within the Annual Report.

There were no instances where the Company was required to make disclosures in respect of FCA Listing Rule 9.8.4 during the financial period under review.

The Directors are not aware of any relevant audit information of which the Company’s Auditor is unaware. The Directors also confirm that they have taken all the steps required of a director to make themselves aware of any relevant audit information and to establish that the Company’s Auditor is aware of that information.

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and Financial Statements in accordance with applicable law and regulation.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable laws) including Financial Reporting Standard 102, the financial reporting standard applicable in the UK and the 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 and of the return or loss of the Company for that period. In preparing those financial statements, the Directors are required to:

(a) select suitable accounting policies and then apply them consistently;

(b) make judgements and accounting estimates that are reasonable and prudent;

(c) state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

(d) prepare the financial statements on the 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.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Report of the Directors, Directors’ Remuneration Report and Statement of Corporate Governance that comply with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included
on the Company website www.brownadvisory.com/basc which is a website maintained by Brown Advisory LLP. Visitors to the website need to be aware that legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the Directors, who are listed within the Annual Report, confirms to the best of their knowledge that:

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

2. the Strategic Report includes a fair review of the development and performance of the Company, together with a description of the principal risks and uncertainties that the Company faces; and

3. in their opinion the Annual Report and Financial Statements, taken as a whole, are fair, balanced and understandable and provide the information necessary to assess the Company’s position and performance, business model and strategy.

So far as each Director is aware at the time the report is approved:

1. there is no relevant audit information of which the Company’s Auditor is unaware; and

2. the Directors have taken all steps required of a company director to make themselves aware of any relevant audit information and to establish that the Company’s Auditor has been made aware of that information.

By order of the Board

Stephen White

Chair

22 September 2026

STATEMENT OF COMPREHENSIVE INCOME

for the year ended 30 June 2026

		2026			2025
	Note	Revenue Return £’000	Capital Return £’000	Total £’000	Revenue Return £’000	Capital Return £’000	Total £’000
Gains/(losses) from investments held at fair value through profit or loss	9	–	38,838	38,838	–	(5,178)	(5,178)
Foreign exchange gain/(loss)		–	131	131	–	(880)	(880)
Investment income	3	828	–	828	962	–	962
Other Income	3	403	–	403	225	–	225
		--------	--------	--------	--------	--------	--------
Total income		1,231	38,969	40,200	1,187	(6,058)	(4,871)
Management fee	4	(1,134)	–	(1,134)	(1,152)	–	(1,152)
Other expenses	5	(562)	(3)	(565)	(605)	(3)	(608)
		--------	--------	--------	--------	--------	--------
Total expenses		(1,696)	(3)	(1,699)	(1,757)	(3)	(1,760)
(Loss)/return before finance costs and taxation		(465)	38,966	38,501	(570)	(6,061)	(6,631)
Finance costs	6	(6)	–	(6)	–	–	–
		--------	--------	--------	--------	--------	--------
(Loss)/return before taxation		(471)	38,966	38,495	(570)	(6,061)	(6,631)
Taxation	7	(110)	–	(110)	(132)	–	(132)
		--------	--------	--------	--------	--------	--------
Net (loss)/return after taxation		(581)	38,966	38,385	(702)	(6,061)	(6,763)
		======	======	======	======	======	======
Net (loss)/return per Ordinary share	8	(5.12)p	343.30p	338.18p	(5.99)p	(51.67)p	(57.66)p
		======	======	======	======	======	======

The total column of this statement is the profit and loss account of the Company.

The ‘Revenue’ and ‘Capital’ columns represent supplementary information prepared under guidance issued by The Association of Investment Companies. The Company has no other comprehensive income, and therefore the net (loss)/return after taxation is also the total comprehensive income for the year.

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year.

The Notes within the Annual Report form part of these Financial Statements.

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2026

	Note	2026 £’000	2025 £’000
Fixed assets
Investments at fair value through profit or loss	9	187,287	155,440
Current assets
Debtors	11	268	455
Cash at bank and in hand and cash equivalents	12	10,534	7,970
		------------	------------
		10,802	8,425
Creditors: amounts falling due within one year	13	(3,083)	(466)
Net current assets		7,719	7,959
		------------	------------
Total assets less current liabilities		195,006	163,399
Capital and reserves
Called up share capital	15	4,555	4,555
Share premium account		19,550	19,550
Non-distributable reserve		841	841
Capital redemption reserve		9,628	9,628
Retained earnings – capital reserve		171,718	139,530
Retained earnings – revenue reserve		(11,286)	(10,705)
		------------	------------
Total shareholders’ funds		195,006	163,399
		=======	=======
Net asset value per Ordinary share (pence)	16	1,764.0p	1,416.7p
		=======	=======

The Financial Statements within the Annual Report were approved by the Board of Directors and signed on its behalf on 22 September 2026.

Stephen White
Chair

Company Registration Number 02781968

The Notes within the Annual Report form part of these Financial Statements.

STATEMENT OF CHANGES IN EQUITY

for the year ended 30 June 2026

for the year ended 30 June 2026		Called up Share Capital £’000	Share Premium £’000	Non- distributable Reserve £’000	Capital Redemption Reserve £’000	Capital Reserve? £’000	Revenue Reserve*? £’000	Total £’000
Tuesday, 1 July 2025		4,555	19,550	841	9,628	139,530	(10,705)	163,399
Repurchase of Ordinary shares to be held in treasury	15	–	–	–	–	(6,778)	–	(6,778)
Net return/(loss) for the year		–	–	–	–	38,966	(581)	38,385
		---------	---------	---------	---------	---------	---------	---------
Balance at 30 June 2026		4,555	19,550	841	9,628	171,718	(11,286)	195,006
		=====	=====	=====	=====	=====	=====	=====

for the year ended 30 June 2025		Called up Share Capital £’000	Share Premium £’000	Non- distributable Reserve £’000	Capital Redemption Reserve £’000	Capital Reserve? £’000	Revenue Reserve*? £’000	Total £’000
Monday, 1 July 2024		4,555	19,550	841	9,628	149,973	(10,003)	174,544
Repurchase of Ordinary shares to be held in treasury	15	–	–	–	–	(4,382)	–	(4,382)
Net loss for the year		–	–	–	–	(6,061)	(702)	(6,763)
		---------	---------	---------	---------	---------	---------	---------
Balance at 30 June 2025		4,555	19,550	841	9,628	139,530	(10,705)	163,399
		=====	=====	=====	=====	=====	=====	=====

*  Dividends are only payable from the revenue reserve element of retained earnings.

?  Retained earnings comprise the total of Capital reserve and Revenue reserve.

The Notes within the Annual Report form part of these Financial Statements.

STATEMENT OF CASH FLOWS

for the year ended 30 June 2026

	Note	2026 £’000	2025 £’000
Cash flows from operating activities
Investment income received (gross)		796	940
Deposit interest received		402	225
Investment management fee paid		(1,082)	(1,193)
Other cash expenses		(623)	(531)
		----------	----------
Net cash outflow from operating activities before taxation		(507)	(559)
Taxation	7	(113)	(132)
		----------	----------
Net cash outflow from operating activities		(620)	(691)
Cash flows from investing activities
Purchases of investments		(75,045)	(57,620)
Sales of investments		84,616	61,821
		----------	----------
Net cash inflow from investing activities		9,571	4,201
Cash flows from financing activities
Repurchase of ordinary shares into Treasury		(6,512)	(4,382)
Bank overdraft interest paid		(6)	–
Net cash outflow from financing activities		(6,518)	(4,382)
		----------	----------
Increase/(decrease) in cash and cash equivalents		2,433	(872)
Cash and cash equivalents at start of the year		7,970	9,722
Realised gain/(loss) on foreign currency		131	(880)
		----------	----------
Cash and cash equivalents at end of the year		10,534	7,970
		======	======

The Notes within the Annual Report form part of these Financial Statements.

Reconciliation of net cash outflow from operating activities

		2026 £’000	2025 £’000
Net return/(loss) before finance costs and taxation		38,501	(6,631)
Gain/(loss) on investments		(38,838)	5,178
Realised gain/(loss) on foreign currency		(131)	880
(Increase) in Debtors		(40)	(26)
Increase in other creditors and accruals		1	40
		----------	----------
Net cash outflow from operating activities before taxation		(507)	(559)
		======	======

Analysis of changes in net cash

	At 30 June 2025 £’000	Cash Flow £’000	Non-cash movements	At 30 June 2026 £’000
Cash at bank and cash equivalents	7,970	2,433	131	10,534
	---------	---------	---------	---------
	7,970	2,433	131	10,534
	=====	=====	=====	=====

The Notes within the Annual Report form part of these Financial Statements.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2026

1. General information

Brown Advisory US Smaller Companies PLC (a Public Company Limited by shares) is an investment Company incorporated in the United Kingdom with a premium listing on the London Stock Exchange. The Company registration number is 02781968 and the registered office is 4th Floor, 140 Aldersgate Street, London EC1A 4HY.

The Company conducts its affairs so as to qualify as an investment trust under the provisions of section 1158 of the Corporation Tax Act 2010. The Company has qualified as an investment trust in respect of all relevant years up to and including the year ended 30 June 2026. Section 1158 was amended to allow Companies to seek approval of compliance in advance and for all subsequent financial years. The Company received such advance approval subject to it continuing to meet the relevant eligible conditions and ongoing requirements. The Company intends to conduct its affairs so as to enable it to comply with the requirements. Such approval exempts the Company from UK corporation tax on gains realised in the relevant year on its portfolio of fixed asset investments.

A summary of the accounting policies, all of which have been applied consistently throughout the period is set out below.

2. Accounting policies

(a)  Basis of preparation

The Financial Statements for the year ended 30 June 2026 have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (“UK GAAP”), including Financial Reporting Standard 102 (“FRS 102”), the financial reporting standard applicable in the United Kingdom and Republic of Ireland, and with the Statement of Recommended Practice (“SORP”) for Investment Trust Companies and Venture Capital Trusts issued by the Association of Investment Companies (“AIC”) in July 2022.

The Financial Statements have been prepared on a going concern basis.

In assessing the appropriateness of the going concern basis, the Directors have considered the Company’s financial position, liquidity, forecast cash flows, expected operating costs and the ongoing Strategic Review. As set out in the Viability Statement, the Board is considering a range of strategic options for the future of the Company, including the possibility of a Section 110 wind-up and the provision of a significant liquidity opportunity for shareholders. Feedback received from shareholders and the Company’s corporate broker indicates that such outcomes represent realistic possibilities.

The Directors have concluded that the Company has sufficient resources to continue in operational existence and to meet its liabilities as they fall due for a period of at least twelve months from the date of approval of these Financial Statements. In reaching this conclusion, the Directors have considered the Company’s available cash resources, the liquidity of the investment portfolio, forecast expenditure, known liabilities and a range of downside scenarios.

However, the outcome of the Strategic Review and the nature and timing of any future transaction remain uncertain. Accordingly, the Directors recognise that these circumstances represent a material uncertainty that may cast significant doubt on whether the Company will continue as a commercially viable investment trust beyond the implementation of any strategy ultimately approved by shareholders.

Notwithstanding this material uncertainty, the Directors consider that it remains appropriate to prepare the Financial Statements on a going concern basis as the Company has sufficient assets and liquidity to meet its obligations as they fall due throughout the going concern assessment period. The Financial Statements do not include any adjustments that would result if the Company were unable to continue as a going concern.

Statement of Compliance

The Financial Statements have been prepared in accordance with United Kingdom Accounting Standards, including FRS 102, the Companies Act 2006 and the requirements of SORP issued by the AIC.

(b) Principal accounting policies

(i) Financial instruments

Financial instruments include fixed asset investments and derivative assets and liabilities.

Accounting standards recognise a hierarchy of fair value measurements for financial instruments which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level 3). The classification of financial instruments depends on the lowest significant applicable input, as follows:

Level 1 – Unadjusted, fully accessible and current quoted prices in active markets for identical assets or liabilities. Included within this category are investments listed on any recognised stock exchange.

Level 2 – Quoted prices for similar assets or liabilities, or other directly or indirectly observable inputs which exist for the duration of the period of investment. Examples of such instruments would be those for which the quoted price has been recently suspended, forward exchange contracts and certain other derivative instruments.

Level 3 – External inputs are unobservable.

Value is the Directors’ best estimate, based on advice from relevant knowledgeable experts, use of recognised valuation techniques and on assumptions as to what inputs other market participants would apply in pricing the same or similar instruments. Included within this category are unquoted investments.

(ii) Fixed asset investments

As an investment trust, the Company measures its fixed asset investments at “fair value through profit or loss” and treats all transactions on the realisation and revaluation of investments as transactions on the capital account. Purchases are recognised on the relevant trade date, inclusive of expenses which are incidental to their acquisition. Sales are also recognised on the trade date, after deducting expenses incidental to the sales.

Quoted investments are valued at bid value at the close of business on the relevant date on the exchange on which the investment is quoted.

(iii) Foreign currency

Monetary assets, monetary liabilities and equity investments denominated in a foreign currency are expressed in sterling at rates of exchange ruling at the Statement of Financial Position date. Purchases and sales of investment securities, dividend income, interest income and expenses are translated at the rates of exchange prevailing at the respective dates of such transactions.

Foreign exchange profits and losses on fixed asset investments are included within the changes in fair value in the capital account. Foreign exchange profits and losses

on other currency balances are separately credited or charged to the capital account except where they relate to revenue items when they are credited or charged to the revenue account.

(iv) Income

Income from equity shares is brought into the revenue account (except where, in the opinion of the Directors, its nature indicates it should be recognised within the capital account) on the ex-dividend date or, where no ex-dividend date is quoted, when the Company’s right to receive payment is established.

Dividends from overseas companies are shown gross of withholding tax.

Where the Company has elected to receive its dividends in the form of additional shares rather than in cash (scrip dividends), the amount of the cash dividend foregone is recognised as income. Any excess in the value of the shares received over the amount of the cash dividend foregone is recognised in the capital account.

Deposit interest income and interest from cash equivalents is accounted for on an accruals basis and recognised in the period the interest is earned.

(v) Expenses, including finance charges

Expenses are charged to the revenue account of the Income Statement, except as noted below:

         expenses incidental to the acquisition or disposal of fixed asset investments are included within the cost of the investments or deducted from the disposal proceeds of investments and are thus charged to the capital element of retained earnings – arising on investments sold via the capital account; and

         all expenses are accounted for on an accruals basis. Finance charges are accrued using the effective interest rate method.

(vi) Taxation

Withholding tax deducted at source from income received is treated as part of the taxation charge in the income account, in instances where it cannot be recovered.

Deferred tax is provided in accordance with FRS 102, on an undiscounted basis, on all timing differences that have originated but not reversed by the Statement of Financial Position date, based on the tax rates that are expected to apply in the period when the liability is settled or the asset realised.

Deferred tax assets are only recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of timing differences can be deducted. In line with the recommendations of the SORP, the allocation method used to calculate the tax relief on expenses charged to capital is the “marginal” basis. Under this basis, if taxable income is capable of being offset entirely by expenses charged through the revenue account, then no tax relief is transferred to the capital account.

(vii) Capital redemption reserve

The nominal value of Ordinary share capital purchased and cancelled is transferred out of called-up share capital and into the capital redemption reserve.

Capital redemption reserve is not available for the payment of dividends.

(viii) Retained earnings

This consists of the following:

Capital return

The following are accounted for in this reserve:

   gains and losses on the realisation of fixed asset investments;

   increases and decreases in the valuation of fixed asset investments held at the year end;

   realised and unrealised foreign exchange differences of a capital nature;

   tax charges associated with transactions of a capital nature;

   costs of professional advice, including related irrecoverable VAT, relating to the capital structure of the Company;

   other capital charges and credits charged or credited to this account in accordance with the above policies; and

   the costs of purchasing Ordinary share capital.

Revenue return

   the income return or loss for the year is taken to the income element of this reserve.

This element of the retained earnings reserve may be used to fund the distribution of profits to investors via dividend payments only when this is in a surplus position. Currently there is an accumulated loss and therefore no distributions can be paid.

 (ix) Borrowing and finance costs

Interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs and subsequently measured at amortised cost. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis in the Income Statement using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.

Finance costs are recognised in the Income Statement in the period in which they are incurred. All finance costs are directly charged to the revenue column of the Income Account.

(x) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and short-term highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

Recognition – cash and cash equivalents are recognised at the time funds are received into the company bank accounts, settlement account, or custodial account. Similar withdrawals or transfers are recognised when payments are initiated or cleared.

Measurement – cash and cash equivalents are measured at amortized cost, which approximates fair value due to their short-term nature. cash and cash equivalents typically include balances with bank & custodians, including current accounts and overnight deposits, short-term investments, margin cash balances held with brokers, demand deposits.

(xi) Securities sold awaiting settlement

Securities sold and purchases awaiting settlement represent proceeds due/payable from the investment transactions which have been contracted for but not yet settled as at the reporting date.

Under FRS 102, these balances are recognised when the contractual obligation for the sale has been established (i.e. trade date accounting is applied), and are measured initially at fair value, which is typically the transaction price.

Receivables arising from securities sold are presented within current assets and payables arising from securities purchased are presented within creditors: amounts falling due within one year on the Statement of Financial Position.

3. Income

	2026 £’000	2025 £’000
Investment Income
Dividends from United Kingdom companies	12	50
Dividends from overseas companies	816	912
	------	------
	828	962
Other income
Deposit interest	17	51
Interest from liquidity fund (cash equivalents)	386	174
	------	------
	403	225
	------	------
Total income	1,231	1,187
	====	====

4. Management fee

	2026			2025
	Revenue Return £’000	Capital Return £’000	Total £’000	Revenue Return £’000	Capital Return £’000	Total £’000
Management fee	1,134	–	1,134	1,152	–	1,152
	--------	--------	--------	--------	--------	--------
	1,134	–	1,134	1,152	–	1,152
	=====	=====	=====	=====	=====	=====

Details of the calculation of the management fee are given in Note 17.

5. Other expenses

	2026			2025
	Revenue Return £’000	Capital Return £’000	Total £’000	Revenue Return £’000	Capital Return £’000	Total £’000
Directors’ remuneration	141	–	141	147	–	147
Auditor’s remuneration – audit of the Company Financial Statements	59	–	59	56	–	56
Other expenses	362	3	365	402	3	405
	------	------	------	------	------	------
	562	3	565	605	3	608
	====	====	====	====	====	====

6. Finance costs

2026

2025

Revenue Return £’000

Capital Return £’000

Total £’000

Revenue Return £’000

Capital Return £’000

Total £’000

Bank overdraft interest

6

–

6

–

–

–

------

------

------

------

------

------

6

–

6

–

–

–

====

====

====

====

====

====

7. Taxation

(a) Analysis of tax charge in the year

					2026									2025
					Revenue Return £’000			Capital Return £’000			Total £’000				Revenue Return £’000			Capital Return £’000		Total £’000
Overseas tax charge relating to the current year					110			–			110				132			–		132
		------				------			------			------				------			------
Total tax (see Note 7b)					110			–			110				132			–		132
				====			====			====			====				====		====

(b) Factors affecting current tax charge for the year

The tax assessed for the year is lower than (2025: higher) the Company’s applicable rate of corporation tax of 25.00% (2025: 25.00%). The differences are explained below:

	2026			2025
	Revenue Return £’000	Capital Return £’000	Total £’000	Revenue Return £’000	Capital Return £’000	Total £’000
Net (loss)/return before taxation	(471)	38,966	38,495	(570)	(6,061)	(6,631)
Corporation tax at 25.00% (2025: 25.00%)	(117)	9,742	9,625	(142)	(1,515)	(1,657)
	--------	--------	--------	--------	--------	--------
Effects of:
Tax free (gains)/losses on investments	–	(9,743)	(9,743)	–	1,514	1,514
Non-taxable income received	(187)	–	(187)	(222)	–	(222)
Capital expenses not deductible for tax purposes	–	1	1	–	1	1
Overseas tax relating to the current year	110	–	110	132	–	132
Double taxation relief expensed	(3)	–	(3)	(3)	–	(3)
Unutilised management expenses for the year	307	–	307	367	–	367
	--------	--------	--------	--------	--------	--------
Total tax charge for the year	110	–	110	132	–	132
	=====	=====	=====	=====	=====	=====

Due to the Company’s status as an investment trust and the intention to continue meeting the conditions required to obtain approval in the foreseeable future, the Company has not provided deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.

There is an unrecognised deferred tax asset of £6,476,000 (2025: £6,210,000) which relates to unutilised excess expenses. The deferred tax asset would only be recovered if the Company were to generate sufficient profits to utilise these expenses. It is considered too uncertain that this will occur and therefore, no deferred tax asset has been recognised.

8. Net (loss)/return per Ordinary share

The return/(loss) per Ordinary share figure is based on the net gain for the year of £38,385,867 (2025: loss £6,762,857), and on 11,350,520 (2025: 11,728,907) Ordinary shares, being the weighted average number of Ordinary shares in issue during the year.

The return/(loss) per Ordinary share figure detailed above can be further analysed between revenue and capital, as below.

	2026 £’000	2025 £’000
Net revenue loss	(581)	(702)
Net capital return/(loss)	38,966	(6,061)
	------------	------------
Net total return/(loss)	38,385	(6,763)
Weighted average number of Ordinary shares in issue during the year	11,350,520	11,728,907
Revenue loss per Ordinary share	(5.12)p	(5.99)p
Capital return/(loss) per Ordinary share	343.30p	(51.67)p
Total return/(loss) per Ordinary share	338.18p	(57.66)p
	======	======

9. Investments held as at fair value through profit or loss

(a) Portfolio investments

	2026 £’000	2025 £’000
Valuation at beginning of year	155,440	165,925
Investment holding gains at beginning of year	(2,138)	(5,983)
	-----------	-----------
Cost at beginning of year	153,302	159,942
Purchases at cost	77,394	56,864
Sales at cost	(77,991)	(63,504)
Cost at end of year	152,705	153,302
Investment holding gains at end of year	34,582	2,138
	-----------	-----------
Valuation at end of year	187,287	155,440
	-----------	-----------
Investments listed overseas included above	187,287	155,440
	======	======

(b) Gains/(losses) on investments

	2026 £’000	2025 £’000
Net gains/(losses) on sale of investments	6,394	(1,333)
Movement in investment holding gains/(losses)	32,444	(3,845)
	-----------	-----------
Gains/(losses) on investments	38,838	(5,178)
	======	======

10. Transaction costs

During the year expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains (2025: losses) on investments in the Income Statement. The total costs were as follows:

		2026 £’000		2025 £’000
Purchases		56		49
Sales		50		33
	-----------		-----------
Total		106		82
		======		======

11. Debtors

	2026 £’000	2025 £’000
Prepayments and accrued income	35	26
Overseas tax recoverable	3	–
Dividends receivable	111	79
Securities sold awaiting settlement	119		350
	-----------		-----------
	268		455
	======		======

12. Cash and cash equivalents

	2026 £’000	2025 £’000
Cash at bank and in hand	1,039	1,133
Cash equivalents	9,495	6,837
	-----------	-----------
	10,534	7,970
	======	======

Cash equivalents comprise liquidity holdings in the Blackrock ICS US Treasury Open-ended Fund and in the GSLN LQ TR US Open-ended Fund.

13. Creditors: amounts falling due within one year

	2026 £’000	2025 £’000
Management fee	314	262
Other creditors and accruals	154	204
Repurchases of the Company’s own shares awaiting settlement	266	–
Purchases awaiting settlement	2,349	–
	-----------	-----------
	3,083	466
	======	======

14. Financial instruments

Background

The Company’s financial instruments comprise securities and other investments, cash balances and term loans, debtors and creditors that arise directly from its operations, for example, in respect of sales and purchases of investments awaiting settlement and debtors for accrued income. The numerical disclosures below exclude short-term debtors and creditors which are denominated in sterling and do not incur interest and therefore are not subject to foreign currency risk or interest rate risk.

The principal risks the Company faces in its portfolio management activities are:

     foreign currency risk

    market price risk

    interest rate risk

    liquidity risk

    credit and counterparty risk

The Portfolio Manager’s policies for managing these risks are summarised below and have been applied throughout the year.

(a) Foreign currency risk

A substantial portion of the financial assets of the Company are denominated in US Dollars with the result that the Statement of Financial Position and Income Statement can be significantly affected by currency movements.

The Company normally takes account of this risk when making investment decisions although it could hedge against foreign currency movements affecting the value of the investment portfolio where adverse movements are anticipated.

Foreign currency sensitivity

The principal currency to which the Company was exposed during the year was the US Dollar as all investments are quoted in that currency. The exchange rates applying against sterling at 30 June and the average rates during the year ended 30 June were as follows:

	2026		2025
	At 30 June	Average for the year	At 30 June	Average for the year
US Dollar	1.3273	1.3415	1.3704	1.2943
	----------	----------	----------	----------
	1.3273	1.3415	1.3704	1.2943
	======	======	======	======

The following tables illustrate the sensitivity of the profit after tax for the year and net assets to exchange rates for sterling against the US Dollar. It assumes the following changes in exchange rates:

£/US Dollar +/– 5% (2025: +/– 5%)

These percentages have been determined based on market volatility in exchange rates over the previous twelve months. The sensitivity analysis is based on the company’s foreign currency financial instruments held at the date of each Statement of Financial Position.

If sterling had weakened by 5% (2025: 5%) against the currencies this would have had the following effect on revenue, capital, total return and, accordingly, net assets:

	2026			2025
	Impact on revenue  return £’000	Impact on capital return £’000	Total £’000	Impact on revenue  return £’000	Impact on capital return £’000	Total £’000
US Dollar	(61)	9,364	9,303	(51)	7,772	7,721
	---------	---------	---------	---------	---------	---------
	(61)	9,364	9,303	(51)	7,772	7,721
	=====	=====	=====	=====	=====	=====

If sterling had strengthened by 5% (2025: 5%) against the currencies below this would have had the following effect:

	2026			2025
	Impact on revenue  return £’000	Impact on capital return £’000	Total £’000	Impact on revenue  return £’000	Impact on capital return £’000	Total £’000
US Dollar	61	(9,364)	(9,303)	51	(7,772)	(7,721)
	---------	---------	---------	---------	---------	---------
	61	(9,364)	(9,303)	51	(7,772)	(7,721)
	=====	=====	=====	=====	=====	=====

(b) Market price risk

By the very nature of its activities, the Company’s investments are exposed to market price fluctuations.

The board reviews and agrees policies for managing this risk. The investment adviser assesses the exposure to market price risk when making each investment decision, and monitors the overall level of market price risk on the whole of the investment portfolio on an ongoing basis. Further information on the investment portfolio and investment policy is set out in the Portfolio Manager’s Review within the Annual Report.

Other price risk sensitivity

The following illustrates the sensitivity of the profit after taxation for the year and the total equity to an increase or decrease of 20% (2025: 20%) in the fair value of the Company’s equities. This level of change is considered to be reasonably possible based on observation of market conditions during the year. The sensitivity analysis is based on the Company’s equities at each reporting date, with all other variables held constant.

The impact of a 20% increase in the value of investments on the revenue loss for the year to 30 June 2026 is an increase of £243,000 (2025: £202,000) and on the capital return is an increase of £37,457,000 (2025: £31,088,000).

The impact of a 20% fall in the value of investments on the revenue loss for the year to 30 June 2026 is a decrease of £243,000 (2025: £202,000) and on the capital return is a decrease of £37,457,000 (2025: £31,088,000).

(c) Interest rate risk

Interest rate movements may affect:

   the fair value of investments of fixed interest securities,

   the level of income receivable from any floating interest-bearing securities and cash at bank and on deposit, and

the interest payable on floating interest term loans.

The financial assets (excluding short-term debtors) consist of:

	2026			2025
	Cash flow interest rate risk £’000	No interest rate risk £’000	Total £’000	Cash flow interest rate risk £’000	No interest rate risk £’000	Total £’000
GBP	970	–	970	1,287	–	1,287
US Dollar	9,564	–	9,564	6,683	–	6,683
	-----------	-----------	-----------	-----------	-----------	-----------
	10,534	–	10,534	7,970	–	7,970
	======	======	======	======	======	======

The floating interest rate risk assets consist of cash deposits at call.

The financial liabilities consist of:

	2026			2025
	Fixed rate £’000	Non-interest bearing £’000	Total £’000	Fixed rate £’000	Non-interest bearing £’000	Total £’000
US Dollar	–	2,349	2,349	–	466	466
GBP	–	733	733	–	–	–
	-----------	-----------	-----------	-----------	-----------	-----------
	–	3,082	3,082	–	466	466
	======	======	======	======	======	======

(d) Liquidity risk

Liquidity risk is not considered significant. All liabilities are payable within three months. The Company’s assets comprise mainly readily realisable securities which can be sold to meet funding requirements if necessary.

(e) Credit and counterparty risk

Credit risk is the exposure to loss from the failure of a counterparty to deliver securities or cash for acquisitions or disposals of investments or to repay deposits. The Company manages credit risk by using brokers from a database of approved brokers who have undergone due diligence tests by the Portfolio Manager’s Best Execution Committee and by dealing through JPMCB with banks authorised by the Financial Conduct Authority. Any derivative positions are marked to market and exposure to counterparties is monitored on a daily basis by the Portfolio Manager; the Board reviews it on a quarterly basis. The maximum exposure to credit risk at 30 June 2026 was £10,802,000 (2025: £8,425,000).

The calculation is based on the Company’s credit exposure as at 30 June 2026 and may not be representative of the year as a whole.

(f) Fair value of financial assets and financial liabilities

The financial assets and financial liabilities are carried in the Statement of Financial Position at their fair value or the statement amount is a reasonable approximation of fair value (due from brokers, dividends and interest receivable, due to brokers, accruals and cash at bank).

Fair Value hierarchy

FRS 102 – section 34.22 on Financial Instruments requires financial institutions, such as investment trusts, to classify fair value measurements using fair value hierarchy that reflects the significance of the inputs used in making the measurements.

The fair value hierarchy shall have the following levels:

Level 1 reflects financial instruments quoted in an active market.

Level 2 reflects financial instruments whose fair value is evidenced by comparison with other observable current market transactions in the same instrument or based on a valuation technique whose variables includes only data from observable markets.

Level 3 reflects financial instruments whose fair value is determined in whole or in part using a valuation technique based on assumptions that are not supported by prices from observable market transactions in the instrument and not based on available observable market data. The financial assets measured at fair value in the Statement of Financial Position are grouped into the fair value hierarchy as follows:

	2026				2025
	Level 1 £’000	Level 2 £’000	Level 3 £’000	Total £’000	Level 1 £’000	Level 2 £’000	Level 3 £’000	Total £’000
Investments	187,287	–	–	187,287	155,440	–	–	155,440
	======	======	======	======	======	======	======	======

(g) Use of derivatives

In order to enhance returns, the Company may take short positions (using contracts for difference) in respect of a small number of larger capital securities. There were no derivative positions held at the year end (2025: nil).

15. Paid-up share capital

	2026		2025
	Number	£’000	Number	£’000
Ordinary shares of 25p each
Balance brought forward	11,533,787	2,882	11,862,159	2,964
Ordinary shares repurchased into treasury	(479,080)	(120)	(328,372)	(82)
	---------------	---------	---------------	--------
Closing balance of Ordinary shares	11,054,707	2,762	11,533,787	2,882
Treasury shares
Balance brought forward	6,689,626	1,673	6,361,254	1,591
Repurchase of Ordinary shares into treasury	479,080	120	328,372	82
	---------------	---------	---------------	--------
Closing balance of Ordinary shares held in treasury	7,168,706	1,793	6,689,626	1,673
Total		4,555		4,555
		=====		====

479,080 shares were bought back in the year for holding in treasury (2025: 328,372) for a total consideration of £6.78m (2025: £4.38m). 7,168,706 shares were held in Treasury at the year end (2025: 6,689,626). Therefore the Company has bought back 4.2% of its shares in the year (2025: 2.8%).

Since the year end, 85,605 further shares were bought back for holding in treasury.

The reasons for the repurchases of the Company’s shares are provided in the Chair’s Statement within the Annual Report.

16. Net asset value per Ordinary share

The net asset value per Ordinary share is based on the net assets attributable to the equity shareholders £195,006,000 (2025: £163,399,000) and on 11,054,707 (2025: 11,533,787) Ordinary shares, being the number of Ordinary shares in issue at the year end.

17. Related parties and transactions with the Portfolio Manager and the AIFM

Directors

There are no transactions with the Directors other than aggregated remuneration for services as Directors as disclosed in the Directors’ Remuneration Report within the Annual Report and as set out in Note 5 to the Financial Statements within the Annual Report and the beneficial interests of the Directors in the Ordinary shares of the company as disclosed within the Annual Report.

Transactions with the Portfolio Manager and the AIFM

FundRock Partners Limited (FundRock) has been appointed as AIFM to the Company pursuant to an Alternative Investment Fund Management Agreement between FundRock and the Company. FundRock has also been appointed to provide company secretarial services to the Company.

Brown Advisory has been appointed to provide portfolio management services pursuant to a Portfolio Management Agreement between the Company, FundRock and Brown Advisory.

The management fee has been calculated at an annual rate of 0.65% on the first £200 million; 0.6% of the next £300 million; and 0.5% thereafter, in each case of the lower of the Company’s market capitalisation and the Company’s adjusted net assets.

The management fee is payable by the Company to FundRock, who shall deduct from the management fee the amounts due to it as AIFM and for company secretarial services and shall pay the balance to Brown Advisory.

The management fee is calculated and payable on a quarterly basis.

The management fee payable to FundRock for the period from 1 July 2025 to 30 June 2026 was £1,134,000 (payable to FundRock for the period from 1 July 2024 to 30 June 2025: £1,152,000) with £314,000 outstanding as at 30 June 2026 (2025: £262,000).

The appointment of Brown Advisory and FundRock may be terminated by not less than six months’ notice.

18. Contingent liabilities and capital commitments

There were no contingent liabilities or capital commitments outstanding at 30 June 2026 (2025: nil).

A copy of the Annual Report & Accounts for the year ended 30 June 2026 will shortly be submitted to the National Storage Mechanism and will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

The Annual Report & Accounts will also be available for download from the Company's website www.brownadvisory.com/basc

Enquiries:

FundRock Partners Limited, Company Secretary

[e-mail]

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

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