## BAILLIE GIFFORD
## US GROWTH TRUST plc
## In search of
## exceptional growth
## Annual Report and Financial Statements
## 31 May 2023
### Baillie Gifford US Growth Trust plc seeks to invest
### predominantly in listed and unlisted US companies
### which the Company believes have the potential to grow
### substantially faster than the average company, and to
### hold onto them for long periods of time, in order to
### produce long-term capital growth.
### Contents
Strategic Report Financial Report
 Summary of Results  Independent Auditor’s Report
 Chairman’s Statement  Income Statement
 Business Review  Balance Sheet
 Managers’ Review  Statement of Changes in Equity
 Valuing Private Companies  Cash Flow Statement
 Investment Principles  Notes to the Financial Statements
 Baillie Gifford Statement on Stewardship Shareholder Information
and Stewardship Principles
 Notice of Annual General Meeting
 Purposeful Company Conversations
 Further Shareholder Information
 Review of Investments
 Analysis of Shareholders
 List of Investments
 Communicating with Shareholders
 Distribution of Total Assets
 Sustainable Finance Disclosures
 Private Companies Summary Regulation (‘SFDR’)
 Five Year Summary  Alternative Investment Fund Managers
Regulations
 Summary of Results Since Inception
 Automatic Exchange of Information
Governance Report
 Third Party Data Provider Disclaimer
 Directors and Management
 Glossary of Terms and Alternative
 Directors’ Report
Performance Measures
 Corporate Governance Report
 Audit Committee Report
 Directors’ Remuneration Report
 Statement of Directors’ Responsibilities
in Respect of the Annual Report and
Financial Statements
### Investor Disclosure Document
The UK Alternative Investment Fund Managers Regulations requires certain information to be
made available to investors prior to their making an investment in the Company. The Company’s
Investor Disclosure Document is available for viewing at bgusgrowthtrust.com.
Notes
None of the views expressed in this document should be construed as advice to buy or sell a particular investment.
Investment trusts are UK public listed companies and as such comply with the requirements of the Financial Conduct
Authority. They are not authorised or regulated by the Financial Conduct Authority.
Baillie Gifford US 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
Financial Conduct Authority in relation to non-mainstream investment products.
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt as to the action you should take you should consult your stockbroker, bank manager, solicitor,


If you have sold or otherwise transferred all of your ordinary shares in Baillie Gifford US Growth Trust plc, please
forward this document, together with any 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.
Strategic Report
### Strategic Report
### This Strategic Report, which includes pages 1 to 28 and incorporates the Chairman’s
### Statement, has been prepared in accordance with the Companies Act 2006.
### Summary of Results *
### The following information illustrates how Baillie Gifford US Growth Trust plc performed over
### the year to 31 May 2023 and over the period from inception to 31 May 2023.
31 May 2023 31 May 2022 % change
Shareholders’ funds* £568.6m £584.2m

| Gearing | ‡ |  |  |  |  |  |  | 6% 6% |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Net asset value per ordinary share (after deducting borrowings at fair value) |  |  |  |  |  | ‡ | 186.48p 191.63p (2.7) |  |  |
| Net asset value per ordinary share (after deducting borrowings at book value) |  |  |  |  |  | * | 186.33p 191.44p (2.7) |  |  |
| Share price |  |  |  |  |  |  | 144.80p 168.00p (13.8) |  |  |
| Comparative index (in sterling terms) |  |  | †# |  |  |  |  |  | 4.7 |
| Ongoing charges |  | ‡ |  |  |  |  | 0.69% 0.62% |  |  |
| Discount (after deducting borrowings at fair value) |  |  |  |  | ‡ |  | 22.4% 12.3% |  |  |
| Discount (after deducting borrowings at book value) |  |  |  |  | ‡ |  | 22.3% 12.2% |  |  |
| Active share (relative to S&P 500 Index) |  |  |  | ‡ |  |  |  | 92% 93% |  |

Number of shares in issue 305,153,700 305,153,700
Market capitalisation £441.9m £512.7m

|  | For the |  | For the |
| --- | --- | --- | --- |
| year ended |  | year ended |  |
| 31 May 2023 |  | 31 May 2022 |  |

Revenue earnings per share (1.55p) (1.88p)
Year to 31 May 2023 Year to 31 May 2022
Period’s high and low High Low High Low
Share price 197.00p 132.80p 358.00p 146.00p
Net asset value per ordinary share
(after deducting borrowings at fair value) ‡ 223.16p 169.35p 360.20p 179.40p
Net asset value per ordinary share

| (after deducting borrowings at book value) |  | * 222.91p 169.09p 360.19p 179.19p |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Premium/(discount) (after deducting borrowings at fair value) |  |  | ‡ | (9.7%) (23.7%) 7.5% (18.9%) |  |  |  |
| Premium/(discount) (after deducting borrowings at book value) |  |  | ‡ | (9.5%) (23.6%) 7.4% (18.8%) |  |  |  |
|  |  |  |  |  | 31 May 2023 23 March 2018 | ¶ | % change |
| Performance since inception | ¶ |  |  |  |  |  |  |

Share price 144.80p 100.50p 44.1
Net asset value per ordinary share (after deducting borrowings at fair value) ‡ 186.48p 97.96p 90.4
Net asset value per ordinary share (after deducting borrowings at book value) * 186.33p 97.96p 90.2
Comparative index (in sterling terms) 102.0
*
† S&P 500 Index total return (in sterling terms). See disclaimer on page 75.
# 
‡ Alternative performance measure, see Glossary of Terms and Alternative Performance Measures on pages 76 and 77.
¶ 
Past performance is not a guide to future performance.
Baillie Gifford US Growth Trust plc 01
Strategic Report

## Chairman's Statement

![img-0.jpeg](img-0.jpeg)

Dear Shareholders

During the financial year to 31 May 2023, the Company's share price and net asset value total return, calculated by deducting borrowings at fair value, were -13.8% and -2.7% respectively. This compares with a total return of 4.7% for the S&P 500 Index* (in sterling terms). Over the period from 23 March 2018 (launch date and first trade date), the Company's share price and net asset value total return, calculated by deducting borrowings at fair value, returned 44.1% and 90.4% respectively compared to a total return of 102.0% for the S&P 500 Index* (in sterling terms).

Information about the Company's portfolio performance is covered by our portfolio managers, Gary Robinson and Kirsty Gibson, in their Managers' Review.

### Share Issuance and Buy-backs

The Company's shares moved from a discount of 12.3% last year to a discount of 22.4% at 31 May 2023 as sentiment continued to turn against the Company's growth investing style. Having bought back 2,206,300 shares, to be held in treasury, at a total cost of £3.6 million in May 2022 with limited impact on the discount, the Board took the decision to use the capital to invest in new growth opportunities instead. The Company issued no shares during the year to 31 May 2023.

The Board regularly reviews the Company's liquidity policy and it is a key discussion point at Board meetings. The Board acknowledges the discount is a challenge to many shareholders but notes that, from the data provided to the Board, there continues to be natural buyers of the Company's shares in the market.

As at 31 May 2023, the Company had authority, which was granted at the 2022 Annual General Meeting, to issue a further 30.5 million shares and to buy-back a further 45.7 million shares. These authorities expire in September 2023. The Company will be seeking to renew both the issuance and buy-back authorities at the forthcoming Annual General Meeting.

Since the year end and as we enter our sixth year of business, the Board concluded it would be timely to review our broking arrangements. After meeting with several suitable firms, the Board have agreed that we will be best supported by the specialist team at Panmure Gordon (UK) Limited going forward. We are grateful to Investec for their work on our behalf since IPO.

### Gearing

The Company had two loan facilities in place with ING Bank N.V., London Branch, throughout the year to 31 May 2023. The first was a US$25 million five-year revolving credit facility which expired on 31 July 2023 and the second is a US$25 million three-year fixed rate facility which expires on 23 October 2023. The facilities are available to be used to fund purchases of securities as and when suitable opportunities arise. As at 31 May 2023, the facilities had been drawn down in full (31 May 2022 – US$50 million). Net gearing stayed at 6% over the course of the year. Subsequent to the year end on, 26 July 2023 the US$25 million five-year revolving credit facility was refinanced with a US$25 million three-year revolving credit facility from ING Bank N.V., London Branch.

### Earnings and Dividend

The Company's priority is to generate capital growth over the long term. The Company therefore has no dividend target and will not seek to provide shareholders with a particular level of dividend. The net revenue return per share for the year to 31 May 2023 was a negative 1.55p (year to 31 May 2022 – a negative 1.88p). As the revenue account is again running at a deficit, the Board is recommending that no final dividend be paid. Should the level of underlying income increase in future years, the Board will seek to distribute the minimum permissible to maintain investment trust status by way of a final dividend.

### Private Company (Unlisted) Investments

As at the Company's year end, the portfolio weighting in private company (unlisted) investments stood at 34.5% of total assets, invested in twenty-five companies (2022 – 36.4% invested in twenty-four companies). There was one new private company purchase in the year, Oddity. There is commentary on the new and existing holdings in the Managers' Review and Review of Investments on pages 10 to 20. Your portfolio managers remain alert to further special and high potential opportunities not widely accessible through public markets. In respect of the valuation process, the private company (unlisted) investments continue to be revalued on a three-month rolling cycle which is overseen by the valuations group at Baillie Gifford who take advice from an independent third party, S&P Global. As a Board we continue to scrutinise and challenge the Managers on the valuation of the private company (unlisted) investments. They are also subject to the scrutiny of the external auditor on an annual basis. More detail on this process can be found on page 14.

* Source: Refinitiv and relevant underlying index providers. See disclaimer on page 75.

For a definition of terms see Glossary of Terms and Alternative Performance Measures on pages 76 and 77.

Past performance is not a guide to future performance.

02 Annual Report 2023
Strategic Report

The Company’s Managers believe that sustainability is inextricably
linked to being a long-term investor, and their thoughts on this topic
are set out in more detail on pages 16 and 17. The Managers’
pursuit of long-term growth opportunities typically involves
investment in entrepreneurial, disruptive and technology-driven
businesses. These companies are often capital-light with a low
carbon footprint.

The Annual General Meeting of the Company will be held at

18 September 2023. All shareholders are invited to attend,
and the Board looks forward to welcoming you. The meeting
will be followed by a presentation from the Managers.
I encourage shareholders to submit their votes by proxy before
the applicable deadline ahead of the meeting and to submit any
questions for the Board or Managers in advance by email to
trustenquiries@bailliegifford.com or by calling 0800 917 2112
(Baillie Gifford may record your call). In order to increase the
accessibility of the Annual General Meeting the Board plan to
hold the 2024 Annual General Meeting in London. Details of
how shareholders can watch this year’s Annual General Meeting
online can be found in the Notice of Annual General Meeting on
page 69.
Outlook

on both the opportunity and risks of growth investing against the
turbulent global backdrop that we have all been living through.
As I wrote last year’s statement, I’m certain that the optimist in
me was hoping that the market for growth companies would
have stabilised over the coming twelve months, but in general the
valuations of more predictable assets have fared better than the

My inner optimist remains, though I fear this coming year will
be equally hard to predict. That is not to say that our Managers
have not been able to make good progress – not least in getting
back to face-to-face engagement with the leadership of those
companies already held and those they have decided to research.
The Board continues to believe that the companies we hold are
very well placed to generate extremely attractive returns to

in our outlook.
Tom Burnet
Chairman
9 August 2023
Baillie Gifford US Growth Trust plc 03
Strategic Report
### Business Review
 With prior approval of the Board, the Company may use

Business and Status
(in order to reduce, transfer or eliminate investment risk in the
Baillie Gifford US Growth Trust plc (‘the Company’) is a public
Company’s portfolio). Derivative instruments in which the

Company may invest may include foreign exchange forwards,
Wales. The Company is an investment company within the
exchange-listed and over-the-counter options, futures, options
meaning of section 833 of the Companies Act 2006 and carries
on futures, swaps and similar instruments. The Board, however,
on business as an investment trust. Investment trusts are UK
currently does not expect to enter into derivative or hedging
public listed companies and their shares are traded on the
transactions to mitigate against currency or interest rate risk.

The Board intends to employ gearing in the normal course of

events. The Company may in aggregate borrow amounts
although, subject to shareholder approval, it may purchase its
equalling up to 30% of the net asset value of the listed securities
own shares or issue shares. The price of the Company’s shares
held by the Company, calculated at the time of drawdown,
is determined, like other listed shares, by supply and demand.
although the Board expects that borrowings will typically
The Company has been approved as an investment trust by
represent an amount in the range of 10% to 20% of the net
HM Revenue & Customs subject to the Company continuing to
asset value of the listed securities held by the Company.
meet the eligibility conditions. The Directors are of the opinion that
While it is intended that the Company will be fully invested
the Company has continued to conduct its affairs so as to enable
in normal market conditions, the Company may hold cash
it to comply with the ongoing requirements of section 1158 of the
on deposit or invest on a temporary basis in a range of cash
Corporation Tax Act 2010 and the Investment Trust (Approved
equivalent instruments. The Board does not expect that the
Company) (Tax) Regulations 2011.
Company will hold cash or cash equivalent instruments,
The Company is an Alternative Investment Fund for the purposes
but there is no restriction on the amount of cash or cash
of the UK Alternative Investment Fund Managers Regulations.
equivalent instruments that the Company may hold.
Purpose
Culture and Values
Baillie Gifford US Growth aims to deliver above average long-term
In the context of a company with no employees, culture and
returns for shareholders by keeping fees and costs low and
values are expressed by the Company’s Directors and the
harnessing the long-term growth potential of companies.
service providers with whom shareholders and other stakeholders
Objective and Policy interact, and through the relationships between the Board and
those service providers, including the Managers. As noted in
The Company’s investment objective is to produce long-term
more detail in the section 172 statement on pages 8 and 9 the
capital growth.
Board seeks to engage with its Managers and other service
The Company invests predominantly in equities of companies which
providers in a collaborative and collegiate manner, and to

maintain the highest standards of business conduct.
of their business, in the United States and which the Company
believes have the potential to grow substantially faster than the Dividend Policy
average company over the long term. Such investment is typically The Company’s priority is to produce capital growth over the
direct, but may be indirect, including through investment in funds. long term. The Company therefore has no dividend target and
will not seek to provide shareholders with a particular level of
The maximum direct investment in any one company or fund is
distribution. However, the Company intends to comply with the
limited to 10% of the Company’s total assets measured at the
requirements for maintaining investment trust status for the
time of investment.
purposes of section 1158 of the UK Corporation Tax Act 2010
The portfolio consists of direct holdings in listed securities and
(as amended) regarding distributable income. The Company
unlisted securities in up to a combined maximum of 90 companies
will therefore distribute amounts such that it does not retain, in
or funds, typically with 30 or more listed security holdings.
respect of an accounting period, an amount greater than 15%
The maximum amount which may be invested directly in unlisted
of its income (as calculated for UK tax purposes) for that period.
securities shall not exceed 50% of the total assets of the Company,

measured at the time of investment.

The Company will at all times be invested in several sectors.

sector, the Company will at all times invest and manage the
portfolio in a manner consistent with spreading investment risk.
04 Annual Report 2023
Strategic Report

## Liquidity 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 a material discount or premium to net asset value per share. While it has not adopted any formal discount or premium targets which would dictate the point at which the Company would seek to purchase shares or issue further shares, the Board is committed 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; the level of the Company's existing borrowings; and the working capital requirements of the Company. The Board, having assessed the impact of the shares bought back during the year to 31 May 2022, are of the view that in the current market environment it is not in the best interests of shareholders to continue buying back the Company's shares. The Board believes allowing the Managers to use the capital to invest in exciting growth opportunities is a more successful method of enhancing long term returns for shareholders. The Board will continue to monitor the discount and will amend the approach to discount management as and when market conditions require it and when it is in the Company's best interests to do so. The Board will keep shareholders appraised, on a regular and ongoing basis, of the approach which it has adopted in implementing this liquidity policy, principally through commentary in its Annual and Interim Reports.

**Share Buy-backs** – at the Annual General Meeting held on 16 September 2022 the Company was granted a general authority to make purchases of up to 45,742,539 shares, being approximately 14.99% of the issued ordinary share capital as at 5 August 2022. This authority expires at the forthcoming Annual General Meeting. In exercising the Company's power to buy back shares, the Board has complete discretion as to the timing, price and volume of shares so purchased. If the Company does purchase its own shares it may hold them in treasury rather than purchase them for cancellation. Shares may only be reissued from treasury at a price which, after issue costs, is not less than the net asset value per share at the relevant time.

All share repurchases are conducted in accordance with the Companies Act 2006 and the Listing Rules applicable to closed-ended investment funds from time to time and are announced to the market via a Regulatory Information System on the same or the following day.

No shares were bought back during the year under review. At 31 May 2023 2,206,300 shares were held in treasury.

The Directors are seeking shareholders' approval at the Annual General Meeting to renew the authority to purchase up to 14.99% of the ordinary shares in issue as at 4 August 2023, being the latest practicable date prior to the publication of this document or, if less, up to 14.99% of the ordinary shares in issue (excluding treasury shares) on the date on which the authority is granted, such authority to expire at the date of the Annual General Meeting in 2024. Such purchases will only be made at a discount to the prevailing net asset value. Any such shares which are bought back may be held in treasury and may subsequently then either be sold for cash or cancelled.

**Share Issuance** – the Directors will again be seeking authorities at the forthcoming Annual General Meeting for issuance and disapplication of pre-emption rights to sell any shares held in treasury and allot new shares at a premium to the net asset value per share with debt valued at fair value. These authorities will expire at the conclusion of the 2024 Annual General Meeting or on the expiry of 15 months from the passing of the resolutions, whichever is earlier. Should shareholder approval be granted it will allow the Directors to issue new ordinary shares at a premium to net asset value or C shares convertible into ordinary shares, in order to satisfy investor demand over the year should the Company be in a position to do so.

No new ordinary shares will be issued at a price which (after costs and expenses) is less than the net asset value per existing ordinary share at the time of the issue of the new shares, unless the new shares are first offered pro-rata to shareholders on a pre-emptive basis. C shares will be issued at a price of £1 per C share. As mentioned above, the Company has the authority to raise further funds through the issue of C shares rather than ordinary shares. C shares are designed to overcome the potential disadvantages that may arise out of a fixed price issue of further shares for cash. These disadvantages relate primarily to the effect that an injection of uninvested cash may have on the net asset value per ordinary share performance of an otherwise fully invested portfolio (commonly referred to as 'cash drag').

During the year to 31 May 2023, the Company issued no shares. Between 1 June 2023 and 4 August 2023 no shares were issued.

## Performance

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

## Key Performance Indicators

The key performance indicators ('KPIs') used to measure the progress and performance of the Company over time are established industry measures and are as follows:

- the movement in the net asset value per ordinary share;
- the movement in the share price;
- the movement of the net asset value and share price performance compared to the comparative index;
- the premium/discount of the share price to the net asset value per share; and
- the ongoing charges ratio.

Bailie Gifford US Growth Trust plc 05
Strategic Report
An explanation of these measures can be found in the Glossary of Private Company Investments – the Company’s risk could be
Terms and Alternative Performance Measures on pages 76 and 77. increased by its investment in private company securities. These

The KPIs for the year to 31 May 2023 and since inception,
prices may be greater than for listed investments. To mitigate this
28 March 2018, are shown on pages 1, 27 and 28.
risk, the Board considers the private company securities in the
In addition to the above, the Board considers peer group
context of the overall investment strategy and provides guidance
comparative performance.
to the Managers on the maximum exposure to private company
securities. The investment policy limits the amount which may be
Borrowings
invested in private company securities to 50% of the total assets
At 31 May 2023 the drawings were US$25 million under the
of the Company, measured at the time of investment.

Branch which expires on 31 July 2023 and US$25 million under Investment Strategy Risk – pursuing an investment strategy to
 
Branch which expires on 23 October 2023 (31 May 2022 – unattractive or inappropriate, or the ineffective implementation of
 an attractive or appropriate strategy, may lead to reduced returns
 for shareholders and, as a result, a decreased demand for the
notes 11 and 12 on page 60 for the sterling equivalent at each Company’s shares. This may lead to the Company’s shares
period end). Subsequent to the year end on 26 July 2023, the trading at a widening discount to their net asset value. To mitigate
expiring US$25 million revolving credit facility with ING Bank N.V. this risk, the Board regularly reviews and monitors the Company’s
 objective and investment policy and strategy, the investment
US$25 million from ING Bank N.V., London Branch. portfolio and its performance, the level of discount/premium to net
asset value at which the shares trade and movements in the share
Principal and Emerging Risks
register, and raises any matters of concern with the Managers.
As explained on page 36 there is an ongoing process for
Environmental, Social and Governance Risk – as investors
identifying, evaluating and managing the risks faced by the
place increased emphasis on environmental, social and
Company on a regular basis. The Directors have carried out a

robust assessment of the principal and emerging risks facing the
in an investee company could lead to that company’s shares being
Company, including those that would threaten its business model,
less attractive to investors, adversely af fecting its share price, in
future performance, regulatory compliance, solvency or liquidity.
addition to potential valuation issues arising from any direct impact


during the year. A description of these risks and how they are
management of the investee company (for example a failure to
being managed or mitigated is set out below:
identify a pathway to Net Zero or poor employment practices).
The Board considers the heightened macroeconomic and 
geopolitical concerns to be factors which exacerbate existing in investee companies could lead to the Company’s own shares
risks, rather than discrete risks, within the context of an investment being less attractive to investors, adversely af fecting its own share
trust. Their impact is considered within the relevant risks. 
and engagement policies which are available to view on the
Financial Risk – the Company’s assets consist mainly of listed
Managers’ website: bailliegifford.com and have been reviewed

and endorsed by the Board, and which are fully integrated into the
market related and include market risk (comprising currency risk,
investment process as well as the extensive up-front and ongoing
interest rate risk and other price risk), liquidity risk and credit risk.
due diligence which the Manager undertakes on each investee
An explanation of those risks and how they are managed is
company. This due diligence includes assessment of the risks
contained in note 19 to the Financial Statements on pages
inherent in climate change as well as ongoing positive engagement
62 to 68. The Board has, in particular, considered the impact

of heightened market volatility over recent months due to
  Discount Risk – the discount/premium at which the Company’s
 shares trade relative to its net asset value can change. The risk of
As oversight of this risk, the Board considers at each meeting  
various metrics including industrial sector weightings, top and the Company. The Board monitors the level of discount/premium at
bottom stock contributors to performance and sales and which the shares trade and the Company has authority to buy back
purchases of investments. Individual investments are discussed its existing shares, when deemed by the Board to be in the best
with the portfolio managers together with general views on the interests of the Company and its shareholders. The Liquidity Policy
investment market and sectors. A strategy meeting is held annually. is set out on page 5.
06 Annual Report 2023
Strategic Report
Regulatory Risk – failure to comply with applicable legal and Leverage Risk – the Company may borrow money for investment
regulatory requirements such as the tax rules for investment trust purposes (sometimes known as ‘gearing’ or ‘leverage’). If the
companies, the FCA Listing Rules and the Companies Act could investments fall in value, any borrowings will magnify the extent of
 this loss. If borrowing facilities are not renewed, the Company may
 have to sell investments to repay borrowings. The Company can
subject to tax on capital gains. To mitigate this risk, Baillie Gifford’s also make use of derivative contracts. All borrowings require the
Business Risk, Internal Audit and Compliance Departments provide prior approval of the Board and leverage levels are discussed by
regular reports to the Audit Committee on Baillie Gifford’s monitoring the Board and Managers at every meeting. Covenant levels are
programmes. Major regulatory change could impose disproportionate monitored regularly. The majority of the Company’s investments are
compliance burdens on the Company. In such circumstances in quoted securities that are readily realisable. Further information
representation is made to ensure that the special circumstances on leverage can be found on page 75 and the Glossary of Terms
of investment trusts are recognised. Shareholder documents and and Alternative Performance Measures on pages 76 and 77.
announcements, including the Company’ s published Interim Capital constraints and other macroeconomic factors could
Report and Annual Report and Financial Statements, are subject result in banks being unwilling to lend, preventing the Company
to stringent review processes and procedures are in place to fr om making use of leverage to enhance long-term returns for
ensure adherence to the Transparency Directive and the Market shareholders.
Abuse Directive with reference to inside information.
Political and Associated Economic Risk – the Board is of the
Custody and Depositary Risk – safe custody of the Company’s view that political change in areas in which the Company invests
assets may be compromised through control failures by the or may invest may have practical consequences for the Company.
Depositary, including breaches of cyber security. To monitor Political developments are closely monitored and considered
potential risk, the Audit Committee receives half yearly reports by the Board. The Board continues to assess the potential
 consequences for the Company’s future activities including those
assets held by the Custodian. Cash and portfolio holdings are that may arise from geopolitical tensions. The Board remains
independently reconciled to the Custodian’s records by the watchful of broader global political tensions and the associated
Managers. The Custodian’s assured internal controls reports 
are reviewed by Baillie Gifford’s Business Risk Department and
Emerging Risks – as explained on pages 6 and 7 the Board has
a summary of the key points is reported to the Audit Committee
regular discussions on principal risks and uncertainties, including
and any concerns investigated.
any risks which are not an immediate threat but could arise in the
Operational Risk – failure of Baillie Gifford’s systems or those longer term. The Board considers that the key emerging risks
of other third party service providers could lead to an inability to arise from the interconnectedness of the global economy
pr ovide accurate reporting and monitoring or a misappropriation (including factors such as supply chain constraints, economic
of assets. To mitigate this risk, Baillie Gifford has a comprehensive sanctions and lending associated capital constraints) and the
business continuity plan which facilitates continued operation of related exposure of the investment portfolio to external and
the business in the event of a service disruption or major disaster . 
The Audit Committee reviews Baillie Gifford’s Report on Internal 
Controls and the reports by other key third party providers are intelligence, new infectious diseases or similar public health
reviewed by Baillie Gifford on behalf of the Board and a summary threats. This is mitigated by the Manager’s close links to the
of the key points is reported to the Audit Committee and any investee companies and their ability to ask questions on
concerns investigated. The other key third party service providers contingency plans. The Manager believes the impact of such
 events may be to slow growth rather than to invalidate the
their respective services to the Company. investment rationale over the long term.
Cyber Security Risk – a cyber attack on Baillie Gifford’s network
Viability Statement

In accordance with provision 31 of the UK Corporate Governance
integrity or availability of data and systems. To mitigate this risk,
Code, that the Directors assess the prospects of the Company
the Audit Committee reviews Reports on Internal Controls

published by Baillie Gifford and other third party service providers.

Baillie Gifford’s Business Risk Department report to the Audit
 
Committee on the effectiveness of information security controls
strategy of the Company, and to be a period during which, in the
in place at Baillie Gifford and its business continuity framework.
absence of any adverse change to the regulatory environment and
Cyber security due diligence is performed by Baillie Gif ford on
to the favourable tax treatment afforded to UK investment trusts,
third party service providers which includes a review of crisis

management and business continuity frameworks.
principal risks facing the Company nor to the adequacy of the
mitigating controls in place. Furthermore, the Directors do not
reasonably envisage any change in strategy or objectives or any
events that would prevent the Company from continuing to
operate over that period.
Baillie Gifford US Growth Trust plc 07
Strategic Report
In considering the viability of the Company, the Directors have In this context, having regard to Baillie Gifford US Growth being
conducted a robust assessment of each of the Company’s an externally managed investment company with no employees,
principal and emerging risks and uncertainties as detailed on the Board considers the Company’s key stakeholders to be: its
pages 6 and 7 and in particular the impact of market risk where a existing and potential new shareholders; its externally-appointed
 Managers (Baillie Gifford); other professional service providers
the value of the Company’s investment portfolio. The Directors (Corporate Broker, Registrar, Auditor and Depositary); lenders;
have also considered the Company’s leverage and liquidity in the 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
expire in October 2023, the income and expenditure projections
deliver sustainable long-term growth, in line with the Company’s
and the fact that the Company’s investments comprise mainly
stated objective and strategy, and meet the highest standards
readily realisable quoted equity securities which can be sold to
of legal, regulatory, and commercial conduct, with the differences

between stakeholders being merely a matter of emphasis on
liquidity stress testing was conducted during the year, including
those elements. The Board’s methods for assessing the Company’s
consideration of the risk of further market deterioration.
progress in the context of its stakeholders’ interests are set

out below.

The Board places great importance on communication with
range of market conditions that may adversely impact the portfolio.
shareholders. The Annual General Meeting provides the key

forum for the Board and Managers to present to shareholders
assets that can be liquidated within one month that would result in
on the Company’s performance, future plans and prospects.
the value of those assets falling below the value of the borrowings.
The Chairman is available to meet with shareholders as
The stress testing did not indicate any matters of concern.
appropriate. The Managers meet regularly with shareholders
In addition, as substantially all of the essential services required
and their representatives, reporting their views back to the Board.
by the Company are outsourced to third party service providers,
Directors are available to attend certain shareholder presentations,
this allows key service providers to be replaced at relatively short

notice where necessary.
may also communicate with members of the Board at any
Based on the Company’s processes for monitoring operating

costs, share price discount/premium, the Managers’ compliance
or to the Company’s broker and by emailing the Managers
with the investment objective, asset allocation, the portfolio risk
at trustenquiries@bailliegifford.com. These communication

opportunities help inform the Board when considering how best
controls, the Directors have concluded that there is a reasonable

expectation that the Company will be able to continue in
shareholders over the long term.
operation and meet its liabilities as they fall due over the next
The Board seeks to engage with its Managers and other service

providers in a collaborative and collegiate manner, encouraging
Promoting the Success of the Company open and constructive discussion and debate, whilst also
 ensuring that appropriate and regular challenge is brought and
Under section 172 of the Companies Act 2006, the directors of a evaluation conducted. This approach aims to enhance service
company must act in the way they consider, in good faith, would levels and strengthen relationships with the Company’s providers,
be most likely to promote the success of the company for the with a view to ensuring the interests of the Company’s shareholders
 and other stakeholders are best served by keeping cost levels
(amongst other matters and to the extent applicable) to: proportionate and competitive, and by maintaining the highest
standards of business conduct.
a) the likely consequences of any decision in the long term;
Whilst the Company’s operations are limited, as third party service
b) the interests of the company’s employees;
providers conduct all substantive operations, the Board is aware
c) the need to foster the company’s business relationships
of the need to consider the impact of the Company’s investment
with suppliers, customers and others; onment. The
strategy and policy on wider society and the envir
Board considers that its oversight of environmental, social and
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.
08 Annual Report 2023
Strategic Report
sits naturally with Baillie Gifford US Growth’s longstanding aim of Gender Representation
providing a sustainable basis for adding value for shareholders. 
The Board’s review of the Managers includes an assessment and two female. The Company has no employees. The Board’s
  policy on diversity is set out on page 35.
decisions. The Board supports the Managers’ long-term perspective
Environmental, Social and Governance Policy
as set out in their Investment Principles on page 15 and regularly
 Details of the Company’s policy on socially responsible investment
 can be found under Corporate Governance and Stewardship on
 page 37.
included on page 17.
The Company considers that it does not fall within the scope of
The Board recognises the importance of keeping the interests of the Modern Slavery Act 2015 and it is not, therefore, obliged to
the Company’s shareholders, and of acting fairly between them, 
 the Company considers its supply chains to be of low risk as its
Secretaries are at all times available to the Board to ensure that suppliers are typically professional advisers. A statement by the
suitable consideration is given to the range of factors to which the Managers under the Act has been published on the Managers’
Directors should have regard. In addition to ensuring that the website at bailliegifford.com.
Company’s stated investment objective was being pursued, key
Future Developments of the Company
decisions and actions during the year which required the Directors
The outlook for the Company for the next twelve months is set
to have regard to applicable section 172 factors included:
out in the Chairman’s Statement on pages 2 and 3 and the
— the appointment of Panmure Gordon (UK) Limited with effect
Managers’ Review on pages 10 to 13.
from 1 June 2023 as the corporate broker following the
completion of a tender process. The Board believes that the
appointment of Panmure Gordon will continue to support the

and potential shareholders and provide the Board with
access to its market expertise;
— replacing the expiring revolving credit facility from ING Bank
N.V. subsequent to the year end on 26 July with a three-year
US$25 million unsecured revolving credit facility from ING
Bank N.V., for the purpose of investing in exciting growth
opportunities, which the Board believes will enhance long
term returns for shareholders; and
— following a formal tender process, the Board proposes the

year commencing 1 June 2023.
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.
Baillie Gifford US Growth Trust plc 09
Strategic Report

## Managers' Review

During the period from 23 March 2018, launch date and first trade date, to 31 May 2023, the Company's share price and net asset value total return (after deducting borrowings at fair value) returned 44.1% and 90.4%, respectively. This compares with a total return of 102.0% for the S&P 500 Index* (in sterling terms).

We are disappointed. We asked you to judge us over the long term, and as shareholders and managers of the Baillie Gifford US Growth Trust, we are dissatisfied with our five-year performance. These are not the numbers we looked to deliver at the Company's fifth anniversary.

It has been a volatile period. We have experienced multiple once-in-a-generation events since the Company was founded: a global pandemic, war, and supply shocks. With such turbulence, it is easy to overlook the fundamental progress the underlying companies we invest your capital in have made.

We launched Baillie Gifford US Growth Trust in March 2018 with the belief that a fund with a five-plus year time horizon that could invest in the most exceptional public and private growth businesses in the US, brought something different to the market and had the opportunity to deliver outsized returns. We continue to believe that to be the case. When we began, 0% of the portfolio was invested in private companies. At the end of May 2023, that number stands at 34.5%. We now have two private companies in the top ten and six in the top twenty. We believe this is something to be celebrated, not feared. We are delighted that private companies have grown sufficiently to make considerable contributions to the Company's future performance. We believe these companies are among the most important forces behind future progress.

Whilst share prices have been volatile since inception, the fundamental progress of the companies within the Company has been phenomenal.

Zipline, the drone delivery company, was our first private investment. Today it represents 2.3% of total assets. In 2018, Zipline's operations were predominantly in Rwanda, where its autonomous drones played a pivotal role in delivering medical supplies, specifically blood, to hard-to-reach locations. Fast forward to 2023, and Zipline serves 3,400 hospitals and health facilities globally and is contracted to serve more than 10,000 by the end of the year. While initially focusing on medical supplies, the company has expanded into ecommerce, animal, and agricultural products. Zipline is now the largest autonomous drone delivery company on earth, having flown over forty million commercial, autonomous miles, and is on track to make twice as many deliveries this year as all previous years combined. And with Zipline's home delivery system launching two months ago in the US, it is just getting started.

In 2018, Shopify, the commerce platform for merchants and the largest public investment in the Company, had gross merchandise value ('GMV') of ~US$40 billion, a 2.6% take rate, and revenue had just crossed the one-billion-dollar mark. Fast forward to 2023, and GMV sits at close to US$200 billion, the company's take rate in quarter one was over 3.0% and FY22 revenue was close to US$3 billion. Additionally, the company launched numerous products, including Shop Pay Instalments in 2021 and Audiences (an advertising tool) in 2022. With net cash of US$3.9 billion, there is plenty of scope for innovation and new product launches.

Space Exploration Technologies ('SpaceX') makes rockets and satellites. In 2018 SpaceX made 21 launches, about half of which made successful ground landings. In 2022 the company launched 61 orbital missions, nearly doubling its previous single-year record of 31, set in 2021. That number means that SpaceX launched, on average, every six days from one of three sites. It is driving the launch market, taking two-thirds market share. It has achieved this by making its service much cheaper, driven by reusable rockets. Nothing illustrates this more effectively than SpaceX recently relaunching one of its Falcon rockets for the fifteenth time. SpaceX is leveraging this cost advantage to move into the communications sector with Starlink, a low earth orbit satellite constellation to deliver fast broadband to rural areas. It already has over one million customers. Starlink recorded its first quarter of positive free cash flow in 2022 and President and COO Gwynne Shotwell has said publicly that the internet business "will make money" in 2023, joining the core launch business which already "makes money".

![img-1.jpeg](img-1.jpeg)

© Joerg Boehling/Alamy Stock Photo.

* Source: Refinitiv/Baillie Gifford and relevant underlying index providers. See disclaimer on page 75.

Past performance is not a guide to future performance.

For a definition of terms see Glossary of Terms and Alternative Performance Measures on pages 76 and 77.

10 Annual Report 2023
Strategic Report
 Like fungi, companies evolve in response to the environment in
billion in 2018 to US$80 billion today. Wayfair, the online homeware 
business, has more than doubled its top line since 2018, seen 
gross margin expansion of more than 700 basis points and nearly to invest in the future, but they are cognisant that the path of
doubled its active customer base from 13 million to over 21 million. progress is less likely to be funded by others.
CoStar, the commercial and residential real estate company, has

increased its revenue 126%, adding over US$1 billion, since the

Company’s launch, expanded margins and reduced them again as
expectations have been reset. Those who over-invested in
it invests counter-cyclically in new growth opportunities. Watsco,
their cost bases during the pandemic years must readjust now.
the heating, ventilation and air conditioning (‘HVAC’) distribution
Companies such as Wayfair, Twilio, Shopify and Snap have
business, has improved gross margins by 410 basis points, built
announced layoffs which bring about cultural challenges but also
an ecommerce business which is now over 33% of sales and


while continuing to invest in the long-run opportunity. Cloud
Of course, the progress of companies in the Company’s portfolio 
has not been a linear journey; there have been highs and lows. experiencing slower growth rates as their underlying customers
However, when surrounded by noise and volatility, it is easy to look for ways to reduce costs. Still the structural opportunity for
forget how far many of the companies we invest in on behalf of 
the Company have come. The fundamental progress on a Jassy has suggested around 90% of IT spend is still on-premise.
 
app, and The Trade Desk, the programmatic advertising platform,
Opportunity Remains
which are earlier still in their structural opportunity, have seen
In nature, there exists a mushroom: the matsutake. Matsutake
limited impact from the macroeconomic environment. Duolingo
are wild mushrooms that emerge in some of the most disturbed
has recently seen its seventh straight quarter of accelerating user
environments in the world. However, matsutake is not considered
growth, and revenue increase 34% year on year in 2022. It has
a pest; it is a gourmet treat: the most valuable mushroom in the
shifted the number of paying users from around 4% at IPO in
world.
2021 to around 8% today and continues to innovate with the
Nature shows us that valuable products can emerge even within launch of Duolingo Max, its AI-powered offering which enables
the most disturbed environments. The same applies to companies; roleplay and personalised feedback. The Trade Desk has grown
 its share of the global advertising market from 0.6% to 1.0% since
tenets of long-run success. While the term disturbance has 2020; its revenues have grown over 20% annually since March
negative connotations, disturbance can renew as well as destroy. 
 upfront advertising product this year.

Companies which survive and adapt to the macroeconomic
forget the potential and opportunity that lies beneath. The pull
shocks of the past year can emerge stronger than before, and
toward the safety of established trees or, in our world, companies,
like the matsutake mushroom, those that do are likely to be far
threatens to overwhelm.
more valuable in future.
Patience is key: the most impactful innovations may lie dormant
Portfolio Changes


of innovations arrive before their time. Dormancy can result from
in the companies we own. Having revisited the upside cases for
inertia, powerful incumbency, and resistance to change. Idea
most of the Company’s holdings, we continue to believe in the
creation is the easy task; creating success is where the hard work
underlying investment opportunities.
begins. Disturbance creates opportunities for innovation because
it enables heterogeneity – it opens the possibility of alternative 
landscapes and new ways of doing things. As the pull toward de-rating. When performance is challenged, it is easy to be drawn
convention and homogeneity continues, disturbance can create into focusing on the underperforming stocks and those where
lasting transformations that enable exuberant growth and your conviction is waning. We believe new ideas and enthusiasms
progress. should drive portfolio changes. Thus, we have spent time on
new ideas and underwriting the Company’s investments. Bringing
The rapidly changing macro environment over the past year is
new ideas, or a new perspective on a current holding, to the table
the stock market equivalent of disturbance. While uncomfortable
and comparing them to our existing portfolio enables constructive
to experience, it may be that periodic disturbance is necessary
discussion of ideas, moving the conversation beyond short-term
to separate the wheat from the chaff and to help the landscape
challenges to whether a stock merits a position in the portfolio

and at what scale.

damage has been done. For some companies, the damage,
whether the consequence of unsustainable business models
or an overreliance on cheap access to capital, will be fatal.
For some, the damage is painful but survivable, for others,

Baillie Gifford US Growth Trust plc 11
Strategic Report
There have been some changes to the top ten over the last remains large, we concluded that it had become constrained by
 
All have become larger holdings because of solid share price 
 ability to compete effectively.
since the beginning of this year. A reduction in Illumina moved it
We sold First Republic as the bank grappled with a run on its
out of the top ten. The ability to read DNA remains foundational
deposits in the wake of the Silicon Valley Bank collapse. We have
for advances in healthcare, but the competitive landscape is
long admired First Republic’s service model, deep customer
evolving rapidly, and the company’s execution has disappointed.
relationships, conservative lending culture and management team,
but these features did not provide protection when panic set in.
Given the existential risk in the near term posed by deposit
withdrawals and the higher cost of replacement funding depressing

We made one additional unlisted investment over the last twelve
months: Oddity. We have included a description of this business
on page 20. Given the market environment, none of our existing
private company holdings went public during the period. The net
result was that, at the end of May, we held 25 private company
investments which comprised 34.5% of total assets. Considering
companies that were previously private company investments, but

Roblox is built by a global community of millions of developers and
creators making new experiences for users to explore.

We added several new listed holdings to the portfolio over the
last year: Roblox, Sweetgreen and Doximity. Roblox is an online
gaming and game creation platform with a strong market share
in the 9–12-year-old demographic. We began researching the
company before its IPO and were excited at its opportunity to
‘age up’ its user base and broaden the experiences available on
the platform. We used share price weakness to initiate a holding.
We also bought a small holding in Sweetgreen, a salad restaurant
Sweetgreen has a clear plan to self-sustainability and are
chain. Again, we have followed the business for some time. The

company is early in its store rollout. Still, its strong brand, positive
© Bloomberg/Getty Images.
store economics, creative management team and clear plan to
self-sustainability led us to take a position. Doximity’s vision is to
become the ‘Bloomberg of Medicine’. The company has created
Investment Principles
free-to-use products which improve quality and productivity within
a social network for doctors and monetises by selling hyper- As we have done for the last three years, we have included our
targeted, unobtrusive advertising to pharmaceutical companies. investment principles again, unaltered. We hope that by publishing
With only 20% of pharmaceutical marketing budgets allocated our investment framework in this and future communications we
to digital advertising compared to around 80% for Fortune 100 provide shareholders with a useful reminder of our philosophy and
 a yardstick with which to measure us.
 Our second principle begins: ‘Short-term volatility is an inevitable
and First Republic during the period. Abiomed was acquired by feature of the market, and we will not manage the portfolio to
 reduce volatility at the expense of long-term gain.’ In recognising
 the inescapability of volatility up front, we can be better prepared
 for it when it happens. The last few years have been particularly
succeed, we felt the probability of doing so was diminishing, and volatile and challenging. However, our philosophy and process
we sold the holding. Our most recent sale was Carvana, the 
online used car dealership. While the opportunity for the business and the Company’s underlying holdings has not weakened.
12 Annual Report 2023
Strategic Report
Outlook
When surrounded by noise and volatility, taking a step back and

barrier between what is and what could be has never felt lower.


software code as medicine and biology’s power to solve the

imagination. The Company owns companies addressing each:

Bioworks. The future feels closer than it has ever been before,
and that is indicative of a world ripe with opportunity.
It is true that success does not happen in a vacuum; more than
creativity and innovation is needed. Success also depends upon
the environment into which an idea is born. We are long-term
investors, but we cannot lose sight of the fact that companies
have to face their current circumstances as they are today, not
as they will look in the future. Still, those businesses that can

have the opportunity to emerge from this environment stronger
than they went in.
As managers of the Baillie Gifford US Growth Trust, the worst
thing we could do right now is to go against the philosophy that

on the short term at the expense of the long term. Performance
has been poor, and we are disappointed. No one sets out to

inevitable for a long-term growth investor, it does not make it
easier. However, given the opportunities in front of the companies
the Company invests in, we cannot panic and pro-cyclically turn
defensive. We will not get every investment right. But we have
underwritten the investment cases for the companies held in the
portfolio and are excited about their long-term potential. The



Baillie Gifford US Growth Trust plc 13
Strategic Report
### Valuing Private Companies
We aim to hold our private company investments at ‘fair value’,
Baillie Gifford US Growth Trust*
i.e. the price that would be paid in an open-market transaction.
Valuations are adjusted both during regular valuation cycles and Percentage of portfolio revalued up to 4 times # 30%
on an ad hoc basis in response to ‘trigger events’. Our valuation Percentage of portfolio revalued up to 6 times 80%
process ensures that private companies are valued in both a fair
Percentage of portfolio revalued up to 7 times 20%
and timely manner.
*
The valuation process is overseen by a valuations group at Company’s reporting period.
Baillie Gifford, which takes advice from an independent third # Includes additions in the year.
party (S&P Global). The valuations group is independent from
Year to date, most revaluations have been decreases, with a small
the investment team with all voting members being from different
number of companies raising capital at an increased valuation.

The average movement in company valuations and share prices

for those are shown below.
We revalue the private holdings on a three-month rolling cycle,
with one-third of the holdings reassessed each month. During Average
stable market conditions, and assuming all else is equal, each movement Average
in company movement in
investment would be valued four times in a 12-month period.
valuation share price
For investment trusts, the prices are also reviewed twice per
year by the respective boards and are subject to the scrutiny Baillie Gifford US Growth Trust* -15.5% -18.6%
of external auditors in the annual audit process.
*
reporting period.
Beyond the regular cycle, the valuations committee also monitors
the portfolio for certain ‘trigger events’. These may include
During the year to 31 May 2023, as we continued to write down
changes in fundamentals, a takeover approach, an intention to
some of the valuations of the investments in the portfolio, the
carry out an Initial Public Offering (‘IPO’), company news which
economic reality of the liquidation preferences having been

reviewed, leading to a less pronounced divergence in the valuation
or meaningful changes to the valuation of comparable public
decreases across the various share classes held in the portfolio
companies. Any ad hoc change to the fair valuation of any holding
and the underlying company valuations.

asset value (‘NAV’). There is no delay.
The valuations committee 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.
Continued market volatility has meant that recent pricing has
moved much more frequently than would have been the case with

revaluations carried out during the year to 31 May 2023, however

portfolio that has not resulted in a change in valuation.
14 Annual Report 2023
Strategic Report
### Investment Principles
To our shareholders — We do not believe that the index is the right starting point for
Our core task is to invest in the exceptional growth businesses in portfolio construction. The index allocates capital based on
America. Over the full course of time, these companies will develop 
 marginal return and the ability to grow at those rates of return.
unusually high shareholder returns. We endeavour to generate Big companies are not immune to disruption. We do not
returns for our clients by helping in the creation and improvement manage the portfolio to an active share target, but we expect
of such useful enterprise. To the extent that we are successful in the active share of this fund to be high.
identifying these companies, we believe that we can multiply the
— The role of capital markets has changed, and we have
wealth of our clients over the long term.
evolved with it. As companies are remaining private for longer,
Managing shareholders’ money is a huge privilege, and not one we so too have we broadened our search for exceptional growth
take lightly. It is a relationship, not a transaction. Relationships can companies into private companies. We are largely indifferent
only be built on a foundation of trust and understanding. It is with to a company’s private or public status. We will conduct
this in mind that we seek to lay out the fundamental principles by diligent analysis and allocate capital to where the highest
which we will manage your money and the framework for how we returns are likely to be.
make decisions so that you, our shareholders, can decide whether
— We may discuss long-term trends and themes present in
it aligns with your investment philosophy.
the portfolio, but we do not plan on discussing short-term
— We believe the fundamental measure of our success will be performance. We believe our duty is to maximise the long-
the value we create for our shareholders over the long term. term wealth of our shareholders, and that creating narratives
 around short-term performance serves our shareholders
characteristics we look for in businesses become apparent. poorly.

 
We ask that our shareholders measure our performance over
and economical way possible. That means keeping our
similar periods.
management fees and ongoing costs low. We recognise that
— Short-term volatility is an inevitable feature of the market, even modest amounts, when allowed to compound over long
and we will not manage the portfolio to reduce volatility at the periods of time, add up to staggering sums, and we do not
expense of long-term gain. Many managers are risk-averse wish to dilute the compounding of returns with the
and fear loss more than they value gain. Therefore, they compounding of costs.
accept smaller, more predictable risks rather than the larger
With this foundation, we hope to build Baillie Gifford US Growth
and less predictable ones. We believe that this is harmful to
into a world class savings vehicle. We are grateful that you have
long-term returns, and we will not shy away from making
joined us on this journey, and we look forward to a long and
investments that are perceived to be risky if we believe that
hopefully prosperous relationship with you .
the potential payoffs are worthwhile. This means that our
performance may be lumpy over the short term.
— We believe, and academic work has shown, that long-term
equity returns are dominated by a small handful of exceptional

do not matter for long-term equity returns, and investors
will be poorly served by owning them. In our search for
exceptional growth companies, we will make mistakes. But the
asymmetry inherent in equity markets, where we can make far
more in a company if we are right than lose if we are wrong,
tells us that the costliest of mistakes is excessive risk aversion.
Baillie Gifford US Growth Trust plc 15
Strategic Report
### Baillie Gifford Statement on Stewardship
Baillie Gifford’s over-arching ethos is that we are ‘actual’ investors. We have a responsibility to behave as supportive and constructively
engaged long-term investors. We invest in companies at different stages in their evolution, across vastly different industries and
geographies and we celebrate their uniqueness. Consequently, we are wary of prescriptive policies and rules, believing that these often

shape our interactions with companies.
### Our Stewardship Principles
Prioritisation of Long-term Value Creation Fair Treatment of Stakeholders
We encourage our holdings to be ambitious and focus their We believe it is in the long-term interests of all enterprises to
investments on long-term value creation. We understand that maintain strong relationships with all stakeholders – employees,
  customers, suppliers, regulators and the communities they exist
maximisation but believe these often lead to sub-optimal 
long-term outcomes. We regard it as our responsibility to steer that operating policies, governance and ownership structures may
  need to vary according to circumstance. Nonetheless, we believe
activities that create genuine economic and stakeholder value the principles of fairness, transparency and respect should be
over the long run. We are happy that our value will often be in prioritised at all times.
supporting management when others do not.
Sustainable Business Practices
A Constructive and Purposeful Board We believe an entity’s long-term success is dependent on
We believe that boards play a key role in supporting corporate maintaining its social licence to operate and look for holdings
success and representing the interests of all capital providers. to work within the spirit and not just the letter of the laws and
 r egulations that govern them. We expect all holdings to consider
have the resources, information, cognitive and experiential how their actions impact society, both directly and indirectly, and
  encourage the development of thoughtful environmental practices
that good governance works best when there are diverse 
skillsets and perspectives, paired with an inclusive culture and Climate change, environmental impact, social inclusion, tax and
str ong independent representation able to assist, advise and fair treatment of employees should be addressed at board level,
constructively challenge the thinking of management. with appropriately stretching policies and targets focused on the
relevant material dimensions. Boards and senior management
Long-term Focused Remuneration with
should understand, regularly review and disclose information
Stretching Targets
relevant to such targets publicly, alongside plans for ongoing
We look for remuneration policies that are simple, transparent
improvement.
and reward superior strategic and operational endeavour.
We believe incentive schemes can be important in driving
behaviour, and we encourage policies which create genuine
long-term alignment with external capital providers. We are

commensurate with outstanding long-run value creation, but
plans should not reward mediocre outcomes. We think that
performance hurdles should be skewed towards long-term
results and that remuneration plans should be subject to
shareholder approval.
16 Annual Report 2023
Strategic Report
### Purposeful Company Conversations
We talk often with the boards, managers and staff of the companies we invest in. These conversations are central to our research and
monitoring. Gaining an insight into the motivations and abilities of the people running each company makes us more effective owners.
We are both grateful for, and mindful of, the time that is made available to us.
W e use that time as effectively as we can. We monitor every holding against our key investment contentions, which include statements
on the broader societal impact of growth for each business. These frameworks help us to prioritise our questions when we meet with
companies.
In r eturn we communicate our reasons for owning the shares clearly to our holdings as a minimum. Simply knowing that you have a
shareholder on the books who will support you if you make choices that enhance the long-term return opportunity can help management
teams to be ambitious. More directly, we can provide capital support on occasion too, particularly for the private companies
in the Company’s portfolio.
It is far fr om a one-way street. We are not afraid to provide thoughtful challenge to the companies we invest in. We are clear about our
views on topics we see as being key to each investment case. Some examples of the discussions we have found most useful this year
are noted below.
Duolingo Ginkgo Bioworks
We met with Duolingo, an online education business, in its The synthetic biology business has only been a public company
 since 2021, though the Company has invested in Ginkgo since
company’s use of AI. The company had shifted its product 2019. Ginkgo designs, tests and ferments programmed cells
development focus towards generative AI earlier that year, and for a wide range of end uses; from healthcare to chemicals
by the time we met with it every engineer in its organisation was manufacturing. It is a complicated and nascent business,
using it. W e discussed its content generation capabilities and the and during the year we discussed with the company how it
possibilities this might unlock. The founder Luis Von Ahn believes communicates its pr ogress to public market participants. We
 
 disclosure about the potential value of its projects. Ginkgo often
education universally available. We discussed how the high quality retains a right to participate in the future success of a product it
of its free product both furthers its mission and acts as an edge develops via milestones, royalties or ownership. We think this is
 poorly understood. Improving awareness here could put the
growth do not just align with shareholder returns, they reinforce company on the strongest possible footing as it grows.
the company’s potential. This is an exciting combination.
Shopify

platform Shopify in London in late 2022. Shopify’s platform helps


competition and greater consumer choice. Having enjoyed strong
demand for their services during the Covid-19 pandemic, the
company has had to readjust to a much tougher environment.
Shopify has made staff redundant and discontinued some of its
investment projects. These choices present serious challenges to
a growth business, but the discussion highlighted the considered
Ginkgo designs, tests and ferments programmed cells for a wide
approach that Shopify is taking as well as its efforts to maintain the range of end uses.
pace of innovation at the projects it considers most important to
© Ginkgo Bioworks.
its merchants.
Twilio
Solugen
Twilio is a cloud-based software platform. It provides software
Solugen is a synthetic biology company that has remained private.
that developers use when adding communication capabilities
It has been held in the Company’s portfolio since 2021. Solugen
into their applications, allowing businesses to communicate
aims to bring greener, cleaner and safer chemical production
with their customers in ways that were not possible until recently.

T wilio has grown its sales substantially but has made little progress
raising costs. It does this by developing processes that harness

 
environment, making staff redundant and renegotiating
commercial scale serving the oil and gas sector; an important
compensation. We spoke with the company’s Chief Operating
validation of the concept. It is a highly ambitious, and potentially

transformational business. We accepted the offer of a board
their stock-based compensation agreements. We followed up with
observer position at the company. This has helped to deepen our

understanding of how this innovative business is governed. It has
Twilio’s newly formed business divisions. Twilio still has serious
also broadened our network of contacts who are experts in this
challenges to address, but we believe that the stage is set for a
space, providing valuable additional opportunities to learn more

about this fast-developing industry.
Baillie Gifford US Growth Trust plc 17
Strategic Report
### Review of Investments
### A review of the Company’s ten largest investments and additions to the private company
### securities as at 31 May 2023 is given below and on the following two pages.
Top Ten Holdings
Space Exploration Technologies The Trade Desk
* *
 The advertising industry is undergoing a wholesale shift in the
launches advanced rockets and spacecraft. By fully embracing way that advertising is bought and sold. Whereas in the past
innovation and vertical integration, the company has opened advertising was bought and sold in bundles, in the digital world,
up a series of cost and capability improvements which are advertising can be transacted on a one to one basis, targeting
transforming the space industry. These improvements have only the audiences that are relevant. The Trade Desk provides
unlocked a diverse range of revenue generating opportunities the technology that enables this targeted buying of advertising
in areas such as global satellite connectivity and space logistics. through real-time auctions. Its platform connects media buyers
to a wide range of digital inventory and provides a set of tools

to help buyers determine what price to pay for those ad
Shopify opportunities. This is known as programmatic advertising – the
* buying of advertising using data. Programmatic advertising is still

Shopify provides software tools which allow merchants to easily
and a tangible demonstration of return on investment. As the
set-up and manage their businesses across an increasingly complex
programmatic industry becomes mainstream, it will consolidate
and fragmented retail landscape. Shopify’s software helps to make
around a handful of buying platforms, and we believe that The

Trade Desk will emerge as the leading buying platform for the
operations (e.g. marketing, inventory management, payments,
independent internet.
order processing, shipping) thus allowing them to focus on product

run by an impressive founder who has built a distinctive merchant-
focused culture.
Space Exploration Technologies has unlocked a diverse range of revenue generating opportunities.

* Total assets less current liabilities, before deduction of borrowings. See Glossary of Terms and Alternative Performance Measures on pages 76 and 77.
18 Annual Report 2023
Strategic Report
Stripe Amazon
* *
Stripe is a payments technology company. Founded in 2010 by 
Irish brothers Patrick and John Collison, the company is in the global retail and global IT spending. In retail, it competes on
process of developing a platform for sending money seamlessly price, selection and convenience and is improving all three as
and compliantly between any two internet-connected nodes in 
the world. The company processes massive volumes of payments is less mature than its retail business, but it is no less exciting.
from a broad customer base, ranging from US start-ups to global 
giants. Stripe’s long-term ambition is to make entrepreneurship turn out to be one of the largest and most important market shifts
 of our time. Both opportunities are outputs of what is perhaps
conducted online. 
optimises for customer delight. The company is run with a
Stripe is a private company investment.
uniquely long-term perspective. It is willing to be bold and scale
Tesla its experiments (and failures) as it grows. These cultural
* 
combination of scale and immaturity.
Tesla makes electric cars, battery storage and solar power systems.
The company has proven that cars can be environmentally friendly

without compromising on style, safety, or performance. We are
*
in the early stages of a major shift in the transportation industry


class of medicines that leverage the body’s natural protein-
on this. It is an innovative and mission-driven company whose
production apparatus to treat diseases. It is known for its
success is aligned with the interests of the planet.
Covid-19 vaccine, but its long-term growth opportunity is far
broader. mRNA is a foundational technology that theoretically has
the potential to induce the production of just about any protein –
human or non-human – inside our cells. This versatility opens up
a wide range of therapeutic opportunities for mRNA. Furthermore,
mRNA, like DNA, is, in a sense, digital, and is therefore
programmable. In moving from one drug to the next, the delivery
mechanism and building blocks remain the same. The only thing
that changes is the code. Because of this, Moderna’s mRNA
platform ought to be more scalable than past drug development
approaches. Indeed, Moderna may have more in common with a
software company than a traditional biotech business.
NVIDIA designs and manufactures graphics processing units for the
gaming and professional markets.
© NVIDIA.
NVIDIA
*
NVIDIA designs and manufactures graphics processing units
(GPUs) for the gaming and professional markets. They are highly
specialised semiconductor chips that can be used for a range

intelligence (‘AI’). After years of investment into both hardware

of generative AI, as its chips form the infrastructure layer to power
large language models. NVIDIA is using its scale to further reinvest
in its opportunity; designing new hardware to make data centres

help companies adopt AI more quickly.
* Total assets less current liabilities, before deduction of borrowings. See Glossary of Terms and Alternative Performance Measures on pages 76 and 77.
Baillie Gifford US Growth Trust plc 19
Strategic Report

*

and distribution media brand. Its base of more than 230 million
subscribers allows it to invest in building a strong customer
proposition through its library of exclusive and desirable content.
This in turn attracts more subscribers, creating a powerful

shift from linear TV to on-demand streaming is still in the early

CoStar Group
*
CoStar provides information, analytics and online marketplaces
to the commercial real estate industry in the US. The market for

transaction has numerous participants and copious information
requirements and, to facilitate transactions, participants must

have accurate and current information. CoStar provides this
and distribution media brand.
information through its CoStar Suite, a dataset that has been built
up over three decades. It aims to provide industry professionals © Francis Vachon / Alamy Stock Photo.
with the knowledge to research and complete transactions, price
optimally and stay up to date with market changes. The company
has leveraged its position to expand into online marketplaces in
both commercial real estate, apartment listings and most recently
residential real estate. The company is led by its ambitious
founder, Andy Florance, who has shown himself to be a shrewd

long-term growth.

Oddity

Oddity is a cosmetics and skincare holding company, focused on
launching online-only direct-to-consumer brands. Fundamentally,
the company believes the western beauty industry has failed to
make the transition to online and remains stuck in a paradigm of
online replenishment purchases rather than customer acquisition.
Oddity’s brands present customers with high quality products in
high-retention categories, at prestige price points (foundation at
US$45 vs US$8–16 for mass market) and take away the primary
frictions of online purchasing through a returns guarantee and
product matching. The promise and ambition is to use the
common data-driven backbone to iteratively launch brands with
US$1 billion plus sales potential and form a new type of
Consumer Packaged Goods (‘CPG’) company.
Oddity’s brands present customers with high quality products
in high-retention categories.
© Shutterstock/DCStockPhotography.
* Total assets less current liabilities, before deduction of borrowings. See Glossary of Terms and Alternative Performance Measures on pages 76 and 77.
20 Annual Report 2023
Strategic Report
### List of Investments as at 31 May 2023

|  | 2023 | % of |  | 2022 |
| --- | --- | --- | --- | --- |
|  | Value | total |  | Value |
| Name Business | £’000 | assets | * | £’000 |

 Rocket and spacecraft company 2,374 0.4 2,122
 Rocket and spacecraft company 732 0.1 655
 Rocket and spacecraft company 20,041 3.3 17,917
 Rocket and spacecraft company 4,568 0.8 4,083
 Rocket and spacecraft company 11,505 1.9 10,285
39,220 6.5 35,062
Shopify Class A Cloud-based commerce platform provider 33,135 5.4 19,215
The Trade Desk Advertising technology company 32,448 5.3 26,818

| Stripe Class B Common | Online payment platform 2,281 0.4 4,452 |
| --- | --- |
| Stripe Series G Preferred | Online payment platform 11,110 1.8 21,678 |
| Stripe Series H Preferred | Online payment platform 1,430 0.2 1,865 |
| Stripe Series I Preferred | Online payment platform 10,860 1.8 – |

25,681 4.2 27,995
Tesla  24,967 4.1 30,401
NVIDIA Graphics chips 24,334 4.0 12,481
 Online retailer and cloud computing provider 22,361 3.7 21,988
Moderna Therapeutic messenger RNA 21,025 3.5 25,556
 Subscription service for TV shows and movies 17,247 2.8 9,620
CoStar Group Commercial property information provider 15,817 2.6 12,610
Brex Class B Common Corporate credit cards for start-ups 8,050 1.3 10,922
Brex Series D Preferred Corporate credit cards for start-ups 7,574 1.3 10,276
15,624 2.6 21,198

| Zipline International Series C Preferred | Drone-based medical delivery 8,771 1.4 5,995 |
| --- | --- |
|  | Drone-based medical delivery 4,970 0.8 3,695 |
| Zipline International Series F Preferred | Drone-based medical delivery 807 0.1 – |

14,548 2.3 9,690
Workday  13,548 2.2 10,155

| Faire Wholesale | Online wholesale marketplace 4,546 0.7 7,590 |
| --- | --- |
| Faire Wholesale Series F Preferred | Online wholesale marketplace 5,114 0.9 7,886 |
| Faire Wholesale Series G Preferred | Online wholesale marketplace 3,789 0.6 4,569 |

13,449 2.2 20,045
 Cloud-based provider of network services 12,589 2.1 9,551
Duolingo Mobile learning platform 11,944 2.0 3,162
Doordash Online local delivery 11,482 1.9 7,065
Watsco Air conditioning, heating and refrigeration
equipment distributor 11,076 1.8 10,024
Alnylam Pharmaceuticals Therapeutic gene silencing 11,066 1.8 7,650
Discord Series I Preferred Communication software 11,006 1.8 11,740
Solugen Series C-1 Preferred 
to make chemicals 7,257 1.2 7,010
Solugen Series D Preferred 
to make chemicals 3,487 0.6 –
10,744 1.8 7,010
 Digital mental health platform for enterprises 6,688 1.1 7,101
Lyra Health Series F Preferred Digital mental health platform for enterprises 1,591 0.3 1,656
8,279 1.4 8,757
Datadog IT monitoring and analytics platform 8,193 1.3 7,645
Roblox User generated content game company 8,115 1.3 –
Databricks Series H Preferred Data and AI platform 7,974 1.3 8,193
 Developer of a SaaS-based cloud data
warehousing platform 7,598 1.3 6,124
Twilio Cloud-based communications platform 7,399 1.2 9,969
Novocure  7,182 1.2 8,406
Baillie Gifford US Growth Trust plc 21
Strategic Report

|  | 2023 | % of |  | 2022 |
| --- | --- | --- | --- | --- |
|  | Value | total |  | Value |
| Name Business | £’000 | assets | * | £’000 |

Convoy Common Marketplace for truckers and shippers 557 0.1 –
Convoy Series D Preferred Marketplace for truckers and shippers 2,962 0.5 4,834
 Marketplace for truckers and shippers 2,792 0.5 3,967
Convoy Convertible Loan Note Marketplace for truckers and shippers 403 0.1 –
6,714 1.2 8,801
Snyk Ordinary Shares Developer of security software 2,424 0.4 1,659
Snyk Series F Preferred Developer of security software 4,061 0.6 3,889
6,485 1.0 5,548
Illumina Gene sequencing equipment and consumables 6,183 1.0 14,453
Chewy Online pet supplies retailer 6,168 1.0 4,868
 Video game platform and software developer 6,060 1.0 10,555
Workrise Technologies Series D Preferred Jobs marketplace for the energy sector 2,662 0.4 3,595
Workrise Technologies Series D-1 Preferred Jobs marketplace for the energy sector 592 0.1 799
 Jobs marketplace for the energy sector 2,741 0.5 3,531
5,995 1.0 7,925
Denali Therapeutics Clinical stage neurodegeneration company 5,803 1.0 4,590
Pinterest Image sharing and social media company 5,698 0.9 3,550
Penumbra Medical tools to treat vascular diseases 5,696 0.9 4,847
Oddity Tech Ltd Class A Online cosmetics and skincare company 5,648 0.9 –
Zoom Video Communications Remote conferencing service provider 5,385 0.9 9,006
MarketAxess Holdings  5,071 0.9 5,475
BillionToOne Series C Preferred Molecular diagnostics technology platform 3,438 0.6 3,662
BillionToOne Promissory Note Molecular diagnostics technology platform 1,614 0.3 –
5,052 0.9 3,662

| Away (JRSK) Series D Preferred | Travel and lifestyle brand 1,698 0.3 1,327 |
| --- | --- |
| Away (JRSK) Convertible Promissory Note 2021 | Travel and lifestyle brand 1,075 0.2 1,085 |
| Away (JRSK) Convertible Promissory Note | Travel and lifestyle brand 1,075 0.2 1,085 |
| Away (JRSK) Series Seed Preferred | Travel and lifestyle brand 1,165 0.2 617 |

5,013 0.9 4,114
Roku Online media player 4,895 0.8 8,337
Wayfair Online furniture and homeware retailer 4,831 0.8 7,430
HashiCorp Open source infrastructure software 4,709 0.8 3,549
  2,116 0.3 4,466
  2,373 0.4 4,467
4,489 0.7 8,933
 Single cell sequencing company 4,361 0.7 4,441
Coursera Online educational services provider 4,176 0.6 5,824

| Tanium Class B Common | Online security management 3,814 0.6 6,737 |
| --- | --- |
| Nuro Series C Preferred | Self-driving vehicles for local delivery 2,040 0.3 3,930 |
| Nuro Series D Preferred | Self-driving vehicles for local delivery 1,645 0.3 3,201 |

3,685 0.6 7,131
PsiQuantum Series D Preferred Silicon photonic quantum computing 3,535 0.6 3,770
Snap Class A Camera and social media company 3,399 0.6 4,889
Ginkgo Bioworks Bioengineering company developing microorganisms
that produce various proteins 2,946 0.5 5,842
Airbnb Class B Common Online marketplace for travel accommodation 2,725 0.4 2,951
Doximity 
medical professionals 2,680 0.4 -

| Niantic Series C Preferred |  | Augmented reality games 2,608 0.4 3,841 |
| --- | --- | --- |
| Warby Parker | Online and physical glasses retailer 2,406 0.4 3,846 |  |
| Indigo Agriculture Common |  | Agricultural technology company 11 <0.1 42 |
|  |  | Agricultural technology company 1,415 0.2 1,414 |
| Indigo Agriculture Series F Preferred |  | Agricultural technology company 398 0.1 416 |
| Indigo Agriculture Series G Preferred |  | Agricultural technology company 551 0.1 592 |

2,375 0.4 2,464
22 Annual Report 2023
Strategic Report

|  | 2023 | % of |  | 2022 |
| --- | --- | --- | --- | --- |
|  | Value | total |  | Value |
| Name Business | £’000 | assets | * | £’000 |

Lemonade Insurance company 2,335 0.4 3,111
Capsule Series 1-D Preferred Digital pharmacy 1,305 0.2 –
 Digital pharmacy 807 0.1 –
2,112 0.3 –
Recursion Pharmaceuticals Drug discovery platform 2,111 0.3 1,340
  2,048 0.3 2,136
Thumbtack Class A Common Online directory service for local businesses 810 0.1 1,108
Thumbtack Series A Preferred Online directory service for local businesses 58 <0.1 79
Thumbtack Series B Preferred Online directory service for local businesses 4 <0.1 5
Thumbtack Series C Preferred Online directory service for local businesses 17 <0.1 23
Thumbtack Series I Preferred Online directory service for local businesses 1,113 0.2 1,135
2,002 0.3 2,350
Chegg Online education company 1,777 0.3 4,987
Rivian Automotive Developer of security platform 1,560 0.3 3,472
Sweetgreen Salad fast food chain 1,212 0.2 –
Aurora Self-driving technology 368 0.1 1,003
Aurora Innovation Class B Common Self-driving technology 785 0.1 1,767
1,153 0.2 2,770
Blockstream Series B-1 Preferred Bitcoin and digital asset infrastructure 1,140 0.2 2,254
Sana Biotechnology Gene editing technology 929 0.2 825
Honor Technology Series D Preferred Home care provider 609 0.1 2,451
 Home care provider 264 <0.1 1,037
873 0.1 3,488
Total Investments  
Net Liquid Assets # 3,033 0.5
Total Assets*  
* Total assets less current liabilities, before deduction of borrowings. See Glossary of Terms and Alternative Performance Measures on pages 76 and 77.
Denotes security in listed company previously held in the portfolio as an unlisted (private company) investment.
Denotes unlisted (private company) security.
# See Glossary of Terms and Alternative Performance Measures on pages 76 and 77.
Listed Unlisted Net liquid Total
equities securities † assets # assets *
% % % %
    
31 May 2022 63.2 36.4 0.4 100.0
Figures represent percentage of total assets. See Glossary of Terms and Alternative Performance Measures on pages 76 and 77.
† Includes holdings in ordinary shares, preference shares and convertible promissory notes.
# See Glossary of Terms and Alternative Performance Measures on pages 76 and 77.


| Contributors Absolute Performance % * | Detractors Absolute Performance % * |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
| Shopify Class A 2.6 | Stripe | (2.7) |  |  |  |
| NVIDIA 2.4 | First Republic Bank |  |  | # | (1.2) |
|  1.5 | Faire Wholesale |  | (1.2) |  |  |
| The Trade Desk 1.3 | Brex | (1.1) |  |  |  |
| Duolingo 1.0 | Tesla (0.9) |  |  |  |  |
| *  |  |  |  |  |  |

Glossary of Terms and Alternative Performance Measures on pages 76 and 77.
Denotes unlisted (private company) security.
Denotes listed security previously held in the portfolio as an unlisted (private company) security.
# First Republic Bank was sold during the period.
Baillie Gifford US Growth Trust plc 23
Strategic Report
### Distribution of Total Assets*
(31 May 2022)
Real Estate 0.3% (0.3%)
Net Liquid Assets 0.5% (0.4%)
Materials 2.3% (1.1%) Communication
Services 11.7% (4.2%)
Information
Technology
Consumer
31.3% (33.8%)
Discretionary
18.8% (20.7%)
Consumer Staples
1.3% (0.4%)
Financials
Industrials
3.9% (6.1%)
16.2% (14.8%)
Healthcare
13.7% (18.2%)
* Total assets less current liabilities before deduction of borrowings.
See Glossary of Terms and Alternative Performance Measures on pages 76 and 77.
### Distribution of Total Assets by Growth Drivers


for individual companies not playing out, rather than how index providers choose to classify companies.
Illumina
10x Genomics
Lyra Health Doximity
Penumbra DATA MEETS
HEALTHCARE
DEVICES
5.2% Honor
2.0%
PsiQuantum BillionToOne,Inc.
Capsule
Novocure Recursion
Tanium Pharmaceuticals
Workday
Twilio INNOVATIVE
Datadog
HEALTHCARE
NEW 13.7%
ENTERPRISE
Databrick 17.1% 
Watsco Zoom Snyk


| CAPITAL | HashiCorp |  |  | Alnylam |
| --- | --- | --- | --- | --- |
| ALLOCATORS |  |  | Pharmaceuticals |  |
| 3.1% |  | NVIDIA |  |  |

Denali Therapeutics
Amazon.com Niantic THERAPIES
THERAPIES
CoStar

|  |  |  | Roku |  |  |  | (DEVELOPMENT |  | (COMMERCIAL |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Away (JRSK) |  |  |  |  |  |  |  | STAGE) |  | STAGE) |
|  |  | Roblox | BATTLE FOR |  |  |  |  | 1.2% |  | 5.3% |
|  | Thumbtack |  |  |  |  | Solugen |  |  |  |  |
|  |  |  | OUR ATTENTION |  | Indigo Agriculture |  | Sana Biotechnology |  |  |  |

The Trade Desk

|  |  | Snap | 11.3% |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  | INDUSTRIALISATION |  |  | Moderna |
|  | Sweetgreen |  |  |  |  | OF BIOLOGY |  |  |
|  |  | Pinterest |  | Discord |  |  | 2.7% |  |

Shopify
Ginkgo
FUTURE OF COMMERCE
Bioworks
24.6% Epic Games
Wayfair
Brex
Faire Wholesale
Workrise Lemonade
Warby Parker (JAND) Blockstream
Rivian
DIGITISATION
Chewy Airbnb
Nuro OF FINANCE
Zipline COMMERCIALISATION
9.0%

|  | Oddity |  | OF SPACE |  |  |
| --- | --- | --- | --- | --- | --- |
| DoorDash |  |  | 6.5% |  |  |
|  |  | EVOLUTION OF |  |  | Stripe |

TRANSPORTATION
Chegg

|  |  | 8.6% |  | MarketAxess |
| --- | --- | --- | --- | --- |
| Coursera |  |  | SpaceX |  |
| CHANGE IN | Aurora |  |  |  |

Convoy
EDUCATION
2.9% Tesla Inc
Duolingo
Cultural outliers

 # represents 0.5% of total assets * .
* Total assets less current liabilities, before deduction of borrowings. See Glossary of Terms and Alternative Performance Measures on pages 76 and 77.
# See Glossary of Terms and Alternative Performance Measures on pages 76 and 77.
24 Annual Report 2023
Strategic Report

# Private Companies Summary

## Historical snapshot

Since our first investment in Private Companies in 2018, Baillie Gifford US Growth has deployed £309.9m of capital in this area.

![img-2.jpeg](img-2.jpeg)

### Transaction value

Showing all transactions prior to report date (£'000).

![img-3.jpeg](img-3.jpeg)

## Portfolio activity – year to 31 May 2023

£24.8m of new capital deployed in private companies during the year.

|  New buys | Follow on funding rounds  |   |
| --- | --- | --- |
|  Oddity Tech Ltd | BillionToOne | Solugen  |
|   | Convoy | Stripe  |
|   | Capsule | Zipline  |

No private companies listed or were taken-over during the year.

## Concentration

At 31 May 2023 we held 25 private companies which equated to 34.5% of total assets.

- Five companies account for 51.6% of the private company exposure.
- Ten companies account for 73.3% of the private company exposure.

![img-4.jpeg](img-4.jpeg)

![img-5.jpeg](img-5.jpeg)

All figures stated as percentage of total assets, as at 31 May 2023.

Baillie Gifford US Growth Trust plc 25
Strategic Report


(absolute performance in sterling terms %)
Affirm
Aurora
Airbnb
Ginkgo Bioworks
Snowflake
Warby Parker
400 5000-100 200 300100
Absolute performance from initial investment to initial public offering
Absolute performance from initial public offering to 31 May 2023
Total absolute performance from initial investment to 31 May 2023
eturns cannot be added together as they are geometric.
ce: StatPro/Baillie Gifford.
Private company securities and listed securities previously held as private company securities
#
as a percentage of total assets
(plotted quarterly from March 2018)
1,000
40
800
30
600 %
20
400
10
200

| 0 |  |  |  |  |  |  |  |  |  |  |  |  | 0 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Mar | Aug | Mar | Aug | Mar | Aug | Mar | Aug | Mar | Aug | Mar | May |  |
|  | 2018 | 2018 | 2019 | 2019 | 2020 | 2020 | 2021 | 2021 | 2022 | 2022 | 2023 | 2023 |  |
| ce: | Baillie Gifford. |  |  |  |  |  |  |  |  |  |  |  |  |

Total assets in sterling (left hand axis)
Private company securities as a % of total assets (right hand axis)
Private company securities and listed securities previously held in the portfolio as private comany securities as a % of total assets (right hand axis)
See Glossary of Terms and Alternative Performance Measures on pages 76 to 77.
Size
Our private company exposure tends to be weighted to the upper end of the maturity curve, focused on late stage private

1,200 50
% of total
Cap Total equity value (USD) assets * Number of holdings
Micro <$300m 0.1 1
£m
Small $300m–$2bn 8.5 11
Medium $2bn–$10bn 11.1 8
Large >$10bn 14.8 5
 
* Total assets less current liabilities before deduction of all borrowings. See Glossary of Terms and Alternative Performance Measures on pages 76 to 77.
Sour As at 31 May 2023.
26 Annual Report 2023
Note: Absolute performance r
#
Sour
Strategic Report
### Five Year Summary
### The following charts indicate how an investment in Baillie Gifford US Growth Trust has
### performed relative to its comparative index and its underlying net asset value over the
### 
#

| Five Year Performance | Premium/(Discount) to Net Asset Value |
| --- | --- |
|  |  |
| 400 | 15% |
| 350 | 10% |

5%
300
0%
250
(5%)
200
(10%)
150
(15%)

| 100 |  |  |  |  |  |  |  |  |  |  | (20%) |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 50 |  |  |  |  |  |  |  |  |  |  | (25%) |  |  |  |  |  |  |
|  | 2018 |  |  | 2019 |  | 2020 2021 |  |  | 2022 | 2023 |  | 2018 | 2019 |  | 2020 2021 | 2022 | 2023 |
|  |  |  |  |  |  |  |  | Cumulative to 31 May |  |  |  |  |  |  |  | Years to 31 May |  |
| Source: |  | Refinitiv | and relevant underlying index providers |  |  |  | # |  |  |  | Source: Refinitiv/Baillie Gifford |  |  | # |  |  |  |
| Share price return |  |  |  |  |  |  |  |  |  |  | Baillie Gifford US Growth Trust premium/(discount) |  |  |  |  |  |  |
| NAV (after deducting borrowings at fair value) return |  |  |  |  |  |  |  | * |  |  | The premium/(discount) is the difference between Baillie Gifford US Growth’s quoted |  |  |  |  |  |  |
|  |  |  |  |  | † |  |  |  |  |  | share price and its underlying net asset value (after deducting borrowings at fair value). |  |  |  |  |  |  |

Comparative index
Annual Net Asset Value and Share Price Returns Annual Net Asset Value and Share Price Returns
(relative to the benchmark total returns)

| 80% |  |  |  |  |  |  |  | 60% |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 60% |  |  |  |  |  |  |  | 40% |  |  |  |  |  |  |  |  |
| 40% |  |  |  |  |  |  |  | 20% |  |  |  |  |  |  |  |  |
| 20% |  |  |  |  |  |  |  | 0% |  |  |  |  |  |  |  |  |
| 0% |  |  |  |  |  |  |  | (20%) |  |  |  |  |  |  |  |  |
| (20%) |  |  |  |  |  |  |  | (40%) |  |  |  |  |  |  |  |  |
| (40%) |  |  |  |  |  |  |  | (60%) |  |  |  |  |  |  |  |  |
| (60%) |  |  |  |  |  |  |  | (80%) |  |  |  |  |  |  |  |  |
|  | 2019 |  | 2020 2021 |  | 2022 |  | 2023 |  | 2019 |  |  | 2020 2021 |  | 2022 |  | 2023 |
|  |  |  |  |  |  | Y |  |  |  |  |  |  |  |  | Years to 31 May |  |
| Source: Refinitiv |  | # |  |  |  |  |  |  |  |  |  |  |  | # |  |  |
|  |  |  |  |  |  |  |  | Source: Refinitiv |  |  | and relevant underlying index providers |  |  |  |  |  |
| NAV ( |  | after deducting borrowings at fair value |  | ) return | * |  |  | NAV ( |  | after deducting borrowings at fair value |  |  | ) return relative to the |  |  |  |
|  |  |  |  |  |  |  |  | comparative index |  |  |  | † |  |  |  |  |

Share price return
Share price return relative to the comparative index †
Five Year Active Share Relative to the Benchmark Ongoing Changes*

1.0%

| 80% | 0.8% |
| --- | --- |
| 60% | 0.6% |
| 40% | 0.4% |
| 20% | 0.2% |

100%

|  | 0% |  |  |  |  |  |  | 0.0% |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | 2018 | 2019 | 2020 2021 |  | 2022 | 2023 |  | 2019 | 2020 2021 | 2022 |  | 2023 |
|  |  |  |  |  |  | Years to 31 May |  |  |  |  |  | Years to 31 May |  |
| Source: Baillie Gifford and relevant underlying index providers |  |  |  |  | # |  |  | Source: Baillie Gifford |  |  |  |  |  |
| Active share |  |  | * |  |  |  |  | Ongoing charges are calculated as total operating costs divided |  |  |  |  |  |

by average net asset value (after deducting borrowings at fair value).
† S&P 500 Index total return (in sterling terms). See disclaimer on page 75. ears to 31 May
# See disclaimer on page 75.
* See Glossary of Terms and Alternative Performance Measures on pages 76 and 77.
Baillie Gifford US Growth Trust plc 27
Strategic Report
### Summary of Results Since Inception *
Capital
Shareholders’

|  |  |  |  |  |  |  |  | funds/net asset | Net asset |  |  |  | Premium/ |  | Premium/ |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  | Total |  |  | Shareholders’ |  | value (book) | value per |  | Share |  | (discount) |  | (discount) |  |
|  |  |  | assets | Borrowings |  |  | funds | per share | share (fair) | † | price |  | (book) | † | (fair) | † |
| At 31 May |  |  | £’000 |  | £’000 |  | £’000 | p | p |  |  | p | % |  | % |  |
| 23 March 2018 | # | 169,466 – 169,466 97.96 97.96 100.50 2.6 2.6 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

2019 301,830 11,901 289,929 126.17 126.17 129.00 2.2 2.2
2020 490,762 14,560 476,202 181.92 181.92 189.00 3.9 3.9
2021 935,222 26,339 908,883 296.21 296.12 308.00 4.0 4.0
2022 623,860 39,674 584,186 191.44 191.63 168.00 (12.2) (12.3)
        
Revenue Gearing Ratios

|  |  |  |  | Net return |  | Revenue earnings |  | Ongoing |  |  |  | Gross |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Period/year |  | Income |  | after tax |  | per ordinary share |  | charges | † | Gearing | † | gearing | † |
| to 31 May |  |  | £’000 |  | £’000 | p | ‡ | % |  | % |  | % |  |
| 2019 | ¶ |  | 699 (2,054) (1.09) 0.77 2 4 |  |  |  |  |  |  |  |  |  |  |

2020 595 (2,555) (1.05) 0.75 (1) 3
2021 648 (5,066) (1.78) 0.68 1 3
2022 568 (5,781) (1.88) 0.62 6 7
      

At 31 May Net asset value total return (fair) † Share price total return † Comparative index total return §
23 March 2018 # 100 100 100
2019 129 128 122
2020 186 188 141
2021 302 306 172
2022 196 167 193
   
* 
† Alternative Performance Measure. See Glossary of Terms and Alternative Performance Measures on pages 76 and 77.
# 
‡ The calculation of revenue earnings per share is based on the revenue from ordinary activities after taxation and the weighted average number of ordinary shares in issue
(see note 7 on page 57).
¶ For the period 7 February 2018, date of incorporation of the Company, to 31 May 2019.
§ 
Past performance is not a guide to future performance.
The Strategic Report which incorporates pages 1 to 28 was approved by the Board on 9 August 2023.
Tom Burnet
Chairman
28 Annual Report 2023
Governance Report
### Directors and Management
### Members of the Board come from a broad variety of backgrounds. The Board can draw
### on a very extensive pool of knowledge and experience.
Directors
Tom Burnet – Chairman Sue Inglis
Tom Burnet was appointed a Director and Chairman on 5 March Sue Inglis was appointed a Director on 5 March 2018 and is the
2018 and is also Chairman of the Nomination Committee. He is Senior Independent Director. She has a wealth of experience from
chairman of Kainos Group plc, a London listed IT services business more than 30 years advising listed investment companies and
 
Tom is also chairman of two privately owned technology businesses. her executive roles included managing director – Corporate Finance
Previously, Tom was managing director of Serco’s Defence Services 
 
Watch (R.H.R.), having graduated with an MBA from the University 
 services group, at Shepherd & Wedderburn, a leading Scottish law


investment company sectors, which was acquired by Canaccord
Genuity in 2009. Sue is currently the chairman of ThomasLloyd

Managed Portfolio Trust PLC, Momentum Multi-Asset Value Trust plc
and Seraphim Space Investment Trust PLC.
Graham Paterson Chris van der Kuyl
Graham Paterson was appointed a Director on 5 March 2018 and Chris van der Kuyl was appointed a Director on 1 June 2021.
is Chairman of the Audit Committee. He is an investment and He is one of Scotland’s leading entrepreneurs working across the
 technology, media, gaming and entertainment sectors. Chris is most
private equity industry. A chartered accountant, Graham was one of notably co-founder and chairman of multiple award-winning games
the founding partners of SL Capital Partners LLP (formerly Standard developer 4J Studios, best known for developing Minecraft for
 Microsoft, Sony and Nintendo games consoles. He and fellow
board member until 2010. During his 13 years at SL Capital, he was co-founder, Paddy Burns, launched Chroma Ventures, the investment
 arm of 4J Studios, in 2021. Chris is also chairman of Puny Astronaut,
was a member of the advisory boards to a number of leading private Broker Insights, Stormcloud Games, Ace Aquatec and Parsley Box
equity fund managers. In 2013, Graham co-founded TopQ Software Plc and sits on the boards of Blippar, Ant Workshop and Chroma
Ltd, a technology company which develops software for the private Developments. Alongside his commercial roles, he was the founding
equity industry. TopQ Software was acquired by eVestment Inc 
(now part of NASDAQ Inc) in 2015, where Graham was a director of multiple advisory and local charity boards.
the private markets data and analytics business until early 2018. Graham
is currently Chairman of Mobeus Income & Growth 4 VCT plc and a
non-executive director of Invesco Perpetual UK Smaller Companies
Investment Trust plc.
Baillie Gifford US Growth Trust plc 29
Governance Report

The Company has appointed Baillie Gifford & Co Limited, a wholly
owned subsidiary of Baillie Gifford & Co, as its Alternative Investment
Fund Manager and Company Secretaries. Baillie Gifford & Co Limited
has delegated portfolio management services to Baillie Gifford & Co.
Dealing activity and transaction reporting have been further
sub-delegated to Baillie Gifford Overseas Limited and Baillie Gifford
Asia (Hong Kong) Limited. Baillie Gifford & Co is an investment

WS, which had been involved in investment management since 1908.
Rachael Palmer
Baillie Gifford is one of the largest investment trust managers in
Rachael Palmer was appointed a Director on 1 June 2021. the UK and currently manages thirteen closed-ended companies.
She is an experienced strategy, marketing and business development Baillie Gifford also manages a listed investment company and
professional with extensive experience working within the technology open-ended investment companies, together with investment
sector. Currently, Rachael leads Google’s VC and Startup Partnerships portfolios on behalf of pension funds, charities and other institutional
 clients, both in the UK and overseas. Funds under the management
consulted to numerous start-ups and led marketing and business or advice of Baillie Gifford totalled around £230 billion at 8 August 2023.
 
 
Microsoft where she held various product, marketing and business staff of around 1,900.
development roles. Rachael received her MBA from The Wharton
Gary Robinson and Kirsty Gibson are the co-portfolio managers.


University of Pennsylvania.
Team and named managers of the Baillie Gifford American Fund.
Baillie Gifford & Co Limited and Baillie Gifford & Co are both
All Directors are members of the Nomination and Audit Committees. authorised and regulated by the Financial Conduct Authority.
30 Annual Report 2023
Governance Report
### Directors’ Report
The Directors present their Report together with the Financial Depositary
Statements of the Company for the year to 31 May 2023.
In accordance with the Alternative Investment Fund Managers
Directive, the AIFM must appoint a Depositary to the Company.
Corporate Governance
The Bank of New York Mellon (International) Limited has been
The Corporate Governance Report is set out on pages 34 to 37
appointed as the Company’s Depositary.
and forms part of this Report.
The Depositary’s responsibilities include cash monitoring, safe
 
Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie and maintaining a record of other assets and monitoring the
Gifford & Co, has been appointed as the Company’s Alternative Company’s compliance with investment limits and leverage
Investment Fund Manager (‘AIFM’) and Company Secretaries. requirements. The custody function is also undertaken by The
Baillie Gifford & Co Limited has delegated portfolio management Bank of New York Mellon (International) Limited (‘the Custodian’).
services to Baillie Gifford & Co. Dealing activity and transaction
Directors
reporting has been further sub-delegated to Baillie Gifford
The names and biographical details of the Board members who
Overseas Limited and Baillie Gifford Asia (Hong Kong) Limited.
served on the Board as at the year end and up to the date the
The Investment Management Agreement between the AIFM and
Financial Statements were signed can be found on pages 29 and 30.
the Company sets out the matters over which the Managers have

authority in accordance with the policies and directions of, and
Meeting and offer themselves for re-election.
subject to restrictions imposed by, the Board. The Investment
Management Agreement is terminable on not less than six Following formal performance evaluation, the Board concluded
months’ notice. Compensation fees would only be payable in that the performance of the Directors continues to be effective
respect of the notice period if termination by the Company were and each remains committed to the Company. Their contribution
to occur within a shorter notice period. to the Board is greatly valued and the Board recommends their
re-election to shareholders.

of net assets, 0.55% on the next £900 million of net assets

and 0.50% on the remaining net assets. Management fees are
The Company has entered into qualifying third party deeds of
calculated and payable quarterly. The Board is of the view that
indemnity in favour of each of its Directors. The deeds, which
calculating the fee with reference to performance would be
were in force during the year to 31 May 2023 and up to the date

of approval of this Report, cover any liabilities that may arise to
 a third party, other than the Company, for negligence, default
 
investment management and secretarial arrangements on a respect of liabilities to the Company, any regulatory or criminal
continuing basis and a formal review is conducted at least 
annually. in which the Director is convicted or civil proceedings brought
by the Company in which judgement is given against him or her.
The Board considers, amongst others, the following topics
In addition, the indemnity does not apply to any liability to the
in its review:
extent that it is recovered from another person.
— the quality of the personnel assigned to handle the

Company’s affairs;
— the investment process and the results achieved to date; 

— the administrative services provided by the Secretaries; and
the Nomination Committee on an annual basis. The Committee
— the marketing effort undertaken by the Managers.
considers these carefully, taking into account the circumstances
Following the most recent review, it is the opinion of the Directors surrounding them and makes a recommendation to the Board
that the continuing appointment of Baillie Gifford & Co Limited 
as AIFM and Company Secretaries and the delegation of the Board authorisation is for a period of one year.
investment management services to Baillie Gifford & Co, and the

further sub-delegation of dealing activity and transaction reporting
no situations which gave rise to a direct or indirect interest of
to Baillie Gifford Overseas Limited and Baillie Gifford Asia (Hong

Kong) Limited, on the terms agreed, is in the interests of the
Company and the shareholders as a whole due to the strength Share Capital
of the investment management team, the Managers’ commitment
Capital Structure
to the investment trust sector, the quality of the secretarial and
The Company’s capital structure (excluding treasury shares) as at
administrative functions and the marketing efforts undertaken
31 May 2023 consisted of 305,153,700 ordinary shares of 1p each,
by the Managers.
see note 13. At 31 May 2023, 2,206,300 shares were held in
treasury. There are no restrictions concerning the holding or
transfer of the Company’s ordinary shares and there are no special
rights attached to any of the shares.
Baillie Gifford US Growth Trust plc 31
Governance Report
Dividends Resolution 11, which is proposed as a special resolution, seeks
The ordinary shares carry a right to receive dividends. Interim authority for the Directors to allot equity securities or sell treasury
dividends are determined by the Directors, whereas any proposed shares on a non pre-emptive basis for cash up to an aggregate
 nominal amount of £305,153.70 (representing 10% of the issued
objective is to produce capital growth and the policy is only to ordinary share capital of the Company as at 4 August 2023).
 This authority would be in substitution for the existing authority and
to maintain investment trust status. No dividends were declared will continue until the conclusion of the Annual General Meeting to
during the period. be held in 2024 or on the expiry of 15 months from the passing of
the resolutions, if earlier.
Capital Entitlement
The Directors consider that the authorities proposed to be granted
On a winding up, after meeting the liabilities of the Company, the
by Resolutions 10 and 11 continue to be advantageous when the
surplus assets will be paid to ordinary shareholders in proportion
Company’s shares trade at a premium to net asset value and the
to their shareholdings.
level of natural liquidity in the market is unable to meet demand.
Voting
The Directors do not intend to use these authorities to sell or
 issue ordinary shares on a non pre-emptive basis at a discount
to one vote on a show of hands and, on a poll, to one vote for to net asset value.
every share held.
Such authorities will only be used to issue ordinary shares or
Information on the deadlines for proxy appointments can be sell ordinary shares from treasury at a premium to net asset value
found on pages 70 and 71. and only when the Directors believe that it would be in the best
interests of the Company to do so. The Directors believe that the

ability to buyback shares at a discount and re-sell them or issue

|  |  | No. of ordinary |  | new ordinary shares at a premium are useful tools in smoothing |
| --- | --- | --- | --- | --- |
|  | 1p shares held at |  | % of | supply and demand. |
| Name |  | 31 May 2023 | issue |  |

2,206,300 shares were held in treasury as at 4 August 2023.
Quilter plc (indirect) 30,492,080 10.0

Brewin Dolphin Limited (indirect) 27,039,346 8.9
At the last Annual General Meeting the Company was granted
Tilney Smith & Williamson Limited (indirect) 15,368,104 5.0
authority to purchase up to 45,742,539 ordinary shares
 15,273,156 5.0
(equivalent to approximately 14.99% of its issued share capital
There have been no other changes to the major interests in the as at 5 August 2022). This authority expires at the forthcoming
Company’s shares intimated up to 4 August 2023. Annual General Meeting.
No shares were bought back during the year under review (2022

– 2,206,300) and 2,206,300 shares are held in treasury. Between
Issuance of Shares
1 June and 4 August 2023, no shares were bought back.
At the last Annual General Meeting, the Directors were granted
Share buy-backs may be made principally:
shareholders’ approval for a general authority to allot shares and
also an authority to issue shares or sell shares held in treasury (i) to enhance net asset value for continuing shareholders by
 purchasing shares at a discount to the prevailing net asset
to existing shareholders pro-rata to their existing holdings). No value; and
shares were issued during the year (2022 – 525,000 were issued
(ii) to address any imbalance between the supply of and the
at a premium to net asset value, raising proceeds of £1,812,000).
demand for the Company’s shares that results in a discount
Both authorities expire at the forthcoming Annual General Meeting of the quoted market price to the published net asset value
and the Directors are seeking shareholders’ approval to renew per share.
them for a further year, as detailed below.
The Company may hold bought back shares in treasury and then:
Resolution 10 in the Notice of Annual General Meeting seeks
(i) sell such shares (or any of them) for cash (or its equivalent
a general authority in substitution to the Company’s existing
under the Companies Act 2006); or
authorities for the Directors to issue ordinary shares or C shares
(ii) cancel the shares (or any of them).
up to an aggregate nominal amount of £1,017,179.00. This
amount represents one-third of the Company’s total ordinary Shares will only be re-sold from treasury at a premium to net
share capital in issue (excluding treasury shares) at 4 August asset value per ordinary share.
2023 and meets institutional guidelines. This authority would be
in substitution for the existing authority and will continue until the
conclusion of the Annual General Meeting to be held in 2024 or
on the expiry of 15 months from the passing of the resolutions,
if earlier.
32 Annual Report 2023
Governance Report

The Directors are seeking shareholders' approval at the Annual General Meeting to renew the authority to purchase up to 45,742,539 ordinary shares, equivalent to approximately 14.99% of the Company's ordinary shares in issue as at 4 August 2023, being the latest practicable date prior to publication of this document, or, if less, up to 14.99% of the ordinary shares in issue (excluding treasury shares) on the date on which the resolution is passed, such authority to expire at the Annual General Meeting of the Company to be held in 2024.

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

- (i) 5% above the average closing price on the London Stock Exchange of an ordinary share over the five business days immediately preceding the date of purchase; and
- (ii) the higher of the price of the last independent trade and the highest current independent bid as stipulated by Article 5(1) of Commission Regulation (EC) 22 December 2003 implementing the Market Abuse Directive as regards exemptions for buy-back programmes and stabilisation of financial instruments (No. 2273/2003).

The minimum price (exclusive of expenses) that may be paid will be the nominal value of an ordinary share. Purchases of shares will be made within guidelines established, from time to time, by the Board. Your attention is drawn to Resolution 12 in the Notice of Annual General Meeting.

#### Recommendation

The Board considers each resolution being proposed at the Annual General Meeting to be in the best interests of the Company and its shareholders as a whole and it unanimously recommends that all shareholders vote in favour of them, as each Director intends to do where possible in respect of his or her own beneficial shareholdings.

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

#### 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 ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the Company's Auditor is aware of that information.

#### Independent Auditor

A formal tender process was carried out by the Company's Audit Committee. Following this process, the Board has approved the proposed appointment of Ernst & Young LLP as Auditor for the financial year commencing 1 June 2023. Ernst & Young LLP has expressed its willingness to be appointed Auditor to the Company. The appointment is subject to shareholder approval at the Annual General Meeting to be held on 18 September 2023 and resolutions concerning Ernst & Young LLP's appointment and remuneration will be submitted to the Annual General Meeting. The Board extends its appreciation to KPMG LLP for its services as Auditor.

#### Post Balance Sheet Events

The Directors confirm that there have been no post Balance Sheet events up to 4 August 2023 other than those noted in note 20 on page 68.

#### 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 reasons set out above, the Company considers itself to be a low energy user and therefore is not required to disclose energy and carbon information 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.

On behalf of the Board
Tom Burnet
Chairman
9 August 2023

Bailie Gifford US Growth Trust plc 33
Governance Report
### Corporate Governance Report
The Board is committed to achieving and demonstrating high Appointments to the Board
standards of corporate governance. This statement outlines
The terms and conditions of Directors’ appointments are set out
how the principles of the 2018 UK Corporate Governance Code
in formal letters of appointment which are available for inspection
(the ‘Code’) which can be found at frc.org.uk and the principles
on request.
of the Association of Investment Companies Code of Corporate
Under the provisions of the Company’s Articles of Association,
Governance (the ‘AIC Code’) were applied throughout the
a Director appointed during the period is required to retire

and seek election by shareholders at the next Annual General
practice for investment companies and can be found at
Meeting. In accordance with the Code, all Directors will retire
theaic.co.uk.

Compliance offer themselves for re-election.
 The reasons why the Board supports the re-election are set out
the year under review with the relevant provisions of the Code on page 31.
and the recommendations of the AIC Code. The Code includes
Directors are not entitled to any termination payments in relation
provisions relating to the role of the chief executive, executive
to their appointment.
directors’ remuneration and the need for an internal audit
function. Given that the Company is an externally managed Chairman and Directors’ Tenure
investment trust, the Board considers these provisions are not
The Nomination Committee has considered the question of
relevant to the Company (the need for an internal audit function
tenure for Directors and has concluded that there should not

be a set maximum time limit for a Director or Chairman to serve
 on the Board. The Nomination Committee keeps under review
against the AIC Code will be meeting their obligations in relation to the balance of skills, knowledge, experience, performance and
the UK Code. length of service of the Directors ensuring the Board has the
right combination of skills and preservation of knowledge and
The Board
experience balanced with the appointment of new Directors
The Board has overall responsibility for the Company’s affairs. It has bringing in fresh ideas and perspective.
a number of matters formally reserved for its approval including
Independence of Directors
strategy, investment policy, currency hedging, gearing, treasury
matters, dividend and corporate governance policy. A separate All of the Directors are considered by the Board to be independent
strategy session is held annually. The Board also reviews the of the Managers and free of any business or other relationship which
Financial Statements, investment transactions, revenue budgets could interfere with the exercise of their independent judgement.
and performance of the Company. Full and timely information is
The Directors recognise the importance of succession planning
provided to the Board to enable the Board to function effectively
for company boards and reviews the Board composition annually.
and to allow Directors to discharge their responsibilities.
The Board is of the view that length of service will not necessarily
 compromise the independence or contribution of Directors of an
are non-executive. investment trust company, where continuity and experience can

The Chairman, Mr TJW Burnet, is responsible for organising the
business of the Board, ensuring its effectiveness and setting its Following formal performance evaluation the Board considers
agenda. that each Director continues to be independent in character and

The executive responsibilities for investment management have
to the Board.
been delegated to the Company’s Alternative Investment Fund
Manager (‘AIFM’), Baillie Gifford & Co Limited, and in the context

of a Board comprising entirely non-executive Directors, there is
There is an annual cycle of Board meetings which is designed to

address, in a systematic way, overall strategy, review of investment
Ms SP Inglis.
policy, investment performance, gearing, premium/discount,
The Directors believe that the Board has a balance of skills marketing, revenue budgets, dividend policy and communication
and experience which enable it to provide effective strategic 
leadership and proper governance of the Company. Information regularly to discharge its duties effectively. The following table shows
about the Directors, including their relevant experience, can be the attendance record for the Board and Committee meetings held
found on pages 29 and 30. during the year, excluding ancillary and sub-committee meetings.
The Annual General Meeting was attended by all of the Directors.
There is an agreed procedure for Directors to seek independent
professional advice if necessary at the Company’s expense.
No such advice was sought in the year to 31 May 2023 or
31 May 2022.
34 Annual Report 2023
Governance Report

Number
Number of Senior
Audit Nomination
of Board Percentage Positions on
Board Committee Committee
Ethnic Background Members of the Board the Board
Number of meetings   
White British or other White
TJW Burnet 4 2 1 (including minority white groups) 4 80% 2 *
SP Inglis 4 2 1 Black/African/Caribbean/Black
British 1 20% –
GD Paterson 4 2 1
CRD van der Kuyl 4 2 1 * The Board Chairman and SID, being senior positions in accordance with the FCA
Listing Rules. The Board also considers the Nomination Committee and Audit
RL Palmer 4 2 1
Committee Chairs to be senior positions. The Nomination Committee Chair is also
the Board Chairman. The Audit Committee Chair’s ethnic background is White.
Nomination Committee
As at 31 May 2023, the Board did comply with the FCA Listing
The Nomination Committee consists of the whole Board due to
Rule target with respect to ethnic background and the 40% target

for women. The Board also meets the FCA Listing Rules target for
of the Committee. The Committee meets on an annual basis
a woman holding a senior role on the Board (Ms SP Inglis is the
and at such other times as may be required. The Committee
Senior Independent Director). As an externally managed
has written terms of reference which include reviewing the

composition of the Board, identifying and nominating new

candidates for appointment to the Board, Board appraisal, Board
Committee and Nomination Committee to be senior roles in
independence, succession planning and training. The Committee
addition to the roles of Senior Independent Director and Board
also considers whether Directors should be recommended for

re-election by shareholders. The Committee is responsible for
 Board Composition
recommendations to the Board on whether or not the potential 
 of having a range of skilled and experienced Directors, balancing

The Committee’s terms of reference are available on request from
with the desirability of ensuring regular refreshment of the Board.
the Company and on the Company’s page on the Managers’
website: bgusgrowthtrust.com. The Board reviewed the composition of the Board during the year
in consideration of succession planning and developing a diverse
Board Diversity
pipeline.
Board Diversity Policy
In line with the AIC Corporate Governance Code principle that
Appointments to the Board are made on merit with due regard
‘a successful company is led by an effective Board, whose role

is to promote the long-term sustainable success of the company,
backgrounds and cognitive and personal strengths. The priority in
generating value for shareholders and contributing to wider
appointing new Directors is to identify the candidate with the best
society’ the Board will be undertaking a recruitment process
range of skills and experience to complement existing Directors,
in the coming years to allow time for an appropriate transition
with a view to ensuring that the Board remains well placed to help
period. The intention of the Board is that any Director retirements
the Company achieve its investment and governance objectives.
will be staggered ensuring the experience and diversity of the
The following disclosures are provided in respect of the FCA Board is maintained and effective succession planning occurs.
Listing Rules targets that: i) 40% of a board should be women;
Performance Evaluation
ii) at least one senior role should be held by a woman; and
An appraisal of the Chairman, each Director and a performance
iii) at least one board member should be from a non-white ethnic
evaluation and review of the Board as a whole and its Committees

was carried out during the year. After completing an evaluation
criteria.
questionnaire the results were discussed and reviewed by the
The breakdown of gender diversity and ethnic background on
Board. The appraisal of the Chairman was led by Ms SP Inglis,
the Board is shown below.
the Senior Independent Directo r.
 The appraisals and evaluations considered, amongst other criteria,
the balance of skills of the Board, training and development
Number
requirements, the contribution of individual Directors and the overall
Number of Senior
of Board Percentage Positions on effectiveness of the Board and its Committees. Following this
Gender Members of the Board the Board process it was concluded that the performance of each Director,
the Chairman, the Board and its Committees continues to be
Men 3 60% 1 *
ef fective and each Director and the Chairman remains committed
Women 2 40% 1
to the Company.
* The Board Chairman, being a senior position in accordance with the FCA Listing
Rules. The Board also considers the Nomination Committee and Audit Committee
Chairs to be senior positions. The Nomination Committee Chair is also the Board
Chairman. The Audit Committee Chair is a man.
Baillie Gifford US Growth Trust plc 35
Governance Report
A review of the Chairman’s and other Directors’ commitments Controls of Service Organisations made available to Third Parties.
 This report is independently reviewed by Baillie Gifford & Co’s
 Auditor and a copy is submitted to the Audit Committee.

A report identifying the material risks faced by the Company and
commitments during the year.
the key controls employed to manage these risks is reviewed by
 the Audit Committee.
there is no requirement for the Board to use external consultants
These procedures ensure that consideration is given regularly
to assist with the evaluation process. The Board acknowledges the
to the nature and extent of risks facing the Company and that

they are being actively monitored. Where changes in risk have
the current review process provides the appropriate level of rigour


assess whether further action is required to manage these risks.
external performance evaluation is kept under review.

Induction and Training of the Company’s risk management and internal controls systems
which accord with the FRC ‘Guidance on Risk Management,
New Directors are provided with an induction programme which
Internal Control and Related Financial and Business Reporting’
is tailored to the particular circumstances of the appointee.
and they have procedures in place to review their effectiveness

 
were provided to the Board by the Managers and Secretaries.
the year under review and up to the date of this Report.
The Directors receive other relevant training as necessary.

Remuneration

As all the Directors are non-executive, there is no requirement
place up to the date of approval of this Report.
for a separate Remuneration Committee. Directors’ fees are
To comply with the UK Alternative Investment Fund Managers
considered by the Board as a whole within the limits approved
Directive, The Bank of New York Mellon (International) Limited
by shareholders. The Company’s policy on remuneration is set
acts as the Company’s Depositary and Baillie Gifford & Co Limited
out in the Directors’ Remuneration Report on pages 41 and 42.
as its AIFM.
Audit Committee
The Depositary’s responsibilities include cash monitoring,
The report of the Audit Committee is set out on pages 38 to 40. 
ownership and maintaining a record of other assets and

monitoring the Company’s compliance with investment limits
The Directors acknowledge their responsibility for the Company’s
and leverage requirements. The Depositary is liable for the loss
risk management and internal controls systems and for reviewing

their effectiveness. The systems are designed to manage rather
ensure that any delegate segregates the assets of the Company.
than eliminate the risk of failure to achieve business objectives
The Company’s Depositary also acts as the Company’s
and can only provide reasonable but not absolute assurance
Custodian. The Custodian prepares reports on its key controls
against material misstatement or loss.
and safeguards which are independently reviewed by its
 appointed auditor, KPMG LLP. The reports are reviewed by
 Baillie Gifford’s Business Risk Department and a summary
the Company in accordance with the FRC guidance ‘Guidance of the key points is reported to the Audit Committee and any
on Risk Management, Internal Control and Related Financial and concerns are investigated.
Business Reporting’.
The Depositary provides the Audit Committee with a report on its
The practical measures in relation to the design, implementation monitoring activities.
and maintenance of control policies and procedures to safeguard
The AIFM has established a permanent risk management function
the Company’s assets and to manage its affairs properly, including
to ensure that effective risk management policies and procedures
the maintenance of effective operational and compliance controls,
are in place and to monitor compliance with risk limits. The AIFM
have been delegated to the Managers and Secretaries.
has a risk management policy which covers the risks associated
The Board oversees the functions delegated to the Managers and with the management of the portfolio, and the adequacy and
Secretaries and the controls managed by the AIFM in accordance effectiveness of this policy is reviewed and approved at least
with the UK Alternative Investment Fund Managers Directive (as annually. This review includes the risk management processes
detailed below). Baillie Gifford & Co’s Internal Audit and Compliance and systems and limits for each risk area.
Departments and the AIFM’s permanent risk function provide
The risk limits, which are set by the AIFM and approved by the
the Audit Committee with regular reports on their monitoring

programmes. The reporting procedures for these departments
of the portfolio. These limits, including leverage (see page 75)

are monitored and the sensitivity of the portfolio to key risks is
Gifford & Co conducts an annual review of its system of internal
undertaken periodically as appr opriate to ascertain the impact
controls which is documented within an internal controls report
 

monitoring and stress testing undertaken by Baillie Gifford’s
Business Risk Department are escalated to the AIFM and reported
to the Board along with any remedial measures being taken.
No exceptions occurred during the year.
36 Annual Report 2023
Governance Report
Going Concern Corporate Governance and Stewardship
In accordance with The Financial Reporting Council’s guidance on The Company has given discretionary voting powers to Baillie
going concern and liquidity risk, the Directors have undertaken a Gifford & Co. The Managers vote against resolutions they
rigorous review of the Company’s ability to continue as a going consider may damage shareholders’ rights or economic interests
concern. and report their actions to the Board.
The Company’s principal risks are market related and include The Company believes that it is in the shareholders’ interests to
market risk, liquidity risk and credit risk. An explanation of these 
risks and how they are managed is set out on pages 6 and 7 and including climate change, when selecting and retaining
contained in note 19 to the Financial Statements. investments and has asked the Managers to take these issues
into account as long as the investment objectives are not
The Board has, in particular, considered the impact of heightened
compromised. The Managers do not exclude companies from
market volatility due to macroeconomic and geopolitical concerns,


but adopt a positive engagement approach whereby matters
but does not believe the Company’s going concern status is
are discussed with management with the aim of improving the
affected .
relevant policies and management systems and enabling the
The Company’s assets, the majority of which are investments in

quoted securities which are readily realisable, exceed its liabilities
investment returns. The Managers’ statement of compliance

with the UK Stewardship Code can be found on the Managers’
Gearing levels and compliance with borrowing covenants are
website at bailliegifford.com. The Managers’ policy has been
reviewed by the Board on a regular basis. As at 31 May 2023,
reviewed and endorsed by the Board. Baillie Gifford & Co has
the Company had a net current liability of £37.3 million primarily
considered the Sustainable Finance Disclosure Regulation (‘SFDR’)

and further details can be found on page 75.
with ING Bank N.V., London Branch, which matured on 31 July
 Climate Change
Bank N.V., London Branch, due to mature on 23 October 2023. The Board recognises that climate change poses a serious threat
Subsequent to the year end on 26 July 2023, a new unsecured to our environment, our society and to economies and companies
US$25 million three-year revolving credit facility was drawn ar ound the globe. Addressing the underlying causes is likely to
down from ING Bank N.V., London Branch. The Company has result in companies that are high emitters of carbon facing greater
continued to comply with the investment trust status requirements societal and regulatory scrutiny and higher costs to account for the
of section 1158 of the Corporation Tax Act 2010 and the true environmental impact of their activities. The Managers pursuit
Investment Trust (Approved Company) (Tax) Regulations 2011. of long-term growth opportunities typically involves investment in
entrepreneurial, disruptive and technology-driven businesses.
Accordingly, the Financial Statements have been prepared on
These companies are often capital-light with a low carbon footprint.
the going concern basis as it is the Directors’ opinion, having
assessed the principal and emerging risks and other matters set The Manager has engaged an exter nal provider to map the
out in the Viability Statement on pages 7 and 8 which assesses the carbon footprint of the portfolio, using the information to prioritise
 engagement and understand what higher emitting companies ar e
Company will continue in operational existence for a period of at doing to manage climate risk better. This analysis estimates that
least twelve months from the date of approval of these Financial the carbon intensity of Baillie Gifford US Growth’s portfolio is 89.3%
Statements. lower than the index (S&P 500 Index). This analysis estimate is
based on the 65% of the value of the Company’s portfolio
Relations with Shareholders
which reports on carbon emissions and other carbon related
The Board places great importance on communication with

shareholders. The Company’s Managers meet regularly with
of the portfolio per unit of output and assesses the portfolio’s
shareholders and their representatives and report shareholders’
exposur e to carbon-intensive companies.
views to the Board. The Chairman is available to meet with
Baillie Gifford’s Task Force on Climate-Related Financial Disclosures
shareholders as appropriate. Shareholders wishing to
(‘TCFD’) Climate Report is available on the Managers’ website at
communicate with any member of the Board may do so by
bailliegifford.com. A TCFD climate report for Baillie Gifford US

Growth is available on the Company’s page of the Managers’
the Company’s broker, Panmure Gordon (UK) Limited (see
website at bgusgrowthtrust.com.
contact details on the back cover).
The Managers, Baillie Gifford & Co, are signatories to the Principles
The Company’s Annual General Meeting provides a forum for
for Responsible Investment, the Net Zero Asset Managers initiative
communication with all shareholders. The level of proxies lodged
and the Carbon Disclosure Project and are also members of the
for each resolution will be announced at the Meeting and is
Asian Corporate Governance Association and the International
published on the Company’s page of the Managers’ website
Corporate Governance Network.
bgusgrowthtrust.com subsequent to the meeting.
The notice period for the Annual General Meeting is at least
twenty working day s. On behalf of the Board
Tom Burnet
Shareholders and potential investors may obtain up-to-date
Chairman
information on the Company at bgusgrowthtrust.com.
9 August 2023
Baillie Gifford US Growth Trust plc 37
Governance Report
### Audit Committee Report
The Audit Committee consists of all the independent Directors. Internal Audit
The 2019 AIC Code of Corporate Governance permits the
The Committee continues to believe that the compliance and
Chairman of the Board to be a member of the Audit Committee.
internal controls systems and the internal audit function in place
The Board believes that Mr TJW Burnet’s knowledge, experience


system of internal control, which safeguards shareholders’
The members of the Committee consider that they have the
investment and the Company’s assets, is maintained. An internal


of the Committee. Mr GD Paterson, Chairman of the Committee,
unnecessary.
is a Chartered Accountant.
Financial Reporting


its written terms of reference which are available on request
risk likely to impact the Financial Statements is the existence,
from the Company Secretaries and at bgusgrowthtrust.com.
ownership and valuation of investments as they represent
The terms of reference are reviewed annually.
99.5% of total assets.
The Committee’s effectiveness is reviewed on an annual basis
as part of the Board’s performance evaluation process. Unlisted (Private Company) Investments
The Committee reviewed the Managers’ valuation approach for
At least once a year the Committee meets with the external
investments in unquoted companies (as described on pages 14,
Auditor without any representative of the Managers being present.
54 and 55) and approved the valuations of the unlisted investments
 following a detailed review of the valuation of each investment and
relevant challenge where appropriate.
The Committee met twice during the year, and the external
Auditor, KPMG LLP, attended both meetings. Baillie Gifford &

Co’s Internal Audit and Compliance Departments and the AIFM’s

permanent risk function provided reports on their monitoring

programmes for these meetings. In addition, the external Auditor
relevant investee companies.
met with the Audit Committee Chairman on an ad hoc basis to
Listed Investments
discuss matters pertinent to the Committee as they arose.
The majority of the investments are in quoted securities and
The matters considered, monitored and reviewed by the
market prices are readily available from independent external
Committee during the course of the year included the following:
pricing sources. The Committee reviewed Baillie Gifford’s Report
— the results announcement and the Annual and Interim Reports;
on Internal Controls which details the controls in place regarding
the recording and pricing of investments.
— the Company’s accounting policies and practices and the
implementation of the Managers’ valuation policy for
The Managers agreed the prices of all the listed investments at
investments in unquoted companies;
31 May 2023 to external price sources and the holdings were agreed
 
— the regulatory changes impacting the Company;
— the fairness, balance and understandability of the Annual FRC Review
Report and Financial Statements and whether it provided
The Financial Reporting Council (‘FRC’) reviewed the Company’s
the information necessary for shareholders to assess the
Annual Report and Financial Statements for the year to 31 May
Company’s performance, business model and strategy;
2022.
— the effectiveness of the Company’s internal control

environment;
analysis disclosed to demonstrate the sensitivity of private
company investments to changes in the assumptions
— the audit tender process and appointment, remuneration and
underpinning the calculation of their fair value (see note 19 on
terms of engagement of the external Auditor;
pages 65 to 67). Additional detail was provided and a number of
— the policy on the engagement of the external Auditor to
improvements have been made to the disclosure enhancing its
supply non-audit services;
understandability.
— the independence and objectivity of the external Auditor
The FRC notes that its review does not provide assurance that the
and the effectiveness of the external audit process;
Annual Report and Financial Statements are correct in all material
— the need for the Company to have its own internal audit respects and that its role is not to verify the information provided
function; but to consider compliance with reporting requirements.
— internal controls reports received from the Managers and
Custodian; and
— the arrangements in place within Baillie Gifford & Co whereby


38 Annual Report 2023
Governance Report
 Non-audit service requests are considered on a case by case basis.
The Committee reviewed the Managers’ Report on Internal Controls

which details the controls in place regarding completeness and
the Committee considered and reviewed:
accurate recording of investment income. The accounting treatment
— the Auditor’s engagement letter;
of special dividends received or receivable during the year is
reviewed by the Managers as they arise. — the Auditor’s proposed audit strategy;
The Committee considered the factors that might affect the — the audit fee; and

— a report from the Auditor on the conclusion of the audit.
to continue as a going concern for at least twelve months from
KPMG LLP was appointed as the Company’s Auditor, by the
the date of signing of the Financial Statements, together with
Directors, on 23 April 2018. The audit partner responsible for


projections of the Company, the liquidity of its investment portfolio,
with professional and regulatory standards in order to protect
compliance with debt covenants, availability of borrowing facilities,
independence and objectivity and to provide fresh challenge to
and the Company’s ability to meet its obligations as they fall due.
the business. Mr John Waterson, the current audit partner, has
The Committee also reviewed the Viability Statement on pages

7 and 8 and statement on Going Concern on page 37. Following

this assessment, the Committee recommended to the Board the
it believes it is independent within the meaning of regulatory and
appropriateness of the Going Concern basis in preparing the
professional requirements and that the objectivity of the audit

partner and staff is not impaired.
Statement and statement on Going Concern.
Having carried out the review described above, the Committee is


were not aware of any material misstatements in the context of the
for the purposes of this year’s audit.
Financial Statements as a whole and that the Financial Statements
are in accordance with applicable law and accounting standards. There are no contractual obligations restricting the Committee’s
choice of external Auditor.

The Committee reviewed the effectiveness of the Company’s Audit Tender
risk management and internal controls systems as described on The Committee acknowledges its responsibility to monitor and,
 at suitable junctures, to test the external audit market in order
under review. to ensure that the provision of external audit services to the
Company remains of a high quality as well as cost proportionate,
External Auditor
by reference to developing industry practice and expectations.

The Committee is aware that the scope, complexity and
external Auditor, the Committee reviewed:
associated cost of external audit engagements continues
— the Auditor’s audit strategy for the year to 31 May 2023 to increase across the market, driven by a number of factors
which included a report from the Auditor describing their including growing regulatory expectations, new auditing
arrangements to manage auditor independence and received 
 a high-quality audit and a challenging audit labour market.
— the extent of non-audit services provided by the external The Audit Committee undertook a formal audit tender process
Auditor. There were no non-audit fees paid to KPMG LLP 
in the year to 31 May 2023 or the year to 31 May 2022. onwards. In March 2023, invitations to tender were sent out to

To assess the effectiveness of the external Auditor, the Committee
to tender. KPMG LLP, the current auditor, was included in that list
reviewed and considered:
and invited to tender.
 
The invitations to tender included selection criteria including
— the Audit Quality Inspection Report on KPMG LLP issued
industry experience, credentials and relevant experience of the
by the FRC’s Audit Quality Review team (‘AQRT’); and
proposed audit team, audit approach, quality assurance,
— detailed discussion with audit personnel to challenge audit independence and governance and fees. The invitations included
processes and deliverables. 
proposal documents and presentations.
Baillie Gifford US Growth Trust plc 39
Governance Report


Audit Committee meeting. Following the presentations the





& Young LLP is being put to shareholders at the Annual General
Meeting being held on 18 September 2023 (see Notice of Annual
General Meeting on page 69).
Regulatory Compliance

with the requirements of the Statutory Audit Services for Large
Companies Market Investigation (Mandatory Use of Competitive
Tender Processes and Audit Committee Responsibilities) Order
2014, which relates to the frequency and governance of tenders
for the appointment of the external auditor and the setting of
policy on the provision of non-audit services.
Accountability and Audit
The respective responsibilities of the Directors and the Auditor
in connection with the Financial Statements are set out on pages
43 to 49.
On behalf of the Board
Graham Paterson
Audit Committee Chairman
9 August 2023
40 Annual Report 2023
Governance Report
### Directors’ Remuneration Report
This report has been prepared in accordance with the 
requirements of the Companies Act 2006. apart from the reimbursement of allowable expenses. There are
no performance conditions relating to Directors’ fees and there are
Statement by the Chairman
no long term incentive schemes or pension schemes. Ther e is no
The Directors’ Remuneration Policy is subject to shareholder

approval every three years or sooner if an alteration to the policy
Limits on Directors’ Remuneration
is proposed. The Remuneration Policy which is set out below was
last appr oved at the Annual General Meeting in September 2022 The fees for the non-executive Directors are payable monthly
and no changes to the policy are proposed. in arrears and are determined within the limit set out in the
Company’s Articles of Association which is currently £300,000
For the year to 31 May 2023 the Directors’ remuneration was set
per annum in aggregate. Any change to this limit requires
at £ 29,290 per annum for each Director other than the Chairman,
shareholder approval.
who received an additional £11,110 per annum, Chairman of the
Audit Committee, who received an additional £5,050 per annum, The basic and additional fees payable to Directors in respect of the
and the Senior Independent Director who received an additional year ended 31 May 2023 and the fees payable in respect of the
£1,515 per annum. year ending 31 May 2024 are set out in the table below. The fees

The Board reviewed the level of fees during the year and agreed
determined following an annual review of the Directors’ fees.
that, with effect from 1 June 2023 the fee for the Chairman would
increase to £42,420, the Directors’ fees would increase to
Expected
£30,755, the additional fee for the Chairman of the Audit
fees for the Fees for the
Committee would increase to £7,000 and the additional fee for the

|  | year ending |  |  |  | year ended |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Senior Independent Director would increase to £1,590. The fees |  | 31 May |  |  |  | 31 May |  |  |
| were last increased on 1 June 2022. |  |  | 2024 |  |  |  | 2023 |  |
|  |  |  |  | £ |  |  |  | £ |

Directors’ Remuneration Policy
Chairman’s fee 42,420 40,400
The Board is composed wholly of non-executive Directors, none
Non-executive Director fee 30,755 29,290
of whom has a service contract with the Company. There is no
Additional fee for Chairman
separate r emuneration committee and the Board as a whole
of the Audit Committee 7,000 5,050
considers changes to Directors’ fees from time to time.
Additional fee for the Senior
The Board’s policy is that the remuneration of Directors should be
Independent Director 1,590 1,515
set at a reasonable level that is commensurate with the duties and
responsibilities of the role and consistent with the requirement to Total aggregate annual fees that can be
attract and retain Directors of the appropriate quality and experience. paid to the Directors in any year under the
The Board believes that the fees paid to the Directors should Directors’ Remuneration Policy, as set out in
 the Company’s Articles of Association 300,000 300,000
take account of the level of fees paid by comparable investment
trusts. Any views expressed by shareholders on the fees being
Annual Report on Remuneration
paid to Directors will be taken into consideration by the Board
An ordinary resolution for the approval of this report will be put to
when reviewing the Board’s policy on remuneration. Baillie Gifford
the members at the forthcoming Annual General Meeting.
& Co Limited, the Company Secretaries, provides comparative
The law requires the Company’s Auditor to audit certain of the
information when the Board considers the level of Directors’ fees.
disclosures provided in this report. Where disclosures have been
audited, they are indicated as such. The Auditor’s opinion is
included in KPMG LLP’s report on pages 44 to 49.
Directors’ Remuneration for the Year (audited)

the entire remuneration paid to the Directors.
For the year ended 31 May 2023 For the year ended 31 May 2022

|  |  |  |  |  | Taxable |  |  |  |  |  | Taxable |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  | Fees |  | benefits |  | Total |  | Fees |  | benefits |  | Total |  |
| Name |  |  |  | £ |  | £ |  | £ |  | £ |  | £ |  | £ |
| TJW Burnet | (Chairman) | 40,400 – 40,400 40,000 – 40,000 |  |  |  |  |  |  |  |  |  |  |  |  |
| GD Paterson | (Audit Committee Chairman) | 34,340 – 34,340 34,000 – 34,000 |  |  |  |  |  |  |  |  |  |  |  |  |
| SP Inglis (Senior Independent Director) |  | 30,805 77 30,882 30,500 – 30,500 |  |  |  |  |  |  |  |  |  |  |  |  |
| CRD van der Kuyl |  | 29,290 157 29,447 29,000 – 29,000 |  |  |  |  |  |  |  |  |  |  |  |  |
| RL Palmer |  | 29,290 6,288 35,578 29,000 2,838 31,838 |  |  |  |  |  |  |  |  |  |  |  |  |

     
Baillie Gifford US Growth Trust plc 41
Governance Report
Annual Percentage Change in Remuneration Directors’ Service Details
This represents the annual percentage change in the total
Date of Due date for
remuneration paid to the Directors.

|  |  |  | Name | appointment | re-election |
| --- | --- | --- | --- | --- | --- |
| % change | % change | % change | TJW Burnet | 5 March 2018 AGM in 2023 |  |
| from 2022 | from 2021 | from 2020 |  |  |  |

SP Inglis 5 March 2018 AGM in 2023
Name to 2023 to 2022 to 2021
CRD van der Kuyl 1 June 2021 AGM in 2023
TJW Burnet 1.0 15.9 –
RL Palmer 1 June 2021 AGM in 2023
SP Inglis 1.3 24.5 # –
GD Paterson 5 March 2018 AGM in 2023
GD Paterson 1.0 17.2 –
CRD van der Kuyl Company Performance
(appointed 1 June 2021) 1.5 – * n/a
The following graph compares, for the period from 23 March 2018,
RL Palmer 
(appointed 1 June 2021) 11.7 – * n/a price total return (assuming all dividends are reinvested) to the
Company’s ordinary shareholders compared to the total shareholder
*
# return on a notional investment made up of shares in the component
When the Board reviewed the level of fees during the year to 31 May 2021 an
additional fee of £1,500 for the Senior Independent Director was introduced for the 

comparison purposes as it is a widely used measure of
due to the increase in private company holdings.
performance for UK listed companies. Comparative Index
Directors’ Interests (audited) provided for information purposes only.

Performance Graph
Company, were as shown below. There have been no changes

intimated in the Directors’ interests up to 4 August 2023.

|  |  |  |  |  |  | Comparative Index | * |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  | Ordinary 1p |  | Ordinary 1p |  |  |
|  |  | Nature | shares held at | shares held at |  |  |  |
| Name | of interest |  | 31 May 2023 |  | 31 May 2022 | 400 |  |

350
TJW Burnet  126,040 126,040
300
SP Inglis  50,000 50,000
250
GD Paterson  80,000 80,000
200
CRD van der Kuyl  285,314 285,314
150
RL Palmer  – –
100
 50
Mar Sep Mar Sep Sep Mar Mar Sep SepMar Mar
At the Annual General Meeting held on 16 September 2022, of
18 19 20 21 22 23 23
the proxy votes received in respect of the Directors’ Remuneration
Source: Refinitiv/Baillie Gifford and relevant underlying index providers.
Policy, 99.77% were in favour, 0.20% were against and votes See disclaimer on page 75.
withheld were 0.03%. At the Annual General Meeting held Baillie Gifford US Growth share price
on 16 September 2022, of the proxy votes received in respect FTSE All-Share Index
of the Directors’ Remuneration Report, 99.77% were in favour, Comparative Index * (in sterling terms)
0.19% were against and, votes withheld were 0.04%. All figures are total return (assuming all dividends reinvested) (See Glossary of Terms
and Alternative Performance Measures on pages 76 and 77).
Relative Importance of Spend on Pay * S&P 500 Index total return (in sterling terms). See disclaimer on page 75.
As the Company has no employees, the Directors do not consider
it appropriate to present a table comparing remuneration paid Past performance is not a guide to future performance.
to employees with distributions to shareholders. The Directors’
Approval
remuneration for the year and the expected fees for the year
The Directors’ Remuneration Report on pages 41 and 42 was
to 31 May 2024 are set out on the previous page. The table
approved by the Board of Directors and signed on its behalf on
below shows the actual expenditure during the year in relation
9 August 2023 .
to Directors’ remuneration and distributions to shareholders.
2023 2022 Change
£’000 £’000 % Tom Burnet
Chairman
Directors’ remuneration 171 165 3.6 May
Share buy-backs – 3,599 n/a
42 Annual Report 2023
Governance Report
### Statement of Directors’ Responsibilities in Respect
### of the Annual Report and the Financial Statements
The Directors are responsible for preparing the Annual Report Under applicable laws and regulations, the Directors are also
and the Financial Statements in accordance with applicable responsible for preparing a Strategic Report, Directors’ Report,
law and regulations. a Directors’ Remuneration Report and a Corporate Governance
Statement that complies with that law and those regulations.
Company law requires the Directors to prepare Financial Statements
 The Directors have delegated responsibility to the Managers
prepare the Financial Statements in accordance with applicable 
law and United Kingdom Accounting Standards including FRS information included on the Company’s page of the Managers’
102 ‘The Financial Reporting Standard applicable in the UK and website. Legislation in the United Kingdom governing the
Republic of Ireland’. preparation and dissemination of Financial Statements may
differ from legislation in other jurisdictions.
Under company law the Directors must not approve the Financial

Responsibility Statement of the Directors in Respect

of the Annual Financial Report
loss of the Company for that period. In preparing these Financial

Statements, the Directors are required to:
— the Financial Statements, which have been prepared in
— select suitable accounting policies and then apply them
accordance with applicable law and United Kingdom
consistently;
Accounting Standards (United Kingdom Generally Accepted
— make judgements and accounting estimates that are Accounting Practice) including FRS 102 ‘The Financial
reasonable and prudent; Reporting Standard applicable in the UK and Republic
of Ireland’, give a true and fair view of the assets, liabilities,
— state whether applicable United Kingdom Accounting

Standards have been followed, subject to any material
departures disclosed and explained in the Financial — the Annual Report and Financial Statements taken as a
Statements; whole is fair, balanced and understandable and provides
the information necessary for shareholders to assess the
— assess the Company’s ability to continue as a going concern,
Company’s performance, business model and strategy; and
disclosing, as applicable, matters related to going concern;
and — the Strategic Report and Directors’ Report include a fair
review of the development and performance of the business
— use the going concern basis of accounting unless they
and the position of the Company, together with a description
either intend to liquidate the company or to cease operations,
of the principal risks and uncertainties that it faces.
or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting
 On behalf of the Board
transactions and disclose with reasonable accuracy at any time Tom Burnet
 Chairman
that its Financial Statements comply with the Companies Act 2006. 9 August 2023
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 have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the Company
and to prevent and detect fraud and other irregularities.
Baillie Gifford US Growth Trust plc 43
Financial Report

KPMG

# Independent auditor's report

to the members of Baillie Gifford US Growth Trust plc.

1. Our opinion is unmodified

We have audited the financial statements of Baillie Gifford US Growth Trust plc ("the Company") for the year ended 31 May 2023 which comprise the Income Statement, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and the related notes, including the accounting policies in note 1.

In our opinion the financial statements:

- give a true and fair view of the state of the Company's affairs as at 31 May 2023 and of its return for the year then ended;
- have been properly prepared in accordance with UK accounting standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland; 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 are described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion is consistent with our report to the audit committee.

We were first appointed as auditor by the Directors on 23 April 2018. The period of total uninterrupted engagement is for the five financial periods ended 31 May 2023. We have fulfilled our ethical responsibilities under, and we remain independent of the Company in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed public interest entities. No non-audit services prohibited by that standard were provided.

Overview

|  **Materiality:** | £6.1m (2022:£6.2m)  |
| --- | --- |
|  Financial statements as a whole | 1% (2022: 1%) of Total Assets  |

|  **Key audit matter** | vs 2022  |
| --- | --- |

|  **Recurring risk** | Valuation of certain specific unlisted investments  |
| --- | --- |

44 Annual Report 2023
Financial Report

## 2. Key audit matters: including our assessment of risks of material misstatement

Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. We summarise below the key audit matter, in arriving at our audit opinion above, together with our key audit procedures to address the matter and our findings from those procedures in order that the Company’s members, as a body, may better understand the process by which we arrived at our audit opinion. This matter was addressed, and our findings are based on procedures undertaken, in the context of, and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are incidental to that opinion, and we do not provide a separate opinion on this matter.

|   | The risk | Our response  |
| --- | --- | --- |
|  **Valuation of certain specific unlisted investments** (Certain specific investments within the total unlisted investment balance of £209.6 million; (2022: £227.4 million) *Refer to page 38 (Audit Committee Report), page 55 (accounting policy) and note 9 on pages 58 and 59 and note 19 on pages 62 to 68 (financial disclosures).* | **Subjective valuation:** Certain of the unlisted investments within the total unlisted investments balance of £209.6 million are subject to significant inherent estimation uncertainty in determining their valuation. The factors considered in assessing which unlisted investments were subject to significant risk included the quantum of the individual investment, time since funding round, performance of the investment, nature of the investment held as well as the estimation uncertainty of the methodology and inputs used. Unlisted investments are measured at fair value, which is established in accordance with the International Private Equity and Venture Capital Valuation Guidelines, by using measurements of value such as prices of recent orderly transactions, earnings multiples, and net assets. We assessed that there is a significant risk associated with this matter due to the quantum of the balance, and the level of judgement associated with certain unobservable inputs. Therefore this is one of the key areas that our audit has focused on. The financial statements (note 19) disclose the sensitivity estimated by the Company in respect of all the unlisted investments held. | We performed the tests below rather than seeking to rely on any of the Company’s controls, because the nature of the balance is such that we would expect to obtain audit evidence primarily through the detailed procedures described below: Our procedures included: — **Historical comparisons:** Assessment of investment valuations, comparing current period valuations and movements to prior period valuations in the absence of any sales or listings, to understand the reasons for significant variances and determine whether they are indicative of bias or error in the Company’s approach to valuations; — **Methodology choice:** In the context of observed industry best practice and the provisions of the International Private Equity and Venture Capital Valuation Guidelines, we challenged the appropriateness of the valuation basis selected; — **Our valuation experience:** Challenging the investment manager on key judgements affecting investee company valuations, such as the choice of benchmark and calibration to latest funding rounds. We compared key underlying financial data inputs to external sources, investee company audited accounts where available and management information as applicable. Our work included consideration of events which occurred subsequent to the period end until the date of this audit report; — **Our corporate finance expertise:** Utilising the expertise of KPMG Corporate Finance specialists to assist the audit team in assessing specific areas, such as evaluating the appropriateness of comparable companies for a selection of unlisted investments; — **Comparing valuations:** Where a recent transaction has been used to value a holding, we obtained an understanding of the circumstances surrounding the transaction and whether it was considered to be on an arms-length basis and suitable as an input into a valuation; and — **Assessing transparency:** Consideration of the appropriateness, in accordance with relevant accounting standards, of the disclosures in respect of unlisted investments and the effect of changing one or more inputs to reasonably possible alternative valuation assumptions. **Our findings:** — We found the Company’s valuation of certain specific unlisted investments to be balanced (2022: slightly cautious) and the related disclosures to be proportionate (2022: proportionate).  |

We continue to perform procedures over the carrying amount of quoted investments, however we have not assessed this as one of the most significant risks in our current year audit, or to be subject to a significant level of judgement because they comprise liquid, quoted investments valued using readily available market data and, therefore, it is not separately identified as a key audit matter in our report this year.

KPMG

Bailie Gifford US Growth Trust plc 45
Financial Report

### 3. Our application of materiality and an overview of the scope of our audit

Materiality for the financial statements as a whole was set at £6.1m (2022: £ 6.2m), determined with reference to a benchmark of total assets, of which it represents 1% (2022: 1%). In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower threshold, performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in individual account balances add up to a material amount across the financial statements as a whole.

Performance materiality was set at 75% (2022: 75%) of materiality for the financial statements as a whole, which equates to £4.6m (2022: £ 4.6m). We applied this percentage in our determination of performance materiality because we did not identify any factors indicating an elevated level of risk.

We agreed to report to the Audit Committee any corrected or uncorrected identified misstatements exceeding £307k (2022: £ 310k), in addition to other identified misstatements that warranted reporting on qualitative grounds.

Our audit of the Company was undertaken to the materiality level specified above and was performed by a single audit team.

The scope of the audit work performed was fully substantive as we did not rely upon the Company's internal control over financial reporting.

![img-6.jpeg](img-6.jpeg)

### 4. The impact of climate risk on our audit

In planning our audit we have considered the potential impacts of climate change on the Company's financial statements.

We have performed a risk assessment of how the impact of climate change may affect the financial statements and our audit. Level 1 quoted investments make up 65.1% of the Company's total assets, for which fair value is determined as the quoted market price. Therefore, we assessed that the financial statement estimate that is primarily exposed to climate risk is the unquoted investment portfolio, for which the valuation assumptions and estimates may be impacted by physical or legal climate risks, such as an increase in climate related compliance expenditure. We made enquiries of management to understand the extent of the potential impact of climate change risk on the unquoted investment portfolio.

We assessed that, whilst climate change posed a risk to the determination of investment valuations in the current year, this risk was not significant when considering the nature of the underlying investment portfolio. Therefore there was no significant impact of this on our key audit matter.

We have read the disclosure of climate related narrative in the front half of the financial statements and considered consistency with the financial statements and our audit knowledge.

### 5. Going concern

The Directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Company or to cease its operations, and as they have concluded that the Company's financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements ("the going concern period").

We used our knowledge of the Company, its industry, and the general economic environment to identify the inherent risks to its business model and analysed how those risks might affect the Company's financial resources or ability to continue operations over the going concern period. The risks that we considered most likely to adversely affect the Company's available financial resources and metrics relevant to debt covenants over this period were:

- the impact of a significant reduction in the valuation of investments and the implications for the Company's debt covenants;
- the liquidity of the investment portfolio and its ability to meet the liabilities of the Company as and when they fall due; and
- the operational resilience of key service organisations.

We considered whether these risks could plausibly affect the liquidity or covenant compliance in the going concern period by assessing the degree of downside assumption that, individually and collectively, could result in a liquidity issue, taking into account the Company's liquid investments.

KPMG

46 Annual Report 2023
Financial Report

## 5. Going concern (continued)

We considered whether the going concern disclosure in note 1 to the financial statements gives a full and accurate description of the Directors' assessment of going concern, including the identified risks and related sensitivities.

Our conclusions based on this work:

- We consider that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate;
- We have not identified, and concur with the Directors' assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for the going concern period;
- We have nothing material to add or draw attention to in relation to the Directors' statement in note 1 to the financial statements on the use of the going concern basis of accounting with no material uncertainties that may cast significant doubt over the Company's use of that basis for the going concern period, and we found the going concern disclosure in note 1 to be acceptable; and
- The related statement under the Listing Rules set out on page 37 is materially consistent with the financial statements and our audit knowledge.

However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Company will continue in operation.

## 6. Fraud and breaches of laws and regulations – ability to detect

Identifying and responding to risks of material misstatement due to fraud

To identify risks of material misstatement due to fraud ("fraud risks") we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:

- enquiring of Directors as to the Company's policies and procedures to prevent and detect fraud, as well as whether they have knowledge of any actual, suspected or alleged fraud;
- assessing the segregation of duties in place between the Directors, the Administrator and the Company's Investment Manager; and
- reading Board and Audit Committee minutes.

We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit.

As required by auditing standards, we perform procedures to address the risk of management override of controls, in particular to the risk that management may be in a position to make inappropriate accounting entries and the risk of bias in accounting estimates and judgements such as the valuation of unlisted investments.

On this audit we do not believe there is a fraud risk related to revenue recognition because the revenue is non-judgemental and straightforward, with limited opportunity for manipulation.

We evaluated the design and implementation of the controls over journal entries and other adjustments and made inquiries of the Administrator about inappropriate or unusual activity relating to the processing of journal entries and other adjustments. We selected journal entries for testing, which included material post-closing journal entries and compared any identified entries to supporting documentation.

We did not identify any additional fraud risks.

Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience and through discussion with the Directors, the Investment Manager and the Administrator (as required by auditing standards) and discussed with the Directors the policies and procedures regarding compliance with laws and regulations. As the Company is regulated, our assessment of risks involved gaining an understanding of the control environment including the entity's procedures for complying with regulatory requirements.

We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.

The potential effect of these laws and regulations on the financial statements varies considerably.

Firstly, the Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation, and its qualification as an Investment Trust under UK taxation legislation, any breach of which could lead to the Company losing various deductions and exemptions from UK corporation tax, and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

KPMG

Bailie Gifford US Growth Trust plc 47
Financial Report

## 6. Fraud and breaches of laws and regulations – ability to detect (continued)

Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations (continued)

Secondly, the Company is subject to many other indirect laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: money laundering, data protection, bribery and corruption legislation and certain aspects of company legislation recognising the financial and regulated nature of the Company's activities and its legal form. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Directors and the Administrator and inspection of regulatory and legal correspondence, if any. Therefore if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.

Context of the ability of the audit to detect fraud or breaches of law or regulation

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.

In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.

## 7. We have nothing to report on the other information in the Annual Report and financial statements

The Directors are responsible for the other information presented in the Annual Report together with the financial statements. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work we have not identified material misstatements in the other information.

Strategic report and Directors' report

Based solely on our work on the other information:

- we have not identified material misstatements in the strategic report and the Directors' report;
- in our opinion the information given in those reports for the financial year is consistent with the financial statements; and
- in our opinion those reports have been prepared in accordance with the Companies Act 2006.

Directors' remuneration report

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

Disclosures of emerging and principal risks and longer-term viability

We are required to perform procedures to identify whether there is a material inconsistency between the Directors' disclosures in respect of emerging and principal risks and the viability statement, and the financial statements and our audit knowledge.

Based on those procedures, we have nothing material to add or draw attention to in relation to:

- the Directors' confirmation within the Viability Statement on pages 7 and 8 that they have carried out a robust assessment of the emerging and principal risks facing the Company, including those that would threaten its business model, future performance, solvency and liquidity;
- the Principal and Emerging Risks disclosures describing these risks and how emerging risks are identified, and explaining how they are being managed and mitigated; and
- the Directors' explanation in the Viability Statement of how they have assessed the prospects of the Company, over what period they have done so and why they considered that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.

We are also required to review the Viability Statement, set out on pages 7 and 8 under the Listing Rules. Based on the above procedures, we have concluded that the above disclosures are materially consistent with the financial statements and our audit knowledge.

48 Annual Report 2023
Financial Report

## 7. We have nothing to report on the other information in the Annual Report and financial statements (continued)

# Disclosures of emerging and principal risks and longer-term viability (continued)

Our work is limited to assessing these matters in the context of only the knowledge acquired during our financial statements audit. As we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the absence of anything to report on these statements is not a guarantee as to the Company's longer-term viability.

# Corporate governance disclosures

We are required to perform procedures to identify whether there is a material inconsistency between the Directors' corporate governance disclosures and the financial statements and our audit knowledge.

Based on those procedures, we have concluded that each of the following is materially consistent with the financial statements and our audit knowledge:

- the Directors' statement that they consider that the annual report and financial statements taken as a whole is fair, balanced and understandable, and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy;
- the section of the annual report describing the work of the Audit Committee, including the significant issues that the audit committee considered in relation to the financial statements, and how these issues were addressed; and
- the section of the annual report that describes the review of the effectiveness of the Company's risk management and internal control systems.

We are required to review the part of Corporate Governance Statement relating to the Company's compliance with the provisions of the UK Corporate Governance Code specified by the Listing Rules for our review. We have nothing to report in this respect.

## 8. We have nothing to report on the other matters on which we are required to report by exception

Under the Companies Act 2006, we are required 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.

We have nothing to report in these respects.

## 9. Respective responsibilities

# Directors' responsibilities

As explained more fully in their statement set out on page 43, the Directors are responsible for: the preparation of the financial statements including being satisfied that they give a true and fair view; 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; 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 they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

# Auditor's responsibilities

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 our opinion in an auditor's report. Reasonable assurance is a high level of assurance, but does not 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 aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

A fuller description of our responsibilities is provided on the FRC's website at:

www.frc.org.uk/auditorsresponsibilities.

## 10. The purpose of our audit work and to whom we owe our responsibilities

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 and the terms of our engagement by the Company. 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 the further matters we are required to state to them in accordance with the terms agreed with the Company, 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.

John Waterson (Senior Statutory Auditor)

for and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants
Saltire Court
20 Castle Terrace
Edinburgh
EH1 2EG

9 August 2023

KPMG

Bailie Gifford US Growth Trust plc 49
Financial Report
### Income Statement


|  |  | 2023 | 2023 |  |  | 2022 | 2022 |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Revenue |  | Capital | Total | Revenue |  | Capital | Total |
| Notes |  | £’000 | £’000 |  |  | £’000 | £’000 |  |

Losses on investments 9 – (10,169)  – (314,153) 
Currency losses 14 – (700)  – (2,976) 
Income 2 850 –  568 – 
Investment management fee 3 (3,345) –  (4,865) – 
Other administrative expenses 4 (670) –  (676) – 

and taxation (3,165) (10,869)  (4,973) (317,129) 
Finance costs of borrowings 5 (1,482) –  (741) – 
Net return before taxation (4,647) (10,869)  (5,714) (317,129) 
Tax 6 (71) –  (67) – 
Net return after taxation      
Net return per ordinary share 7      

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 the Company does not have any other comprehensive income and the net return after

The accompanying notes on pages 54 to 68 are an integral part of the Financial Statements.
50 Annual Report 2023
Financial Report

## Balance Sheet

As at 31 May

|   | Notes | 2023 £'000 | 2023 £'000 | 2022 £'000 | 2022 £'000  |
| --- | --- | --- | --- | --- | --- |
|  **Fixed assets** |  |  |  |  |   |
|  Investments held at fair value through profit or loss | 9 |  | 605,908 |  | 621,587  |
|  **Current assets** |  |  |  |  |   |
|  Debtors | 10 | 657 |  | 359 |   |
|  Cash and cash equivalents | 19 | 3,440 |  | 3,007 |   |
|   |  | 4,097 |  | 3,366 |   |
|  **Creditors** |  |  |  |  |   |
|  Amounts falling due within one year | 11 | (41,406) |  | (20,930) |   |
|  **Net current liabilities** |  |  | (37,309) |  | (17,564)  |
|  **Total assets less current liabilities** |  |  | 568,599 |  | 604,023  |
|  **Creditors** |  |  |  |  |   |
|  Amounts falling due after more than one year | 12 |  | – |  | (19,837)  |
|  **Net assets** |  |  | **568,599** |  | **584,186**  |
|  **Capital and reserves** |  |  |  |  |   |
|  Share capital | 13 |  | 3,073 |  | 3,073  |
|  Share premium account | 14 |  | 250,827 |  | 250,827  |
|  Special distributable reserve | 14 |  | 168,942 |  | 168,942  |
|  Capital reserve | 14 |  | 165,931 |  | 176,800  |
|  Revenue reserve | 14 |  | (20,174) |  | (15,456)  |
|  **Shareholders' funds** |  |  | **568,599** |  | **584,186**  |
|  **Net asset value per ordinary share** (after deducting borrowings at book value*) | 15 |  | **186.33p** |  | **191.44p**  |

The Financial Statements of Baillie Gifford US Growth Trust plc (Company Registration number 11194060) were approved and authorised for issue by the Board and were signed on 9 August 2023.

Tom Burnet Chairman

* See Glossary of Terms and Alternative Performance Measures on pages 76 and 77.

The accompanying notes on pages 54 to 68 are an integral part of the Financial Statements.

Baillie Gifford US Growth Trust plc 51
Financial Report
### Statement of Changes in Equity


|  |  |  | Share |  | Special |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Share | premium |  | distributable |  | Capital | Revenue |  | Shareholders’ |  |
|  | capital | account |  |  | reserve | reserve | reserve |  |  | funds |
| Notes | £’000 |  | £’000 |  | £’000 | £’000 |  | £’000 |  |  |

Shareholders’ funds at 1 June 2022 3,073 250,827 168,942 176,800 (15,456) 
Net return after taxation – – – (10,869) (4,718) 
      


|  |  |  | Share |  | Special |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Share | premium |  | distributable |  | Capital | Revenue |  | Shareholders’ |  |
|  | capital | account |  |  | reserve | reserve | reserve |  |  | funds |
| Notes | £’000 |  | £’000 |  | £’000 | £’000 |  | £’000 |  |  |

Shareholders’ funds at 1 June 2021 3,068 249,020 168,942 497,528 (9,675) 
Ordinary shares issued 13 5 1,807 – – – 
Ordinary shares bought back into treasury 13 – – – (3,599) – 
Net return after taxation – – – (317,129) (5,781) 
      
The accompanying notes on pages 54 to 68 are an integral part of the Financial Statements.
52 Annual Report 2023
Financial Report

## Cash Flow Statement

For the year ended 31 May

|   | 2023 £'000 | 2023 £'000 | 2022 £'000 | 2022 £'000  |
| --- | --- | --- | --- | --- |
|  **Cash flows from operating activities** |  |  |  |   |
|  Net return before taxation |  | (15,516) |  | (322,843)  |
|  Net losses on investments |  | 10,169 |  | 314,153  |
|  Currency losses |  | 700 |  | 2,976  |
|  Finance costs of borrowings |  | 1,482 |  | 741  |
|  Overseas withholding tax incurred |  | (71) |  | (67)  |
|  Changes in debtors and creditors |  | (308) |  | (387)  |
|  **Cash from operations*** |  | (3,544) |  | (5,427)  |
|  Finance costs paid |  | (1,481) |  | (745)  |
|  **Net cash outflow from operating activities** |  | (5,025) |  | (6,172)  |
|  **Cash flows from investing activities** |  |  |  |   |
|  Acquisitions of investments | (63,894) |  | (146,903) |   |
|  Disposals of investments | 69,383 |  | 129,027 |   |
|  **Net cash inflow/(outflow) from investing activities** |  | 5,489 |  | (17,876)  |
|  **Cash flows from financing activities** |  |  |  |   |
|  Ordinary shares issued | – |  | 1,812 |   |
|  Ordinary shares bought back into treasury and stamp duty thereon | – |  | (3,599) |   |
|  Bank loans drawn down^{#} | – |  | 9,082 |   |
|  Bank loans repaid^{#} | – |  | – |   |
|  **Net cash inflow from financing activities** |  | – |  | 7,295  |
|  **Increase/(decrease) in cash and cash equivalents** |  | 464 |  | (16,753)  |
|  Exchange movements |  | (31) |  | 1,276  |
|  Cash and cash equivalents at start of the period |  | 3,007 |  | 18,484  |
|  **Cash and cash equivalents at 31 May** |  | **3,440** |  | **3,007**  |

* Cash from operations includes dividends received in the period of £472,000 (2022 – £448,000) and interest received of £154,000 (2022 – £1,000).

#Cash movements in bank loans are shown on a net basis. Prior year balances have been updated to reflect this.

The accompanying notes on pages 54 to 68 are an integral part of the Financial Statements.

Bailie Gifford US Growth Trust plc 53
Financial Report

# Notes to the Financial Statements

Bailie Gifford US Growth Trust plc (the 'Company') was incorporated under the Companies Act 2006 in England and Wales as a public limited company with registered number 11194060. The Company is an investment company within the meaning of section 633 of the Companies Act 2006 and carries on business as an investment trust.

## 1 Principal Accounting Policies

The Financial Statements for the year to 31 May 2023 have been prepared in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and on the basis of the accounting policies set out below which are unchanged from the prior year and have been applied consistently.

### (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 at fair value through profit or loss, and on the assumption that approval as an investment trust under section 1158 of the Corporation Tax Act 2010 and the Investment Trust (Approved Company) (Tax) Regulations 2011 will be retained. The Board has, in particular, considered the impact of heightened market volatility due to macroeconomic and geopolitical concerns, including rising interest rates, inflation and the Russia-Ukraine war 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. Gearing levels and compliance with borrowing covenants are reviewed by the Board on a regular basis. As at 31 May 2023, the Company had a net current liability of £37.3 million primarily as a result of the US$25 million five-year revolving credit facility with ING Bank N.V., London Branch, which matured on 31 July 2023 and the US$25 million three-year fixed rate facility with ING Bank N.V., London Branch, due to mature on 23 October 2023. Subsequent to the year end on 26 July 2023, a new unsecured US$25 million three-year revolving credit facility was drawn down from ING Bank N.V., London Branch. 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. 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 set out in the Viability Statement on pages 7 and 8 which assesses the prospects of the Company over a period of five years, that the Company will continue in operational existence for a period of at least twelve months from the date of approval of these Financial Statements.

The Financial Statements have been prepared in accordance with the Companies Act 2006, applicable UK Accounting Standards, the Association of Investment Companies ('AIC') 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 profit and loss account between items of a revenue and capital nature has been presented in the Income Statement.

Although the Company invests in US dollar investments, the Directors consider the Company's functional currency to be sterling, as the Company's share capital is denominated in sterling, the entity is listed on a sterling stock exchange in the UK, the Company's shareholders are predominantly based in the UK and the Company and its Manager, who are subject to the UK's regulatory environment, are also UK based.

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

### (b) Accounting Estimates, Assumptions and Judgements

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

#### Judgements

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

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

The key judgements in the fair valuation process are:

- (i) the Managers' determination of the appropriate application of the International Private Equity and Venture Capital Valuation ('IPEV') Guidelines 2018 along with the Special Guidelines issued in March 2020 to each unlisted investment; and
- (ii) the Directors' consideration of whether each fair value is appropriate following detailed review and challenge. The judgement applied in the selection of the methodology used (see 1(c) below) for determining the fair value of each unlisted investment can have a significant impact upon the valuation.

#### Estimates

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

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

Fair value estimates are cross-checked to alternative estimation methods where possible to improve the robustness of the estimates. As the valuation outcomes may differ from the fair value estimates a price sensitivity analysis is provided in Other Price Risk Sensitivity in note 19 on pages 64 to 67 to illustrate the effect on the Financial Statements of an over or under estimation of fair values. The risk of an over or under estimation of fair values is greater when methodologies are applied using more subjective inputs.

54 Annual Report 2023
Financial Report
Assumptions where appropriate to incorporate the operational progress of the
The determination of fair value by the Managers involves key investee company into the valuation. Additionally, the background
assumptions dependent upon the valuation technique used. to the transaction must be considered. As a result, various Multiples-
As explained in 1(c) below, the primary technique applied under based techniques ar e employed to assess the valuations particularly
  
approach is used the valuation process recognises also, as stated in are used where appropriate. An absence of relevant industry peers
 may preclude the application of the Industry Valuation Benchmarks
appropriate starting point for estimating fair value. The Multiples technique and an absence of observable prices may preclude the
approach involves subjective inputs and therefore presents a greater Available Market Prices approach. All valuations are cross-checked
risk of over or under estimation and particularly in the absence of a for reasonableness by employing relevant alternative techniques.
recent transaction. The unlisted investments are valued according to a three monthly
The key assumptions for the Multiples approach are that the cycle of measurement dates. The fair value of the unlisted
selection of comparable companies provides a reasonable basis investments will be reviewed before the next scheduled three
for identifying relationships between enterprise value, revenue and monthly measurement date on the following occasions:
gr owth to apply in the determination of fair value. Other assumptions — at the year end and half year end of the Company; and
include:
 
(i) the discount applied for reduced liquidity versus listed peers;  
(ii) the probabilities assigned to an exit being through either an Gains and Losses
IPO or a company sale; and
Gains and losses on investments, including those arising from
(iii) that the application of milestone analysis and industry foreign currency exchange differences, are recognised in the Income
benchmark indices are a reasonable basis for applying Statement as capital items.
appropriate adjustments to the valuations.
The Managers monitor the investment portfolio on a fair value basis
Valuations are cross-checked for reasonableness to alternative and uses the fair value basis for investments in making investment
Multiples-based approaches or benchmark index movements 
as appropriate.
(d) Cash and Cash Equivalents
(c) Investments 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
sections 11 and 12 of FRS 102. Changes in fair value of investments or if they have a maturity or period of notice of not more than one
and gains and losses on disposal are recognised as capital items in working day .
the Income Statement.
(e) Financial Liabilities
Recognition and Initial Investment  
Purchases and sales of investments are accounted for on a trade at amortised cost. They are initially recorded at the proceeds
 received net of direct costs.
to capital at the time of acquisition or disposal. All investments are
(f) Income

(i) Income from equity investments is brought into account on the
recognition and are measured at subsequent reporting dates at
date on which the investments are quoted ex-dividend or, where
fair value.
no ex-dividend date is quoted, when the Company’s right to
Measurement and Valuation receive payment is established.
Listed Investments
(ii) If scrip dividends are taken in lieu of dividends in cash, the net
The fair value of listed security investments is the last traded price amount of the cash dividend declared is credited to the revenue
on recognised overseas exchanges. account. Any excess or shortfall in the value of the shares
Unlisted Investments received over the amount of the cash dividend foregone is
recognised as capital.
Unlisted investments are valued at fair value by the Directors following
a detailed review and appropriate challenge of the valuations proposed (iii) Special dividends are treated as repayments of capital or income
by the Managers. The Managers’ unlisted investment valuation policy depending on the facts of each particular case.

(iv) Overseas dividends include the taxes deducted at source.
The techniques applied are predominantly market-based
(v) Interest receivable on bank deposits and underwriting

commission are recognised on an accruals basis.
set out below and are followed by an explanation of how they are
(g) Expenses
applied to the Company’s unlisted portfolio:
 
— Multiples;
charged through the revenue column of the Income Statement
— Industry Valuation Benchmarks; and except where:
— Available Market Prices. (i) they relate directly to the acquisition or disposal of an investment
  (transaction costs), in which case they are recognised as capital
valuation technique applied. The valuation approach recognises that, within losses/gains on investments; and
 (ii) they relate directly to the buy-back/issuance of shares, in which
resulting from an orderly transaction, generally represents fair value case they are added to the buy-back cost or deducted from the
as at the transaction date and may be an appropriate starting point share issuance proceeds.
for estimating fair value at subsequent measurement dates. However,
(h) Finance Costs
consideration is given to the facts and circumstances as at the
Finance costs are accounted for on an accruals basis and on an
subsequent measurement date, including changes in the market or
effective interest rate basis and are charged through the revenue
performance of the investee company. Milestone analysis is used
account.
Baillie Gifford US Growth Trust plc 55
Financial Report

# **(i) Taxation**

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to taxation authorities. The tax rates and tax laws used to compute the amount are those enacted or substantively enacted at the reporting date.

Deferred taxation is provided on an undiscounted basis on all timing differences which have originated but not reversed by the Balance Sheet date, calculated at the tax rates expected to apply when the timing differences reverse, based on what has been enacted or substantially 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.

# **(j) Foreign Currencies**

Transactions involving foreign currencies are converted at the rate ruling at the time of the transaction. Assets and liabilities 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 capital reserve or revenue reserve as appropriate. Foreign exchange movements on investments are included in the Income Statement within gains or losses on investments.

# **2 Income**

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  **Income from investments** |  |   |
|  Overseas dividends | 472 | 448  |
|  Overseas interest | 224 | 119  |
|   | 696 | 567  |
|  **Other income** |  |   |
|  Deposit interest | 154 | 1  |
|  **Total income** | **850** | **568**  |

# **3 Investment Management Fee**

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  Investment management fee | **3,345** | **4,865**  |

Details of the Investment Management Agreement are set out on page 31. With effect from 1 September 2021 the annual management fee is 0.70% on the first £100 million of net assets, 0.55% on the next £900 million of net assets and 0.50% on the remaining net assets. Prior to 1 September 2021 the fee was 0.70% on the first £100 million of net assets and 0.55% on the remaining net assets. Management fees are calculated and payable quarterly.

# **4 Other Administrative Expenses**

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  Director's fees (see Directors' Remuneration Report on page 41) | 164 | 163  |
|  Auditor's remuneration for audit services | 135 | 105  |
|  General administrative expenses | 287 | 345  |
|  Marketing* | 84 | 63  |
|   | **670** | **676**  |

There were no non-audit fees paid to KPMG LLP in the year to 31 May 2023 or 2022.

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

# **(k) Special Distributable Reserve**

The special distributable reserve can be used for the repurchase of shares and may be distributed by way of dividend.

# **(l) Capital Reserve**

Gains and losses on disposal of investments, changes in the fair value of investments held and realised and unrealised foreign exchange differences of a capital nature are dealt with in this reserve after being recognised in the Income Statement. Purchases of the Company's own shares may be funded from this reserve.

# **(m) Revenue Reserve**

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

# **(n) Single Segment Reporting**

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

56 Annual Report 2023
Financial Report

## 5 Finance Costs of Borrowings

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  Interest on bank loans (see notes 11 and 12) | **1,482** | **741**  |

Finance costs include the initial amortised arrangement fee and non-utilisation fees.

## 6 Tax

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  **Analysis of charge in the year** |  |   |
|  Overseas withholding taxation | 71 | 67  |
|  **Factors affecting the tax charge for the year** |  |   |
|  The tax charge for the year is higher (2022 – higher) than the UK corporation tax rate of 20% for the period (2022 – 19%). The differences are explained below: |  |   |
|  Net return before taxation | (15,516) | (322,843)  |
|  Net return before taxation multiplied by the UK corporation tax rate of 20% for the period (2022 – 19%) | (3,103) | (61,340)  |
|  Capital returns not taxable | 2,174 | 60,255  |
|  Overseas dividends not taxable | (95) | (86)  |
|  Current year management expenses and non-trade loan relationship deficit not utilised | 1,024 | 1,171  |
|  Overseas withholding tax incurred | 71 | 67  |
|  Tax charge for the year | **71** | **67**  |

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

### Factors that may affect future tax charges

At 31 May 2023, the Company had a potential deferred tax asset of £5,599,000 (2022 – £4,319,000) in respect of tax losses which are 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 generate sufficient taxable profits that the losses can be utilised against in future periods. The potential deferred tax asset has been calculated using a corporation tax rate of 25% (2022 – 25%).

## 7 Net Return per Ordinary Share

|   | 2023 Revenue | 2023 Capital | 2023 Total | 2022 Revenue | 2022 Capital | 2022 Total  |
| --- | --- | --- | --- | --- | --- | --- |
|  Net return after taxation | **(1.55p)** | **(3.56p)** | **(5.11p)** | **(1.88p)** | **(103.24p)** | **(105.12p)**  |

Revenue return per ordinary share is based on the net revenue loss after taxation of £4,718,000 (2022 – net revenue loss after taxation of £5,781,000) and on 305,153,700 (2022 – 307,185,443) ordinary shares, being the weighted average number of ordinary shares in issue (excluding treasury shares) during each period.

Capital return per ordinary share is based on the net capital loss for the financial period of £10,869,000 (2022 – net capital loss of £317,129,000) and on 305,153,700 (2022 – 307,185,443) ordinary shares, being the weighted average number of ordinary shares in issue (excluding treasury shares) during each period.

Total return per ordinary share is based on the total loss for the financial period of £15,587,000 (2022 – total loss of £322,910,000) and on 305,153,700 (2022 – 307,185,443) ordinary shares, being the weighted average number of ordinary shares in issue (excluding treasury shares) during each period.

There are no dilutive or potentially dilutive shares in issue.

## 8 Ordinary Dividends

There are no dividends paid or proposed in respect of the financial year. There is no investment income available for distribution by way of dividend for the year to 31 May 2023 due to the revenue loss of £4,718,000 in the year (2022 – revenue loss of £5,781,000).

Bailie Gifford US Growth Trust plc 57
Financial Report
 
Level 1 Level 2 Level 3 Total
As at 31 May 2023 £’000 £’000 £’000 
Listed securities 396,272 – – 
Unlisted ordinary shares – – 37,307 
Unlisted preference shares * – – 168,162 
Unlisted convertible promissory notes – – 4,167 
  –  
Level 1 Level 2 Level 3 Total
As at 31 May 2022 £’000 £’000 £’000 
Listed securities 394,228 – – 
Unlisted ordinary shares – – 45,842 
Unlisted preference shares * – – 179,347 
Unlisted convertible promissory notes – – 2,170 
  –  
*
repayment (or multiple thereof) of the original investment in the event of a liquidation event such as a take-over.
During the year to 31 May 2023 no investments (31 May 2022 – investments with a book cost of £10,542,000) were transferred from Level 3
to Level 1 on becoming listed.



Fair Value Hierarchy


in its entirety as follows:
Level 1 – using unadjusted quoted prices for identical instruments in an active market;
Level 2 – using inputs, other than quoted prices included within Level 1, that are directly or indirectly observable (based on market data); and
Level 3 – using inputs that are unobservable (for which market data is unavailable).
The valuation techniques used by the Company are explained in the accounting policies on pages 54 and 55. A sensitivity analysis by
valuation technique of the unlisted securities is on pages 64 to 67.

|  | Listed | Unlisted |  |
| --- | --- | --- | --- |
| securities |  | securities * | Total |
|  | £’000 | £’000 |  |

Cost of investments at 31 May 2022 430,175 178,247 
Investment holding gains and losses at 31 May 2022 (35,947) 49,112 
Value of investments at 31 May 2022 394,228 227,359 
Analysis of transactions in the year:
Purchases at cost 39,140 24,754 
Sales proceeds received (69,383) – 
Gains and losses on investments 32,287 (42,477) 
Value of investments at 31 May 2023   
Cost of investments at 31 May 2023 376,349 203,001 
Investment holding gains and losses at 31 May 2023 19,923 6,635 
Value of investments at 31 May 2023   
* Includes holdings in ordinary shares, preference shares and convertible promissory notes.
58 Annual Report 2023
Financial Report
 (continued)
The Company received £69,383,000 from investments sold in the year (31 May 2022 – £126,118,000). The book cost of these investments
when they were purchased was £92,966,000 (2022 – £76,648,000). 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.
Transaction costs of £12,000 (2022 – £29,000) and £14,000 (2022 – £25,000) were suffered on purchases and sales respectively.
2023 2022
 
Net losses on investments
(Losses)/gains on sales (23,583) 49,470
Changes in investment holding gains and losses 13,393 (363,602)
Provision for Stripe put right 21 (21)
 
 

Recommended Practice ‘Financial Statements of Investment Trust Companies and Venture Capital Trusts’ (updated in July 2022),
in relation to unlisted investments included in the twenty largest holdings within the List of Investments disclosed on pages 21 to 23.


As at 31 May 2023 Income

|  |  |  |  |  |  | Proportion |  |  |  |  | recognised |  |  |  |  |  | Net assets |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  | of |  |  |  | from |  |  |  |  | attributable |  |
|  |  |  |  | Latest |  |  | capital |  | Book | Market | holding in |  |  |  | Pre-tax |  |  | to |
|  |  |  | Financial |  |  |  | owned |  | cost | value | the period |  | Turnover | profit/(loss) |  | shareholders |  |  |
| Name Business |  | Statements |  |  |  |  |  | % | £’000 | £’000 |  | £’000 | (US$’000) | (US$’000) |  |  | (US$’000) |  |
|  | Rocket and spacecraft |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Technologies | company n/a 0.02 11,225 39,220 Nil Information not publicly available |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Stripe Online payment platform |  |  |  |  | n/a 0.05 25,463 25,681 Nil Information not publicly available |  |  |  |  |  |  |  |  |  |  |  |  |  |

Brex Corporate credit cards
for start-ups n/a 0.23 14,536 15,624 Nil Information not publicly available
Zipline Drone-based medical
delivery n/a 0.45 6,131 14,548 Nil Information not publicly available
Faire Wholesale Online wholesale
marketplace n/a 0.23 17,699 13,449 Nil Information not publicly available
Discord Communication software n/a 0.10 11,551 11,006 Nil Information not publicly available
As at 31 May 2022 Income

|  |  |  |  |  |  | Proportion |  |  |  |  | recognised |  |  |  |  |  | Net assets |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  | of |  |  |  | from |  |  |  |  | attributable |  |
|  |  |  |  | Latest |  |  | capital |  | Book | Market | holding in |  |  |  | Pre-tax |  |  | to |
|  |  |  | Financial |  |  |  | owned |  | cost | value | the period |  | Turnover | profit/(loss) |  | shareholders |  |  |
| Name Business |  | Statements |  |  |  |  |  | % | £’000 | £’000 |  | £’000 | (US$’000) | (US$’000) |  |  | (US$’000) |  |
|  | Rocket and spacecraft |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Technologies | company n/a 0.02 11,225 35,062 Nil Information not publicly available |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Stripe Online payment platform |  |  |  |  | n/a 0.04 14,375 27,995 Nil Information not publicly available |  |  |  |  |  |  |  |  |  |  |  |  |  |

Brex Corporate credit cards
for start-ups n/a 0.24 14,536 21,198 Nil Information not publicly available
Faire Wholesale Online wholesale
marketplace n/a 0.23 17,699 20,045 Nil Information not publicly available
Discord Communication software n/a 0.11 11,551 11,740 Nil Information not publicly available
 Video game platform and
software developer n/a 0.04 7,315 10,555 Nil Information not publicly available
Zipline Drone-based medical
delivery n/a 0.50 5,322 9,690 Nil Information not publicly available
Baillie Gifford US Growth Trust plc 59
Financial Report

## 10 Debtors

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  **Amounts falling due within one year:** |  |   |
|  Income accrued (net of withholding taxes) | 472 | 171  |
|  Other debtors and prepayments | 185 | 188  |
|   | **657** | **359**  |

None of the above debtors are financial assets designated at fair value through profit or loss. The carrying amount of debtors is a reasonable approximation of fair value. There were no debtors that were past due or impaired at 31 May 2023 or 31 May 2022.

## 11 Creditors – Amounts falling due within one year

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  ING Bank N.V. floating and fixed rate loans | 40,342 | 19,837  |
|  Investment management fee | 819 | 841  |
|  Other creditors and accruals | 245 | 231  |
|  Provision for Stripe put right | – | 21  |
|   | **41,406** | **20,930**  |

None of the above creditors at 31 May 2022 are financial liabilities designated at fair value through profit or loss.

### Borrowing facilities

The Company entered into a US$25 million five-year revolving credit facility with ING Bank N.V., London Branch on 1 August 2018. Subsequent to the year end on 26 July 2023, this loan was refinanced with a new unsecured US$25 million three-year revolving credit facility from ING Bank N.V., London Branch.

At 31 May 2023 there were drawings of US$25 million at an interest rate of 6.87017% (2022 – US$25 million at an interest rate of 3.09786%).

The fixed rate borrowing facility is noted below.

The main covenants relating to the loan are that borrowings should not exceed 30% of the Company's adjusted net asset value and the Company's minimum adjusted net asset value shall be £140 million. The adjusted net asset value calculation includes the deduction of 100% of any unlisted securities. There were no breaches in the loan covenants during the year to 31 May 2023 (31 May 2022 – none).

## 12 Creditors – Amounts falling due in more than one year

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  ING Bank N.V. fixed rate loan | – | **19,837**  |

### Borrowing facilities

The Company entered into a US$25 million three-year fixed rate facility with ING Bank N.V., London Branch on 23 October 2020.

At 31 May 2023 and 31 May 2022 there were drawings of US$25 million at an interest rate of 1.902%.

The main covenants relating to the loan are that borrowings should not exceed 30% of the Company's adjusted net asset value and the Company's minimum adjusted net asset value shall be £140 million. The adjusted net asset value calculation includes the deduction of 100% of any unlisted securities. There were no breaches in the loan covenants during the year to 31 May 2023 (31 May 2022 – none).

60 Annual Report 2023
Financial Report

2023 2023 2022 2022
Number £’000 Number £’000
Allotted, called up and fully paid ordinary shares of 1p each 305,153,700 3,051 305,153,700 3,051
Treasury shares of 1p each 2,206,300 22 2,206,300 22
   
In the year to 31 May 2023, the Company issued no shares (in the year to 31 May 2022, the Company issued a total of 525,000 shares
with nominal value £5,250 representing 0.2% of the issued share capital at 31 May 2021, raising net proceeds of £1,812,000, which was
invested in accordance with the Company’s investment policy).
Over the period from 31 May 2023 to 4 August 2023 the Company has issued no shares.
The Company’s authority to buy back shares up to a maximum of 14.99% of the Company’s issued share capital was renewed at the
Annual General Meeting held on 16 September 2022. In the year to 31 May 2023 no shares were bought back (2022 – 2,206,300 shares
with a nominal value of £22,063 were bought back at a total cost of £3,599,000 and held in treasury). At 31 May 2023 the Company had
authority to buy back 45,742,539 ordinary shares.
Over the period from 31 May 2023 to 4 August 2023 the Company bought back no shares.


|  |  | Share |  | Special |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Share | premium |  | distributable |  | Capital | Revenue |  | Shareholders’ |  |
| capital | account |  |  | reserve | reserve | reserve |  |  | funds |
| £’000 |  | £’000 |  | £’000 | £’000 |  | £’000 |  |  |

At 31 May 2022 3,073 250,827 168,942 176,800 (15,456) 
Net losses on sales of investments – – – (23,583) – 
Changes in investment holding gains and losses – – – 13,393 – 
Provision for Stripe put right released – – – 21 – 
 – – – (669) – 
 – – – (31) – 
Revenue return after taxation (4,718) 
– – – –
At 31 May 2023      
The capital reserve includes investments holding gains of £26,558,000 (2022 – £13,165,000) as disclosed in note 9.

by way of dividend.
The special distributable reserve and the capital reserve can be used for the repurchase of shares.

The net asset value per ordinary share and the net asset value attributable to the ordinary shareholders at the year end calculated
in accordance with the Articles of Association were as follows:

|  |  |  |  | 2023 |  |  |  |  | 2022 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | 2023 | Net assets |  |  |  | 2022 | Net assets |  |
| Net asset value |  |  | attributable |  | Net asset value |  |  | attributable |  |
|  | per share |  |  | £’000 |  | per share |  |  | £’000 |

Ordinary shares    
The movements during the period of the assets attributable to the ordinary shares are shown in note 14.
Net asset value per ordinary share is based on the net assets as shown above and on 305,153,700 (2022 – 305,153,700) ordinary shares,
being the number of ordinary shares in issue (excluding treasury shares) at 31 May 2023 and 31 May 2022.
Baillie Gifford US Growth Trust plc 61
Financial Report


| At 31 May |  | Cash | Exchange |  |  | Other | At 31 May |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | 2022 | flows | movement |  | non-cash |  |  | 2023 |
|  | £’000 | £’000 |  | £’000 | changes |  |  | £’000 |

Cash and cash equivalents 3,007 464 (31) – 
Loans due within one year (19,837) – (669) (19,836) 
Loans due within two to three years (19,837) – – 19,837 –
    

The Directors’ fees and shareholdings are detailed in the Directors’ Remuneration Report on pages 41 and 42. No Director has a contract
of service with the Company. During the period no Director was interested in any contract or other matter requiring disclosure under
section 412 of the Companies Act 2006.
Baillie Gifford & Co Limited has been appointed as the Company’s Alternative Investment Fund Manager and Company Secretaries.
Details of the terms of the Investment Management Agreement are set out on page 31 and details of the fees during the period and the
balance outstanding at the period end are shown in notes 3 and 11 respectively.

The Company has an investment in Stripe, which had a right, but not an obligation, to sell to the Company, on or prior to 30 September 2022,
Series H Preferred shares up to a maximum cost of US$6.73 million. A provision of £21,000 was recognised as at 31 May 2022 in relation to
this put right. During the year to 31 May 2023 Stripe chose to call the put option but agreed to write off US$1 of the option for every US$2

option. The provision of £21,000 has consequently been removed.

As an investment trust, the Company invests in listed and unlisted securities and makes other investments so as to achieve its investment
objective of maximising capital appreciation from a focussed and actively managed portfolio of investments predominantly in listed and

by borrowed monies will generate a return in excess of the cost of borrowing. In pursuing its investment objective, the Company is exposed

These risks are categorised 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. Risk provides the potential for both losses and gains. In assessing risk, the Board
encourages the Managers to exploit the opportunities that risk affords.

 

in market prices. This market risk comprises three elements – currency risk, interest rate risk and other price risk. The Board of Directors
reviews and agrees policies for managing these risks and the Company’s Managers both assess the exposure to market risk when making
individual investment decisions and monitor the overall level of market risk across the investment portfolio on an ongoing basis.
Details of the Company’s investment portfolio are shown in note 9. The Company may, from time to time, enter into derivative transactions

entered into. The Company’s Managers may not enter into derivative transactions without the prior approval of the Board.
(i) Currency Risk
The Company’s assets, liabilities and income are principally denominated in US dollars. The Company’s functional currency and that in which
it reports its results is sterling. Consequently, movements in the US dollar/sterling exchange rate will affect the sterling value of those items.
The Manager monitors the Company’s US dollar exposure (and any other overseas currency exposure) and reports to the Board on a regular
basis. The 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.


US dollar borrowings can limit the Company’s exposure to anticipated future changes in exchange rates which might otherwise adversely
affect the value of the portfolio of investments.
62 Annual Report 2023
Financial Report
(continued)
(i) Currency Risk (continued)

is shown below.

|  |  |  | Cash and |  |  | Other debtors |  | Net |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Investments |  | deposits |  | Loans | and creditors * | exposure |  |
| At 31 May 2023 |  | £’000 |  | £’000 | £’000 | £’000 |  |  |

US dollar 605,908 3,074 (40,342) (556) 
Total exposure to currency risk 605,908 3,074 (40,342) (556) 
Sterling – 366 – 149 
    
* Includes non-monetary assets of £172,000.

|  |  |  | Cash and |  |  | Other debtors |  | Net |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Investments |  | deposits |  | Loans | and creditors * | exposure |  |
| At 31 May 2022 |  | £’000 |  | £’000 | £’000 | £’000 |  |  |

US dollar 621,587 2,633 (39,674) (866) 
Total exposure to currency risk 621,587 2,633 (39,674) (866) 
Sterling – 374 – 132 
    
* Includes non-monetary assets of £176,000.
Currency Risk Sensitivity
At 31 May 2023, if sterling had strengthened by 5% against the US dollar, with all other variables held constant, total net assets and total
return would have decreased by £28,404,000 (2022 – £29,184,000). A 5% weakening of sterling against the US dollar, with all other
variables held constant, would have had an equal but opposite effect on the Financial Statement amounts. The analysis is performed on the
same basis as it was for 2022.
A change of 5% in foreign currency rates has been considered to be a reasonably plausible change.
(ii) Interest Rate Risk
Interest rate movements may affect directly the level of income receivable on cash deposits and the interest payable on any variable rate
borrowings.
They may also impact upon the market value of investments as the effect of interest rate movements upon the earnings of a company may


investment decisions and when entering into borrowing agreements.
The Board reviews on a regular basis the amount of investments in cash and the income receivable on cash deposits.

approved levels are monitored and reviewed regularly by the Board.
 
Financial Assets

|  |  |  |  | 2023 | 2023 |  |  |  |  | 2022 | 2022 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | 2023 |  | Weighted |  | Weighted |  | 2022 |  | Weighted |  | Weighted |
| Fair value |  |  | average |  | average period | Fair value |  |  | average |  | average period |
|  | £’000 | interest rate |  |  | until maturity * |  | £’000 | interest rate |  |  | until maturity * |

Cash:
US dollar 3,074 2.3% n/a 2,633 0.2% n/a
Sterling 366 1.1% n/a 374 <0.1% n/a
 
* Based on expected maturity date.

prevailing bank base rates.
Baillie Gifford US Growth Trust plc 63
Financial Report
(continued)
(ii) Interest Rate Risk (continued)
Financial Liabilities

|  |  |  |  | 2023 |  |  | 2023 |  |  |  |  | 2022 |  |  | 2022 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | 2023 |  | Weighted |  |  | Weighted |  |  | 2022 |  | Weighted |  |  | Weighted |  |
| Book value |  |  | average |  | average period |  |  | Book value |  |  | average |  | average period |  |  |
|  | £’000 | interest rate |  |  | until maturity |  |  |  | £’000 | interest rate |  |  | until maturity |  |  |

Bank loans:
Floating rate – US$ denominated 20,171 5.2% 61 days 19,837 3.1% 92 days
Fixed rate – US$ denominated 20,171 1.9% 145 days 19,837 1.9% 510 days
 
Financial Assets
Fixed asset investments are valued at bid prices which equate to their fair value. A full list of the Company’s investments is given
on pages 21 to 23. In addition, an analysis of the investment portfolio by broad industrial or commercial sector is shown on page 24.
Interest Rate Risk Sensitivity
An increase of 100 basis points in interest rates, with all other variables being held constant, would have decreased the Company’s total
net assets and total return for the year to 31 May 2023 by £146,000 (31 May 2022 decreased by £119,000). This is mainly due to the

an equal but opposite effect.
(iii) 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 Board manages the market price risks inherent in the investment portfolio by ensuring full and timely access to relevant
information from the Manager. The Company’s portfolio of unlisted Level 3 investments is not necessarily affected by market performance,
however the valuations are affected by the performance of the underlying securities in line with the valuation criteria in note 1(c). The Board
meets regularly and at each meeting reviews investment performance, the investment portfolio and the rationale for the current investment
portfolio positioning to ensure consistency with the Company’s objectives and investment policies. The portfolio does not seek to reproduce
the comparative index. Investments are selected based upon the merit of individual companies and therefore performance may well diverge
from the comparative index.
Other Price Risk Sensitivity
A full list of the Company’s investments is given on pages 21 to 23. In addition, an analysis of the investment portfolio by broad industrial
or commercial sector is shown on page 24.
69.7% (2022 – 67.5%) of the Company’s net assets are invested in quoted equities. A 5% increase in quoted equity valuations at 31 May 2023
would have increased total assets and total return by £19,814,000 (2022 – £19,711,000). A decrease of 5% would have had an equal but
opposite effect.
36.7% (2022 – 38.9%) of the Company’s net assets are invested in private company investments. The fair valuation of the private company

64 Annual Report 2023
Financial Report
(continued)
(iii) Other Price Risk (continued)
Other Price Risk Sensitivity (continued)



of values for the key unobservable inputs.
As at 31 May
2023 Significant unobservable inputs*

|  | Fair value of |  |  | Key |  | Other |  |  | Weighted |  |  | Sensitivity to changes |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Valuation | investments |  |  | unobservable |  | unobservable |  |  | average | Sensitivity |  | in significant unobservable |
| Approach |  |  | £’000 | inputs |  | inputs | † | Range | range ** | % | † | inputs |
| Market |  | 30,526  |  |  | # | a,b,c,d 1.9x–6.9x 4.8x 10.0%  |  |  |  |  |  |  |
| approach using |  |  |  |  |  |  |  |  |  |  |  |  |
| comparable |  |  |  |  |  |  |  |  |  |  |  | fair value would change |
| traded multiples |  |  |  |  |  |  |  |  |  |  |  | by £1,418,080 and |

-£1,390,974.
 ‡ a,b,c,d 4.4x–4.9x 4.6x 10.0% 

fair value would change
by £715,920 and
-£715,110.
Illiquidity discounts e (10.0%) (10.0%) 10.0% If the transaction implied
premium/discount is

fair value would change
by £241,009 and
-£237,884.
Transaction implied g n/a n/a n/a n/a
premiums and

|  |  | discounts |  | ^^ |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Benchmark | 83,399 Selection of comparable |  |  |  | a,b,c,f (36.3%)– |  | (9.8%) 10.0% If input comparable |  |
| performance |  | companies and relevant |  |  |  | 21.2% |  | company performance |
|  |  | indices | ¶ |  |  |  |  |  |

fair value would change
by £5,463,779 and
-£5,331,196.
Recent 95,711 n/a ^
a,b n/a n/a n/a n/a
transaction
price
Total 
† See explanation for other unobservable inputs on pages 66 and 67 (sections ‘a’ to ‘g’ as relevant).
**Weighted average is calculated by reference to the fair value of holdings as at the respective year-end. This therefore gives a clearer
indication of the typical multiple or adjustment being applied across the portfolio.
# 
‡ 
^^ Due to fewer transactions in the last 12 months and to avoid stale valuations, there were no transaction implied premiums or discounts
directly impacting the valuations.
¶ 
in overall company value for the basket of comparable companies relevant to each holding since the most recent transaction or since the
last assessed.
^ Whilst a recent transaction price may be the most appropriate basis for a valuation, it will be corroborated by other techniques which factor
in the unobservable inputs noted in the above table. However, the transaction price itself is observable.
* 
The unobservable inputs applicable to each broad category of valuation basis will vary dependent on the particular circumstances of each
unlisted company valuation. An explanation of each of the key unobservable inputs is provided below and includes an indication of the range
in value for each input, where relevant. The assumptions made in the production of the inputs are described in note 1(b) on pages 54 and 55.
Baillie Gifford US Growth Trust plc 65
Financial Report
(continued)
(iii) Other Price Risk (continued)
Other Price Risk Sensitivity (continued)
As at 31 May
2022 Significant unobservable inputs*

|  | Fair value of |  |  | Key |  | Other |  |  | Weighted |  |  | Sensitivity to changes |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Valuation | investments |  |  | unobservable |  | unobservable |  |  | average | Sensitivity |  | in significant unobservable |
| Approach |  |  | £’000 | inputs |  | inputs | † | Range | range ** | % | † | inputs |
| Market |  | 59,307  |  |  | # | a,b,c,d 2.9x–8.8x 7.7x 10.0%  |  |  |  |  |  |  |
| approach using |  |  |  |  |  |  |  |  |  |  |  |  |
| comparable |  |  |  |  |  |  |  |  |  |  |  | fair value would change |
| traded multiples |  |  |  |  |  |  |  |  |  |  |  | by £4,863,047 and |

-£4,609,401.
 ‡ a,b,c,d 2.3x–4.7x 3.1x 10.0% 

fair value would change by
£151,582 and -£151,583.
Illiquidity discounts e (10.0%) (10.0%) 10.0% If the illiquidity discount is

fair value would change
by -£333,236 and
£338,440.
Transaction implied g (16.5%)– (0.7%) 10.0% If the transaction implied
premiums and discounts 51.8% premium/discount is

fair value would change
by -£202,281 and
£194,422.

| Benchmark | 109,971 Selection of comparable |  |  | a,b,c,f (58.2%)– |  | (25.3%) 10.0% If input comparable |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
| performance |  | companies and relevant |  |  | (8.8%) |  | company performance |
|  |  | indices | ¶ |  |  |  |  |

fair value would change
by £4,986,147 and
-£4,812,024.
Recent 58,081 n/a ^
a,b n/a n/a n/a
transaction
price
Total 
† See explanation for other unobservable inputs on pages 66 and 67 (sections ‘a’ to ‘g’ as relevant).
**Weighted average is calculated by reference to the fair value of holdings as at the respective year-end. This therefore gives a clearer
indication of the typical multiple or adjustment being applied across the portfolio.
# 
‡ 
¶ See explanation for the selection of comparable companies on page 67 section ‘c’. 
in overall company value for the basket of comparable companies relevant to each holding since the most recent transaction or since the
last assessed.
^ Whilst a recent transaction price may be the most appropriate basis for a valuation, it will be corroborated by other techniques which factor
in the unobservable inputs noted in the above table. However, the transaction price itself is observable.
* 
The unobservable inputs applicable to each broad category of valuation basis will vary dependent on the particular circumstances of each
unlisted company valuation. An explanation of each of the key unobservable inputs is provided below and includes an indication of the range
in value for each input, where relevant. The assumptions made in the production of the inputs are described in note 1(b) on pages 54 and 55.
(a) Application of Valuation Basis

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


66 Annual Report 2023
Financial Report
(continued)
(iii) Other Price Risk (continued)
Other Price Risk Sensitivity (continued)
(b) Probability Estimation of Liquidation Event
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
 

(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

depending on the companies selected and the industries they operate in.
(d) Estimated Sustainable Earnings

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,


(f) Selection of Appropriate Benchmarks
The selection of appropriate benchmarks is assessed individually for each investment. The industry and geography of each company
are key inputs to the benchmark selection, with either one or two key indices or benchmarks being used for comparison.
(g) Transaction Implied Premium and Discount
Where there is an implied company valuation available as a result of an external arm’s length transaction, the ongoing valuation will be
calibrated to this by deriving a company valuation with reference to the average multiple from a set of comparable companies and
comparing this to a transaction implied valuation, and could result in an implied premium or discount compared to comparable companies at
the point of transaction. This discount or premium will be considered in future valuations, and may be reduced due to factors such as period
of time since the transaction and company performance. Where a calibrated approach is not appropriate, a discount for illiquidity will be
applied as noted in (e) above.
Liquidity Risk


readily realisable. The Board provides guidance to the Managers as to the maximum exposure to any one holding and to the maximum
aggregate exposure to substantial holdings.
The Company has the power to take out borrowings, which give it access to additional funding when required. The Company’s current
borrowing facilities are detailed in notes 11 and 12. Under the terms of the borrowing facility, borrowings are repayable on demand at their
current carrying value.
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 Managers make 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 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.

— investment transactions are carried out with a large number of brokers whose creditworthiness is reviewed by the Managers.
Transactions are ordinarily undertaken on a delivery versus payment basis whereby the Company’s custodian bank 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;
Baillie Gifford US Growth Trust plc 67
Financial Report

## 19 Financial Instruments (continued)

### (iii) Other Price Risk (continued)

#### Credit Risk (continued)

- 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, are subject to rigorous assessment by the Managers; and
- cash is only held at banks that are regularly reviewed by the Managers. At 31 May 2023 and 31 May 2022 all cash deposits were held with the custodian bank.

The Company owns a number of unquoted preference share securities. Some of these may have been classified as debt by the issuer. There are no material amounts past due in relation to these securities. As these instruments (alongside the ordinary share securities) have been recognised at fair value through profit and loss, the fair value takes into account credit, market and other price risk.

#### Credit Risk Exposure

The exposure to credit risk at 31 May was:

|   | 2023 £'000 | 2022 £'000  |
| --- | --- | --- |
|  Fixed interest investments | 4,167 | 2,170  |
|  Cash and short-term deposits | 3,440 | 3,007  |
|  Debtors and prepayments | 657 | 359  |
|   | **8,264** | **5,536**  |

The maximum exposure in cash during the year to 31 May 2023 was £23,049,000 (31 May 2022 – £28,330,000) and the minimum was £1,213,000 (31 May 2022 – £3,007,000). None of the Company's financial assets are past due or impaired.

#### Fair Value of Financial Assets and Financial Liabilities

The Directors are of the opinion that the financial assets and liabilities of the Company are stated at fair value in the Balance Sheet with the exception of long-term borrowings. The fair values of the Company's borrowings are shown below.

|   | 2023 |   | 2022  |   |
| --- | --- | --- | --- | --- |
|   |  Book Value £'000 | Fair Value £'000 | Book Value £'000 | Fair Value £'000  |
|  Floating rate multi-currency loan* | 20,171 | 20,171 | 19,837 | 19,837  |
|  Fixed rate multi-currency loan | 20,171 | 19,733 | 19,837 | 19,244  |
|   | **40,342** | **39,904** | **39,674** | **39,081**  |

* All short-term floating rate borrowings are stated at book cost which is considered to be equal to their fair value given the facilities are revolving credit facilities.

#### Capital Management

The capital of the Company is its share capital and reserves as set out in notes 13 and 14 together with its borrowings (see notes 11 and 12). The objective of the Company is to invest predominantly in listed and unlisted US companies in order to achieve capital growth. The Company's investment policy is set out on page 4. In pursuit of the Company's objective, the Board has a responsibility for ensuring the Company's ability to continue as a going concern and details of the related risks and how they are managed are set out on pages 6 and 7. The Company has the authority to issue and buy back its shares and changes to the share capital during the period are set out in notes 13 and 14. The Company does not have any externally imposed capital requirements other than the covenants on its loans which are detailed in notes 11 and 12.

## 20 Subsequent Events

### Share Price and Net Asset Value Movements

Subsequent to the year end investment valuations have continued to increase through underlying investment performance since the year end valuation which has resulted in an increase in investment valuation of 3.6% and a related movement in net asset value of 4.3% to 194.45p as at 4 August 2023.

As at 4 August 2022 the share price was 160.80p, 11.0% higher than as at 31 May 2023. As all movements relate to post year end activity these will be reported within the Annual Report for the year ended 31 May 2024.

### Private Company Investments

Since 31 May 2023 up to 4 August 2023 there have been no further investments in private companies.

On 19 July 2023, Oddity Tech Ltd went public on the Nasdaq stock exchange. Oddity Tech Ltd priced its initial public offering at US$35 per share, 18.0% higher than the value as at 31 May 2023.

68 Annual Report 2023
Shareholder Information

## Notice of Annual General Meeting

![img-7.jpeg](img-7.jpeg)

The Annual General Meeting of the Company will be held at the offices of Baillie Gifford & Co, Calton Square, 1 Greenside Row, Edinburgh EH1 3AN on Monday, 18 September 2023 at 9.30am.

**By Rail:**
Edinburgh Waverley – approximately a 5 minute walk away

**By Bus:**
Lothian Buses local services include:
1, 5, 7, 8, 10, 12, 14, 15, 15A, 16, 22, 25, 34

**By Tram:**
Stops at St Andrew Square and York Place

Access to Waverley Train Station on foot

The Board encourages all shareholders to submit proxy voting forms as soon as possible and, in any event, by no later than 9.30am on 14 September 2023. Should you or, if appointed, your proxy, wish to watch the Annual General Meeting electronically please get in touch with the Managers at trustenquiries@bailliegifford.com, who will be able to provide you with details and instructions for doing so. Please note you will not be able to vote and you will not be counted as part of the quorum but you will have the opportunity to watch the Managers' presentation. You will also be able to submit questions in advance to the Board and Managers by email to trustenquiries@bailliegifford.com or call 0800 917 2112.

Baillie Gifford may record your call.

NOTICE IS HEREBY GIVEN that the fifth Annual General Meeting of Baillie Gifford US Growth Trust plc (the 'Company') will be held at the offices of Baillie Gifford & Co, Calton Square, 1 Greenside Row, Edinburgh EH1 3AN on Monday, 18 September 2023 at 9.30am for the purposes of considering and, if thought fit, passing the following resolutions, of which Resolutions 1 to 10 will be proposed as Ordinary Resolutions and Resolutions 11 and 12 will be proposed as Special Resolutions:

1. To receive and adopt the Annual Report and Financial Statements of the Company for the financial year ended 31 May 2023 together with the Reports of the Directors and of the Independent Auditor thereon.
2. To approve the Directors' Annual Report on Remuneration for the financial year ended 31 May 2023.
3. To re-elect Mr TJW Burnet as a Director of the Company.
4. To re-elect Ms SP Inglis as a Director of the Company.
5. To re-elect Mr GD Paterson as a Director of the Company.
6. To re-elect Mr CRD van der Kuyl as a Director of the Company.
7. To re-elect Ms RL Palmer as a Director of the Company.
8. To appoint Ernst & Young LLP as Independent Auditor of the Company to hold office until the conclusion of the next Annual General Meeting at which the Financial Statements are laid before the Company.

9. To authorise the Directors to determine the remuneration of the Independent Auditor of the Company.
10. That, in substitution to 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 ordinary shares in the capital of the Company, or C shares convertible into ordinary shares, provided that such authority shall be limited to the allotment of ordinary shares and grant of rights in respect of ordinary shares with an aggregate nominal value of up to £1,017,179.00 (representing approximately one-third of the nominal value of the issued share capital excluding treasury shares as at 4 August 2023), 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 ordinary shares or C shares to be allotted or granted after the expiry of such authority and the Directors shall be entitled to allot or grant ordinary shares or C shares in pursuance of such an offer or agreement as if such authority had not expired.

Baillie Gifford US Growth Trust plc 69
Shareholder Information

11. That, subject to the passing of Resolution 10 above, and in substitution to any existing authorities 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 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, and including ordinary shares and C shares) for cash pursuant to the authority given by Resolution 10 above and to sell treasury shares for cash as if section 561(1) of the Act did not apply to any such allotment or sale, provided that this power:

(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 after such expiry and the Directors may allot equity securities 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 £305,153.70 (representing approximately 10% of the nominal value of the issued share capital excluding treasury shares of the Company as at 4 August 2023).
12. 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 generally and unconditionally authorised, 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 1p each in the capital of the Company ('ordinary shares') (either for retention as treasury shares for future reissue, resale or transfer or for cancellation) provided that:
(a) the maximum aggregate number of ordinary shares hereby authorised to be purchased is 45,742,539, or, if less, the number representing approximately 14.99% of the issued ordinary share capital (excluding treasury shares) 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 any ordinary share purchased pursuant to this authority 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 day of purchase; and
(ii) the higher of the price of the last independent trade and the highest current independent bid for an ordinary share in the Company on the trading venues where the market purchases by the Company pursuant to the authority conferred by this Resolution 12 will be 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 next Annual General Meeting, 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 or contracts.

By Order of the Board
Baillie Gifford & Co Limited
Managers and Secretaries
17 August 2023

Notes:

1. As a member you are entitled to appoint a proxy or proxies to exercise all or any of your rights to attend, speak and vote at the AGM. A proxy need not be a member of the Company but must attend the AGM to represent you. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You can only appoint a proxy using the procedure set out in these notes and the notes to the proxy form. You may not use any electronic address provided either in this notice or any related documents (including the Financial Statements and proxy form) to communicate with the Company for any purpose other than those expressly stated.
2. 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 two days (excluding non-working days) before the time of the meeting or any adjourned meeting.
3. 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.
4. 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 & Ireland 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,

70 Annual Report 2023
Shareholder Information

in order to be valid, be transmitted so as to be received by the Company's registrar (ID 3RA50) no later than 9.30am two days (excluding non-working days) before the time of the meeting or any adjournment. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Application Host) from which the Company's registrar is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.

5. CREST members and, where applicable, their CREST sponsors, or voting service providers should note that Euroclear UK & Ireland 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 or 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.
6. 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.
7. The return of a completed proxy form or other instrument of proxy will not prevent you attending the AGM and voting in person if you wish.
8. 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 9.30am two days (excluding non-working days) prior to the commencement of the AGM or any adjourned meeting. Changes to the Register of Members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the meeting.
9. 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. The members of the Company 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. The Company will be required to do so once it has received such requests from either members representing at least 5% of the total voting rights of the Company or at least 100 members who have a relevant right to vote and hold shares in the Company on which there has been paid up an average sum per member of at least £100. Such requests must be made in writing and must state your full name and address and be sent to the Company at Calton Square, 1 Greenside Row, Edinburgh, EH1 3AN.
12. 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 bgusgrowthtrust.com.
13. Members have the right to ask questions at the meeting in accordance with section 319A of the Companies Act 2006.
14. Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member provided that they do not do so in relation to the same shares.
15. As at 4 August 2023 (being the last practicable date prior to the publication of this notice) the Company's issued share capital (excluding treasury shares) consisted of 305,153,700 ordinary shares of 1p each, carrying one vote each. Therefore, the total number of voting rights in the Company as at 4 August 2023 were 305,153,700 votes.
16. Any person holding 3% or more of the total voting rights of the Company who appoints a person other than the Chairman of the meeting as his or her proxy will need to ensure that both he/she and his/her proxy complies with their respective disclosure obligations under the UK Disclosure Guidance and Transparency Rules.
17. No Director has a contract of service with the Company.

Bailie Gifford US Growth Trust plc 71
Shareholder Information

## Further Shareholder Information

**Baillie Gifford US Growth Trust plc ('Baillie Gifford US Growth') is an investment trust. Investment trusts offer investors the following:**

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

### How to Invest

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

### Sources of Further Information on the Company

The ordinary shares of the Company are listed on the London Stock Exchange and their price is shown in the Financial Times. The price of shares can also be found on the Company's page on Baillie Gifford's website at bgusgrowthtrust.com. Trustnet at trustnet.co.uk and on other financial websites. Company factsheets are also available on the Baillie Gifford website and are updated monthly. These are available from Baillie Gifford on request.

### Baillie Gifford US Growth Share Identifiers

ISIN GB00BDFGHW41

Sedol BDFGHW4

Ticker USA

Legal Entity Identifier 213800UM1OUWXZPKE539

### Key Dates

The Company pays the minimum permissible level of final dividend and no interim dividend. If a dividend was payable this would be due soon after the Annual General Meeting.

### Share Register Enquiries

Computershare Investor Services PLC maintains the share register on behalf of the Company. In the event of queries regarding shares registered in your own name, please contact the Registrars on 0370 707 1711.

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

- hear the latest share price;
- confirm your current shareholding balance; and
- order Change of Address and Stock Transfer forms.

By quoting the reference number on your share certificate you can check your holding on the Registrar's 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;
- change address details; and
- use online dealing services.

To take advantage of this service, please log in at investorcentre.co.uk and enter your Shareholder Reference Number and Company Code (this information can be found on 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 1711.

### CREST Proxy Voting

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

Where this has been received in a country where the provision of such a service would be contrary to local laws or regulations, this should be treated as information only.

### Analysis of Shareholders at 31 May

|   | 2023 Number of shares held | 2023 % | 2022 Number of shares held | 2022 %  |
| --- | --- | --- | --- | --- |
|  Institutions | 45,557,960 | 14.9 | 53,807,542 | 17.6  |
|  Intermediaries | 240,643,562 | 78.9 | 248,309,862 | 81.4  |
|  Individuals | 1,552,388 | 0.5 | 1,162,411 | 0.4  |
|  Marketmakers | 17,399,790 | 5.7 | 1,873,885 | 0.6  |
|   | **305,153,700** | **100.0** | **305,153,700** | **100.0**  |

### 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 bgusgrowthtrust.com.

72 Annual Report 2023
Shareholder Information
### Communicating with Shareholders
Baillie Gifford US Growth Trust web page at bgusgrowthtrust.com
Trust
Trust Suggestions and Questions
Trust Any suggestions on how communications with shareholders can
published twice a year. It provides an insight to Baillie Gifford’s be improved are welcomed. Please contact the Baillie Gifford
investment approach by including interviews with Baillie Gifford’s Client Relations Team (see contact details below) and give them
fund managers, as well as containing investment trust news, your suggestions. They will also be very happy to answer
investment features and articles about the trusts managed by questions that you may have about Baillie Gifford US Growth .
Baillie Gifford, including Baillie Gifford US Growth. Trust plays an
Client Relations Team Contact Details
important role in helping to explain Baillie Gifford’s products so
that readers can really understand them. Telephone: 0800 917 2112
Your call may be recorded for training or monitoring purposes.
You can subscribe to Trust
Email: trustenquiries@bailliegifford.com
bailliegifford.com/trust.
Website: bailliegifford.com
Baillie Gifford Client Relations Team
Baillie Gifford US Growth on the Web
Calton Square
Up-to-date information about Baillie Gifford US Growth can be
1 Greenside Row
found on the Company’s page of the Managers’ website at

bgusgrowthtrust.com  Baillie Gifford
US Growth , including recent portfolio information and performance
 Please note that Baillie Gifford is not permitted to give
financial advice. If you would like advice, please ask an
authorised intermediary.
Baillie Gifford US Growth Trust plc 73
Shareholder Information
Risk Warnings 
companies. The Company’s risk could be increased as these
Past performance is not a guide to future performance.

Baillie Gifford US Growth Trust plc (‘Baillie Gifford US Growth’) is a
may be greater.
listed UK company. The value of its shares, and any income from
Share prices may either be below (at a discount) or above (at a
them, can fall as well as rise and you may not get back the
premium) the net asset value (‘NAV’). The Company may issue
amount invested.
new shares when the price is at a premium which may reduce the
Baillie Gifford US Growth invests in overseas securities.
share price. Shares bought at a premium may have a greater risk
Changes in the rates of exchange may also cause the value of
of loss than those bought at a discount.
your investment (and any income it may pay) to go down or up.
Charges are deducted from income. Where income is low, the
Baillie Gifford US Growth has borrowed money to make further
expenses may be greater than the total income received and the
investments (sometimes known as ‘gearing’ or ‘leverage’).
capital value would be reduced.
The risk is that when this money is repaid by the Company,
The aim of Baillie Gifford US Growth is to achieve capital growth
the value of the investments may not be enough to cover the
and it is unlikely that the Company will provide steady, or indeed
borrowing and interest costs, and the Company will make
any, income.
a loss. If the Company’s investments fall in value, any invested
borrowings will increase the amount of this loss.
You should note that tax rates and reliefs may change at any time
and their value depends on your circumstances.
Baillie Gifford US Growth can buy back its own shares. The risks
from borrowing, referred to above, are increased when a company
Baillie Gifford US Growth is a UK public listed company and as
buys back its own shares.
such complies with the requirements of the Financial Conduct
Authority but is not authorised or regulated by the Financial

Conduct Authority.
may not be readily available and there can be no assurance that

The information and opinions expressed within the Annual Report
price the Company might receive upon their sale.
and Financial Statements are subject to change without notice.
Baillie Gifford US Growth can make use of derivatives which may
The staff of Baillie Gifford & Co and Baillie Gifford US Growth
impact on its performance. Currently the Company does not
Directors may hold shares in Baillie Gifford US Growth and may
make use of derivatives.
buy and sell such shares from time to time.
Investments in smaller companies is generally considered higher
Further details of the risks associated with investing in the
risk as changes in their share prices may be greater and the
Company, including a Key Information Document and how
shares may be harder to sell. Smaller companies may do less
charges are applied, can be found at bgusgrowthtrust.com,
well in periods of unfavourable economic conditions.
or by calling Baillie Gifford on 0800 917 2112. Your call may be
recorded for training or monitoring purposes.
Baillie Gifford US Growth’s exposure to a single market and
currency may increase risk.
This information has been issued and approved by Baillie Gifford
& Co Limited, the Managers and Secretaries, and does not in any
way constitute investment advice.
### Sustainable Finance Disclosure Regulation (‘SFDR’)
 
not have a direct impact in the UK due to Brexit, however, it detail on the Managers’ approach to sustainability can be found
 
 on the Baillie Gifford website bailliegifford.com.
BG & Co Limited, via the National Private Placement Regime
Taxonomy Regulation
(NPPR) the following disclosures have been provided to comply

with the high-level requirements of SFDR. The AIFM has adopted
or criteria for environmentally sustainable economic activities in

respect of six environmental objectives. It builds on the disclosure
on integration of sustainability risks in investment decisions. Baillie
requirements under SFDR by introducing additional disclosure
Gifford & Co’s approach to investment is based on identifying and
obligations in respect of alternative investment funds that invest
holding high quality growth businesses that enjoy sustainable
in an economic activity that contributes to an environmental
competitive advantages in their marketplace. To do this it looks
objective. The Company does not commit to make sustainable


research to build an in-depth knowledge of an individual company

and a view on its long-term prospects. This includes the
environmentally sustainable economic activities.
consideration of sustainability factors (environmental, social and/
or governance matters) which it believes will positively or
74 Annual Report 2023
Shareholder Information
### Alternative Investment Fund Managers (AIFM) Regulations
In accordance with the Alternative Investment Fund Managers Leverage
Regulations, information in relation to the Company’s leverage and The Company’s maximum and actual leverage levels (see Glossary
the remuneration of the Company’s AIFM, Baillie Gifford & Co of Terms and Alternative Performance Measures on pages 76 and
Limited, is required to be made available to investors. 77) at 31 May 2023 are shown below:

Gross method Commitment method
In accordance with the Regulations, the AIFM’s remuneration policy
Maximum limit 2.50:1 2.00:1
is available at bailliegifford.com or on request (see contact details
on the back cover) and the numerical remuneration disclosures in Actual 1.07:1 1.07:1
respect of the AIFM’s relevant reporting period are also available
at bailliegifford.com .
### Automatic Exchange of Information
 New shareholders, excluding those whose shares are held in
the automatic exchange of information, Baillie Gifford US Growth 
Trust plc is required to collect and report certain information about 
certain shareholders.
For further information, please see HMRC’s Quick Guide: Automatic
The legislation requires investment trust companies to provide 
personal information to HMRC on certain investors who purchase gov.uk/government/publications/exchange-of-information-
shares in investment trusts. Accordingly, Baillie Gifford US Growth account-holders.
Trust plc must provide information annually to the local tax
authority on the tax residencies of a number of non-UK based
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
of this communication.
Baillie Gifford US Growth Trust plc 75
Shareholder Information

## Glossary of Terms and Alternative Performance Measures ('APM')

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

### Total Assets

This is the Company's definition of Adjusted Total Assets, being the total value of all assets held less all liabilities (other than liabilities in the form of borrowings).

### Shareholders' Funds and Net Asset Value

Shareholders' funds is the value of all assets held less all liabilities, with borrowings deducted at book cost. Net asset value ('NAV') is the value of all assets held less all liabilities, with borrowings deducted at either fair value or book value as described below. Per share amounts are calculated by dividing the relevant figure by the number of ordinary shares in issue.

### Borrowings at Book Value

Borrowings are valued at adjusted net issue proceeds. The value of the borrowings at book is set out on page 68.

### Borrowings at Fair Value (APM)

Borrowings are valued at an estimate of their market worth. The value of the borrowings at fair is set out on page 68.

### Net Asset Value (Reconciliation of NAV at Book Value to NAV at Fair Value)

|   | 31 May 2023 | 31 May 2022  |
| --- | --- | --- |
|  Net asset value per ordinary share (borrowings at book value) | 186.33p | 191.44p  |
|  Shareholders' funds (borrowings at book value) | £568,599,000 | £584,186,000  |
|  Add: book value of borrowings | £40,342,000 | £39,674,000  |
|  Less: fair value of borrowings | (£39,904,000) | (£39,081,000)  |
|  Net Asset Value (borrowings at fair value) | £569,037,000 | £584,779,000  |
|  Number of shares in issue | **305,153,700** | **305,153,700**  |
|  Net asset value per ordinary share (borrowings at fair value) | **186.48p** | **191.63p**  |

### Net Liquid Assets

Net liquid assets comprise current assets less current liabilities (excluding borrowings).

### (Discount)/Premium (APM)

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 per share it is said to be trading at a discount. The size of the discount is calculated by subtracting the share price from the NAV per share and is usually expressed as a percentage of the NAV per share. If the share price is higher than the NAV per share, this situation is called a premium.

|   | 31 May 2023 | 31 May 2022  |
| --- | --- | --- |
|  Net asset value per ordinary share (after deducting borrowings at fair value) | (a) 186.48p | 191.63p  |
|  Share price | (b) 144.80p | 168.00p  |
|  Discount (borrowings at fair value) | ((b)-(a)) ÷ (a) **22.4%** | **12.3%**  |

|   | 31 May 2023 | 31 May 2022  |
| --- | --- | --- |
|  Net asset value per ordinary share (after deducting borrowings at book value) | (a) 186.33p | 191.44p  |
|  Share price | (b) 144.80p | 168.00p  |
|  Discount (borrowings at book value) | ((b)-(a)) ÷ (a) **22.3%** | **12.2%**  |

### Total Return (APM)

The total return is the return to shareholders after reinvesting any dividend on the date that the share price goes ex-dividend. The Company does not pay a dividend, therefore, the one year and since inception total returns for the share price and NAV per share at book and fair value are the same as the percentage movements in the share price and NAV per share at book and fair value as detailed on pages 1 and 28.

### Ongoing Charges (APM)

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 average net asset value (with debt at fair value).

### Ongoing Charges Calculation

|   | 31 May 2023 £'000 | 31 May 2022 £'000  |
| --- | --- | --- |
|  Investment management fee | 3,345 | 4,865  |
|  Other administrative expenses | 670 | 676  |
|  **Total expenses** | **4,015** | **5,541**  |
|  Average daily cum-income net asset value | (b) 578,722 | 898,007  |
|  **Ongoing charges** | **((a)+(b)) 0.69%** | **0.62%**  |

76 Annual Report 2023
Shareholder Information

## 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 the shareholders' assets is called 'gearing'. If the Company's assets grow, the shareholders' assets 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 at book value less cash and cash equivalents (including any outstanding trade settlements) expressed as a percentage of shareholders' funds.

|   | 31 May 2023 | 31 May 2022  |
| --- | --- | --- |
|  Borrowings (at book cost) | £40,342,000 | £39,674,000  |
|  Less: cash and cash equivalents | (£3,440,000) | (£3,007,000)  |
|  Adjusted borrowings (a) | £36,902,000 | £36,667,000  |
|  Shareholders' funds (b) | £568,599,000 | £584,186,000  |
|  Gearing: (a) as a percentage of (b) | 6% | 6%  |

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

|   | 31 May 2023 | 31 May 2022  |
| --- | --- | --- |
|  Borrowings (at book cost) (a) | £40,342,000 | £39,674,000  |
|  Shareholders' funds (b) | £568,599,000 | £584,186,000  |
|  Gross gearing: (a) as a percentage of (b) | 7% | 7%  |

## Leverage (APM)

For the purposes of the Alternative Investment Fund Managers 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.

## 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.

## Private (Unlisted) Company

An unlisted or private company means a company whose shares are not available to the general public for trading and are not listed on a stock exchange.

Bailie Gifford US Growth Trust plc 77
7 August 2023
Our ref
Contact
Dear Sir/Madam,
Statement to Baillie Gifford US Growth Trust Plc (no. 11194060) on ceasing to
hold office as auditors pursuant to section 519 of the Companies Act 2006
The reason connected with our ceasing to hold office is the holding of a competitive
tender for the audit, in which we were unsuccessful in retaining the audit
Yours faithfully,
KPMG LLP
Audit registration number: 9188307
Audit registration address:
15 Canada Square
Canary Wharf, London E14 5GL
Private & confidential
Baillie Gifford US Growth Trust Plc
28 St James's Square
Grimaldi House
limited by
London
SW1Y 4JH
KPMG LLP, a UK limited liability partnership and a member firm of the Registered in England No OC301540
KPMG global organisation of independent member firms affiliated with Registered office: 15 Canada Square, London, E14 5GL
KPMG International Limited, a private English company For full details of our professional regulation please refer to
John.Waterson@KPMG.co.uk
15 Canada Square London E14 5GL United Kingdom KPMG LLP Tel +44 (0) 20 7311 1000 Audit Fax +44 (0) 20 7311 3311 guarantee. ‘Regulatory information’ under ‘About’ at www.kpmg.com/uk John Waterson AR-1858 Reference - AR-1858
Document Classification - KPMG Highly Confidential
### Directors  Alternative Investment
### Chairman: Baillie Gifford & Co Limited Fund Manager and
### TJW Burnet Grimaldi House Company Secretaries
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