The Company's assets consist mainly of listed securities and unlisted investments and its principal financial risks are therefore market related. These include market risk (comprising currency risk, interest rate risk and other price risk), liquidity risk and credit risk. Further explanation of market risk, liquidity risk and credit risk and illustrative sensitivities is provided in Note 19 to the Financial Statements.

The Company's investment strategy, including its focus on long-term growth companies and its unconstrained approach to portfolio construction, may result in increased volatility and periods of underperformance relative to the comparative index. The pursuit of this strategy, or the ineffective implementation of it through stock selection and portfolio construction, may lead to reduced returns for shareholders and a decreased demand for the Company's shares.

The Company's exposure to private (unlisted) investments may increase these risks. Such investments:

• may be more difficult to buy or sell

• are less liquid than listed securities

• require the use of subjective valuation methodologies

• may be perceived to be more volatile or their valuations less certain, particularly in periods of market stress or where funding conditions are constrained

The Company may also have significant exposure to individual holdings, meaning that the performance of a limited number of investments can have a material impact on overall portfolio returns.

Macroeconomic and geopolitical developments, including changes in interest rates, inflation, global trade dynamics and political instability, together with changes in regulatory posture in local market jurisdictions, and environmental, social and governance factors (including climate-related risks and regulatory developments), may exacerbate these risks by:

• increasing market volatility

• affecting capital availability and funding conditions

• influencing company valuations and investor sentiment

These risks are interrelated and ultimately manifest through the Company's net asset value, share price performance and long-term shareholder returns.

The Board has, in particular, considered the impact of heightened macroeconomic and geopolitical concerns on the Company's investment portfolio.

The Board considers at each meeting a range of portfolio metrics, including:

• individual stock performance and weightings

• the top and bottom contributors to performance

• sector and geographic exposures

• levels of portfolio concentration

The Managers provide detailed rationale for stock selection decisions and portfolio positioning.

To mitigate these risks, the Board:

• regularly reviews and monitors the Company's investment objective, policy and strategy and their implementation

• undertakes periodic in-depth reviews of investment strategy and portfolio construction, including consideration of performance outcomes

• monitors the Company's exposure to private company investments, ensuring adherence to investment policy limits and regular and robust valuation processes, including oversight of valuations supported by an independent third-party valuation adviser (S&P Global), and with reference to the Managers' valuation policy detailed in Note 1(c) to the Financial Statements

• reviews the balance between conviction and diversification, particularly in relation to larger holdings

• considers the potential impact of currency movements, including the interaction between portfolio assets and foreign currency borrowings

• engages closely with the Managers, including through an annual update from the Managers' investment risk team, to ensure that portfolio risks are identified, understood and appropriately managed

This risk remains high but stable given ongoing market volatility and the Company's long-term growth investment approach.

The external environment continues to be characterised by heightened geopolitical tensions, including ongoing conflicts and shifting global alliances, together with greater unpredictability in government policy and international trade dynamics, which may contribute to increased market volatility and uncertainty.

In addition, rapid technological developments, particularly in areas such as artificial intelligence, are creating both significant opportunities and uncertainty. The potential implications for business models, capital allocation and wider society may influence investor sentiment and contribute to periods of market dislocation.

The Company's exposure to private company investments and the increased concentration of the portfolio, including as a result of valuation uplifts in certain holdings, may further amplify the impact of adverse market movements on overall returns, particularly where a limited number of holdings represent a significant proportion of the portfolio.

The Company's shares may trade at a discount to net asset value. A sustained or widening discount may:

• reduce shareholder returns

• undermine investor confidence

• increase the risk of shareholder activism or pressure on capital allocation decisions

The level of the discount is influenced by a range of factors, including the Company's performance, investor sentiment towards the investment trust sector and broader market conditions.

The Board monitors the level of discount and shareholder sentiment on an ongoing basis.

The Board has authority to undertake share buybacks where considered to be in the best interests of shareholders. During the year to 31 March 2026, the Company bought back 122.9 million shares at a total cost of £1.31 billion. Over the two-year period to 31 March 2026, the Company has bought back 307.7 million shares at a total cost of £3.02 billion, representing approximately 22% of the issued share capital as at 31 March 2024.

The Board continues to take a pragmatic approach to capital allocation, balancing the use of share buybacks with other uses of capital, including new investments.

The Board engages actively with shareholders and monitors developments within the wider investment trust sector.

This risk is considered to be reducing and moderate. The Company's average discount remained broadly stable, narrowing from 9.7% to 9.6% over the year to 31 March 2026, although the year-end discount widened slightly from 9.0% to 9.5%. Following the year end, the shares moved to a premium.

While discount volatility remains influenced by market conditions and investor sentiment, the scale of share buybacks undertaken by the Company and the Board's continued focus on capital allocation have strengthened its ability to manage this risk effectively.

Failure to comply with applicable legal and regulatory requirements could result in:

• financial penalties

• reputational damage

• suspension of the Company's shares from listing

• loss of investment trust status

A breach of the conditions required to maintain investment trust status could result in the Company losing its approved status and becoming liable to pay tax on capital gains, which would have a significant adverse impact on shareholder returns.

In addition, changes to the regulatory environment affecting investment trusts could increase the administrative and compliance burden on the Company or reduce its operational flexibility.

The Board relies on the Managers' compliance, risk and internal audit functions to ensure adherence to applicable regulations.

The Audit Committee receives regular reports on compliance monitoring and the effectiveness of internal controls.

Shareholder communications, including the Annual and Interim Reports, are subject to robust internal review processes to ensure compliance with applicable requirements.

Procedures are also in place to ensure adherence to relevant market regulations, including disclosure obligations.

The Board and Managers monitor regulatory developments closely and, where appropriate, make representations in respect of proposed changes to ensure that the interests of the Company and its shareholders are recognised.

This risk is considered to be low and stable. The Company continues to operate within a well-established regulatory framework and control procedures are considered to be operating effectively.

The Company relies on third-party service providers, including the Managers, depositary, custodian and registrar, for the provision of key operational, administrative and safeguarding functions. Failure of these providers' systems or controls could result in:

• operational disruption

• an inability to provide accurate reporting and monitoring

• loss or misappropriation of assets

The Company's exposure to private (unlisted) investments increases the importance of robust third-party processes and controls, particularly in relation to:

• the valuation of investments, which involves the application of judgement and the use of external data inputs

• the maintenance of accurate records and reporting, including for less liquid and less frequently priced assets

Custody of the Company's assets may be compromised through control failures at the depositary or custodian, while failures in systems or processes may affect the integrity and timeliness of shareholder reporting.

The Board has delegated the design, implementation and operation of internal controls to the Managers but retains overall responsibility for oversight.

Baillie Gifford & Co conducts an annual review of its system of internal controls, the results of which are documented in an independently audited internal controls report. This report is reviewed by the Managers' risk function, with a summary of key findings reported to the Audit Committee.

The depositary, custodian and registrar provide regular reports on their control environments, including the safekeeping of assets and maintenance of shareholder records. Where available, independently audited internal controls reports are reviewed by the Managers' risk function and reported to the Audit Committee, with any issues investigated.

The Managers conduct periodic due diligence on key third-party service providers, including consideration of their control environments and operational resilience, with findings reported to the Board as appropriate.

The Company's assets are subject to independent reconciliation and verification procedures, including:

• reconciliation of holdings to custodian records

• confirmation of ownership of securities and cash balances

• verification of holdings with counterparties and, where appropriate, investee companies

In relation to private company investments, the valuation processes operated by the Managers, including the use of independent third-party inputs and the governance of valuation decisions, form part of Baillie Gifford's internal control framework and are subject to review by its internal audit function, with relevant findings reported to the Board.

Baillie Gifford maintains business continuity and disaster recovery plans designed to ensure the continued operation of systems and processes in the event of a disruption.

The Board considers the performance and resilience of all key service providers on an ongoing basis and believes that alternative providers could be engaged if required.

This risk is considered to be low and stable - control procedures are operating effectively. While the increasing complexity of private company investments places greater reliance on robust third-party processes, the Board considers that appropriate controls and oversight arrangements are in place.

A cyber attack on the systems of Baillie Gifford or the Company's third-party service providers could compromise the confidentiality, integrity or availability of data and systems, potentially resulting in:

• operational disruption

• financial loss

• reputational damage

The evolving nature of cyber threats, including the increasing sophistication of attacks and the potential for the malign use of emerging technologies such as artificial intelligence to automate, scale and target cyber attacks, may increase both the likelihood and potential impact of cyber incidents.

In addition, the continued reliance on digital systems, the use of third-party service providers and the interconnectedness of those providers may increase exposure to cyber risks.

The Audit Committee receives regular reporting from Baillie Gifford's Business Risk function on the effectiveness of information security controls and the broader cyber security framework.

Cyber security due diligence is performed on key third-party service providers, including an assessment of their information security controls, crisis management procedures and operational resilience.

The Baillie Gifford Business Risk function also reviews internal controls reports provided by key third-party service providers, where available, and reports its findings to the Audit Committee.

Baillie Gifford maintains business continuity and disaster recovery plans, designed to ensure the continued operation of systems and processes in the event of a cyber incident or other disruption.

The Baillie Gifford Business Risk function reviews the resilience of key systems and service providers, with any significant matters reported to the Board.

This risk is considered to be moderate and increasing due to the evolving threat landscape, heightened geopolitical tensions and the growing sophistication of cyber attacks, including those enabled by emerging technologies.

The Company may borrow money for investment purposes, a practice also known as gearing or leverage. If the value of investments falls, any borrowings will magnify the impact of these losses.

There is also a risk that borrowing facilities may not be renewed or that covenant requirements may not be met, which could require the Company to sell investments to repay borrowings at an unfavourable time.

Further details of the Company's borrowings and related risks are set out in Notes 11 and 12 to the Financial Statements on pages 96 to 98.

The Board has set limits on the level of gearing and reviews these at each Board meeting.

All borrowings require prior approval of the Board and compliance with loan covenants is monitored on an ongoing basis.

During the year, all borrowing facilities that expired were successfully refinanced, demonstrating continued access to funding.

The Company's borrowings are structured across a range of maturities, providing flexibility in managing gearing levels. Approximately 27% of the Company's debt is in the form of revolving credit facilities, which can be repaid at short notice, enhancing the Company's financial flexibility.

The majority of the Company's investments are in listed securities which are readily realisable and could be sold to repay borrowings if required.

The Company also maintains access to undrawn revolving credit facilities of US$70 million, providing additional flexibility in managing liquidity and gearing.

This risk is considered to be moderate and reducing. Gearing decreased from 13% to 11% over the year to 31 March 2026, reflecting a reduction in borrowings and active management of the balance sheet.

While the use of leverage continues to introduce additional risk in adverse market conditions, the current level of gearing, the successful refinancing of facilities and the availability of undrawn facilities provide flexibility in managing this risk.