BAILLIE GIFFORD EUROPEAN GROWTH TRUST PLC

Annual Report • Dec 9, 2024

Annual Report and Financial Statements 30 September 2024

Baillie Gifford European Growth Trust plc

Investor Disclosure Document

The UK Alternative Investment Fund Managers Regulations require certain information to be made available to investors prior to their investment in the Company. The Company's Investor Disclosure Document is available for viewing at bgeuropeangrowth.com

Notes

None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

Investment trusts are UK public listed companies and as such comply with the requirements of the Financial Conduct Authority ('FCA'). They are not authorised or regulated by the FCA.

Baillie Gifford European Growth Trust plc currently conducts its affairs, and intends to continue to conduct its affairs, so that the Company's ordinary shares can qualify to be considered as a mainstream investment product and can be recommended by Independent Financial Advisers to ordinary retail investors in accordance with the rules of the FCA in relation to non-mainstream investment products.

This document is important and requires your immediate attention.

If you reside in the UK and you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000 immediately. If you reside outwith the UK, you should consult an appropriately authorised financial adviser.

If you have sold or otherwise transferred all of your holding in Baillie Gifford European Growth Trust plc, please forward this document, together with accompanying documents, but not your personalised form of proxy, as soon as possible to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was or is being effected for delivery to the purchaser or transferee.

Cover image: Aurora Borealis over Tromsø in northern Norway.

Contents

Introduction

Financial highlights	01
Baillie Gifford – philosophy and process	04

Strategic report

Chairman's statement	07
Managers' report	10
Review of investments	16
One year summary	20
Five year summary	22
Ten year record	24
Business review	26
Baillie Gifford statement on stewardship	39
Environmental, social and governance engagement	40
Baillie Gifford – proxy voting	44
Baillie Gifford – valuing private companies	45
List of investments	46
Distribution of total assets	48

Governance report

Directors and management	51
Directors' report	54
Corporate governance report	60
Audit Committee report	67
Directors' remuneration report	70
Statement of Directors' responsibilities	74

Financial report

Independent Auditor's report	77
Income statement	84
Balance sheet	85
Statement of changes in equity	86
Cash flow statement	87
Notes to the Financial Statements	88

Shareholder information

Notice of Annual General Meeting	105
Further shareholder information	111
Communicating with shareholders	113
Third party data provider disclaimer	116
Sustainable Finance Disclosure Regulation	117
Glossary of terms and alternative performance measures	118
Company information	121

Baillie Gifford European Growth Trust plc aims to achieve capital growth over the long-term from a diversified portfolio of European securities.

Financial highlights

Year to 30 September 2024

Total returns

Share price*

S 2023

90

130

120

110

100

NAV (borrowings at book value)*†

NAV (borrowings at fair value)*†

Comparative index*#

9.3%

14.5%

NAV, share price and benchmark total return*

(figures rebased to 100 at 30 September 2023)

● Share price* ● NAV*† ● Benchmark*#

(figures plotted on a weekly basis)

* Alternative performance measures – see Glossary of terms and alternative performance measures on pages 118 to 120.

† Net asset value per share ('NAV').

The benchmark is the FTSE Europe ex UK Index (in sterling terms).

O N D J F MAM J A J

Source: LSEG/Baillie Gifford and relevant underlying index providers. See disclaimer on page 116. Past performance is not a guide to future performance.

Baillie Gifford – philosophy and process

Our philosophy

To generate remarkable returns over time we strongly believe that our investment philosophy and process need to break from convention. Since the inception of our first European equities strategy in 1985 we have been working on this very task. We have always believed that being longer-term than most and being truly active would tip the odds of outperforming in our favour.

Now however, we also have a much greater understanding of the hidden asymmetry in equity markets. Wealth creation and outperformance are not generated by lots of slightly better-than-average companies; they are generated by a very small number of special companies that go on to produce huge returns over long periods of time. These are the outliers we are looking for.

They endure and prosper thanks to attractive growth opportunities and unique corporate cultures that translate into strong competitive advantages. They are mostly owned or managed by entrepreneurial founders, families or other inside owners, who tend to focus more on sustainability and protecting the interests of employees and customers.

Our philosophy and process have evolved over time to give ourselves the best chance of finding these outliers, and to own them for the long-term. We need to think in decades rather than quarters; we need differentiated sources of insight; we need to think about what might go right rather than wrong; and we need to have the right corporate culture that encourages and supports our way of thinking.

Long-term

We believe great businesses can be structurally mispriced as the market often underestimates their durability and attractiveness. At the same time, most investors have a time horizon that is far too short to fully appreciate the potential of outstanding businesses; they are neither willing nor able to align themselves with the timescale of achievement of great businesses.

Capturing significant upside requires the adoption of a long-term mindset: we must think about companies, their progress and opportunities, not in months and quarters but in years and decades. We must have the courage and conviction to own businesses through thick and thin. While in aggregate our average holding period will typically be between five and ten years, implying a portfolio turnover of 10–20%, we are likely to hold individual companies for a much longer period.

Growth

We are looking for each company we invest in to have the potential to at least double in value on a five year view. Our analysis shows this is correlated with earnings growth rather than a change in valuation. For that reason, we focus on companies that have large, structural growth opportunities, and that are capable of reinvesting at high rates of return as a result of strong competitive advantages.

Optimism

Thinking creatively and optimistically are critical underpinnings if we are aiming to invest in Europe's outliers. We need to think about what can go right, rather than what can go wrong in an investment case. We need to be willing to embrace uncertainty and recognise that we will make mistakes. We need to recognise that returns in equity markets are asymmetric, with the maximum loss capped to the initial stake and the upside unbounded. In our portfolios, the driving force behind returns is not the occasional misstep, but rather the highly successful investments. As humans, we are programmed to dislike losses far more than we enjoy gains. However, we know that stock market returns are highly skewed, with overall returns dominated by a small subset of outliers. We must guard against this cognitive bias and remain resolute in our pursuit of investing in Europe's great growth companies.

Bottom-up approach

We believe investors spend too much time worrying about top-down, macroeconomic considerations which are highly unpredictable and outwith their control. We are bottom-up stock pickers and approach investing with the view to become a long-term owner in a select number of fundamentally attractive businesses. We devote our time and energy to gaining a deep understanding of what drives success in business in general, and in the case of specific companies. We seek out differentiated sources of information to enable us to gain differentiated insights.

Strategic report

The Strategic report, which includes pages 7 to 49 and incorporates the Chairman's statement, has been prepared in accordance with the Companies Act 2006.

Chairman's statement

Michael MacPhee Chairman

Appointed to the Board in 2016 and as Chairman in 2017

Performance

The net asset value per share ('NAV') total return over the Company's financial year was 12.1% compared to a total return of 15.3% for the FTSE Europe ex UK Index, in sterling terms. The share price total return over the year was 9.3% and so the discount to NAV of the Company's shares widened from 13.6% to 15.7%.

Our six-month interim period ending in March was a stronger period for the Company, and growth investing more generally. The second half of the year, however, felt like a pause for breath as various macroeconomic and election data points were digested. This is a reminder that the recovery of our performance will not be linear but it does not derail our belief in the Managers and the view that operational progress and growth in cashflows will be the main driver of value creation for the foreseeable future. The portfolio is well positioned to benefit from this. Further details on performance are provided in the Managers' report on pages 10 to 14.

Since Baillie Gifford began managing the portfolio in November 2019, the NAV total return has been 22.4% compared to a total return of 44.3% for the FTSE Europe ex UK Index, in sterling terms. The share price total return has been 12.1%, with the discount widening from 7.5% to 15.7%. This has been disappointing overall, but given the differentiation of our portfolio from the index, periods of underperformance can be expected. The Board considers five years to be the minimum period over which investment performance should be properly assessed.

Source: LSEG/Baillie Gifford and relevant underlying index providers. See disclaimer on page 116. All figures are stated on a total return basis. Total return and discount are an alternative performance measures – see Glossary of terms and alternative performance measures on pages 118 to 120.

Performance-Triggered Tender Offer

At the annual strategy session of the Company held in September 2024, the Board undertook a review of the performance of the Company and various related matters including investment risk. Key areas of review included valuation and diversification. The Board found the discussion around investment risk to be highly informative. Aside from the damage done to valuation of long term growth by a major shift in interest rates there is no doubt that stock-picking mistakes have been made. We wanted reassurance that lessons had been learned, however, and are optimistic on this score.

In the 21 months since the end of 2022, the European equity market has posted positive returns. However, the Company has underperformed. While markets have been up, it has not been a typical postrecession recovery. Indeed, the threat of a recession has certainly played its part in creating a nervous environment. The bulk of index performance has been accounted for by 11 of Europe's largest companies. While market concentration has been a global phenomenon, in Europe it has been steady, cashgenerative companies that have led this concentration rather than big tech (as in the US). As the Managers are European growth investors, they typically have a large portion of the Company's portfolio invested in small and mid-sized companies and therefore the continued outperformance of large caps has harmed the Company's own performance recovery to this point when gauged against an index weighted towards large cap companies.

Following this in-depth review, the Board continues to hold a strong belief in the Company's mandate and has confidence that, over the longer term, the Managers have the ability to outperform as the current headwinds to growth investing will not last forever. Valuations move around but time is on your side if underlying idiosyncratic operational growth and opportunity is at the heart of your investment analysis. Whilst maintaining this belief, the Board is painfully aware of the disappointing absolute and relative performance of the Company over the last three years and recognises that shareholders expect the Company to outperform broad market indices over the medium term. It is therefore proposed to commit to the following.

• A one-off performance-triggered tender offer of 100% of the Company's issued share capital (excluding shares held in Treasury) which will be triggered if the Company's NAV total return per share (measuring debt at fair value) underperforms the return of the FTSE European ex UK Index (in sterling terms) over the four years to 30 September 2028. The tender would be at a price close to NAV. If the tender offer is triggered, it is expected to be subject to shareholder approval at the Company's Annual General Meeting to be held in early 2029.

The Board believes that this commitment is in the best interests of shareholders as a whole.

Earnings and Dividend

Revenue per share for the year was 0.72p (2.68p 2023) and the Board is recommending a final dividend of 0.6p per share (0.40p 2023). Subject to shareholder approval at the Annual General Meeting, the dividend will be paid on 14 February 2025 to shareholders on the register on 10 January 2025 The ex-dividend date will be 9 January 2025.

As noted in the Company's 2019 Annual Report, any dividend paid will be by way of a final dividend and be the minimum required for the Company to maintain its investment trust status.

Borrowings

The Company has two €30 million long-term debt facilities: the first has a remaining duration of 16 years and is priced at a fixed rate of 1.57% and the other has over 11 years outstanding at a fixed rate of 1.55%. The Company also has an undrawn €30 million overdraft facility with The Northern Trust Company, which at present is capped at €15 million following Board agreement. At the year end, the Company had gearing of 13.6% of shareholders' funds.

Share Buybacks, Issuance and Discount

Over the course of the Company's financial year, the share price moved from a 13.6% discount to NAV to a 15.7% discount to NAV. During this period, the Company bought back 6,365,921 shares at a total cost of approximately £6.0m. The shares repurchased by the Company are held in Treasury and are available to be reissued, at a premium, when market conditions allow.

The Board is of the view that the Company should retain the power to buy back shares during the year and so, at the Annual General Meeting, is seeking to renew the annual authority to repurchase up to 14.99% of the shares in the Company in issue. When buying back shares, the Board does not have a formal discount target and is prepared to buy back shares opportunistically and accretively.

The Company also has authority to issue new shares and to reissue any shares held in treasury for cash on a non-pre-emptive basis. Shares are issued/ reissued only at a premium to net asset value, thereby enhancing net asset value per share for existing shareholders. The Directors are, once again, seeking 10% share issuance authority at the Annual General Meeting. As with the buy back authority, this authority would expire at the conclusion of the Annual General Meeting to be held in 2026.

The Board

As detailed in the 2023 Annual Report, I plan to step down from the Board at the upcoming Annual General Meeting and, as previously noted, David Barron will replace me as Chair. In the light of my retirement, the Board undertook a recruitment process seeking to appoint an additional non-executive director and was pleased to announce the appointment of Davina Curling with effect from 1 November 2024. Davina has over 25 years of fund management experience. She was managing director and head of Pan European equities at Russell Investments. Prior to that she was head of European equities at F&C, ISIS and Royal & Sun Alliance. Davina has also previously held positions at Nikko Capital Management (UK) and Kleinwort Benson and was previously a director of BlackRock Greater Europe Investment Trust plc. Her experience as both fund manager and investment trust director strongly underpin her appointment. Davina will stand for election at the upcoming Annual General Meeting.

Annual General Meeting

The AGM will be held at 11am on 5 February 2025 at Baillie Gifford's offices in Edinburgh. Please see pages 105 to 110 that set out the AGM location and directions thereto. It is the Board's present intention to hold the Company's AGM in London and Edinburgh on alternate years in order to reach as many shareholders as possible. The Managers will make a presentation and I look forward to meeting shareholders who are able to attend.

To accurately reflect the views of shareholders of the Company, the Board intends to hold the AGM voting on a poll, rather than by a show of hands as has been customary. This will ensure an exact and definitive result. The Board encourages all shareholders to exercise their votes on the AGM resolutions by completing and submitting the form of proxy enclosed with the Annual Report to ensure that your votes are represented at the meeting (whether

or not you intend to attend in person). If you hold shares through a share platform or other nominee, the Board encourages you to contact these organisations directly as soon as possible to arrange for you to submit votes in advance of the AGM. Alternatively, the Association of Investment Companies' ('AIC') website theaic.co.uk/how-to-vote-your-shares has information on how to vote your shares if you hold them via one of the major platforms. The following link will also take you through to the AIC website where there is information on how your platform can help you attend the AGM in person theaic.co.uk/aic/ ready-to-invest/shareholdervoting/attending-an-agm.

Should shareholders have questions for the Board or the Managers or any queries as to how to vote, they are welcome, as always, to submit them by email to trustenquiries@bailliegifford.com or call 0800 917 2112.

Information on the resolutions can be found on pages 56 to 58 of the Annual Report and Financial Statements. The Directors consider that all resolutions to be put to shareholders are in their and the Company's best interests as a whole and recommend that shareholders vote in their favour.

Outlook

This is undeniably a time of accelerating change in geopolitics and much else besides. Companies' ability to adapt to change is the single biggest reason why equities beat inflation over sustained periods. Strong businesses with attractive prospects and properly aligned, talented and hard working people within them is the combination that wins over time. Winning is asymmetric in equity investment. The upshot, for the patient, is high and rising returns on capital and, typically, margins. We recognise that our shareholders are absorbing volatility in both absolute and relative returns in order to harness this effect. Our Managers have the skill to discern these businesses and the courage to withstand the volatility that a long term growth strategy brings with it. The Board feels that the measure we are setting in place will give our Managers the best chance to deliver on your behalf while also offering shareholders appropriate protection.

Michael MacPhee Chairman 25 November 2024

Managers' report

Stephen Paice Investment Manager

Chris Davies Investment Manager Equity markets around the world continue to grind higher as the dampening effects on valuations from supply chain shocks and higher rates subside. The start of a coordinated approach by central banks to lower rates buoyed markets, as did the excitement around the progress of generative AI. In Europe, some of that excitement wore off in the second half of the year, following a snap election in France and some mixed economic data from the US and China. At that point, those pointing to a soft landing started to doubt themselves. In September, however, two major policy announcements restored some confidence: a 50bps policy rate cut by the US Federal Reserve and a range of stimulus measures from The People's Bank of China. Forecasting what comes next and how it will impact equity markets is difficult, however, the conditions we see in front of us appear to be much more favourable than they have been for some time.

Before we lead you to conclude that we have become readers of the economic tea leaves, let us reassure you. Our investment philosophy remains unchanged even if the process has evolved and will continue to do so in light of lessons learned. We are long-term growth investors focused on exploiting market inefficiencies in valuing the rate and duration of growth. We search for Europe's outliers – companies that can at least double in value over a five-year period principally by increasing their cashflows and increasing the returns on the cashflows they reinvest, beyond rates expected by the market. When we find them, we aim to hold them for a very long time. This also means that we will normally have a portfolio that looks very different from the index, and most other managers. Having said that, we have strengthened our processes around portfolio construction and valuation. This has helped us better shape our portfolio to capture the maximum amount of upside while minimising risk.

For a definition of terms see Glossary of terms and alternative performance measures on pages 118 to 120. Past performance is not a guide to future performance.

Some portfolio companies continue to grapple with complex short-term issues. However, when we think about the current environment we are in, and the fundamentals of the companies we own, we continue to look at the future with a great deal of optimism.

Performance

Over the last financial year, the Company's NAV delivered a total return of 12.1% (14.5% with loans at book value) while the FTSE Europe ex-UK index returned 15.3% in sterling terms. The Company's share price total return was 9.3%, representing a discount of 15.7% to the NAV. This compares to a discount of 13.6% at the beginning of the period. This is again disappointing given many of the headwinds that caused underperformance in prior years have abated. Breaking attribution down further gives a clearer picture of what has been working and what hasn't.

Encouragingly, our public companies, now accounting for 94% of our portfolio, delivered a total return of around 20% over the year. Offsetting this were significant write-downs to two of our private companies, Northvolt and McMakler, and a widening of the Company's discount to NAV. These resulted in a negative contribution of -6.5% and -2.8% respectively. An increase in the fair value of our loans also resulted in a negative contribution of -2.4%, making the total from these factors around -12%. In highlighting this we do not mean to wash our hands of the responsibility for the Company's investment performance – quite the opposite. Conditions for our style of investing are much improved which provides a great platform for both us and the companies we invest in. Our underperformance has mainly come from stock-picking, including two private companies we chose to invest in that are having problems with their end markets and raising capital.

Public companies

As we noted in the Interim report, many of our listed holdings are now starting to benefit from inflection points both in terms of demand but also profitability. Companies that chose to invest in their businesses over the past few years are now in the position to increase prices faster than costs.

Spotify, for example, has been able to increase its subscription prices with limited impact on demand, but it has also become much more efficient in how it spends money. This means that the world's largest streaming platform with over 600 million monthly active users, has now exceeded its medium-term target of 10% operating profit margins after an extended period of losses.

Adyen, the Dutch payment company, is in a similar place. It continues to grow revenues more than 20% by winning new clients and expanding business with existing clients. It is, however, growing its profits faster than this as it slows down its aggressive hiring programme.

Schibsted, the Nordic online classifieds platform, also performed well. Part of this related to the sale of its News Media business and a majority stake in Adevinta, its European classifieds platform, which was bought by a private equity consortium. What is left is a much cleaner business with a lot of scope to increase prices for its services while benefitting from a recovery in demand.

Another inflection point drove the share price of Hypoport significantly higher. As Germany's largest online marketplace for mortgages and home loans, it benefited as transaction volumes picked up following the worst downturn in decades.

Overall, we take encouragement that fundamentals are back to driving share prices, rather than valuation multiples.

Some companies didn't fare as well. Kering, the parent of luxury brands like Gucci and Saint Laurent, suffered from weaker Chinese demand which affected most of its peers to varying degrees. This downturn has been especially tough as Gucci's extraordinary growth of recent years came to an end and those who led it left the business. We think the turnaround will take longer than expected so we sold our position.

HelloFresh, which we noted as another sale in the interim report, also provided a drag to performance. Its core meal kit business appeared to be more mature than expected and we were not convinced on the attractions of its new ready-to-eat business.

Soitec, a manufacturer of engineered substrates or wafers for semiconductors used in mobile phones, cars and connected devices, didn't perform like many other semiconductor companies. It is still dealing with excess inventories at its customers so is yet to see orders rebound. We believe this is just a matter of time, and with almost all its customers now making positive comments, we've been adding to our position during this period of share price weakness.

Private companies

At the end of the financial year, our five private companies accounted for around 5.7% of total investments. We are very pleased with the operational progress at three of them.

Bending Spoons, the Italian software company which owns mobile digital applications like Evernote, Splice, and Meetup, continues to both improve the growth and profitability of the apps it owns, and acquire new apps at attractive prices.

sennder, the digital freight-forwarder, recently acquired CH Robinson's European ground transportation business, effectively doubling its revenue and accelerating its path to profitability.

Flix, the global travel-tech business which manages bus operations like FlixBus and Greyhound, also continues to grow profitably. It had been exploring a summer IPO but decided to remain private and team up with a consortium of investors including EQT, the listed Swedish private equity business which we also own directly, which acquired a significant stake. We think this structure increases the probability of an excellent long-term outcome even if it deprives us of the opportunity for external validation in the near term.

Our other two private companies – Northvolt and McMakler – have faced highly contrasting fortunes. We have been forced to take significant writedowns in both investments. McMakler, the German real-estate broker, has, much like Hypoport, been

operating against a tough economic backdrop in Germany. That the entire investment was written off reflects the precarious position the company found itself in and the conservative approach we take to valuation. Helped by our relationship with the company, we were able to support its recapitalisation and give it the cash runway to see it through to better times. This was done on extremely favourable terms, and if business continues to improve as it has for Hypoport, we would expect the value of our new investment to rise materially.

Northvolt, the Swedish battery company, is a much bigger and higher profile company. While confidentiality agreements limit what we can disclose about all our private companies, there have been numerous newspaper articles reporting on Northvolt's recent troubles. Operational progress is not where it should be, and its customers are increasingly facing Chinese competition. The scaling back of European subsidies has also resulted in weaker demand, making fundraising for any business involved with electric battery production much more difficult. Northvolt's ambition is admirable, but while it remains of strategic importance to Europe, there are still significant challenges to overcome. It also seems clear now that this ambition caused them to overreach. The company has been forced to reduce the size of its workforce by around 20% and focus almost exclusively on the first phase of its Swedish gigafactory. This will have a significant impact on Northvolt's output by the end of the decade, and its ability to generate cash. Given these difficulties, it was decided to make a substantial write-down on the value of our investment. Since the end of our financial year however, Northvolt has continued to face liquidity problems and has filed for Chapter 11 reorganisation. It's CEO, Peter Carlsson, has also resigned. While companies can often emerge from this process in a much stronger position, we have decided to write this investment down to zero. From such a promising start, this has been incredibly frustrating and disappointing for us as managers, our fellow shareholders, and for Europe.

With two of our five private company investments in distress, it is fair to ask whether we ought to stick to public markets. We have tended to be selective in our private company investments, but always cognisant that over time, some would produce great returns, and some would not. Fundamentally, we believe strongly that this is an area where we can offer something quite unique with the potential for worthwhile and asymmetric payoffs. If anything, our long-termism and privileged access to companies, mean that we should have an even stronger advantage in private markets.

It is here that we are meeting some of the most innovative companies in the world. The last few years have been difficult for many public growth companies, but even more so for private companies. It is normal that some companies need to reset and refocus, and others fail. Entrepreneurialism and innovation will, however, enable some of these companies to achieve great things. On this we remain confident. A successful IPO or realisation event in this segment of the market may have a significant impact on sentiment given the current situation.

Portfolio activity

Over the past year our turnover has doubled, to just over 18%. This still indicates an average holding period of more than five years but also that competition for capital is increasing. We are finding more and more companies that we admire trading on extremely low valuation multiples. In the first half of our financial year, we bought Lonza, Genmab, Camurus, and Assa Abloy. Continued innovation in healthcare underpins the first three, while the capacity to carry out value-accretive acquisitions underpins the latter. These themes are also evident in the four new purchases we made in the second half of the year:

• Vitec, a serial acquirer in the VMS (vertical market software) industry, is very similar to Topicus, one of our highest conviction names. We expect similar growth rates – around the 20% level – driven mostly by acquisitions. Vitec's headline valuation multiples might appear high, but we think the market is still underestimating the company's prospects for profitably consolidating an extremely fragmented industry.
• Instalco is another serial acquirer from Sweden, this time in the technical installation industry, which comprises a broad range of markets including plumbing and scaffolding. This also has a huge market to consolidate, is owned and managed by a founder and a young entrepreneurial CEO, and like many other serial acquirers we invest in, gets better as it gets bigger. We considered buying it last year, but we were cautious about the ongoing downturn in Nordic construction markets, so waited and continued to learn from the sidelines. This turned out to be the right thing to do, as we got a better entry point when we recently bought some shares.
• Dino Polska, a founder-run retailer with a network of convenience stores across Poland's countryside, has a slightly different approach to capital allocation. Rather than acquire, it reinvests all its free cashflow organically at very high rates of

return, mainly by rolling out new stores. Deflation and price competition between Lidl and Biedronka have made life difficult for Polish retailers, but these forces should abate. Dino is one of the highest quality retailers we have ever seen, and the current valuation looks attractive to us.

• Novo Nordisk is the current global leader in insulin and GLP-1 drugs for diabetes and obesity. It has performed extremely well in recent years and thus been a painful omission from our portfolio. We initially doubted the scale of potential for its obesity franchise. What matters now is whether the share price can continue to perform strongly over the next decade, and our view is that there is a lot to like. First, we have more conviction in the growth potential from its obesity drugs despite the competition. There are decades of innovation left in GLP-1s and combination therapies, and the potential 1bn patient population has barely been penetrated. Health economic data and better drug efficacy will help broaden access here and to support cost benefits. Secondly, as well as its track record in innovation, Novo has distribution and manufacturing advantages through increasing scale which will help cement its position as lowest cost provider. Finally, having looked at several other ways to access the potential of this paradigm shifting technology, we think Novo is the best value. There are very few companies in Europe, or even in the world, that have the potential to grow revenue at 15% for more than a decade while making incredibly high returns on capital.

Sources of funds

As well as Kering, we have also moved on from adidas, Delivery Hero, and Evotec. adidas has had its problems over the years with inventory building up, brand-tarnishing ambassadors, and a perceived lack of innovation. The turnaround is well underway under new CEO Bjørn Gulden, but expectations are quite high now and the market seems to be pricing in a return to peak margins. Elsewhere, our thesis that competition would become more rational in the online food delivery business was disproven, so we moved on from Delivery Hero in favour of better companies. We also sold Evotec, a CRO (contract research organisation), following revelations of insider trading by the now fired CEO. He was an important part of the investment case given his vision and experience; however, we remain interested bystanders as the attractive core business may well prove to be less dependent on one man than we currently think.

Reasons for rational exuberance, or at least optimism

We try to be as objective as possible when it comes to investing, and to learn from our mistakes. This is why we think a team-based approach is the optimal structure for fostering long-term outperformance. We also spend a lot of time thinking about how we can improve and where we can exploit market inefficiencies. We would offer the following analysis:

• Our diversified portfolio is exposed to themes that should underpin structural growth for years, if not decades. We have serial acquirers consolidating fragmented markets, innovative healthcare companies meeting unmet medical needs and driving costs out of the system, some of the largest and most powerful e-commerce and digital entertainment platforms in the world, companies providing hardware and software for the further advancement of Moore's Law, solutions providers helping us to transition to a lower carbon economy, capital allocators investing in private markets, and a collection of the highest quality luxury brands.
• In terms of cyclical tailwinds, broader macroeconomic conditions are more supportive than they have been for many years. Interest rates and inflation are either falling or stabilising, normal ordering patterns are resuming in many industries we are exposed to, M&A activity is picking up, as are the number of IPOs, and the outlook for demand seems to be improving from a low base.
• The most compelling reason, however, is that we believe valuations do not reflect this upside. Looking at the portfolio in aggregate (portfolio characteristics chart below), we can see that when compared to the index, our companies have been and are likely to continue growing faster, are generating higher returns on equity and invested capital, and have stronger balance sheets. For these qualities we would expect to pay a valuation premium versus the index, but even this has been narrowing significantly. In our minds, this understates the fundamental, durable attractions of our portfolio. We also see record levels of discounts right across Europe, across the small and mid-cap sector, and on Investment Trusts and other listed holding companies. This Investment Trust is now trading on a record wide discount of around 16% to its own NAV.

Index

Baillie Giord European Growth Trust

Portfolio characteristics

● Baillie Gifford European Growth Trust ● Index

We are clearly very disappointed with the recent period of sharp underperformance. The Board has set us a fouryear performance-based challenge, and as Managers, we acknowledge and accept this. We strongly believe that the starting point for future investment returns hasn't been this favourable for many years. We are confident that we will return to delivering the performance our shareholders have every right to expect.

Stephen Paice Chris Davies Baillie Gifford 25 November 2024

Review of investments

A review of the Company's ten largest investments as at 30 September 2024.

Prosus

A global consumer technology holding company that listed in Europe in 2019. Its biggest and most important asset is a stake in Tencent, the founder-run, Chinese social media and gaming giant. With over 1.3bn monthly users and an undermonetised platform, there are ample opportunities for continued profitable growth. We think Tencent is mispriced, and as Prosus trades at a significant discount to the value of its assets, we think it's even more mispriced.

Geography	Netherlands
Valuation	£23,328,000
% of total assets	5.6
Valuation at 30 September 2023	£18,710,000
% of total assets at 30 September 2023	4.9
Net purchases/(sales) in year to 30 September 2024	(£1,623,000)

Topicus.com

A serial acquirer in the vertical market software space, buying niche software companies in the highly fragmented European market. Internal cash generation is strong thanks to the mission-critical nature of the software and customer stickiness, which leads to pricing power. This and the presence of parent company and major shareholder Constellation Software – from which Topicus.com was spun out in early 2021 – increase the odds of smart capital allocation and value creation for many years to come.

Geography	Netherlands
Valuation	£21,090,000
% of total assets	5.1
Valuation at 30 September 2023	£16,053,000
% of total assets at 30 September 2023	4.2
Net purchases/(sales) in year to 30 September 2024	Nil

DSV

One of the world's biggest freight forwarding companies with significant operations in the sea and air markets. It grows organically and via periodic, large acquisitions. This helps it gain scale, which permits ever higher investment in products and services that competitors cannot match and allows it to secure better pricing from carriers. It also has a unique, high-performance culture focused on operational efficiency, allowing it to make substantial improvements to the companies it acquires.

Schibsted

A collection of online classifieds marketplaces in the Nordics. Powerful network effects have led to its marketplaces, covering jobs, real estate, used cars and more, becoming dominant and hard to displace. This dominance should enable Schibsted to capture an increasing proportion of the transactions being made on its platforms, leading to growth from both pricing and volumes over the long-term.

© Ryanair

Ryanair

The dominant European low-cost airline. Its levels of growth and profitability make Ryanair an outlier in the industry. These are driven by its significant and increasing size advantage and a relentless corporate culture focused on low costs. A strong balance sheet and attractive cash generation also provide additional shareholder returns and the ability to buy new, larger, and more fuel‑efficient aircraft. We think that there are many more years of market share gains to come.

Geography	Denmark
Valuation	£19,414,000
% of total assets	4.7
Valuation at 30 September 2023	£12,473,000
% of total assets at 30 September 2023	3.3
Net purchases/(sales) in year to 30 September 2024	£5,556,000

Geography	Norway
Valuation	£17,971,000
% of total assets	4.3
Valuation at 30 September 2023	£14,381,000
% of total assets at 30 September 2023	3.8
Net purchases/(sales) in year to 30 September 2024	(£5,564,000)

Geography	Ireland
Valuation	£16,662,000
% of total assets	4.0
Valuation at 30 September 2023	£16,791,000
% of total assets at 30 September 2023	4.4
Net purchases/(sales) in year to 30 September 2024	Nil

© (ASML) All Rights Reserved

ASML

Makes lithography machines vital for the manufacture of semiconductor chips. It is a crucial enabler of Moore's Law and has an especially strong lead in the most technologically advanced extreme ultraviolet lithography machines where it enjoys monopoly status. Demand for smaller and more computationally powerful chips continues to grow strongly with multiple drivers ranging from artificial intelligence to internet-of-things applications. This will require more capital expenditure from semiconductor fabs, resulting in a highly favourable growth outlook.

Geography	Netherlands
Valuation	£15,666,000
% of total assets	3.8
Valuation at 30 September 2023	£12,247,000
% of total assets at 30 September 2023	3.2
Net purchases/(sales) in year to 30 September 2024	Nil

Hypoport

A financial software company digitising the German mortgage market. Hypoport operates the dominant platform used by mortgage brokers to compare mortgage rates across lenders and takes a cut of the mortgages written using the platform. Germany's mortgage advice market is under-penetrated relative to markets such as the UK and the US. Over time, we expect this to change and Hypoport is well placed to benefit, while also benefiting from a return to growth in mortgage volumes after a significant slump in the past few years.

Geography	Germany
Valuation	£15,625,000
% of total assets	3.7
Valuation at 30 September 2023	£5,633,000
% of total assets at 30 September 2023	1.5
Net purchases/(sales) in year to 30 September 2024	£2,655,000

Adyen

Adyen is a global payments processing business, founded and listed in the Netherlands. It solves complexity in the payments stack, allowing merchants to accept online and in-person payments faster and cheaper. It has grown rapidly in recent years, securing business from major customers like Shopify and McDonald's. We expect that growth to continue for many years to come given that it has barely penetrated its addressable market.

Geography	Netherlands
Valuation	£15,294,000
% of total assets	3.7
Valuation at 30 September 2023	£8,024,000
% of total assets at 30 September 2023	2.1
Net purchases/(sales) in year to 30 September 2024	Nil

© Atlas Copco © Allegro

Atlas Copco

We think this is one of the best engineering companies in the world. It has leading market shares in air compressors and vacuum pumps which have wide industrial uses and come with very profitable aftermarket businesses. Its decentralised organisation and innovative corporate culture set the standard for others to try and copy. Capital allocation is excellent, and we are strongly aligned with its long-term anchor shareholder, Investor AB.

Allegro.eu

Poland's dominant ecommerce platform. Online penetration of retail remains relatively low in Poland, and we believe Allegro will gain significant share as it continues to broaden its assortment and offers the best prices on the market. It recently acquired Mall Group, adding countries like Czechia and almost doubling its addressable market. Allegro's position is driven by powerful network effects, and its ability to fight off competition has been well-demonstrated, even against almighty Amazon.

Geography	Sweden
Valuation	£13,923,000
% of total assets	3.3
Valuation at 30 September 2023	£13,070,000
% of total assets at 30 September 2023	3.5
Net purchases/(sales) in year to 30 September 2024	(£1,575,000)

Geography	Poland
Valuation	£13,478,000
% of total assets	3.2
Valuation at 30 September 2023	£12,058,000
% of total assets at 30 September 2023	3.2
Net purchases/(sales) in year to 30 September 2024	Nil

One year summary

The following information illustrates how Baillie Gifford European Growth Trust has performed over the year to 30 September 2024

	30 September 2024	30 September 2023	% change
Shareholders' funds (borrowings at book value)	£366.4m	£327.4m
Gearing*	(14%)	(16%)
Net asset value per ordinary share (borrowings at book value)	104.2p	91.4p	14.0%
Net asset value per ordinary share (borrowings at fair value)*	108.0p	96.7p	11.7%
Share price	91.0p	83.6p	8.9%
FTSE Europe ex UK Index (in sterling terms)			11.9%
Ongoing charges*†	0.65%	0.62%
Discount (with borrowings at book value)*	12.7%	8.5%
Discount (with borrowings at fair value)*†	15.7%	13.6%
Active share*	88%	91%
Revenue earnings per ordinary share	0.72p	2.68p	(73.1%)
Special interim dividend paid during the year	–	2.20p
Final dividend declared for the year	0.6p	0.40p
Dividends paid and payable in respect of the year	0.6p	2.60p

† Key Performance Indicator.

Source: LSEG/Baillie Gifford and relevant underlying index providers. See disclaimer on page 116. Past performance is not a guide to future performance.

^* Alternative performance measure – see Glossary of terms and alternative performance measures on pages 118 to 120.

Year to 30 September		2024	2023
Total return (%)*
Net asset value per ordinary share (borrowings at book value)		14.5%	8.7%
Net asset value per ordinary share (borrowings at fair value)†		12.1%	8.3%
Share price†		9.3%	8.6%
FTSE Europe ex UK Index (in sterling terms)		15.3%	20.5%
Year to 30 September 2024		2024	2023	2023
Year's high and low	High	Low	High	Low
Net asset value per ordinary share (borrowings at book value)	114.07p	83.24p	115.08p	83.08p
Net asset value per ordinary share (borrowings at fair value)*	118.28p		119.91p	88.69p
Share price	101.0p	75.4p	101.8p	77.4p
Discount (10.8%) (borrowings at fair value)*†		(15.8%)	(11.2%)	(15.7%)
Year to 30 September		2024	2023
Net return per ordinary share
Revenue return		0.72p	2.68p
Capital return		12.35p	5.09p
Total return		13.07p	7.77p

† Key performance indicator.

Source: LSEG/Baillie Gifford and relevant underlying index providers. See disclaimer on page 116. Past performance is not a guide to future performance.

^* Alternative performance measure – see Glossary of terms and alternative performance measures on pages 118 to 120.

Five year summary

The following charts indicate how an investment in Baillie Gifford European Growth Trust has performed relative to its benchmark and its underlying NAV over the five year period to 30 September 2024.

Five year total return* performance

(figures rebased to 100 at 30 September 2019, figures plotted on a monthly basis)

(Discount)/premium* to NAV

(figures plotted on a monthly basis)

● (Discount)/premium

Source: LSEG/Baillie Gifford.

The (discount)/premium is the difference between Baillie Gifford European Growth Trust's quoted share price and its underlying net asset value per share expressed as a percentage of net asset value per share.

* See Glossary of terms and alternative performance measures on pages 118 to 120.

† With borrowings deducted at fair value.

The benchmark is the FTSE Europe ex UK Index (in sterling terms).

‡ See disclaimer on page 116.

Annual NAV and share price total returns*

Source: LSEG/Baillie Gifford and relevant underlying index providers‡.

* See Glossary of terms and alternative performance measures on pages 118 and 120.

† With borrowings deducted at fair value.

The benchmark is the FTSE Europe ex UK Index (in sterling terms).

‡ See disclaimer on page 116.

Ten year record

At 30 September	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014
Capital
Total assets (£'000)		416,275 379,350 362,957				613,010 469,587 373,857 426,974 440,200 360,875					312,239 336,729
Borrowings (£'000)	49,844	51,960	52,560	51,471	16,939	–	12,655	–	10,216	–	–
Shareholders' funds (£'000)	366,431	327,390	310,397		561,539 452,648 373,857			414,319 440,200 350,659			312,239 336,729
NAV per share (book) (p)*†	104.2	91.4	86.5	154.0	125.0	92.9	100.4	104.8	83.4	74.2	80.0
NAV per share (fair) (p)*†	108.0	96.7	91.9	154.5	125.0	92.9	100.4	104.8	83.4	74.2	80.0
Share price (p)†	91.0	83.6	79.5	152.4	122.0	81.0	90.8	92.0	72.3	67.3	74.9
Discount (book) (%)*	12.7	8.5	8.1	1.0	2.4	12.8	9.6	12.3	13.3	9.3	6.4
Discount (fair) (%)*	15.7	13.6	13.5	1.3	2.4	12.8	9.6	12.3	13.4	9.3	6.5
Revenue
Gross revenue (£'000)	4,013	3,912	4,313	3,256	2,597	14,523	13,775	12,591	10,357	9,540	9,528
Available for ordinary shareholders (£'000)	2,547	9,625	2,861	1,533	1,569	12,605	11,461	10,853	8,003	6,708	6,246
Revenue earnings per ordinary share (p)†	0.7	2.7	0.8	0.4	0.4	3.1	2.7	2.6	1.9	1.6	1.5
Ordinary dividends paid and proposed per share†	0.6	0.4	0.7	0.3	0.3	3.1	2.7	2.1	1.6	1.4	1.4
Special dividends per share (p)†	–	2.2	–	–	–	–	–	0.1	0.6	0.2	0.1
Ongoing charges ratio (%)#	0.6	0.6	0.6	0.7	0.4	0.6	0.6	0.6	0.6	0.6	0.6
Gearing
Gearing (%)*	14.0	16.0	16.0	7.0	4.0	0.0	3.0	–	3.0	–	–
Gross gearing (%)*	14.0	16.0	17.0	9.0	4.0	0.0	3.0	–	3.0	–	–
Performance Total Returns
NAV (borrowings at fair value) % change*	12.1	8.3	(40.4)	24.0	37.5	(4.6)	(2.1)	29.9	14.9	(5.5)	6.4
Share price % change*	9.3	8.6	(47.7)	25.2	54.2	(7.6)	1.2	32.2	9.8	(8.3)	12.1
Benchmark % change*‡	15.3	20.5	(15.3)	23.0	(0.3)	6.9	2.4	22.6	21.8	(1.8)	5.3

Source: LSEG/Baillie Gifford. See disclaimer on page 116.

* For a definition of terms see Glossary of terms and alternative performance measures on pages 118 and 120.

† Prior year figures restated for the ten for one share split on 1 February 2021.

Total operating costs divided by average net asset value. Baillie Gifford & Co Limited was appointed on 29 November 2019 and agreed to waive its management fee for six months from the date of its appointment. Without the management fee waiver the ongoing charges ratio for the year to 30 September 2020 would have been 0.66%. See Glossary of terms and alternative performance measures on pages 118 and 120.

‡ FTSE Europe ex UK Index (in sterling terms).

Cumulative performance (taking 2014 as 100)

Net asset value per share	Net asset value total return *	Share price	Share price total return *	Benchmark †	Benchmark total return †	Revenue earnings per ordinary share	Dividends paid and proposed per ordinary share
100	100	100	100	100	100	100	100
93	95	90	92	95	98	107	100
104	109	97	101	112	120	128	114
131	141	123	133	133	147	173	150
125	138	121	135	132	150	184	193
116	132	108	124	137	160	208	221
156	181	163	192	133	160	28	21
192	224	204	240	160	197	28	21
108	134	106	126	131	167	53	50
114	145	112	136	153	201	180	29
130	163	122	149	171	231	48	43

Compound annual returns (%)

5 year	2.3	4.3	2.4	3.7	4.6	7.6	(25.3)	(28.0)
10 year	2.7	5.0	2.0	4.1	5.5	8.8	(7.0)	(8.1)

Ten year total return performance*

Source: LSEG and underlying data providers. See disclaimer on page 116.

* See Glossary of terms and alternative performance measures on pages 118 to 120.

† FTSE Europe ex UK Index (in sterling terms).

Business review

Business model

Business and status

Baillie Gifford European Growth Trust plc ('the Company') is a public company limited by shares and is incorporated in England. The Company is an investment company within the meaning of section 833 of the Companies Act 2006 and carries on business as an investment trust. Investment trusts are UK public listed companies and their shares are traded on the London Stock Exchange. They invest in a portfolio of assets in order to spread risk. The Company has a fixed share capital although, subject to shareholder approval sought annually, it may purchase its own shares or issue shares. The price of the Company's shares is determined, like other listed shares, by supply and demand. The Company has been approved as an investment trust by HM Revenue & Customs subject to the Company continuing to meet the eligibility conditions. The Directors are of the opinion that the Company has continued to conduct its affairs so as to enable it to comply with the ongoing requirements of section 1158 of the Corporation Tax Act 2010 and the Investment Trust (Approved Company) (Tax) Regulations 2011.

The Company is an Alternative Investment Fund ('AIF') for the purposes of the UK Alternative Investment Fund Managers Regulations.

Investment objective

To achieve capital growth over the long-term from a diversified portfolio of European securities.

Investment policy

The Company is invested in a diversified portfolio of between 30 to 60 European companies.

The Company may not invest more than 10% of total assets in any one individual stock at the time of investment.

The Board recognises that investment in some European countries can be riskier than in others. Investment risks are diversified through holding a wide range of securities in different countries and industrial sectors. The Company has the ability to invest in securities that are listed in countries which are not included in the FTSE All-World European ex UK indices, where these securities have a meaningful connection with continental Europe.

The Board has the authority to hedge the Company's exposure to movements in the rate of exchange of currencies, principally the euro, in which the Company's investments are denominated, against sterling, its reporting currency.

Up to 20% of total assets, as measured at the time of initial investment, can be invested in unlisted investments.

The level of gearing within the portfolio is agreed by the Board and the absolute amount of any gearing should not exceed 20% of net assets at time of drawdown, excluding any unlisted investments in the calculation of net assets.

No more than 10% of the total assets of the Company may be invested in other listed investment companies (including investment trusts) except in those that have stated that they will invest no more than 15% of their total assets in other listed investment companies. In this case, the limit is 15%.

The Managers' compliance with the limits set out in the investment policy is monitored by the Board and the Alternative Investment Fund Manager ('AIFM').

Culture

As an externally managed investment company with no employees, Baillie Gifford European Growth Trust's culture is expressed through its Board and its third party service providers, in particular its Managers, in their interactions with shareholders and other stakeholders. The Board's assessment of its own interactions is described in its Section 172 Statement on pages 35 to 37, and the Baillie Gifford statement on stewardship, which describes the Managers' culture of constructive engagement,is set out on page 39.

Borrowings

At 30 September 2024 the Company had an uncommitted €30 million bank overdraft credit facility agreement with The Northern Trust Company for the purpose of pursuing its investment objective. At 30 September 2024, nil had been drawn down (2023 – nil). At 30 September 2024 the Company also had €30 million of long-term, fixed rate, senior, unsecured privately placed loan notes, with a fixed coupon of 1.57% to be repaid on 8 December 2040 and a further €30 million of long-term, fixed rate, senior, unsecured privately placed loan notes with a fixed coupon of 1.55% to be repaid on 24 June 2036. Further details of the Company's borrowings are set out in note 12 on page 95.

Performance

At each Board meeting, the Directors consider a number of performance measures to assess the Company's success in achieving its objectives. The performance measures below are to 30 September 2024.

Key performance indicators

The Board uses key performance indicators ('KPIs') to measure the progress and performance of the Company over time when discharging its duties as set out on page 61. These KPIs are established industry measures.

The one, five and ten year records of the KPIs can be found on pages 20 to 25. Further discussion and related actions are included in the Chairman's statement on pages 7 to 9.

In addition to the above, the Board considers peer group comparative performance.

Across these measures, the Board looks for relative outperformance over the long term, while remaining mindful that the nature of the Investment Policy and the growth characteristics of the portfolio investments may entail periods of underperformance over the short and medium term.

Share price total return relative to the benchmark*

The total return is the return to shareholders after reinvesting the net dividend on the date that the share price goes ex-dividend.

Net asset value total return relative to the benchmark* The total return is the return to shareholders after reinvesting the net dividend on the date that the share price goes ex-dividend.

-80 -70 -60 -50 -40 -30 -20 -10 0 ● NAV total return 1 year 5 years 10 years

Share price (discount)/premium*

As stock markets and share prices vary, an investment trust's share price is rarely the same as its NAV. When the share price is lower than the NAV it is said to be trading at a discount. If the share price is higher than the NAV, this situation is called a premium.

Ongoing charges ratio*

The ongoing charges ratio is the total recurring expenses (excluding the Company's cost of dealing in investments and borrowing costs) incurred by the Company as a percentage of the daily average net asset value. Without the management fee waiver (see page 24) the ongoing charges ratio for 2020 would have been 0.66%

* Alternative performance measure – see Glossary of terms and alternative performance measures on pages 118 to 120. Baillie Gifford & Co was appointed on 29 November 2019.

Viability statement

Having regard to provision 31 of the UK Corporate Governance Code, the Directors have assessed the prospects of the Company over a five year period. The Directors continue to believe this period to be appropriate as it reflects the Company's longer term investment strategy and to be a period during which, in the absence of any adverse change to the regulatory environment and to the tax treatment afforded to UK investment trusts, they do not expect there to be any significant change to the current principal risks facing the Company nor to the effectiveness of the controls employed to mitigate those risks. Notwithstanding the performancetriggered tender offer over the four years to 30 September 2028 the Directors do not reasonably envisage any change in strategy or any events which would prevent the Company from operating over a period of five years.

In considering the viability of the Company, the Directors have conducted a robust assessment of each of the principal and emerging risks and uncertainties detailed on pages 30 to 34, in particular the impact of market risk where a significant fall in European equity markets would adversely impact the value of the investment portfolio. The Directors have also considered the Company's leverage and liquidity in the context of the loan notes repayable in 2036 and 2040, the income and expenditure projections and the fact that the majority (94%) of the Company's investments are readily realisable quoted equity securities which

can be sold to meet its liabilities if necessary, the main liabilities currently being the loan notes.

Specific leverage and liquidity stress testing was conducted during the year, including consideration of the risk of further market volatility resulting from increasing geopolitical tensions. The leverage stress testing identified the impact on leverage in scenarios where gross assets fall by 25% and 50%, reflecting a range of market conditions that may adversely impact the portfolio. The liquidity stress testing identified the reduction in the value of assets that can be liquidated within one month that would result in the value of those assets falling below the value of the borrowings. The stress testing did not indicate any matters of concern.

In addition, all of the key operations required by the Company are outsourced to third party service providers and it is reasonably considered that alternative providers could be engaged at relatively short notice where necessary.

Based on the Company's processes for monitoring revenue projections and operating costs, share price discount/premium, the Managers' compliance with the investment objective, asset allocation, the portfolio risk profile, leverage, counterparty exposure, liquidity risk, financial controls and the Managers' operational resilience, the Directors have concluded that there is a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the next five years.

Principal and emerging risks

As explained on page 64 there is an ongoing process for identifying, evaluating and managing the risks faced by the Company. The Directors have undertaken a robust assessment of the principal and emerging risks facing the Company, including those that would threaten the business model, future performance, solvency or liquidity. A description of these risks and how they are being managed or mitigated is set out below:

Financial	What is the risk?	How is it managed?	Current assessment of risk
risk	The Company's assets consist mainly of listed securities (94% of the investment portfolio) and its principal and emerging financial risks are therefore market related and include market risk (comprising currency risk, interest rate risk and other price risk), liquidity risk and credit risk. An explanation of those risks and how they are managed is contained in note 19 to the Financial Statements on pages 97 to 103.	The Board has, in particular, considered the impact of heightened market volatility due to macroeconomic factors such as higher inflation and interest rates and geopolitical concerns. In order to oversee this risk, the Board considers at each meeting various metrics including regional and industrial sector weightings, top and bottom stock contributors to performance along with sales and purchases of investments. Individual investments are discussed with the portfolio manager together with general views on the investment markets and sectors. A strategy session is held annually.	The prospect of market volatility remains, given continuing geopolitical instability.
Investment strategy risk	What is the risk? Pursuit of an investment strategy to fulfil the Company's objective which the market perceives to be unattractive or inappropriate, or the ineffective implementation of an attractive or appropriate strategy, may lead to reduced returns for shareholders and, as a result, a decreased demand for the Company's shares. This may lead to the Company's shares trading at a widening discount to their net asset value.	How is it managed? To mitigate this risk, the Board regularly reviews and monitors the Company's objective and investment policy and strategy, the investment portfolio and its performance, the level of discount/premium to net asset value at which the shares trade and movements in the share register and raises any matters of concern with the Managers.	Current assessment of risk During the year, the Company's NAV total return was behind the benchmark. However, there are signs that the market's appetite for growth stocks, typically held by the Company, is recovering.
Political and associated economic risk	What is the risk? Political change in areas in which the Company invests or may invest may have financial consequences for the Company.	How is it managed? To mitigate this risk developments are closely monitored and considered by the Board and are regularly discussed at Board meetings.	Current assessment of risk The prospect of market volatility remains, given continuing geopolitical instability.

Discount risk

What is the risk?

The discount/premium at which the Company's shares trade relative to its net asset value can change. The risk of a widening discount is that it may undermine investor confidence in the Company.

How is it managed?

To manage this risk, the Board monitors the level of discount/premium at which the shares trade and the Company has authority to buy back its existing shares, when deemed by the Board to be in the best interests of the Company and its shareholders.

How is it managed?

To mitigate this risk, Baillie Gifford's Business Risk, Internal Audit and Compliance Departments provide regular reports to the Audit Committee on Baillie Gifford's monitoring programmes. Major regulatory change could impose disproportionate compliance burdens on the Company. In such circumstances representation is made to ensure that the special circumstances of investment trusts are recognised. Shareholder documents and announcements, including the Company's published Interim and Annual Report and Financial Statements, are subject to stringent review processes and procedures are in place to ensure adherence to the Transparency Directive and the Market Abuse Directive with reference to inside information.

Current assessment of risk

The Company's shares traded at an average discount of 14.3% throughout the year and it bought back 6,365,921 ordinary shares during the year. The Board has also put in place a performancerelated tender offer as set out on page 8.

Current assessment of risk

All control procedures are working effectively. There have been no material regulatory changes that have impacted the Company during the year.

Regulatory risk

What is the risk?

Failure to comply with applicable legal and regulatory requirements such as the tax rules for investment trust companies, the UK Listing Rules and the Companies Act could lead to suspension of the Company's Stock Exchange listing, financial penalties, a qualified audit report or the Company being subject to tax on capital gains. Changes to the regulatory environment could negatively impact the Company.

Custody and depositary risk	What is the risk? Safe custody of the Company's assets may be compromised through control failures by the Depositary, including breaches of cyber security.	How is it managed? To mitigate this risk, the Audit Committee receives six-monthly reports from the Depositary confirming safe custody of the Company's assets held by the Custodian. Cash and portfolio holdings are independently reconciled to the Custodian's records by the Managers who also agree uncertificated private portfolio holdings to confirmations from investee companies. The Custodian's audited internal controls reports are reviewed by Baillie Gifford's Business Risk Department and a summary of the key points is reported to the Audit Committee and any concerns investigated. In addition, the existence of assets is subject to annual external audit.	Current assessment of risk All control procedures are working effectively.
Operational risk	What is the risk? Failure of Baillie Gifford's systems or those of other third party service providers could lead to an inability to provide accurate reporting and monitoring or a misappropriation of assets.	How is it managed? To mitigate this risk, Baillie Gifford has a comprehensive business continuity plan which facilitates continued operation of the business in the event of a service disruption. The Audit Committee reviews Baillie Gifford's Report on Internal Controls and reports by other key third party providers are reviewed by Baillie Gifford on behalf of the Board and a summary of the key points is reported to the Audit Committee	Current assessment of risk All control procedures are working effectively.

and any concerns investigated. The other key third party service providers have not experienced significant operational difficulties affecting their respective services

to the Company.

Increasing Risk Decreasing Risk No Change

Leverage risk What is the risk?

The Company may borrow money for investment purposes (sometimes known as 'gearing' or 'leverage'). If the investments fall in value, any borrowings will magnify the extent of this loss. If borrowing facilities are not renewed, the Company may have to sell investments to repay borrowings.

How is it managed?

To mitigate this risk, all borrowings require the prior approval of the Board and leverage levels are discussed by the Board and Managers at every meeting. Covenant levels are monitored regularly. The majority of the Company's investments are in quoted securities that are readily realisable. Further information on leverage can be found on page 115 and the Glossary of terms and alternative performance measures on pages 118 to 120.

Current assessment of risk

The Company has in place long term borrowings, expiring in 2036 and 2040.

Climate and governance risk

What is the risk?

Perceived problems on environmental, social and governance ('ESG') matters in an investee company could lead to that company's shares being less attractive to investors, adversely affecting its share price, in addition to potential valuation issues arising from any direct impact of the failure to address the ESG weakness on the operations or management of the investee company (for example in the event of an industrial accident or spillage). Repeated failure by the Managers to identify ESG weaknesses in investee companies could lead to the Company's own shares being less attractive to investors, adversely affecting its own share price.

How is it managed?

This is mitigated by the Managers' strong ESG stewardship and engagement policies which are available to view on the Managers' website, bailliegifford.com/esg, and which have been reviewed and endorsed by the Company, and which have been fully integrated into the investment process. Due diligence includes assessment of the risks inherent in climate change (see page 66).

Current assessment of risk

The Investment Manager continues to employ strong ESG stewardship and engagement policies.

Cyber security risk What is the risk? A cyber attack on Baillie Gifford's network or that of a third party service provider could impact the confidentiality, integrity or availability of data and systems. Emerging technologies, including AI and quantum computing capabilities, may introduce new, and increase existing information security risks that impact operations. How is it managed? To mitigate this risk, the Audit Committee reviews Reports on Internal Controls published by Baillie Gifford and other third party service providers. Cyber security due diligence is performed by Baillie Gifford on third party service providers which includes a review of crisis management and business continuity frameworks. Current assessment of risk This risk is seen as increasing due to recent indications that the continuation of geopolitical tensions could lead to cyber attacks. Emerging technologies, including AI, could potentially increase information security risks. In addition, service providers operate a hybrid approach of remote and office working, thereby increasing the potential of

Emerging risks

As explained on pages 64 and 65, the Board has regular discussions on principal and emerging risks, including any risks which are not an immediate threat but could arise in the longer term. The Board considers emerging risks at each Board meeting and discusses any mitigations required.

a cyber security threat.

Increasing Risk Decreasing Risk No Change

Promoting the success of the Company (section 172 statement)

Under section 172 of the Companies Act 2006, the directors of a company must act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters and to the extent applicable) to: a) the likely consequences of any decision in the long term, b) the interests of the company's employees, c) the need to foster the company's business relationships with suppliers, customers and others, d) the impact of the company's operations on the community and the environment, e) the desirability of the company maintaining a reputation for high standards of business conduct, and f) the need to act fairly as between members of the company.

In this context, having regard to the Company being an externally-managed investment company with no employees, the Board considers the Company's key stakeholders to be: its existing and potential new shareholders; its externally-appointed Managers and Secretaries (Baillie Gifford); other professional service providers (corporate broker, registrar, Auditors and depositary); lenders; wider society and the environment.

The Board considers that the interests of the Company's key stakeholders are aligned, in terms of wishing to see the Company deliver sustainable long-term growth, in line with the Company's stated objective and strategy, and meet the highest standards of legal, regulatory, and commercial conduct, with the differences between stakeholders being merely a matter of emphasis on those elements.

The Board's methods for assessing the Company's progress in the context of its stakeholders' interests are set out below.

Stakeholder	Why we engage	How we engage and what we do
Shareholder	Shareholders are, collectively, the Company's owners: providing them with a return for their investment in accordance with the Company's investment policy and objective is the reason for its existence.	The Board places great importance on communication with shareholders. The Annual General Meeting provides an opportunity for the Board and Managers to present to shareholders on the Company's performance, future plans and prospects. It also allows shareholders the opportunity to meet with the Board and Managers and raise questions and concerns. The Chairman and Senior Independent Director ('SID') are available to meet with shareholders as appropriate. The Managers meet regularly with shareholders and their representatives, reporting their views back to the Board. Directors also attend certain shareholder presentations, in order to gauge shareholder sentiment first hand. Shareholders may also communicate with members of the Board at any time by writing to them at the Company's registered office or to the Company's broker. These communication opportunities help inform the Board when considering how best to promote the success of the Company for the benefit of all shareholders over the long term.
Baillie Gifford – Managers and Secretaries	The Company's Board has delegated the management of the Company's portfolio, and the administration of the Company's operations including fulfilment of regulatory and taxation reporting requirements, to Baillie Gifford. Baillie Gifford is therefore responsible for the substantial activities of the Company and has the most immediate influence on its conduct towards the other stakeholders, subject to the oversight and strategic direction provided by the Board.	The Board seeks to engage with its Managers and Secretaries, and other service providers, in a collaborative and collegiate manner, encouraging open and constructive discussion and debate, while also ensuring that appropriate and regular challenge is brought and evaluation conducted. This approach aims to enhance service levels and strengthen relationships with the Company's providers, with a view to ensuring the interests of the Company's shareholders are best served by keeping cost levels proportionate and competitive, and by maintaining the highest standards of business conduct.

Stakeholder	Why we engage	How we engage and what we do
Portfolio companies	As all of the Company's operations are conducted by third party professional providers, it is the companies held in its investment portfolio which have the primary real-world impact in terms of social and environmental change, both positively and negatively, as well as generating, through their commercial success, the investment growth sought by the Company's shareholders. The investee companies have an interest in understanding their shareholders' investment rationale in order to assure themselves that long-term business strategies will be supported.	The Board is cognisant of the need to consider the impact of the Company's investment strategy and policy on wider society and the environment. The Board considers that its oversight of environmental, social and governance ('ESG') matters is an important part of its responsibility to all stakeholders. The Board's review of the Managers includes an assessment of their ESG approach and its application in making investment decisions. The Board regularly reviews Governance Engagement reports, which document the Managers' interactions with investee companies on ESG matters (see pages 40 to 43).
Brokers	The Company's brokers provide an interface between the Company's Board and its institutional shareholders.	The Company's brokers regularly attend Board meetings, and provide reports to those meetings, in order to keep the Board apprised of shareholder and wider market sentiment regarding the Company. They also arrange forums for shareholders to meet the Chairman, or other Directors, outwith the normal general meeting cycle.
Registrars	The Company's registrars provide an interface with those shareholders who hold the Company's shares directly.	The Company Secretaries liaise with the registrars to ensure the frequency and accuracy of communications to shareholders is appropriate, and monitor shareholder correspondence to ensure that the level of service provided by the registrars is acceptable. The Manager's risk function reviews the registrars' internal controls report and reports on the outcome of this review to the Audit Committee.
Auditor	The Company's Auditor has a responsibility to provide an opinion on whether the Company's Financial Statements as a whole are free from material misstatement, as set out in more detail in the Auditor's Report to the members on page 77.	The Company's Auditor meets with the Audit Commitee, in the absence of the Managers where deemed necessary, and the Managers undertake to provide all information requested by the Auditor in connection with the Company's annual audit promptly and to ensure that it is complete and accurate in all respects.
Depositary and Custodian	The Depositary is responsible for the safekeeping of the Company's financial instruments, as set out in more detail on page 55.	The Depositary provides the Audit Committee with a report on its monitoring activities. The Board and Managers seek to engage with the Depositary and Custodian in a collaborative and collegiate manner, encouraging open and constructive discussion and debate, while also ensuring that appropriate and regular challenge is brought and evaluation conducted. This approach aims to enhance service levels and strengthen relationships with the Company's providers, with a view to ensuring the interests of the Company's shareholders are best served by keeping cost levels proportionate and competitive, and by maintaining the highest standards of business conduct.
Lenders	Lenders such as holders of debt instruments (debentures, bonds and private placement loan notes) and banks providing fixed or revolving credit facilities or overdrafts provide the Company's gearing and have an interest in the Company's ongoing financial health and viability.	The Company's legal advisers review all legal agreements in connection with the Company's debt arrangements and advise the Board on the appropriateness of the terms and covenants therein. The Managers and Secretaries ensure that the frequency and accuracy of reporting on, for example, covenant certification, is appropriate and that correspondence from the lenders receives a prompt response.

Stakeholder	Why we engage	How we engage and what we do
AIC/industry peers	The Association of Investment Companies (AIC) and the Company's investment trust industry peers have an interest in the Company's conduct and performance, as adverse market sentiment towards one investment trust can affect attitudes towards the wider industry.	The Company is a member of the AIC, and the Directors and/ or the Managers and Secretaries (as appropriate) participate in technical reviews, requests for feedback on proposed legislation or regulatory developments, corporate governance discussions and/or training.
Investment platforms	Investment platforms provide an interface with shareholders who invest in the Company indirectly.	The Managers liaise with the various investment platforms on strategies for improving communications with the Company's shareholders who hold their shares via these platforms. Up to-date information about the Company, including monthly commentary, recent portfolio information, performance figures and an annual timetable of key dates is published on the Company's website, for the ease of reference of such shareholders.
Wider society and the environment	No entity, corporate or otherwise, can exist without having an influence on the society in which it operates or utilising the planet's resources. Through its third-party relationships, as noted above, the Company seeks to be a positive influence and, in circumstances where that is not possible, to mitigate its negative impacts insofar as is possible.	The Board and Managers' interactions with the various stakeholders as noted above form the principal forms of direct engagement with wider society and in respect of the environment (commercial, financial, and in terms of planetary health and resources).

The Board recognises the importance of maintaining the interests of the Company and its stakeholders, in aggregate, firmly front of mind in its key decision making and Baillie Gifford & Co Limited, the Company Secretaries, are at all times available to the Board to ensure that suitable consideration is given to the range of factors to which the Directors should have regard. In addition to ensuring that the Company's stated investment objective was being pursued, key decisions and actions during the year which have required the Directors to have regard to applicable section 172 factors include:

• Undertaking a recruitment process and subsequently appointing Davina Curling as a Director with effect from 1 November 2024 (see page 61). This appointment is consistent with the AIC Corporate Governance Code principle that 'a successful company is led by an effective board, whose role is to promote the long-term sustainable success of the Company, generating value for shareholders and contributing to wider society';

• The Board's decision to declare a final dividend of 0.40p per ordinary share for the year end 30 September 2023, the minimum required for the Company to maintain its investment trust status;
• The buy back of 6,365,921 shares at a discount enhancing the NAV for continuing shareholders;
• The Board undertook a review of the performance of the Company at the annual strategy session in September 2024 as described on page 8;
• The Chairman and David Barron (Chairman-elect) met with major shareholders during the year; and
• The Board's proposal to commit to a 100% performance triggered tender offer which would be triggered if the Company's NAV total return per share, measuring debt at fair value, underperformed the return of the FTSE Europe ex UK Index (in sterling terms) over the four years to 30 September 2028.

Employees, human rights and community issues

The Board recognises the requirement to provide information about employees, human rights and community issues. As the Company has no employees, all its Directors are non-executive and all its functions are outsourced, there are no disclosures to be made in respect of employees, human rights and community issues.

Gender representation

At 30 September 2024, the Board comprises four Directors, three male and one female. The Company has no employees. The Board's policy on diversity is set out on pages 62 and 63.

Environmental, social and governance policy

Details of the Company's policy on socially responsible investment can be found under Corporate governance and stewardship on page 66.

The Company considers that it does not fall within the scope of the Modern Slavery Act 2015 and it is not, therefore, obliged to make a slavery and human trafficking statement. In any event, the Company considers its supply chains to be of low risk as its suppliers are typically professional advisers. A statement by the Managers under the Act has been published on the Managers' website at bailliegifford.com.

The Strategic report, which includes pages 7 to 49 was approved by the Board of Directors and signed on its behalf on 25 November 2024.

Michael MacPhee Chairman

Baillie Gifford statement on stewardship

Baillie Gifford's overarching ethos is that we are 'Actual' investors. That means we seek to invest for the long term. Our role as an engaged owner is core to our mission to be effective stewards for our clients. As an active manager, we invest in companies at different stages of their evolution across many industries and geographies, and focus on their unique circumstances and opportunities. Our approach favours a small number of simple principles rather than overly prescriptive policies. This helps shape our interactions with holdings and ensures our investment teams have the freedom and retain the responsibility to act in clients' best interests.

Where possible we consider all asset classes within the framework of our stewardship activities. We seek to apply the most appropriate ownership tools to each holding in delivering our objectives.

Long-term value creation

We believe that companies that are run for the long-term are more likely to be better investments over our clients' time horizons. We encourage our holdings to be ambitious, focusing on long-term value creation and capital deployment for growth. We know events will not always run according to plan. In these instances we expect management to act deliberately and to provide appropriate transparency. We think helping management to resist short-term demands from shareholders often protects returns. We regard it as our responsibility to encourage holdings away from destructive financial engineering towards activities that create genuine value over the long-run. Our value will often be in supporting management when others don't.

Alignment in vision and practice

Alignment is at the heart of our stewardship approach. We seek the fair and equitable treatment of all shareholders alongside the interests of

management. While assessing alignment with management often comes down to intangible factors and an understanding built over time, we look for clear evidence of alignment in everything from capital allocation decisions in moments of stress to the details of executive remuneration plans and committed share ownership. We expect companies to deepen alignment with us, rather than weaken it, where the opportunity presents itself.

Governance fit for purpose

Corporate governance is a combination of structures and behaviours; a careful balance between systems, processes and people. Good governance is the essential foundation for long-term company success. We firmly believe that there is no single governance model that delivers the best long-term outcomes. We therefore strive to push back against one-dimensional global governance principles in favour of a deep understanding of each company we invest in. We look, very simply, for structures, people and processes which we think can maximise the likelihood of long-term success. We expect to trust the boards and management teams of the companies we select, but demand accountability if that trust is broken.

Sustainable business practices

A company's ability to grow and generate value for our clients relies on a network of interdependencies between the company and the economy, society and environment in which it operates. We expect holdings to consider how their actions impact and rely on these relationships. We believe long-term success depends on maintaining a social licence to operate and look for holdings to work within the spirit and not just the letter of the laws and regulations that govern them. Material factors should be addressed at the board level as appropriate.

Environmental, social and governance engagement

Corporate governance and stewardship

The Company has given discretionary voting powers to Baillie Gifford & Co. The Managers vote against resolutions they consider may damage shareholders' rights or economic interests and report their actions to the Board.

The Company believes that it is in the shareholders' interests to consider environmental, social and governance ('ESG') factors when selecting and retaining investments and has asked the Managers to take these issues into account as long as the investment objectives are not compromised. The Managers do not exclude companies from their investment universe purely on the grounds of ESG factors but adopt a positive engagement approach whereby matters are discussed with

management with the aim of improving the relevant policies and management systems and enabling the Managers to consider how ESG factors could impact long-term investment returns. The Managers' statement of compliance with the UK Stewardship Code can be found on the Managers' website: bailliegifford.com. The Managers' policy has been reviewed and endorsed by the Board.

By engaging with companies, the Managers seek to build constructive relationships with them, to better inform our investment activities and, where necessary, effect change within our holdings, ultimately with the goal of achieving better returns for our shareholders. The table on the following page shows the engagements in the year to 30 September 2024.

	Governance
Environmental	Social

The examples on the following pages demonstrate our stewardship approach through constructive, ongoing engagement.

Adyen

Objective

During the year we held two meetings with Adyen's sustainability team and chief financial officer. One focused on our ongoing climate engagement, specifically on Adyen's emissions reduction targets and downstream emissions progress. In the second meeting, we provided input into Adyen's materiality exercise to identify the most significant ESG issues for the business.

Discussion

Regarding climate, we encouraged Adyen to take a bottom-up approach to target setting. It is taking a thoughtful approach, and we hope to see targets soon. Disappointingly, it has rolled back its work on engaging customers on emissions after seeing little demand for its offset at the point of payment trial. We suspect this has also been influenced by the criticism it received for previously offering low-quality offsets through the consultant Southpole.

This was the second year we provided an investor perspective on Adyen's ESG materiality exercise. We were encouraged to see the company respond to the feedback we offered last year. The backdrop to this request is the EU's latest sustainability disclosure regulation, the Corporate Sustainability Reporting Directive ('CSRD'), which requires companies to assess and prioritise ESG issues for reporting purposes against the two dimensions of impact (defined as 'how the company affects people and the environment') and financial materiality (described as 'effects that flow through to the company's bottom line'). CSRD introduces complex and onerous reporting requirements, so we were eager to understand how internal processes have adapted in response.

Outcome

Our climate engagement improved our knowledge of Adyen's emissions reduction approach, and we provided the company with guidance on what we think is best practice. We welcome the opportunity to continue supplying Adyen with our input in their CSRD materiality exercise.

Wizz Air

Objective

We engaged with Wizz Air on three material ESG issues: its decarbonisation pathway, safety and employee oversight, and customer service policy reform. We discussed these areas with the Senior Independent Director Barry Eccleston, who is a veteran of the aeronautical industry, as well as executives from across the business.

Discussion

To reach its emissions intensity reduction targets, Wizz Air is focusing much of its efforts on fleet renewal. It already has one of the youngest fleets in the industry, which means it is one of the most efficient operators against the industrystandard metric of carbon dioxide per revenue passenger kilometre. In order to decouple absolute emissions growth from industry growth, however, a paradigm shift in plane design is needed, and the incumbent plane manufacturers do not yet have a solution. The reason why Wizz Air has not made its own explicit Sustainable Aviation Fuel ('SAF') commitment, unlike Ryanair, is because of the lack of visibility in supply. A lot of work is going on in silos, and more collaboration is needed across the value chain to scale SAF. To secure future supply, Wizz Air has made direct equity investments in SAF manufacturing plants, largely in preparation for EU blending mandates. We also learned that Wizz Air had established a safety, security & an operational compliance board committee due to external factors and that this had not been in response to specific internal issues. It is investing heavily in its customer service systems to address earlier shortcomings, and the measures it is taking seem comprehensive.

Outcome

This discussion reinforced the difficulties that the aviation industry faces to decarbonise. It also highlighted the dependencies of the airlines on the innovation pathways of plane manufacturers and on the scaling of the supply of SAF. We were reassured by the level of board oversight on safety and the progress Wizz Air was able to demonstrate in its claims management processes. We will continue to monitor and engage on Wizz Air's progress in these material areas.

DSV

Objective

DSV is a global freight forwarder that provides optimised transport and logistics services for its customers. We engaged with the company's Executive Vice President ('EVP') of Sustainability and Compliance, Martin Andreasen, and EVP of Investor Relations, Flemming Ole Nielsen. The primary purpose was to understand how DSV intends to manage the risks associated with its joint venture ('JV') where it will offer construction logistics for the NEOM mega-city project in Saudi Arabia. Due to the high proportion of migrant labour and the poor human rights record in the region, there is an increased risk of modern slavery associated with its involvement in the project. We also used the opportunity to cover updates related to DSV's climate ambition, CEO succession and the decarbonisation of shipping.

Discussion

DSV acknowledged shortcomings in its messaging around the NEOM JV announcement. On reflection, they would have disclosed more about the relevant risk management mechanisms already in place, and those which will be applied as part of the JV. These include internal and external auditing procedures, a deeply embedded risk-reporting culture, and reporting lines that lead up to the board. From a transparency perspective, it will comply with disclosure requirements on human rights due diligence as part of the EU's forthcoming Corporate Sustainability Reporting Directive ('CSRD'). On the topic of climate, a near-term decarbonisation roadmap will be included in DSV's forthcoming ESG report, which is due for publication in early 2024. An internal carbon price is now applied to DSV's subsidiaries, based on their level of operational emissions, with proceeds used to fund low-carbon innovations. DSV believes that the inclusion of the shipping industry in the EU's Emissions Trading Scheme, thereby internalising the cost of carbon for the sector, will be the main catalyst in the shift to low-carbon fuels.

Outcome

We continue to think that DSV will face a high hurdle in demonstrating full commitment to upholding international human and labour rights because of its involvement in the NEOM JV. We intend to write a letter to the board outlining our expectations regarding the levels of transparency on related risk monitoring. We also agreed to have a followup discussion on DSV's decarbonisation pathway following the publication of its ESG report.

Baillie Gifford – proxy voting

We believe that 'active ownership' of our clients' holdings is as important as selecting the right investments in the first instance. These guidelines are aligned with our stewardship principles and describe our approach to proxy voting and company engagement, the key levers of active ownership, often described as 'stewardship'.

While these guidelines are intended to provide an insight into how we approach voting on our clients' behalf, it is important to note that we assess every company individually. In voting, we will always evaluate proposals on a case-by-case basis, based on what we believe to be in the best long-term interests of our clients, rather than rigidly applying a policy.

A broad cross-section of our investment staff are involved in our ongoing work on stewardship. In the same way that our investment approach is based around empowered and independent teams, our voting and engagement is led by the individual investment teams. In keeping with our decentralised and autonomous culture, our investment teams will, on occasion, elect to vote differently on the same general meeting resolutions. Where this happens, we report accordingly in the proxy voting disclosure on our website. We also have clear processes in place to identify, prevent and manage potential proxy voting related conflicts of interest to ensure that in all cases the firm acts in the clients' best interest. Baillie Gifford's firm-wide conflict of interest disclosure is available on its website.

Prior to taking any voting action, we usually address specific ESG concerns by engaging directly with the company, using voting as an escalation mechanism if we have not seen sufficient progress.

Company meeting record

Voting distribution

Baillie Gifford – valuing private companies

We aim to hold our private company investments at 'fair value' ie the price that would be paid in an open-market transaction. Valuations are adjusted both during regular valuation cycles and on an ad hoc basis in response to 'trigger events'. Our valuation process ensures that private companies are valued in both a fair and timely manner.

The valuation process is overseen by a valuations committee at Baillie Gifford which takes advice from an independent third party (S&P Global). The portfolio managers feed into the process, but the valuations committee owns the process and the portfolio managers only receive final valuation notifications once they have been applied.

We revalue the private holdings on a three-month rolling cycle, with one-third of the holdings reassessed each month. For investment trusts, the prices are also reviewed twice per year by the respective investment trust boards and are subject to the scrutiny of external auditors in the annual audit process.

Recent market volatility has meant that recent pricing has moved much more frequently than would have been the case with the quarterly valuations cycle. Beyond the regular cycle, the valuations team also monitors the portfolio for certain 'trigger events'. These may include: changes in fundamentals; a takeover approach; an intention to carry out an IPO; or changes to the valuation of comparable public companies. The valuations team also monitors relevant market indices on a weekly basis and updates valuations in a manner consistent with our external valuer's (S&P Global) most recent valuation report where appropriate. When market volatility is particularly pronounced the team do these checks daily. Any ad hoc change to the fair valuation of any holding is implemented swiftly and reflected in the next published net asset value. There is no delay.

List of investments

As at 30 September 2024

			2024 Value	2024 % of total
Name	Geography	Business	£'000	assets
Prosus	Netherlands	Portfolio of online consumer companies	23,328	5.6
Topicus.com	Netherlands	Acquirer of vertical market software companies	21,090	5.1
DSV	Denmark	Freight forwarder	19,414	4.7
Schibsted	Norway	Media and classifieds advertising platforms	17,971	4.3
Ryanair	Ireland	Low-cost airline	16,662	4.0
ASML	Netherlands	Semiconductor equipment manufacturer	15,666	3.8
Hypoport	Germany	FinTech platform	15,625	3.7
Adyen	Netherlands	Online payments platform	15,294	3.7
Atlas Copco	Sweden	Industrial group	13,923	3.3
Allegro.eu	Poland	Ecommerce platform	13,478	3.2
Nexans	France	Cable manufacturing company	13,111	3.1
Kingspan	Ireland	Building materials provider	12,932	3.1
IMCD	Netherlands	Speciality chemicals distributor	12,080	2.9
Reply	Italy	IT consulting and systems integration provider	12,019	2.9
EXOR	Netherlands	Investment company specialising in industrials	11,834	2.8
Spotify	Sweden	Online audio streaming service	10,445	2.5
Bending Spoons	Italy	Mobile application software developer	9,862	2.4
EQT	Sweden	Investment firm, investing in equity, ventures, infrastructure and real estate	9,748	2.3
Lonza*	Switzerland	Contract development and manufacturing organisation	9,656	2.3
Novo Nordisk*	Denmark	Pharmaceutical company	8,553	2.0
Moncler	Italy	Manufactures luxury apparel products	8,179	2.0
Soitec	France	Manufactures engineered substrates for semiconductor wafers	8,156	2.0
Dassault Systèmes	France	Develops software for 3D computer-aided design	7,879	1.9
sennder  †	Germany	Freight forwarder focused on road logistics	7,603	1.8
Richemont	Switzerland	Owner of luxury goods companies	7,306	1.8
Assa Abloy*	Sweden	Developer, designer and manufacturer in access solutions market	7,256	1.7
Sartorius Stedim Biotech	France	Pharmaceutical and laboratory equipment provider	6,876	1.7
Instalco*	Sweden	Serial acquirer of technical installation businesses	6,561	1.6
Royal Unibrew	Denmark	Alcoholic and non-alcoholic beverages	5,562	1.3
Epiroc	Sweden	Mining and infrastructure equipment provider	5,253	1.3

Name	Geography	Business	2024 Value £'000	2024 % of total assets
Camurus*	Sweden	Develops and commercialises therapeutic medications	5,154	1.2
Vitec Software*	Sweden	Serial acquirer of vertical market software businesses	4,861	1.2
Beijer Ref	Sweden	Wholesaler of cooling technology	4,381	1.1
LVMH	France	Luxury goods	4,264	1.0
Tonies	Germany	Musical storybox toys for children	4,218	1.0
Flix	Germany	Long-distance bus and train provider	4,213	1.0
Kinnevik	Sweden	Investment company specialising in digital consumer businesses	4,044	1.0
Dino Polska*	Poland	Grocery store chain	3,876	0.9
Wizz Air	Hungary	Low-cost airline	3,459	0.8
Genmab*	Denmark	Antibody based drug development	3,458	0.8
Avanza Bank	Sweden	Online investment platform	3,383	0.8
Mettler-Toledo	Switzerland	Manufacturer of precision instruments for laboratories	3,303	0.8
Eurofins	France	Analytical testing services	2,916	0.7
VNV Global	Sweden	Investment company specialising in early-stage technologies	2,734	0.7
CRISPR Therapeutics	Switzerland	Developer of treatments based on gene editing technology	2,544	0.6
AutoStore	Norway	Warehouse automation and cubic storage systems	2,048	0.5
Northvolt	Sweden	Battery developer and manufacturer	965	0.3
McMakler	Germany	Digital real estate broker	832	0.2
Total Investments			413,975	99.4
Net liquid assets			2,300	0.6
Total assets			416,275	100.0
Borrowings			(49,844)	(12.0)
Shareholders' funds			366,431	88.0

Details of the ten largest investments are given on pages 16 to 19 along with comparative valuations.

Denotes unlisted investment (private company).

* New holdings bought during the year (Adevinta, adidas, AUTO1, Cellectis, Delivery Hero, Evotec, HelloFresh, Hemnet, Hexpol, Kering and Zalando were sold during the period).

† Includes convertible loan note.

Distribution of total assets*

Sector 2024

	Sector	2024 %	2023 %
1	Industrials	30.1	25.4
2	Information Technology	26.2	24.1
3	Financials	13.5	10.4
4	Consumer Discretionary	11.9	24.4
5	Health Care	10.1	6.8
6	Technology	4.4	2.1
7	Consumer Staples	2.2	0.8
8	Consumer Services	0.8	1.2
9	Net liquid assets	0.6	0.4
10	Real Estate	0.2	2.9
11	Materials	0.0	1.5

Geographical 2024

	Geographical	2024 %	2023 %
1	Netherlands	23.9	19.8
2	Sweden	19.0	20.9
3	France	10.4	12
4	Denmark	8.8	4.1
5	Germany	7.7	14.9
6	Italy	7.3	3.8
7	Ireland	7.1	7.4
8	Switzerland	5.5	5.2
9	Norway	4.8	7.1
10	Poland	4.1	3.2
11	Hungary	0.8	1.2
12	Net liquid assets	0.6	0.4

* Total assets represents total net assets before deduction of borrowings.

Governance report

This governance report, which includes pages 51 to 75, outlines the Board's approach to the governance of your Company. We believe that good governance builds better outcomes and we are committed to high standards of corporate governance and transparency.

Directors and management

Directors

Michael MacPhee Chairman Appointed 2016

Michael MacPhee was called to the English Bar in 1987, and joined Baillie Gifford & Co in 1989 and became a partner in 1998. He headed the firm's European department from 2003 to 2008 and thereafter co-managed a global investment strategy. From 1998 until his retirement from the firm in 2014 he was the manager of Mid Wynd International Investment Trust PLC. He is a director of Carbon Recycled Energy Limited. He was appointed a Director of the Company in 2016 and Chairman in 2017.

David Barron Director Appointed 2023

David Barron has spent 25 years working in the investment management sector and until November 2019 was chief executive officer of Miton Group PLC following six years with the firm. Prior to this he was head of investment trusts at JP Morgan Asset Management for more than ten years having joined Robert Fleming in 1995. He is currently chairman of Dunedin Income Growth Investment Trust PLC, chairman of the audit committee of Fidelity Japan Trust PLC and of BlackRock American Income Trust plc. He was also a non-executive director of Premier Miton Group PLC until 7 July 2023. He was appointed a Director of the Company on 1 October 2023.

Emma Davies Director Appointed 2021

Andrew Watkins Audit Committee Chair Appointed 2019

Emma Davies (Senior Independent Director) is an experienced investment professional who has spent her career investing across global equity markets, as well as in the property and private equity markets in the UK. She has a sophisticated understanding of ESG considerations, particularly with regard to social and governance concerns. She is currently the chief investment officer at Guy's & St Thomas' Foundation and is also a non-executive director and chair of the audit and risk committee of Riverstone Credit Opportunities Income Plc. She was appointed a Director of the Company in 2021.

Andrew Watkins was head of client relations, sales

and marketing for Invesco Perpetual's listed investment funds business until his retirement in June 2017. He is currently chairman of Ashoka India Equity Investment Trust plc and CT UK High Income Trust plc, a director of Chelverton UK Dividend Trust plc and Consistent Unit Trust Management Company Limited. He was appointed a Director of the Company in 2019 and Chairman of the Audit Committee in 2024.

Davina Curling Director Appointed 2024

Davina Curling has over 30 years of fund management experience. She was managing director and head of Pan European equities at Russell Investments. Prior to that she was head of European equities at F&C, ISIS and Royal & SunAlliance. Davina has also held positions at Nikko Capital Management (UK) and Kleinwort Benson and was previously senior independent director of BlackRock Greater Europe Investment Trust plc, retiring at the end of her tenure in 2023. Davina is currently the senior independent director of abrdn Asia Focus plc. She is a non-executive director of Henderson Opportunities Trust plc and an independent member of the Investment Committee of St. James's Place. She was appointed a Director of the Company on 1 November 2024.

All of the Directors are members of the Audit Committee.

Managers and secretaries

The Company has appointed Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford & Co, as its Alternative Investment Fund Managers ('AIFM') and Company Secretary. Baillie Gifford & Co Limited has delegated investment management services to Baillie Gifford & Co. Baillie Gifford & Co is an investment management firm formed in 1927 out of the legal firm Baillie Gifford, WS, which had been involved in investment management since 1908.

Baillie Gifford is one of the largest investment trust managers in the UK and currently manages twelve investment trusts. Baillie Gifford also manages unit trusts and open ended investment companies, together with investment portfolios on behalf of pension funds, charities and other institutional clients, both in the UK and overseas. Funds under the management or advice of Baillie Gifford totalled around £224 billion as at 21 November 2024. Based in Edinburgh, it is one of the leading privately owned investment management firms in the UK, with 58 partners and a staff of around 1,670.

The Managers of Baillie Gifford European Growth Trust are Stephen Paice and Chris Davies. Stephen is Head of the European Equity Team and became a partner of Baillie Gifford & Co on 1 April 2024. Chris is an Investment Manager in the European Equity Team.

Baillie Gifford & Co and Baillie Gifford & Co Limited are both authorised and regulated by the Financial Conduct Authority.

Directors' report

The Directors present their Report together with the audited Financial Statements of the Company for the year to 30 September 2024.

Corporate governance

The Corporate governance report is set out on pages 60 to 66 and forms part of this Report.

Managers and Company Secretaries

Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford & Co, was appointed as the Company's Alternative Investment Fund Manager ('AIFM') and Company Secretaries on 29 November 2019. Baillie Gifford & Co Limited has delegated portfolio management services to Baillie Gifford & Co. Dealing activity and transaction reporting has been further sub-delegated to Baillie Gifford Overseas Limited and Baillie Gifford Asia (Hong Kong) Limited.

The Investment Management Agreement between the AIFM and the Company sets out the matters over which the Managers have authority in accordance with the policies and directions of, and subject to restrictions imposed by, the Board. The Investment Management Agreement is terminable on not less than three months' notice or on shorter notice in certain circumstances. Compensation would only be payable if termination occurred prior to the expiry of the notice period. The annual management fee is 0.55% of the lower of (i) the Company's market capitalisation and (ii) the Company's net asset value (which shall include income), in either case up to £500 million, and 0.50% of the amount of the lower of the Company's market capitalisation or net asset value above £500 million, calculated and payable quarterly.

Careful consideration has been given by the Board as to the basis on which the management fee is charged. The Board considers that maintaining a relatively low ongoing charges ratio is in the best interests of the shareholders. The Board is also of the view that calculating the fee with reference to performance would be unlikely to exert a positive influence over the long-term performance.

The Board considers the Company's investment management and secretarial arrangements on an ongoing basis and a formal review is conducted annually. The Board considered, amongst others, the following topics in its review: the quality of the personnel assigned to handle the Company's affairs; the investment process and the results achieved to date; investment performance; the administrative services provided by the Secretaries and the quality of information provided; the marketing efforts undertaken by the Managers; the relationship with the Managers; and comparative peer group charges and fees.

Following the most recent review, the Board concluded that the continuing appointment of Baillie Gifford & Co Limited as AIFM and the delegation of investment management services to Baillie Gifford & Co, on the terms agreed, is in the interests of shareholders as a whole.

Depositary

In accordance with the Alternative Investment Fund Managers Regulations, Northern Trust Investor Services has been appointed as Depositary to the Company.

The Depositary's responsibilities include cash monitoring, safe keeping of the Company's financial instruments, verifying ownership and maintaining a record of other assets and monitoring the Company's compliance with investment limits and leverage requirements. Custody services are provided by The Northern Trust Company (as a delegate of the Depositary) ('the Custodian').

Directors

Information about the Directors, including their relevant experience, can be found on pages 51 and 52.

With the exceptions of Mr MacPhee, who is standing down, and Ms Curling, who is seeking election for the first time, all Directors will retire at the Annual General Meeting and offer themselves for reelection. Following a formal performance evaluation, the Chairman confirms that the Board considers that their performance continues to be effective and each remains committed to the Company. Their contribution to the Board is greatly valued and the Board recommends their re-election to shareholders.

Director indemnification and insurance

The Company has entered into qualifying third party deeds of indemnity in favour of each of its Directors. The deeds, which were in force during the year to 30 September 2024 and up to the date of approval of this report, cover any liabilities that may arise to a third party, other than the Company, for negligence, default or breach of trust or duty. The Directors are not indemnified in respect of liabilities to the Company, any regulatory or criminal fines, any costs incurred in connection with criminal proceedings in which the Director is convicted or civil proceedings brought by the Company in which judgement is given against her or him. In addition, the indemnity does not apply to any liability to the extent that it is recovered from another person.

The Company maintains Directors' and Officers' liability insurance.

Conflicts of interest

Each Director submits a list of potential conflicts of interest to the Board for consideration and approval at each meeting. The Board considers these carefully, taking into account the circumstances surrounding them prior to authorisation. Having considered the lists of potential conflicts there were no situations which gave rise to a direct or indirect interest of a Director which conflicted with the interests of the Company.

Dividends

The Board recommends a final dividend of 0.6p per ordinary share (2023 – 0.40p). During the prior financial year a special interim dividend of 2.20p was paid on 15 September 2023. Dividends will only be paid to the extent needed to maintain the Company's investment trust status.

If approved by shareholders at the Annual General Meeting, the recommended final dividend per ordinary share will be paid on 14 February 2025 to shareholders on the register at the close of business on 10 January 2025. The ex-dividend date is 9 January 2025. The Company's Registrar offers a Dividend Reinvestment Plan (see page 112) and the final date for elections for this dividend is 24 January 2025.

Share capital

Capital structure

The Company's capital structure at 30 September 2024 consists of 402,443,690 ordinary shares of 2.5p each (2023 – 402,443,690) of which 351,783,279 (2023 – 358,149,200) are allotted and fully paid and 50,660,411 (2023 – 44,294,490) are held in treasury.

There are no restrictions concerning the holding or transfer of the Company's ordinary shares and there are no special rights attached to any of the shares.

Dividends

The ordinary shares carry a right to receive dividends. Interim dividends are determined by the Directors, whereas the proposed final dividend is subject to shareholder approval.

Capital entitlement

On a winding up, after meeting the liabilities of the Company, the surplus assets will be paid to ordinary shareholders in proportion to their shareholdings.

Voting

Each ordinary shareholder present in person or by proxy is entitled to one vote on a show of hands and, on a poll, to one vote for every share held.

Information on the deadlines for proxy appointments can be found on pages 108 to 110.

Major interests disclosed in the Company's shares

The Company has received notifications in accordance with the Financial Conduct Authority's Disclosure and Transparency Rule 5.1.2R of the following interests in 3% or more of the voting rights attached to the Company's issued share capital.

Name	Number of ordinary 2.5p shares held at 30 September 2024	% of issue *
Allspring Global Investments Holdings	53,330,303	15.2
1607 Capital Partners LLC	43,170,090	12.3
City of London Investment Management Company Ltd	38,800,977	11.0
Investec Wealth & Investment Ltd	18,433,790	5.2
Charles Stanley	17,973,280	5.1

* Ordinary shares in issue excluding treasury shares.

During the period from 30 September 2024 to 21 November 2024, the Company was notified that Allspring Global Investments Holdings held 52,645,771 (15.0% of the shares in issue as at 21 November 2024). Holdings are as per the most recent notification to a Regulatory Information Service. There have been no other changes to the major interests in the Company's shares intimated up to 21 November 2024.

Analysis of Shareholders at 30 September

	2024 Number of shares held	2024 %	2023 Number of shares held	2023 %
Institutions	161,776,710	46.0	133,291,147	37.2
Intermediaries/ Retail Savings Platforms	156,559,705	44.5	194,983,462	54.4
Individuals	22,109,766	6.3	24,632,840	6.9
Marketmakers	11,337,098	3.2	5,241,751	1.5
	351,783,279	100	358,149,200	100.0

Annual General Meeting

The details of this year's AGM, including the proposed resolutions and information on the deadlines for proxy appointments, can be found on pages 108 to 110. Shareholders who hold shares in their own name on the main register will be provided with a Form of Proxy. If you hold shares through a share platform or other nominee, the Board would encourage you to contact these organisations directly as soon as possible to arrange for you to vote at the AGM. The resolutions relating to the renewal of the Directors' authorities to issue and buy back shares are explained in more detail below.

Authority to hold general meetings at shorter notice

Resolution 13, which is proposed as a special resolution, seeks authority for the Directors to convene general meetings of the Company, other than Annual General Meetings ('AGMs'), on a minimum of 14 clear days' notice. The notice period for AGMs will remain at 21 clear days. The approval will be effective until the Company's next AGM, at which it is intended that renewal will be sought. The Directors will only call general meetings on 14 clear days' notice where they consider it in the best interests of shareholders to do so and the relevant matter requires to be dealt with expediently.

Share issuance authority

Resolution 10 in the Notice of Annual General Meeting seeks to renew the Directors' general authority to issue shares up to an aggregate nominal amount of £2,915,688. This amount represents onethird of the Company's total ordinary share capital currently in issue and meets institutional guidelines. No issue of ordinary shares will be made pursuant to the authorisation of Resolution 10 which would effectively alter the control of the Company without the prior approval of shareholders in general meeting.

Resolution 11, which is proposed as a special resolution, seeks authority for the Directors to issue shares or sell shares held in treasury on a non pre-emptive basis for cash up to an aggregate nominal amount of £874,706 (representing 10% of the issued ordinary share capital of the Company as at 21 November 2024). This authority will continue until the conclusion of the Annual General Meeting to be held in 2026 or on the expiry of 15 months from the passing of the resolution, if earlier.

Such authorities will only be used to issue shares or sell shares from treasury at a premium to NAV and only when the Directors believe that it would be in the best interests of the Company to do so.

During the year to 30 September 2024, no shares (2023 – no shares) were issued from treasury.

Market purchases of own shares

At the last Annual General Meeting the Company was granted authority to purchase up to 52,447,399 ordinary shares (equivalent to 14.99% of its issued share capital), such authority to expire at the 2025 Annual General Meeting. The Directors are seeking shareholders' approval at the Annual General Meeting to renew the authority to make market purchases of up to 14.99% of the Company's ordinary shares in issue (excluding treasury shares) at the date of passing of the resolution, such authority to expire at the Annual General Meeting of the Company to be held in 2026. Such purchases will only be made at a discount to the prevailing NAV. During the year to 30 September 2024, 6,365,921 shares (representing 1.78% of issued share capital at 30 September 2023) at a discount to net asset value at a cost of £6,001,000 (2023 – 538,471 shares) were bought back under the buy-back authority. Between 1 October and 21 November 2024, 1,900,694 shares were bought back. 52,561,105 shares were held in treasury as at 21 November 2024 (representing 13% of the share capital).

The Company may hold bought-back shares in treasury and then:

• (i) sell such shares (or any of them) for cash (or its equivalent under the Companies Act 2006); or
• (ii) cancel the shares (or any of them).

Shares will only be resold from treasury at a premium to NAV.

Treasury shares do not receive distributions and the Company will not be entitled to exercise the voting rights attaching to them.

In accordance with the Listing Rules, the maximum price (excluding expenses) that may be paid on the exercise of the authority must not exceed the higher of:

• (i) 5 per cent. above the average closing price on the London Stock Exchange of an ordinary share over the five business days immediately preceding the date of purchase; and
• (ii) the higher of the price of the last independent trade and the highest current independent bid on the London Stock Exchange.

The minimum price (exclusive of expenses) that may be paid will be the nominal value of an ordinary share. Purchases of ordinary shares will be made within guidelines established, from time to time, by the Board. Your attention is drawn to Resolution 12 in the Notice of Annual General Meeting. This authority, if conferred, will only be exercised if to do so would result in an increase in NAV for the remaining shareholders and if it is considered in the best interests of shareholders generally.

Recommendation

The Directors unanimously recommend you vote in favour of the resolutions to be proposed at the Annual General Meeting as it is their view that the resolutions are in the best interests of shareholders as a whole.

Financial instruments

The Company's financial instruments comprise its investment portfolio, cash balances, borrowings and debtors and creditors that arise directly from its operations such as sales and purchases awaiting settlement and accrued income. The financial risk management objectives and policies arising from its financial instruments and the exposure of the Company to risk are disclosed in note 19 to the Financial Statements.

Future developments of the Company

The outlook for the Company is set out in the Chairman's statement on pages 7 to 9 and in the Managers report on pages 10 to 14.

Articles of Association

The Company's Articles of Association may only be amended by special resolution at a general meeting of shareholders.

Disclosure of information to Auditor

The Directors confirm that, so far as each of the Directors is aware, there is no relevant audit information of which the Company's Auditor is unaware and the Directors have taken all the steps that they might reasonably be expected to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the Company's Auditor is aware of that information.

Independent Auditor

The Auditor, BDO LLP, is willing to continue in office, and in accordance with section 489 and section 491(1) of the Companies Act 2006, resolutions concerning BDO LLP's reappointment and remuneration will be submitted to the Annual General Meeting.

Post Balance Sheet events

The Directors confirm, up to 25 November 2024, that there have been no significant post Balance Sheet events which require adjustment to the Financial Statements, note 20 details the write-down of the value of the holdings in Northvolt post year end.

Stakeholder engagement

Although the Company has no employees, trade suppliers or customers, the Directors give regular consideration to the need to foster the Company's business relationships with its stakeholders, in particular with shareholders, its externally appointed Managers, other professional service providers and lenders. The effect of this consideration upon the key decisions taken by the Company during the financial year is set out in further detail in the Strategic report on pages 35 to 37.

Greenhouse gas emissions and Streamlined Energy & Carbon Reporting ('SECR')

All of the Company's activities are outsourced to third parties. The Company therefore has no greenhouse gas emissions to report from its operations, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013. For the same reasons as set out above, the Company considers itself to be a low energy user under the SECR regulations and has no energy and carbon information to disclose.

Bribery Act

The Company has a zero tolerance policy towards bribery and is committed to carrying out business fairly, honestly and openly. The Managers also adopt a zero tolerance approach and have policies and procedures in place to prevent bribery.

Criminal Finances Act 2017

The Company has a commitment to zero tolerance towards the criminal facilitation of tax evasion.

On behalf of the Board Michael MacPhee Chairman 25 November 2024

Corporate governance report

The Board is committed to achieving and demonstrating high standards of Corporate Governance. This statement outlines how the principles of the 2018 UK Corporate Governance Code (the 'UK Code') which can be found at frc.org.uk and the relevant principles of the Association of Investment Companies ('AIC') Code of Corporate Governance (the 'AIC Code') published in 2019 were applied throughout the financial year. The AIC Code provides a framework of best practice for investment companies and can be found at theaic. co.uk. The Board is also mindful of the updated UK Corporate Governance Code 2024, the majority of its provisions will apply to the financial year ending 30 September 2026.

Compliance

The FRC has confirmed that AIC member companies who report against the AIC Code will be meeting their obligations in relation to the UK Code. The Board confirms that the Company has complied throughout the year under review with the relevant provisions of the UK Code and the recommendations of the AIC Code except as follows:

• a Nomination Committee has not been established. As the Board is comprised entirely of non-executive Directors and is small in size, a Nomination Committee is considered unnecessary.
• the Company has no executive Directors and no employees and consequently does not have a Remuneration Committee. The Directors' Remuneration report on pages 70 to 73 provides information on the remuneration arrangements for the Directors of the Company. The Chairman is available to engage with shareholders on issues relating to Directors' remuneration where required.
• given the small size of the Board and the fact that all Directors are independent, the Company does not have a Management Engagement Committee. The Company's management functions are delegated to the AIFM, who has delegated the management of the Company's investment portfolio to the Investment Manager, Baillie Gifford & Co. The Board reviews at least annually the performance of the AIFM, the terms of its engagement and the continued appointment of the AIFM. The Board also reviews the performance of the Investment Manager.
• the Audit Committee comprises all Directors of the Company. The Chairman is a member of the Audit Committee as he was independent on appointment.

The Board

The Board has overall responsibility for the Company's affairs. It has a number of matters formally reserved for its approval including strategy, investment policy, gearing, share buy-back and issuance policy, treasury matters, dividend and corporate governance policy. The Board seeks to contribute to the delivery of the Company's strategy by engaging with the Managers in a collaborative and collegiate manner with open and respectful discussion and debate being encouraged, whilst also ensuring that appropriate and regular challenge is brought and evaluation is conducted. The Board also reviews the Financial Statements, investment transactions, revenue budgets and performance of the Company. Full and timely information is provided to the Board to enable it to function effectively and to allow Directors to discharge their responsibilities.

As at 30 September 2024 the Board comprised four Directors, all of whom are non-executive. The Chairman is responsible for organising the business of the Board, ensuring its effectiveness and setting its agenda. The executive responsibility for investment management has been delegated to the Company's Alternative Investment Fund Manager ('AIFM'), Baillie Gifford & Co Limited, and, in the context of a Board comprising only non-executive Directors, there is no chief executive officer. The Senior Independent Director is Emma Davies.

The Directors believe that the Board has a balance of skills and experience that enables it to provide effective strategic leadership and proper governance of the Company. Information about the Directors, including their relevant experience, can be found on pages 51 and 52.

There is an agreed procedure for Directors to seek independent professional advice, if necessary, at the Company's expense.

Appointments to the Board

In advance of Mr MacPhee's retiral at the 2025 Annual General Meeting, Trust Associates was engaged to help identify a potential new Director. The Board identified the skills and experience that would be required, having due regard for the benefits of diversity on the Board, and candidates were interviewed from a shortlist provided by Trust Associates. Trust Associates has no other connection with the Company or any of the Directors. Davina Curling was identified as the preferred candidate and was appointed to the Board on 1 November 2024. The Board believes her depth of experience and knowledge will be a great benefit to the Company.

The terms and conditions of Directors' appointments are set out in formal letters of appointment which are available for inspection on request.

Under the provisions of the Company's Articles of Association, Directors are subject to election by shareholders at the first AGM after their appointment. Thereafter, at each AGM any Director who has not stood for re-election at either of the two preceding AGMs is required to retire and offer themselves for re-election. In addition, one third of the Directors eligible to retire by rotation shall retire from office at each AGM. Beyond these requirements, it has been agreed that all Directors will seek annual re-election at the Company's AGMs.

Independence of Directors

All the Directors are considered by the Board to be independent of the Managers and free of any business or other relationship which could interfere with the exercise of their independent judgement.

The Directors recognise the importance of succession planning for company boards and review the Board's composition annually. The Board is of the view that length of service will not necessarily compromise the independence or contribution of directors of an investment trust company, where continuity and experience can be a benefit to the Board. The Board concurs with the view expressed in the AIC Code that long-serving Directors should not be prevented from being considered independent.

In accordance with the AIC Code of Corporate Governance, all Directors are subject to annual re-election. Following a formal performance evaluation, the Board concluded that its members continued to be independent in character and judgement and their skills and experience added significantly to the strength of the Board.

Meetings

There is an annual cycle of Board meetings which is designed to address, in a systematic way, overall strategy, review of investment policy, investment performance, marketing, revenue budgets, dividend policy and communication with shareholders. The Board considers that it meets sufficiently regularly to discharge its duties effectively. The table below shows the attendance record for the Board and Committee meetings held during the year. The Annual General Meeting was attended by all Directors serving at that date.

Directors' attendance at meetings

	Board	Audit Committee
Number of meetings	5	2
Michael MacPhee	5	2
David Barron	5	2
Emma Davies	4	1
Andrew Watkins	5	2
Michael Woodward*	2	1

* Retired on 18 January 2024.

Policy on Chairman's tenure

The Board's policy is that the Chairman will serve for no longer than nine years, other than in exceptional circumstances for the benefit of the Company.

Performance evaluation

An appraisal of the Chairman, each Director and a performance evaluation and review of the Board as a whole and the Audit Committee was carried out during the year. Each Director and the Chairman responded to an evaluation questionnaire. The Chairman's appraisal was led by Emma Davies, the Senior Independent Director. The appraisals and evaluations considered, amongst other criteria, the balance of skills of the Board, training and development requirements, the contribution of individual Directors and the overall effectiveness of the Board and the Audit Committee. Following this process it was concluded that there was a diverse range of skills within the Board, and the performance of each Director, the Chairman, the Board and the Audit Committee continues to be effective and that each Director and the Chairman remain committed to the Company.

A review of the Chairman's and the other Directors' commitments was carried out and the Board is satisfied that they are capable of devoting sufficient time to the Company. There were no significant changes to the Chairman's other commitments during the year.

Diversity

Appointments to the Board are made on merit with due regard for the benefits of diversity including gender, social and ethnic backgrounds, cognitive and personal strengths. The priority in appointing new Directors is to identify the candidate with the best range of skills and experience to complement existing Directors. Within the context of a small, entirely non-executive Board, a single appointment or retirement can have a significant impact on percentage representation, and a limited number of senior roles are available. The Board will endeavour to comply with the UK Listing Rules diversity targets more often than not but notes that an orderly succession plan can, when implemented thoughtfully and having regard to the best interests of the Company and its shareholders, take a significant period of time to develop and may result in periods when the diversity targets are not met.

Board composition

In order to fulfil its obligations, the Board recognises the importance of having a range of skilled and experienced Directors, balancing the benefits of length of service and knowledge of the Company with the desirability of ensuring regular refreshment of the Board. The Board reviews its composition annually.

The following disclosures are provided in respect of the UK Listing Rules targets that: i) 40% of a board should be women; ii) at least one senior role should be held by a woman; and iii) at least one board member should be from a non-white ethnic background, as defined by the Office of National Statistics criteria.

As an externally managed investment company with no chief executive officer or chief financial officer, the roles which qualify as senior under FCA guidance are Chair and Senior Independent Director ('SID'). The Board also considers Audit Committee Chair to represent a senior role within this context. The Board has resolved that the Company's year end date be the most appropriate date for disclosure purposes. Since 30 September, 2024 Davina Curling has been appointed to the Board.

As at 30 September 2024, the Board did not comply with the UK Listing Rule target with respect to ethnic background or the 40% target for women. The Board considers that its small size is the principal reason why the Listing Rule targets were not met. The Board supports, and is ambitious to meet, all the Listing Rule diversity targets and will continue to review its size and composition both as part of its refreshment cycle and more widely.

As explained in the Chairman's statement on page 9 Mr MacPhee will stand down from the Board at the AGM to be held in February 2025.

Gender	Number	%	Senior roles
Men	3	75	1*
Women	1	25	1
Prefer not to say	–	–	–

* The Board Chairman and SID being senior positions in accordance with the UK Listing Rules. The Board also considers the Audit Committee Chair to be a senior position. The Audit Committee Chair is a man.

Ethnic background	Number	%	Senior roles
White	4	100	2*
Prefer not to say	–	–	–

* The Board Chairman and SID, being senior positions in accordance with the UK Listing Rules. The Board also considers the Audit Committee Chair to be a senior position. The Audit Committee Chair's ethnic background is White.

All recruitment for new Board members will be external, through the use of an external recruitment agency. The recruitment agency will be engaged to undertake the selection of a list of suitable candidates for consideration and approval by the Board. The external recruitment agency will be asked to put forward candidates with the desired skillset and also with a diverse range of backgrounds, cultures and identities. The Board will take the Listing Rule diversity targets and any other best practice matters into account when determining the appropriateness of a candidate and final appointment.

Induction and training

New Directors are provided with an induction programme which is tailored to the particular circumstances of the appointee. Regular briefings were provided during the year on industry and regulatory matters. Directors receive other relevant training as necessary.

Audit Committee

The report of the Audit Committee is set out on pages 67 to 69.

Internal controls and risk management

The Directors acknowledge their responsibility for the Company's risk management and internal control systems and for reviewing their effectiveness, including with regard to preparation of the Company's Annual Report and Financial Statements. The systems are designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable but not absolute assurance against material misstatement or loss.

The Board confirms that there is an ongoing process for identifying, evaluating and managing the significant risks faced by the Company in accordance with the FRC guidance 'Guidance on Risk Management, Internal Control and Related Financial and Business Reporting'.

The practical measures in relation to the design, implementation and maintenance of control policies and procedures to safeguard the Company's assets and to manage its affairs properly, including the maintenance of effective operational and compliance controls have been delegated to the Managers and Secretaries.

The Board oversees the functions delegated to the Managers and Secretaries and the controls managed by the AIFM in accordance with the UK Alternative Investment Fund Managers Regulations (as detailed below). Baillie Gifford & Co's Internal Audit and Compliance Departments and the AIFM's permanent risk function provide the Audit Committee with regular reports on their monitoring programmes. The reporting procedures for these departments are defined and formalised within a service level agreement. Baillie Gifford & Co conducts an annual review of its system of internal controls which is documented within an internal controls report which complies with ISAE 3402 – Assurance Reports on Internal Controls of Service Organisations made available to Third Parties. This report is independently reviewed by Baillie Gifford & Co's Auditor and a copy is submitted to the Audit Committee.

A report identifying the material risks faced by the Company and the key controls employed to manage these risks is reviewed by the Audit Committee. These procedures ensure that consideration is given regularly to the nature and extent of risks facing the Company and that they are being actively monitored. Where changes in risk have been identified during the year they also provide a mechanism to assess whether further action is required to manage these risks.

The Directors confirm that they have reviewed the effectiveness of the Company's risk management and internal controls systems, which accord with the FRC 'Guidance on Risk Management, Internal Control and Related Financial and Business Reporting' and they have procedures in place to review their effectiveness on a regular basis. No significant weaknesses were identified in the year under review and up to the date of this Annual Report.

The Board confirms that these procedures have been in place throughout the Company's financial year and continue to be in place up to the date of approval of this Annual Report.

To comply with the Alternative Investment Fund Managers Regulations, Northern Trust Investor Services acts as the Company's Depositary and Baillie Gifford & Co Limited as its AIFM.

The Depositary's responsibilities include cash monitoring, safe keeping of the Company's financial instruments, verifying ownership and maintaining a record of other assets and monitoring the Company's compliance with investment limits and leverage requirements. The Depositary is liable for the loss of financial instruments held in custody. The Company's Custodian is The Northern Trust Company. The Custodian prepares reports on its key controls and safeguards which are independently reviewed by KPMG LLP. The reports are reviewed by Baillie Gifford's Business Risk Department and a summary of the key points is reported to the Audit Committee and any concerns are investigated.

The Depositary provides the Audit Committee with a report on its monitoring activities.

The AIFM has established a permanent risk management function to ensure that effective risk management policies and procedures are in place and to monitor compliance with risk limits. The AIFM has a risk management policy which covers the risks associated with the management of the portfolio, and the adequacy and effectiveness of this policy is reviewed and approved at least annually. This review includes the risk management processes and systems and limits for each risk area.

The risk limits, which are set by the AIFM and approved by the Board, take into account the objectives, strategy and risk profile of the portfolio. These limits, including leverage (see page 115), are monitored and the sensitivity of the portfolio to key risks is undertaken periodically as appropriate to ascertain the impact of changes in key variables in the portfolio. Exceptions from limits monitoring and stress testing undertaken by Baillie Gifford's Business Risk Department are escalated to the AIFM and reported to the Board along with any remedial measures being taken.

Going concern

In accordance with the Financial Reporting Council's guidance on going concern and liquidity risk, the Directors have undertaken a rigorous review of the Company's ability to continue as a going concern.

The Company's principal and emerging risks are market related. An explanation of these risks and how they are managed is on pages 30 to 34 and contained in note 19 to the Financial Statements. The Board has, in particular, considered the impact of heightened market volatility due to macroeconomic and geopolitical concerns and has conducted specific leverage and liquidity stress testing but does not believe the Company's going concern status is affected.

The Company's assets, which at present are mainly investments in quoted securities which are readily realisable, exceed its liabilities significantly. All borrowings require the prior approval of the Board. Gearing levels and compliance with borrowing covenants are reviewed by the Board on a regular basis. The Company has continued to comply with the investment trust status requirements of section 1158 of the Corporation Tax Act 2010 and the Investment Trust (Approved Company) (Tax) Regulations 2011.

The Company's primary third party suppliers, including its Managers and Secretaries, Custodian, Depositary, Registrar, Auditor and Corporate Broker, are not experiencing significant operational difficulties affecting their respective services to the Company.

Accordingly, the Financial Statements have been prepared on the going concern basis as it is the Directors' opinion, having assessed the principal and emerging risks and other matters, as set out in the Viability Statement on page 29, that the Company will continue in operational existence for a period of at least 12 months from the date of approval of these Financial Statements.

Relations with shareholders

The Board places great importance on communication with shareholders. The Company's Managers meet regularly with shareholders and their representatives. The Chairman and Senior Independent Director also meet shareholders independently of the Managers and report shareholders' views to the Board. Shareholders wishing to communicate with any members of the Board may do so by writing to them at the Company's registered office or through the Company's broker, Peel Hunt LLP (see contact details on page 121). All correspondence addressed to the Chairman is dealt with directly by the Chairman.

The Company's Annual General Meeting provides a further forum for communication with all shareholders. The level of proxies lodged for each resolution is announced at the meeting and is published at bgeuropeangrowth.com subsequent to the meeting. The notice period for the Annual General Meeting is at least 21 clear days. Shareholders and potential investors may obtain up-to-date information from the Company's page on the Managers' website at bgeuropeangrowth.com.

Corporate governance and stewardship

The Board believes that it is in the shareholders' interests to consider environmental, social and governance ('ESG') factors including climate change when selecting and retaining investments and has asked the Managers to take these issues into account. The Managers do not exclude companies from their investment universe purely on the grounds of ESG factors but adopt a positive engagement approach whereby matters are discussed with management with the aim of improving the relevant policies and management systems and enabling the Managers to consider how ESG factors could impact long-term investment returns. The Managers' Statement of Compliance with the UK Stewardship Code can be found on the Managers' website: bailliegifford.com.

The Company has given discretionary voting powers to Baillie Gifford & Co. The Managers vote against resolutions they consider may damage shareholders' rights or economic interests and their actions are reported at Board meetings.

Climate change

The Board recognises that climate change poses a serious threat to our environment, our society and to economies and companies around the globe. Addressing the underlying causes is likely to result in companies that are high emitters of carbon facing greater societal and regulatory scrutiny and higher costs to account for the true environmental impact of their activities. The Managers' pursuit of long-term growth opportunities typically involves investment in entrepreneurial, disruptive and technology-driven businesses. These companies are often capital-light with a low carbon footprint. The Managers believe that carbon footprint metrics in isolation are unhelpful – that some firms pollute more than others

is a mostly meaningless observation. An external provider was engaged to map the carbon footprint of the portfolio. This analysis shows that the carbon intensity of Baillie Gifford European Growth Trust is 62% less than the index (FTSE All-World Europe ex UK Index) and is based on 85% of the value of the Company's portfolio which has either reported or estimated S12 carbon emissions data and 85% of the value of the Company's portfolio which has estimated S3 carbon emissions data.

Baillie Gifford's Task Force on Climate-Related Financial Disclosures ('TCFD') Climate Report is available on the Managers' Website at bailliegifford.com. A Company specific TCFD climate report is also available on the Company's page of the Managers' website at bgeuropeangrowth.com. This report is a means by which the portfolio's carbon footprint and exposure to climate risk are measured and reported. Companies disclosing their emission and communicating emissions plans will be a helpful place from which to begin more useful discussions with management teams, industry experts and regulators. The Managers, Baillie Gifford & Co, are signatories to the Carbon Disclosure Project and are also members of the International Corporate Governance Network.

On behalf of the Board Michael MacPhee Chairman 25 November 2024

Audit Committee report

The Audit Committee consists of all Directors. The members of the Committee consider that they have the requisite financial skills and experience to fulfil the responsibilities of the Committee. Andrew Watkins is the Chairman of the Committee.

The Committee's authority and duties are clearly defined within its written Terms of Reference which are available on request from the Company and on the Company's page of the Managers' website: bgeuropeangrowth.com. The Terms of Reference are reviewed annually.

The Committee's effectiveness is reviewed on an annual basis as part of the Board's performance evaluation process (see page 61).

At least once a year the Committee meets with the external Auditor without any representative of the Manager being present.

Main activities of the Commitee

The Committee met twice during the year to 30 September 2024. Baillie Gifford attended both meetings and the external Auditor, BDO LLP, attended one meeting. Baillie Gifford & Co's Internal Audit and Compliance Departments and the AIFM's permanent risk function provided reports on their monitoring programmes.

The matters considered, monitored and reviewed by the Committee during the course of the year included the following:

• the results announcement and Annual and Interim Reports;
• the Company's accounting policies and practices and the implementation of the Managers' valuation policy for investments in unquoted companies;
• the regulatory changes impacting the Company;
• the fairness, balance and understandability of the Annual Report and Financial Statements and whether it provided the information necessary for shareholders to assess the Company's performance, business model and strategy;
• the effectiveness of the Company's internal control environment;
• the appointment/reappointment, remuneration and terms of engagement of the external Auditor;
• whether the audit services contract should be put out to tender;
• the policy on the engagement of the external Auditor to supply non-audit services;
• the independence and objectivity of the external Auditor and the effectiveness of the audit process;
• the need for the Company to have its own internal audit function;
• the internal controls reports received from the Managers and other service providers; and
• the arrangements in place within Baillie Gifford & Co whereby its staff may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters.

Internal audit

The Committee continues to believe that the compliance and internal control systems and the internal audit function in place within the Managers provide sufficient assurance that a sound system of internal control, which safeguards shareholders' investment and the Company's assets, is maintained. An internal audit function, specific to the Company, is therefore considered unnecessary.

The external Auditor has adopted a wholly substantive approach to testing and therefore the absence of an internal audit function has not had an impact on audit procedures.

Financial reporting

The Committee considers that the most significant issues likely to affect the Financial Statements are the existence and valuation of investments, as they represent 99.4% of total assets, and the accuracy and completeness of income from investments.

The majority of the investments are in quoted securities and market prices are readily available from independent external pricing sources. The Committee reviewed the Managers' Report on Internal Controls which details the controls in place regarding recording and pricing of investments, accurate recording of investment income and the reconciliation of investment holdings to third party data.

The Managers agreed the prices of all the listed investments at 30 September 2024 to external price sources. The Committee reviewed the Managers' valuation policy for investments in private companies (as described on pages 88 and 89) and approved the valuation of the unlisted investments following a detailed review of the valuation of the investments and relevant challenge where appropriate. The listed portfolio holdings were agreed by the Managers to confirmations from the Company's custodian. The unlisted holdings were agreed by the Managers to confirmations from the investee companies.

The Committee considered the factors, including the impact of increasing geopolitical tensions, that might affect the Company's viability over a period of five years and its ability to continue as a going concern for at least twelve months from the date of signing of the Financial Statements, together with the reports from the Managers on the cash position and cash flow projections of the Company, the liquidity of the investment portfolio, compliance with debt covenants, availability of borrowing facilities and the Company's ability to meet its obligations as they fall due. The Committee also reviewed the Viability Statement on page 29 and the statement on Going Concern on page 65 including the impact of increasing geopolitical tensions. Following this assessment, the Committee recommended to the Board the appropriateness of the Going Concern basis in preparing the Financial Statements and confirmed the accuracy of the Viability Statement and statement on Going Concern.

The Managers and Auditor confirmed to the Committee that they were not aware of any material misstatements in the context of the Financial Statements as a whole and that the Financial Statements are in accordance with applicable law and accounting standards.

Internal controls and risk management

The Committee reviewed the effectiveness of the Company's risk management and internal controls systems as described on pages 64 and 65. No significant weaknesses were identified in the year under review.

External Auditor

To fulfil its responsibility regarding the independence and objectivity of the external Auditor, the Committee reviewed:

• the audit plan for the year to 30 September 2024;
• a report from the Auditor describing its arrangements to manage auditor independence and received confirmation of its independence; and
• the extent of non-audit services provided by the external Auditor.

To assess the effectiveness of the external Auditor, the Committee reviewed and considered:

• the Auditor's fulfilment of the agreed audit plan;
• feedback from the Secretaries on the performance of the audit team;
• the Audit Quality Inspection Report from the FRC; and
• detailed discussion with audit personnel to challenge audit processes and deliverables.

To fulfil its responsibility for oversight of the external audit process the Committee considered and reviewed:

• the Auditor's engagement letter;
• the Auditor's proposed audit strategy;
• the audit fee; and
• a report from the Auditor on the conclusion of the audit.

BDO LLP, has been engaged as the Company's Auditor since 2017. The audit partners responsible for the audit are rotated at least every five years in accordance with professional and regulatory standards in order to protect independence and objectivity and to provide fresh challenge to the business. Chris Meyrick is the lead audit partner and has held the role since January 2022.

BDO LLP has confirmed that it believes it is independent within the meaning of regulatory and professional requirements and that the objectivity of the audit partner and staff is not impaired.

Having carried out the review process described above, the Committee is satisfied that the Auditor has remained independent and effective.

There are no contractual obligations restricting the Committee's choice of external Auditor.

Accountability and audit

The respective responsibilities of the Directors and the Auditor in connection with the Financial Statements are set out on pages 74 to 83.

On behalf of the Board Andrew Watkins Audit Committee Chairman 25 November 2024

Directors' remuneration report

This report has been prepared in accordance with the requirements of the Companies Act 2006.

Statement by the Chairman

The Directors' Remuneration Policy is subject to shareholder approval every three years or sooner if an alteration to the policy is proposed. The Remuneration Policy, which is set out below, was approved at the Annual General Meeting in February 2023 and no changes are proposed to the policy at the Annual General Meeting to be held in 2025. Directors' fees were last increased on 1 October 2023. Following the annual review, no increase to Directors' fees is proposed for the year ending 30 September 2025.

Directors' remuneration policy

The Company follows the recommendation of the AIC Code that Directors' remuneration should reflect their duties, responsibilities and the value of their time spent on the Company's affairs. The Board's policy is that the remuneration of the Directors should reflect the experience of the Board as a whole and be determined with reference to comparable organisations and appointments.

The Board has set three levels of fees: one for the Chairman, one for the other Directors, and an additional fee that is paid to the Director who chairs the Audit Committee. Fees are reviewed annually in accordance with the policy. The fee for any new Director appointed will be determined on the same basis.

Any views expressed by shareholders on the fees being paid to Directors will be taken into consideration by the Board when reviewing the Directors' Remuneration Policy and in the annual review of Directors' fees.

The Directors are not eligible for bonuses, pension benefits, share options, long-term incentive schemes or other benefits, as the Board does not consider such arrangements or benefits necessary or appropriate for non-executive Directors.

Under the Articles of Association, Directors are entitled to be paid for all reasonable travel, hotel and incidental expenses incurred in or about the performance of their duties as Directors, including expenses incurred in attending Board or shareholder meetings.

If any Director is called upon to perform extra or special services of any kind, under the Articles of Association, they shall be entitled to receive such extra remuneration as the Board may decide in addition to any remuneration they may be entitled to receive.

The Company does not enter into service contracts with its Directors. Instead, the Company has a policy of entering into a letter of appointment with each of its Directors, copies of which are available on request from the Company Secretary. It is intended that the Company's policy when determining the duration of notice periods and termination payments under the Directors' letters of appointment will be based on prevailing best practice guidelines. Under the Directors' letters of appointment, there is a notice period of one month and no compensation is payable to a Director on leaving office. No compensation is payable in the event of a takeover bid.

The terms of their appointment provide that all Directors shall retire and be subject to election at the first Annual General Meeting after their appointment. Thereafter, at each AGM any Director who has not stood for appointment or re-election at either of the two preceding AGMs is required to retire and offer themselves for re-election. Beyond these requirements, it has been agreed that all Directors will seek annual re-election at the Company's AGMs.

Limits on Directors' remuneration

The fees for the non-executive Directors are payable monthly in arrears and are determined within the limit set out in the Company's Articles of Association which is currently £200,000 per annum in aggregate. Any change to this limit requires shareholder approval.

The fees paid in respect of the year ended 30 September 2024 together with the expected fees payable in respect of the year ending 30 September 2025 are set out in the table below. The fees payable to the Directors in the subsequent financial years will be determined following an annual review of the Directors' fees.

	Expected fees for year ending 30 September 2025 £	Fees paid for the year to 30 September 2024 £
Chairman's fee	44,000	44,000
Non-executive Director's fee	30,000	30,000
Additional fee for the Chairman of the Audit Committee	6,000	6,000
Total aggregate annual fees that can be paid to the Directors in any year under the Directors' Remuneration Policy, as set out in the Company's Articles of Association	200,000	200,000

Annual report on remuneration

An ordinary resolution for the approval of this report will be put to the members at the forthcoming Annual General Meeting.

The law requires the Company's Auditor to audit certain of the disclosures provided in this report. Where disclosures have been audited, they are indicated as such. The Auditor's opinion is included in the Independent Auditor's report on pages 77 to 83.

Directors' remuneration for the year (audited)

The Directors who served during the year received the following remuneration in the form of fees and taxable benefits. This represents the entire remuneration paid to the Directors.

Name	2024 Fees £	2024 Taxable benefits * £	2024 Total £	2023 Fees £	2023 Taxable benefits * £	2023 Total £
Michael MacPhee	44,000	1,839	45,839	40,200	1,219	41,419
David Barron†	30,000	2,560	32,560	–	–	–
Emma Davies	30,000	1,912	31,912	27,000	1,277	28,277
Andrew Watkins	34,231	3,099	37,330	27,000	1,395	28,395
Michael Woodward#	10,938	1,338	12,276	30,600	1,991	32,591
	149,169	10,748	159,917	124,800	5,882	130,682

* Comprises expenses incurred by Directors in the course of travel to attend Board and Committee meetings held at the Company's normal place of business. These amounts have been grossed up for applicable income tax and national insurance.

† Appointed 1 October 2023.

Retired 18 January 2024.

Annual percentage change in remuneration

This represents the annual percentage change in the entire remuneration paid to the Directors.

Name	% from 2023 to 2024	% from 2022 to 2023	% from 2021 to 2022	% from 2020 to 2021	% from 2019 to 2020
Michael MacPhee	11	2	1	20	–
David Barron*	–	–	–	–	–
Emma Davies†	13	2	37	–	–
Andrew Watkins#	31	1	4	20	33
Michael Woodward‡	(62)	3	1	23	–

* Appointed 1 October 2023

† Appointed 1 January 2021

Appointed 1 January 2019

‡ Retired 18 January 2024

Directors' interests (audited)

The Directors at the end of the year under review, and their interests in the Company, are shown in the following table. There is no requirement under the Company's Articles of Association for Directors to hold shares in the Company. There have been no changes intimated in the Directors' interests up to 21 November 2024.

Name	Nature of interest	Ordinary 2.5p shares held at 30 September 2024	Ordinary 2.5p shares held at 30 September 2023
Michael MacPhee	Beneficial	756,950	756,950
David Barron	–	–	–
Emma Davies	Beneficial	20,505	20,420
Andrew Watkins	Beneficial	15,000	15,000
Michael Woodward* Beneficial		–	50,000

* Retired 18 January 2024.

Statement of voting at Annual General Meeting

At the last Annual General Meeting, of the proxy votes received in respect of the Directors' Remuneration Report, 99.5% were in favour, 0.3% were against and votes withheld were 0.2%. At the last Annual General Meeting at which the Directors' Remuneration Policy was considered (February 2023), 99.2% of the proxy votes received were in favour, 0.6% were against and 0.2% votes were withheld.

Relative importance of spend on pay

The table below shows the actual expenditure (fees and taxable benefits) during the year in relation to Directors' remuneration and distributions to shareholders.

	2024 £'000	2023 £'000	Change %
Directors' remuneration	160	131	22
Dividends	2,111	9,312	(77)
Share buy backs	6,001	501	1,098

Company performance

The following graph compares the share price total return (assuming all dividends are reinvested) to ordinary shareholders compared with the total shareholder return on a notional investment made up of shares in the component parts of the FTSE Europe ex UK Index. This index was chosen for comparison purposes as it is a widely used measure of performance for European listed companies and also the index against which the Company measures its performance.

Performance graph

(figures rebased to 100 at 30 September 2014)

Source: LSEG and relevant underlying index providers. See disclaimer on page 115.

All figures are total returns (assuming net dividends are reinvested). See Glossary of terms and alternative performance measures on pages 118 to 120.

Past performance is not a guide to future performance.

Approval

The Directors' Remuneration Report on pages 70 to 73 was approved by the Board of Directors and signed on its behalf on 25 November 2024.

Michael MacPhee Chairman

Statement of Directors' responsibilities

in respect of the Annual Report and the Financial Statements

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

Company law requires the Directors to prepare Financial Statements for each financial year. Under that law they have elected to prepare the Financial Statements in accordance with applicable law and United Kingdom Accounting Standards, comprising Financial Reporting Standard 102 'The Financial Reporting Standard Applicable in the UK and Republic of Ireland' (FRS 102). 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 its profit or loss for that year. In preparing these Financial Statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;
• state whether applicable United Kingdom Accounting Standards, comprising FRS 102, have been followed, subject to any material departures disclosed and explained in the Financial Statements;
• make judgements and accounting estimates that are reasonable and prudent; and
• 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 and the Directors' remuneration report comply with the Companies Act 2006. They are 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, and are also responsible for safeguarding the assets of the Company and to prevent and detect fraud and other irregularities.

Under applicable laws and regulations, the Directors are also responsible for preparing a Strategic report, Directors' report, Directors' remuneration report and Corporate governance statement that complies with those laws and regulations.

In accordance with Disclosure Guidance and Transparency Rule 4.1.14R, the Financial Statements will form part of the annual financial report prepared using the single electronic reporting format under the TD ESEF Regulation. The Auditor's report on these Financial Statements provides no assurance over the ESEF format.

The Directors are responsible for ensuring that the Annual Report and Financial Statements are made available on a website. Financial Statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of Financial Statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's page of the Managers' website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the Financial Statements contained therein. The Directors have delegated responsibility to the Managers for the maintenance and integrity of the Company's page of the Managers' website.

Responsibility Statement of the Directors in respect of the Annual Financial Report

We confirm that, to the best of our knowledge:

• 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 net return of the Company;
• the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties it faces; and
• the Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

On behalf of the Board Michael MacPhee 25 November 2024

Financial report

The Financial Statements for the year to 30 September 2024 are set out on pages 84 to 103 and have been prepared in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

Independent auditor's report

to the members of Baillie Gifford European Growth Trust plc

Opinion on the Financial Statements

In our opinion the Financial Statements:

• give a true and fair view of the state of the Company's affairs as at 30 September 2024 and of its profit for the year then ended;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the Financial Statements of Baillie Gifford European Growth Trust Plc (the 'Company') for the year ended 30 September 2024 which comprise the Income Statement, the Balance Sheet, the Statement of Changes in Equity, the Cash Flow Statement and notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit opinion is consistent with the additional report to the Audit Committee.

Independence

Following the recommendation of the Audit Committee, we were appointed by the members on 24 January 2017 to audit the Financial Statements for the year ended 30 September 2017 and subsequent financial periods. The period of total uninterrupted engagement including retenders and reappointments is 8 years, covering the years ended 30 September 2017 to 30 September 2024. We remain independent of the Company in accordance with the ethical requirements that are relevant to our audit of the Financial Statements in the UK, including the FRC's Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by that standard were not provided to the Company.

Conclusions relating to going concern

In auditing the Financial Statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the Financial Statements is appropriate. Our evaluation of the Directors' assessment of the Company's ability to continue to adopt the going concern basis of accounting included:

• Evaluating the appropriateness of the Directors' method of assessing going concern in light of economic and market conditions by reviewing the information used by the Directors in completing their assessment;
• Reviewing the loan agreements to identify the covenants and assessing the likelihood of them being breached based on the Directors' forecasts and our sensitivity analysis;
• Assessing the liquidity position of available to meet the future obligations and operating expenses for the next twelve months; and
• Challenging the appropriateness of the Directors' assumptions and judgements made with regards to forecasts, including stress-testing forecasts which included consideration of the covenant headroom.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the Financial Statements are authorised for issue.

In relation to the Company's reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the Directors' statement in the Financial Statements about whether the Directors considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

Overview

		2024 2023
Key audit matters	Valuation and ownership of listed and unlisted investments
Materiality	Company Financial Statements as a whole
	£3.6m (2023: £3.2m) based on 1% (2023: 1%) of Net assets

An overview of the scope of our audit

Our audit was scoped by obtaining an understanding of the Company and its environment, including the Company's system of internal controls, and assessing the risks of material misstatement in the Financial Statements. We also addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by the Directors that may have represented a risk of material misstatement.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter	How the scope of our audit addressed the key audit matter
Valuation and ownership of listed and unlisted investments	We responded to this matter by testing the valuation and ownership of the whole portfolio of listed investments. We performed the following procedures:
(Note 1 and 9)	• Confirmed the year end bid price was used by agreeing to externally quoted prices;
We considered the valuation and ownership of listed and unlisted investments to be a significant audit area as investments represent the most significant balance in the Financial Statements and underpin the principal activity of the entity.	• Assessed if there were contra indicators, such as liquidity considerations, to suggest bid price is not the most appropriate indication of fair value by considering the realisation period for individual holdings;
	• Recalculated the valuation by multiplying the number of shares held per the statement obtained from the custodian by the share price;
	• Obtained direct confirmation of the number of shares held per equity investment from the custodian regarding all investments held at the balance sheet date; and
There is a risk that the prices used for the listed investments held by the Company are reflective of fair value. We do not consider the use of bid price for listed investments to be subject to significant estimation uncertainty.	• Agreed the exchange rates used to independent sources.
	We tested the valuation of all the unlisted investments. We performed the following procedures:
	• Considered the appropriateness of the valuation methodology applied by the AIFM under the International Private Equity and Venture Capital Valuation ('IPEV') Guidelines and applicable accounting standards;
	• Reviewed the valuations prepared by Baillie Gifford & Co ('the Manager') and challenged and corroborated the inputs to the valuation with reference to management information on investee
The unlisted investments	companies, market data and our own understanding of the investee companies and assessed the impact of the estimation uncertainty concerning these assumptions;
have significant judgement involved in selecting a valuation methodology and estimation uncertainty involved in	• Agreed the exchange rates used to independent sources; and
	• Agreed the unlisted investments holdings either to independently received third-party confirmation from the custodian or confirmation from the underlying investee companies, to

confirm ownership.

For unlisted investments that were valued using calibrated price of recent investment, reviewed for changes in fair value we:

• Verified the price of recent investment transaction to supporting documentation;
• Considered whether the investment transaction was an arm's length transaction through reviewing the parties involved in the transaction and checking whether or not they were already investors in the investee company;
• Considered whether there were any indications that the price of recent investment transaction was no longer representative of fair value considering, inter alia, the current performance of the investee company and the milestones and assumptions set out in the investment proposal; and
• Considered whether the price of recent investment transaction is supported by alternative valuation techniques as well as the time lapsed/ calibration since the investment round.

determining their valuations.

There is also a risk of error in the recording of investment holdings such that those records do not appropriately reflect the property of the Company.

For these reasons and the materiality to the Financial Statements as a whole, the valuation and ownership of listed and unlisted investments are considered to be a key area of our overall audit strategy and allocation of our resources and hence a key audit matter.

Key audit matter	How the scope of our audit addressed the key audit matter
	For unlisted investments that were valued using market approach (multiples, industry valuation benchmarks and available market prices) we:
	• Challenged and corroborated the inputs to the valuation with reference to management information of investee companies, market data and our own understanding;
	• Reviewed the historical Financial Statements and any recent management information available to support assumptions about maintainable revenues, earnings or cash flows used in the valuations;
	• Considered the multiples applied and the discounts applied by reference to observable quoted company market data;
	• Challenged the consistency and appropriateness of adjustments made to such market data in establishing the revenue, cash flow or earnings multiple applied in arriving at the valuations adopted by considering the individual performance of investee companies against plan and relative to the peer group, the market and sector in which the investee company operates and other factors as appropriate;
	• For investments being valued using the benchmarking method, we have considered the appropriateness of the benchmark index applied;
	• For investments being valued using the benchmarking method, we have also considered the consistency of the benchmark being applied; and
	• Where an Insolvency risk discount has been applied, we have considered the reasonability of the of the discount for the applicable investment.
	Where appropriate, we performed stress and reverse stress tests to determine materiality of possible movements in selected inputs. We have also performed scenario analysis, by developing our own point estimates and evaluating acceptable ranges of valuations, where we considered that alternative input assumptions could reasonably have been applied. We have considered the overall impact of such scenarios on the portfolio of investments in determining whether the valuations, as a whole, are reasonable.
	Key observations:
	Based on our procedures performed, the valuation and ownership of listed and unlisted investments is appropriate.

Our application of materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the Financial Statements.

In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the Financial Statements as a whole.

Based on our professional judgement, we determined materiality for the Financial Statements as a whole and performance materiality as follows:

	Company Financial Statements 2024	2023
Materiality	£3.6 million	£3.2 million
Basis for determining materiality	1% of Net assets	1% of Net assets
Rationale for the benchmark applied	As an investment trust, the net asset value is the key measure of performance for users of the Financial Statements and reflects the fact that debt is present in the Company.
Performance materiality	£2.7 million	£2.4 million
Basis for determining performance materiality	75% of materiality	75% of materiality
Rationale for the percentage applied for performance materiality	The level of performance materiality applied was set after having considered a number of factors including the expected total value of known and likely misstatements and the level of transactions in the year.

Reporting threshold

We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £180,000 (2023: £160,000). We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.

Other information

The Directors are responsible for the other information. The other information comprises the information included in the Annual Report other than the Financial Statements and our Auditor's report thereon. Our opinion on the Financial Statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Financial Statements, or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the Financial Statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Corporate governance statement

The Listing Rules require us to review the Directors' statement in relation to going concern, longer-term viability and that part of the Corporate governance statement relating to the Company's compliance with the provisions of the UK Corporate Governance Code specified for our review.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate governance statement is materially consistent with the Financial Statements, or our knowledge obtained during the audit.

Going concern and longer-term viability

• The Directors' statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified; and

• The Directors' explanation as to their assessment of the Company's prospects, the period this assessment covers and why the period is appropriate.

Other Code provisions

• Directors' statement on fair, balanced and understandable;
• Board's confirmation that it has carried out a robust assessment of the emerging and principal risks;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and
• The section describing the work of the Audit Committee.

Other Companies Act 2006 reporting

Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.

Strategic report and Directors' report

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the Strategic report and the Directors' report for the financial year for which the Financial Statements are prepared is consistent with the Financial Statements; and
• the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.

Directors' remuneration

In our opinion, the part of the Directors' remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from branches not visited by us; or
• the Financial Statements and the part of the Directors' remuneration report to be audited are not in agreement with the accounting records and returns; or
• certain disclosures of Directors' remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.

Responsibilities of Directors

As explained more fully in the Statement of Directors' responsibilities, the Directors are responsible for the preparation of the Financial Statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of Financial Statements that are free from material misstatement, whether due to fraud or error.

In preparing the Financial Statements, the Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements.

Extent to which the audit was capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Non-compliance with laws and regulations

Based on:

• our understanding of the Company and the industry in which it operates;
• discussion with the Investment Manager and those charged with governance (including the Audit Committee); and
• obtaining an understanding of the Company's policies and procedures regarding compliance with laws and regulations.

We gained an understanding of the legal and regulatory framework applicable to the Company and the industry in which it operates and considered the risk of acts by the Company which were contrary to applicable laws and regulations, including fraud.

We considered the significant laws and regulations to be Companies Act 2006, the UK listing and DTR rules, the principles of the AIC Code of Corporate Governance, industry practice represented by the AIC SORP, the applicable accounting framework, and the Company's qualification as an Investment Trust under UK tax legislation as any noncompliance with this would lead to the Company losing various deductions and exemptions from corporation tax.

Our procedures in respect of the above included:

• Agreement of the financial statement disclosures to underlying supporting documentation;
• Enquiries of management and those charged with governance relating to the existence of any noncompliance with laws and regulations;
• Reviewing minutes of meeting of those charged with governance throughout the period for instances of non-compliance with laws and regulations; and
• Reviewing the calculation in relation to Investment Trust compliance to check that the Company was meeting its requirements to retain their Investment Trust Status.

Fraud

We assessed the susceptibility of the financial statement to material misstatement including fraud.

Our risk assessment procedures included:

• Enquiry with the Investment Manager and those charged with governance (including the Audit Committee) regarding any known or suspected instances of fraud;
• Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud; and
• Discussion amongst the engagement team as to how and where fraud might occur in the Financial Statements.

Based on our risk assessment, we considered the areas most susceptible to be valuation of unlisted investments and the risk of management override of controls in relation to the valuation of unlisted investments.

Our procedures in respect of the above included:

• In addressing the risk of valuation of unlisted investments, the procedures set out in the key audit matter section in our report were performed;
• In addressing the risk of management override of control, we:
  • Performed a review of estimates and judgements made in the unlisted investment valuations and considered whether the valuation methodology is the most appropriate;
  • Performed a review of estimates and judgements applied by management in the Financial Statements to assess their appropriateness and the existence of any systematic bias;
  • Considered the opportunity and incentive to manipulate accounting entries and target tested relevant adjustments made in the period end financial reporting process;
  • Reviewed for significant transactions outside the normal course of business; and
  • Performed a review of unadjusted audit differences, if any, for indications of bias or deliberate misstatement.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members, who were deemed to have the appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Our audit procedures were designed to respond to risks of material misstatement in the Financial Statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the Financial Statements, the less likely we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Chris Meyrick (Senior Statutory Auditor) For and on behalf of BDO LLP, Statutory Auditor London, UK 25 November 2024

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

Income statement

For the year ended 30 September

	Notes	2024 Revenue £'000	2024 Capital £'000	2024 Total £'000	2023 Revenue £'000	2023 Capital £'000	2023 Total £'000
Gains on investments	9	–	43,968	43,968	–	19,795	19,795
Currency (losses)/gains	14	(51)	2,073	2,022	(40)	533	493
Income	2	4,013	–	4,013	3,912	–	3,912
Investment management fee	3	(370)	(1,477)	(1,847)	(354)	(1,416)	(1,770)
Other administrative expenses	4	(630)	–	(630)	(564)	–	(564)
Net return before finance costs and taxation		2,962	44,564	47,526	2,954	18,912	21,866
Finance costs of borrowings	5	(160)	(640)	(800)	(164)	(653)	(817)
Net return before taxation		2,802	43,924	46,726	2,790	18,259	21,049
Tax on ordinary activities	6	(255)	–	(255)	6,835	–	6,835
Net return after taxation		2,547	43,924	46,471	9,625	18,259	27,884
Net return per ordinary share	7	0.72p	12.35p	13.07p	2.68p	5.09p	7.77p

The total column of this statement is the profit and loss account of the Company. The supplementary revenue and capital return columns are prepared under guidance published by the Association of Investment Companies.

All revenue and capital items in this statement derive from continuing operations.

A Statement of Comprehensive Income is not required as all gains and losses of the Company have been reflected in the above statement. The accompanying notes on pages 88 to 103 are an integral part of the Financial Statements.

Balance sheet

			As at 30 September		As at 30 September
	Notes	2024 £'000	2024 £'000	2023 £'000	2023 £'000
Fixed assets
Investments held at fair value through profit or loss	9		413,975		377,812
Current assets
Debtors	10	1,331		2,406
Cash at bank	19	1,856		907
		3,187		3,313
Creditors
Amounts falling due within one years	11	(887)		(1,775)
Net current assets			2,300		1,538
Total assets less current liabilities			416,275		379,350
Creditors
Amounts falling due after more than one year:	12		(49,844)		(51,960)
Net assets			366,431		327,390
Capital and reserves
Share capital	13		10,061		10,061
Share premium account	14		125,050		125,050
Capital redemption reserve	14		8,750		8,750
Capital reserve	14		214,138		176,215
Revenue reserve	14		8,432		7,314
Shareholders' funds			366,431		327,390
Net asset value per ordinary share* (borrowings at book value)	15		104.2p		91.4p
Net asset value per ordinary share* (borrowings at fair value)			108.0p		96.7p

The Financial Statements of Baillie Gifford European Growth Trust plc (Company registration number 1055384) were approved and authorised for issue by the Board and were signed on 25 November 2024.

Michael MacPhee Chairman

The accompanying notes on pages 88 to 103 are an integral part of the Financial Statements.

* See Glossary of terms and alternative performance measures on pages 118 to 120.

Statement of changes in equity

For the year ended 30 September 2024

	Notes	Share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Capital reserve £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 October 2023		10,061	125,050	8,750	176,215	7,314	327,390
Dividends paid during the year	8	–	–	–	–	(1,429)	(1,429)
Shares bought back into treasury	13	–	–	–	(6,001)	–	(6,001)
Net return after taxation		–	–	–	43,924	2,547	46,471
Shareholders' funds at 30 September 2024		10,061	125,050	8,750	214,138	8,432	366,431

For the year ended 30 September 2023

	Notes	Share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Capital reserve £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 October 2022		10,061	125,050	8,750	158,457	8,079	310,397
Dividends paid during the year	8	–	–	–	–	(10,390)	(10,390)
Shares bought back into treasury	13	–	–	–	(501)	–	(501)
Net return after taxation	14	–	–	–	18,259	9,625	27,884
Shareholders' funds at 30 September 2023		10,061	125,050	8,750	176,215	7,314	327,390

The accompanying notes on pages 88 to 103 are an integral part of the Financial Statements.

Cash flow statement

For the year ended 30 September

	Notes	2024 £'000	2024 £'000	2023 £'000	2023 £'000
Cash flows from operating activities
Net return before taxation		46,726		21,049
Net losses/(gains) on investments		(43,968)		(19,795)
Currency gains		(2,073)		(533)
Finance costs of borrowings		800		817
Tax repayment received		–		7,034
Overseas withholding tax suffered		(255)		(199)
Overseas withholding tax received		240		451
Changes in debtors*		(149)		(170)
Changes in creditors*		73		29
Cash from operations†			1,394		8,683
Interest paid			(804)		(813)
Net cash inflow from operating activities			590		7,870
Cash flows from investing activities
Acquisitions of investments#		(82,256)		(46,765)
Disposals of investments#		90,091		47,203
Net cash inflow from investing activities			7,835		438
Cash flows from financing activities
Shares bought back into treasury		(5,998)		(509)
Equity dividends paid		(1,429)		(10,390)
Net cash outflow from financing activities			(7,427)		(10,899)
Increase/(decrease) in cash at bank			998		(2,591)
Exchange movements			(49)		(73)
Cash at bank at start of year	16		907		3,571
Cash at bank at end of year	16		1,856		907
Comprising:
Cash at bank			1,856		907
			1,856		907

* Change in debtors is made up of changes in accrued income, prepaid expenses and taxation recoverable (excluding overseas withholding tax received in the year) – see note 10. Change in creditors is made up of changes in other creditors and accruals – see note 11.

† Cash from operations includes dividends received of £3,760,000 (2023 – £2,839,000) and interest received of £75,000 (2023 – £919,000).

Acquisitions of investments is made up of the current year purchases at cost (see note 9), plus opening purchases for subsequent settlement, less closing purchases for subsequent settlement (see note 11). Disposals of investments is made up of the current year sales proceeds (see note 9), plus opening investment sales awaiting settlement, less closing investment sales awaiting settlement (see note 10).

The accompanying notes on pages 88 to 103 are an integral part of the Financial Statements.

Notes to the Financial Statements

01 Principal accounting policies

The Financial Statements for the year to 30 September 2024 have been prepared in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' on the basis of the accounting policies set out below which are consistent with those applied for the year ended 30 September 2023.

a. Basis of accounting

All of the Company's operations are of a continuing nature and the Financial Statements are prepared on a going concern basis under the historical cost convention, modified to include the revaluation of fixed asset investments and on the assumption that approval as an investment trust under section 1158 of the Corporation Tax Act 2010 and the Investment Trust (Approved Company) (Tax) Regulations 2011 will be retained. The Board has, in particular, considered the impact of heightened market volatility due to macroeconomic and geopolitical concerns, but does not believe the Company's going concern status is affected. The Company's assets, which at present are mainly investments in quoted securities which are readily realisable, exceed its liabilities significantly. All borrowings require the prior approval of the Board. Gearing levels and compliance with borrowing covenants are reviewed by the Board on a regular basis. The Company has continued to comply with the investment trust status requirements of section 1158 of the Corporation Tax Act 2010 and the Investment Trust (Approved Company) (Tax) Regulations 2011.

The Company's primary third party suppliers, including its Managers and Secretaries, Custodian, Depositary, Registrar, Auditor and Corporate Broker, are not experiencing significant operational difficulties affecting their respective services to the Company. Accordingly, the Financial Statements have been prepared on the going concern basis as it is the Directors' opinion, having assessed the principal and emerging risks and other matters as set out in the Viability Statement on page 29, that the Company will continue in operational existence for a period of at least 12 months from the date of approval of these Financial Statements.

The Financial Statements have been prepared in accordance with the Companies Act 2006, applicable UK Accounting Standards and with the AIC's Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in November 2014 and updated in July 2022. In order to reflect better the activities of the Company

and in accordance with guidance issued by the AIC, supplementary information which analyses the Income statement between items of a revenue and capital nature has been presented.

Financial assets and financial liabilities are recognised in the Company's Balance sheet when it becomes a party to the contractual provisions of the instrument.

The Directors consider the Company's functional currency to be sterling as the entity is listed on a sterling stock exchange in the UK, the Company's share capital and dividends paid are denominated in sterling, the Company's shareholders are predominantly based in the UK and the Company and its Investment Manager, which are subject to the UK's regulatory environment, are also UK based.

b. Significant accounting estimates and judgements

The preparation of the Financial Statements requires the use of estimates, assumptions and judgements. These estimates, assumptions and judgements affect the reported amounts of assets and liabilities, at the reporting date. While estimates are based on best judgement using information and financial data available, the actual outcome may differ from these estimates. The key sources of estimation and uncertainty relate to the assumptions used in the determination of the fair value of the unlisted investments, which are detailed in note 9 on page 93.

Judgements

The Directors consider that the preparation of the Financial Statements involves the following key judgements:

• i. the determination of the functional currency of the Company as sterling (see rationale in 1(a) above); and
• ii. the fair valuation of the unlisted investments.

The key judgements in the fair valuation process are:

• i. the Managers' determination of the appropriate application of the International Private Equity and Venture Capital Guidelines 2022 (IPEV Guidelines) to each unlisted investment; and
• ii. the Directors' consideration of whether each fair value is appropriate following detailed review and challenge. The judgement applied in the selection of the methodology used for determining the fair value of each unlisted investment can have a significant impact upon the valuation.

Estimates

The key estimate in the Financial Statements is the determination of the fair value of the unlisted investments by the Managers for consideration by the Directors. This estimate is key as it significantly impacts the valuation of the unlisted investments at the Balance Sheet date. The fair valuation process involves estimation using subjective inputs that are unobservable (for which market data is unavailable). The main estimates involved in the selection of the valuation process inputs are:

• i. the selection of appropriate comparable companies in order to derive revenue multiples and meaningful relationships between enterprise value, revenue and earnings growth. Comparable companies are chosen on the basis of their business characteristics and growth patterns;
• ii. the selection of a revenue metric (either historic or forecast);
• iii.the application of an appropriate discount factor to reflect the reduced liquidity of unlisted companies versus their listed peers;
• iv.the estimation of the probability assigned to an exit being through an initial public offering ('IPO') or a company sale;
• v. the selection of an appropriate industry benchmark index to assist with the valuation validation or the application of valuation adjustments, particularly in the absence of established earnings or closely comparable peers; and
• vi.the calculation of valuation adjustments derived from milestone analysis (i.e. incorporating operational success against the plan/forecasts of the business into the valuation), or to capture the risk of insolvency events at a specific company.

c. Investments

The Company's investments are classified as held at fair value through profit and loss in accordance with sections 11 and 12 of FRS 102. Purchases and sales of investments are recognised on a trade date basis. Expenses incidental to the purchase and sale of investments are recognised in the Income Statement as capital items.

Investments are designated as held at fair value through profit or loss on initial recognition and are measured at subsequent reporting dates at fair value. The fair value of listed security investments is bid price or last traded price. Unlisted investments are valued at fair value by the Directors following a detailed review and appropriate challenge of the valuations proposed by the Managers. The Managers' unlisted investment policy applies methodologies consistent with IPEV Guidelines. These methodologies can be categorised as follows (a) market approach (multiples, industry valuation benchmarks and available market prices); (b) income approach (discounted cash flows); and (c) replacement cost approach (net assets). The valuation process recognises also, as stated in the IPEV Guidelines, that the price of a recent investment may be an appropriate starting point for estimating fair value, however it should be evaluated using the techniques described above.

d. Cash at bank

Cash at bank include cash in hand and deposits repayable on demand. Deposits are repayable on demand if they can be withdrawn at any time without notice and without penalty or if they have a maturity or period of notice of not more than one working day.

e. Income

• i. Income from equity investments is brought into account on the date on which the investments are quoted exdividend or, where no ex-dividend date is quoted, when the Company's right to receive payment is established.
• ii. Special dividends are treated as repayments of capital or income depending on the facts of each particular case.
• iii.Interest receivable/payable on bank deposits is recognised on an accruals basis.
• iv.Overseas dividends include the taxes deducted at source.
• v. If scrip is taken in lieu of dividends in cash, the net amount of the cash dividend declared is credited to the revenue account. Any excess in the value of the shares received over the amount of the cash dividend foregone is recognised as capital.
• vi.Interest from fixed interest securities is recognised on an effective yield basis.

f. Expenses

All expenses are accounted for on an accruals basis. Expenses are charged through the revenue account except:

i. where they relate directly to the acquisition or disposal of an investment in which case they are recognised as capital within losses/gains on investments. These expenses are commonly referred to as transaction costs and comprise brokerage commission and stamp duty.

ii. where they relate directly to the buy-back/issuance of shares, in which case they are added to the buy-back cost or deducted from the share issuance proceeds.

The management fee is allocated 20% to revenue and 80% to capital in line with the Board's expected longterm split of revenue and capital return from the Company's investment portfolio. The Board reviews the expense allocation policy on a yearly basis and considers whether it remains appropriate.

g. Long term borrowings, overdrafts and finance costs

Unsecured loan notes and overdrafts are classified as loans and are measured at amortised cost. They are initially recorded at the par value of proceeds received net of direct costs. Finance costs are accounted for on an accruals basis and on an effective interest basis and are allocated 20% to revenue and 80% to capital in line with the Board's expected long-term split of revenue and capital return from the Company's investment portfolio. The Board reviews the expense allocation policy on a yearly basis and considers whether it remains appropriate.

h. Taxation

The taxation charge represents the sum of current tax and the movement in the provision for deferred taxation during the year. Current taxation represents non-recoverable overseas taxes which is charged to the revenue account where it relates to income received and to capital where it relates to items of a capital nature. Deferred taxation is provided on all timing differences which have originated but not reversed by the Balance Sheet date, calculated on a non-discounted basis at the tax rates expected to apply when the timing differences reverse, based on what has been enacted or substantively enacted, relevant to the benefit or liability. Deferred tax assets are recognised only to the extent that it is more likely than not that there will be taxable profits from which underlying timing differences can be deducted.

i. Dividend distributions

Final dividends are recognised in the year in which the dividends are approved by the Company's shareholders in a General Meeting. Interim dividends are recognised in the year in which they are paid.

j. Foreign currencies

Transactions involving foreign currencies are converted at the rate ruling at the time of the transaction. Monetary assets and liabilities and fixed asset investment in foreign currencies are translated at the closing rates of exchange at the Balance Sheet date. Any gain or loss arising from a change in exchange rate subsequent to the date of the transaction is included as an exchange gain or loss in the Income Statement as capital or revenue as appropriate to the transaction.

k. Capital reserve

Gains and losses on disposal of investments, changes in the fair value of investments held, exchange differences of a capital nature and the amount by which other assets and liabilities valued at fair value differ from their book cost are dealt with in the capital reserve. Purchases of the Company's own shares are also funded from this reserve. The nominal value of such shares is transferred from share capital to the capital redemption reserve if the shares are subsequently cancelled. 80% of management fees and finance costs have been allocated to the capital reserve. The capital reserve, to the extent it constitutes realised profits, is distributable.

l. Share premium

The share premium reserve represents the excess of the issue price over the nominal value of shares issued less transaction costs incurred on the issue of the shares.

m.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 on the relevant trade date.

n. Revenue reserve

The revenue profit or loss for the year is taken to or from this reserve. The revenue reserve may be distributed by way of a dividend.

o. Single segment reporting

The Company is engaged in a single segment of business, being investment, consequently no business segmental analysis is provided.

02 Income

	2024 £'000	2023 £'000
Income from investments
Overseas dividends	3,818	2,890
Overseas interest	120	103
Other income
Interest	75	919
Total income	4,013	3,912

Interest for 2023 includes £869,000 interest received from HMRC with the tax repayment (see note 6 on page 92).

03 Investment management fee

	2024	2024	2024	2023	2023	2023
	Revenue	Capital	Total	Revenue	Capital	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Investment management fee	370	1,477	1,847	354	1,416	1,770

Details of the Investment Management Agreement are disclosed on pages 54 and 55. Baillie Gifford & Co Limited's annual management fee is 0.55% of the lower of (i) the Company's market capitalisation and (ii) the Company's net asset value (which shall include income), in either case up to £500 million, and 0.50% of the amount of the lower of the Company's market capitalisation or net asset value above £500 million, calculated and payable quarterly.

04 Other administrative expenses

	2024 £'000	2023 £'000
General administrative expenses	188	166
Directors' fees (see Directors' remuneration report on page 72)	149	125
Marketing*	95	88
Custody	77	67
Auditor's remuneration – statutory audit of Company's Annual Financial Statements	54	52
Depositary	38	38
Registrar	29	28
	630	564

* The Company is part of a marketing programme which includes all the Investment Trusts managed by the Manager. The marketing strategy has an ongoing objective to stimulate demand for the Company's shares. The cost of this marketing strategy is borne in partnership by the Company and the Manager. The Manager matches the Company's marketing contribution and provides the resource to manage and run the programme.

05 Finance costs

	2024 Revenue £'000	2024 Capital £'000	2024 Total £'000	2023 Revenue £'000	2023 Capital £'000	2023 Total £'000
Overdraft arrangement fee	1	2	3	1	2	3
Loan notes interest	159	638	797	163	651	814
	160	640	800	164	653	817

06 Tax on ordinary activities

	2024 Total £'000	2023 Total £'000
Analysis of charge in year
Overseas taxation	255	199
HMRC tax repayment	–	(7,034)
Tax Charge	255	(6,835)
	2024 £'000	2023 £'000
Factors affecting tax charge for year
The tax charge for the year is lower than the standard rate of corporation tax in the UK of 25%. The differences are explained below:
Net revenue return before taxation	2,802	2,790
Net revenue return multiplied by the standard rate of corporation tax in the UK of 25% (2023 – 22%*)	701	614
Effects of:
Income not taxable	(942)	(627)
Overseas tax charge	255	199
HMRC tax repayment	–	(7,034)
Taxable losses in year not utilised	241	13
Revenue tax charge for the year	255	(6,835)

* A tax rate of 22% for 30 September 2023 reflects the increase in the UK corporation tax rate from 19% to 25% from 1 April 2023.

As an investment trust, the Company's capital gains are not taxable.

As noted in the 2018 Annual Report the Company pursued a potential reclaim of tax relating to Franked Investment Group ('FII GLO') computation-based claims, filed on the basis that the tax treatment of dividends received from EU-resident companies was contrary to Article 43 (freedom of establishment) and/or Article 56 (free movement of capital and payments) of the European Community Treat. Following successful legal action regarding the treatment of overseas dividend income and a subsequent settlement agreement with HMRC the Company received a repayment of tax relating to the accounting periods ending 2003 to 2009 and the revenue tax charge for 2023 therefore includes £7,034,000 UK corporation tax.

Factors that may affect future tax charges

At 30 September 2024 the Company had unrelieved losses carried forward of £30,114,000 (2023 – £27,033,000) and had a potential deferred tax asset of £7,529,000 (2023 – £6,758,000) on taxable losses which is available to be carried forward and offset against future taxable profits. A deferred tax asset has not been recognised on these losses as it is considered unlikely that the Company will make taxable revenue profits in the future and it is not liable to tax on its capital gains. The potential deferred tax asset has been calculated using a corporation tax rate of 25% (2023 – 25%).

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 for deferred tax on any capital gains and losses arising on the revaluation or disposal of investments.

07 Net return per ordinary share

	2024	2024	2024	2023	2023	2023
	Revenue	Capital	Total	Revenue	Capital	Total
Net return per ordinary share	0.72p	12.35p	13.07p	2.68p	5.09p	7.77p

Revenue return per ordinary share is based on the net revenue return after taxation of £2,547,000 (2023 – £9,625,000), and on 355,716,719 (2023 – 358,552,904) ordinary shares, being the weighted average number of ordinary shares in issue during each year.

Capital return per ordinary share is based on the net capital gain for the financial year of £43,924,000 (2023 – £18,259,000), and on 355,716,719 (2023 – 358,552,904) ordinary shares, being the weighted average number of ordinary shares in issue during each year.

There are no dilutive or potentially dilutive shares in issue.

08 Ordinary dividends

	2024	2023	2024 £'000	2023 £'000
Amounts recognised as distributions in the period:
Previous year's final (paid 2 February 2024)	0.40p	0.70p	1,429	2,511
Special Interim Dividend (paid 15 September 2023)	–	2.20p	–	7,879
	0.40p	2.90p	1,429	10,390

Also set out below are the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of section 1158 of the Corporation Tax Act 2010 are considered. The revenue available for distribution by way of dividend for the year is £2,547,000 (2023 – £9,625,000).

	2024	2023	2024 £'000	2023 £'000
Dividends paid and proposed in the period:
Special interim dividend (paid 15 September 2023)	–	2.20p	–	7,879
Proposed final dividend per ordinary share (payable 14 February 2025)	0.6p	0.40p	2,111	1,433
	0.6p	2.60p	2,111	9,312

09 Investments

As at 30 September 2024	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Securities
Listed equities	390,500	–	–	390,500
Unlisted equities	–	–	23,475	23,475
Total financial asset investments	390,500	–	23,475	413,975
As at 30 September 2023	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Securities
Listed equities	336,369	–	–	336,369
Unlisted equities	–	–	41,443	41,443

Investments in securities are financial assets designated at fair value through profit or loss on initial recognition. In accordance with FRS 102 the tables above provide an analysis of these investments based on the fair value hierarchy described below which reflects the reliability and significance of the information used to measure their fair value.

Fair value hierarchy

The levels are determined by the lowest (that is the least reliable or least independently observable) level of input that is significant to the fair value measurement for the individual investment in its entirety as follows:

Level 1 – using unadjusted quoted prices for identical instruments in an active market;

Level 2 – using inputs, other than quoted prices included within Level 1, that are directly or indirectly observable (based on market data); and

Level 3 – using inputs that are unobservable (for which market data is unavailable).

The valuation techniques used by the Company are explained in the accounting policies on pages 88 and 89. A sensitivity analysis by valuation technique of the unlisted securities is on pages 100 to 102.

09 Investments (continued)

	Listed Overseas £'000	Unlisted £'000	Total £'000
Cost of investments held at 30 September 2023	375,265	35,147	410,412
Investment holding gains/(losses) at 30 September 2023	(38,896)	6,296	(32,600)
Value of investments held at 30 September 2023	336,369	41,443	377,812
Analysis of transactions made during the year:
Purchases at cost	79,280	2,023	81,303
Sales proceeds received	(89,108)	–	(89,108)
Gains/(losses) on investments	63,959	(19,991)	43,968
Value of investments held at 30 September 2024	390,500	23,475	413,975
Cost of investments held at 30 September 2024	332,291	30,470	362,761
Unrealised appreciation/(depreciation) at 30 September 2024	58,209	(6,995)	51,214
Value of investments held at 30 September 2024	390,500	23,475	413,975

The purchases and sales proceeds figures above include transaction costs of £41,000 (2023 – £17,000) and £35,000 (2023 – £17,000) respectively.

	2024 £'000	2023 £'000
Net (losses)/gains on investments
Losses on sales*	(39,846)	(25,612)
Changes in investment holding gains	83,814	45,407
	43,968	19,795

* Includes losses on McMakler shares which were written off in the period. The holdings had a book cost of £6,700,000 when written off.

10 Debtors

	2024 £'000	2023 £'000
Accrued income and prepaid expenses	294	186
Taxation recoverable	1,024	1,224
Investment sales awaiting settlement	13	996
	1,331	2,406

None of the above debtors are financial assets designated at fair value through profit or loss. The carrying amount of debtors is a reasonable approximation of fair value.

11 Creditors – amounts falling due within one year

	2024 £'000	2023 £'000
Interest payable	226	236
Purchases for subsequent settlement	13	966
Share buy backs payable	2	–
Other creditors and accruals	646	573
	887	1,775

11 Creditors – amounts falling due within one year (continued)

None of the above creditors are financial liabilities held at fair value through profit or loss. Included in other creditors is £440,000 (2023 – £412,000) in respect of the investment management fee.

The Company currently has a €30,000,000 bank overdraft credit facility agreement with The Northern Trust Company (the 'Bank') for the purpose of pursuing its investment objective. As at 30 September 2024, nil had been drawn down (2023 – nil). The facility is uncommitted. Interest is charged at 1.25% above the European Central Bank Main Financing Rate. The Board has currently agreed to cap a drawdown under this facility at €15,000,000.

The maximum aggregate principal amount which may be outstanding under the facility at any time is the lower of €30,000,000 or 20% of the aggregated value of unencumbered assets acceptable to the Bank. The facility contains covenants preventing the Company from creating any security interest over any assets of the Company held by the Bank or incurring any other financial indebtedness without the express permission of the Bank. The Company is required to maintain its status as an investment trust authorised by HMRC and to maintain the appointment of Northern Trust Investor Services as its Depositary. The facility also demands automatic repayment in the event of an unremedied breach by the Company or should the Company become insolvent or subject to insolvency, winding-up or administrative proceedings. There were no breaches of covenants during the year.

12 Creditors – amounts falling due after more than one year

	2024 £'000	2023 £'000
Unsecured loan notes:
€30m 1.55% 24 June 2036	24,938	25,998
€30m 1.57% 8 December 2040	24,906	25,962
	49,844	51,960

The Company has €30 million of long-term, fixed rate, senior, unsecured privately placed loan notes, with a fixed coupon of 1.57% to be repaid on 8 December 2040 and a further €30 million of long-term, fixed rate, senior, unsecured privately placed loan notes with a fixed coupon of 1.55% to be repaid on 24 June 2036.

The main covenants which are tested monthly are: (i) Net tangible assets shall not fall below £200,000,000. (ii) Total borrowings shall not exceed 30% of the Company's adjusted assets (as defined by the loan agreement). (iii) The Company's number of holdings shall not fall below 30.

13 Share capital

	2024 Number	2024 £'000	2023 Number	2023 £'000
Allotted, called up and fully paid ordinary shares of 2.5p each	351,783,279	8,795	358,149,200	8,954
Treasury shares of 2.5p each	50,660,411	1,266	44,294,490	1,107
Total	402,443,690	10,061	402,443,690	10,061

The Company's shareholder authority permits it to hold shares bought back in treasury. Under such authority, treasury shares may be subsequently either sold for cash (at a premium to net asset value per ordinary share) or cancelled. At 30 September 2024 the Company had authority to buy back 48,283,377 ordinary shares. During the year to 30 September 2024 no ordinary shares (2023 – nil) were bought back for cancellation and 6,365,921 (2023 – 538,471) ordinary shares were bought back into treasury at a cost of £6,001,000 (2023 – £501,000). Under the provisions of the Company's Articles of Association share buy-backs are funded from the capital reserve. The Company has authority to allot shares under section 551 of the Companies Act 2006. The Board has authorised use of this authority to issue new shares at a premium to net asset value per share in order to enhance the net asset value per share for existing shareholders and improve the liquidity of the Company's shares. During the year to 30 September 2024 no shares were issued (in the year to 30 September 2023 – no shares were issued).

14 Capital and reserves

	Share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Capital reserve £'000	Revenue reserve £'000	Shareholders' funds £'000
At 1 October 2023	10,061	125,050	8,750	176,215	7,314	327,390
Gains on investments	–	–	–	43,968	–	43,968
Investment management fee charged to capital	–	–	–	(1,477)	–	(1,477)
Finance costs charged to capital	–	–	–	(640)	–	(640)
Exchange differences	–	–	–	2,073	–	2,073
Ordinary shares bought back into treasury	–	–	–	(6,001)	–	(6,001)
Dividends paid in year	–	–	–	–	(1,429)	(1,429)
Revenue return after taxation	–	–	–	–	2,547	2,547
At 30 September 2024	10,061	125,050	8,750	214,138	8,432	366,431

The capital reserve includes unrealised gains of £51,214,000 (2023 – losses of £32,600,000) as disclosed in note 9 and unrealised currency gains of £3,069,000 (2023 – gains of £947,000).

The revenue reserve of £8,432,000 (2023 – £7,314,000) and the capital reserve (to the extent that realised profits exceed any unrealised losses) £152,860,000 (2023 – £176,215,000) are distributable.

15 Shareholders' funds per ordinary share

	2024	2023
Shareholders' funds	£366,431,000	£327,390,000
Number of ordinary shares in issue at the year end	351,783,279	358,149,200
Shareholders' funds per ordinary share	104.2p	91.4p

The shareholders' funds figures above have been calculated after deducting borrowings at book value, in accordance with the provisions of FRS 102 and based on 351,783,279 (2023 – 358,149,200) ordinary shares, being the number of ordinary shares in issue at the year end, excluding shares held in treasury. The net asset value figures shown on the Balance Sheet on page 85 have been calculated after deducting borrowings at either book value or fair value. Reconciliations between shareholders' funds and both NAV measures are shown in the Glossary of terms and alternative performance measures on page 118. There are no dilutive or potentially dilutive shares in issue.

16 Analysis of change in net debt

	1 October 2023 £'000	Cash flows £'000	Other non-cash changes £'000	Exchange movement £'000	30 September 2024 £'000
Cash at bank	907	998	–	(49)	1,856
Loans due in more than one year	(51,960)	–	(6)	2,122	(49,844)
	(51,053)	998	(6)	2,073	(47,988)

17 Contingent liabilities, guarantees and financial commitments

There were no contingent liabilities, guarantees or financial commitments at the year end (2023 – none).

18 Transactions with related parties and the managers and secretaries

The Directors' fees for the year and interests in the Company's shares at the end of the year are detailed in the Directors' Remuneration Report on pages 72 and 73. The Directors' Fees are included in note 4 on page 91. No Director has a contract of service with the Company. During the years reported, no Director was interested in any contract or other matter requiring disclosure under section 412 of the Companies Act 2006.

The Management fee due to Baillie Gifford & Co Limited is set out in note 3 on page 91 and the amount accrued at 30 September 2023 is set out in note 11 on pages 94 and 95. Details of the Investment Management Agreement are set out on page 5.

The Company is part of a marketing programme which includes all the investment trusts managed by the Manager. The Company's marketing contribution, recharged by the Manager, was £95,000 (2023 – £95,000) as disclosed in note 4.

19 Financial instruments

The Company invests in equities for the long-term so as to achieve its investment objective of long-term capital growth with the aim of providing a total return in excess of the FTSE Europe Ex UK Index. The Company borrows money when the Managers have sufficient conviction that the assets funded by borrowed monies will generate a return in excess of the cost of borrowing. In pursuing its investment objective, the Company is exposed to various types of risk that are associated with the financial instruments and markets in which it invests and could result in a reduction in the Company's net assets and/or a reduction in the profits available for dividend.

These risks are categorised here as market risk (comprising currency risk, interest rate risk and other price risk), liquidity risk and credit risk. The Board monitors closely the Company's exposures to these risks but does so in order to reduce the likelihood of a permanent loss of capital rather than to minimise short-term volatility.

The risk management policies and procedures outlined in this note have not changed substantially from the previous accounting year.

Market risk

The fair value or future cash flows of a financial instrument or other investment held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements – currency risk, interest rate risk and market price risk. The Board of Directors reviews and agrees policies for managing these risks and the Company's Investment Manager assesses the exposure to market risk when making individual investment decisions as well as monitoring the overall level of market risk across the investment portfolio on an ongoing basis. Details of the Company's investment portfolio are shown on pages 46 and 47.

Currency risk

The Company's assets, liabilities and income are denominated in currencies other than sterling (the Company's functional currency and that in which it reports its results). Consequently, movements in exchange rates may affect the sterling value of those items. It is not the Company's policy to hedge foreign currency risk on a continuing basis but the Company may, and currently does through the euro denominated unsecured loan notes, match overseas investments with foreign currency borrowings.

The Investment Manager monitors the Company's exposure to foreign currencies and reports to the Board on a regular basis. The Investment Manager assesses the risk to the Company of the foreign currency exposure by considering the effect on the Company's net asset value and income of a movement in the rates of exchange to which the Company's assets, liabilities, income and expenses are exposed. However, the country in which a company is listed is not necessarily where it earns its profits. The movement in exchange rates on overseas earnings may have a more significant impact upon a company's valuation than a simple translation of the currency in which the company is quoted.

Exposure to currency risk through asset allocation, which is calculated by reference to the currency in which the asset or liability is quoted, is shown below.

At 30 September 2024	Investments £'000	Cash and deposits £'000	Loan Notes £'000	Debtors and creditors £'000	Net exposure £'000
Euro	213,552	1,803	(49,844)	597	166,108
Swedish kroner	67,298	–	–	–	67,298
Danish krone	36,986	–	–	95	37,081
Canadian dollar	21,090	–	–	–	21,090
Norwegian krone	20,019	–	–	–	20,019
Polish Zloty	17,354	–	–	33	17,387
Swiss franc	16,961	–	–	321	17,282
US dollar	17,257	–	–	–	17,257
Total exposure to currency risk	410,517	1,803	(49,844)	1,046	363,522
Sterling	3,458	53	–	(602)	2,909
	413,975	1,856	(49,844)	444	366,431

19 Financial instruments (continued)

Currency risk (continued)

At 30 September 2023	Investments £'000	Cash and deposits £'000	Loan Notes £'000	Debtors and creditors £'000	Net exposure £'000
Euro	203,558	790	(51,960)	224	152,612
Swedish kroner	51,643	–	–	486	52,129
US dollar	38,536	–	–	–	38,536
Norwegian krone	27,109	–	–	–	27,109
Canadian dollar	16,053	–	–	–	16,053
Danish krone	15,365	–	–	133	15,498
Polish zloty	12,058	–	–	32	12,090
Swiss franc	8,907	–	–	287	9,194
Total exposure to currency risk	373,229	790	(51,960)	1,162	323,221
Sterling	4,583	117	–	(531)	4,169
	377,812	907	(51,960)	631	327,390

Currency Risk Sensitivity

At 30 September 2024, if sterling had strengthened by 5% in relation to all currencies, with all other variables held constant, total net assets and total return would have decreased by the amounts shown below. A 5% weakening of sterling against all currencies, with all variables held constant, would have had an equal but opposite effect on the Financial Statement amounts. The analysis is performed on the same basis for 2022.

	2024 £'000	2023 £'000
Euro	8,305	7,631
Swedish kroner	3,365	2,606
Danish krone	1,854	775
Canadian dollar	1,055	803
Norwegian krone	1,001	1,355
Polish zloty	869	605
Swiss franc	864	460
US dollar	863	1,927
	18,176	16,162

Interest rate risk

Interest rate movements may affect the level of income receivable and payable on cash deposits and interest payable on variable rate borrowings and the fair value of the Company's fixed-rate borrowings. They may also impact upon the market value of the Company's investments as the effect of interest rate movements upon the earnings of a company may have a significant impact upon the valuation of that company's equity.

The possible effects on cash flows that could arise as a result of changes in interest rates are taken into account when making investment decisions and when entering borrowing agreements.

The Board reviews on a regular basis the amount of investments in cash and the income receivable on cash deposits.

The Company has the ability to finance part of its activities through borrowings at approved levels. The amount of such borrowings and the approved levels are monitored and reviewed regularly by the Board.

During the year to 30 September 2024, the majority of the Company's assets were non-interest bearing.

19 Financial instruments (continued)

Financial assets

Cash deposits generally comprise overnight call or short-term money market deposits and earn interest at floating rates based on prevailing bank base rates.

Financial liabilities

The interest rate risk profile of the Company's financial liabilities at 30 September is shown below:

	2024 £'000	2023 £'000
Fixed rate – Euro denominated	49,844	51,960

Maturity profile

The maturity profile of the Company's financial liabilities at 30 September was:

	2024	2024	2024	2023	2023	2023
	Within	Between	More than	Within	Between	More than
	1 year	1 and 5 years	5 years	1 year	1 and 5 years	5 years
	£'000	£'000	£'000	£'000	£'000	£'000
Repayment of loans, debentures and loan notes	–	–	49,844	–	–	51,960

Interest rate risk sensitivity

An increase of 1.0% in interest rates, with all other variables being held constant, would have increased the Company's net assets for the year to 30 September 2024 by £16,000 (year to 30 September 2023 – £14,000). A decrease of 1.0% would have had an equal but opposite effect. The sensitivity for 2023 excludes the £869,000 interest received from HMRC relating to the tax repayment.

Other price risk

Changes in market prices other than those arising from interest rate risk or currency risk may also affect the value of the Company's net assets. The Company's exposure to changes in market prices relates to the fixed asset investments as disclosed in note 8.

The Board manages the market price risks inherent in the investment portfolio by ensuring full and timely access to relevant information from the Investment Manager. The Board meets regularly and at each meeting reviews investment performance, the investment portfolio and the rationale for the current investment positioning to ensure consistency with the Company's objectives and investment policies. The portfolio does not seek to reproduce the index, investments are selected based upon the merit of individual companies and therefore performance may well diverge from the comparative index.

Other price risk sensitivity – quoted

A full list of the Company's investments is shown on pages 46 and 47. In addition, a geographical analysis of the portfolio and an analysis of the investment portfolio by broad industrial or commercial sector are contained on page 48.

106.6% (2023 – 102.7%) of the Company's net assets are invested in quoted equities. A 20% increase in quoted equity valuations at 30 September 2024 would have increased total net assets and net return after taxation by £78,100,000 (2023 – £67,274,000). A decrease of 20% would have had an equal but opposite effect. The level of change is considered to be reasonable based on observations of current market conditions.

19 Financial Instruments (continued)

Other price risk sensitivity – unlisted

6.4% (2023 – 12.7%) of the Company's net assets are invested in unlisted investments. The fair valuation of the unlisted investments is influenced by the estimates, assumptions and judgements made in the fair valuation process (see 1(b) on pages 88 and 89). A sensitivity analysis is provided below which recognises that the valuation methodologies employed involve subjectivity in their significant unobservable inputs and illustrates the sensitivity of the valuations to these inputs. The inputs have been flexed by +/-10% with the exception of the Recent Transaction Price valuation approach as it does not involve significant subjectivity. The table also provides the range of values for the key unobservable inputs.

As at 30 September 2024	Significant unobservable inputs*
Valuation technique	Fair value of investments £'000	Key unobservable inputs	Other unobservable inputs†	Range	Weighted average range#	Sensitivity %	Sensitivity to changes in significant unobservable inputs
Market approach using comparable traded multiples	5,873	EV/NTM revenue multiple	a,b,c,d	N/A	6.5x	10%	If EV/LTM multiples changed by +/- 10%, the fair value would change by £621,066 and (£623,742)‡.
		Transaction implied premiums/ (discounts)	g	N/A	(55.7%)	10%	If the transaction implied premium/ (discount) is changed by +/- 10%, the fair value would change by £955,457 and (£919,070).
Benchmark performance	2,695	Selection of comparable companies and relevant indices	a,b,c,f	(26.7)% – 5.9%	(5.8%)	10%	If input comparable company performance changed by +/- 10%, the fair value would change by £273,014 and (£266,614).
		Insolvency risk discount	a,b	N/A	90.0%	10%	If the insolvency risk discount changed by +/-10%, the fair value would change by £971,539 and (£965,139).
Recent transaction price	14,907	N/A	a,b	N/A	N/A	10%	If the recent transaction price changed by +/- 10%, the fair value would change by +/- £1,490,764.

19 Financial Instruments (continued)

As at 30 September 2023			Significant unobservable inputs*
Valuation technique	Fair value of investments £'000	Key unobservable inputs	Other unobservable inputs†	Range	Weighted average range#	Sensitivity %	Sensitivity to changes in significant unobservable inputs
Market approach using comparable traded multiples	5,841	Enterprise Value/Last twelve months (EV/LTM) revenue multiple	a,b,c,d	0.5x – 3.9x	1.57x	10%	If EV/LTM multiples changed by +/- 10%, the fair value would change by £621,066 and (£623,742)‡.
		Transaction implied premiums and discounts	g	25.1%– 30.7%	27.8%	10%	If the transaction implied premium/ discount is changed by +/- 10%, the fair value would change by £126,043 and (£128,718).
Benchmark performance	18,752	Selection of comparable companies and relevant indices	a,b,c,f	(15.7%)– 3.4%	(13.2%)	10%	If input comparable company performance changed by +/- 10%, the fair value would change by £1,994,592 and (£1,992,712).
Recent transaction price	16,850	Initial transaction price	a,b	n/a	n/a	n/a	n/a

Other price risk sensitivity – unlisted (continued)

† See explanation of significant unobservable inputs below (sections 'a' to 'g' as relevant).

Weighted average is calculated by reference to the fair value of holdings as at the respective year end. This therefore gives a clearer indication of the typical multiple or adjustment being applied across the portfolio.

‡ Flexing the revenue figures by the same sensitivity would result in the same change in both directions.

* Significant unobservable inputs

The variable inputs applicable to each broad category of valuation basis will vary dependent on the particular circumstances of each private company valuation. An explanation of each of the key variable inputs is provided below. The assumptions made in the production of the inputs are described in note 1(c) on page 89.

a. Application of valuation basis

Each investment is assessed independently, and the valuation basis applied will vary depending on the circumstances of each investment. When an investment is pre-revenue, the focus of the valuation will be on assessing the recent transaction and the achievement of key milestones since investment. Adjustments may also be made depending on the performance of comparable benchmarks and companies. For those investments where a trading multiples approach can be taken, the methodology will factor in revenue, earnings or net assets as appropriate for the investment, and where a suitable correlation can be identified with the comparable companies then a regression analysis will be performed. Discounted cash flows will also be considered where appropriate forecasts are available.

b. Probability estimation of liquidation events

The probability of a liquidation event such as a company sale, insolvency event, or alternatively an initial public offering ('IPO'), is a key variable input in the transaction-based and multiples-based valuation techniques. The probability of an IPO versus a company sale is typically estimated from the outset to be 50:50 if there has been no indication by the company of pursuing either of these routes. If the company has indicated an intention to IPO, the probability is increased accordingly to 75% and if an IPO has become a certainty the probability is increased to 100%. Likewise, in a scenario where a company is pursuing a trade sale the weightings will be adjusted accordingly in favour of a sale scenario, or in a situation where a company is underperforming expectations significantly and therefore deemed very unlikely to pursue an IPO. Should there be a risk of an insolvency event, then an appropriate discount may be applied and the ability to enforce liquidation protections will be assessed based on the individual circumstances.

19 Financial instruments (continued)

c. Selection of comparable companies

The selection of comparable companies is assessed individually for each investment at the point of investment, and the relevance of the comparable companies is continually evaluated at each valuation. The key criteria used in selecting appropriate comparable companies are the industry sector in which they operate, the geography of the company's operations, the respective revenue and earnings growth rates and the operating margins. Typically, between 4 and 10 comparable companies will be selected for each investment, depending on how many relevant comparable companies are identified. The resultant revenue or earnings multiples or share price movements derived will vary depending on the companies selected and the industries they operate in.

d. Estimated sustainable earnings

The selection of sustainable revenue or earnings will depend on whether the company is sustainably profitable or not, and where it is not then revenues will be used in the valuation. The valuation approach will typically assess companies based on the last twelve months of revenue or earnings, as they are the most recent available and therefore viewed as the most reliable. Where a company has reliably forecasted earnings previously or there is a change in circumstance at the business which will impact earnings going forward, then forward estimated revenue or earnings may be used instead.

Significant unobservable inputs (continued)

e. Application of illiquidity discount

The application of an illiquidity discount will be applied either through the calibration of a valuation against the most recent transaction, or by application of a specific discount. The discount applied where a calibration is not appropriate is typically 10%, reflecting the fact that the majority of the investments held are substantial companies with some secondary market activity.

f. Selection of appropriate benchmarks

The selection of appropriate benchmarks is assessed individually for each investment. The industry and geography of each company are key inputs to the benchmark selection, with either one or two key indices or benchmarks being used for comparison.

g. Transaction implied premium and discount

Where there is an implied company valuation available as a result of an external arm's length transaction, the ongoing valuation will be calibrated to this by deriving a company valuation with reference to the average multiple from a set of comparable companies and comparing this to a transaction implied valuation, and could result in an implied premium or discount compared to comparable companies at the point of transaction. This discount or premium will be considered in future valuations, and may be reduced due to factors such as period of time since the transaction and company performance. Where a calibrated approach is not appropriate, a discount for illiquidity will be applied as noted in (e) above.

Liquidity risk

This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. Liquidity risk is not significant as the majority of the Company's assets are in investments that are readily realisable. The Company's holdings in unlisted investments, which are not considered to be readily realisable, amounted to 6.4% of net assets at 30 September 2024.

The Company has the power to take out borrowings, which give it access to additional funding when required.

The maturity profile of the Company's financial liabilities is on page 99.

Credit risk

This is the risk that a failure of a counterparty to a transaction to discharge its obligations under that transaction could result in the Company suffering a loss. This risk is managed as follows:

• where the Investment Manager makes an investment in a bond or other security with credit risk, that credit risk is assessed and then compared to the prospective investment return of the security in question. The Board regularly receives information from the Managers on the credit ratings of those bonds and other securities in which the Company has invested (if any);
• the Depositary is liable for the loss of financial instruments held in custody. The Depositary will ensure that any delegate segregates the assets of the Company. The Depositary has delegated the custody function to The Northern Trust Company. Bankruptcy or insolvency of the custodian may cause the Company's rights with respect to securities held by the custodian to be delayed. The Investment Manager monitors the Company's risk by reviewing the custodian's internal control reports and reporting its findings to the Board;
• investment transactions are carried out with a large number of brokers whose creditworthiness is reviewed by the Investment Manager. Transactions are ordinarily undertaken on a delivery versus payment basis whereby the Company's custodian ensures that the counterparty to any transaction entered into by the Company has delivered on its obligations before any transfer of cash or securities away from the Company is completed;
• the creditworthiness of the counterparty to transactions involving derivatives, structured notes and other arrangements, wherein the creditworthiness of the entity acting as broker or counterparty to the transaction is likely to be of sustained interest, is subject to rigorous assessment by the Investment Manager; and
• cash is only held at banks that are regularly reviewed by the Investment Manager.

19 Financial instruments (continued)

Credit risk exposure

The exposure to credit risk at 30 September was:

Debtors	1,331	2,406
Cash at bank	1,856	907
	2024 £'000	2023 £'000

None of the Company's financial assets are past due or impaired.

Fair value of financial assets and financial liabilities

The Directors are of the opinion that there is no difference between the amounts at which the financial assets and liabilities of the Company are carried in the Balance Sheet and their fair values, with the exception of long term borrowings. The fair values of the Company's borrowings are shown below. The fair values of the loan notes are calculated by reference to corporate bonds of comparable maturity and yield.

Unsecured loan notes:	2024 Book value £'000	2024 Fair value £'000	2023 Book value £'000	2023 Fair value £'000
€30m 1.55% 24 June 2036	24,938	19,465	25,988	17,793
€30m 1.57% 8 December 2040	24,906	16,960	25,962	15,076
	49,844	36,425	51,960	32,869

Capital management

The objective of the Company is to maximise the total return to its equity shareholders through an appropriate capital structure. Its borrowings are set out in note 12 on page 95. The Company does not have any externally imposed capital requirements other than the covenants on its loan notes which are detailed in note 12. The capital of the Company is the ordinary share capital as detailed in note 13. It is managed in accordance with its investment policy in pursuit of its investment objective, both of which are detailed on pages 26 and 27, and shares may be repurchased or issued as explained on page 95.

20 Subsequent events

On 15 November 2024 the value of the holdings in Northvolt were written down to nil, the value of the holdings as at 30 September 2024 was £965,000, 0.3% of total assets. This was reflected in the published NAV as at 15 November 2024. The Company is not aware of any other subsequent events.

Shareholder information

Notice of Annual General Meeting

By Rail:

Edinburgh Waverley – approximately a 5 minute walk away

By Bus:

Lothian Buses local services include: 1, 3, 5, 7, 8, 10, 14, 15, 16, 25, 34

By Tram:

Stops at St Andrew Square and Picardy Place

Access to Waverley Train Station on foot

The Annual General Meeting of Baillie Gifford European Growth Trust plc will be held at the the offices of Baillie Gifford & Co, Calton Square, 1 Greenside Row, Edinburgh EH1 3AN, on Wednesday 5 February 2025, at 11am. You will find directions to the venue by scanning the QR code above.

To accurately reflect the views of shareholders of the Company, the Board intends to hold the AGM voting on a poll, rather than by a show of hands, as has been customary.

The Board encourages all shareholders to submit proxy voting forms as soon as possible and, in any event, by no later than 11am on 3 February 2025.

Should shareholders have questions for the Board or the Managers or any queries as to how to vote or how to attend the meeting they are welcome as always to submit them by email to trustenquiries@bailliegifford.com or call 0800 917 2112. Baillie Gifford may record your call.

For details of how to vote your shares if held via a platform please refer to theaic.co.uk/how-to-voteyour-shares.

Notice is hereby given that an Annual General Meeting of Baillie Gifford European Growth Trust plc will be held at the offices of Baillie Gifford & Co, Calton Square, 1 Greenside Row, Edinburgh EH1 3AN, on Wednesday 5 February 2025, at 11am for the following purposes.

To consider and, if thought fit, to pass the following Resolutions as Ordinary Resolutions.

• 1. To receive and adopt the Financial Statements of the Company for the year to 30 September 2024 with the Reports of the Directors and of the Independent Auditor thereon.
• 1. To approve the Directors' Annual Report on Remuneration for the year to 30 September 2024.
• 1. To declare a final dividend of 0.6p per ordinary share.
• 1. To elect Davina Curling as a Director of the Company.
• 1. To re-elect David Barron as a Director of the Company.
• 1. To re-elect Andrew Watkins as a Director of the Company.
• 1. To re-elect Emma Davies as a Director of the Company.
• 1. To re-appoint BDO LLP as Independent Auditor of the Company to hold office from the conclusion of this meeting until the conclusion of the next Annual General Meeting at which the Financial Statements are laid before the Company.
• 1. To authorise the Directors to determine the remuneration of the Independent Auditor of the Company.

• That, in substitution for any existing authority, but without prejudice to the exercise of any such authority prior to the date hereof, the Directors of the Company be and they are hereby generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006 (the 'Act') to exercise all the powers of the Company to allot shares in the Company and to grant rights to subscribe for or to convert any security into shares in the Company ('Securities') provided that such authority shall be limited to the allotment of shares and the grant of rights in respect of shares with an aggregate nominal value of up to £2,915,688, such authority to expire at the conclusion of the next Annual General Meeting of the Company after the passing of this resolution or on the expiry of 15 months from the passing of this resolution, whichever is the earlier, unless previously revoked, varied or extended by the Company in a general meeting, save that the Company may at any time prior to the expiry of this authority make an offer or enter into an agreement which would or might require Securities to be allotted or granted after the expiry of such authority and the Directors shall be entitled to allot or grant Securities in pursuance of such an offer or agreement as if such authority had not expired.

To consider and, if thought fit, to pass Resolutions 11, 12 and 13 as Special Resolutions.

1. That, subject to the passing of Resolution 10 above, and in substitution for any existing power but without prejudice to the exercise of any such power prior to the date hereof, the Directors of the Company be and they are hereby generally empowered, pursuant to sections 570 and 573 of the Companies Act 2006 (the 'Act'), to allot equity securities (within the meaning of section 560(1) of the Act), for cash pursuant to the authority given by Resolution 10 above, and to sell treasury shares for cash, as if section 561(1) of the Act did not apply to any such allotment or sale, provided that this power:

2. a.expires at the conclusion of the next Annual General Meeting of the Company after the passing of this Resolution or on the expiry of 15 months from the passing of this Resolution, whichever is the earlier, save that the Company may, before such expiry, make an offer or agreement which would or might require equity securities to be allotted or treasury shares to be sold after such expiry and the Directors may allot equity securities or sell treasury shares in pursuance of any such offer or agreement as if the power conferred hereby had not expired; and

3. b.shall be limited to the allotment of equity securities or the sale of treasury shares up to an aggregate nominal value of £874,706, being approximately 10% of the nominal value of the issued share capital of the Company, as at 21 November 2024.
4. 1. That, in substitution for any existing authority but without prejudice to the exercise of any such authority prior to the date hereof, the Company be and is hereby generally and unconditionally authorised, pursuant to and in accordance with section 701 of the Companies Act 2006 (the 'Act') to make market purchases (within the meaning of section 693(4) of the Act) of fully paid ordinary shares of 2.5 pence each in the capital of the Company ('ordinary shares') (either for retention as treasury shares for future reissue, resale, transfer or cancellation), provided that:
   2. a.the maximum aggregate number of ordinary shares hereby authorised to be purchased is 52,447,399, or, if less, the number representing approximately 14.99% of the issued ordinary share capital of the Company as at the date of the passing of this Resolution;
   3. b.the minimum price (excluding expenses) which may be paid for each ordinary share shall be the nominal value of that share;
5. c.the maximum price (excluding expenses) which may be paid for each ordinary share shall not be more than the higher of:
   • i. 5 per cent above the average closing price on the London Stock Exchange of an ordinary share over the five business days immediately preceding the date of purchase; and
   • ii. the higher of the last independent trade and the highest current independent bid on the London Stock Exchange; and
6. d.unless previously varied, revoked or renewed by the Company in a general meeting, the authority hereby conferred shall expire at the conclusion of the Annual General Meeting of the Company to be held in respect of the year ending 30 September 2025, save that the Company may, prior to such expiry, enter into a contract to purchase ordinary shares under such authority which will or might be completed or executed wholly or partly after the expiration of such authority and may make a purchase of ordinary shares pursuant to any such contract.
7. 1. That, the Company be and is hereby generally and unconditionally authorised to hold general meetings (other than Annual General Meetings) on 14 clear days' notice,such authority to expire at the conclusion of the next Annual General Meeting of the Company.

By order of the Board Baillie Gifford & Co Limited Company Secretaries 25 November 2024

Notes

• 1. As a member you are entitled to appoint a proxy or proxies to exercise all or any of your rights to attend, speak and vote at the AGM. A proxy need not be a member of the Company but must attend the AGM to represent you. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You can only appoint a proxy using the procedure set out in these notes and the notes to the proxy form. You may not use any electronic address provided either in this notice or any related documents (including the proxy form) to communicate with the Company for any purpose other than those expressly stated.
• 1. To be valid any proxy form or other instrument appointing a proxy, together with any power of attorney or other authority under which it is signed or a certified copy thereof, must be received by post or (during normal business hours only) by hand at the Registrars of the Company at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY or online at eproxyappointment.com no later than two days (excluding non-working days) before the time of the meeting or any adjourned meeting.
• 1. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual and/or by logging on to the website euroclear. com/CREST. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriateaction on their behalf.
• 1. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a 'CREST Proxy Instruction') must be properly authenticated in accordance with Euroclear UK & International Limited's specifications, and must contain the information required for such instruction, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the Company's registrar (ID 3RA50) no later than two days (excluding non-working days) before the time of the

meeting or any adjournment. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Application Host) from which the Company's registrar is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.

• 1. CREST members and, where applicable, their CREST sponsors, or voting service providers should note that Euroclear UK & International Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider(s), to procure that his/ her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
• 1. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
• 1. The return of a completed proxy form or other instrument of proxy will not prevent you attending the AGM and voting in person if you wish.
• 1. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001 and section 311 of the Companies Act 2006 the Company specifies that to be entitled to attend and vote at the Annual General Meeting (and for the purpose of the determination by the Company of the votes they may cast), shareholders must be registered in the Register of Members of the Company no later than two days (excluding non-working days) prior to the commencement of the AGM or any adjourned meeting. Changes to the Register of Members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the meeting.
• 1. Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy information rights (a 'Nominated Person') may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the Annual General Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.
• 1. The statement of the rights of shareholders in relation to the appointment of proxies in Notes 1 and 2 above does not apply to Nominated Persons. The rights described in those Notes can only be exercised by shareholders of the Company.
• 1. Under section 338 of the Companies Act 2006, members meeting the qualification criteria set out in note 14 below may, subject to certain conditions, require the Company to circulate to members notice of a resolution which may properly be moved and is intended to be moved at that meeting. The conditions are that:
  2. a.the resolution must not, if passed, be ineffective (whether by reason of inconsistency with any enactment or the Company's constitution or otherwise);
  3. b.the resolution must not be defamatory of any person, frivolous or vexatious; and
  4. c.the request:
     • i. may be in hard copy form or in electronic form;
     • ii. must identify the resolution of which notice is to be given by either setting out the resolution in full or, if supporting a resolution sent by another member, clearly identifying the resolution which is being supported;
     • iii.must be authenticated by the person or persons making it; and
     • iv. must be received by the Company not later than 25 December 2024.

• Under section 338A of the Companies Act 2006, members meeting the qualification criteria set out at note 14 below may require the Company to include in the business to be dealt with at the Annual General Meeting a matter (other than a proposed resolution) which may properly be included in the business (a matter of business). The request must have been received by the Company no later than 25 December 2024. The conditions are that the matter of business must not be defamatory of any person, frivolous or vexatious.

The request must identify the matter of business by either setting it out in full or, if supporting a statement sent by another member, clearly identify the matter of business which is being supported. The request must be accompanied by a statement setting out the grounds for the request. Members seeking to do this should write to the Company providing their full name and address.

• 1. Under section 527 of the Companies Act 2006, members meeting the qualification criteria set out in note 14 below may require the Company to publish, on its website, (without payment) a statement (which is also passed to the Auditor) setting out any matter relating to the audit of the Company's Financial Statements, including the Auditor's Report and the conduct of the audit. Such requests must be made in writing and must state your full name and address.
• 1. In order to be able to exercise the members' rights in notes 11 to 13, the relevant request must be made by:
  2. a.members representing at least 5% of the total voting rights of all the members who have a right to vote on the resolution to which the requests relate; or
  3. b.at least 100 members who have a right to vote on the resolution to which the requests relate and hold shares in the Company on which there has been paid up an average sum, per member, of at least £100.

Such requests should be sent to the Company at Calton Square, 1 Greenside Row, Edinburgh, EH1 3AN. Electronic requests permitted under section 338 (see note 11) should be sent to trustenquiries@bailliegifford.com.

• 1. Information regarding the Annual General Meeting, including information required by section 311A of the Companies Act 2006, is available from the Company's page of the Managers' website at bgeuropeangrowth.com.
• 1. As at 21 November 2024 (being the last practicable day prior to the publication of this notice) the Company's issued share capital consisted of 349,882,585 ordinary shares, carrying one vote each. Therefore, the total voting rights in the Company as at 21 November 2024 were 349,882,585 votes. Voting on the resolutions will be conducted by way of a poll. This will ensure an extact and definitive result.
• 1. Any person holding 3% or more of the total voting rights of the Company who appoints a person other than the Chairman of the meeting as his/her proxy will need to ensure that both he/she and his/her proxy comply with their respective disclosure obligations under the UK Disclosure and Transparency Rules.
• 1. No Director has a contract of service with the Company.

Further shareholder information

Baillie Gifford European Growth Trust is an investment trust. Investment trusts offer investors the following:

• participation in a diversified portfolio of shares;
• constant supervision by experienced professional managers; and
• the Company is free from capital gains tax on capital profits realised within its portfolio, although investors are still liable for capital gains tax on profits when selling their investment.

How to invest

The Company's shares are traded on the London Stock Exchange. They can be bought by placing an order with a stockbroker, or by asking a professional adviser to do so. If you are interested in investing directly in Baillie Gifford European Growth Trust, you can do so online. There are a number of companies offering real time online dealing services. Find out more by visiting the investment trust pages at bailliegifford.com.

Sources of further information on the Company

The price of the Company's shares is quoted daily in the Financial Times and can also be found on the Company's page of the Managers' website at bgeuropeangrowth.com, Trustnet at trustnet.com and on other financial websites. Company factsheets are also available on the Baillie Gifford website and are updated monthly. These are available from Baillie Gifford on request.

Baillie Gifford European Growth Trust Identifiers

ISIN GB00BMC7T380

Sedol BMC7T38

Ticker BGEU

Legal Entity Identifier 213800QNN9EHZ4SC1R12

The ordinary shares of the Company are listed on the London Stock Exchange.

Key dates

Ordinary shareholders normally receive one dividend in respect of each financial year paid in February. The Annual Report and Financial Statements are normally issued in November and the AGM is normally held in January/February.

Share register enquiries

Computershare Investor Services PLC maintains the share register on behalf of the Company. In the event of queries regarding shares registered in your own name, please contact the Registrars on 0370 889 4086.

This helpline also offers an automated self-service functionality (available 24 hours a day, 7 days a week) which allows you to:

• hear the latest share price;
• confirm your current share holding balance; and
• order Change of Address, Dividend Bank Mandate and Stock Transfer forms.

You can also check your holding on the Registrars' website at investorcentre.co.uk. They also offer a free, secure share management website service which allows you to:

• view your share portfolio and see the latest market price of your shares;
• calculate the total market price of each shareholding;
• view price histories and trading graphs;
• change address details; and
• use online dealing services.

To take advantage of this service, please log in at investorcentre.co.uk and enter your Shareholder Reference Number and Company Code (this information can be found on the last dividend voucher or your share certificate).

Electronic proxy voting

If you hold stock in your own name you can choose to vote by returning proxies electronically at eproxyappointment.com.

If you have any questions about this service please contact Computershare on 0370 889 4086.

Dividend Reinvestment Plan

Computershare operate a Dividend Reinvestment Plan which can be used to buy additional shares instead of receiving your dividend via cheque or into your bank account. For further information log on to investorcentre.co.uk and follow the instructions or telephone 0370 889 4086.

CREST proxy voting

If you are a user of the CREST system (including a CREST Personal Member), you may appoint one or more proxies or give an instruction to a proxy by having an appropriate CREST message transmitted. For further information please refer to the CREST Manual.

Communicating with shareholders

Trust magazine

Trust is the Baillie Gifford investment trust magazine which is published twice a year. It provides an insight to our investment approach by including interviews with our fund managers, as well as containing investment trust news, investment features and articles about the trusts managed by Baillie Gifford, including Baillie Gifford European Growth Trust. Trust plays an important role in helping to explain our products so that readers can really understand them.

You can subscribe to Trust magazine or view a digital copy at bailliegifford.com/trust

Suggestions and Questions

Any suggestions on how communications with shareholders can be improved are welcomed, so please contact the Baillie Gifford Client Relations Team and give them your suggestions. They will also be very happy to answer questions that you may have about Baillie Gifford European Growth Trust.

UK Individual investor Change V						Contact
Baillie Gifford Funds	Insights				Aboutus V	Events Q Caroers V
			Baillie Gifford European Growth Trust
	Overviow	Performance & Partfollo	Insights Meet the Managers	How to Invest Documents
your client may not get back the amount originally invested. Detailed risk warning ->		Performance & Portfolio	Baillie Gifford European Growth Trust aims to achieve capital growth over the long term from a diversified portfolio of European securities.
SHARE PRICE
10/10/2023		Periodic Parlormance All figures to 31/08/2023
Shore Price	83000		1 Year	3 Years	G Years	10 Years
	24.00cc	Share Price	5.7%	-22.5%	6.3%
NAV at Fair						65.6%
Premium / Discount [+1-) at Fair	-54.3%
Ongoling Charges®	CGO%	NAV	3.7%	-12.196	9.4%	67.6%

Trust magazine Baillie Gifford European Growth Trust web page at bgeuropeangrowth.com

Baillie Gifford European Growth Trust on the web

Up-to-date information about Baillie Gifford European Growth Trust is available on the Company's page of the Managers' website at bgeuropeangrowth.com. You will find full details of the Company, including recent portfolio information and performance figures.

Electronic communications from the Company

Shareholders now have the opportunity to be notified by email when the Company's Annual Reports, Interim Reports and other formal communications are available on the website, instead of receiving printed copies by post. This has environmental benefits in the reduction of paper, printing, energy and water usage, as well as reducing costs to the Company.

If you have not already elected to receive electronic communications from the Company and wish to do so, please contact the Registrar using the details shown on page 121. Please have your Shareholder Reference Number to hand.

Client relations team contact details

You can contact the Baillie Gifford Client Relations Team by telephone, email or post:

Telephone: 0800 917 2112 Your call may be recorded for training or monitoring purposes.

Email: trustenquiries@bailliegifford.com Website: bailliegifford.com

Address: Baillie Gifford Client Relations Team Calton Square 1 Greenside Row Edinburgh EH1 3AN

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UK Alternative Investment Fund Managers ('AIFM') Regulations

In accordance with the AIFM Regulations, information in relation to the Company's leverage and the remuneration of the Company's AIFM, Baillie Gifford & Co Limited, is required to be made available to investors.

AIFM Remuneration

In accordance with the Regulations, the AIFM remuneration policy is available at bailliegifford. com or on request (see contact details on page 121). The numerical remuneration disclosures in respect of the AIFM's reporting period are available at bailliegifford.com.

Leverage

The Company's maximum and actual leverage (see Glossary of terms and alternative performance measures on page 120) levels at 30 September 2024 are shown below:

	Gross method	Commitment method
Maximum limit	2.50:1	2.00:1
Actual	1.13:1	1.13:1

Automatic exchange of information

In order to fulfil its obligations under UK tax legislation relating to the automatic exchange of information, the Company is required to collect and report certain information about certain shareholders.

The legislation requires investment trust companies to provide personal information to HMRC on certain investors who purchase shares in investment trusts. As an affected company, Baillie Gifford European Growth Trust will have to provide information annually to the local tax authority on the tax residencies of a number of non-UK based certificated shareholders and corporate entities.

Shareholders, excluding those whose shares are held in CREST, who come on to the share register will be sent a certification form for the purposes of collecting this information.

For further information, please see HMRC's Quick Guide: Automatic Exchange of Information – information for account holders

gov.uk/government/publications/exchange-ofinformation-account-holders.

Third party data provider disclaimer

No third party data provider ('Provider') makes any warranty, express or implied, as to the accuracy, completeness or timeliness of the data contained herewith nor as to the results to be obtained by recipients of the data.

No Provider shall in any way be liable to any recipient of the data for any inaccuracies, errors or omissions in the index data included in this document, regardless of cause, or for any damages (whether direct or indirect) resulting therefrom. No Provider has any obligation to update, modify or amend the data or to otherwise notify a recipient thereof in the event that any matter stated herein changes or subsequently becomes inaccurate.

Without limiting the foregoing, no Provider shall have any liability whatsoever to you, whether in contract (including under an indemnity), in tort (including negligence), under a warranty, under statute or otherwise, in respect of any loss or damage suffered by you as a result of or in connection with any opinions, recommendations, forecasts, judgements, or any other conclusions, or any course of action determined, by you or any third party, whether or not based on the content, information or materials contained herein.

FTSE Index data

Source: London Stock Exchange Group plc and its group undertakings (collectively, the 'LSE Group'). ©LSE Group 2024. FTSE Russell is a trading name of certain of the LSE Group companies. 'FTSE®' 'Russell®', 'FTSE Russell®, are trade marks of the relevant LSE Group companies and are used by any other LSE Group company under license. All rights in the FTSE Russell indices or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indices or data and no party may rely on any indices or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company's express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication.

Sustainable Finance Disclosure Regulation ('SFDR') (unaudited)

The EU Sustainable Finance Disclosure Regulation ('SFDR') does not have a direct impact in the UK due to Brexit, however, it applies to third-country products marketed in the EU. As Baillie Gifford European Growth Trust is marketed in the EU by the AIFM, Baillie Gifford & Co Limited, via the National Private Placement Regime ('NPPR') the following disclosures have been provided to comply with the high-level requirements of SFDR.

The AIFM has adopted Baillie Gifford & Co's ESG Principles and Guidelines as its policy on integration of sustainability risks in investment decisions.

Baillie Gifford & Co believes that a company cannot be financially sustainable in the long run if its approach to business is fundamentally out of line with changing societal expectations. It defines 'sustainability' as a deliberately broad concept which encapsulates a company's purpose, values, business model, culture, and operating practices.

Baillie Gifford & Co's approach to investment is based on identifying and holding high quality growth businesses that enjoy sustainable competitive advantages in their marketplace. To do this it looks beyond current financial performance, undertaking proprietary research to build up an in-depth knowledge of an individual company and a view on its long-term prospects. This includes the consideration of sustainability factors (environmental, social and/or governance matters) which it believes will positively or negatively influence the financial returns of an investment.

The likely impact on the return of the portfolio from a potential or actual material decline in the value of investment due to the occurrence of an environmental, social or governance event or condition will vary and will depend on several factors including but not limited to the type, extent, complexity and duration of an event or condition, prevailing market conditions and existence of any mitigating factors. Whilst consideration is given to sustainability matters, there are no restrictions on the investment universe of the Company, unless otherwise stated within in its Investment Objective & Policy. Baillie Gifford & Co can invest in any companies it believes could create beneficial long-term returns for investors. However, this might result in investments being made in companies that ultimately cause a negative outcome for the environment or society. More detail on the Manager's approach to sustainability can be found in the ESG Principles and Guidelines document, available publicly on the Baillie Gifford website bailliegifford.com and by scanning the QR code below. The underlying investments do not take into account the EU criteria for environmentally sustainable economic activities established under the EU Taxonomy Regulation.

Glossary of terms and alternative performance measures ('APM')

An alternative performance measure ('APM') is a financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework. The APMs noted below are commonly used measures within the investment trust industry and serve to improve comparability between investment trusts.

Total assets

This is the Company's definition of Adjusted Total Assets, being the total value of all assets less current liabilities, before deduction of all borrowings.

Shareholders' funds

Shareholders' funds is the value of all assets held less all liabilities, with borrowings deducted at book value.

Net asset value

Net Asset Value is the value of total assets less liabilities with borrowings deducted at either book value or fair value as described below. The net asset value per share (NAV) is calculated by dividing this amount by the number of ordinary shares in issue (excluding treasury shares).

Net asset value (borrowings at fair value) (APM)

Borrowings are valued at an estimate of market worth. The fair value of the Company's loan notes is set out in note 19 on page 103.

A reconciliation from shareholders' funds (borrowings at book value) to net asset value after deducting borrowings at fair value is provided below.

	2024 £'000	2024 per share	2023 £'000	2023 per share
Shareholders' funds (borrowings at book value)	366,431	104.2p	327,390	91.4p
Add: book value of borrowings	49,844	14.2p	51,960	14.5p
Less: fair value of borrowings	(36,425)	(10.4p)	(32,869)	(9.2p)
Net asset value (borrowings at fair value)	379,850	108.0p	346,481	96.7p

The per share figures above are based on 351,783,279 (2023 – 358,149,200) ordinary shares of 2.5p, being the number of ordinary shares in issue at the year end.

Net liquid assets

Net liquid assets comprise current assets less current liabilities, excluding borrowings.

Discount/premium (APM)

As stockmarkets and share prices vary, an investment trust's share price is rarely the same as its NAV. When the share price is lower than the NAV it is said to be trading at a discount. The size of the discount is calculated by subtracting the NAV from the share price and is usually expressed as a percentage of the NAV. If the share price is higher than the NAV, it is said to be trading at a premium.

	2024 NAV (book)	2024 NAV (fair)	2023 NAV (book)	2023 NAV (fair)
Closing NAV	104.2p	108.0p	91.4p	96.7p
Closing share price	91.0p	91.0p	83.6p	83.6p
Discount	12.7%	15.7%	8.5%	13.6%

Total return (APM)

The total return is the return to shareholders after reinvesting the net dividend on the date that the share price goes ex-dividend.

		2024 NAV (fair)	2024 Share price	2023 NAV (fair)	2023 Share price
Closing NAV/share price	(a)	108.0p	91.0p	96.7p	83.6p
Dividend adjustment factor*	(b)	1.0039	1.0045	1.0286	1.0328
Adjusted closing NAV/share price	(c) = (a) x (b)	108.4p	91.4p	99.5p	86.3p
Opening NAV/share price	(d)	96.7p	83.6p	91.9p	79.5p
Total return	(c) ÷ (d) -1	12.1%	9.3%	8.3%	8.6%

* The dividend adjustment factor is calculated on the assumption that the final dividend of 0.4p (2023 – dividends of 0.7p and 2.20p) paid by the Company during the year were reinvested into shares of the Company at the cum income NAV/share price, as appropriate, at the ex-dividend date.

The NAV(fair) total return for the period since Baillie Gifford began managing the portfolio in November 2019 can be calculated using the methodology shown in the table above and an opening NAV of 93.7p, a dividend adjustment factor of 1.0615 and a closing NAV of 108.0p.

Ongoing charges (APM)

The total expenses (excluding borrowing costs) incurred by the Company as a percentage of the average net asset value with borrowings at fair value. The ongoing charges have been calculated on the basis prescribed by the Association of Investment Companies.

A reconciliation from the expenses detailed in the Income Statement on page 84 is provided below.

		2024	2023
Investment management fee		£1,847,000	£1,770,000
Other administrative expenses		£630,000	£564,000
Total expenses	(a)	£2,477,000	£2,334,000
Average net asset value (with borrowings deducted at fair value)	(b)	£383,617,000	£379,519,000
Ongoing charges ((a) ÷ (b) expressed as a percentage)		0.65%	0.62%

Gearing (APM)

At its simplest, gearing is borrowing. Just like any other public company, an investment trust can borrow money to invest in additional investments for its portfolio. The effect of the borrowing on shareholders' funds is called 'gearing'. If the Company's assets grow, shareholders' funds grow proportionately more because the debt remains the same. But if the value of the Company's assets falls, the situation is reversed. Gearing can therefore enhance performance in rising markets but can adversely impact performance in falling markets.

Gearing is the Company's borrowings adjusted for cash at hand expressed as a percentage of shareholders' funds.

Gross gearing is the Company's borrowings expressed as a percentage of shareholders' funds.

Leverage (APM)

For the purposes of the Alternative Investment Fund Managers (AIFM) Regulations, leverage is any method which increases the Company's exposure, including the borrowing of cash and the use of derivatives. It is expressed as a ratio between the Company's exposure and its net asset value and can be calculated on a gross and a commitment method. Under the gross method, exposure represents the sum of the Company's positions after the deduction of sterling cash balances, without taking into account any hedging and netting arrangements. Under the commitment method, exposure is calculated without the deduction of sterling cash balances and after certain hedging and netting positions are offset against each other.

Active share (APM)

Active share, a measure of how actively a portfolio is managed, is the percentage of the portfolio that differs from its comparative index. It is calculated by deducting from 100 the percentage of the portfolio that overlaps with the comparative index. An active share of 100 indicates no overlap with the index and an active share of zero indicates a portfolio that tracks the index.

Company information

Directors

Chairman: M MacPhee D Curling* D Barron E Davies A Watkins

* Appointed 1 November 2024

Registrar

Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS99 6ZZ

T: +44 (0)370 889 4086

Depositary

Northern Trust Investor Services Limited

50 Bank Street Canary Wharf London E14 5NT

Alternative Investment Fund Managers, Secretaries and Registered office

Company Broker

Baillie Gifford & Co Limited

Ground floor 3 St Helen's Place London EC3A 6AB

T: +44 (0)131 275 2000

bailliegifford.com

Further information

Client Relations Team

Baillie Gifford & Co Calton Square 1 Greenside Row Edinburgh EH1 3AN

T: +44 (0)800 917 2112

trustenquiries@bailliegifford.com

Peel Hunt LLP

7th Floor 100 Liverpool Street London EC2M 2AT

Independent Auditor

BDO LLP

55 Baker Street London W1U 7EU

Company details

bgeuropeangrowth.com

Company Registration No. 1055384

ISIN: GB00BMC7T380

Sedol: BMC7T38

Ticker: BGEU

Legal Entity Identifier: 213800QNN9EHZ4SC1R12

bgeuropeangrowth.com

Calton Square, 1 Greenside Row, Edinburgh EH1 3AN Telephone +44 (0)131 275 2000