Annual Report and
Financial Statements
Baillie Gifford
China Growth
Trust plc
31 January 2026
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 bailliegiffordchinagrowthtrust.com.
Notes
None of the views expressed in this document should be construed
asadvice to buy or sell a particular investment.
Investment trusts are UK public listed companies and as such
complywith the requirements of the Financial Conduct Authority
(‘FCA’). They are not authorised or regulated by the FCA.
BaillieGifford China 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 United Kingdom 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 United Kingdom, you should
consult an appropriately authorised financial adviser.
If you have sold or otherwise transferred all of your holding in
BaillieGifford China 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.
01
Baillie Gifford China Growth Trust plc
Introduction
Financial highlights 2
Key performance indicators 3
BaillieGifford – philosophy and process 4
Strategic report
Chair’s statement 7
Managers’ report 12
Review of investments 22
One year summary 26
Five year summary 28
Ten year record 30
Business review 32
Managers’ report on environmental, social and governance engagement 45
BaillieGifford – proxy voting 51
BaillieGifford – statement on stewardship 52
BaillieGifford – valuing private companies 54
List of investments 55
Distribution of total assets 58
Governance report
Directors and management 60
Directors’ report 63
Corporate governance report 68
Audit Committee report 75
Directors’ remuneration report 78
Statement of Directors’ responsibilities 82
Financial report
Independent Auditor’s report 85
Income statement 94
Balance sheet 95
Statement of changes in equity 96
Cash flow statement 97
Notes to the Financial Statements 98
Shareholder information
Notice of Annual General Meeting 114
Further shareholder information 120
Communicating with shareholders 122
Insights 123
Third party data provider disclaimer 124
Sustainable Finance Disclosure Regulation 125
Glossary of terms and alternative performance measures 126
Company information 129
Contents
Introduction
Annual Report and Financial Statements 2026
02
Financial highlights
Year to 31 January 2026
Share price
*
+38.8%
NAV
*
†
+34.0%
Comparative index
*
#
+22.2%
* Source: LSEG/BaillieGifford and relevant underlying index providers. See disclaimer on page 124. All figures are stated on a total return basis.
Total return and discount are alternative performance measures – see Glossary of terms and alternative performance measures on pages 126 to 128.
†
Net asset value per share (‘NAV’).
#
The benchmark is the MSCI China All Shares Index (in sterling terms).
Past performance is not a guide to future performance.
The principal investment objective of the
Company is to produce long-term capital
growth by investing predominantly in shares
of, or depositary receipts representing the
shares of, Chinese companies.
NAV, share price and benchmark total return
*
(figures rebased to 100 at 31 January 2025)
Discount to net asset value
*
(figures plotted on a weekly basis)
J
2026
J
2025
F MAMJJAS N
OD
● Share price*
●
NAV*
†
●
Benchmark*
#
90
100
140
130
120
110
20262025
JJFMAMJJAS N
OD
● Discount*
●
Average discount*
(20%)
(5%)
(15%)
(10%)
Baillie Gifford China Growth Trust plc
03
Comparative index
*
#
+22.2%
* Alternative performance measure – see Glossary of terms and alternative performance measures on pages126 to 128.
Past performance is not a guide to future performance.
-30
-20
-10
0
10
20
30
● NAV total return relative
to benchmark
● Share price total return
relative to benchmark
1 year 5 years3 years 10 years
%
Net asset value total return relative to the benchmark
*
The total return is the return to shareholders after reinvesting the netdividend
on the date that theshare price goes ex-dividend.
Share price total return relativeto the benchmark
*
The total return is the return to shareholders after reinvesting the netdividend
on the date that theshare price goes ex-dividend.
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 iscalledapremium.
-12
-10
-8
-6
-4
-2
0
● Average (discount)/premium
of share price to NAV
1 year 5 years3 years 10 years
%
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 NAV. Without the management fee
waiver (see page30) the ongoing charges ratio for 2021 would have been 1.0%
and in 2022 0.8%. The Board has an ongoing charges target of 1.0% or less.
The Board is satisfied that the ongoing charges ratio is competitive.
0.0
0.5
1.0
1.5
● Ongoing charges ratio
%
2016 2026
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 70. These KPIs are established industry measures.
The one, five and ten year records of the KPIs can be found on pages 26 to 31. Further discussion is included in
the Chair’s statement on pages 7 to 11.
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.
BaillieGifford & Co Limited were appointed as Managers and Company Secretaries on 16 September 2020.
Before16September 2020, the Trust was able to invest across the Asia Pacific region rather than solely in
China, andhad a different comparative index.
The Board believes that KPI performance in the financial year to 31 January 2026 was positive. The NAV
total return outperformance relative to benchmark was a key positive. Share price performance relative
to the benchmark was positive. The ongoing charges ratio was stable at around 1%. The Board assesses
the KPIs over longer periods, including since the mandate change in September 2020 and since the
commencement of the performance related CTO period on 29 November 2024.
Introduction
Annual Report and Financial Statements 2026
04
BaillieGifford –
philosophy and process
Our philosophy and competitive edges
Our goal is to use our global perspectives and local
knowledge to identify the next generation of exciting
growth companies and build a portfolio of 40–80 of
the best ideas. We seek to identify mispricing relative
to fundamentals and accept that it can take time for
this to be reflected properly in company valuations.
We believe that long-term returns are derived from
investing in disruptive and secular trends which play
out over years not months or quarters. We are looking
for businesses that enjoy sustainable competitive
advantages and have the potential to grow their
earnings significantly ahead of the market average
over the long term. As growth investors, we are
focused on identifying the innovative companies
with competitive advantages that position
themselves to benefit from, and contribute to,
China’s economic, societal and cultural development
over the long-term.
We believe fundamental research focused on the
five-year prospects for companies makes for a
differentiated approach to managing Chinese
equities, in an asset class where impatience and
short-termism abound. We think our approach
delivers an active edge in three key areas:
timehorizons, perspectives and insights.
Time horizon
Companies grow over time. The true value of a
business is rarely determined by what will happen
inthe next few quarters, but by what will happen
inthe many years ahead. It is over years that
deepchanges in industries and behaviours occur,
and that competitive advantage and management
excellence are recognised. Being able to think
andact independently of the structures and
short-term incentives of traditional finance
isanimportant advantage.
A long-term focus also embeds the consideration of
ESG factors at its heart. We believe this is vital in a
country like China, given the role of the state, lower
levels of disclosure, and the need for engagement
with companies. It allows us to mitigate the risks of
getting Chinese companies wrong, but importantly,
ithelps us discover where the best opportunities lie.
Fighting the instinct to involve ourselves in conventional
market short termism requires important behavioural
and cultural traits. Our partnership structure allows
usto think differently and independently, and that
provides our opportunity.
Baillie Gifford China Growth Trust plc
05
Perspective
We believe that balancing on-the-ground insights
with a global perspective gives us an important
edge. An open and collaborative culture allows
ustounderstand Chinese companies not just in
theirown market, but in a global context too.
Having investment managers and analysts on-the-
ground in Shanghai enables us to deepen our
long-standing relationships with existing holdings,
identify the next generation of exceptional companies
at an earlier stage, better understand societal and
cultural developments, and forge partnerships with
academics and industry specialists in the region.
When added to the global perspectives derived
across BaillieGifford, we can gain far deeper
insights into companies and sectors of interest.
Thebenefit from our global perspectives is
multi-fold: BaillieGifford’s long history of
researching growth companies globally,
well-established trust with global companies as
long-term, patient investors, as well as our strong
academic connections, not only deepens our
understanding of the industry trends and the
competitive environment that Chinese companies
operate in, but also provides checks and balances
when assessing Chinese companies in a global
context, including an assessment of the geopolitical
environment and ESG standards.
Relationships and insight
Given our investment time horizons, we prioritise
meeting with academics, industry specialists and
owners of businesses who think about their strategy,
not financial analysts who think about the next
quarter’s earnings.
With three decades of experience investing in
China,we have built relationships as a patient and
supportive shareholder and developed strong
accessto some of the largest and most influential
companies. Relationships take time to build but they
have been critical in helping us understand China’s
ongoing development and the future direction of
Chinese businesses.
These relationships, often built on trust and
reputation over many years, provide access to a
range of interesting companies, ensure management
teams are aware of our approach and philosophy,
and in doing so, help position us and our thinking in
a different light to much of the market. This has
provided an advantage in our understanding of
companies early in their growth stages, and insight
into the future challenges and opportunities for
companies we hold.
The Strategic report,
whichincludes pages 6 to 58
and incorporates the Chair’s
statement, has been prepared in
accordance with the Companies
Act 2006.
Strategic
report
07
Baillie Gifford China Growth Trust plc
Chair’s
statement
For a definition of terms, see Glossary of terms and alternative performance measures on pages 126 to 128. See disclaimer on page 124.
Past performance is not a guide to future performance.
Introduction
The Board believe that Baillie Gifford China Growth
Trust (‘the Company’) has a unique investment
strategy. There is no other open or closed end equity
fund offering a China growth style, investment in
unlisted companies, prudent gearing, a competitive
cost and a commitment to discount management
via a buyback and a 100% performance related
Conditional Tender Offer (‘CTO’).
The financial year to 31 January 2026 was a period
where all the components of the Company strategy
contributed to deliver very strong performance for
shareholders. The strong performance over the
past year therefore builds on the recovery in the
Company’s performance, which started in 2024.
Whilst Baillie Gifford’s long-term investment time
horizon is five to ten years, it remains encouraging
that the Manager has continued to outperform
when conditions for growth investing have been
morefavourable.
In the past year the Board has remained focussed
on enhancing shareholder value including scrutiny
of the Company’s strategy and investment
performance, monitoring the prevailing discount
at which the shares trade, and undertaking share
buybacks (2.9% in financial year to 31 January
2026), renewal of the loan facility and the marketing
of the Company.
Key Performance Indicators (‘KPIs’)
The Company has four KPIs:
• Net Asset Value per share total return (‘NAV TR’)
relative to the benchmark
• Share price total return relative to the benchmark
• the discount of the share price to Net Asset Value
(‘the discount’)
• the Ongoing Charges Ratio (‘OCR’)
Nicholas Pink
Chair
Appointed to
theBoard in 2023
andas Chair in 2024
Strategic report
Annual Report and Financial Statements 2026
08
Investment Performance
China’s equity performance in 2025 echoes Lenin’s
famous saying that “there are decades when nothing
happens; and there are weeks where decades
happen”. It arguably marked a turning point in
investor attitudes to Chinese equities. The past
year saw investors wake-up to the attraction of
China’s innovation in critical technologies such as
EVs, e-commerce, advanced manufacturing and AI,
all available at below historic average valuations.
This,combined with a re-evaluation of the risk and
reward of passive global equity portfolios dominated
by USinvestments, triggered diversification outside
the US, including to China, where regulatory risk also
receded. These factors provided a tailwind to both the
Chinese equity market and growthinvesting.
The Company’s performance rebounded significantly
in absolute and relative terms. Analysis of the
performance drivers shows management of the
portfolio consistent with the growth style, evidence
of improved stock selection and a contribution from
improved valuation and sell discipline. Specifically,
outperformance was driven by strong contributions
from several of the Manager’s highest conviction
holdings. Keycontributors were ByteDance, Zijin
Mining Group, Pop Mart and Zhongji Innolight.
Detractors were Meituan, DPC Dash and Sunny
OpticalTechnology.
Further detail on investment performance can be
found in the Managers’ report on page 12.
Earnings and Dividend
In the year to 31 January 2026, the revenue earnings
per ordinary share increased by 17.8% from 2.53p
to 2.98p. The Company’s dividend policy is that any
dividend paid will be by way of a final dividend and be
not less than the minimum required for the Company
to maintain its investment trust status.
The Board is proposing a final dividend of 2.50p,
an increase of 14%, which, subject to shareholder
approval, will be paid on 22 July 2026 to
shareholders on the register at the close of business
on 19 June 2026, with the shares trading ex-dividend
on 18 June 2026.
The Company reported positive progress on all
itsKPIs.
The NAV TR was 34.0%, outperforming the
benchmark by 11.8%. The share price total return
was 38.8%, also exceeding the benchmark by
16.6%. Encouragingly, the discount of share price to
Net Asset Value decreased to 7.4% as at 31 January
2026 (10.4% as at 31 January 2025).
The OCR fell to 1.06% in the year to 31 January
2026 (from 1.12% in the financial year to 31 January
2025) due to the higher average Net Asset Value
(‘NAV’) owing to investment gains.
In November 2024, the Company announced
a CTO based on performance in the four-year
period to 30 November 2028. Further details
can be found on page 76 of the Annual Report.
Since the CTO measurement period commenced
(29November 2024 to 31 January 2026), the NAV
TR outperformed the benchmark by 12.4%.
The very strong performance over the past two years
is therefore sharply reducing the underperformance
since the Company’s mandate change. Between
16 September 2020 and 31 January 2026, the
Company NAV TR and share price total return has
underperformed the benchmark by 6.3% and 9.3%,
respectively.
Total Return Performance
*
Year to
31 January
2026
Since
announcement
of Conditional
Tender Offer
†
to 31 January
2026
Since
Mandate
change
#
31 January
2026
NAV TR (%) 34.0 38.9 -8.2
Share price TR (%) 38.8 4 7.7 -11.2
Benchmark TR
‡
(%) 22.2 26.5 -1.9
Whilst Investment Manager Baillie Gifford’s
investment time horizon is five to ten years, it is very
encouraging that the Manager has outperformed
the benchmark consistently since August 2024,
when conditions for growth investing in China have
beenfavourable.
* Source: LSEG/Baillie Gifford and relevant underlying index providers. See disclaimer on page 124. All figures are stated on a total return basis. Total
return and discount are alternative performance measures – see Glossary of terms and alternative performance measures on pages 126 to 128.
†
The Company announced the introduction of a performance related tender offer (the ‘Conditional Tender Offer’) from 29 November 2024.
#
Baillie Gifford & Co Limited were appointed as Managers and Company Secretaries on 16 September 2020.
‡
The benchmark is the MSCI China All Shares Index (in sterling terms).
09
Baillie Gifford China Growth Trust plc
The increased income partly reflects the continuing
improvement in dividend pay-out ratios for
portfolio companies because of improved capital
discipline. Whilst a positive, Baillie Gifford’s focus
is on managing the portfolio for total return and
most future total returns are expected to be from
capitalgains.
Company Strategy
In the financial year ending 31 January 2026 the
Board reviewed and reaffirmed the relevance of the
Company’s strategy to shareholders. The annual
Strategy Day covered the investment objective,
strategy limits, gearing, unlisted investments, discount
management, the investment manager’s approach to
Environmental, Social and Governance research and
investment performance.
Unlisted Investments
The Board believe owning unlisted investments
benefits shareholders, especially given the
Company’s closed-end status and Baillie Gifford’s
expertise in successfully sourcing and investing
in private Chinese investments via its close
relationships with founders and global investment
knowledge. However, trading unlisted investments
is more complex due to lower liquidity and the
potential need for permission from the investee
company to sell to others, depending on individual
arrangements. The Company has a limit on unlisted
investments of 20% of gross asset value of the
Company, measured at the time of investment.
When above this figure, the existing investments
can continue to be held, but new positions or follow-
on investments cannot be made. The Investment
Manager, under scrutiny from the Board, closely
monitors the proportion of the portfolio invested in
unlisted investments and the diversification of the
investment portfolio.
The Company’s primary private investment is
ByteDance, which was 10.4% of total assets on
31January 2026. In September 2025 the manager
made a private investment in RedNote, a Chinese
lifestyle content and commerce platform. In total,
unlisted investments represented 12.2% of total assets
as at 31 January 2026 (9.1% as at 31January 2025).
The valuation of private investments is undertaken
by Baillie Gifford and supplemented by independent
input from S&P Global. This valuation is overseen
by the Board at the interim and annual results.
Thevaluation of unlisted investments is an estimate
based on the price of recent investments in
secondary market trading and peer multiples and
revenues. In addition, the Board takes comfort
that there is additional information available via
ByteDance’s annual buybacks.
ByteDance made significant progress in 2025,
becoming the world’s third largest private company
measured by most recent funding round
*
. Since
acquisition to 31 January 2026, ByteDance has
increased in value 158% in sterling terms and
is the largest single contributor to Company
outperformance. Whilst the ByteDance IPO is not
imminent, it is an indication of the value offered by
private investment in China.
Gearing
A prudent level of gearing remains advantageous
given that the long-term returns forecast in China
equities by Baillie Gifford exceed the cost of
debt. The Company is in discussions with lenders
regarding renewal of the US$25m loan facility, which
is due to mature on 11 April 2026, and the Board
does not currently anticipate any issues with its
renewal. The Board sets a gearing limit to maintain
prudent liquidity and adhere to its loan covenants.
The Board is mindful of high volatility in Chinese
equities, the portfolio’s higher Beta compared to the
benchmark and the Company ownership of unlisted
investments. Within the Board’s limits, Baillie Gifford
manages and reports quarterly to the Board on the
proposed use of gearing. Net gearing was 3.1% as
at 31January 2026 (3.3% as at 31 January 2025).
Discount and Premium Management
The Board recognises the need to address any
sustained and significant imbalance of buyers and
sellers which might otherwise lead to shares trading at
an anomalous discount or premium to NAV. TheBoard
constantly monitors the level of discount and regularly
consults its advisers and shareholders to determine
appropriate measures. The Board is committed to
using its share purchase and issuance authorities
where appropriate to mitigate such imbalances. Details
of the Discount/premium policy are on page 33.
*
Source: Financial Times 5 February, Crunchbase
Strategic report
Annual Report and Financial Statements 2026
10
In the 12 months to 31 January 2026 the Company
bought back 1.7m shares representing 2.9% of
share capital excluding shares held in Treasury as at
31 January 2025. The buyback was conducted at an
average discount of 10.4% and enhanced the NAV
per share by 0.3%.
The combination of investment performance, the
commencement of the share buyback in January
2024 and the introduction of the CTO in November
2024 has significantly reduced the discount level
and its volatility since 2023. The average discount
of share price to NAV has reduced from 11.3% in
the year to 31 January 2025 to 9.6% in the year to
31January 2026 and the discount was significantly
less volatile over the year.
China Risks
Risks related to investing in China are difficult to
diversify given the single country mandate and
could adversely affect companies held within the
portfolio. These comprise the economic outlook
and geopolitical risks, including the potential impact
of sanctions. The Board evaluates the risks with
Baillie Gifford and, where appropriate, with input
from external advisers and experts. A summary of
Principal Risks is on page 35.
Marketing
The Board co-funds marketing with
Baillie Gifford. This includes the website
(bailliegiffordchinagrowthtrust.com) and digital
content from Baillie Gifford. During the year the
Board wrote to all shareholders who hold their
shares via the large investment platforms to invite
them to sign-up for updates from the Company.
If you’ve not already signed up but would like to
do so, please scan the QR code located on the
back cover of this Annual Report. In addition, the
Board continued to fund a programme of marketing
targeting regional wealth managers via its broker.
The Board
There were no changes to the Board during the year,
and the Board remains fully compliant with both
the Parker review and the FTSE Women Leaders
Review. The Board has disclosed its ethnic diversity
within the Corporate Governance Statement in the
Company’s Annual Report on page 71. The Board
conducted an internal review of Board performance
and concluded it was operating effectively.
Annual General Meeting (the ‘AGM’)
The AGM will be held at 1 Moorgate Pl, City of London,
London, EC2R 6EA on Wednesday 27 May 2026,
at 2pm. A presentation from Baillie Gifford will be
included and all shareholders are invited to attend.
The Board encourages all shareholders to exercise
their votes on the AGM resolutions by completing and
submitting the form of proxy elections in advance
of the meeting and submitting any questions by
emailing enquiries@bailliegifford.com or by calling
0800 917 2113.
Outlook
Whilst the re-rating over the past two years has
eliminated China equity market’s historical valuation
discount, the Board remains positive about the
Company’s prospects.
Firstly, China’s ongoing structural transformation
continues to offer compelling opportunities for
the Company’s strategy of owning a concentrated
portfolio of China’s most innovative growth stocks.
The Company has exposure to China’s growing
dominance in critical technologies such as energy
transition, e-commerce, advanced manufacturing
and AI.
Secondly, whilst China stock valuations have
increased to just above the long-term average in
the past two years, and the portfolio’s valuation,
as measured by the price earnings ratio, is higher
than the benchmark, the Company’s holdings are
forecasted to deliver nearly double the benchmark’s
earnings growth over the next three years. It is a
comfort that the portfolio’s concentration in higher
valuation names is significantly lower than at past
market peaks.
Thirdly, there is potential upside from earnings
growth in innovation-led growth companies,
stabilisation of the property market and a recovery
in consumption, further government stimulus, a
continued truce in US-China relations and greater
allocation to China equities by both foreign and
domestic investors.
11
Baillie Gifford China Growth Trust plc
However, there are also risks to investing in
the Company, which can lead to volatility and
drawdowns. These include a deterioration in
US-China relations, continuing geopolitical tension,
portfolio concentration in AI related businesses and
deflation in China. The discount the portfolio trades
to global equities is arguably a comfort, as investors
re-assess the risk-reward of passive global equity
portfolios dominated by US technology companies.
Additionally, the Company’s effective discount
control through the share buyback and CTO provide
some protection against discount widening to
shareholders until November 2028.
The Board therefore continue to believe that a
holding in the Company remains an attractive part of
an investor’s long-term global equity allocation.
Nicholas Pink
Chair
31 March 2026
Strategic report
Annual Report and Financial Statements 2026
12
Managers’
report
For a definition of terms see Glossary of terms and alternative performance measures on pages 126 to 128.
Past performance is not a guide to future performance.
Over the past 12 months, the Company delivered
itssecond consecutive year of strong performance
for shareholders.
In a year when China’s macro backdrop continued
to evolve, the market increasingly rewarded
genuine corporate progress and innovation, and
the Company captured that strength particularly
well. For the 12 months to 31 January 2026, the
Company returned 34.0% on a NAV total return
basis and 38.8% on a share price total return basis,
comfortably ahead of the 22.2% benchmark return.
Looking back on 2025: the Chinese economy
In 2025, China delivered a steady but distinctly two-
speed expansion. Real GDP grew by 5.0%, broadly
in line with the official target, though momentum
eased as the year progressed. The year is best
understood less as a simple slowdown and more as
a transition away from a property-led growth model
toward one driven by productivity, innovation and
new forms of consumption. While uneven, this shift
matters for investors as it reshapes the picture of
where long-term growth opportunities will emerge.
Exports and industrial activity once again provided
resilience. Goods trade increased 3.8% in value
terms, with exports rising 6.1%, supported by
continued diversification toward Belt and Road
Initiative (BRI) partner countries, which accounted for
just over half of total trade. BRI countries are those
that have signed a BRI cooperation document (often
Memorandums of Understanding) with China. China’s
official messaging commonly frames this as “over
150countries and over 30 international organisations”
having signed BRI cooperation documents. Hi-tech
exports rose 13.2%, reflecting China’s growing
presence in higher-value manufacturing.
This was echoed in production. Industrial value
added grew 5.9%, led by equipment manufacturing
and hi-tech industries. Output growth in areas such
as 3D-printing devices (+52.5%), industrial robots
(+28.0%) and new energy vehicles (+25.1%)
highlighted how quickly ‘innovation at scale’ is
translating into real productive capacity. China’s
response to demographic and cost pressures has
increasingly been automation and digitisation,
and the country is now the world’s largest
industrial-robot market, accounting for more than
half of global installations.
Another notable development was the extension of
China’s external footprint beyond traditional ‘hard
goods’ into higher-value technology, brands and
intellectual property. CATL (a holding in the portfolio)
remained emblematic of this shift, supplying
batteries for around one-third of new electric
vehicles globally and a similar share of grid-scale
energy storage systems. In consumer culture,
companies such as Pop Mart illustrated how Chinese
design and intellectual property are increasingly
resonating with overseas consumers.
Domestic consumption improved modestly but
remained uneven. Retail sales grew 3.7% for
the year, with online channels continuing to
outperform. Targeted policy support was visible in
categories linked to trade-in programmes, including
communication equipment (+20.9%) and household
appliances and audio-visual equipment (+11.0%).
Momentum, however, softened toward year-end,
and weak pricing conditions persisted, with flat
consumer prices and declining producer prices
(-2.6%), reinforcing a sense of ‘real growth but weak
nominal momentum’.
13
Baillie Gifford China Growth Trust plc
Confidence remained the key constraint, closely
tied to housing. The property downturn continued
to weigh on activity, with real-estate development
investment down 17.2%, floor space sold down
8.7%, and new starts down 20.4%. This helps
explain subdued fixed-asset investment (-3.8%)
and private investment (-6.4%), even as ‘upgrading’
activity persisted in areas such as equipment and
technology, where investment rose 11.8%.
Policy signals during the year helped stabilise
expectations. Support for the private sector became
clearer, fiscal policy adopted a more proactive
stance, and official messaging increasingly
emphasised consumption as a strategic priority,
acknowledging the limits of investment-led growth
amid overcapacities. However, we do not expect
a large, credit-fuelled stimulus of the kind seen in
past cycles. The more realistic path is continued
targeted support, aimed first at preventing further
deterioration in the property market and gradually
improving household confidence, alongside
selective consumption incentives. In our view, this
makes the recovery more likely to be steady and
uneven, rather than rapid. With households holding
substantial savings, the potential for a gradual shift
toward spending or longer-duration financial assets
remains an important swing factor for the outlook.
Household deposits exceeded roughly RMB 160tn
(about US$22tn vs China’s economy of US$30tn)
by mid-2025 and continued to rise through the year.
It means even a modest change in behaviour at the
margin can become macro-relevant.
Finally, 2025 was a year in which innovation became
increasingly visible in day-to-day economic activity.
In AI, the emergence of tools such as DeepSeek and
the rapid proliferation of generative applications
underscore the speed of the Chinese ecosystem’s
evolution, supported by intense competition and
policy momentum.
AI for China
Artificial intelligence became a defining theme
for China in 2025, moving decisively from
experimentation to deployment. For policymakers,
AI is increasingly viewed as a strategic lever to lift
productivity, upgrade industry and offset structural
headwinds such as the ageing demographic.
For companies, the focus has shifted from
demonstrating technical capability to embedding
AI into products, services and workflows at scale.
From our perspective as long-term investors, this
transition from capability to application is what
ultimately matters.
China’s national AI strategy places less emphasis
on a single ‘breakthrough moment’ and more
on diffusion, the broad rollout of AI across
manufacturing, services and everyday economic
activity. This approach plays to China’s strengths:
scale, speed of iteration and the ability to integrate
software into physical systems. Rather than being
confined to a small number of frontier labs, AI in
China is increasingly appearing in factories, devices,
enterprise tools, and consumer platforms.
In Shenzhen, a visit to private company Bambu
Lab (not a holding in the portfolio) captured this
shift perfectly. China produces around 90% of the
world’s consumer-grade 3D printers, with much
of that manufacturing concentrated in Shenzhen,
giving companies such as Bambu an unusually
dense ecosystem of suppliers, engineers and rapid
iteration loops. Rather than talking about AI in
abstract terms, the team showed us how a small
on-device neural network, essentially a compact
digital brain built directly into the printer’s hardware,
quietly monitors a print as it runs. This can detect
‘spaghetti’ failures (prints that detach or misprint,
leaving a nest of extruded filament) in real time and
can intervene before material and time arewasted.
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It was a modest moment, but a powerful one:
AInot as a headline feature, but as something that
simply makes everyday tools work better. More
broadly, it reflected how China’s supply chains and
engineering talent allow hardware, software and AI
to be combined and improved at remarkable speed.
Portfolio holding Tencent also offers a distinctive
form of AI leverage through gaming. As the
world’s leading game development, publishing
and operations platform, it is using AI not only
to build games, but to provide AI-enabled tools
and services that make game creation faster and
cheaper. Tencent highlighted GiiNEX, its generative
game AIengine, designed to support developers
throughout the production pipeline. In Tencent’s
own examples, GiiNEX can compress tasks such as
city modelling from days to minutes and accelerate
testing and simulation, which are often major
bottlenecks in modern game production.
Alongside this, Tencent’s GCloud platform
packages a range of game technologies, solutions
and services for development and operations,
reinforcing the idea of ‘gaming-as-a-service’ where
Tencent can monetise not just content, but the
underlying toolchain that powers it.
In autonomous driving, our time spent with
portfolio company Horizon Robotics underscored
how AI is being shaped for China’s real-world
driving conditions. What stood out was the
company’s pragmatic focus on shipping capability,
not promises: Horizon emphasised advanced
driver-assistance systems that can be deployed at
scale by domestic automakers today, then improved
quickly through feedback from large volumes of
real driving data. In an environment as complex as
China’s roads, this step-by-step approach felt both
commercially grounded and technically credible.
Over time, as Chinese automakers expand overseas,
we believe this software-and-compute stack has
the potential to travel with them – turning domestic
scale into a meaningful globalisation opportunity.
A visit to private company Unitree (not a holding
in the portfolio) offered a different but equally
striking perspective on China’s robotics ambitions.
Watching a humanoid robot walk, balance and
recover from external pushes was impressive, but
the more revealing insight came from the discussion
around cost. Unitree’s emphasis is not only on
capability but also on making robots affordable
enough to be widely deployed, a key philosophy
that mirrors China’s broader approach to technology
diffusion. The ambition is not to build a handful of
showcase machines, but to drive down costs so that
humanoid and quadruped robots can move from
demonstrations into industrial, commercial, and
eventually consumer use.
Doubao owned by ByteDance (our largest unlisted
holding in the portfolio), is also a useful illustration
of how quickly AI can diffuse in China when paired
with strong product design and distribution. By late
December 2025, multiple reports citing ByteDance
internal data suggested Doubao’s daily active
users had surpassed 100 million, achieved with
unusually low user-acquisition and marketing spend
for a product of that scale. What we found striking
on the ground was how this growth has been
driven: Doubao’s creative tools – such as image
and video generation – are designed for sharing,
and ByteDance can place them directly into the
everyday ‘habits’ people already have across its
ecosystem. In other words, adoption is increasingly
being pulled by usefulness and social sharing, rather
than pushed by novelty – an important distinction if
AI is to become part of daily life at a national scale.
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Baillie Gifford China Growth Trust plc
Time spent with MiniMax, a newer holding of the
Company, reinforced the idea that constraints can
shape behaviour constructively. MiniMax is building
cutting-edge foundation models and turning them
into real products – spanning text, image, video and
audio generation – bringing powerful generative
AI tools to consumers and businesses at scale.
Management emphasised competing on efficiency,
delivering models strong enough for the vast
majority of real-world use cases at a fraction of the
cost of leading US offerings. In a recent interview,
the founder described an ambition to achieve
roughly 90% of the capability at around one-tenth
the cost, reflecting how price-sensitive many users
and enterprises are. As ‘inference’ (using a trained
model to answer questions or generate outputs,
not training it) becomes the dominant driver of
compute demand, this emphasis on deployment
cost, optimisation and long context practicality
increasingly looks like a durable advantage.
We believe China’s long-term position in AI rests on
reinforcing strengths that favour diffusion at scale.
Powerful platform distribution and intense domestic
competition create rapid feedback loops, helping AI
move quickly from novelty to habit. China can also
integrate AI into the physical economy, devices,
factories and supply chains, where productivity
gains can be tangible and durable.
China’s talent density is another advantage. NVIDIA
chief executive Jensen Huang has remarked that
around half of the world’s AI researchers are
Chinese, and Stanford’s 2025 AI Index estimates
that China accounts for around 70% of granted
AIpatents.
Finally, AI is an energy-intensive technology.
China’s scale in renewables and leadership in the
clean-energy supply chain mean electricity can be
materially cheaper. In some regions, it is reportedly
around half US levels, supporting lower-cost training
and, increasingly, inference at scale. Grid-scale
storage is a crucial enabler of that system, and
CATL’s leadership in energy storage is an important
piece of the puzzle. But transmission matters just
as much: China has built around 8,200 miles of
ultra-high-voltage lines, far outstripping the US at
roughly375 miles.
Our approach to AI exposure remains pragmatic.
Rather than attempting to identify a single ‘winner’
at the model layer, we focus on companies with
durable distribution, data advantages and clear
paths to monetising AI within existing business
models. This underpins our continued conviction in
holdings such as Tencent, Alibaba and ByteDance,
alongside selective exposure to emerging
AIspecialists such as MiniMax.
AI is a marathon, not a sprint. China’s advantage is
unlikely to be defined by a single moment or model,
but by its ability to deploy AI broadly, efficiently
and at scale. Based on what we saw through
2025, that diffusion is already underway – and it
has the potential to become an important driver of
productivity and value creation over time.
Importantly, AI is not only a US–China contest. Much
of the next wave of adoption is likely to come from
the rest of the world, particularly emerging markets,
where cost, local deployment and language support
matter as much as frontier performance. China’s
growing ecosystem of open and low-cost models
is increasingly being used internationally, allowing
developers and businesses to build AI capabilities
without relying solely on expensive closed-model
APIs. In Africa, for example, Chinese models are
gaining traction because they can be deployed more
flexibly on local infrastructure and lower the barriers
for startups and public services. More broadly,
webelieve AI’s benefits should not be confined to a
handful of countries. It should be a general-purpose
technology that can raise productivity and widen
opportunities globally.
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Geopolitics: still a factor, but changing
Geopolitics remained a meaningful headwind in
2025, and the first half of the year was volatile.
Thereturn of a Trump administration brought an
early tariff shock, including a 10% additional tariff
on imports from China from early February, and
the year saw further tariff signalling and escalation
episodes that kept markets on edge. Technology
remained the most sensitive arena: US restrictions
on advanced chips and AI-related exports continued
to tighten and evolve, raising costs and uncertainty
for parts of the ecosystem while reinforcing China’s
push for efficiency and domestic capability-building.
Later in the year, the relationship showed signs of
tactical de-escalation rather than reconciliation.
High-level engagement between the US and China
helped reduce the risk of immediate escalation, but
the underlying strategic competition in technology
and security remains unresolved. As a result, we
continue to assume that geopolitical frictions will
be a persistent feature of the investment backdrop
rather than a one-off episode.
A further uncertainty entering 2026 is the Iran-
related escalation and the wider Middle East
backdrop, which have increased the risk of
disruption along key energy and shipping routes,
such as the Strait of Hormuz. In the near term, the
most direct channel is energy prices and freight/
insurance costs, which can affect global inflation
and risk appetite and, by extension, emerging-
market valuations. Over a 5- 10-year horizon, our
base case is not to forecast any single outcome, but
to assume that periodic flare-ups remain possible
and that markets will continue to price a geopolitical
risk discount. For the portfolio, most holdings are
primarily exposed to domestic Chinese demand
rather than to Middle East trade flows; however,
higher, more volatile energy prices can still influence
consumer confidence and input costs. At the same
time, energy insecurity can also reinforce structural
tailwinds behind electrification, efficiency, and
energy storage, where China has clear competitive
strengths and where companies such as CATL are
positioned as enablers.
Against this backdrop, some idiosyncratic risks
effectively resolved. The TikTok situation culminated
in a completed US transaction, with the agreed
structure involving a US-based entity under
non-Chinese control and ByteDance retaining only
a minority economic interest. With the deal now
confirmed, the previous “ban vs no ban” binary has
given way to a more stable operating framework,
materially reducing the likelihood of abrupt
disruption relative to earlier periods.
Meanwhile, DeepSeek became a fresh geopolitical
flashpoint by demonstrating how quickly China’s AI
capabilities are advancing, intensifying scrutiny in
Washington. Sanctions and entity-list risk remain
part of the landscape and are inherently difficult
to predict. We therefore incorporate sanctions
screening and export-control awareness into
both pre-investment due diligence and ongoing
monitoring, drawing on a combination of internal
analysis and third-party risk tools. Overall,
wecontinue to distinguish headline risk from
underlying exposure: most portfolio companies
derive the majority of revenues from China and
other non-US markets, where domestic and regional
demand remain the dominant long-term drivers.
Where does that leave us as growth
investors in China?
For growth investors, China continues to present
a large but highly selective opportunity set. The
country is home to a deep pool of innovative,
ambitious companies, but the discipline required to
convert that opportunity into attractive shareholder
returns remains high. The key question is not
whether growth exists in China – it clearly does
– but whether the expected return is sufficient to
compensate for the risks, volatility and uncertainty
that accompany investing in this market.
From a valuation perspective, the starting point
remains supportive, but it is important to be precise
about the measure being used. On a headline
basis, broad China indices such as the MSCI China
were trading in the mid-teens P/E range around
end-January 2026, which is around to modestly
above some long-run averages depending on the time
period chosen and whether one looks at trailing or
forward earnings. By contrast, the relative valuation
remains attractively discounted: at end-January
2026, MSCI China was trading at roughly a mid-30%
P/E discount to MSCI World (c. 16x versus c.25x).
This matters for growth investors because valuation
provides both downside protection and the potential
for meaningful upside when fundamentals improve.
Importantly, today’s valuations coincide with a
backdrop in which the most disruptive phase of
regulatory tightening appears to be behind us, policy
direction has become clearer, and several industries,
particularly technology, advanced manufacturing,
and consumer services, are emerging from
cyclicallows.
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Baillie Gifford China Growth Trust plc
However, the opportunity is not broad-based. We
believe returns will be driven by a narrower cohort
of companies that can combine durable growth
with improving capital discipline, clear competitive
advantages and the ability to monetise innovation.
In areas such as AI, advanced manufacturing,
renewable energy systems and selected consumer
platforms, we continue to see businesses with the
potential to compound value over long time horizons.
At the same time, competition within China
remains intense, and growth alone is not sufficient.
Execution, cost control and return on invested
capital matter more than ever.
Our experience over recent years has reinforced
the importance of valuation discipline and risk
awareness within a growth framework. Periods of
strong performance can quickly give way to sharp
corrections, particularly in a market where sentiment
can shift abruptly. Since the enhancements we
described last year, we have continued to work
closely with Baillie Gifford’s Investment Risk team
to embed a more systematic set of tools into the
portfolio process. These include clearer valuation
reference points at purchase, regular monitoring
of portfolio-level valuation dispersion, and alerts to
identify anomalies where share prices move materially
ahead of changes in underlying fundamentals.
The benefits are practical rather than theoretical.
During the year we used these tools to support
measured profit-taking in a small number of holdings
after unusually rapid share-price appreciation, and
to recycle capital into opportunities where we felt
the prospective return was more attractive. This
discipline is not intended to dampen returns. Instead,
it is designed to improve the quality and durability of
those returns through the cycle, while ensuring that
we remain long-term owners of exceptional companies
without becoming complacent about valuation.
At the firm level, Baillie Gifford remains deeply
committed to China as a long-term growth
opportunity. We continue to invest in local presence,
research capability and risk oversight, recognising
that successful investing in China requires both long-
term conviction and on-the-ground understanding.
Our approach remains unchanged: to identify a
concentrated set of exceptional growth companies,
remain patient through volatility, and evolve the
portfolio as opportunities and riskschange.
In summary, we believe China remains a compelling
market for growth investors who are willing to
be selective, disciplined and long-term in their
approach. With valuations still supportive, innovation
accelerating across multiple sectors, and confidence
showing tentative signs of improvement, we believe
the balance of risks and rewards remains attractive
for long term investors.
Portfolio positioning and recent activity
We continue to run the Company as a concentrated
portfolio of China’s most innovative growth
businesses, typically holding 40–80 companies
selected from an investable universe of thousands.
The portfolio remains differentiated, with an
active share of 62% and a one-year standard
turnover of 19.1%, consistent with our long-term
investmenthorizon.
At a portfolio level, we aim to keep the Company
anchored in structural growth, particularly the
platform economy powered by AI, consumer brands,
advanced manufacturing and the energy transition,
while remaining selective in areas where we see
fewer attractive growth opportunities.
Portfolio activity throughout the year was purposeful
rather than frequent. We used market dislocations
to refine the portfolio – adding where we saw
durable compounding at attractive prices and exiting
where the growth outlook, risk profile or valuation
asymmetry became less compelling.
• New holdings included a mix of structural growers
and diversifiers: MiniMax (AI), Anta Sports
Products, Atour, H World (consumer/services),
Didi (mobility), Wanhua Chemical, China Yangtze
Power (quality infrastructure/clean power),
and selected resources exposure including
Tianqi Lithium, Ganfeng Lithium, and Zijin Gold
International.
• We also continued to evolve our approach to
private companies. During the year we added a
second private holding, RedNote (Little Red Book),
alongside ByteDance. The Company’s investment
policy permits investment in unlisted securities
up to 20% of gross asset value at the time of
investment, and our allocation to private companies
remains within this limit. RedNote is a consumer
internet franchise at the intersection of social
discovery and commerce: users come for trusted
recommendations and content-led discovery,
and merchants come for highly targeted demand
generation. Our investment followed a long period
of monitoring and repeated engagement with
management, reflecting the additional diligence
required for private investments, where we focus
heavily on governance, incentives, competitive
positioning and the durability ofmonetisation.
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• Sales/exits included Li Ning, Proya, Ke Holdings,
Robam Appliances, Shanxi Fen Wine, Yonyou, and
others where our conviction reduced or where
risk/reward became less favourable.
Beyond outright exits, we also made selective sizing
decisions. For example, we materially trimmed
Meituan as competitive intensity in food delivery
and instant retail escalated, and we redeployed
capital toward opportunities where we judged the
prospective return to be more attractive.
By the end of the period, the portfolio’s top ten
investments included Tencent, ByteDance, Alibaba,
Ping An, CATL, Zijin Mining, Kweichow Moutai,
China Merchants Bank, China Construction Bank,
and Weichai Power. It is a combination of platform
AI leaders, consumer franchises and energy-
transition enablers. Overall, the pattern of activity
reflects our intent to keep the portfolio focused
on a concentrated set of high-conviction growth
franchises, while remaining willing to adjust
exposures as fundamentals, valuations and the
opportunity cost of capital evolve.
Performance
The Company delivered strong absolute and relative
returns. For the 12 months to 31 January 2026, the
Company generated a NAV total return of 34.0% and
a share price total return of 38.8%, compared with
22.2% for the benchmark.
Returns were supported by a broad-based recovery
across growth equities in China, with particularly
strong contributions from several of our highest-
conviction holdings. Platform and AI-related exposure
were an important driver as market confidence
improved and investors began to re-engage with
China’s leading private-sector champions.
From a sector perspective, relative performance
was driven primarily by stock selection, with +8.3%
coming from selection effects versus +1.9% from
allocation (total relative attribution: +10.4%).
In plain terms, allocation reflects where we
positioned the portfolio at the sector level, meaning
the impact of being overweight or underweight
sectors relative to the benchmark. Selection reflects
what we owned within those sectors, meaning the
impact of choosing individual stocks that performed
better or worse than the benchmark’s holdings in the
same sector.
The largest positive sector contributions came from:
• Consumer discretionary (+2.1%) – the biggest
driver of relative returns. Industrials (+2.1%) –
again dominated by selection (+2.2%), with a
broadly neutral allocation impact (-0.1%).
• Financials (+1.6%) – positive despite a large
underweight in the sector (6.2% vs 19.5%
index). The contribution came from a combination
of allocation (+0.7%) and selection (+0.8%),
suggesting that our more selective exposure was
helpful relative to the broader sector.
• Communication services (+1.4%) – driven
mainly by allocation (+1.3%), consistent with our
structural overweight to platform leaders.
• Materials (+1.1%) and information technology
(+0.9%) – both mainly selection-led, reflecting
strong stock-specific outcomes.
Other notable items:
• A small additional tailwind came from capital
structure. The Company’s modest net gearing
added to returns in a rising market, while our low
allocation to cash and deposits was a slight drag
on relative performance. Taken together, these
effects were minor but directionally consistent
with the benefit of being more fully invested during
a strong year forequities.
• Most other sectors were close to neutral, with only
consumer staples (-0.1%) slightly negative.
Overall, the pattern is encouraging. The performance
was not reliant on a single sector call, and the
majority of outperformance came from choosing the
right businesses within sectors rather than simply
being in the ‘right’ parts of the market.
Stock-specific contributors to relative performance
were varied. Over the year, the largest positive
contributors were:
ByteDance (+1.70% relative contribution; average
weight ~10.3%)
ByteDance was the single largest contributor to
relative performance and remains the Company’s
most significant unlisted holding. It represented
10.4% of total assets at 31 January 2026, reflecting
both business progress and valuation uplifts.
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Baillie Gifford China Growth Trust plc
Over the year, the investment case was supported
by continued strong execution in advertising and
content monetisation, rapidly scaling AI activity,
and the successful completion of the TikTok US
transaction. The agreed structure – with TikTok’s
US operations housed in a US-based entity under
non-Chinese control and ByteDance retaining
only a minority economic interest – has reduced
regulatory tail risk and provided greater clarity over
TikTok’s long-term operating environment in its
largestmarket.
In valuation terms, the Company’s interim report
noted that ByteDance’s valuation was revised
upwards by about 30% in response to double-digit
revenue and cash flow growth, a higher valuation
backdrop for its listed peer group, and reduced
uncertainty around TikTok’s US outlook. Given the
deal has now completed, the valuation remains
attractive even on a standalone basis, assuming no
value for theUSbusiness.
This is also a good point to reiterate how we
value private holdings: the process is overseen
by BaillieGifford’s valuations committee, with
independent input from S&P Global, and is
monitored for “trigger events”, such as material
corporate or regulatory developments, that warrant
updates between regularcycles.
US-related uncertainty (TikTok) remained a key
swing factor for sentiment, but the risk profile
became less binary as deadlines were repeatedly
extended and negotiations continued, allowing
investors to place a less punitive value on the US
option than in earlier periods. We do not assume a
definitive resolution is “done” until agreements are
finalised and implemented, but we also note that our
conviction in ByteDance does not depend on the
US business: as stated previously, we continue to
view the growth opportunity and current valuation as
attractive even excluding the US operations.
Finally, on position size: the Company’s investment
policy limits any individual holding to the lower of
20% or the benchmark weight plus 7.5%, measured
at the time of investment. Within those parameters,
we remain comfortable with ByteDance as a
large holding given its scale, cash generation and
reinvestment capacity, and we continue to monitor it
closely through our private valuation framework and
ongoing fundamental engagement.
Zijin Mining (H-shares) (+1.62% relative contribution;
active weight ~+1.94%)
Zijin Mining was a significant contributor over the
year. The shares benefited from a constructive
backdrop for metals, particularly gold and copper,
alongside continued operational delivery and
progress on asset development. Our overweight
position versus the index was the main driver of the
relative contribution. In addition, investor sentiment
was supported by corporate actions during the
period, including the planned separation and listing
of Zijin Gold International (also a portfolio holding),
which helped to crystallise value and increase focus
on the group’s fast-growing gold business.
Pop Mart (+1.46% relative contribution; active
weight ~+2.28%)
Pop Mart’s contribution reflected both strong
underlying momentum and a continuing
internationalisation story. Demand for its IP –
especially its character Labubu – helped drive rapid
overseas growth, reinforcing the thesis that this is
not simply a domestic toy company, but an IP-led
consumer platform with growing global resonance.
Zhongji Innolight (+1.30% relative contribution;
active weight ~+0.76%)
Zhongji Innolight was also a meaningful positive
contributor. The shares delivered an exceptional
return over the year (+437%), and our overweight
position versus the benchmark translated this into
a sizeable relative contribution (+1.3%). Innolight is
a leader in high-speed optical transceivers – critical
components in AI training clusters and data centre
networks. It has benefited from sustained growth
in global AI-related capex and demand for higher-
bandwidth connectivity. Following such a rapid share
price move, we trimmed the position to realise some
gains and reallocated capital to other opportunities
with more attractive prospective returns.
The three largest detractors were:
Meituan (-0.57% relative contribution; active weight
~+0.90%)
Meituan was the largest detractor as competition
in local services intensified, weighing on near-term
margin expectations and investor sentiment. While
we remain positive on Meituan’s long-term position
in local commerce and fulfilment, 2025 reminded us
that competitive cycles in China can be sharp, and
markets often discount near-term pressure quickly.
We did reduce our position meaningfully in the
middle of the year to take some profit from its strong
performance last year.
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DPC Dash (-0.46% relative contribution; average
weight +0.43%)
DPC Dash detracted as the market focused on the
costs of expansion and the path to sustainable
profitability. Despite progress in execution and brand
momentum, investor concerns around operating
leverage and the pace of store rollout weighed on
the shares during the period.
Sunny Optical Technology (-0.41% relative
contribution; active weight ~+1.18%)
Sunny Optical Technology was affected amid a
weaker demand environment for parts of consumer
electronics and ongoing pricing pressure across
components. While longer-term opportunities in
automotive optics and higher-value modules remain
attractive, the year highlighted how cyclical end
markets can still dominate short-term performance.
Outlook for 2026
As we look ahead to 2026, our outlook for China
is shaped less by any single macro forecast
and more by the direction of travel that became
clearer through 2025. China’s transition toward
a growth model led by innovation, productivity
and consumption remains uneven, but it is
progressing. It is increasingly showing up in
company-leveloutcomes.
Policy is likely to remain supportive but pragmatic.
We do not expect a sudden credit-fuelled rebound
or a return to the excesses of past cycles. Instead,
the focus should remain on stabilising confidence,
particularly in housing, while directing resources
toward strategic priorities such as advanced
manufacturing, AI, clean energy, automation and
healthcare innovation. Incremental progress is the
more likely path, but incremental change can still be
powerful in an economy of China’s scale.
Domestic demand remains the key swing factor.
The lessons of 2025 reinforced that confidence,
rather than capacity, is the binding constraint.
With household balance sheets strong and
savings substantial, even modest improvements
in sentiment could translate into meaningful
momentum. Astabilising property market, clearer
policy messaging and improving labour-market
dynamics would support this process. The timing is
uncertain, but the asymmetry is notable: small shifts
in behaviour can have outsized effects.
Innovation will remain central to China’s growth
trajectory in 2026. What changed in 2025 is that
innovation is increasingly visible in deployment.
AI is moving from experimentation to application
across platforms, enterprises and physical systems.
As AI diffusion accelerates, factors such as scale,
integration with manufacturing and access to
low-cost clean energy are likely to matter as much
as headline breakthroughs. Over time, we believe
this can support productivity gains and new profit
pools across multiple sectors.
Geopolitical uncertainty will continue to
influence sentiment and valuations. However,
recent experience suggests these risks are
persistent rather than paralysing. Trade patterns
are diversifying, companies are adapting their
structures, and China’s domestic market remains
large enough to support long-term growth for many
businesses. Thisreinforces the importance of
distinguishing between headline risk and underlying
economicexposure.
Valuations remain an important part of the
opportunity. Despite two consecutive years of strong
performance, Chinese equities continue to trade
at a meaningful discount to global markets. While
the USmarket (60% of global indices) continues
to trade at elevated levels, Chinese equities offer
a compelling absolute value proposition. Currently,
major Chinese indices are trading at P/E levels of
approximately 16x, well within their historical range
of 10x to 25x.
Beyond these low entry points, BG’s conviction
rests on the ‘growth-inflection’ potential within
our portfolio. Using our investment risk matrix,
we identify ‘outlier’ companies in sectors like AI,
automation, and core technology that possess the
fundamental characteristics to double in value over a
five-year horizon. We believe the market is currently
underestimating the compounding power of these
domestic champions, providing a margin of safety on
an absolute basis while offering significant upside
from structural growth.
21
Baillie Gifford China Growth Trust plc
If policy execution continues to improve and
confidence stabilises, there is scope for valuation
normalisation alongside earnings growth, particularly
for high-quality growth companies with durable
competitive advantages.
For the Company, our focus in 2026 remains
unchanged. We aim to own a concentrated portfolio
of exceptional Chinese growth companies, remain
disciplined on valuation and risk, and look beyond
near-term volatility. The past year reinforced that
patience, selectivity and long-term conviction matter
in China. While challenges remain, the lessons of
2025 leave us cautiously optimistic that the balance
of risks and rewards continues to improve for
long-term growth investors.
Linda Lin
Sophie Earnshaw
BaillieGifford & Co
31 March 2026
Strategic report
Annual Report and Financial Statements 2026
22
Review of
investments
A review of the Company’s
ten largest investments as
at31January 2026.
ByteDance
ByteDance is a social media and short
form video company and it represents
theCompany’s first private investment.
Itwas founded in 2012 by Yiming Zhang
and the company has grown to rank
amongst the world’s largest companies
ofits kind. Its short form video app,
Douyin, is a market leader in China, and
TikTok, its global equivalent, is dominating
the format globally. ByteDance benefits
from a technological edge in machine
learning which it uses to bring out new
applications tailored to different media
forms and different demographics.
Thecompany’s ability to innovate in this
space is exceptional and we believe one of
the key drivers of its likely future success.
We believe ByteDance has the potential to
be a generation defining media company.
Valuation at
31 January 2026 (‘000)
£21,349
% of total investments
at 31 January 2026
10.5
Valuation at
31 January 2025 (‘000)
£14,429
% of total investments
at 31 January 2025
9.1
Net purchases/(sales) in year
to 31 January 2026 (‘000)
Nil
© AFP/Getty Images
Tencent
Tencent is a leading social media and
entertainment platform. It has a dominant
position in online gaming and an
ecosystem in WeChat that we believe is
one of the strongest in China. Monetisation
of WeChat’s over one billion monthly
active users represents one growth
driver for the company. Further growth
opportunities are provided by Tencent’s
strong positions in cloud infrastructure and
consumer and SME lending, along with
its portfolio of investee companies which
span online music streaming, ecommerce,
and short form video. Pony Ma, the
founder and Chairman of the company,
is indelibly focused on the long term and
has executed exceptionally well in one of
China’s fastest moving industries.
Valuation at
31 January 2026 (‘000)
£24,628
% of total investments
at 31 January 2026
12.1
Valuation at
31 January 2025 (‘000)
£19,013
% of total investments
at 31 January 2025
11.9
Net purchases/(sales) in year
to 31 January 2026 (‘000)
(£924)
© Alamy Stock Photo
23
Baillie Gifford China Growth Trust plc
Alibaba
Alibaba is a leading online retailer. Its
ecommerce business is returning to growth
after a period of intensified competition
and share loss. Steadily increasing online
penetration in segments such as grocery
and Fast Moving Consumer Goods remains
a long term driver for the business, whilst
the company’s efforts to integrate live
streaming and social media into the
platform aim to revitalise the platform
following stiff competition for customers’
and merchants’ attention from competitors.
In addition, Alibaba retains a strong
position in infrastructure as a service, or
the cloud, where it has a similar business to
Amazon Web Services. The company has
taken the decision to focus on profitable
growth as opposed to growth at any cost.
Alibaba’s partnership structure and its
capable and experienced management
team are well-aligned with shareholders.
Valuation at
31 January 2026 (‘000)
£16,939
% of total investments
at 31 January 2026
8.3
Valuation at
31 January 2025 (‘000)
£9,679
% of total investments
at 31 January 2025
6.1
Net purchases/(sales) in year
to 31 January 2026 (‘000)
(£778)
© China News Service/Getty Images
CATL
CATL is a Chinese manufacturer of lithium-
ion battery cells with dominant market
share both in cathode chemistries (LFP)
and form factors (prismatic) batteries
which are poised to grow through electric
vehicle (EV) uptake and energy storage.
The company is a national champion in
China, which is the world’s largest EV and
electricity generation market, and it is well
aligned with the state’s decarbonisation
objectives and emphasis on Chinese
self-sufficiency in the hard sciences and
technology. Beyond its home market,
CATL’s future growth could be further
fuelled by its operations in Europe where it
already has a manufacturing presence and
its presence in other emerging markets.
We like the magnitude and duration of the
growth opportunity combined with CATL’s
market leadership, which we believe can
prove defensible thanks to the company’s
partnerships with a wide variety of
automakers who are making the shift to
electric vehicles and relying on CATL’s cell-
to-pack battery technology to do so.
Valuation at
31 January 2026 (‘000)
£6,537
% of total investments
at 31 January 2026
3.2
Valuation at
31 January 2025 (‘000)
£5,315
% of total investments
at 31 January 2025
3.3
Net purchases/(sales) in year
to 31 January 2026 (‘000)
(£122)
Valuation at
31 January 2026 (‘000)
£8,376
% of total investments
at 31 January 2026
4.1
Valuation at
31 January 2025 (‘000)
£4,984
% of total investments
at 31 January 2025
3.1
Net purchases/(sales) in year
to 31 January 2026 (‘000)
£739
Ping An Insurance
Ping An Insurance is one of China’s leading
financial services groups. It is China’s
second largest life insurer, a market with
growth potential driven by China’s emerging
middle class and rising disposable income.
It also has a leading position in property and
casualty insurance where it has consistently
delivered strong returns. In addition, it has
consistently invested in artificial intelligence
and machine learning in order to increase
the efficiency and long-term viability of its
core business. Again, this is a company
with a long-term, growth mind-set that we
believe will deliver substantial returns to
shareholders.
Strategic report
Annual Report and Financial Statements 2026
24
Valuation at
31 January 2026 (‘000)
£6,514
% of total investments
at 31 January 2026
3.2
Valuation at
31 January 2025 (‘000)
£2,909
% of total investments
at 31 January 2025
1.8
Net purchases/(sales) in year
to 31 January 2026 (‘000)
(£259)
Zijin Mining Group
Zijin is a Chinese mining company that
has been active in overseas acquisitions
in recent years and is now present in 12
countries with exposure to an exciting
portfolio of growth assets. The historic
focus has been on gold but is now shifting
to copper, where production is forecast to
double over the next few years helped in
particular by the company’s exposure to
the world-class, low-cost Kamoa-Kakula
project in the DRC. Copper demand is likely
to remain elevated amid the transition
to net-zero, and given the potential
supply constraints involved in meeting
such demand, we feel that Zijin has an
important role to play as an enabler of
green infrastructure. We do not think the
upside to the commodity price, nor Zijin’s
growth potential, is being adequately
factored in by the market, and we also think
that the company suffers from an unfair
ESG discount given the improvement that
we have observed in transparency and
reporting.
Valuation at
31 January 2026 (‘000)
£5,426
% of total investments
at 31 January 2026
2.7
Valuation at
31 January 2025 (‘000)
£6,268
% of total investments
at 31 January 2025
3.9
Net purchases/(sales) in year
to 31 January 2026 (‘000)
(£514)
Kweichow Moutai
Kweichow Moutai is one of the most
important and iconic Chinese brands.
It manufactures premium baijiu (white
alcohol) which has a heritage and respect
embedded within Chinese culture. Its
unique brewing conditions and process
provide a core competitive advantage.
When combined with supply scarcity and
limited competition in the very high-
end market, Moutai is able to price at a
premium and maintain a loyal customer
base. It is an extremely profitable business.
We believe in the strength and heritage
of the brand, the sustainability of revenue
growth, and the longevity of its core
competitive advantage.
China Merchants Bank
China Merchants Bank is a leading
consumer bank in China with a lengthy
track record and solid market share.
Ithasoutcompeted its state-owned rivals
via a relentless focus on the consumer.
As such, it has built up an enviable
position in consumer lending and in wealth
management, both segments with strong
growth potential. In terms of lending
quality, this has been strong through the
cycle and we believe this is a bank that
willcontinue to offer attractive returns
toshareholders.
Valuation at
31 January 2026 (‘000)
£4,870
% of total investments
at 31 January 2026
2.4
Valuation at
31 January 2025 (‘000)
£5,057
% of total investments
at 31 January 2025
3.2
Net purchases/(sales) in year
to 31 January 2026 (‘000)
(£242)
© VCG/Getty Images
25
Baillie Gifford China Growth Trust plc
Valuation at
31 January 2026 (‘000)
£4,818
% of total investments
at 31 January 2026
2.4
Valuation at
31 January 2025 (‘000)
–
% of total investments
at 31 January 2025
–
Net purchases/(sales) in year
to 31 January 2026 (‘000)
£4,902
China Construction Bank
Corporation
We bought CCB because we think China’s
banking sector is closer to a profitability
trough than the market implies. Over the
past decade, shadow banking has been
curtailed and legacy losses absorbed.
Profitability has compressed as margins
have fallen, fees have been cut, and the
sector has been forced to absorb a certain
degree of directed lending. However,
recent steps such as recapitalisations and
deposit-rate cuts suggest that the burden
is starting to ease, while valuations remain
very low (around 0.5x price to book). In
that context, we believe banks like CCB
with strong retail franchises benefit from
the best risk-adjusted books; CCB stands
out for its scale in wealth/custody, deep
urban footprint, prime mortgage exposure,
strong cost discipline and relatively sticky
low-cost deposits. These factors give
it a better chance to defend margins
and stabilise returns. Even assuming
no rerating, a c. 5% dividend yield plus
modest earnings resilience offers a
credible path to double-digit total returns.
Valuation at
31 January 2026 (‘000)
£4,737
% of total investments
at 31 January 2026
2.3
Valuation at
31 January 2025 (‘000)
£2,715
% of total investments
at 31 January 2025
1.7
Net purchases/(sales) in year
to 31 January 2026 (‘000)
(£81)
Weichai Power
Weichai Power is a state-owned enterprise
with 35-40% market share in diesel
engines. Its products have been widely
adopted for truck makers, buses,
construction machinery and industrial
equipment. Heavy duty truck engines
represent roughly two thirds of revenues and
profits. Weichai is expected to benefit from
continued development in China’s industrial
and infrastructure sectors. In addition to the
core engine business, Weichai also makes
heavy duty trucks through its fully-owned
subsidiary, Shaanqi, and has a presence in
global warehouse logistics and automation
via a majority stake in German forklift maker
Kion. Future growth is likely to come from
diversification into new products and
markets both via expanding engine types
and entering new markets.
Strategic report
Annual Report and Financial Statements 2026
26
One year
summary
The following information
illustrates how BaillieGifford
China Growth Trust has
performed over the year to
31January 2026
* For a definition of terms see Glossary of terms and alternative performance measures on pages 126 to 128.
†
Key Performance Indicator.
#
The benchmark is the MSCI China All Shares Index (in sterling terms).
¶
Alternative performance measure – see Glossary of terms and alternative performance measures on pages 126 to 128.
Source: LSEG/BaillieGifford and relevant underlying index providers. See disclaimer on page 124.
Past performance is not a guide to future performance.
31 January
2026
31 January
2025 % change
Total adjusted assets
(before deduction of bank loans)*
£205.3m £159.2m
Bank loans £7.7 m £6.1m
Shareholders’ funds* £197.6m £153.1m
Net asset value per ordinary share* 344.44p 259.07p 33.0%
Share price 319.00p 232.00p 3 7. 5 %
MSCI China All Shares Index
(in sterling terms)
#
19.3%
Revenue earnings per ordinary share 2.98p 2.53p
Dividends paid and payable in respect
of the year
2.50p 2.20p
Ongoing charges
†¶
1.06% 1.12%
Discount
†¶
(7.4%) (10.4%)
Active share
¶
62% 68%
Year to 31 January 2026 2025
Total return
¶
Net asset value per ordinary share
34.0% 35.4%
Share price 38.8% 29.4%
Benchmark
#
22.2% 32.4%
27
Baillie Gifford China Growth Trust plc
* For a definition of terms see Glossary of terms and alternative performance measures on pages 126 to 128.
†
Key Performance Indicator.
#
The benchmark is the MSCI China All Shares Index (in sterling terms).
¶
Alternative performance measure – see Glossary of terms and alternative performance measures on pages 126 to 128.
Source: LSEG/BaillieGifford and relevant underlying index providers. See disclaimer on page 124.
Past performance is not a guide to future performance.
Year to 31 January 2026 2026 2025 2025
Year’s high and low High Low High Low
Net asset value per
ordinary share
355.69p 255.52p 285.19p 193.64p
Share price 322.00p 223.00p 253.00p 176.00p
(Discount)/
premium
†¶
(6.1%) (14.8%) (6.3%) (15.7%)
Year to 31 January 2026 2025
Net return per ordinary share
Revenue 2.98p 2.53p
Capital 83.83p 64.39p
Total 86.81p 66.92p
Strategic report
Annual Report and Financial Statements 2026
28
(Discount)/premium* to NAV
(figures plotted on a monthly basis)
20262021 2022 2023 2024 2025
Years to 31 January
●
(Discount)/premium
*
Source:
LSEG/Baillie Gifford.
(15%)
(10%)
10%
15%
5%
(5%)
0%
* Alternative performance measure – see Glossary of terms and alternative performance measures on pages 126 to 128.
†
The benchmark is the MSCI China All Shares Index (in sterling terms), prior to 16 September 2020 the benchmark
was MSCI AC Asia ex Pacific Index. Data is chain-linked from 16 September 2020 to form a single comparative index.
#
See disclaimer on page 124.
Past performance is not a guide to future performance.
Five year total return* performance
(figures rebased to 100 at 31 January 2020)
20262021 2022 2023 2024 2025
Cumulative to 31 January
● NAV total return
*
●
Share price total return
*
● Benchmark
†#
Source:
LSEG/Baillie Gifford and relevant underlying index providers
#.
20
120
80
40
60
100
Five year
summary
The following charts indicate
how an investment in
BaillieGifford China Growth
Trust has performed relative
toits benchmark
†
and its
underlying NAV over the
fiveyear period to
31January2026.
29
Baillie Gifford China Growth Trust plc
20262022 2023 2024 2025
Years to 31 January
Source: LSEG/Baillie Gifford and relevant underlying index providers
#
.
●
NAV total return
*
● Share price total return
*
(20%)
(15%)
20%
15%
10%
0%
5%
(10%)
(5%)
Annual NAV and share price total returns*(relative to the benchmark
#
total returns)
* Alternative performance measure – see Glossary of terms and alternative performance measures on pages126 to 128.
†
The benchmark is the MSCI China All Shares Index (in sterling terms), prior to 16 September 2020 the benchmark
was MSCI AC Asia ex Pacific Index. Data is chain-linked from 16 September 2020 to form a single comparative index.
#
See disclaimer on page124.
Past performance is not a guide to future performance.
Annual NAV and share price total returns*
2026
2022
2023 2024 2025
Years to 31 January
●
NAV total return
*
● Share price total return
*
Source: LSEG/Baillie Gifford.
(60%)
(40%)
60%
40%
20%
(20%)
0%
Strategic report
Annual Report and Financial Statements 2026
30
Capital
At
31 January
Total
assets
£’000
Borrowings
£’000
Shareholders’
funds *
£’000
NAV *
p
Share
price
p
(Discount)/
premium *
%
2016 170,388 – 170,388 259.3 231.0 (10.9)
2017 217,035 – 217,035 333.9 286.0 (14.3)
2018 244,455 – 244,455 386.6 344.0 (11.0)
2019 219,929 – 219,929 352.5 303.0 (14.1)
2020 222,208 – 222,208 363.5 333.0 (8.4)
2021 271,424 – 271,424 492.7 548.0 11.2
2022 224,931 5,590 219,341 353.7 339.3 (4.1)
2023 210,032 6,092 203,940 328.9 308.0 (6.3)
2024 125,301 5,890 119,411 193.1 181.0 (6.2)
2025 159,193 6,094 153,099 259.1 232.0 (10.4)
2026 205,340 7,74 5 197,595 344.4 319.0 (7.4)
Ten year
record
BaillieGifford & Co Limited were appointed as Managers and Company Secretaries on 16 September 2020. Before 16 September 2020, the Trust was able
to invest across the Asia Pacific region rather than solely in China, and had a different comparative index.
* For a definition of terms see Glossary of terms and alternative performance measures on pages 126 to 128.
†
Total operating costs (excluding performance fees) divided by average net asset value. BaillieGifford was appointed on 16 September 2020 and agreed
to waive its management fee for six months from the date of appointment. Without the management fee waiver the ongoing charges for the year to
31 January 2021 would have been 1.0% and the year to 31 January 2022 would have been 0.8%.
Past performance is not a guide to future performance.
Revenue Gearing ratios
Year to
31 January
Gross
revenue
£’000
Available
for ordinary
shareholders
£’000
Revenue
earnings per
ordinary
share
p
Ordinary
dividends paid
and proposed
per share
p
Ongoing
charges
ratio
†
%
Gearing *
%
Gross
gearing *
%
2016 4,782 2,836 4.3 4.7 1.1 – –
2017 5,004 2,880 4.4 4.8 1.0 – –
2018 5,740 4,141 6.5 5.5 1.0 – –
2019 6,577 4,954 7.9 7.0 1.0 – –
2020 6,073 4,412 7.2 7.2 1.1 – –
2021 3,600 2,329 4.5 7.2 0.7 – –
2022 1,599 592 1.0 7.2 0.7 1 3
2023 2,047 1,325 2.1 1.7 0.9 3 3
2024 2,599 1,498 2.4 2.0 1.0 4 5
2025 2,718 1,529 2.5 2.2 1.1 3 4
2026 3,039 1,734 3.0 2.5 1.1 3 4
31
Baillie Gifford China Growth Trust plc
BaillieGifford & Co Limited were appointed as Managers and Company Secretaries on 16 September 2020. Before 16 September 2020, the Trust was able
to invest across the Asia Pacific region rather than solely in China, and had a different comparative index.
Source: LSEG and underlying index providers. See disclaimer on page 124.
* For a definition of terms see Glossary of terms and alternative performance measures on pages 126 to 128.
†
The benchmark is the MSCI China All Shares Index (in sterling terms), prior to 16 September 2020 the benchmark was MSCI AC Asia ex Pacific Index.
Data is chain-linked from 16 September 2020 to form a single comparative index.
Past performance is not a guide to future performance.
Cumulative performance (taking 2016 as 100)
At
31 January
Net asset
value per
share
Net asset
value total
return *
Share
price
Share price
total return* Benchmark
†
Benchmark
total
return*
†
2016 100 100 100 100 100 100
2017 129 131 124 126 132 135
2018 149 153 149 154 151 160
2019 136 142 131 138 139 151
2020 140 149 144 155 147 164
2021 190 206 237 260 175 199
2022 136 151 147 164 137 158
2023 127 142 133 151 131 155
2024 74 84 78 89 89 107
2025 100 114 100 116 114 142
2026 133 152 138 161 136 174
Compound annual returns (%)
3 year 2% 2% 1% 2% 1% 4%
5 year (7%) (6%) (10%) (9%) (5%) (3%)
10 year 3% 4% 3% 5% 3% 6%
Strategic report
Annual Report and Financial Statements 2026
32
Business model
Business and status
BaillieGifford China 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. TheCompany has a fixed share capital,
although, subject to shareholder approval sought
annually, itmay purchase its own shares or issue
shares. Theprice of the Company’s shares is
determined, like other listed shares, by supply and
demand. TheCompany 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 produce long-term capital growth by investing
predominantly in shares of, or depositary receipts
representing the shares of, Chinese companies.
Investment policy
The Company invests predominantly in shares
of,or depositary receipts representing the shares
of, Chinese companies. Chinese companies are
companies that have their headquarters in China
or that the Investment Manager deems to have a
significant part of their operations in China. They
may be listed, quoted, or traded on any market,
orunlisted. The Company will be actively managed
and may invest in companies of any size and in any
sector. In furtherance of the Investment policy the
portfolio will normally consist principally of quoted
equity securities although unlisted companies, fixed
interest holdings or other non equity investments
may be held.
The portfolio will comprise between 40 and 80 listed
and unlisted securities. No individual investment
willrepresent a greater weight in the portfolio
than, (i) 20%, or (ii) its weight in the MSCI China
All Shares Index (in sterling terms) plus 7.5%,
whichever is lower as measured at the time of
investment.
The maximum amount which may be invested in
unlisted securities shall not exceed 20% of the
gross asset value of the Company, measured at
thetime of investment.
The Company will at all times be invested in several
sectors. While there are no specific limits placed on
exposure to any one sector, the Company will at all
times invest and manage the portfolio in a manner
consistent with spreading investment risk.
The Company intends to employ gearing in the
normal course of events. The Company may in
aggregate borrow amounts equalling up to 25%
ofgross asset value, although the Board expects
that borrowings will typically not exceed 20% of
gross asset value, in both cases calculated at the
time of drawdown.
With prior approval of the Board, the Company
may use derivatives for the purposes of efficient
portfolio management in order to reduce, transfer or
eliminate investment risk in the Company’s portfolio.
Derivative instruments in which the Company may
Business
review
33
Baillie Gifford China Growth Trust plc
invest may include foreign exchange forwards,
exchange-listed and over-the-counter options,
futures, options on futures, swaps and similar
instruments. The Company does not intend to enter
into derivative or hedging transactions to mitigate
against general currency or interest rate risk.
While it is intended that the Company will be fully
invested in normal market conditions, the Company
may hold cash on deposit or invest on a temporary
basis in a range of cash equivalent instruments.
There is no restriction on the amount of cash or cash
equivalent instruments that the Company may hold.
The Company may invest no more than 10%, in
aggregate, of gross asset value at the time of
acquisition in other listed closed-ended investment
funds, but this restriction will not apply to
investments in such funds which themselves have
stated investment policies to invest no more than
15% of their gross asset value in other closed-ended
investment funds. In this case, the limit is 15%.
No material change will be made to the Company’s
Investment Policy without the prior approval by
ordinary resolution of the shareholders.
Culture
As an externally managed investment company
withno employees, BaillieGifford China Growth
Trust’s culture is expressed through its Board and
itsthird party service providers, in particular its
Managers, in their interactions with shareholders
and other stakeholders. The Board’s assessment
ofits own interactions is described in its Section
172Statement on page 41, and the
BaillieGiffordstatement on stewardship, which
describes the Managers’ culture of constructive
engagement, is set out on page 52.
Dividend policy
The Company’s priority is to produce capital
growth over the long term. The Company’s dividend
policy is that any dividend paid will be by way of
a final dividend and be not less than the minimum
required for the Company to maintain its investment
truststatus.
Discount/premium policy
The Board recognises the need to address any
sustained and significant imbalance of buyers and
sellers which might otherwise lead to shares trading
at an anomalous discount or premium to net asset
value per share. While it has not adopted any formal
discount or premium targets which would dictate
thepoint at which the Company would seek to
purchase shares or issue further shares, the Board
iscommitted to utilising its share purchase and
share issuance authorities where appropriate in
such a way as to mitigate the effects of any such
imbalance. In considering whether buy-back or
issuance might be appropriate in any particular set
of circumstances, the Board will take into account,
inter alia: the prevailing market conditions; whether
the discount is substantial relative to the Company’s
peers; the degree of net asset value accretion that
will result from the buy-back or issuance; the cash
resources readily available to the Company; the
immediate pipeline of investment opportunities open
to the Company; and the level of the Company’s
existing borrowings.
Performance
At each Board meeting, the Directors consider a
number of performance measures to assess the
Company’s success in achieving its objectives.
Strategic report
Annual Report and Financial Statements 2026
34
Borrowings
The Company employs gearing, as set out in the
Investment Policy. The Company has in place a
two year revolving credit facility for US$25 million
with Royal Bank of Scotland (International) Limited
which expires on 11 April 2026. The Company is
in discussions with lenders regarding renewal of
the loan facility, and the Board does not currently
anticipate any issues with its renewal.
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 material adverse
change to the regulatory environment in the UK
and/or China and to the tax treatment afforded to
UK investment trusts, they do not expect there to
be any significant change to the current principal
and emerging risks facing the Company nor to the
effectiveness of the controls employed to mitigate
those risks. Notwithstanding the conditional tender
offer announced by the Board on 13 November
2024 in relation to the performance for the four
year period to 30 November 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 (including climate change) detailed on
pages 35 to 41, in particular the impact of market
risk where a significant fall in Chinese 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 revolving credit facility which expires in April
2026 (which they are seeking to renew) with specific
leverage and liquidity stress testing conducted
during the year, including consideration of the risk
of further market volatility resulting from increasing
geopolitical tensions.
In addition, the Board and the Managers monitor
the covenant levels included in the revolving credit
facility regularly. The majority of the Company’s
investments are listed at present and readily
realisable and can be sold to meet its liabilities as
they fall due. Borrowings may not exceed 25% of
gross asset value, and are not expected to exceed
20% of gross asset value. 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
overthe next five years.
35
Baillie Gifford China Growth Trust plc
Principal and emerging risks
As explained on pages 72 and 73 there is an ongoing process for identifying, evaluating and managing
the risks faced by the Company on a regular basis. 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. There have been no significant changes to the principal
risks during the year. A description of these risks, an assessment of the risk level and how they are being
managed or mitigated together with the change in assessment of any increase or decrease in risk during the
year is set out below:
Financial risk
What is the risk?
The Company’s assets consist mainly of
listed securities (8 7. 8 % 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 18 to the
Financial Statements on pages 107 to 112.
How is it managed?
The Board has, in particular, considered
the impact of heightened market volatility
due to macroeconomic factors such as
higher inflation and continued high interest
rates and geopolitical concerns. In order
to oversee this risk, the Board considers
at each meeting various metrics including
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.
Rating and
change
Current assessment of risk
This risk is considered to
have increased as market
volatility remains due to
continuing macroeconomic and
geopolitical concerns.
Investment strategy risk
What is the risk?
Inappropriate business strategy and/
or changes in the financial services
market leads to lack of demand for the
Company’s shares and its shares trading
at a persistent and anomalous discount to
the NAV.
Poor investment performance, including
through inappropriate
asset allocation, leads to value loss
for shareholders in comparison to the
benchmark or the peer group.
How is it managed?
The Board reviews its strategy at an
annual strategy meeting. It considers
investor feedback, consults with its broker
and reviews its marketing strategy. It
regularly reviews its discount/premium
policy. The strategy is considered in the
context of developments in the wider
financial services industry.
The performance of the Managers is
reviewed at each Board meeting
and compared against the benchmark
and peer group. Exposures are reviewed
against benchmark exposures to identify
the highest risk exposures. TheBoard
regularly reviews andmonitors the
Company’s objective and investment
policy and strategy.
Rating and
change
Current assessment of risk
During the year the NAV total
return was 34.0% compared
to the benchmark return of
22.2%. Market conditions for
growth stocks typically held by
the Company are improving.
Decreasing RiskIncreasing Risk Stable Risk
Moderate RiskHigh Risk Low Risk
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Annual Report and Financial Statements 2026
36
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 Boardmonitors
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
itsshareholders.
Rating and
change
Current assessment of risk
The Company’s discount
narrowed during the year
(seechart on page 28).
TheCompany has been
buying back shares during
the year to 31 January 2026.
On 13November 2024, the
Board announced a conditional
tender offer, see page 76.
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, aqualified audit report
or the Company being subject to tax on
capital gains. Changes to the regulatory
environment could negatively impact the
Company.
How is it managed?
To mitigate this risk, BaillieGifford’s
Business Risk, Internal Audit and
Compliance Departments provide regular
reports to the Audit Committee on
BaillieGifford’s monitoring programmes.
Major regulatory change could impose
disproportionate compliance burdens
on the Company. In suchcircumstances
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 insideinformation.
Rating and
change
Current assessment of risk
All control processes are
working effectively. Therehave
been no material regulatory
changes that have impacted
the Company during the year.
Decreasing RiskIncreasing Risk Stable Risk
Moderate RiskHigh Risk Low Risk
37
Baillie Gifford China Growth Trust plc
Decreasing RiskIncreasing Risk Stable Risk
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
alsoagree uncertificated private portfolio
holdings to confirmations from investee
companies. TheCustodian’s audited
internal controls reports are reviewed
byBaillieGifford’s Business Risk
Department and a summary ofthekey
points is reported to theAudit Committee
and anyconcerns investigated. Inaddition,
the existence of assets is subject to annual
external audit.
Rating and
change
Current assessment of risk
All control procedures are
working effectively.
Operational risk
What is the risk?
Failure of BaillieGifford’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, BaillieGifford has a
comprehensive business continuity plan
which facilitates continued operation of the
business in the event of a service disruption
or major disaster. TheAudit Committee
reviews BaillieGifford’s Reporton Internal
Controls and the reports by other key
third party providers are reviewed by
BaillieGifford on behalf of the Board and
a summary of the key points is reported
to the Audit Committee and any concerns
investigated. Inthe year under review, the
other key third party service providers have
not experienced significant operational
difficulties affecting their respective
services to theCompany.
Rating and
change
Current assessment of risk
All control procedures are
working effectively.
Moderate RiskHigh Risk Low Risk
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Annual Report and Financial Statements 2026
38
Decreasing RiskIncreasing Risk Stable Risk
Leverage risk
What is the risk?
The Company may utilise borrowings
in order to increase its investment
exposure. While such leverage
*
presents
opportunities for increasing total returns,
it can also have the opposite effect of
increasing losses. If income and capital
appreciation on investments acquired with
borrowed funds are less than the costs
of the leverage, the Company’s net asset
value will decrease. The use of leverage
also increases the investment exposure,
which means that if the market moves
adversely, the resulting loss to capital
would be greater than ifleverage were
notused.
How is it managed?
Under the Investment Policy, the maximum
gearing is 25% of gross assets, though
the Company does not expect borrowing
to be in excess of 20% of gross assets.
All borrowing facilities are approved by the
Board and gearing levels are discussed
by the Board and the Managers at every
meeting. Covenant levels are monitored
regularly by the Board and the Managers.
The Managers perform biannual liquidity
stress tests which are reviewed by the
Board to assess the portfolio’s ability to
meet its obligations under adverse market
conditions.
Rating and
change
Current assessment of risk
No significant change in risk
level. The Company continues
to deploy gearing and has
arevolving credit facility
inplace which expires in
April2026. The Company is
in discussions with lenders
regarding renewal of the loan
facility, and the Board does not
currently anticipate any issues
with its renewal.
Climate and governance risk
What is the risk?
As investors place increased emphasis on
climate change and other Environmental,
Social and Governance (‘ESG’) issues,
perceived problems with these matters
in an investee company could lead
to that company’s shares being less
attractive to investors, adversely affecting
its share price. In addition, potential
valuation issues could arise 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 Investment Manager to identify
climate/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?
As described on page 74, the
consideration of ESG (including
climate change) is a core component of
BaillieGifford’s investment process, with
the Board overseeing and challenging
BaillieGifford on ESG matters. The Board
meet with the Investment Manager and
discuss the investment portfolio, including
the application of BaillieGifford’s ESG
framework. BaillieGifford’s Governance
and Sustainability team undertake specific
ESG reviews on investment portfolios.
Rating and
change
Current assessment of risk
The Investment Manager
continues to employ strong
ESG stewardship and
engagement policies.
Moderate RiskHigh Risk Low Risk
* See Glossary of terms and alternative performance measures on pages 126 to 128.
39
Baillie Gifford China Growth Trust plc
Cyber securityrisk
What is the risk?
A cyber-attack on BaillieGifford’s network
or that of athird party service provider
could impact the confidentiality, integrity
or availability of data and systems.
How is it managed?
The Audit Committee reviews Reports
on Internal Controls published by
BaillieGifford and other third party service
providers. BaillieGifford’s Business Risk
Department report to the Audit Committee
on the effectiveness of information
security controls in place at BaillieGifford
and its business continuity framework.
Cyber security due diligence is performed
by BaillieGifford on third party service
providers which includes a review of crisis
management and business continuity
frameworks.
Rating and
change
Current assessment of risk
This risk is considered to be
increasing due to ongoing
geopolitical tensions and an
observed increase in malign
cyber activity. 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 a cyber security threat.
Single country risk
What is the risk?
The Company invests predominantly in
equities ofcompanies which are
incorporated or domiciled, orwhich
conduct a significant portion of their
business, inChina. Investing in a single
country is generally considered a higher
risk investment strategy than investing
more widely, as it exposes the investor to
the fluctuations of asingle geographical
market, inthis case the Chinese market.
How is it managed?
The Company’s exposure to asingle
country, China, is an integral part of its
investment strategy. Risk is mitigated to a
degree by appropriate portfolio
diversification and careful analysis of
investment opportunities.
Rating and
change
Current assessment of risk
This risk is seen as increasing
due to concerns over
geopolitical risks.
Decreasing RiskIncreasing Risk Stable Risk
Moderate RiskHigh Risk Low Risk
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Annual Report and Financial Statements 2026
40
Emerging market risk
What is the risk?
Investing in an emerging market such as
China subjects the Company to a higher
level of market risk than investment in a
more developed market. This is due,
among other things, to the existence of
greater market volatility, lower trading
volumes, the risk of political and economic
instability, legal and regulatory risks, risks
relating to accounting practices,
disclosure and settlement, a greater risk
of market shut down, standards of
corporate governance and more
governmental limitations on foreign
investment than are typically found in
developed markets. Geopolitical tensions
between the US and China, inparticular
relating to Taiwan, remain heightened with
the potential for further sanctions tobe
imposed. Investing in China is often
through contractual structures, such
asVariable Interest Entities (‘VIEs’, see
Glossary of terms and alternative
performance measures on page 128) that
arecomplex and could be opento
challenge.
How is it managed?
The Managers are cognisant of the risks
associated with investing in emerging
markets such as China, and they shape
their investment strategy and due
diligence accordingly. The Board is kept
informed of political and regulatory issues
impacting Chinaand the portfolio.
TheBoard monitors the risks associated
with any complex investment structures,
including the proportion of investments
held in VIEs (estimated to be 29% as at
31January 2026). The Board evaluate
sanctions risk with the Manager and where
appropriate with input from
externaladvisers.
Rating and
change
Current assessment of risk
Rising concerns over
geopolitical risk.
Unlisted securities risk
What is the risk?
The Company may invest in unlisted
securities, which are not readily realisable
and are more difficult to value given the
absence of a quoted price. There may be
less available information and there will be
less regulation in respect of disclosures
and corporate governance
How is it managed?
BaillieGifford conducts appropriate due
diligence in respect of all unlisted
investments, and has an established
valuation approach (as described on
page54), whichis carefully reviewed
bytheBoard. The Board considers the
unlisted investments in the context of the
overall investment strategy and provides
guidance to the Managers on the
maximum exposure to unlisted securities.
The investment policy limits the amount
which may be invested in unlisted
securities to 20% of the total assets of
the Company in aggregate, measured at
the time of investment.
Rating and
change
Current assessment of risk
No change in assessment
ofrisk.
Decreasing RiskIncreasing Risk Stable Risk
Moderate RiskHigh Risk Low Risk
41
Baillie Gifford China Growth Trust plc
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 and having regard to the Company
being an externally-managed investment company
with no employees, the Board considers that the
Company’s key stakeholders to be: its existing and
potential new shareholders; its externally-appointed
Managers and Secretaries (BaillieGifford); 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.
Emerging risk
As explained on pages 72 to 74, the Board has regular discussions on principal risks and uncertainties, including any risks which
are not an immediate threat but could arise in the longer term. The Board considers that the key emerging risks arise from the
interconnectedness of global economies and the related exposure of the investment portfolio to external and emerging threats such as
escalating geopolitical tensions, cyber security risks including developing AI and quantum computing capabilities, and new coronavirus
variants orsimilar public health threats.
This is mitigated by the Board discussing at each Board meeting the impact of such threats on both markets globally and also more
specifically on the Chinese market. This is mitigated by the Managers’ close links to the investee companies and their ability to ask
questions on contingency plans. The Managers believe the impact of such events may be to slow growth rather than to invalidate
the investment rationale over the long term. The Managers monitor certain emerging risks and have established a group to manage
the response to any future events that might result in heightened levels of market volatility. Regular exercises are carried out to
test the Managers’ response to various scenarios. The Company also monitors its service providers to ensure there is adequate
businesscontinuity.
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Annual Report and Financial Statements 2026
42
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 Chair and Senior Independent Director (‘SID’)
are available to meet with shareholders independently of the
Managers as appropriate. The Managers meet regularly with
shareholders and their respective 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
(see contact details on page 129). These communication
opportunities help inform the Board when considering how
best to promote the success of the Company for the benefit
ofall shareholders over the long term.
BaillieGifford –
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
BaillieGifford. BaillieGifford 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.
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 45 to 50).
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 Chair, or other Directors,
outwiththe normal general meeting cycle.
The Board’s methods for assessing the Company’s progress in the context of its stakeholders’ interests are
set out below.
43
Baillie Gifford China Growth Trust plc
Stakeholder Why we engage How we engage and what we do
Registrars The Company’s registrars provide an
interfacewith those shareholders who
holdthe 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 Managers’ 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 85.
The Company’s Auditor meets with the Audit Committee, 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
page64.
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
inthe Company’s ongoing financial health
andviability.
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.
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,
asadverse market sentiment towards
oneinvestment 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
Companyindirectly.
The Managers liaise with the various investment platforms
onstrategies for improving communications with the
Company’s shareholders who hold their shares via these
platforms. 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
inwhich 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).
Strategic report
Annual Report and Financial Statements 2026
44
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 BaillieGifford & 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:
• the purchase of 1,728,219 of the Company’s own
shares into treasury at a discount to net asset
value (2.9% of share capital as at 31 January
2025), for subsequent reissue, in order to ensure
the Company’s shareholders found liquidity for
their shares when natural market demand was
insufficient, and on terms that enhance net asset
value for remaining shareholders;
• the Board met with shareholders representing
approximately 30% of the register to discuss the
Company’s strategy;
• the Board’s decision to declare a final dividend
of2.5p.
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. Further
information on the Company’s approach to
Environmental, Social and Governance matters
areprovided below.
Gender representation
At 31 January 2026, and at the date of this report,
the Board comprised five Directors, three male and
two female. The Company has no employees. The
Board’s policy on diversity is set out on page71.
Environmental, social and governance policy
Details of the Company’s policy on socially
responsible investment can be found under Corporate
Governance and Stewardship on page74.
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. Astatement by the Managers under the
Act has been published on the Managers’ website
atbailliegifford.com.
Future developments of the Company
The outlook for the Company is set out in the Chair’s
statement on pages7 to 11 and the Managers’ report
on pages12 to 21.
The Strategic report, which includes pages6 to 58
was approved by the Board of Directors and signed
on its behalf on 31March 2026.
Nicholas Pink
Chair
45
Baillie Gifford China Growth Trust plc
Stewardship for us means responsibly managing
capital to create long-term value for clients and
sustainable benefits for the economy, environment,
and society. The Managers of the Trust have always
embedded stewardship into their investment
philosophy and process. The six ESG principles for
the Chinese Equity team are in Box 1, with country-
based knowledge a foundational principle.
Context matters and shapes our integration of ESG
in China. Without a grounded understanding of
how politics, policy, and culture shape corporate
behaviour, ESG analysis risks missing the mark.
When paired with global awareness, however, local
fluency not only sharpens our investment judgments
but also helps us anticipate reputational risks that
may not be visible through a purely domestic or
international lens alone. Thus, it underpins how we
evaluate governance, interpret disclosure, assess
sustainability, and engage with companies.
Managers’ report on
environmental, social and
governance engagement
Our investment process begins with a fundamental
question that anchors our research process: “Does
this company contribute to or benefit from China’s
economic, social, or environmental development—
and how does it fit within the global context?” In
China, where economic policy, social objectives,
and company outcomes are deeply intertwined,
alignment with the country’s long-term development
goals is not just a philosophical consideration. It’s
a material factor that affects a company’s ability to
generate value and its long-term share price returns.
We supplement our 10Q research framework with a
detailed due diligence checklist to identify material
downside risks—spanning corporate governance,
environmental, and social dimensions. These tools
support a consistent, repeatable process while
allowing room for local judgment and engagement.
Box 1
Our approach is guided by our ESG principles
1) Country-based knowledge is essential: we believe it is the gateway to meaningful ESG integration in China.
2) Investment process founded on long-term ownership of growing businesses: We offer both support and
challenge to the companies in which we invest in an effort to help them achieve their long-term growth
potential and to ignore the short-term pressures of the market.
3) Sustainability is central to our analytical task: Businesses engaging in practices that are harmful to society
may be capable of generating attractive returns in the short term, but are unlikely to be sustainable over the
periods we seek to invest.
4) We do not believe ‘one size fits all’: ESG practices need to be assessed case-by-case and not rely on
formulaic and backwards-looking screens.
5) Not seeking ‘perfect’ companies: we prefer to consider the likely direction of change in otherwise promising
investments and engage accordingly.
6) China is not a market where ESG sits alongside the investment case. Economic policy, social objectives,
and company outcomes are deeply intertwined, so alignment with China’s long-term development goals is
a material factor shaping a company’s ability to compound value, and ultimately its long-term share price
returns. This underpins our conviction in bottom-up stock selection and active ownership in China.
Strategic report
Annual Report and Financial Statements 2026
46
Company Engagement Highlights
Company engagement sits at the centre of our
process. Where we believe governance and
sustainability factors are material to a company’s
success, we encourage actions that enhance
opportunities and mitigate risks. We determine our
engagement priorities through a combination of
subjective assessments of an issue’s materiality, our
capacity to influence outcomes, and other qualitative
inputs that help guide our focus. We exercise our
voting rights wherever possible and will vote against
management if we consider its actions to be contrary
to shareholders’ interests.
Our work is supported by a dedicated China ESG
analyst and additional analysts who form part of
Baillie Gifford’s broader ESG resource.
Through engaging with companies, we aim to
build constructive relationships that better inform
our investment decisions and, where appropriate,
drive change within our holdings, with the ultimate
objective of delivering improved returns for our
shareholders. The three examples that follow
illustrate our stewardship approach through
constructive, ongoing engagement.
Box 2
Seeking evidence through thorough research and active stewardship rather than divest directly when
holdings face adverse allegations or news – Weichai Power
Weichai Power is a leading manufacturer of diesel and liquefied natural gas (LNG) engines, automotive
components and agricultural machinery. Its investments in new-energy powertrains, as well as in diesel
engines used as back-up power for data centres, are closely aligned with the trajectory of China’s economic
and technological development.
In 2024, a global investment fund added the company to its exclusion list, citing unacceptable risks arising
from its alleged involvement in the sale of military equipment to the authorities in Russia and Belarus.
Following extensive due diligence, we found no evidence to substantiate these allegations regarding
Weichai’s military-related activities in these markets. Nor did third-party sources identify any weapons-related
involvement by the company.
We sought an opportunity to meet the company in person in 2025 and were able to corroborate our findings.
The military products referenced were linked to foreign corporations with which Weichai had established joint
ventures, but were not related to the joint ventures themselves. Moreover, Weichai had already exited the
relevant joint ventures, which, in our view, materially reduces the company’s exposure to sanctions risk.
We also discussed the stability of the management team following the 2024 appointment of a new chairman.
The company emphasised that the management structure remains stable, with no changes to its business
strategy or long-term development plans. The previous chairman’s resignation was attributed to personal
reasons related to age. This continuity in leadership further reinforces our confidence in Weichai’s prospects
for sustainable long-term growth.
47
Baillie Gifford China Growth Trust plc
Box 3
Understanding and assessing the implications of labour controversies when holdings march towards
overseas – Fuyao Glass
Fuyao Glass, a leading global automotive glass manufacturer, is facing an investigation by the US Department
of Homeland Security into labour recruitment at Fuyao’s US factories.
We had a call with Fuyao and learned that the investigation primarily targeted its labour dispatching partner
(using agency workers hired through a third party), and the lawsuit is still ongoing. In response, Fuyao has
terminated all forms of labour dispatching in the US and has transitioned to directly recruiting its employees.
This strategic shift aims to eradicate future third-party labour recruitment-related risk in the US for Fuyao. The
company remains confident in the legality and compliance of its previous partnership, citing trading volumes
and price metrics, as well as comprehensive internal audits and ad hoc inspections conducted throughout the
relationship.
Additionally, Fuyao has strengthened its employee safety management and improved productivity among the
overseas local workforce. Despite the investigation, the company has not received any requests or complaints
from downstream customers, indicating stable client relations. Fuyao is further addressing the relatively higher
turnover rate among its overseas employees compared with domestic staff, with plans to disclose overseas
turnover data next year.
We consider Fuyao’s response to these potential risks to be satisfactory. The company has reinforced its
operational integrity and enhanced its approach to employee management by eliminating the dispatching
partners, underscoring its commitment to sustainable growth and sound governance. Going forward, we will
continue to monitor the progress and results of the ongoing lawsuit.
Box 4
Understanding the regulations on the new employment form and assessing our holding’s stance and efforts
in the social insurance battle – Meituan
In Q1 2025, provisions of social insurance to riders among Chinese platform companies in the food delivery
sector were widely discussed. It demonstrated an increasingly higher level of society’s attention to rider
welfare and protection as gig workers, a historically under-addressed group, grow. We conducted thorough
discussions with policy experts and interviewed Meituan to gain a better understanding of where it stands in
protecting its riders.
Scale and practicality matter the most. We found that Meituan’s innovative approaches are leading in both
perspectives and within its capabilities and should serve as a pioneer for its peers. Scale – Success can
be achieved with a steady rollout to its one million qualified riders nationwide. Meituan’s regulatory efforts
have been realised in two pilot cities and are ongoing with other local governments to facilitate a full rollout.
Practicality – In the food delivery industry, where many riders choose it as a transitional job, what they need
most is pension insurance, in addition to the current accident insurance. Meituan’s approach allows a rider
to qualify for pension insurance subsidies within a minimum of 3 months and offers full flexibility in payment
cycles and where to contribute.
Financially, the impact on 2025 Meituan earnings from the pension subsidies in the two pilot cities will be
trivial. The implications of an expanding pension subsidy scheme in the next five years will also be controllable.
We would like to regard it as a cost of an enhanced social licence to operate and an encouraging outcome
from years of endeavour to tackle the social protection of riders. Together with Meituan’s continuous
improvements in rider protection, such as algorithm transparency and safe riding practices, we remain a happy
holder and believe that Meituan’s social awareness and support for riders on the platform will keep it in a
leading role in the food delivery business.
Strategic report
Annual Report and Financial Statements 2026
48
Data Points of the Portfolio vs. Index
The following selected data points illustrate the
questions that we seek to explore through our
broader analysis and company engagement. Data
points are shown in relation to the index (MSCI
China All Share) for the period from 1 February 2025
to 31January 2026. It should be noted that there
are some data gaps, particularly for the private
companies in the Company’s portfolio.
Independence of Audit Committee
What it is – We look to the independence level of
company audit committees at the board level to
provide effective oversight. Typical data points are
shown below in relation to the index (MSCI China
AllShare).
independence % of Audit Committees in the portfolio and the index
91.2
●
Company ● Index
0%
20%
100%
80%
60%
40%
94.3
What does the data tell us – We believe the
independence of audit committees is critical in
providing financial oversight. Therefore, in addition
to board independence, tenure, and diversity, we also
pay specific attention to this factor. Our portfolio’s
independence % of audit committees is higher
than the index. As China streamlines its governance
structure by abolishing the Board of Supervisors,
companies are strengthening their audit committees,
and we expect their roles to continue to develop.
While we expect local norms regarding compliant
audit committee independence as a minimum, we
are encouraging best practices among our holdings
that have not yet achieved 100% independent
audit committees. We also follow up directly with
companies if we have specific concerns or questions
about the independence or quality of the audit
committee chairperson.
UN Global Compact Alignment
What it is – This indicator uses company alignment
with the ten UN Global Compact (‘UNGC’) Principles
as a proxy for social performance and exposure
to corporate controversies, which can be found at
unglobalcompact.org/what-is-gc/mission/principles.
The chart shows the percentage of the portfolio
assessed by a third-party data provider as ‘compliant’.
What does the data tell us – The data suggests that
the majority of holdings are aligned with the principles
of the UN Global Compact and conduct themselves
responsibly in regard to society and the planet. One is
assessed as non-compliant by a third party, and two
are on the watchlist. Please note there is no data on
UNGC compliance for five of our holdings (outside
the third-party assessment coverage), which together
account for approximately 16% of the portfolio. For
companies without third-party coverage, we conduct
an internal manual assessment of their alignment with
the 10 UNGC Principles at the pre-buy stage.
Passed UN Global Compact Compliance
67.3
82.4
●
Company ● Index
0%
20%
100%
80%
60%
40%
Tencent remains non-compliant on a third-party
list with Principle 2 of the UN Global Compact for
allegations of complicity in human rights abuses. Our
research and engagement have led us to conclude
that the company is taking the greatest possible
action to comply with domestic legislation while also
attempting to comply with international norms. We
hold an annual ESG dialogue with Tencent and will
continue to monitor it on our in-house watchlist for
enhanced due diligence. By the end of January 2026,
Tencent had been reassessed as UNGC compliant by
another well-known third-party data provider.
49
Baillie Gifford China Growth Trust plc
Zijin Mining remains on the data provider’s watchlist
(and is non-compliant on another data providers
list). We concluded our three-year engagement
plan in September 2025, after seeing tangible
progress in relation to transparency and disclosure,
external validation, improved governance practices
and progress reflected in third-party assessments,
alongside a clearer foundation for future monitoring.
During the reporting period, Zijin published the
results of the third-party audit of the Ashele Copper
project and its internal audits in Xinjiang. This is
significant because it demonstrates Zijin’s willingness
to proactively assess and disclose labour practices
and human rights protections in a sensitive area.
We consult external experts – a mining ESG
consultant in China and an international human rights
expert in Scotland – to benchmark Zijin’s practices
and consider other questions. We also engage with
one of the third-party rating providers to identify
whether Zijin’s progress is reflected in controversy
assessments. As its overseas gold assets are spun off
into Zijin Gold International, our next step is to follow
up on how the new entity continues to make progress
across safety, workplace and community engagement
and environmental performance.
BYD was added to the watchlist after its labour
controversy in Brazil. Soon after the incident,
we conducted our own research, which led us
to conclude that cutting ties with the contractor
demonstrates the company’s swift response and
its decision to cease cooperation with problematic
partners accused of labour controversies. In
November 2025, we held an in-person meeting
with the company, during which we discussed the
Supplier Code of Conduct, on-site audits, different
working practices in overseas markets, and its supply
chain management committee and procurement
leadership to oversee procurement risks, alongside
other interesting social and governance topics. The
meeting further strengthened our understanding
of the company’s efforts to manage partners and
suppliers globally.
Our expectation for all companies we hold is that
they will respect internationally accepted human
rights and labour rights throughout their business
operations and value chain. This includes the
management of exposure to labour and human rights
risks and encouraging positive relationships with local
communities.
Carbon Performance
Addressing climate change is one of the most
significant challenges of our time. From shifting
weather patterns that threaten food production
and disrupt supply chains, to rising sea levels that
increase the risk of catastrophic flooding, the
impacts of climate change are global in scope and
unprecedented in scale. Growing societal pressure
and regulatory action are combining with the physical
impacts of climate change to create new risks and
opportunities for companies. As long-term investors,
we must take cognisance of these to understand the
implications for long-term value creation.
What it is – Carbon footprint analysis identifies
the largest direct emitters and which feeds into
our prioritisation of research and engagement
activities. The relative carbon footprint compares
the total carbon emissions of the portfolio with the
index per US$1 million invested. Weighted Average
Carbon Intensity is the sum product of the portfolio
constituent weights and intensities of Carbon
Intensity (the total carbon emissions per US$1 million
of revenue generated and shows the efficiency of the
portfolio in terms of emissions per unit of financial
output). These intensity measures allow comparison
of emissions across companies of different sizes
and in different industries. We recognise that
carbon footprinting and emissions intensity analysis
is imperfect. Beyond simple concerns about data
accuracy and availability, this analysis can only tell
us where a company is – not where it is going. This is
why we see it as a starting point and not the end.
Scope 1 emissions are those deriving directly
from company activities (i.e., stack emissions and
fuel use); Scope 2 emissions arise indirectly from
electricity use. Emissions within these scopes are
reasonably under the company’s control and are
expected to be calculated by all companies. We are
continuing to engage with companies and research
providers on the availability, comparability and
robustness of Scope 3 emissions – those that result
from activities of assets not owned or controlled by
the reporting organisation, but that the organisation
indirectly impacts in its value chain.
* CREDIT stands for carbon footprint, recycling, energy, due diligence, innovation and transparency
Strategic report
Annual Report and Financial Statements 2026
50
What does the data tell us – The data demonstrates
that our portfolio’s carbon intensity and footprint
are much lower than the index. This is attributed
to the fact that most of our holdings are light in
assets, except for a few from the manufacturing
and power sectors. For the top portfolio emissions
contributors, analysis and engagement are ongoing
to understand and monitor their latest updates on
their decarbonisation routes and climate-related
targets. We have also seen an increase in companies’
awareness and efforts in calculating Scope 3 GHG
emissions. We expect higher disclosure rates and
greater data accuracy in the future.
Carbon footprint (tCO
2
e/US$ million invested)
Scope 1, 2 & Material Scope 3
(PCAF)
Scope 1&2
0
200
600
400
26.6
151.3
201.9
492.9
●
Company ● Index
Weighted average carbon intensity
(tCO
2
e/US$ million revenue)
Scope 1, 2 & Material Scope 3
(PCAF)
Scope 1&2
●
Company ● Index
0
200
1,000
800
600
400
81.8
296.4
426.2
850.8
51
Baillie Gifford China Growth Trust plc
BaillieGifford –
proxy voting
How are we voting?
Thoughtful voting of our clients’ holdings is an integral
part of our commitment to stewardship. We believe
that voting should be investment led, because how we
vote is an important part of the long-term investment
process, which is why our strong preference is to be
given this responsibility by our clients. The ability to
vote our clients’ share also strengthens our position
when engaging with investee companies. Therefore, we
fully exercise our voting rights on behalf of our clients in
the reporting period.
We look for high-quality management teams and
governance structures supportive of long-term
investment opportunities. The graph on the right shows
our voting for the Baillie Gifford China Growth Trust in
the reporting period. It is no surprise that as long-term
owners, seeking to invest in a relatively small number
of exceptional companies, we are generally supportive
of management. Where we disagree or where our
engagement has been unsuccessful, there are cases
where we will vote against management. For example,
during the reporting period, we opposed a resolution
to finance a project due to insufficient information on
the quantitative assessment of the project’s economic
benefits and the payment period, which created
uncertainty about the company’s future shareholder
return plans. We also opposed resolutions seeking
authority to issue equity because the potential dilution
would not be in the shareholders’ interests.
In 2025, our central voting team has updated our
General Principles and market-based guides for voting
which serve as a living reference document to all things
related to proxy voting. The jurisdiction sheets capture
market-specific context and keep reflecting the latest
regulations of each market.
In addition to the international proxy voting advisers,
our in-house voting analyses are also based on input
from a local voting service provider with good market
knowledge. Our embedded ESG analyst in the region
clarifies details with the companies when necessary to
make the most informed decisions.
The data
All data is pulled from MSCI, Sustainalytics, ISS
andBoardEx, via the Factset platform along with
some internal sources. It is fact checked by our ESG
analysts and is considered correct at the time of
writing. The data covers the calendar year 2025.
For more detail, please see bailliegifford.com/en/
global/all-users/literature-library/miscellaneous/
investment-stewardship-activities-report/
BaillieGifford China Growth Trust
proxy voting record 2025
% Votes
Votes for 98.1 1,232
Votes against 1.3 17
Abstain 0.6 7
No Vote – 0
Total 100.0 1,256
Source: MSCI. MSCI makes no express or implied warranties or representations
and shall have no liability whatsoever with respect to any MSCI data contained
herein. The MSCI data may not be further redistributed or used as a basis for
other indexes or any securities or financial products. This report is not approved,
endorsed, reviewed or produced by MSCI. None of the MSCI data is intended
to constitute investment advice or a recommendation to make (or refrain from
making) any kind of investment decision and may not be relied on as such.
Strategic report
Annual Report and Financial Statements 2026
52
BaillieGifford –
statementon stewardship
BaillieGifford’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.
Ourapproach favours a small number of simple
principles rather than overly prescriptive policies.
This helps shape our interactions with holdings
andensures our investment teams have the
freedomandretain the responsibility to act
inclients’bestinterests.
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.
53
Baillie Gifford China Growth Trust plc
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
ifthat 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.
Strategic report
Annual Report and Financial Statements 2026
54
We aim to hold our private company investments
at‘fair value’ i.e. the price that would be paid in an
open-market transaction. Valuations are adjusted
both during regular valuation cycles and on an
adhoc basis in response to ‘trigger events’.
Ourvaluation process ensures that private companies
are valued in both a fair and timely manner.
The valuation process is overseen by a valuations
committee at BaillieGifford which takes advice
froman independent third party (S&P Global).
Theportfolio managers feed into the process,
butthe 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,
theprices 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.
Continued 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 initial
public offering; 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.
More information specific to the valuation
ofByteDance and RedNote, the unlisted holdings
held by BaillieGifford China Growth Trust can be
foundinnote 9, on page 103.
The Independent Auditor’s report on page 85
explains the procedures carried out by the external
Auditor on the private companies (unquoted
investments) as part of their audit.
BaillieGifford – valuing
private companies
55
Baillie Gifford China Growth Trust plc
Name Business
Value
£’000
% of total
assets*
Tencent Social media and entertainment company 24,628 12.0
ByteDance Social media and entertainment company 21,349 10.4
Alibaba Group Online retailer, payments and cloud business 16,939 8.2
Ping An Insurance Life and health insurance 8,376 4.1
CATL Electric vehicle battery maker 6,537 3.2
Zijin Mining Group Renewable energy enabler 6,514 3.2
Kweichow Moutai Luxury baijiu maker 5,426 2.6
China Merchants Bank Consumer lending and wealth management 4,870 2.4
China Construction Bank Corporation Commercial bank 4,818 2.3
Weichai Power Construction machinery and heavy duty trucks 4,737 2.3
PDD Holdings Online retailer 4,448 2.2
Pop Mart Toy and collectibles maker 4,128 2.0
NetEase Gaming and entertainment business 3,765 1.8
Midea Group White goods and robotics manufacturer 3,649 1.8
RedNote Lifestyle content and commerce platform 3,643 1.8
Zhongji Innolight Optical transceiver and component maker for AI chips 3,369 1.6
Zijin Gold International Gold miner 3,141 1.5
BeOne Medicines Immunotherapy biotechnology company 3,079 1.5
H World Group Hotel operator 2,828 1.4
BYD Hybrid and EV automobiles 2,731 1.3
Meituan Online food delivery company 2,719 1.3
Jiangsu Azure Small form batteries 2,550 1.2
China Oilfield Services Oilfield service provider 2,433 1.2
Naura Technology GP Integrated micro-electronics company 2,430 1.2
List of
investments
at 31 January 2026
Strategic report
Annual Report and Financial Statements 2026
56
Name Business
Value
£’000
% of total
assets*
Sungrow Power Supply Component supplier to renewables industry 2,327 1.1
Wanhua Chemical Group Chemicals and advanced materials producer 2,304 1.1
Shenzhen Inovance Technology Factory automation company 2,257 1.1
ENN Energy Gas distributor and provider 2,240 1.1
Shandong Sinocera Functional Material Advanced materials manufacturer 2,233 1.1
Centre Testing International Testing and inspection company 2,233 1.1
Fuyao Glass Industry Group Automotive glass manufacturer 2,202 1.1
Luxshare Precision Industry Co Electronic components manufacturer 2,186 1.1
China Yangtze Power Power generation operator 2,163 1.1
Haidilao International Hot pot restaurant brand 2,155 1.0
ANTA Sports Products Sportswear designer and manufacturer 2,021 1.0
Atour Lifestyle Holdings Limited Hotel operator 2,010 1.0
Sunny Optical Technology Electronic components for smartphones and autos 1,931 0.9
Advanced Micro-Fabrication Etch and deposition semiconductor equipment
manufacturer
1,874 0.9
Shenzhou International Garment manufacturer 1,794 0.9
Luckin Coffee
†
Coffee retailer 1,755 0.9
Horizon Robotics AI chips used in autonomous driving and advanced
driving assistance systems
1,738 0.8
Tianqi Lithium Lithium product developer and manufacturer 1,597 0.8
MiniMax Artificial intelligence company 1,546 0.8
DiDi Global Passenger transportation platform operator 1,536 0.7
Anker Innovations Consumer electronics 1,368 0.7
Zhejiang Sanhua Intelligent Controls Heating and cooling component manufacturer 1,340 0.7
Inner Mongolia Xingye Mining Non-ferrous metals miner 1,267 0.6
Yifeng Pharmacy Chain Drug retailer 1,159 0.6
57
Baillie Gifford China Growth Trust plc
Name Business
Value
£’000
% of total
assets*
SG Micro Corp Semiconductor designer 1,146 0.6
Kingsoft Software for SMEs and corporates 1,127 0.5
Kingdee International Software Software for SMEs and corporates 1,104 0.5
Minth Automotive parts manufacturer 1,098 0.5
Estun Automation Robotics and factory automation company 1,076 0.5
DPC Dash Franchise fast food restaurant operator 1,035 0.5
Ganfeng Lithium Group Lithium producer and processor 977 0.5
Innovent Biologics Biopharmaceutical company 836 0.4
Silergy Semiconductors & semiconductor equipment 791 0.4
Dongguan Yiheda Automation Co Automation components 593 0.3
New Horizon Health
#
Early cancer detection – 0.0
Total investments 204,126 99.4
Net liquid assets
‡
1,214 0.6
Total assets* 205,340 100.0
Borrowings (7,745) (3.8)
Shareholders' funds 197,595 96.2
* Total assets before deduction of loans.
Denotes unlisted investment (private company).
†
Includes investments in American Depositary Receipt (ADR).
#
Suspended.
‡
For a definition of terms used, see Glossary of terms and alternative performance measures on pages 126 to 128.
Listed
equities
%
Suspended
equities
%
Unlisted
securities
%
Net liquid
assets
%
Total
assets
%
31 January 2026 8 7. 2 – 12.2 0.6 100.0
31 January 2025 90.5 0.1 9.1 0.3 100.0
Figures represent percentage of total assets.
Strategic report
Annual Report and Financial Statements 2026
58
Distribution
of total assets
*
Sector at 31 January 2026
* Total assets represents total net assets before deduction of borrowings.
3
4
5
8
7
2
6
1
Sector 2026
%
2025
%
1 Consumer discretionary 25 29
2 Communication
services
25 24
3 Consumer staples 3 7
4 Financials 9 6
5 Healthcare 2 3
6 Industrials 12 15
7 Information technology 11 10
8 Materials 9 3
9 Real estate – 1
10 Utilities 2 1
11 Energy 1
–
12 Net liquid assets 1 1
Governance
report
This governance report, which includes
pages 59 to 83 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.
Governance report
Annual Report and Financial Statements 2026
60
Directors and
management
Nicholas Pink
Chair
Appointed 2023
Tim Clissold
Director
Appointed 2021
Nicholas Pink has extensive senior management
experience in financial services with previous roles
at UBS Investment Bank including Global Head
of Research and Head of Asia Research. Nicholas
is currently the Chairman of Ruffer Investment
Company Limited. He was previously an independent
director of Redburn (Europe) Limited, and a non-
executive director of JP Morgan Emerging Europe,
Middle East and Africa Securities plc. He was
appointed as a Director of the Company in 2023 and
appointed Chair in 2024.
Tim Clissold qualified as a Chartered Accountant and
has worked in Australia, Hong Kong and extensively
in China, where he was co-founder of one of the
first private equity groups in the country. He later
ran Goldman Sachs China’s distressed investment
business in Beijing. Tim is a Senior Advisor to
Highgate, where he assists resolving disputes
between foreign investors and Chinese companies.
He is a Visiting Fellow at Jesus College, Cambridge
University and a non executive director of Henderson
Far East Income Limited. He was a member of
the Strategic Advisory Board of Braemar Energy
Ventures, aNew York venture capital fund focused
on energy efficiency technologies. He is the author of
Mr China and Chinese Rules and speaks, reads and
writes Mandarin Chinese.
Directors
61
Baillie Gifford China Growth Trust plc
Sarah MacAulay
Director
Appointed 2024
Sarah MacAulay has over twenty years of Asian
fund management experience based in both
London and Hong Kong, managing unit trusts and
institutional assets. She was formerly a Director of
Baring Asset Management (Asia) Ltd in Hong Kong,
Asian Investment Manager at Kleinwort Benson
Investment Management and Eagle Star in London.
She is currently Chairman of Schroder Asian Total
Return Investment Company plc and a non-executive
Director of Bellevue Healthcare Trust plc and Ashoka
India Equity Investment Trust plc. Until March 2024,
Sarah was Chair of JPMorgan Multi-Asset Growth
and Income plc and Senior Independent Director of
abdn China Investment Company Ltd.
Jonathan Silver is a qualified accountant and
member of the Institute of Chartered Accountants of
Scotland. Jonathan has held various senior financial
positions throughout his career, including 21 years
as Chief Financial Officer on the main Board of Laird
plc from 1994 until 2015. Jonathan was the
chairman of the audit committee at Invesco Income
and Growth Trust plc from 2007 until 2021.
Jonathan is a non-executive director and chairman
of the audit and risk committee of Henderson High
Income Trust plc, a position he has held since 2019
and is also a non-executive director of Synthomer
PLC, a position he has held since 2025.
Jonathan Silver
Audit Committee
Chair
Appointed 2022
All of the Directors are members of the Audit Committee.
Magdalene Miller
Director
Appointed 2020
Magdalene Miller is a former investment director with
Aberdeen Standard Investments’ global emerging
market team. Based in London and Edinburgh, she
spent 32 years managing listed equity portfolios,
investing in Japanese, Asian Pacific and UK markets.
In the 10 years before her retirement in 2018, she
ran the Standard Life China Sicav, one of the top
performing funds in its sector. A native of Hong Kong,
Magdalene is fluent in Cantonese and Mandarin
and has travelled extensively in China and Asia over
the course of her career. She is a non-executive
director of Templeton Emerging Markets Investment
Trust plc. She also currently serves as a trustee for
an educational endowment fund and participates in
volunteering work.
Governance report
Annual Report and Financial Statements 2026
62
Managers and secretaries
The Company has appointed BaillieGifford & Co
Limited, a wholly owned subsidiary of BaillieGifford
& Co, as its Alternative Investment Fund Managers
(‘AIFM’) and Company Secretary. BaillieGifford &Co
Limited has delegated investment management
services to BaillieGifford & Co. BaillieGifford & Co
is an investment management firm formed in 1927
out of the legal firm BaillieGifford, WS, which had
been involved in investment management since 1908.
BaillieGifford is one of the largest investment trust
managers in the UK and currently manages eleven
investment trusts. BaillieGifford 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 BaillieGifford totalled
around £183 billion as at 26March 2026. Based
in Edinburgh, it is one of the leading privately
owned investment management firms in the UK,
with59partners and a staff of around 1,616.
During the year ended 31 January 2026, the
Managers of BaillieGifford China Growth Trust were
Linda Lin and Sophie Earnshaw.
Sophie joined BaillieGifford in 2010 and is an
investment manager in the Emerging Markets
andChina A-share Teams. She has also been
co-manager of the China Fund and a member
oftheInternational Focus Portfolio Construction
Group since 2014.
Sophie is a CFA Charter holder. She graduated
MA in English Literature from the University of
Edinburgh in 2008 and MPhil in Eighteenth Century
and Romantic Literature from the University of
Cambridge in 2009.
Linda is an investment manager in the China Equities
team and a decision maker on BaillieGifford’s All
China and China A share strategies. She is also
a member of the Long Term Global Growth team.
Linda joined BaillieGifford in September 2014 and
worked in Edinburgh until relocating to Shanghai
in 2019 as Head of the Investment Team. She
became a partner of the firm in May 2022 and is now
based in Edinburgh. Prior to joining BaillieGifford,
Linda spent four years as a global equity analyst
with Aubrey Capital and two years in real estate
investment in China. She graduated BComm in
Accounting and Finance from the University of
Auckland, New Zealand in 2007 and MSc in Finance
and Investment from the University of Edinburgh in
2011. Linda is a native Mandarin speaker.
BaillieGifford & Co and BaillieGifford & Co Limited
are both authorised and regulated by the Financial
Conduct Authority.
Sophie Earnshaw
Investment Manager
Linda Lin
Investment Manager
63
Baillie Gifford China Growth Trust plc
The Directors present their
Reporttogether with the
audited Financial Statements
of the Company for the year to
31January 2026.
Directors’
report
Corporate governance
The Corporate governance report is set out on
pages68 to 74 and forms part of this Report.
Managers and company secretaries
BaillieGifford & Co Limited, a wholly owned
subsidiary of BaillieGifford & Co, was appointed
as the Company’s Alternative Investment Fund
Managers (‘AIFM’) and Company Secretaries on
16 September 2020. BaillieGifford & Co Limited
has delegated portfolio management services to
BaillieGifford & Co. Dealing activity and transaction
reporting has been further sub-delegated to
BaillieGifford Overseas Limited and BaillieGifford
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
bepayable if termination occurred prior to the expiry
of the notice period. The annual management fee
is (i) 0.75% of the first £50 million of net asset
value; plus (ii) 0.65% of net asset value between
£50 million and £250 million; plus (iii) 0.55% of net
asset value in excess of £250 million, calculated and
payable quarterly.
Governance report
Annual Report and Financial Statements 2026
64
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
BaillieGifford & Co Limited as AIFM and the
delegation of investment management services to
BaillieGifford & Co, on the terms agreed, is in the
interests of shareholders as a whole.
Depositary
In accordance with the UK Alternative Investment
Fund Managers Regulations, The Bank of New York
Mellon (International) Limited 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
TheBank of New York Mellon (International) Limited
(as a delegate of the Depositary) (the ‘Custodian’).
Directors
Information about the Directors, including their
relevant experience, can be found on pages 60
and61.
All Directors will retire at the Annual General Meeting
and offer themselves for re-election. Following a
formal performance evaluation, the Chair confirms
that the Board considers that each Director’s
performance continues to be effective and that each
Director remains committed to the Company and
capable of devoting sufficient time to their roles. The
Board recommends their re-election to shareholders.
Director indemnification and insurance
To the extent permitted by law and by the Company’s
Articles, the Company has entered into deeds of
indemnity for the benefit of each Director of the
Company in respect of liabilities which may attach to
them in their capacity as Directors of the Company.
These provisions, which are qualifying third party
indemnity provisions as defined by section 234 of
the Companies Act 2006, were in place throughout
the year and as at the date of approval of the
Financial Statements.
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 2.50p
perordinary share (2025 – 2.20p). No interim dividend
is paid. Dividends will beby way of a final dividend
and be not less than theminimum required for the
Company to maintain its investment trust status.
If approved by shareholders at the Annual General
Meeting, the recommended final dividend per ordinary
share will be paid on 22 July 2026 to shareholders
on the register at the close of business on 19 June
2026. The ex-dividend date is 18 June 2026.
Share capital
Capital structure
The Company’s capital structure at 31 January
2026 consists of 68,348,151 ordinary shares of
25p each (2025 – 68,348,151) of which 57,367,461
(2025 – 59,095,680) are allotted and fully paid and
10,980,690 (2025 – 9,252,471) are held in treasury.
65
Baillie Gifford China Growth Trust plc
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 114 to 119.
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
25p shares
notified as at
31 January 2026
% of
issue *
City of London Investment
Management
11,580,409 20.2
Rathbone Nominees 3,076,669 5.4
* Ordinary shares in issue excluding treasury shares.
In the period from 31 January 2026 to 26March
2026, the Company was notified that City of London
Investment Management held 11,847,577 shares
(21.4% of the shares in issue as at 26March 2026).
There have been no other changes to the major
interests in the Company’s shares intimated up to
26March 2026.
Analysis of shareholders at 31 January
2026
Number of
shares held
2026
%
2025
Number of
shares held
2025
%
Institutions 19,630,850 34.2 19,110,755 32.3
Intermediaries/
Retail savings
platforms
33,612,205 58.6 34,842,353 59.0
Individuals 3,680,694 6.4 3,983,263 6.7
Marketmakers 443,712 0.8 1,159,309 2.0
57,367,461 100.0 59,095,680 100.0
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 114 to 119. 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
buyback shares, and proposed capital reduction
areexplained in more detail below.
Share issuance authority
Resolution 12 in the Notice of Annual General Meeting
seeks to renew the Directors’ general authority to
issue shares up to an aggregate nominal amount of
£4,615,260. This amount represents one third 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 Resolution12 which would effectively
alter the control of the Company withoutthe prior
approval of shareholders in GeneralMeeting.
Governance report
Annual Report and Financial Statements 2026
66
Resolution 13, which is being proposed as a special
resolution, seeks to renew the Directors’ authority
to issue shares or sell shares held in treasury on a
non pre-emptive basis for cash up to an aggregate
nominal amount of £1,384,577 (representing 10% of
the issued ordinary share capital of the Company as
at 26March 2026). This authority will continue until
the conclusion of the Annual General Meeting to be
held in 2027 or on the expiry of 15 months from the
passing of the resolution, if earlier. The authority
proposed to be granted by Resolution 13 will only be
used to issue shares or sell shares from treasury at,
or at a premium to, net asset value and only when
the Directors believe that it would be in the best
interests of the Company to do so.
During the year to 31 January 2026, the Company
did not issue any shares.
Market purchases of own shares
At the last Annual General Meeting the Company
was granted authority to purchase up to 8,780,456
ordinary shares (equivalent to 14.99% of its issued
share capital), such authority to expire at the 2026
Annual General Meeting. The Directors are seeking
shareholders’ approval at the Annual General Meeting
to renew the authority to make market purchases 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 2027.
Such purchases will only be made at a discount to the
prevailing net asset value.
During the year to 31 January 2026, 1,728,219
shares (2025 – 2,756,602 shares) were bought back
under the buy-back authority, representing 2.9% of
share capital as at 31 January 2025.
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 the net asset value per ordinary share.
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 UK 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% 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. an amount equal to the higher of the price of
the last independent trade of an ordinary share
and the highest current independent bid for an
ordinary share on the trading venue where the
purchase is carried out.
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, bythe Board. Your attention is drawn to
Resolution 14 in the Notice of Annual General
Meeting. Thisauthority, if conferred, will only be
exercised if to do so would result in an increase in
net asset value per ordinary share for the remaining
shareholders and if it is considered in the best
interests of shareholders generally.
Articles of Association
The Company’s Articles of Association may only be
amended by special resolution at a general meeting
of shareholders.
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 18 to the
Financial Statements.
67
Baillie Gifford China Growth Trust plc
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
ofthatinformation.
Independent Auditor
The Auditor, Ernst & Young LLP, is willing to
continue in office, and in accordance with section
489 and section 491(1) of the Companies Act
2006, resolutions concerning Ernst & Young LLP’s
re-appointment and remuneration will be submitted
to the Annual General Meeting.
Post Balance sheet events
The Directors confirm that there have been no
significant post Balance sheet events which require
adjustment to, or disclosure in, the Financial
Statements or notes up to 31March 2026.
Subsequent to the year-end, the Company has
repurchased an additional 2,069,724 shares,
placed into Treasury, for a total consideration of
£6,287,409.
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 6 to 58.
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 reason
set out above, the Company considers itself to be
a low energy user and has no energy and carbon
information to disclose under the SECR regulations.
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.
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.
On behalf of the Board
Nicholas Pink
Chair
31 March 2026
Governance report
Annual Report and Financial Statements 2026
68
Compliance
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.
The Code includes provisions relating to the role of
the chief executive, executive directors’ remuneration
and the need for an internal audit function. Given that
the Company is an externally-managed investment
trust, the Board considers these provisions are not
relevant to the Company (the need for an internal
audit function specific to the Company has been
addressed on page 77).
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 AIC
Code can be found at theaic.co.uk).
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, discount/premium
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.
Corporate
governance report
The Board is committed to
achieving and demonstrating
high standards of Corporate
Governance. This statement
outlines how the principles of the
2024 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 2024 were
applied throughout the financial
year. The AIC Code provides
a framework of best practice
forinvestment companies
andcanbe found at theaic.co.uk.
69
Baillie Gifford China Growth Trust plc
Board of Directors
Comprises independent
non-executive directors
Chair: Nicholas Pink
Senior Independent Director:
Magdalene Miller
Audit Committee
Chair: Jonathan Silver
Purpose: The primary purpose of the
Company’s Audit Committee is to provide
oversight of the financial reporting
process, the audit process, the Company’s
system of internal controls, compliance
with laws and regulations.
Nomination
Committee
Chair: Nicholas Pink
Purpose: The main purpose of the
Nomination Committee is to oversee Board
recruitment and succession planning as
well as Board appraisals including
identifying training needs.
Third party service providers appointed
by the Board
Alternative Investment Fund Manager and Company Secretary:
BaillieGifford & Co Limited
(wholly owned subsidiary of BaillieGifford & Co)
Dealing activity and transaction reporting:
BaillieGifford Overseas Limited and
BaillieGifford Asia (Hong Kong) Limited
The Company does not have a
Management Engagement Committee,
thefunction of a Management
Engagement Committee is performed
bythe Board. That function is to ensure
that the Managers remain suitable to
manage the portfolio, that the
management contract is competitive
andreasonable for the shareholders,
andthat the Company maintains
appropriate administrative and company
secretarial support.
Ernst & Young LLP
Auditor
The Bank of
NewYorkMellon
(International) Limited
Depositary and Custodian
Computershare
Investor Services
PLC
Registrar
JP Morgan
Cazenove
Company broker
Governance report
Annual Report and Financial Statements 2026
70
The Board comprises five Directors, all of whom
are non-executive. The Chair 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’), BaillieGifford & Co
Limited, and, in the context of a Board comprising
only non-executive Directors, there is no chief
executive officer. The Senior Independent Director
isMagdalene Miller.
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 60 to 62.
There is an agreed procedure for Directors to seek
independent professional advice, if necessary, at the
Company’s expense.
Appointments to the Board
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, all Directors will retire at
each AGM and, if appropriate, offer themselves for
re-election.
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
composition annually. The Board is of the view that
length of service will not necessarily compromise
theindependence or contribution of Directors of
aninvestment trust company, where continuity
andexperience can be a benefit to 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
Nominations
Committee Strategy
Audit
Committee
Number of meetings 4 2 1 4
Nicholas Pink 4 2 1 4
Tim Clissold 4 2 1 4
Magdalene Miller 4 2 1 3
Sarah MacAulay* 4 2 1 4
Jonathan Silver 4 2 1 4
Policy on Board and Chair’s tenure
The Board’s policy is that all Directors, including
the Chair, shall normally have tenure limited to
nine years from their first appointment to the
Board. Exceptions may be made in exceptional
circumstances, particularly in respect of the Chair
for example to facilitate effective succession
planning or if the Company were in the middle of
a corporate action, when an extension may be
appropriate. However, the Board believes that long
serving Directors should not be prevented from
forming part of an independent majority and that the
length of a Director’s tenure does not necessarily
reduce his or her ability to act independently.
Performance evaluation
An appraisal of the Chair, 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 Chair
responded to an evaluation questionnaire.
TheChair’s appraisal was led by Magdalene Miller,
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
71
Baillie Gifford China Growth Trust plc
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 Chair, the Board
and the Audit Committee continues to be effective
and that each Director and the Chair remain
committed to the Company.
A review of the Chair’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 Chair’s other commitments during
the year.
Diversity
Appointments to the Board are made on merit
and based on objective criteria, including the
promotion of diversity of gender, social and ethnic
backgrounds, and cognitive and personal strengths.
The priority in succession planning and appointing
new Directors is to identify candidates with the best
range of skills and experience to complement those
of the existing Directors, with a view to ensuring that
the Board remains well placed to help the Company
achieve its investment and governance objectives.
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. There have been no changes since
31January 2026, and data has been collected on a
self reporting basis.
Gender Number %
Senior
roles
*
Men 3 60% 2
Women
2
40%
1
Ethnic background Number %
Senior
roles
*
White British or Other White
(including minority white groups)
4 80%
2
Asian/Asian British
1 20
%
1
* 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
Chair is a man and the SID a woman. The Board also considers the role
of Audit Committee Chair to represent a senior role within this context
and this role is performed by a man.
The Board meets the UK Listing Rules diversity
targets that at least 40% of the individuals on
the Board are women, at least one of the senior
positions on the Board is held by a woman and that
there is at least one Director of an ethnic minority
background.
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
Nominations Committee. The external recruitment
agency will be asked to put forward candidates
withthe desired skillset and also with a diverse
range of backgrounds, cultures and identities. The
Nominations Committee will take the UK 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.
Governance report
Annual Report and Financial Statements 2026
72
Remuneration
As all the Directors are non-executive, there is
no requirement for a separate Remuneration
Committee. Directors’ fees are considered by
the Board as a whole within the limits approved
by shareholders. The Company’s policy on
remuneration is set out in the Directors’
remuneration report on pages 78 to 81.
Management Engagement Committee
The Directors have considered that a separate
Management Engagement Committee is not required
given the small size of the Board.
Audit Committee
The report of the Audit Committee is set out on
pages 75 to 77.
Nomination Committee
The Nomination Committee consists of the whole
Board due to the small size of the Board. Mr Pink is
Chair of the Nomination Committee. The Committee
meets at least annually and at such other times
as may be required. The Committee has written
terms of reference that include reviewing the
Board, identifying and nominating new candidates
for appointment to the Board, Board appraisal,
succession planning and training. The Committee
also considers whether Directors should be
recommended for re-election by shareholders.
The Committee is also responsible for considering
Directors’ potential conflicts of interest and for
making recommendations to the Board on whether
or not the potential conflicts should be authorised.
The Committee’s terms of reference are available on
request from the Company and on the Company’s
website: bailliegiffordchinagrowthtrust.com
Internal controls and risk management
The Directors acknowledge their responsibility
forthe 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). BaillieGifford & 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. BaillieGifford & Co conducts an annual
review of its system of internal controls which is
documented within an internal controls report which
complies with ISAE 3402 and Technical Release
AAF 01/06 – Assurance Reports on Internal Controls
of Service Organisations made available to Third
Parties. This report is independently reviewed
by BaillieGifford & 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
theserisks.
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 report.
73
Baillie Gifford China Growth Trust plc
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 report.
To comply with the UK Alternative Investment
FundManagers Regulations, The Bank of New York
Mellon (International) Limited acts as the Company’s
Depositary and BaillieGifford & 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 Bank of New
York Mellon (International) Limited. The Custodian
prepares reports on its key controls and safeguards
which are independently reviewed by KPMG
LLP. The reports are reviewed by BaillieGifford’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
areport 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 38), are
monitored and the sensitivity of the portfolio to
keyrisks 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 BaillieGifford’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.
An explanation of the Company’s principal and
emerging risks and how they are managed is on
pages 35 to 41 and contained in note 1 to the
Financial Statements. The Board has, in particular,
considered the impact of increasing geopolitical
tensions and conflicts, including increased
macroeconomic concerns alongside specific
leverage and liquidity stress testing but does not
believe the Company’s going concern status is
affected. The Company’s assets, the majority of
which are investments in quoted securities which are
readily realisable, exceed its liabilities significantly.
All borrowings require the prior approval of the
Board, and the current revolving credit facility
expires in April 2026. 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
theCompany.
Accordingly, the Financial Statements have been
prepared on the going concern basis as it is the
Directors’ opinion, having assessed the principal
risks and other matters as set out in the Viability
Statement on page 34, that the Company will
continue in operational existence until 30 April 2027,
which is for a period of at least 12 months from the
date of approval of these Financial Statements.
Governance report
Annual Report and Financial Statements 2026
74
Relations with shareholders
The Board places great importance on
communication with shareholders. The Company’s
Managers communicate regularly with shareholders
and their representatives. The Chair also meets
shareholders independently of the Managers, from
time to time, and reports 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, J.P. Morgan Cazenove (see
contact details on page 129). All correspondence
addressed to the Chair is dealt with directly by
theChair.
The Company’s Annual General Meeting provides
a further forum for communication with all
shareholders. The level of proxies lodged for
eachresolution is announced at the meeting and
is published at bailliegiffordchinagrowthtrust.com
subsequent to the meeting. The notice period
for theAnnual General Meeting is at least
21 clear days. Shareholders and potential
investors may obtain up-to-date information on
the Company from the Managers’ website at
bailliegiffordchinagrowthtrust.com.
Corporate governance and stewardship
The Company has given discretionary voting powers
to BaillieGifford & Co. The Managers vote against
resolutions they consider may damage shareholders’
rights or economic interests and their actions are
reported at Board meetings.
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. 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
toconsider how ESG factors could impact
long-term investment returns. The Managers’
report on ESG onpages 45 to 50 provides more
detail. Thestatement of compliance with the UK
Stewardship Code can be found on the Managers’
website at bailliegifford.com. BaillieGifford & Co,
the Managers, has considered the Sustainable
Finance Disclosure Regulation (‘SFDR’) and further
details can be found on page 125.
The Managers are signatories to the United Nations
Principles for Responsible Investment and are also
members of the of the Asian Corporate Governance
Association and the International Corporate
Governance Network.
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 have engaged an external provider
to map the carbon footprint of the equity portfolio
using the information to prioritise engagement and
understand what higher emitting companies are
doing to manage climate risk better. The carbon
intensity of the Company portfolio is provided in
theManagers’ report on ESG on pages 45 to 50.
BaillieGifford’s Task Force on Climate-
Related Financial Disclosures (‘TCFD’) Climate
Reportisavailable on the Managers’ website
atbailliegifford.com. A Company specific
TCFD climate report is also available on the
Company’s page of the Company’s website at
bailliegiffordchinagrowthtrust.com. The Managers,
BaillieGifford & Co, are signatories to the CDP
(formerly the Carbon Disclosure Project).
On behalf of the Board
Nicholas Pink
Chair
31 March 2026
75
Baillie Gifford China Growth Trust plc
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.
Jonathan Silver is the Chair
oftheCommittee.
Audit
Committee report
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:
bailliegiffordchinagrowthtrust.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 70).
At least once a year the Committee meets with the
external Auditor without any representatives of the
Managers being present.
Main activities of the Committee
The Committee met four times during the year to
31January 2026, with two of the meetings focussed
on the review of the Company’s private company
valuation. BaillieGifford attended all meetings.
BaillieGifford & Co’s Internal Audit and Compliance
Departments and the AIFM’s permanent risk function
provided reports on their monitoring programmes for
the two meetings focussed on governance matters
and the approval of the financial statements, Ernst
& Young LLP, the external Auditor attended two of
those meetings.
The following significant issues have been
considered in relation to the Annual Report and
Accounts for the year ended 31 January 2026:
Governance report
Annual Report and Financial Statements 2026
76
Valuation and existence
The prices of all the listed investments at 31January
2026 were agreed to external price sources.
The majority of the investments are in listed
securities and market prices are readily available
from independent external pricing sources. The
Committee reviewed the Managers’ valuation policy
for investments in unlisted companies (as described
on page 54) and approved the valuation of the
unlisted and suspended investments following a
detailed review of the valuation of the investments
and relevant challenge where appropriate. The listed
portfolio holdings were agreed to confirmations from
the Company’s Custodian. The unlisted holdings in
ByteDance and RedNote were agreed to external
confirmations from the Company’s custodian.
Recognition of income
Income received is accounted for in line with
theCompany’s accounting policy. There were
nosignificant matters during the year to report.
The Audit Committee reviews the treatment of any
special dividends received during the year, and also
reviews total income against both prior year income
and forecast income.
Risk review and emerging risks
The Committee regularly reviews the Company’s
risk matrix and keeps the key strategic risks facing
the Company under particular scrutiny. Please see
the discussion of principal risks on pages 35 to 41.
In addition, the Audit Committee considered its
processes for identifying and monitoring emerging
risks. It was agreed that at each Audit Committee
meeting there should be a discussion on emerging
risks, and any identified emerging risks should be
recorded in the risk matrix.
Going concern and viability statement
The Committee considered the factors, including
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. It has also reviewed the
reports from the Managers on the cash position and
income projections of the Company, the liquidity
of the investment portfolio, compliance with debt
covenants and the Company’s ability to meet its
obligations as they fall due.
The Company announced the introduction of a
performance related tender offer (the ‘Conditional
Tender Offer’) in November 2024. In the event that
the Company’s net asset value total return does
not exceed the benchmark total return (MSCI China
All Shares index in sterling terms) over the period
beginning from the NAV announcement in relation
to 29 November 2024 to the NAV announcement in
relation to 30November 2028, then the Conditional
Tender Offer will be held as soon as practicable
thereafter.
The Committee also reviewed the Viability statement
on page
34
and the statement on going concern
on page
73
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.
Other Matters Considered During the Year
During the year, the Audit Committee also
considered the following:
• Independent Auditor: Ernst & Young (‘EY’) were
re-appointed as Independent Auditor for the year
ended 31 January 202
6
. Details are provided on
page
77
in the section External Auditor.
• Compliance with section 1158 of the Corporation
Tax Act 2010: The Directors regularly receive
updates from the Managers on the Company’s
compliance with the requirements of investment
trust status. There were no significant matters
during the year to report.
• Cyber security: The threat of a cyber attack
is a concern for all organisations. The Audit
Committee considered the principal risks, and
reviewed information from relevant service
providers on their cyber security arrangements.
• Service providers: The Audit Committee reviewed
the performance and internal controls of its major
operational service providers. The Committee
also reviewed the arrangements in place within
BaillieGifford & Co whereby their staff may,
in confidence, raise concerns about possible
improprieties in matters of financial reporting or
other matters.
• Allocation of costs: The Audit Committee
reviewed the Company’s policy on the allocation
of certain costs (principally management fees
and interest costs) between capital and revenue
and recommended to the Board that thereshould
be no change in the following proportion: capital
75%; revenue 25%. This split reflected the
Board’s view of the expected long-term split
of returns, in compliance with the SORP. The
recommendation was accepted by the Board.
77
Baillie Gifford China Growth Trust plc
• Fair, balanced and understandable: The Audit
Committee reviewed the integrity of financial
statements and ensured that, taken as a whole,
they presented fair, balanced and understandable
assessment of the Company’s position and
prospects.
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.
Internal controls and risk management
The Committee reviewed the effectiveness of the
Company’s risk management and internal controls
systems as described on pages 72 and 73. 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 31 January 2026;
• 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. There were no non-audit fees for
the year to 31 January 2026.
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
oftheaudit.
Ernst & Young LLP has been engaged as the
Company’s Auditor since 2020. The audit Partner
responsible for the audit is 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. Ahmer Huda is the lead audit partner,
has held the role since the conclusion of the 2024
audit and will continue as audit partner until the
conclusion of the 2029 audit.
Ernst & Young LLP has confirmed that it believes it
is independent within the meaning of regulatory and
professional requirements and that the objectivity
ofthe 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 82 to 83.
On behalf of the Board
Jonathan Silver
Audit Committee Chair
31 March 2026
Governance report
Annual Report and Financial Statements 2026
78
Directors’
remuneration report
Statement by the Chair
The Directors’ Remuneration Policy is subject to
shareholder approval every three years or sooner
ifanalteration to the policy is proposed. The
Remuneration Policy which is set out below was last
approved at the Annual General Meeting in June
2023 and no changes are proposed to the policy to
be approved atthe Annual General Meeting to be
held on 27May2026.
The Board reviewed the level of fees during the year
and considered the rate of inflation, independent
industry surveys of Investment Company Director fees
and peer group comparatives, and it was agreed that
with effect from 1 February 2026, the Chair’s fee
should increase from £44,000 to £45,760, and the
non-executive Director fee should increase by£1,120
to £29,120. The additional fee for the Chairman of the
Audit Committee and the additional fee for the Senior
Independent Director should increase by £220
to£5,720 and by £60 to £1,560 respectively.
Directors’ Remuneration Policy
The Company’s policy is that the remuneration
of non-executive Directors should reflect the
experience of the Board as a whole and be
determined with reference to the Company’s peer
group and the investment trust industry generally.
Directors are not eligible for bonuses, pension
benefits, share options, long-term incentive
schemes or other performance-related benefits as
the Boarddoes not believe that this is appropriate
fornon-executive Directors.
The Board has set four levels of fees: one for the
Chair, one for the other non-executive Directors, an
additional fee that is paid to the Director who chairs
the Audit Committee and an additional fee paid to
the Senior Independent Director. Fees are reviewed
annually in accordance with the policy. The fee for
any new Director appointed will be determined on
the same basis. Any changes to Directors’ fees are
considered by the Board as a whole.
This report has been prepared in
accordance with the requirements
of the Companies Act 2006.
79
Baillie Gifford China Growth Trust plc
Expected
fees for
year ending
31 January 2027
£
Fees paid
for the year to
31 January 2026
£
Chair’s fee 45,760 44,000
Non-executive Director’s fee 29,120 28,000
Additional fee for the Chairman of the Audit Committee 5,720 5,500
Additional fee for Senior Independent Director 1,560 1,500
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
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.
Under the Articles of Association, Directors are
entitled to be paid 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
toreceive.
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. 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 requires all Directors
to retire and be subject to election at the first Annual
General Meeting after their appointment. Thereafter
all Directors will seek annual re-election at the
Company’s AGMs.
Limits on Directors’ remuneration
The fees paid to the non-executive Directors 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 for the non-executive Directors are payable
monthly in arrears and the fees paid in respect of
the year ended 31 January 2026 together with the
expected fees payable in respect of the year ending
31 January 2027 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.
Governance report
Annual Report and Financial Statements 2026
80
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.
Wheredisclosures have been audited, they are indicated as such. The Auditor’s opinion is included
intheIndependent Auditor’s report on pages 85 to 92.
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
2026
Fees
£
2026
Taxable
benefits *
£
2026
Total
£
2025
Fees
£
2025
Taxable
benefits *
£
2025
Total
£
Nicholas Pink
†
44,000 3,435 47,435 39,750 1,836 41,586
Susan Platts-Martin
#
– – – 11,000 621 11,621
Tim Clissold 28,000 283 28,283 27,000 1,392 28,392
Magdalene Miller
‡
29,500 2,028 31,528 28,000 1,612 29,612
Sarah MacAulay
¶
28,000 1,763 29,763 20,250 510 20,760
Jonathan Silver
^
33,500 314 33,814 32,000 619 32,619
163,000 7,823 170,823 158,000 6,590 164,590
Annual percentage change in remuneration
This represents the annual percentage change in the entire remuneration paid to the Directors.
Name
% from
2025 to
2026
% from
2024 to
2025
% from
2023 to
2024
% from
2022 to
2023
% from
2021 to
2022
Nicholas Pink
†
14 228 – – –
Susan Platts-Martin
#
– (76) 11 2 (17)
Tim Clissold
**
– – 10 206 –
Dermot McMeekin
††
– – – – (61)
Magdalene Miller
‡
6 1 11 2 492
Sarah MacAulay
¶
43 – – – –
Chris Ralph
^^
– – – (59) 7
Andrew Robson
§
– (97) (60) 2 12
Jonathan Silver
^
4 5 296 – –
* Comprises expenses incurred by Directors in the course of travel to attend Board and Committee meetings.
†
Mr Pink was appointed as a Director on 1 September 2023 and as Chair on 1 May 2024.
#
Ms Platts-Martin retired as Chair on 30 April 2024 and was paid an additional £10,000 for the year to 31 January 2021 to reflect the
exceptional work done in relation to the selection of the new Managers.
‡
Ms Miller was appointed as a Director on 26 November 2020 and was appointed Senior Independent Director on 15 June 2023.
¶
Ms MacAulay was appointed as a Director on 1 May 2024.
^
Mr Silver was appointed as a Director on 1 September 2022 and appointed as Audit Chair on 15 June 2023.
**
Mr Clissold was appointed as a Director on 1 October 2021.
§
Mr Robson retired as a Director on 15 June 2023.
††
Mr McMeekin retired as a Director on 16 June 2021.
^^
Mr Ralph retired as a Director on 16 June 2022.
81
Baillie Gifford China Growth Trust plc
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, 99.6% were in favour, 0.4%
were against and votes withheld were 0.0%. At the
last Annual General Meeting at which the Directors’
Remuneration Policy was considered (June 2023),
99.4% of the proxy votes received were in favour,
0.5% were against and 0.1% votes were withheld.
Relative importance of spend on pay
The table below shows the actual expenditure
(feesand taxable benefits) during the year
in relationto Directors’ remuneration and
distributionsto shareholders.
2026
£’000
2025
£’000
Change
%
Directors’ remuneration 171 165 3.6
Share buy backs 4,759 5,503 (13.5)
Dividends 1,290 1,220 5.7
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 benchmark.
The benchmark is the MSCI China All Shares
Index (in sterling terms), prior to 16 September
2020 the benchmark was MSCI AC Asia ex Pacific
Index. Thebenchmark was chosen for comparison
purposes as it is the index against which the
Company measures its performance.
Directors’ interests (audited)
The Directors at the end of the year under review, and their interests in the Company, are shown in
thefollowing table. There is no requirement under the Company’s Articles of Association for Directors
tohold shares in the Company. There have been no changes intimated in the Directors’ interests up to
31March2026.
Name
Nature
of interest
Ordinary 25p
shares held at
31 January
2026
Ordinary 25p
shares held at
31 January
2025
Nicholas Pink Beneficial 26,158 26,158
Tim Clissold Beneficial 50,000 50,000
Magdalene Miller Beneficial 10,000 10,000
Sarah MacAulay Beneficial 60,000 27,000
Jonathan Silver Beneficial 25,000 25,000
Performance graph
(figures rebased to 100 at 31 January 2016)
Cumulative to 31 January
20262016 2018 2020 2022 2024
Source: LSEG and relevant underlying index providers. See disclaimer
on page 124.
All figures are total returns (assuming net dividends are reinvested).
See Glossary of terms and alternative performance measures on pages 126
to 128.
* MSCI China All Shares Index (in sterling terms). Prior to 16 September
2020 the benchmark was MSCI AC Asia ex Pacific Index.
0
300
150
100
50
250
200
● Benchmark* ● Baillie Gifford China Growth Trust’s
share price
Past performance is not a guide to future performance.
Approval
The Directors’ remuneration report on pages 78 to 81
was approved by the Board of Directors and signed
on its behalf on 31 March 2026.
Nicholas Pink
Chair
Governance report
Annual Report and Financial Statements 2026
82
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.
The Directors are responsible for ensuring that
theAnnual Report and Financial Statements
aremade available on a website. Financial
Statements are published on the Company’s
websitein accordance with legislation in the
UnitedKingdom governing the preparation
anddissemination of Financial Statements,
whichmay 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
pageofthe Managers’ website.
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.
Underthat law they have elected to prepare
the Financial Statements in accordance with
applicable law and United Kingdom Accounting
Standards, comprising Financial Reporting
Standard 102 ‘TheFinancial Reporting Standard
applicable intheUK and Republic of Ireland’ (FRS
102). Undercompany law the Directors must not
approvethe Financial Statements unless they
aresatisfied that they give a true and fair view ofthe
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
applythem consistently;
• state whether applicable United Kingdom
Accounting Standards, comprising FRS 102,
havebeen followed, subject to any material
departures disclosed and explained in the
Financial Statements;
• make judgements and accounting estimates
thatare 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.
Statement of Directors’
responsibilities
in respect of the Annual Report and the Financial Statements
83
Baillie Gifford China Growth Trust plc
Responsibility statement of the Directors
inrespect 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 thedevelopment and performance of the
businessand 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,
businessmodel and strategy.
On behalf of the Board
Nicholas Pink
Chair
31 March 2026
Notes
The following notes relate to financial statements published on a website and are not included in the printed
version of the Annual Report and Financial Statements:
• The maintenance and integrity of the Baillie Gifford & Co website is the responsibility of Baillie Gifford &
Co; the work carried out by the auditors does not involve consideration of these matters and accordingly,
the auditors accept no responsibility for any changes that may have occurred to the financial statements
since they were initially presented on the website.
• Legislation in the United Kingdom governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Financial
report
The Financial Statements for the
year to 31 January 2026 are set
out on pages 85 to 112 and have
been prepared in accordance with
FRS 102 ‘The Financial Reporting
Standard applicable in the UK and
Republic of Ireland’.
85
Baillie Gifford China Growth Trust plc
Independent
auditor’s report
to the members of BaillieGifford China Growth Trust plc
Independence
We are 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 public
interest entities, and we have fulfilled our other
ethical responsibilities in accordance with these
requirements.
The non-audit services prohibited by the FRC’s
Ethical Standard were not provided to the Company
and we remain independent of Company in
conducting the audit.
Opinion
We have audited the financial statements of Baillie
Gifford China Growth Trust plc (“the Company”) for
the year ended 31 January 2026 which comprise
the Income Statement, Balance Sheet, Statement
of Changes in Equity, Cash Flow Statement, and
the related notes 1 to 18, 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 FRS 102 “The
Financial Reporting Standard applicable in the UK
and Republic of Ireland” (United Kingdom Generally
Accepted Accounting Practice).
In our opinion, the financial statements:
• give a true and fair view of the Company’s affairs
as at 31 January 2026 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.
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.
Financial report
Annual Report and Financial Statements 2026
86
• Inspection of the Directors’ assessment of the risk
of breaching the debt covenants as a result of a
reduction in the value of the Company’s portfolio.
We recalculated the Company’s compliance with
debt covenants in the scenarios assessed by the
Directors and reviewed the Directors’ reverse
stress testing in order to identify what factors
would lead to the Company breaching the financial
covenants and in turn impact the going concern.
• Review of the Company’s going concern
disclosures included in the annual report in order
to assess that the disclosures were appropriate
and in conformity with the reporting standards.
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 assessed
by the Directors, being the period to 30 April 2027,
which is at least 12 months from the date these
financial statements were authorised for issue.
In relation to the Company’s reporting on how they
have 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. However,
because not all future events or conditions can be
predicted, this statement is not a guarantee as to the
Company’s ability to continue as a going concern.
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:
• Confirmation of our understanding of the
Company’s going concern assessment process
by engaging with the Directors and the Company
Secretary to determine if all key factors were
considered in their assessment.
• Inspecting the Directors’ assessment of going
concern, including the revenue forecast, for the
period to 30 April 2027 which is at least 12 months
from the date these financial statements were
authorised for issue.
• Reviewing the factors and assumptions, including
the impact of the current economic environment
and other significant events that could give rise to
market volatility, as applied to the revenue forecast
and the liquidity assessment of the investments
and determined, through testing of the
methodology and calculations, that the methods,
inputs and assumptions utilised are appropriate to
be able to make an assessment for the Company.
• Consideration of the mitigating factors included in
the revenue forecasts that are within the control
of the Company. We reviewed the Company’s
assessment of the liquidity of investments held
and evaluated the Company’s ability to sell those
investments in order to cover working capital
requirements should revenue decline significantly.
87
Baillie Gifford China Growth Trust plc
Overview of our audit approach
Key audit
matters
• Risk of incomplete or inaccurate revenue
recognition
• Risk of incorrect valuation or ownership of the
investment portfolio.
Materiality
• Overall materiality of £1.98m which represents
1% of shareholders’ funds.
An overview of the scope of our audit
Tailoring the scope
Our assessment of audit risk, our evaluation of
materiality and our allocation of performance
materiality determine our audit scope for the
Company. This enables us to form an opinion on
the financial statements. We take into account
size, risk profile, the organisation of the Company
and effectiveness of controls, the potential impact
of climate change and changes in the business
environment when assessing the level of work to be
performed. All audit work was performed directly by
the audit engagement team and relevant specialist.
Climate change
Stakeholders are increasingly interested in how
climate change will impact Companies. The
Company has determined that the most significant
future impacts from climate change on its operations
will be from how climate change could affect the
Company’s investments and overall investment
process. This is explained on page 38 under the
principal and emerging risks section of the annual
report. This disclosure forms part of the ‘Other
information’, rather than the audited financial
statements. Our procedures on these unaudited
disclosures therefore consisted solely of considering
whether they are materially inconsistent with the
financial statements or our knowledge obtained in
the course of the audit or otherwise appear to be
materially misstated, in line with our responsibilities
on ‘Other information’.
Our audit effort in considering climate change
was focused on the adequacy of the Company’s
disclosures in the financial statements as set out in
note 1(a) and conclusion that there was no further
impact of climate change to be taken into account
other than the unlisted investments as the listed
investments are fair valued based on market pricing
as required by FRS102. Unlisted investments are
fair valued using IPEV Guidelines which require
fair value to be assessed for implications related to
climate change. We also challenged the Directors’
considerations of climate change in their assessment
of viability and associated disclosures.
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. These matters included
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 our opinion thereon, and we do not provide a
separate opinion on these matters.
Financial report
Annual Report and Financial Statements 2026
88
Risk Our response to the risk
Key observations communicated
to the Audit Committee
Incomplete or inaccurate revenue recognition (as
described on page 76 in the Audit Committee’s
Report and as per the accounting policy set out
on pages 98 to 100)
The total revenue for the year to 31 January
2026 was £3.04m (2025: £2.72m), consisting
primarily of dividend income from listed
investments.
There is a risk of incomplete or inaccurate
recognition of revenue through the failure to
recognise proper income entitlements or to
apply an appropriate accounting treatment.
Additionally, in accordance with the AIC SORP,
special dividends received by the Company
can be included in either the revenue or capital
columns of the Statement of Comprehensive
Income depending on the commercial
circumstances behind the payments.
We have performed the following procedures:
We obtained an understanding of the Baillie
Gifford’s (the ‘Manager’) processes and controls
surrounding revenue recognition by performing
walkthrough procedures.
For all dividends received and accrued, we
recalculated the dividend income by multiplying
the investment holdings at the ex-dividend date,
per the accounting records, by the dividend
per share, agreed to an independent data
vendor. We also agreed all exchange rates to an
independent data vendor and agreed dividend
amounts to bank statements where cash has
been received.
To test completeness, we confirmed that all
expected dividends for investee companies
held during the year were recorded, based on
investee announcements from an independent
data vendor.
For all dividends accrued at the year end, we
reviewed investee announcements to confirm
the entitlements arose before 31 January 2026
and agreed any subsequent receipts to post-
year end bank statements.
We reviewed dividend types for all listed
investments using an independent data vendor
to identify special dividends. The Company
received two such dividends. For a sample
of one, we assessed the appropriateness of
its classification as capital by reviewing the
distribution rationale.
The results of our procedures
identified no material
misstatements in relation to the
risk of incomplete or inaccurate
revenue recognition.
89
Baillie Gifford China Growth Trust plc
Risk Our response to the risk
Key observations communicated
to the Audit Committee
Incorrect valuation or ownership of the
investment portfolio (as described on page 75
in the Audit Committee’s Report and as per the
accounting policy set out on pages 98 and 99).
The valuation of the investment portfolio
at 31January 2026 was £204.13m (2025:
£158.68m) consisting of listed equities with an
aggregate value of £179.14m (2025: £144.06m)
and unlisted equity investments with an
aggregate value of £24.99m (2025: £14.62m).
The valuation of the assets held in the
investment portfolio is the key driver of the
Company’s net asset value and total return.
Incorrect investment pricing, or failure to
maintain proper legal title of the investments
held by the Company could have a significant
impact on the portfolio valuation and the return
generated for shareholders.
The fair value of listed investments is determined
using quoted market bid prices at close of
business on the reporting date.
The unlisted investments are valued at fair value
by the Directors following a detailed review and
appropriate challenge of the valuations proposed
by the Investment Manager. The unlisted
investments policy applies methodologies
consistent with the International Private Equity
and Venture Capital Valuation guidelines
(“IPEV”).
The valuation of the unlisted investments, and
the resultant impact on the unrealised gains/
(losses), is the area requiring the most significant
judgement and estimation in the preparation of
the financial statements.
We performed the following procedures:
We obtained an understanding of the
Manager’s processes and controls surrounding
investment valuation and legal title, including an
understanding of the operation of the Investment
Manager’s Private Companies Valuation Group
and the Directors’ process for review of the
unlisted investments valuations, by performing
walkthrough procedures.
For all listed investments in the portfolio, we
compared the market prices and exchange rates
applied to an independent pricing vendor and
recalculated the investment valuations as at the
year end.
We inspected the stale price report produced
by the Manager to identify prices that have not
changed and verified whether the listed price is
a valid fair value. We did not identify any listed
investments with stale prices.
For the unlisted investments held as at the year-
end we utilised our specialist Valuations team to
review and challenge the valuation. This included:
• Reviewing the valuation papers prepared by
the Manager as at the year-end;
• For the unlisted investments, assessing
whether the valuation has been performed in
line with the accounting policy and the IPEV
guidelines;
• Assessing the appropriateness of the data
inputs and challenging the assumptions used
to support the valuations;
• Assessing other facts and circumstances,
such as market movement and comparative
company information, that have an impact
on the fair market value of the unlisted
investments; and
• Determining a fair value range for
the valuation and assessing whether
Management’s valuation is within this range.
We recalculated the unrealised gains/losses on
investments as at the year-end using the book-
cost reconciliation.
We compared the Company’s investment
holdings as at 31 January 2026 to an
independent confirmation received directly from
the Company’s Depository.
The results of our procedures
identified no material
misstatements in relation to
the risk of incorrect valuation
or ownership of the investment
portfolio.
Financial report
Annual Report and Financial Statements 2026
90
Our application of materiality
We apply the concept of materiality in planning and
performing the audit, in evaluating the effect of
identified misstatements on the audit and in forming
our audit opinion.
Materiality
The magnitude of an omission or misstatement that,
individually or in the aggregate, could reasonably
be expected to influence the economic decisions
of the users of the financial statements. Materiality
provides a basis for determining the nature and
extent of our audit procedures.
We determined materiality for the Company to be
£1.98 million (2025: £1.53 million), which is 1%
(2025: 1%) of shareholders’ funds. We believe that
shareholders’ funds provides us with materiality
aligned to the key measurement of the Company’s
performance.
Performance materiality
The application of materiality at the individual
account or balance level. It is set at an amount to
reduce to an appropriately low level the probability
that the aggregate of uncorrected and undetected
misstatements exceeds materiality.
On the basis of our risk assessments, together with
our assessment of the Company’s overall control
environment, our judgement was that performance
materiality was 75% (2025: 75%) of our planning
materiality, namely £1.48 m (2025: £1.15m). We
have set performance materiality at this percentage
due to past experience of the audit that indicates
a lower risk of misstatements, both corrected and
uncorrected.
Given the importance of the distinction between
revenue and capital for investment trusts, we also
applied a separate testing threshold for the revenue
column of the Income Statement of £0.10m (2025:
£0.08m), being 5% of net return on ordinary
activities before taxation.
Reporting threshold
An amount below which identified misstatements are
considered as being clearly trivial.
We agreed with the Audit Committee that we would
report to them all uncorrected audit differences in
excess of £0.10m (2025: £0.07m), which is set at
5% of planning materiality, as well as differences
below that threshold that, in our view, warranted
reporting on qualitative grounds.
We evaluate any uncorrected misstatements against
both the quantitative measures of materiality
discussed above and in light of other relevant
qualitative considerations in forming our opinion.
Other information
The other information comprises the information
included in the annual report, other than the
financial statements and our auditor’s report
thereon. The Directors are responsible for the other
information contained within the annual report.
Our opinion on the financial statements does not
cover the other information and, except to the extent
otherwise explicitly stated in this 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 the other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by
theCompanies Act 2006
In our opinion the part of the Directors’ remuneration
report to be audited has been properly prepared in
accordance with the Companies Act 2006.
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 Directors’ reports have
been prepared in accordance with applicable legal
requirements;
91
Baillie Gifford China Growth Trust plc
Matters on which we are required to report
by exception
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 Directors’
report.
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,
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
Corporate Governance Statement
We have reviewed 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 by the UK Listing Rules.
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:
• Directors’ statement with regards to the
appropriateness of adopting the going concern
basis of accounting and any material uncertainties
identified set out on page 73;
• Directors’ explanation as to its assessment of the
Company’s prospects, the period this assessment
covers and why the period is appropriate set out
on page 34;
• Director’s statement on whether it has a
reasonable expectation that the Company will
be able to continue in operation and meets its
liabilities set out on page 76;
• Directors’ statement on fair, balanced and
understandable set out on page 83;
• Board’s confirmation that it has carried out a
robust assessment of the emerging and principal
risks set out on page 35;
• The section of the annual report that describes the
review of effectiveness of risk management and
internal control systems set out on page 72; and;
• The section describing the work of the audit
committee set out on pages 75 to 77.
Responsibilities of Directors
As explained more fully in the Directors’
responsibilities statement set out on pages 82
and83, 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
ofthefinancial 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.
Financial report
Annual Report and Financial Statements 2026
92
Explanation as to what extent the audit
was considered 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 irregularities, including fraud. 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 or intentional
misrepresentations, or through collusion. The extent
to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
However, the primary responsibility for the
prevention and detection of fraud rests with both
those charged with governance of the Company and
management.
• We obtained an understanding of the legal and
regulatory frameworks that are applicable to
the Company and determined that the most
significant are FRS 102, the Companies Act
2006, the UK Listing Rules, the UK Corporate
Governance Code, The Companies (Miscellaneous
Reporting) Regulations 2018, the Association of
Investment Companies’ Code and Statement of
Recommended Practice and Section 1158 of the
Corporation Tax Act 2010.
• We understood how the Company is complying
with those frameworks through discussions with
the Audit Committee and Company Secretary,
and review of Board minutes and the Company’s
documented policies and procedures related to
controls over the financial reporting process.
• We assessed the susceptibility of the Company’s
financial statements to material misstatement,
including how fraud might occur by testing specific
accounting journal entries and considering the
key risks impacting the financial statements. We
identified fraud risks with respect to incorrect
valuation of the unlisted investments and the
resultant impact on unrealised gains and (losses).
Further discussion of our approach is set out in the
key audit matters above.
• Based on this understanding we designed our
audit procedures to identify non-compliance
with such laws and regulations. Our procedures
involved review of the reporting to the Directors
with respect to the application of the documented
policies and procedures related to controls over
the financial reporting process, and review of the
financial statements to ensure compliance with
the reporting requirements of the Company.
A further description of our responsibilities for
the audit of the financial statements is located
on the Financial Reporting Council’s website at
https://www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
Other matters we are required to address
• Following the recommendation from the audit
committee, we were appointed by the Company on
12 June 2019 to audit the financial statements for
the year ending 31 January 2020 and subsequent
financial periods.
• The period of total uninterrupted engagement
including previous renewals and reappointments is
seven years, covering the years ending 31 January
2020 to 31 January 2026.
• The audit opinion is consistent with the additional
report to the audit committee.
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.
Ahmer Huda (Senior statutory auditor)
forandonbehalf of Ernst & Young LLP,
StatutoryAuditor
London
31 March 2026
93
Baillie Gifford China Growth Trust plc
Financial report
Annual Report and Financial Statements 2026
94
For the year ended 31 January
Notes
2026
Revenue
£’000
2026
Capital
£’000
2026
Total
£’000
2025
Revenue
£’000
2025
Capital
£’000
2025
Total
£’000
Gains/(losses) on investments 9 – 49,431 49,431 – 40,068 40,068
Currency (losses)/gains 13 – 645 645 – (1) (1)
Income 2 3,039 – 3,039 2,718 – 2,718
Investment management fee 3 (309) (926) (1,235) (246) (737) (983)
Other administrative expenses 4 (671) – (671) (584) – (584)
Net return before finance costs
and taxation
2,059 49,150 51,209 1,888 39,330 41,218
Finance costs of borrowings 5 (113) (339) (452) (149) (448) (597)
Net return before taxation 1,946 48,811 50,757 1,739 38,882 40,621
Ta x
6
(212) – (212) (210) – (210)
Net return after taxation 1,734 48,811 50,545 1,529 38,882 40,411
Net return per ordinary share 7 2.98p 83.83p 86.81p 2.53p 64.39p 66.92p
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 98 to 112 are an integral part of the Financial Statements.
Income
statement
95
Baillie Gifford China Growth Trust plc
As at 31 January As at 31 January
Notes
2026
£’000
2026
£’000
2025
£’000
2025
£’000
Fixed assets
Investments held at fair value through profit or loss 9 204,126 158,682
Current assets
Debtors 10 156 40
Cash and cash equivalents 15 1,668 975
1,824 1,015
Creditors
Amounts falling due within one year 11 (8,355) (6,598)
Net current liabilities (6,531) (5,583)
Total assets less current liabilities 197,595 153,099
Capital and reserves
Share capital 12 17,087 17,087
Share premium account 13 – 31,780
Distributable capital reserve 13 31,780 –
Capital redemption reserve 13 41,085 41,085
Capital reserve 13 100,206 56,154
Revenue reserve 13 7, 4 37 6,993
Shareholders’ funds 197,595 153,099
Net asset value per ordinary share* 14 344.44p 259.07p
The Financial Statements of BaillieGifford China Growth Trust plc (Company registration number 91798)
were approved and authorised for issue by the Board and were signed on 31 March 2026.
Nicholas Pink
Chair
The accompanying notes on pages 98 to 112 are an integral part of the Financial Statements.
* See Glossary of terms and alternative performance measures on pages 126 to 128.
Balance
sheet
Financial report
Annual Report and Financial Statements 2026
96
For the year ended 31 January 2026
Notes
Share
capital
£’000
Share
premium
account
£’000
Distributable
capital
reserve
£’000
Capital
redemption
reserve
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Shareholders’
funds
£’000
Shareholders’ funds at 1 February 2025 17,087 31,780 – 41,085 56,154 6,993 153,099
Dividends paid during the year 8 – – – – – (1,290) (1,290)
Net return after taxation 7 – – – – 48,811 1,734 50,545
Ordinary shares bought back into treasury – – – – (4,759) – (4,759)
Cancellation of share premium account – (31,780) 31,780 – – – –
Shareholders’ funds at 31 January 2026 17,087 – 31,780 41,085 100,206 7, 4 37 197,595
For the year ended 31 January 2025
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 February 2024 17,087 31,780 41,085 22,775 6,684 119,411
Dividends paid during the year 8 – – – – (1,220) (1,220)
Net return after taxation 7 – – – 38,882 1,529 40,411
Ordinary shares bought back into treasury – – – (5,503) – (5,503)
Shareholders’ funds at 31 January 2025 17,087 31,780 41,085 56,154 6,993 153,099
The accompanying notes on pages 98 to 112 are an integral part of the Financial Statements.
Statement of
changes in equity
97
Baillie Gifford China Growth Trust plc
* Cash from operations includes dividends received of £3,017,000 (2025 – £2,697,000) and interest received of £22,000 (2025 – £21,000).
The accompanying notes on pages 98 to 112 are an integral part of the Financial Statements.
Cash flow
statement
For the year ended 31 January
Notes
2026
£’000
2026
£’000
2025
£’000
2025
£’000
Cash flows from operating activities
Net return before taxation 50,757 40,621
Adjustments to reconcile company profit before tax to net cash flow from operating activities
Net (gains)/losses on investments 9 (49,431) (40,068)
Currency losses/(gains) (645) 1
Finance costs of borrowings 5 452 597
Other capital movements
Changes in debtors (116) (16)
Change in creditors 88 40
Taxation
Overseas withholding tax suffered 6 (212) (212)
Overseas withholding tax reclaims received – 2
Cash from operations* 893 965
Interest paid (433) (534)
Net cash inflow from operating activities 460 431
Cash flows from investing activities
Acquisitions of investments 9 (42,356) (31,284)
Disposals of investments 9 46,343 37,421
Net cash inflow/(outflow) from investing activities 3,987 6,137
Cash flows from financing activities
Equity dividends 8 (1,290) (1,220)
Bank loans repaid – (5,906)
Bank loans drawn down 2,451 5,970
Shares bought back 13 (4,759) (5,503)
Net cash outflow from financing activities (3,598) (6,659)
Increase/(decrease) in cash and cash equivalents 849 (91)
Exchange movements (156) 140
Cash and cash equivalents at start of year 15 975 926
Cash and cash equivalents at end of year 15 1,668 975
Financial report
Annual Report and Financial Statements 2026
98
01 Principal accounting policies
The Financial Statements for the year to 31 January 2026
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
setout below which are consistent with those applied for
theyear ended 31 January 2025.
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
increasing 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 34, that the Company will continue in operational
existence until 30 April 2027, which is for a period of
at least 12months from the date of approval of these
FinancialStatements.
In preparing these Financial Statements the Directors
have considered the impact of climate change risk as a
principal risk as set out on page 38, and have concluded
that it does not have a material impact on the Company’s
investments. They have considered the impact of climate
change on the value of both the listed and unlisted
investments included in the Financial Statements.
Thelisted investments should already include the impact
in their prices as quoted on the relevant exchange and
consistent with that view, we do not believe the impact
onthe unlisted investments would be material.
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 with
consequential amendments. 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
arevenue and capital nature has been presented.
Financial assets and financial liabilities are recognised
inthe 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, Company’s
shareholders are predominantly based in the UK and the
Company and its Investment Manager, who are subject
tothe UK’s regulatory environment, are also UK based.
The financial statements are presented in Pounds
Sterling rounded to the nearest thousand, except where
otherwiseindicated.
b. Significant accounting estimates and judgements
The preparation of the Financial Statements requires
theuse of estimates, assumptions and judgements.
Theseestimates, assumptions and judgements affect
thereported 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.
Thekey sources of estimation and uncertainty relate
tothe assumptions used in the determination of the fair
value of the unlisted investments, which are detailed in
note 9 on pages 103 and 104.
Notes to the
Financial Statements
99
Baillie Gifford China Growth Trust plc
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 and suspended
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 2025 (‘IPEV Guidelines’)
toeach unlisted investment; and
ii. the Directors’ consideration of whether each fair
valueis 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.
Thisestimate 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
onthe basis of their business characteristics and
growth patterns;
ii. the selection of a revenue metric (either historic
orforecast);
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
frommilestone analysis (i.e. incorporating operational
success against the plan/forecasts of the business into
the valuation).
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 classified 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. The fair value of the suspended investment is the
last traded price, adjusted for the estimated impact on
the business of the suspension. 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 and cash equivalents
Cash and cash equivalents 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.
Financial report
Annual Report and Financial Statements 2026
100
e. Income
i. Income from equity investments is brought into
accounton the date on which the investments are
quoted ex-dividend 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
isrecognised on an accruals basis.
iv. Overseas dividends include the taxes deducted
atsource.
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, (transaction costs), in which case
they are recognised as capital within losses/gains
on investments; and these expenses are commonly
referred to as transaction costs and comprise brokerage
commission and stamp duty.
ii. 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 25% to revenue
and75% 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.
g. Long term borrowings, overdrafts and finance costs
Bank loans and overdrafts are classified as loans and are
measured at amortised cost. They are initially recorded at
the proceeds received net of direct costs. Finance costs
are accounted for on an accruals basis and are allocated
25% to revenue and 75% 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 accounts
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
Interim dividends are recognised in the year in which they
are paid and final dividends are recognised in the year
in which the dividends are approved by the Company’s
shareholders in a General Meeting.
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.
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 and the weighted average purchase price
paid to purchase the shares is credited to this reserve
if the shares are subsequently sold from treasury. The
nominal value of such shares is transferred from share
capital to the capital redemption reserve if the shares are
subsequently cancelled.
l. Share premium
The share premium reserve represents:
• the proceeds of sales of shares held in treasury in
excess of the weighted average purchase price paid by
the Company to repurchase the shares; and
• the excess of the proceeds of issuance of new shares
over the nominal value.
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,
beinginvestment business, consequently no business
segmental analysis is provided.
101
Baillie Gifford China Growth Trust plc
02 Income
2026
£’000
2025
£’000
Income from investments
Overseas dividends 3,017 2,697
Other income
Interest 22 21
Total income 3,039 2,718
03 Investment management fee
2026
Revenue
£’000
2026
Capital
£’000
2026
Total
£’000
2025
Revenue
£’000
2025
Capital
£’000
2025
Total
£’000
Investment management fee 309 926 1,235 246 737 983
Details of the Investment Management Agreement are disclosed on pages 63 and 64. BaillieGifford & Co Limited’s annual
management fee is (i) 0.75% of the first £50 million of net asset value; plus (ii) 0.65% of net asset value between £50 million and
£250 million; plus (iii) 0.55% of net asset value in excess of £250 million, calculated and payable quarterly.
04 Other administrative expenses
2026
£’000
2025
£’000
General administrative expenses 258 196
Directors’ fees (see Directors’ remuneration report on page 78) 163 158
Marketing* 97 99
Custody fees
52 37
Registrar fees
33 31
Depositary fees
16 13
Auditor’s remuneration – statutory audit of Company’s Annual Financial Statements 52 50
671 584
* The Company is part of a marketing programme which includes all the Investment Trusts managed by the Managers. 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 Managers. The Managers matches the Company’s marketing contribution and provides the resource to manage and run the programme.
05 Finance costs of borrowing
2026
Revenue
£’000
2026
Capital
£’000
2026
Total
£’000
2025
Revenue
£’000
2025
Capital
£’000
2025
Total
£’000
Interest on bank loans 113 339 452 149 448 597
Financial report
Annual Report and Financial Statements 2026
102
06 Tax on ordinary activities
2026
Revenue
£’000
2026
Capital
£’000
2026
Total
£’000
2025
£’000
2025
£’000
2025
£’000
Analysis of charge in year
Overseas withholding taxation 212 – 212 210 – 210
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 return before taxation 1,946 – 1,946 1,739 38,882 40,621
Net return on ordinary activities multiplied by
the standard rate of corporation tax in the UK
of 25%
487 12,203 12,690 435 9,721 10,156
Effects of:
Capital returns not taxable – (12,519) (12,519) – (10,017) (10,017)
Income not taxable (754) – (754) (674) – (674)
Overseas withholding tax incurred 212 – 212 212 – 212
Taxable losses in year not utilised 267 316 583 239 296 535
Tax repayment received – – – (2) – (2)
Revenue tax charge for the year 212 – 212 210 – 210
As an investment trust, the Company’s capital gains are not taxable.
Factors that may affect future tax charges
At 31 January 2026 the Company had a potential deferred tax asset of £7,640,835 (2025 – £7,073,000) 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%.
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.
The Company has filed protective claims with HMRC in order to seek recovery of potentially overpaid taxes from HMRC in relation
to the UK’s pre-2009 dividend tax rules. The claims cover accounting periods ending 2005–2007 and accounting periods ending
2008 and 2009 in which the Company paid UK tax under Schedule D Case V. In such periods, the Company is seeking recovery of
the tax paid together with interest.
The decision of the First Tier Tribunal (FTT) in the Post Prudential case was issued in December 2021 and was largely in favour
of the claimants. However, many of the decisions of the FTT were appealed by HMRC. Subsequently, in January 2024, the Upper
Tribunal (UT) issued a further judgement overturning some but not all the FTT’s decisions. HMRC and the claimants appealed the
UT’s decision to the Court of Appeal, which was heard in January 2025; the judgment was issued on 25 February, ruling against
the taxpayers. The Supreme Court has refused permission to appeal, so the Court of Appeal’s judgment in the PPCN litigation
is now final and binding. The decision means that the taxes in respect of the accounting periods ending 2005-2007 will not
berepaid.
The claims covering the accounting periods ending in 2008 & 2009 remain under dispute with HMRC and have been formally
referred to the First-tier Tribunal. A hearing date has not yet been set.
Contingent asset
HMRC have indicated they will repay overpaid taxes for the accounting periods ending 2008 and 2009 of £1.1 million plus interest.
As the repayment is probable, but not virtually certain, the Company is disclosing £1.1 million as a contingent asset.
103
Baillie Gifford China Growth Trust plc
07 Net return per ordinary share
2026
Revenue
2026
Capital
2026
Total
2025
Revenue
2025
Capital
2025
Total
Net return per ordinary share 2.98p 83.83p 86.81p 2.53p 64.39p 66.92p
Revenue return per ordinary share is based on the net revenue return on ordinary activities after taxation of £1,734,000 (2025 –
£1,529,000), and on 58,224,680 (2025 – 60,389,282) 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 £48,811,000 (2025 – gain of £38,882,000)
and on 58,224,680 (2025 – 60,389,282) ordinary shares, being the weighted average number of ordinary shares in issue during
eachyear.
There are no dilutive or potentially dilutive shares in issue.
08 Ordinary dividends
2026 2025 2026
£’000
2025
£’000
Amounts recognised as distributions in the period:
Previous year’s final dividend (paid 25 July 2025) 2.20p 2.00p 1,290 1,220
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
ofdividends for the year is £1,734,000 (2025 – £1,529,000).
2026 2025 2026
£’000
2025
£’000
Dividends paid and proposed in the period:
Proposed final dividend per ordinary share
(payable 22 July 2026)
2.50p 2.20p 1,385 1,296
09 Investments
As at 31 January 2026
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Securities
Listed equities 179,134 – – 179,134
Suspended equities* – – – –
Unlisted equities – – 24,992 24,992
Total financial asset investments 179,134 – 24,992 204,126
As at 31 January 2025
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
Securities
Listed equities 144,059 – – 144,059
Suspended equities* – – 194 194
Unlisted equities – – 14,429 14,429
Total financial asset investments 144,059 – 14,623 158,682
Investments in securities are financial assets held 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.
* New Horizon Health was a Listed equity from 1 February 2024 until suspension on 28 March 2024.
Financial report
Annual Report and Financial Statements 2026
104
09 Investments (continued)
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 page 98. The Company’s unlisted
ordinary share investments at 31 January 2026 were valued using the market approach using the price of recent transaction.
Asensitivity analysis of the unlisted securities is on page 110.
Significant Holdings Disclosure Requirements – AIC SORP
Details are disclosed below in accordance with the requirements of paragraph 82 of the AIC Statement of Recommended Practice
‘Financial Statements of Investment Trust Companies and Venture Capital Trusts’ (updated in July 2022) in relation to unlisted
investments included in the ten largest holdings disclosed on page 55. As required, this disclosure includes turnover, pre-tax profits
and net assets attributable to investors, as reported within the most recently audited financial statements of the investee companies
where possible.
As at
31 January 2026
Latest
Financial
Statements
Book
cost
£’000
Market
value
£’000
Income
recognised
from holding
in the period
£’000
Turnover
(£‘000)
Pre-tax
profit/
(loss)
(£‘000)
Net assets
attributable to
shareholders
(£‘000)Name Business
ByteDance Social Media n/a 8,212 21,349 Nil Information not publicly available*
As at
31 January 2025
Latest
Financial
Statements
Book
cost
£’000
Market
value
£’000
Income
recognised
from holding
in the period
£’000
Turnover
(£‘000)
Pre-tax
profit/
(loss)
(£‘000)
Net assets
attributable to
shareholders
(£‘000)Name Business
ByteDance Social Media n/a 8,212 14,429 Nil Information not publicly available*
* Confidentiality agreements prevent the disclosure of this information.
Listed
equities
£’000
Suspended
equities
£’000
Unlisted
equities *
£’000
Total
£’000
Cost of investments held at 1 February 2025 182,095 1,515 8,212 191,822
Unrealised holding (losses)/gains at 1 February 2025 (38,036) (1,321) 6,217 (33,140)
Value of investments held at 1 February 2025 144,059 194 14,429 158,682
Analysis of transactions during the year:
Purchases at cost 38,659 – 3,697 42,356
Sales proceeds received (46,343) – – (46,343)
Realised losses on sales (9,188) – – (9,188)
Changes in investment holding gains/(losses) 51,947 (194) 6,866 58,619
Value of investments held at 31 January 2026 179,134 – 24,992 204,126
Cost of investments held at 31 January 2026 165,223 1,515 11,909 178,647
Investment holding (losses)/gains at 31 January 2026 13,911 (1,515) 13,083 25,479
Value of investments at 31 January 2026 179,134 – 24,992 204,126
* The unlisted security investments represent holdings in ByteDance and RedNote.
105
Baillie Gifford China Growth Trust plc
09 Investments (continued)
The company received £46,343,000 (2025 – £37,421,000) from investments sold in the year. The book cost of these investments
when they were purchased was £55,531,000 (2025 – £60,565,000). These investments have been revalued over time and until
they were sold any unrealised gains/losses were included in the fair value of the investments. The purchases and sales proceeds
figures above include transaction costs of £59,000 (2025 – £35,000) and £58,000 (2025 – £47,000) respectively.
2026
£’000
2025
£’000
Net gains on investments
Losses on sales (9,188) (23,144)
Changes in investment holding gains 58,619 63,212
49,431 40,068
10 Debtors
2026
£’000
2025
£’000
Due within one year:
Accrued income and prepaid expenses 156 40
156 40
None of the above debtors are investments classified as held at fair value through profit or loss. The carrying amount of debtors
isa reasonable approximation of fair value.
11 Creditors – amounts falling due within one year
2026
£’000
2025
£’000
The Royal Bank of Scotland (International) Limited loan 7,74 5 6,094
Investment management fee
334 261
Other creditors and accruals 276 243
8,355 6,598
None of the above creditors are financial liabilities held at fair value through profit or loss. At 31 January 2026 borrowings of
£7.7 m (US$10.6 million) (2025 – £6.1 million (US$7.5 million)) were drawn down under a two year US$25 million revolving credit
facility with The Royal Bank of Scotland (International) Limited with a maturity date of 11 April 2026. The main covenants relating
to the current facility are:
i. The consolidated gross borrowings shall not exceed 30% of the Company’s adjusted portfolio value;
ii. The Company’s adjusted portfolio value is not less than £50,000,000; and
iii. Eligible investments held shall not be less than 40 in number.
12 Share capital
2026
Number
2026
£’000
2025
Number
2025
£000
Allotted, called up and fully paid ordinary shares of 25p each 57,367,461 14,342 59,095,680 14,774
Treasury shares of 25p each 10,980,690 2,745 9,252,471 2,313
Total 68,348,151 17,087 68,348,151 17,087
In the year to 31 January 2026 no shares were issued from treasury (2025 – no shares were issued from treasury). 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 31 January 2026 the
Company had authority to buy back 7,572,490 ordinary shares. During the year to 31 January 2026, no ordinary shares (2025 –
nil) were bought back for cancellation and 1,728,219 ordinary shares (2025 – 2,756,602) were bought back into treasury. Under
the provisions of the Company’s Articles of Association share buy-backs are funded from the capital reserve.
Financial report
Annual Report and Financial Statements 2026
106
13 Capital and reserves
Share
capital
£’000
Share
premium
account
£’000
Distributable
capital
reserve
£’000
Capital
redemption
reserve
£’000
Capital
reserve
realised
£’000
Capital
reserve
unrealised
£’000
Revenue
reserve
£’000
Shareholders’
funds
£’000
At 1 February 2025 17,087 31,780 – 41,085 89,391 (33,237) 6,993 153,099
Cancellation of share
premium account
– (31,780) 31,780 – – – – –
Net losses on sales
of investments
– – – – (9,188) – – (9,188)
Changes in investment
holding gains
– – – – – 58,619 – 58,619
Exchange differences – – – – (156) – – (156)
Exchange differences
on bank loans
– – – – – 801 – 801
Ordinary shares
bought back
– – – – (4,759) – – (4,759)
Investment management
fee charged to capital
– – – – (926) – – (926)
Finance costs of borrowings
charged to capital
– – – – (339) – – (339)
Dividends paid in year – – – – – – (1,290) (1,290)
Revenue return after
taxation
– – – – – – 1,734 1,734
At 31 January 2026 17,087 – 31,780 41,085 74,023 26,183 7, 4 37 197,595
Share
capital
£’000
Share
premium
account
£’000
Capital
redemption
reserve
£’000
Capital
reserve
realised
£’000
Capital
reserve
unrealised
£’000
Revenue
reserve
£’000
Shareholders’
funds
£’000
At 1 February 2024 17,087 31,780 41,085 119,089 (96,314) 6,684 119,411
Net losses on sales
of investments
– – – (23,144) – – (23,144)
Changes in investment
holding gains
– – – – 63,212 – 63,212
Exchange differences – – – 140 – – 140
Exchange differences
on bank loans
– – – (6) (135) – (141)
Ordinary shares
bought back
– – – (5,503) – – (5,503)
Investment management
fee charged to capital
– – – (737) – – (737)
Finance costs of borrowings
charged to capital
– – – (448) – – (448)
Dividends paid in year – – – – – (1,220) (1,220)
Revenue return after
taxation
– – – – – 1,529 1,529
At 31 January 2025 17,087 31,780 41,085 89,391 (33,237) 6,993 153,099
The capital reserve as at 31 January 2026 is £100,206,000 (2025 – £56,154,000) and is shown in the above table as capital
reserve realised £74,023,000 (2025 – £89,391,000) and capital reserve unrealised £26,183,000 (2025 – (£33,237,000)). The
capital reserve unrealised includes investment holding gains of£25,479,000 (2025 – losses of £33,140,000).
Under the terms of the Company’s Articles of Association, sums standing to the credit of the realised capital reserve are available
for distribution only by way of redemption, purchase of any of the Company’s own shares or by way of dividend.
The revenue reserve, distributable capital reserve and the capital reserve realised in the table above, are distributable. The share
premium account and the capital redemption reserve in the table above, are not distributable.
On 19 August 2025 The Court of Session approved the cancellation of the amount standing to the credit of the Company’s share
premium account and the crediting of an equivalent amount to the Company’s Distributable Capital Reserve. The Court Order
became effective when it was filed with the Registrar of Companies on 22 August 2025.
107
Baillie Gifford China Growth Trust plc
14 Shareholders’ funds per ordinary share
2026 2025 2026
£’000
2025
£’000
Shareholders’ funds 344.44p 259.07p 197,595 153,099
Net asset value per ordinary share is based on the net assets as shown above and 57,367,461 (2025 – 59,095,680) ordinary
shares, being the number of ordinary shares in issue at the year end, excluding shares held in treasury. At 31 January 2026 all
borrowings were in the form of short term floating rate borrowings and their fair value is considered equal to their book value,
hence there is no difference in the net asset value per share between including debt at book, or fair value, in the calculation.
15 Analysis of change in net debt
1 February
2025
£’000
Cash flows
£’000
Exchange
movement
£’000
31 January
2026
£’000
Cash and cash equivalents 975 849 (156) 1,668
Loans due within one year (6,094) (2,452) 801 (7,745)
(5,119) (1,603) 645 (6,077)
1 February
2024
£’000
Cash flows
£’000
Exchange
movement
£’000
31 January
2025
£’000
Cash and cash equivalents 926 (91) 140 975
Loans due within one year (5,890) (63) (141) (6,094)
(4,964) (154) (1) (5,119)
16 Contingent liabilities, guarantees and financial commitments
There were no contingent liabilities, guarantees or financial commitments at the year end (2025 – none).
17 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 78 to 81. 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 BaillieGifford & Co Limited is set out in note 3 on page 101 and the amount accrued is set out in
note11 on page 105. Details of the Investment Management Agreement are set out on pages 63 and 64.
18 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 MSCI China All Shares Index (in sterling terms). 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 accountingyear.
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, interest rate risk and market price risk. The Board
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 55 to 57.
Financial report
Annual Report and Financial Statements 2026
108
18 Financial instruments (continued)
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.
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, or, for unlisted investments, denominated, is shown below.
At 31 January 2026
Investments
£’000
Cash and
deposits
£’000
Bank loans
£’000
Debtors
and creditors
£’000
Net
exposure
£’000
US dollar 34,740 1,614 – – 36,354
Hong Kong dollar 119,107 – (7,745) – 111,362
Chinese renminbi 49,487 17 – – 49,504
Taiwanese dollar 792 17 – – 809
Total exposure to currency risk 204,126 1,648 (7,745) – 198,029
Sterling – 20 – (454) (434)
204,126 1,668 (7,745) (454) 197,595
At 31 January 2025
Investments
£’000
Cash and
deposits
£’000
Bank loans
£’000
Debtors
and creditors
£’000
Net
exposure
£’000
US dollar 21,247 895 – – 22,142
Hong Kong dollar 85,169 – (6,094) (84) 78,991
Chinese renminbi 51,029 49 – – 51,078
Taiwanese dollar 1,237 11 – – 1,248
Total exposure to currency risk 158,682 955 (6,094) (84) 153,459
Sterling – 20 – (380) (360)
158,682 975 (6,094) (464) 153,099
Currency Risk Sensitivity
At 31 January 2026, if sterling had strengthened by 10% in relation to all currencies, with all other variables held constant, total
net assets and total return on ordinary activities would have decreased by the amounts shown below. A 10% 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 2025.
2026
£’000
2025
£’000
US dollar 3,635 2,214
Hong Kong dollar 11,136 7,899
Chinese renminbi 4,950 5,108
Taiwanese dollar 81 125
19,802 15,346
109
Baillie Gifford China Growth Trust plc
18 Financial instruments (continued)
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. 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 31 January 2026, the majority of the Company’s assets were non-interest bearing, and there was exposure to
interest bearing liabilities through the loan agreement.
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 risk profile of the Company’s financial liabilities and the maturity profile of the undiscounted future cash flows in
respect of the Company’s contractual financial liabilities at 31 January are shown below:
Interest rate risk profile
The interest rate risk profile of the Company’s financial liabilities at 31 January was:
2026
£’000
2025
£’000
Floating rate – HKD denominated 7,74 5 6,094
7,74 5 6,094
Maturity profile
The maturity profile of the Company’s financial liabilities at 31 January was:
2026
£’000
2025
£’000
In less than three months
Repayment of loans 7,74 5 6,094
Interest on loan 102 84
7, 847 6,178
Interest rate risk sensitivity
An increase of 1% in interest rates, with all other variables being held constant, would have decreased the Company’s net assets
for the year to 31 January 2026 by £70,000 (year to 31 January 2025 – £63,000). A decrease of 1% would have had an equal but
opposite effect.
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 9.
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.
Financial report
Annual Report and Financial Statements 2026
110
18 Financial instruments (continued)
Other price risk sensitivity – unlisted
A full list of the Company’s investments is shown on pages 55 to 57.
87.8% (2025 – 90.8%) of the Company’s net assets are invested in Level 1 quoted equities. A 10% increase in quoted equity
valuations at 31 January 2026 would have increased total net assets and net return on ordinary activities after taxation by
£17,913,000 (2025 – £14,425,000 ). A decrease of 10% would have had an equal but opposite effect.
12.2% (2025 – 9.1%) of the Company’s net assets are invested in unlisted securities. A 25% increase in the fair value at 31 January
2026 would have increased total net assets and net return on ordinary activities after taxation by £6,248,000 (2025 – £3,607,000).
A decrease of 25% would have had an equal but opposite effect. The fair valuation of the unlisted investment is influenced by the
estimates, assumptions and judgements made in the fair valuation process (see 1(b) on pages 98 and 99). 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. Thetable also provides the range of values for the key
unobservable inputs.
As at
31 January 2026 Significant unobservable inputs*
Valuation
technique
Fair value of
investments
£’000
Key
unobservable
inputs
Other
unobservable
inputs Range
Sensitivity
%
Sensitivity to changes in
significant unobservable inputs
Recent
transaction price
24,992 n/a a,b n/a 10% If EV/LTM multiples changed by
+/- 10%, the fair value would
change by £2,499,270 and
(£2,499,270)
As at
31 January 2025 Significant unobservable inputs*
Valuation
technique
Fair value of
investments
£’000
Key
unobservable
inputs
Other
unobservable
inputs Range
Sensitivity
%
Sensitivity to changes in
significant unobservable inputs
Market approach
using comparable
traded multiples
14,429 Enterprise
value /
Last twelve
months ( EV/
LTM) revenue
multiple
a,b,c,d 1.3x – 9.9x 10% If EV/LTM multiples changed by
+/- 10%, the fair value would
change by £1,151,741 and
(£1,388,422)
Discount for
lack of liquidity
e 10% 10% If the illiquidity discount is
changed by +/- 10%, the fair
value would change by £160,445
and (£160,212)
* 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 99.
111
Baillie Gifford China Growth Trust plc
18 Financial instruments (continued)
Significant unobservable inputs (continued)
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, 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.
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
orshare 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 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.
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 that the majority of the investments held are substantial companies with some secondary market activity.
Liquidity risk
This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities as they
falldue. Liquidity risk is not significant as the majority of the Company’s assets are in investments that are readily realisable.
TheCompany’s holdings in unlisted investments, which is not considered to be readily realisable, amounts to 12.2% of net assets
at 31 January 2026.
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 109.
Financial report
Annual Report and Financial Statements 2026
112
18 Financial instruments (continued)
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 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 Bank of New York Mellon
(International) Limited. 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.
Credit risk exposure
The exposure to credit risk at 31 January was:
2026
£’000
2025
£’000
Debtors 156 40
Cash and cash equivalents 1,668 975
1,824 1,015
None of the Company’s financial assets are past due or impaired.
Fair value of financial assets and financial liabilities
The Company’s investments are stated at fair value and the Directors are of the opinion that the reported values of the Company’s
other financial assets and liabilities approximate to fair value.
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 11 on page 105. The Company does not have any externally imposed capital requirements other
than the covenants on its loan which are detailed in note 11. The capital of the Company is the ordinary share capital as detailed in
note 12. It is managed in accordance with its Investment Policy in pursuit of its investment objective, both of which are detailed on
pages 32 and 33 and shares may be repurchased or issued as explained on page 105.
Shareholder
information
Shareholder information
Annual Report and Financial Statements 2026
114
Notice of Annual
General Meeting
The Annual General Meeting of BaillieGifford
ChinaGrowth Trust plc will be held at 1 MoorgatePl,
City of London, London, EC2R 6EA on Wednesday
27May 2026, at 2pm. Youwill find directions to the
venue by scanning theQR code above. The Portfolio
Managers responsible for Baillie Gifford China
Growth Trust plc will give a short presentation on the
investment outlook.
To accurately reflect the views of shareholders of
theCompany, the Board intends to hold the AGM
voting on a poll.
The Board encourages all shareholders to
submitproxy voting forms as soon as possible
and,in any event, by no later than 2pm on
Monday25May 2026.
Should shareholders have questions for the
Boardorthe Managers or any queries as to how
tovote orhow to attend the meeting they are
welcome asalways to submit them by email to
enquiries@bailliegifford.com or call 08009172113.
BaillieGifford 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-vote-
your-shares.
Moorgate
Moorgate
Copthall Ave
Throgmorton Ave
Finsbury
Moorgate
Circus
London Wall
London Wall
Basinghall Ave
1 Moorgate Pl
City of London
London
EC2R 6EA
115
Baillie Gifford China Growth Trust plc
Notice is hereby given that an Annual General
Meeting of BaillieGifford China Growth Trust plc will
be held at 1 Moorgate Pl, City of London, London,
EC2R 6EA on Wednesday 27 May 2026, at 2pm for
the following purposes.
To consider and, if thought fit, to pass the following
Resolutions as Ordinary Resolutions.
01. To receive and adopt the Financial Statements
of the Company for the year to 31 January 2026
with the Reports of the Directors and of the
Independent Auditor thereon.
02. To approve the Directors’ Remuneration Policy.
03. To receive and approve the Directors’ Annual
Report on Remuneration for the year to
31January 2026.
04. To declare a final dividend of 2.50p per ordinary
share.
05. To re-elect Nicholas Pink as a Director of the
Company.
06. To re-elect Tim Clissold as a Director of the
Company.
07. To re-elect Magdalene Miller as a Director of the
Company.
08. To re-elect Jonathan Silver as a Director of the
Company.
09. To re-elect Sarah MacAulay as a Director of the
Company.
10. To re-appoint Ernst & Young 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.
11. To authorise the Directors to determine the
remuneration of the Independent Auditor of the
Company.
12. 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 £4,615,260, 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
13 and 14 as Special Resolutions.
Shareholder information
Annual Report and Financial Statements 2026
116
13. That, subject to the passing of Resolution 12
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 12 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:
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
b. shall be limited to the allotment of equity
securities or the sale of treasury shares up
to an aggregate nominal value of £1,384,577,
being approximately 10% of the nominal value
of the issued share capital of the Company, as
at 26 March 2026.
14. 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 25 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:
a. the maximum aggregate number of ordinary
shares hereby authorised to be purchased is
8,301,929, 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;
b. the minimum price (excluding expenses) which
may be paid for each ordinary share shall be
the nominal value of that share;
c. the maximum price (excluding expenses)
which may be paid for each ordinary share
shall not be more than the higher of:
i. 5% 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. an amount equal to the higher of the price
of the last independent trade of an ordinary
share and the highest current independent
bid for an ordinary share on the trading
venue where the purchase is carried out;
and
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 31 January 2027, 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.
By order of the Board
BaillieGifford & Co Limited
Managers and Secretaries
31 March 2026
117
Baillie Gifford China Growth Trust plc
Notes
01. 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.
02. 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 eproxyappointment.com no later
than 2 days (excluding non-working days)
before the time of the meeting or any adjourned
meeting.
03. 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 appropriate action
on their behalf.
04. 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 2 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.
05. 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.
Shareholder information
Annual Report and Financial Statements 2026
118
06. 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.
07. The return of a completed proxy form or
otherinstrument of proxy will not prevent
youattending the AGM and voting in person
ifyou wish.
08. 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 2 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.
09. 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.
10. 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.
11. 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:
a. the resolution must not, if passed,
be ineffective (whether by reason of
inconsistency with any enactment or the
Company’s constitution or otherwise);
b. the resolution must not be defamatory of any
person, frivolous or vexatious; and
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 15 April 2026.
12. 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
theCompany not later than Wednesday 15 April
2026. 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.
119
Baillie Gifford China Growth Trust plc
13. 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.
14. In order to be able to exercise the members’
rights in notes 11 to 13, the relevant request
must be made by:
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
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
enquiries@bailliegifford.com.
15. 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
bailliegiffordchinagrowthtrust.com.
16. All shareholders are strongly encouraged to
exercise your votes in respect of the AGM
in advance, and to appoint the Chair of the
Meeting as your proxy, to ensure that your
votes are counted. Furthermore, the Board
always welcomes questions from the Company’s
shareholders at the AGM and shareholders are
invited to submit their questions to the Board
in advance. The answers to these questions
will be posted on the Company’s page of the
Managers’ website after the AGM. Shareholders
should submit any questions they may have to
enquiries@bailliegifford.com before 20 May
2026.
17. As at 26 March 2026 (being the last practicable
day prior to the publication of this notice) the
Company’s issued share capital consisted
of 55,383,116 ordinary shares, carrying one
vote each. Therefore, the total voting rights
in the Company as at 26 March 2026 were
55,383,116 votes. Voting on the resolutions will
be conducted by way of a poll. This will ensure
an exact and definitive result.
18. Any person holding 3% or more of the total
voting rights of the Company who appoints
a person other than the Chair of the meeting
as his/her proxy will need to ensure that both
he/she and his/her proxy complies with their
respective disclosure obligations under the
UKDisclosure and Transparency Rules.
19. No Director has a contract of service with the
Company.
Shareholder information
Annual Report and Financial Statements 2026
120
BaillieGifford China 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 BaillieGifford China Growth
Trust, youcan 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 shares is quoted daily in the
Financial Times and can also be found on the
Company’s page of the Managers’ website at
bailliegiffordchinagrowthtrust.com, Trustnet at
trustnet.com and on other financial websites.
Company factsheets are also available on the
BaillieGifford website and are updated monthly.
These are available from BaillieGifford on request.
BaillieGifford China Growth Trust identifiers
ISIN GB0003656021
Sedol 0365602
Ticker BGCG
Legal Entity Identifier 213800KOK5G3XYI7ZX18
The ordinary shares of the Company are listed on
the London Stock Exchange.
Key dates
Ordinary shareholders normally receive a final
dividend in respect of each financial year, paid in
July. The Annual Report and Financial Statements
are normally issued in April and the AGM is normally
held in June.
Share register enquiries
Computershare Investor Services PLC maintains
theshare register on behalf of the Company.
Intheevent of queries regarding shares registered
in your own name, please contact the registrars
on 0370 707 1410. This helpline also offers an
automated self-service functionality (available
24hours a day, 7 days a week) which allows you to:
• hear the latest share price;
• confirm your current share holding balance;
• confirm your payment history; 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;
• register to receive communications from the
Company, including the Annual Report and
Financial Statements, in electronic format;
• update bank mandates and change address
details; and
• use online dealing services.
Further shareholder
information
121
Baillie Gifford China Growth Trust plc
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 707 1410.
CREST proxy voting
If you are a user of the CREST system (including
aCREST Personal Member), you may appoint
one ormore proxies or give an instruction to a
proxy byhaving an appropriate CREST message
transmitted. For further information please refer
tothe CREST Manual.
UK Alternative Investment Fund Managers
(‘AIFM’) Regulations
In accordance with the AIFM Regulations,
informationin relation to the Company’s leverage
andthe remuneration of the Company’s AIFM,
BaillieGifford & Co Limited, is required to be
made available to investors. In accordance with
the Regulations, the AIFM remuneration policy
is available at bailliegifford.com or on request
(see contact details on page 129). 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
(seeGlossary of terms and alternative
performancemeasures on pages 126 to 128)
levelsat 31 January 2026 are shown below:
Gross method
Commitment
method
Maximum limit 2.50:1 2.00:1
Actual 1.03:8 1.03:9
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, BaillieGifford China Growth
Trust will have to provide information annually to the
local tax authority on the tax residencies of a number
of non-UK basedcertificated shareholders and
corporateentities.
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
ofcollecting this information.
For further information, please see HMRC’s
QuickGuide: Automatic Exchange of
Information – information for account holders
gov.uk/government/publications/exchange-of-
information-account-holders.
Data protection
The Company is committed to ensuring the
confidentiality and security of any personal data
provided to it. Further details on how personal data is
held and processed on behalf of the Company can be
found in the privacy policy available on the Company’s
website bailliegiffordchinagrowthtrust.com.
Shareholder information
Annual Report and Financial Statements 2026
122
Communicating
with shareholders
Trust magazine BaillieGifford China Growth Trust web page at
bailliegiffordchinagrowthtrust.com
Trust magazine
Trust is the BaillieGifford 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 BaillieGifford,
including BaillieGifford China Growth Trust.
Trustplays an important role in helping to explain
our products so that readers can really understand
them. For a copy of Trust, please contact the
BaillieGiffordClient Relations Team (see contact
details on page 129).
You can subscribe to Trust magazine or view a
digitalcopy at bailliegifford.com/trust
Suggestions and questions
Any suggestions on how communications with
shareholders can be improved are welcomed, so
please contact the BaillieGifford Client Relations
Team and give them your suggestions. They will also
be very happy to answer questions that you may
have about BaillieGifford China Growth Trust.
BaillieGifford China Growth Trust on the web
Up-to-date information about BaillieGifford
China Growth Trust is available on the
Company’s page of the Managers’ website at
bailliegiffordchinagrowthtrust.com. You will find full
details of the Company, including recent portfolio
information and performance figures.
Client relations team contact details
You can contact the BaillieGifford Client Relations
Team by telephone, email or post:
Telephone: 0800 917 2113
Your call may be recorded for training or monitoring
purposes.
Email: enquiries@bailliegifford.com
Website: bailliegifford.com
Address:
BaillieGifford Client Relations Team
Calton Square
1 Greenside Row
Edinburgh EH1 3AN
Please note that BaillieGifford is not permitted
to give financial advice. If you would like advice,
please ask an authorised intermediary.
123
Baillie Gifford China Growth Trust plc
One world,
two growth engines
by Qian Zhang
Going beneath the bonnet of the
world’s two great generators of growth
opportunity.
Tencent:
Stock Story
Fernanda Lai
Fernanda Lai explores how Tencent
became the super-app pioneer connecting
over one billion users.
Shanghai, Shenzhen,
Beijing
by Sophie Earnshaw
On the road with the board and managers
of China Growth Trust.
Insights
Shareholder information
Annual Report and Financial Statements 2026
124
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.
NoProvider 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.
MSCI index data
The MSCI information may only be used for
your internal use, may not be reproduced or
redisseminated in any form and may not be used
as a basis for or a component of any financial
instruments or products or indices. None of the MSCI
information is intended to constitute investment
advice or a recommendation to make (or refrain from
making) any kind of investment decision and may
not be relied on as such. Historical data and analysis
should not be taken as an indication or guarantee
of any future performance analysis, forecast or
prediction. The MSCI information is provided on an
‘as is’ basis and the user of this information assumes
the entire risk of any use made of this information.
MSCI, each of its affiliates and each other person
involved in or related to compiling, computing or
creating any MSCI information (collectively, the
‘MSCI Parties’) expressly disclaims all warranties
(including, without limitation, any warranties of
originality, accuracy, completeness, timeliness,
non-infringement, merchantability and fitness for a
particular purpose) with respect to this information.
Without limiting any of the foregoing, in no event
shall any MSCI Party have any liability for any direct,
indirect, special, incidental, punitive, consequential
(including, without limitation, lost profits) or any
other damages (msci.com).
125
Baillie Gifford China Growth Trust plc
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 BaillieGifford China
Growth Trust is marketed in the EU by the AIFM,
BaillieGifford & 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 BaillieGifford & Co’s
stewardship principles and guidelines as its
policyonintegration of sustainability risks in
investment decisions.
BaillieGifford & 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.
BaillieGifford & 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
Sustainable Finance Disclosure
Regulation (‘SFDR’)
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.
BaillieGifford & 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 Investment Managers’ approach
to sustainability can be found in the ESG Principles
and Guidelines document, available publicly on the
BaillieGifford 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.
Shareholder information
Annual Report and Financial Statements 2026
126
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
intheapplicable financial reporting framework. The APMs noted below are commonly used measures
withinthe investment trust industry and serve to improve comparability between investment trusts.
The APMs are presented in Pounds Sterling rounded to the nearest thousand, except where otherwise
indicated.
Total adjusted 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.
Net asset value
Net asset value is the value of total assets less liabilities (including borrowings). 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 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 per share 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.
2026 2025
Closing NAV (a) 344.44p 259.07p
Closing share price (b) 319.00p 232.00p
Discount
((b) – (a)) ÷ (a)
(7.4%) (10.4%)
127
Baillie Gifford China Growth Trust plc
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.
2026
NAV
2026
Share price
2025
NAV
2025
Share price
Closing NAV per share/share price (a) 344.44p 319.00p
259.07p
232.00p
Dividend adjustment factor* (b) 1.008036 1.009167 1.008783 1.009852
Adjusted closing NAV per share/share price (c) = (a) x (b) 3 47. 21p 321.92p 261.35p 234.29p
Opening NAV per share/share price (d) 259.07p 232.00p 193.06p 181.00p
Total return (c) ÷ (d) -1 34.0% 38.8% 35.4% 29.4%
*
The dividend adjustment factor is calculated on the assumption that the dividend of 2.20p (2025 – 2.00p) paid by the Company during the year was
reinvested into shares of the Company at the cum income NAV/share price, as appropriate, at the ex-dividend date.
Ongoing charges (APM)
The total expenses (excluding borrowing costs) incurred by the Company as a percentage of the average
net asset 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 94 is provided below.
2026 2025
Investment management fee £1,235,000 £983,000
Other administrative expenses £671,000 £584,000
Total expenses (a) £1,906,000 £1,567,000
Average daily cum-income net asset value (b) £179,418,000 £139,358,000
Ongoing charges
((a) ÷ (b) expressed as a percentage)
1.06% 1.12%
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 and cash equivalents expressed as a percentage of
shareholders’ funds.
Gross gearing is the Company’s borrowings expressed as a percentage of shareholders’ funds.
2026 2025
Gearing *
£’000
Gross
Gearing
†
£’000
Gearing *
£’000
Gross
Gearing
†
£’000
Borrowings (a) 7,74 5 7, 74 5
6,094 6,094
Cash and cash equivalents (b) 1,668 – 975 –
Shareholders’ funds (c) 197,595 197,595 153,099 153,099
3.1% 3.9% 3.3% 4.0%
* Gearing: ((a)–(b)) divided by (c), expressed as a percentage.
† Gross gearing: (a) divided by (c), expressed as a percentage.
Shareholder information
Annual Report and Financial Statements 2026
128
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.
Unlisted (Private) Company
An unlisted (private) company means a company whose shares are not available to the general public for
trading and not listed on a stock exchange.
Variable Interest Entity (‘VIE’)
VIE structures are used by some Chinese companies to facilitate access to foreign investors in sectors
oftheChinese domestic economy which prohibit foreign ownership. The purpose of the VIE structure is
togive the economic benefits and operational control of ownership without direct equity ownership itself.
The structures are bound together by contracts and foreign investors are not directly invested in the
underlying company.
Treasury shares
The Company has the authority to make market purchases of its ordinary shares for retention as treasury
shares for future reissue, resale, transfer or for cancellation. Treasury shares do not receive distributions
and the Company is not entitled to exercise the voting rights attaching to them.
129
Baillie Gifford China Growth Trust plc
Directors
Chair: Nicholas Pink
Tim Clissold
Sarah MacAulay
Magdalene Miller
Jonathan Silver
Alternative Investment Fund
Managers, Secretaries and
Registered office
BaillieGifford & Co Limited
3 St Helen’s Place
London EC3A 6AB
T: +44 (0)131 275 2000
bailliegifford.com
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
T: +44 (0)370 707 1410
Depositary and Custodian
Bank of New York Mellon
(International) Limited
160 Queen Victoria Street
London EC4V 4LA
Company Broker
JP Morgan Cazenove
25 Bank Street
Canary Wharf
London E14 5JP
Independent Auditor
Ernst & Young LLP
Chartered Accountants
and Statutory Auditors
25 Churchill Place
London E14 5EY
Further information
Client Relations Team
BaillieGifford & Co
Calton Square
1 Greenside Row
Edinburgh EH1 3AN
T: +44 (0)800 917 2113
enquiries@bailliegifford.com
Company details
bailliegiffordchinagrowthtrust.com
Company Registration No. 91798
ISIN: GB0003656021
Sedol: 0365602
Ticker: BGCG
Legal Entity Identifier:
213800KOK5G3XYI7ZX18
Company
information
Calton Square, 1 Greenside Row, Edinburgh EH1 3AN
Telephone +44 (0)131 275 2000
bailliegiffordchinagrowthtrust.com