![img-0.jpeg](img-0.jpeg) Annual Report and Financial Statements 31 December 2025 # The Scottish American Investment Company P.L.C. (SAINTS) Income again and again Managed by **Baillie Gifford**® --- ## Investor disclosure document The UK Alternative Investment Fund Managers Regulations requires certain information to be made available to investors prior to their investment in the Company. The Company's Investor Disclosure Document is available for viewing at saints-it.com. ## Notes None of the views expressed in this document should be construed as advice to buy or sell a particular investment. Investment trusts are UK public listed companies and as such comply with the requirements of the Financial Conduct Authority ('FCA'). They are not authorised or regulated by the FCA. SAINTS currently conducts its affairs, and intends to continue to conduct its affairs, so that the Company's ordinary shares can qualify to be considered as a mainstream investment product and can be recommended by Independent Financial Advisers to ordinary retail investors in accordance with the rules of the FCA in relation to non-mainstream investment products. **This document is important and requires your immediate attention.** If you reside in the UK and you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000 immediately. If you are outside the UK, you should consult an appropriately authorised financial adviser. If you have sold or otherwise transferred all of your ordinary shares in The Scottish American Investment Company P.L.C., 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. **Baillie Gifford™** --- The Scottish American Investment Company P.L.C. # Contents ## Introduction Financial highlights 03 ## Strategic report Chairman's statement 05 Investment approach 10 Portfolio managers 14 Managers' review 15 Performance attribution 20 Distribution of portfolio 21 Review of investments 22 List of investments 26 Property portfolio 30 One year summary 32 Five year summary 34 Ten year record 36 Environmental, social and governance 38 Business review 39 ## Governance report Directors and management 51 Directors' report 55 Corporate governance report 60 Audit committee report 68 Directors' remuneration report 71 Statement of Directors' responsibilities 75 ## Financial report Independent Auditor's report 77 Income statement 84 Balance sheet 85 Statement of changes in equity 86 Cash flow statement 87 Notes to the Financial Statements 88 ## Shareholder information Notice of Annual General Meeting 105 Further shareholder information 110 Third party data provider disclaimer 112 Sustainable Finance Disclosure Regulation 113 Communicating with shareholders 115 Insights 117 Glossary of terms and alternative performance measures 118 01 --- Introduction SAINTS aims to deliver real dividend growth by increasing capital and growing income. # Financial highlights Year to 31 December 2025 Dividend 15.92p Yield† 3.1% Dividend versus inflation (figures rebased to 100 at 31 December 2015) ![img-1.jpeg](img-1.jpeg) Share price total return* (figures rebased to 100 at 31 December 2015) ![img-2.jpeg](img-2.jpeg) ● Share price total return* Premium/(discount)* (figures plotted at month end dates) ![img-3.jpeg](img-3.jpeg) ● Premium/(discount) (after deducting borrowings at fair value)* ● Premium/(discount)* (after deducting borrowings at book value) Source: LSEG/Baillie Gifford and relevant underlying index providers. See disclaimer on page 112. * Alternative performance measure – see glossary of terms and alternative performance measures on pages 118 to 120. † Yield at the year end based on dividends paid and payable in respect of the year. Past performance is not a guide to future performance. 02 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. # Long-term dividend growth ## Net dividend paid per share ![img-4.jpeg](img-4.jpeg) \* 1938: SAINTS last dividend reduction (US dollar repatriation for WW2). † 2003: Baillie Gifford appointed, with effect from the 1st of January 2004. Source: The Scottish American Investment Company P.L.C. Annual Reports, Baillie Gifford. Dividends are shown net of withholding taxes since 1973, when Advanced Corporation Tax was first introduced in the UK. Dividends from 1965-1973 are shown net of the 45% Corporation Tax introduced in the Financial Act of 1965. Dividends prior to 1965 are shown as if the Corporation Tax had existed before 1965, on a comparable basis. Inflation data sourced from the Office for National Statistics. 03 --- # Strategic report This strategic report, which includes pages 05 to 49 and incorporates the Chairman's statement, has been prepared in accordance with the Companies Act 2006. --- The Scottish American Investment Company P.L.C. # Chairman’s statement ![img-5.jpeg](img-5.jpeg) **Lord Macpherson Chairman Appointed to the Board in 2016 and as Chairman in 2022 SAINTS’ objective is to deliver real dividend growth by increasing capital and growing income. The Board is recommending a final dividend which will bring the total dividends for the year to 15.92p per share, an increase of 7% over the previous year, more than twice the rate of inflation. The Company continues to meet its objective of growing dividends ahead of inflation over the long term, and the recommended dividend will extend the Company’s record of raising its dividend to fifty-two consecutive years. However, despite encouraging income growth, total returns have not kept up with the market and the discount which emerged at the beginning of 2024 has persisted. Nonetheless, it is the Board’s belief that demand for an income which grows ahead of inflation remains at the core of SAINTS’ shareholders’ requirements, and it considers that SAINTS is well placed reliably to deliver on this objective in the future as it has done in the past. The Board regularly reviews and continues to have confidence in the Company’s underlying investment strategy and in its managers, whilst maintaining a sharp focus on the operational performance of the Company’s holdings and engaging with the manager on performance and the robustness and suitability of their investment process. The Board also recognises the importance of Baillie Gifford’s scale, resources and stability as a partnership, and the close alignment of the Company’s and Baillie Gifford’s focus on the long term. The Board takes the discount seriously and continued a programme of share buy backs in 2025. 05 --- Strategic report ## Overview I wrote last year that SAINTS' Board and Managers remained alert to both the opportunities and the risks arising from the accelerated adoption of Artificial Intelligence. This is one of two themes which have dominated markets in 2025 and, with the exception of the sharp drops in the spring related to the reported capabilities of the Chinese AI company DeepSeek, it is the potential opportunities which have dominated, with significant capital expenditure having a positive impact on US corporate profits and GDP growth. However, despite the market rapidly shrugging off DeepSeek, it was nonetheless instructive, as it gave a glimpse of significant underlying concerns about the level and efficacy of AI related expenditure, reflected in continuing debate about the extent of an AI 'bubble'. The other key to another year of exceptionally strong, if once again unusually concentrated, progress from markets has been the persistence of inflation. Rising tariffs and protectionism have not helped. Nor has government acquiescence in unsustainable public sector deficits and rising debt. Central banks' approach to monetary policy has tended to attach a higher weight to an impending slowdown in economic activity, which has so far yet to materialise, than to bringing inflation below target. The result has been a steepening of the yield curve, indicating an expectation that inflation will persist over the longer term. More generally, economies and markets have had to grapple with considerable policy uncertainty often triggered by President Trump's latest announcement. There are signs that the impact of tariffs and erratic trade policy has begun to affect the US consumer and the dollar, and that some investors are seeking to re-allocate investments away from the US, which currently makes up close to three-quarters of the global equity benchmark. This underlines a third development which has so far only temporarily impacted on markets, but which is likely to have great and lasting consequences. This has been the evolution of the US from the bedrock of NATO, bulwark against totalitarian expansionism and willing enforcer and paymaster of *Pax Americana*, to something rather different. The tap of military support for Ukraine has been largely turned off, Russian aggression appears likely to be rewarded and the US's status as a reliable ally severely undermined, not least through its expansionist ambitions in relation to Greenland. The most immediate impact has been on the price of European defence stocks. But the long-term effects on geopolitics and trade are likely to be much more profound. SAINTS has delivered another year of above-inflation dividend growth but total returns have been modest, particularly relative to the market. Against the backdrop described above, steady, durable, quality stocks have been left behind by both large index constituents at the epicentre of the AI boom and other more cyclical companies such as European defence stocks and banks. The continued dependable growth in the income produced by the Company's investments is the key to SAINTS' long-term dividend progression. But lagging the market is not comfortable for shareholders, the Managers or the Board. The generally strong operational performance which supports SAINTS' dividend growth and the broad reasons for SAINTS' underperformance relative to the market over the year are explained more fully in the Manager's review. The Board continues to monitor performance and activity closely, to ensure that the Manager's processes remain sound, that there is no 'style drift' and that, where investments have not performed as hoped, appropriate action is taken and lessons learned. The persistence of discounts has remained a challenge across the investment trust sector, and SAINTS is no exception. To help support SAINTS' share price, the Board has consistently bought back shares at levels which have also enhanced NAV. Factors affecting the discount and demand for the Company's shares are likely to have included both performance and the availability of alternative investments such as gilts with higher yields or trusts with higher, manufactured dividends. The Board remains confident that the discount is cyclical rather than structural. ## Dividend and Inflation The Board recommends a final dividend of 4.595p which will take the full year dividend to 15.92p per share, 7% higher than the 2024 dividend of 14.875p. This year's increase is more than double the annual rate of inflation of 3.4% as measured by CPI over 2025. 06 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. It remains the Company's objective to deliver real dividend growth over the long term. Since 1938, when SAINTS last reduced its dividend, the Company has delivered dividends that have not only been resilient through thick and thin, but have also grown by more than 3% a year ahead of inflation. And since the end of 2003, when the Board of SAINTS appointed Baillie Gifford as managers, the Company has continued this track record of resilient dividend growth: over this period the growth in SAINTS' dividend has also beaten inflation by 3% a year. The power of compounding is easily overlooked. To illustrate, since I joined the SAINTS' Board in 2016, SAINTS' dividend has increased by over 47%, from 10.825p to this year's recommended total of 15.92p. ## Revenues Earnings per share grew to 15.65p over the year, an increase of some 7.9% over the year, and investment income has risen to £32.7m. Operational performance of the equity and infrastructure equity holdings has been generally encouraging, and this has been reflected in growing dividends, as detailed in the Managers' report. Property income also increased over the year, helped by the high proportion of index linked and fixed rental increases and considered upgrades to the portfolio, whilst bond income was lower due to a lower average allocation over the year. Both managers (Baillie Gifford and, for the Company's property investments, OLIM) continue to focus on supporting the dependability and the future growth of the Company's dividend in line with SAINTS' objective. ## Total Return Performance SAINTS' NAV return was positive over the year, and the net asset value total return (capital and income with borrowings at fair) was 2.4%. However, for the reasons summarised above, SAINTS' returns fell short of those from global equities (as measured by the total of return of the FTSE All-World Index in sterling terms) which returned 14.7% over 2025. Although SAINTS' shares remain on a discount, the discount narrowed over the year and the share price return was 6.8%. The Managers and your Board have a long-term perspective and we would therefore encourage shareholders to assess your Company's performance over the long term. Over the last ten years SAINTS has delivered a NAV return of over two hundred percent, which is strong in absolute terms. However, although SAINTS NAV return remains ahead of the AIC Global Equity Income sector return over ten years, it is behind both the weighted-average sector return and the benchmark return over that period. Whilst this relative performance is disappointing, it is worth bearing two things in mind. Firstly, that SAINTS has an income approach, both in terms of its primary objective of delivering real dividend growth by increasing capital and growing income and the way its assets are deployed dependably to meet that objective. And secondly, we are viewing these figures after a highly unusual period in markets. Stability and quality, attributes which are intrinsic to SAINTS' approach and the achievement of its long-term objectives, have been deeply out of favour. This has been uncomfortable, but it is our strong conviction that earnings and dividend growth which is not rewarded today will be rewarded tomorrow. SAINTS' property portfolio delivered a positive return over the year, although capital values fell back slightly. However, transactions including the sale of a shorter let industrial property in Southend, at a price in excess of its previous valuation, and the purchase of a garden centre with a significantly longer lease, have resulted in the portfolio's weighted average unexpired lease term increasing to 16.4 years, and helped increase the portfolio's running yield to 6.4%. The principal contributors to and detractors from performance and the changes to the equity, property and bond investments are explained in more detail in the Managers' review on pages 15 to 19. ## Borrowings SAINTS' long term borrowings of just under £95m represent gearing of some 10% of shareholders' funds. The cost of these borrowings is just under 3% per annum, and they are deployed to enhance current income and long term returns. The borrowing arrangements were increased and then renewed in 2021 and 2022 respectively, when interest rates were lower than currently. The estimated market or fair value of the borrowings – £63.2m – is therefore well below their book value, although it is slightly higher than last year (£62.1m). 07 --- Strategic report ## Environmental, Social and Governance (ESG) The Board of SAINTS recognises the importance of considering Environmental, Social and Governance (ESG) factors when making investments, and in acting as a responsible steward of capital. We consider that Board oversight of such matters is an important part of our responsibility to shareholders, and SAINTS' ESG Policy is available to view on the Company's website (saints-it.com). The Board has been strongly supportive of Baillie Gifford's approach and of their constructive engagement with the companies SAINTS owns, and with potential holdings, in relation to important challenges including climate change. The Board is also supportive of OLIM's approach in relation to property, and in particular of its consideration of environmental factors including climate change in assessing the suitability of SAINTS' investments. I would encourage shareholders to read SAINTS' annual Stewardship Report which can also be accessed on the Company's website (saints-it.com). ## Issuance and buybacks Over the year the Company has bought back 12,764,384 shares (representing 7.2% of the shares in issue at the start of the year) at a cost of some £65.4m. All buybacks have taken place at a significant discount to the Company's NAV, and so each buyback has increased the NAV per share of the Company. Taken together the buybacks over the year have boosted NAV by just under 0.5%. The Company has continued to buy back shares in the current year, and the Board is closely monitoring evidence of the effect which buybacks have on the share price and discount. No shares were issued during the year. ## Board and Manager I have had the privilege of serving on SAINTS' Board for just over nine years. Therefore, as previously indicated and in line with best governance practice, I do not intend to stand for re-election as a Director at the AGM in 2026. The Board carried out a search for a new director in 2025 and, as previously announced, Angus Macpherson was appointed to the Board in September 2025, with a view to becoming the Chairman of SAINTS at the conclusion of the AGM in April 2026. Mr Macpherson's appointment falls to be ratified by shareholders at the AGM in April 2026. It remains the Board's intention that Mr Macpherson should become Chairman of the Board following the conclusion of the AGM. Angus is Chairman of Noble and Company (UK) Limited, an independent boutique Scottish corporate finance business. He has over thirty-five years of investment experience, and is an experienced chairman and director of investment trusts, serving on a number of boards since 2010. He is currently Chairman of Templeton Emerging Markets Investment Trust plc, and a non-executive director of Schroder Japan Growth Fund plc and of Hampden and Co plc. He will be stepping down from Schroder Japan Growth Fund plc in July of this year. I am grateful to SAINTS' Senior Independent Director, Dame Mariot Leslie, who led the recruitment process. The Board were advised throughout the process by Odgers, an independent recruitment consultant. Odgers submitted all the names which were considered for inclusion on the long list of potential candidates, as well as providing evaluations of all candidates. I would also like to thank Anthony Dickson, who will be stepping back from his role as SAINTS' Client Director at Baillie Gifford after the AGM. Anthony has provided excellent counsel and support to the Board over the last twelve years. ## Outlook Economies and corporate earnings tend to grow in the long run, buoyed by technological progress. But uncertainties will always remain, whether in relation to the pace of growth, to inflation, to fiscal sustainability or the changing world order. As a Board we continue to believe a long-term approach based on investing globally for sustainable growth is the best route to achieving SAINTS' aim of growing the dividend ahead of inflation over time. SAINTS aims to deliver that dividend growth by increasing capital and growing income. Given this is my final report, I hope you will forgive me for ending on a personal note and quoting from a report on investment trusts written by my grandfather which I recently found. Ian Macpherson, who began his career as a stockbroker and fund manager in the 1920s (but never worked for Baillie Gifford), wrote: *'Carlyle Gifford' taught me years ago that income was of the first importance and it has proved invaluable for fund management, not only directly but indirectly by maintaining capital value.* * One of Baillie Gifford's two founders in 1907, who officially retired in 1965. 08 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. I found this fascinating for three reasons. Firstly, it underlines the timeless importance of investing for income as an objective in its own right. Secondly, it highlights the strong link between a resilient income and resilient capital values. And thirdly, it reveals that in the long history of Baillie Gifford, income has played its part alongside the Growth investing for which it is currently better known. The fact that the team which James Dow manages is one of the largest teams at Baillie Gifford indicates that the firm believes both Growth and Income will be important to the firm and its clients in the future. SAINTS has been working for individual investors for over 150 years. It is built to help shareholders' income keep pace with inflation, as well as providing capital growth. And it is built for resilience. As I look ahead, I take considerable comfort from this, from the nature of SAINTS' investments, and from the managers' emphasis on quality, on dependability and on growth far out into the future. Along with the rest of the Board, I am encouraged that, as is outlined further in the Managers' review on pages 15 to 19, Baillie Gifford have continued to find new and attractive opportunities. We also believe that both the quality and duration of SAINTS' property portfolio has been further enhanced over the past year. My considered judgement and confidence in Baillie Gifford, OLIM, the Board and the Company is why SAINTS is my largest equity investment. I hope that you share my confidence, thank you for your continued support, and wish you all the very best in the future. ## AGM The AGM will be held at 11.30am on Friday 17th April 2026 at Baillie Gifford's offices at Calton Square, 1 Greenside Row, Edinburgh. The meeting will be followed by a presentation from the Managers. Shareholders are cordially invited to attend the meeting and presentation. As last year, those who are unable to attend in person will be able to view proceedings by remote video link. Details of joining the AGM remotely can be obtained by contacting the Company's Managers at enquiries@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. I would remind shareholders that they are able to submit proxy voting forms before the applicable deadline and also to direct any questions or comments for the Board in advance of the meeting through the Company's Managers, either by emailing enquiries@bailliegifford.com or calling 0800 917 2113 (Baillie Gifford may record your call). The Board welcomes recent moves by platforms to facilitate shareholder participation and encourages shareholders to cast their votes. The Association of Investment Companies' guidance on how to vote through various investment platforms can be found on its website at: **How to vote your shares | The AIC** Finally, my fellow Directors and I send you all our very best wishes for the year ahead. Lord Macpherson of Earl's Court For a definition of terms see glossary of terms and alternative performance measures on pages 118 to 120. Source: LSEG/Baillie Gifford and relevant underlying index providers. See disclaimer on page 112. Past performance is not a guide to future performance. 09 --- Strategic report # Investment approach SAINTS' aim is to provide its shareholders with a dependable source of income, together with growth in income and capital that exceeds inflation over time. To achieve these goals, our strategy is to allocate the majority of the Company's assets to a portfolio of carefully selected global equities. History tells us that equities offer investors the best opportunity to enjoy inflation-beating growth in income and capital over the long term. Within the equity portfolio, we focus solely on companies whose income and growth potential is aligned with SAINTS' goals. Our starting point for any equity investment is a company's long term potential for earnings and cash flow growth above inflation. We believe share prices and dividends over the long term follow company earnings and cash flows. By investing only in companies whose earnings and cash flows are likely to grow ahead of inflation, we expect the shares held in the equity portfolio to deliver the growth in income and capital that we seek for SAINTS' shareholders. Besides the potential for profit growth, we seek dividend dependability at any company in which we invest. By 'dependability' we mean the resilience of a company's dividend through business and economic cycles. We focus on companies whose dividends are likely to prove dependable over long periods of time, regardless of the prevailing market conditions or economic cycle. These resilient dividends help underpin the dependability of SAINTS' own distributions to shareholders. Companies with the prospect of both dependable dividends and attractive profit growth are not common. However, we make full use of the global equity universe available to the Company, which consists of several thousand stocks. This allows us to construct a diversified portfolio of investments which meet our requirements. Typically the portfolio consists of around 50–80 companies. We believe this range strikes the right balance between diversification and focus. SAINTS' portfolio is very different from conventional equity market indices. The income stream from such indices is often dominated by the dividends from a small number of companies, often in cyclical and capital-intensive industries. The result is that as a source of income they are unreliable. Our approach is consciously different, to ensure stability of the income we generate for the Company's shareholders. We are also only interested in truly sustainable income streams, which ultimately come from companies that are managed in a responsible way. Our approach therefore gives careful consideration to environmental, social and governance factors; and we seek to engage constructively with the companies in which we invest in order to help promote their continued long term success. Shareholders can read more about our efforts here in our Annual Stewardship Report, available on the Company's website saints-it.com. To identify the businesses we are looking for, we employ a disciplined research process that focuses on the dependability of a company's dividend and the growth potential of its earnings and cash flow. The opportunities for growth vary widely, but they can be broadly described as falling into one of four categories described on page 12. We have also used this categorisation to illustrate the portfolio, as at 31 December 2025 on page 13. Each block in the illustration represents an individual holding, and the height of each block indicates the size of the holding in the equity portfolio. The colour of each block represents the type of growth by which we categorise the company. The column in which a block appears indicates the stock's dividend yield, shown across the horizontal axis. 10 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ## Borrowed funds Although the equity portfolio accounts for the majority of the Company's investments, we also invest in portfolios of property, infrastructure equities and bonds. As an investment company, SAINTS benefits from the ability to use borrowings, up to a prudent amount. By investing these borrowings in the property, infrastructure equity and bond portfolios, we enhance the Company's ability to meet its investment objective. SAINTS' borrowings currently take the form of long term secured privately placed loan notes. The borrowed money is invested with the intention of beating the cost of these borrowings. Our asset allocation decisions aim to strike a balance between income contribution, income dependability and growth at the whole portfolio level. A directly-held portfolio of UK commercial property, managed by OLIM Property Limited, has been a favoured investment for the borrowed funds for many years. The allocation to this property portfolio has varied over time, but the continuing attraction is OLIM Property Limited's focus on strong covenants and lease terms that typically include fixed or inflation-linked rent increases. Properties are selected for the portfolio on the basis of their income dependability and growth characteristics, much as in the equity portfolio. Similarly, SAINTS' global portfolio of infrastructure equities offer the prospect of dependable real income and capital growth over time. We hold fixed income investments where we view the income as being resistant, and where the level of income significantly exceeds the cost of borrowing. ## Summary **Aim:** To provide shareholders with a dependable source of income, together with growth in income and capital that exceeds inflation over time. - This aim is underpinned for the long term by investment in a portfolio of equities selected for their real income and capital growth potential. - Equity investments are complemented through the opportunistic investment of borrowed funds: - A high-yielding directly-held UK property portfolio offering a dependable and growing rental income stream; - A global portfolio of infrastructure equities to provide real growth in income and capital; - Fixed income investments to enhance resources. - A robust dividend in even the most challenging of investment environments: - Underlying investments are selected for dependability of income alongside growth; - The Board and management team are committed to delivering real dividend growth sustainably into the future; - Significant revenue reserves to support the smooth progression of dividends. **Outcome:** An investment for the long term which can generate a dependable income stream, with significant growth potential in both capital and income. 11 --- Strategic report ## Drivers of earnings and cashflow growth ### Everyday royalties Free cash ![img-6.jpeg](img-6.jpeg) #### Characteristics Leaders in essential products Steady volume growth Pricing power driven by innovation #### Expected outcome Consistent mid-single digit revenue growth over the long term ### Adjacency builders Free cash ![img-7.jpeg](img-7.jpeg) #### Characteristics Exceptional companies growing in adjacent markets Competitive advantages in core markets Expansion into adjacent industries #### Expected outcome Earnings and dividends compound at rates averaging 10% ### Share gainers Free cash ![img-8.jpeg](img-8.jpeg) #### Characteristics Superior products, services or cost efficiency Track record of continued innovation #### Expected outcome Earnings and dividends compounding at around 10% annually ### Market expanders Free cash ![img-9.jpeg](img-9.jpeg) #### Characteristics Innovate to create new business Rapid rates of compounding in end-markets #### Expected outcome Long-duration compounding at rates of 10% or even higher 12 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. # **What will drive growth in earnings and cash flow available for dividends?** | | Global equities % | Weighted Average Yield % | | --- | --- | --- | | Everyday royalties | 28.9 | 2.7 | | Market expanders | 28.9 | 2.3 | | Adjacency builders | 25.1 | 2.5 | | Share gainers | 17.1 | 2.2 | ![img-10.jpeg](img-10.jpeg) Source: IBES, Bloomberg, Baillie Gifford & Co. Holding sizes and forecast yields are as at 31 December 2025. Totals may not sum due to rounding. Yields are based on market consensus and Baillie Gifford estimates of ordinary dividends, on a 12 month forward basis, net of withholding taxes. Excludes cash, weights have been rebalanced to 100%. The following holdings are classified as infrastructure equity investments, and therefore are not included in the chart: Exelon, Greencoat UK Wind, Jiangsu Expressway, Primary Health Properties REIT, Terna, Transurban Group. 13 --- Strategic report # Portfolio managers ![img-11.jpeg](img-11.jpeg) **James Dow** Investment Manager Appointed 2016 James was appointed as one of SAINTS managers in 2016 and leads the team which manages SAINTS. He had previously been a deputy manager, having joined the team in 2014. He joined Baillie Gifford in 2004 and became a partner in 2023. Prior to joining the team, he had been an investment manager in Baillie Gifford's US equity team, and a sector research specialist. James graduated MA (Hons) in Economics and Philosophy from the University of St. Andrews in 2000 and MSc in Development Studies from the London School of Economics in 2001. Before joining Baillie Gifford, he spent three years at the Scotsman newspaper, where he was economics editor. James is a CFA Charterholder. ![img-12.jpeg](img-12.jpeg) **Ross Mathison** Deputy Manager Appointed 2023 Ross was appointed as Deputy Manager of SAINTS in 2023, having joined Baillie Gifford and the team which manages SAINTS in 2019. Prior to joining Baillie Gifford, Ross spent a year at Aviva Investors and, before that, nine years at Standard Life Investments as an investment manager, first in the European Equity team and then in the Global Equity team. Ross graduated MA (Hons) in Business and Finance from Heriot-Watt University in 2008. Ross is a CFA Charterholder. 14 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. # Managers' review ## Performance It was Jean-Jacques Rousseau, the Enlightenment philosopher, who penned the famous maxim: 'La patience est amère, mais son fruit est doux'. The English translation is not quite as lyrical, but it captures the meaning just as well: 'Patience is bitter, but its fruit is sweet'. We have ruminated at length on this expression while reviewing the performance of SAINTS' portfolio over the course of 2025. It has, frankly, been a bittersweet year. The sweet is that the companies you own have delivered good growth in earnings: about 10% higher than in 2024. Regular readers will recall this level of growth is squarely in line with our philosophical north-star, which is to invest in companies that we foresee delivering 10% compound growth for long periods of time, paying resilient dividends along the way. That box was ticked last year, and the fruit of this was robust growth in the earnings of SAINTS. For the full year, the Company's earnings per share (EPS) came in at 15.65p. This is 7.3% above the level in 2024, and it underpinned the Board's ability to raise the dividend to 15.92p, an increase of 7.0% year-on-year: double the rate of UK CPI inflation. But the year also left a bitter taste. Because this underlying growth was simply not rewarded by share price growth of the portfolio holdings, and this resulted in lacklustre NAV and share price performance. Pulling apart the numbers, what we saw was that as the earnings of the portfolio's companies went up, so their Price/Earnings multiples came down by roughly an equal amount. The net result was the capital value of the equity portfolio was essentially flat over the course of the year, with the equity portfolio total return being around 2%. As a result, SAINTS' NAV also remained broadly flat, year over year. This is a frustrating outcome, particularly when performance is compared with global equities more broadly which, as measured by the FTSE All World index, delivered a much stronger total return during the same period of 14.7%, in sterling terms. Whilst we do not expect to keep up with the market during periods of exuberance, we would have hoped to deliver a stronger absolute return for clients. In this Managers' Report we will reflect on why the share prices of the companies in the portfolio did not follow their earnings upwards or keep up with the wider stock market. We'll explain how we have re-visited all of the holdings to investigate if we are missing something. (Spoiler: largely positive, with a few cases where we found problems and divested). We'll then detail the new investments we made to ensure the portfolio is positioned for continued growth in the years ahead. Alas we cannot hope to write as eloquently as M. Rousseau, but after a frustrating year we can at least try to deliver some measure of enlightenment as to why the Company's NAV return last year was so lacklustre. We are convinced that the holdings remain on track to deliver continued solid growth in the years ahead, and we remain optimistic that patience will ultimately bear fruit, in terms of stronger absolute and relative returns. ## Quality's loss of momentum In his statement, the Chairman mentions that our investment style has been out of favour. One of the distinguishing features of your portfolio is its emphasis on 'Quality'. This term is sometimes bandied about with little explanation, but it denotes something important. Essentially it refers to companies which make attractive profits as a ratio of their shareholders' capital, and sustain this over long periods. For a definition of terms see glossary of terms and alternative performance measures on pages 118 to 120. Source: LSEG/Ballie Gifford and relevant underlying index providers. See disclaimer on page 112. Past performance is not a guide to future performance. 15 --- Strategic report Many companies do not achieve this: as examples, most car-makers and airlines earn profits equivalent to a 5% annual return on the billions of capital they have invested in factories and aircraft. This is little better than the return investors can earn risk-free by holding cash in a bank account. Not very attractive in terms of risk and reward! Of course, such companies can have their moment in the sun, when a cyclical upswing can temporarily boost earnings growth and catalyse strong share price performance, and indeed many have done so recently. This has helped some 'Value' investors and short term investors, but not investing in such companies has been one aspect of the headwind we have faced as long term, growth oriented investors. The other aspect has been what we have owned: SAINTS' equity investments are concentrated in companies which earn persistently above-average returns, let's say 10 or 15% a year on shareholders' funds, which are labelled 'high quality'. Such returns indicate these companies must be doing something which their customers value deeply, and which competitors struggle to replicate. If these companies can re-invest earnings at these high returns, they should grow faster than low quality companies, in turn delivering superior growth to shareholders over the long run. This makes them much more attractive to investors. Evidence is in favour of high-quality companies being the best investments to own in the long term. For example, in the quarter-century to 2025, the MSCI World Quality Index (an index which focuses solely on companies which fit the quality description) produced a total return of close to 3,000 per cent, compared to a return of just over 600 per cent for the broader MSCI World Index. Your portfolio's companies earn an average return on invested capital of around 15%. This is almost 60% higher than the stock market average. It is clearly a 'high-quality' portfolio of holdings. But in 2025, frustratingly, these types of companies saw limited share price appreciation. A typical example is SAINTS' holding in Schneider Electric. This company is a dominant provider of power boards and other electrical equipment that is fundamental to operating buildings. As the world generates and consumes ever-more electricity, from solar panels to datacentres, Schneider's sales and profits are growing. In 2025 it earned profits of about EUR 4.5 billion, a high quality 15% return on shareholders' equity. Its earnings grew by 10% over the prior year, and the dividend was raised by 10%. But the share price? Flat during the year. With Schneider's earnings up 10% and share price flat, its Price/Earnings multiple fell by 10%. This picture was repeated across the portfolio: rising earnings offset by falling P/Es. Quality compounders typically trade at a premium to the index, given their proven ability to deliver resilient returns through the market cycle while also outperforming over the long-term. But during 2025 SAINTS equity portfolio de-rated, ending at about 22x trailing, or 19x forward earnings. This is well below the portfolio's historic premium of 3 to 4 points above the index. Indeed, it has never been so 'cheap' relative to the broader stock market. Drilling down into the data from last year, what we see is that two stories essentially drove all of the stock market's return in 2025. One was AI. Some investors are betting that numerous companies will see a continuing boom in profits from this terrific new technology, across industries as diverse as semiconductors and utilities. As a result, many of these companies saw their PE multiples go up last year. SAINTS' portfolio has several AI-related investments, the likes of Microsoft and TSMC, but it is not as large and concentrated an exposure as in the benchmark: which we view as rather risky. It is difficult to forecast where the long-term winners from AI will emerge. Those blessed with grey hair may remember that in the 1990s internet boom – another technology that changed the world, just as AI surely will – there were some companies making oodles of profit (such as Cisco) and others losing money hand over foot (such as Pets.com). This is reminiscent of the current AI boom: some companies are currently making huge amounts of money (such as Nvidia) and others are burning it at a rapid rate (such as OpenAI). After the internet boom peaked in the early 2000s, both Cisco and Pets.com turned out to be poor investments. Meanwhile the biggest long-term winners from the internet often revealed themselves later. For example, Google only really emerged as a long-term success story in the mid-2000s. It takes time for long-term winners to show themselves, and being early to bet does not correlate with returns. We do not intend to gamble clients' money unless we have high conviction in long-term success. The second big story of last year was the interest rate cycle. Many cyclical names saw their valuations rise in 2025, on hopes of continued rate reductions by central banks. This benefited some of the lower return, lower quality businesses in the stock market. It was much less of a tailwind to your portfolio. 16 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. Momentum in these two parts of the market was very strong. Money flowed hot and fast into names linked to these themes, and their valuations rose. Meanwhile more traditional industries, such as consumer goods, healthcare and professional services, which tend to be the higher quality, more resilient, and in the long-term stronger growing parts of the stock market, suffered from declining valuations as investors took money away from them. This momentum has no doubt been reinforced by the ongoing shift to passive investment, where funds are effectively switched into the most concentrated and most expensive parts of the market, funded by the indiscriminate sale of the rest. In the long-term, this is unlikely to continue. Technical factors will come and go, economic cycles will abate, and capital expenditure will be judged on its results: ultimately share prices will follow earnings growth. We are confident in the continued growth in the earnings of SAINTS' portfolio companies and this should, with patience, bear fruit in capital growth. This is even more the case now that last year's earnings progression is, as yet, unrewarded in share price appreciation. Finally, in reviewing performance over the year, we should acknowledge that there have also been stock specific disappointments. The most notable of these has been Novo Nordisk, where operational missteps, management changes, intensifying competition and question marks over future pricing have led to a sharp fall in the share price. We continue to believe that the Company's prospects are very strong, as one of the two lead players in a growing market: a market where growth will be spurred by price reductions, where illegal copycats should be removed from the market, and where the company's innovation pipeline over the coming year should put it back on the front foot – for example its forthcoming launch of the world's first oral pill for obesity. Another European stock, Edenred the voucher company, has been adversely affected by regulatory changes in overseas markets. Here too we believe that its core competencies in its core markets continue to offer a pathway to assured, and capital light, growth, and that these setbacks are not fatal blows but temporary roadbumps. As managers we invest our own savings alongside shareholders, and so we very much appreciate that patience has been required, both in terms of challenges at the stock level and the style headwind alluded to above. So, what have we been doing in response? First, we have gone back and checked every investment case in the portfolio to make sure they all remain on track. Where the share price of a holding has been disappointing, but we believe the competitive advantage and long-term growth runway remain intact, we are swallowing the bitter taste and staying patient. As mentioned above, this even applies to the portfolio's two weakest performers last year, Novo Nordisk and Edenred, which faced real, well-publicised headwinds. After in-depth review and engagement, we increased both positions, because of the strength of the underlying growth opportunity, combined with even more attractive valuations. Second, we have weeded out of the portfolio any names where our analysis shows the investment case had fundamentally weakened. Over the year we divested from SAINTS' holding in UPS, the delivery company, where new competition had raised serious challenges to future growth. Likewise TCI and Man Wah, two manufacturers where, despite real strengths, we have seen brutal competition in China, diminishing our confidence in future growth. In the final quarter of the year we divested from Cognex, where we had observed signs of share loss in some key markets, and our ongoing research had raised questions about the company's growth strategy. Third, these holdings have been replaced by new investments. These are typically names which recently have fallen out of favour in the stock market, yet we see them delivering strong growth in the long-term. At the interim results we talked about Accenture, the world's leading technology consultancy, and Jack Henry, the number one provider of core banking software in the US. In the second half of the year we made investments in MSCI, Alphabet, Mediatek and Zoetis. ## New investments MSCI is a founder-run business with exciting growth opportunities ahead of it. Its core business is providing the index data that investment funds, both active and passive, are benchmarked against. We foresee many years of good growth as its clients buy subscriptions to a rising number of bespoke indices, in an increasingly fragmented market. We also see opportunities to grow its profit in multiple adjacent markets, such as private equity and risk analytics. Its growth requires little capital which allows it to pay out a progressive dividend. Recently the shares have been de-rated following a slowdown in one part of its business: this presented an opportunity to take a holding for SAINTS at a good price. Alphabet is a company which, until recently, was a poor fit for SAINTS' strategy and we judged too risky to invest in. The company refused to pay dividends, and until only a few months ago it faced a case from the US Department of Justice calling 17 --- Strategic report for it to be broken up. However, the company has at last initiated a dividend, and in September the judge ruling on the legal case ruled that a break-up was unnecessary. This transforms the future of the company. What we foresee happening from here is many years of strong growth ahead, in earnings and dividends. We believe AI is likely to be a significant growth driver for the company in its core search business. It is unique in not only owning leading AI technology developed in-house, but also in having a long list of other attractive advantages: an advertising business which allows it to monetise AI profitably; prodigious cash-flow available to invest in this area; and numerous re-enforcing advantages such as its Cloud business, YouTube platform, and more besides. Mediatek is a Taiwan-based digital chip designer with excellent engineering capabilities. We are particularly excited by the potential of its 'ASIC' chips as AI continues to evolve. Our view, based on experience of technology developments historically, is that in the next few years we will see AI move from an 'investment at all costs' mentality, to a more cost-aware approach. We also expect to see dual-sourcing away from Nvidia, which currently dominates the market. When this happens, we expect to see strong growth at Mediatek, whose cost-efficient chips are an excellent alternative. Picking AI winners is not easy, but in this case we have high conviction that growth will follow. Finally we invested in Zoetis, the leading inventor of pharmaceuticals for pets. The company has impressive R&D capabilities, a proven management team, and an exciting pipeline full of future launches of new products. Following the exuberance of the COVID period, when its shares became very expensive, Zoetis has suffered a big de-rating in the past couple of years. Investors have switched their prior euphoria for anything pet-related, replacing it with fear that weakening consumer affordability will reduce spending on pets. We are looking through this short-term fear, and taking it as an opportunity to invest in a good long-term compounder, at a reasonable valuation. ## Property, fixed income and infrastructure investments One of the great advantages of the Investment Trust structure is the ability to borrow at attractive rates for long periods of time. This gearing can then be invested in assets which beat the cost of borrowing and generate additional income and returns for SAINTS' shareholders, beyond the equity portfolio. The Company's total borrowings are currently £95m, or a prudent 10% gearing, with maturities in the 2030s and 2040s and an average interest rate just below 3%. The proceeds of these borrowings have been invested across a diversified range of asset classes: a directly-held property portfolio, together with corporate and sovereign bonds, and infrastructure-related equities. This diversification helps ensure income resilience across the economic cycle. The property portfolio delivered a positive return over the year, although the capital values fell back slightly. Rental income rose by 2.3% to £5.67m, and the rental yield on capital value, at 6.3%, continued to beat SAINTS' cost of borrowing by a comfortable margin, and thus support SAINTS' revenues and dividend. During the year, following industry best practice, the process of rotating valuers to ensure the valuations of the properties remain independent continued. There was one new purchase, a garden centre in Wales which has recently been refurbished, with its rent reviews fixed at 2.5% growth per annum. This was part-funded by the sale of an industrial warehouse, east of London, which was likely to need refurbishment in another few years. Following these transactions SAINTS entered 2026 with a portfolio consisting of 10 properties and a rental income of which only 5% is subject to open-market reviews: meaning that 95% of the rent is subject to fixed increases or is directly linked to UK inflation. This is a robust under-pinning for SAINTS' own growing dividend. The bond portfolio was reduced slightly during the year, to help fund the purchase in the property portfolio. This led to a reduction in income during 2025, until towards the end of the year we used income generated to fund new purchases: with the result that bond income is expected to rise again in 2026. The ups and downs of the bond market in the past 12 months gave us some interesting opportunities to invest, particularly in some corporate bonds where the risk of default, on our analysis, is extremely low. SAINTS now has investments in corporate bonds issued by Tesco, Nestle, Heathrow and Haleon, all of which we see as strong borrowers, yet typically they are paying us attractive yields of 6%. The infrastructure portfolio also had a solid year. Holdings such as Terna, Exelon, Jiangsu Expressway and Primary Healthcare all delivered share price increases in the double-digits. The outlier was Greencoat UK Wind, which continues to suffer from regulatory uncertainty: a great shame when Britain could be a home for a settled regime that 18 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. encourages investment in renewable energy, yet instead undertakes seemingly endless reviews of the operating regime. However, by and large the investment in these infrastructure names was rewarding for SAINTS. ## Pause for thought It is worth taking a moment to step back and take stock of the results which the Board's strategy has achieved for shareholders over the past several years. By focusing on long-term growth, rather than short-term yield, the Board has enabled us as managers to focus on extending SAINTS' long record of resilient dividend growth paid from natural income. The table below summarises the outcomes in terms of dividend, NAV and share price, compared with 5 and 10 years ago: | | 2015 | 2020 | 2025 | | --- | --- | --- | --- | | Dividend | 10.70p | 12.00p | 15.92p | | NAV (31/12) | 262p | 450p | 536p | | Share price (31/12) | 262p | 464p | 516p | Put simply, a shareholder who has remained invested in SAINTS over this period has seen their annual income rise by almost 50%, whilst their capital has broadly doubled. This has beaten UK inflation over the same period. What is perhaps less obvious is this growth has been achieved despite falling yields on most asset classes. For example, the dividend yield on US equities a decade ago was 2.2%, but it has fallen to only 1.1% today. This is a challenging environment for income-growth managers, because inevitably some investments don't live up to expectations, and when the manager sells they can end up re-investing the capital on lower yields. But thanks to robust growth across SAINTS' portfolio holdings, we have managed to accommodate this headwind. The result is this year's dividend of 15.92p representing a yield of 6.1% on the book cost of an investment in 2015. This result has been delivered with, in our view, substantially less risk than the broad equity market. A good example of this is the resilient progression of the dividend, which has grown every single year during this period. That's despite the stresses and strains of, for example, the COVID pandemic. It is a testament to the relatively low-risk nature of SAINTS' equity portfolio that the dividend has remained so resilient. Of course, what matters now is not the past but the future. As managers we are fully focused on continuing SAINTS record of delivering a dividend that grows substantially ahead of inflation; that remains resilient through thick and thin; and which is underpinned by natural income. Although the capital value will oscillate from year to year, and will sometimes lag the broader market, its foundation in a growing income stream should, ultimately, produce good capital growth for shareholders. As managers we share the view of the Board that this combination is an attractive one for the long-term saver who desires growth but is cautious about taking too much risk. ## Looking forward Looking ahead, 2026 may yet prove a choppy environment for markets. Equities are priced for the good times to roll on, but geopolitics are increasingly unstable, inflation has not gone away, the jury is out on the efficacy of much AI related capital expenditure and there is always a risk from those wildcard factors which no crystal ball can foresee. However, whatever the world throws at investors in the coming year, we expect SAINTS to demonstrate greater resilience than the broader market, given the high quality of the businesses the Company owns. Quality compounders can lag during periods of exuberance – but they tend to prove their worth when conditions get tougher. After the de-rating we've seen in the past year, valuations across the portfolio are compelling relative to history, and relative to the market. The underlying fundamentals of the holdings remain strong. Our focus remains consistent: investing in good businesses with high potential for 10% compound earnings growth that should last for many years to come, while paying resilient dividends every year. We hope you agree that's a compelling formula for dependable long-term investment success. It's an approach which, in 2025, continued to bear fruit in terms of dividend progression for shareholders, without taking too much risk. We are optimistic that, with continued patience, the earnings growth being delivered by your portfolio will again be rewarded by capital appreciation, in addition to continuing to support SAINTS' strong dividend growth over time. James Dow Ross Mathison Baillie Gifford & Co 18 February 2026 19 --- Strategic report # Performance attribution For the year to 31 December 2025 | Portfolio breakdown | Average allocation SAINTS % | Average allocation benchmark * % | Total return † SAINTS % | Total return benchmark *† % | | --- | --- | --- | --- | --- | | Global equities | 95.8 | 99.9 | 2.0 | 14.7 | | Infrastructure equities ‡ | 2.8 | 0.1 | 8.5 | | | Bonds | 1.4 | | 9.2 | | | Direct property | 10.0 | | 4.0 | | | Cash at bank | 0.4 | | – | | | Borrowings at book value | (10.2) | | 3.0 | | | **Portfolio total return (borrowings at book value)** | | | **2.4** | | | Other items # | | | (0.1) | | | **Fund total return (borrowings at book value)** | | | **2.3** | | | Adjustment for change in fair value of borrowings | | | 0.1 | | | **Fund total return (borrowings at fair value)** | | | **2.4** | | * The Company's benchmark is the FTSE All-World Index (in sterling terms). † Alternative performance measure – see glossary of terms and alternative performance measures on pages 118 to 120. # Includes Baillie Gifford and OLIM Property Limited management fees and effects of share buybacks. ‡ The allocation reflects the six infrastructure equity holdings set out the list of investments on page 27. Source: Baillie Gifford/LSEG and relevant underlying index providers. See disclaimer on page 112. Past performance is not a guide to future performance. 20 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. # Distribution of portfolio ## Geographical at 31 December 2025 ![img-13.jpeg](img-13.jpeg) | Geographical | 2025 % | 2024 % | | --- | --- | --- | | 1 Equities: North America | 38.9 | 37.7 | | 2 Equities: Europe (ex UK) | 24.3 | 27.8 | | 3 Equities: Asia | 13.7 | 12.8 | | 4 Direct Property | 9.4 | 9.1 | | 5 Equities: United Kingdom | 4.3 | 4.8 | | 6 Infrastructure Equities | 3.3 | 2.9 | | 7 Equities: South America | 1.8 | 1.1 | | 8 Bonds | 1.6 | 1.1 | | 9 Equities: Australasia | 1.3 | 1.5 | | 10 Equities: Africa and Middle East | 1.1 | 0.9 | | 11 Net Liquid Assets | 0.3 | 0.3 | ## Global Equities* by Sector at 31 December 2025 ![img-14.jpeg](img-14.jpeg) | Sector | 2025 % | 2024 % | | --- | --- | --- | | 1 Technology | 27.8 | 21.2 | | 2 Financials | 18.1 | 17.8 | | 3 Consumer Discretionary | 15.6 | 16.5 | | 4 Industrials | 14.4 | 17.8 | | 5 Consumer Staples | 12.3 | 13.4 | | 6 Healthcare | 6.7 | 6.8 | | 7 Basic Materials | 3.3 | 5.0 | | 8 Telecommunications | 1.8 | 1.5 | * The global equities sector analysis does not include infrastructure equities. 21 --- Strategic report # Review of investments **A review of the Company's ten largest equity investments as at 31 December 2025.** ![img-15.jpeg](img-15.jpeg) © Taiwan Semiconductor Manufacturing Co., Ltd. ![img-16.jpeg](img-16.jpeg) © Kumar Srisikandan/Alamy Stock. ## Taiwan Semiconductor Manufacturing TSMC is one of the world's most important companies. It is a pure-play semiconductor manufacturer with most of the world's semiconductor designers, such as Nvidia, being TSMC's customers. The demand for semiconductors has almost skyrocketed over the past decade and we expect that demand to increase for many years to come, particularly given the advent of generative AI in the public consciousness. ## Microsoft The software behemoth whose products span cloud computing, devices, Office 365, gaming and now generative AI. Microsoft's incredible ability to find new innovative avenues for growth have led it to compound capital appreciation and income at high rates for many years, something we believe will continue for many more to come. | Sector | Technology | Sector | Technology | | --- | --- | --- | --- | | Valuation at 31 December 2025 | £37,471,000 | Valuation at 31 December 2025 | £33,879,000 | | % of total assets* | 3.8% | % of total assets* | 3.5% | | Valuation at 31 December 2024 | £32,491,000 | Valuation at 31 December 2024 | £41,555,000 | | % of total assets* | 3.1% | % of total assets* | 4.0% | | Net purchases/(sales) in year to 31 December 2025 | (£5,552,000) | Net purchases/(sales) in year to 31 December 2025 | (£9,923,000) | \* For a definition of terms see glossary of terms and alternative performance measures on pages 118 to 120. 22 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ![img-17.jpeg](img-17.jpeg) © Shutterstock/Anna Hoychuk. ## Apple Apple's introduction of the iPhone in 2008 marked a paradigm shift in consumer internet. Since then, its products and operating system have become central to many peoples' lives. With its innovative culture, we think this will continue into the future. ![img-18.jpeg](img-18.jpeg) © Procter and Gamble. ## Procter & Gamble Procter & Gamble is behind many of the branded consumer goods we use every day. Whether that's the Oral-B toothpaste we might use to brush our teeth in the morning, the Gillette razors for shaving or Fairy for washing up. The strength and defensibility of these brands has enabled the company to continue to grow durably despite being over 180 years old. ![img-19.jpeg](img-19.jpeg) © Atlas Copco. ## Atlas Copco Atlas Copco is one of the world's best engineering companies. It has leading market shares in air compressors and vacuum pumps which have wide industrial uses and come with very profitable aftermarket businesses. Its decentralised organisation and innovative corporate culture set the standard for others to try and copy. Capital allocation is excellent, and we are strongly aligned with its long-term anchor shareholder, Investor AB. | Sector | Technology | | --- | --- | | Valuation at 31 December 2025 | £33,061,000 | | % of total assets* | 3.4% | | Valuation at 31 December 2024 | £35,132,000 | | % of total assets* | 3.4% | | Net purchases/(sales) in year to 31 December 2025 | (£2,169,000) | | Sector | Consumer Staples | | --- | --- | | Valuation at 31 December 2025 | £25,469,000 | | % of total assets* | 2.6% | | Valuation at 31 December 2024 | £32,529,000 | | % of total assets* | 3.1% | | Net purchases/(sales) in year to 31 December 2025 | (£295,000) | | Sector | Industrials | | --- | --- | | Valuation at 31 December 2025 | £25,277,000 | | % of total assets* | 2.6% | | Valuation at 31 December 2024 | £23,810,000 | | % of total assets* | 2.3% | | Net purchases/(sales) in year to 31 December 2025 | (£926,000) | * For a definition of terms see glossary of terms and alternative performance measures on pages 118 to 120. 23 --- Strategic report ![img-20.jpeg](img-20.jpeg) ![img-21.jpeg](img-21.jpeg) © Tolga Adanali/Depo Photos Via Zuma Wire/Shutterstock Cheers, Avionne ![img-22.jpeg](img-22.jpeg) ## CME Founded in 1898, CME is the world's largest marketplace for derivatives. Its contracts allow clients to hedge across agriculture, metals, and financial markets. CME's platform matches buyers and sellers and, through its clearing house, reduces counterparty risk by standing between them. The business has been notably resilient with earnings per share compounding at a double-digit rate over the past decade. We see further growth ahead as overseas participation increases and CME broadens its product range into areas such as battery metals. | Sector | Financials | | --- | --- | | Valuation at 31 December 2025 | £24,427,000 | | % of total assets* | 2.5% | | Valuation at 31 December 2024 | £20,732,000 | | % of total assets* | 2.0% | | Net purchases/(sales) in year to 31 December 2025 | £1,681,000 | ## Coca Cola Coca-Cola is an asset-light, brand-led business embedded in daily consumption habits. Its global portfolio — led by Coca-Cola, Sprite and Fanta, alongside fast-growing low sugar and still options — is supported by unmatched distribution through its bottling system. This underpins pricing power, repeat purchases, and resilient earnings through cycles, while the mix steadily becomes more premium. Strong free cash flow and disciplined capital allocation support a dependable dividend, with scope for progression. | Sector | Consumer Staples | | --- | --- | | Valuation at 31 December 2025 | £23,240,000 | | % of total assets* | 2.4% | | Valuation at 31 December 2024 | £22,349,000 | | % of total assets* | 2.1% | | Net purchases/(sales) in year to 31 December 2025 | (£198,000) | ## Roche Roche is one of the largest pharmaceutical companies in the world. Despite the company's size, it has an admirable science-led culture and its broad portfolio of drugs in development spans areas such as Alzheimer's disease, ulcerative colitis and weight loss treatments. We like that management is willing to take significant risks and embrace innovative technologies. | Sector | Healthcare | | --- | --- | | Valuation at 31 December 2025 | £22,372,000 | | % of total assets* | 2.3% | | Valuation at 31 December 2024 | £17,456,000 | | % of total assets* | 1.7% | | Net purchases/(sales) in year to 31 December 2025 | (£1,268,000) | * For a definition of terms see glossary of terms and alternative performance measures on pages 118 to 120. 24 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ![img-23.jpeg](img-23.jpeg) ![img-24.jpeg](img-24.jpeg) ### Analog Devices Analog Devices designs premium analogue chips that sit at the intersection of the physical and digital worlds — sensing, converting and powering signals in everything from factory automation to vehicles and networks. Its products are design-intensive, often single-sourced and built into systems for 10-20 years, creating high switching costs and robust pricing. We expect strong volume growth as electrification trends continue, from electric vehicles to smart manufacturing and the internet of things. | Sector | Technology | | --- | --- | | Valuation at 31 December 2025 | £21,545,000 | | % of total assets* | 2.2% | | Valuation at 31 December 2024 | £19,420,000 | | % of total assets* | 1.9% | | Net purchases/(sales) in year to 31 December 2025 | (£1,274,000) | ### Partners Group A Swiss private markets investment group. Its scale, reputation and culture has triple sided advantages, attracting flows from blue-chip clients, making it an investor of choice for companies and an employer of choice for top talent. It is well positioned to benefit from the growth of private assets in investors' portfolios. | Sector | Financials | | --- | --- | | Valuation at 31 December 2025 | £20,854,000 | | % of total assets* | 2.1% | | Valuation at 31 December 2024 | £30,639,000 | | % of total assets* | 2.9% | | Net purchases/(sales) in year to 31 December 2025 | (£5,292,000) | \* For a definition of terms see glossary of terms and alternative performance measures on pages 118 to 120. 25 --- Strategic report # List of investments As at 31 December 2025 | Name | Business | 2025 Value £'000 | 2025 % of total assets | | --- | --- | --- | --- | | **Global equities** | | | | | Taiwan Semiconductor Manufacturing | Semiconductor manufacturer | 37,471 | 3.8 | | Microsoft | Computer software | 33,879 | 3.5 | | Apple | Consumer technology | 33,061 | 3.4 | | Procter & Gamble | Household product manufacturer | 25,469 | 2.6 | | Atlas Copco | Engineering | 25,277 | 2.6 | | CME | Derivatives exchange operator | 24,427 | 2.5 | | Coca Cola | Beverage company | 23,240 | 2.4 | | Roche | Pharmaceuticals and diagnostics | 22,372 | 2.3 | | Analog Devices | Integrated circuits | 21,545 | 2.2 | | Partners Group | Asset management | 20,854 | 2.1 | | Deutsche Boerse | Securities exchange owner/operator | 20,041 | 2.1 | | Midea Group | Appliance manufacturer | 18,760 | 1.9 | | Accenture | Global professional services | 18,399 | 1.9 | | Jack Henry & Associates | Provider of software and IT services for banks | 18,294 | 1.9 | | Schneider Electric | Electrical power products | 18,071 | 1.9 | | Pepsico | Snack and beverage company | 17,975 | 1.8 | | Amadeus IT Group | Technology provider for the travel industry | 17,692 | 1.8 | | Epiroc | Mining and infrastructure equipment provider | 17,629 | 1.8 | | L'Oréal | Cosmetics | 17,439 | 1.8 | | B3 S.A. | Securities exchange owner/operator | 17,214 | 1.8 | | McDonald's | Fast food restaurants | 16,955 | 1.7 | | Anta Sports | Sportswear manufacturer and retailer | 16,820 | 1.7 | | Admiral | Car insurance | 16,577 | 1.7 | | Watsco | Distributes air conditioning, heating and refrigeration equipment | 16,318 | 1.7 | | USS | Second-hand car auctioneer | 16,238 | 1.7 | | Cisco Systems | Data networking equipment | 15,590 | 1.6 | | Fastenal | Distribution and sales of industrial supplies | 15,538 | 1.6 | | NetEase | Online gaming company | 14,509 | 1.5 | | Novo Nordisk | Pharmaceutical company | 14,049 | 1.4 | | United Overseas Bank | Commercial banking | 13,905 | 1.4 | | Nestlé | Food producer | 13,897 | 1.4 | | Experian | Credit scoring and marketing services | 13,295 | 1.4 | | Carsales.com | Online marketplace for classified car advertisements | 12,514 | 1.3 | 26 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. | Name | Business | 2025 Value £'000 | 2025 % of total assets | | --- | --- | --- | --- | | Albemarle | Producer of speciality and fine chemicals | 11,737 | 1.2 | | Valmet | Manufacturer of pulp and paper machinery | 11,381 | 1.2 | | Hong Kong Exchanges and Clearing | Securities exchange owner/operator | 11,347 | 1.2 | | T. Rowe Price | Fund manager | 10,743 | 1.1 | | AVI | Staple foods manufacturer | 10,225 | 1.1 | | Home Depot | Home improvement retailer | 10,169 | 1.1 | | Edenred | Voucher programme outsourcer | 9,915 | 1.0 | | Intuit | Software | 9,821 | 1.0 | | Starbucks | Coffee retailer | 9,400 | 1.0 | | Wolters Kluwer | Information services and solutions provider | 9,189 | 0.9 | | Texas Instruments | Semiconductor supplier | 9,164 | 0.9 | | Alphabet | Search platform, software, cloud services and more | 8,578 | 0.9 | | MSCI | Global provider of investment decision support tools | 8,299 | 0.9 | | Diageo | International drinks company | 7,733 | 0.8 | | Coloplast | Manufacturer of medical products | 7,640 | 0.8 | | Paychex | HR, payroll and benefits outsourcer | 6,724 | 0.7 | | Arthur J Gallagher | Insurance broker | 6,717 | 0.7 | | Eurofins | Laboratory testing provider | 6,180 | 0.6 | | SAP | Business software developer | 5,876 | 0.6 | | Medtronic | Medical devices company | 4,838 | 0.5 | | MediaTek | Taiwanese electronic component manufacturer | 4,636 | 0.5 | | Fevertree Drinks | Producer of premium mixer drinks | 4,212 | 0.4 | | Zoetis | Animal health medicines and vaccines | 1,265 | 0.1 | | **Total global equities** | | **831,103** | **85.5** | | **Infrastructure equities** | | | | | Greencoat UK Wind | UK wind farms | 9,154 | 0.9 | | Terna | Electricity grid operator | 7,785 | 0.8 | | Transurban Group | Tollroad operator | 6,621 | 0.7 | | Jiangsu Expressway | Tollroad operator | 4,227 | 0.4 | | Primary Health Properties REIT | Primary healthcare property group | 3,910 | 0.4 | | Exelon | Grid and utility operator | 899 | 0.1 | | **Total Infrastructure equities** | | **32,596** | **3.3** | | **Direct Property** | See table on page 30 | **90,350** | **9.3** | 27 --- Strategic report | Issue | Currency | 2025 Value £'000 | 2025 % of total assets | | --- | --- | --- | --- | | **Bonds** | | | | | Indonesia 7.375% 15/05/2048 | Indonesian rupiah denominated | 1,848 | 0.2 | | Ivory Coast 6.625% 2048 | Euro denominated | 1,720 | 0.2 | | Nestlé Finance Intl 5.125% 2038 | Sterling denominated | 2,052 | 0.2 | | Tesco Corp Treasury Services 5.5% 2035 | Sterling denominated | 2,162 | 0.2 | | Indonesia 9% 15/03/2029 | Indonesian rupiah denominated | 1,848 | 0.2 | | Brazil CPI Linked 15/05/2045 | Brazilian real denominated | 2,400 | 0.3 | | Haleon UK Capital 3.375% 2038 | Sterling denominated | 2,060 | 0.2 | | Heathrow Funding 5.875% 2041 | Sterling denominated | 2,079 | 0.2 | | **Total Bonds** | | **16,169** | **1.7** | | **Total Investments** | | **970,218** | **99.7** | | Net Liquid Assets | | 3,164 | 0.3 | | **Total Assets** (before deduction of borrowings) | | **973,382** | **100.0** | 28 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ![img-25.jpeg](img-25.jpeg) Hoover Dam, Arizona/Nevada, USA. © Adam Mustafa/Getty Images. 29 --- Strategic report # Property portfolio | Location | Type | Tenant | 2025 EPC # Rating | 2025 Value $'000 | 2025 % of total assets | 2024 Value $'000 | | --- | --- | --- | --- | --- | --- | --- | | Cardiff† | Garden Centre 5-yearly 2.5% per annum | Blue Diamond UK Limited | B | 9,600 | 1.0 | – | | Crawley | Motorway Services RPI-linked annual increase (uncapped till May 2025, then collar 2% cap 4%) | Moto Hospitality Limited | B | 20,500 | 2.1 | 19,700 | | Denbigh | Supermarket Fixed-increases 5-yearly (2.5% compounded) | Aldi Stores Limited | B | 4,800 | 0.5 | 4,800 | | Earley | Public House 5-yearly open market review | Spirit Pub Company (Managed) Limited (Greene King plc) | C | 2,150 | 0.2 | 2,500 | | Gosport | Supermarket RPI-linked collar 1% cap 2.75% | Aldi Stores Limited | A | 5,550 | 0.6 | 5,550 | | Holyhead | Hotel CPI-linked with 4% cap | Premier Inn Hotels Limited | A | 6,000 | 0.6 | 6,500 | | New Romney | Holiday Village RPI-linked collar 3% cap 7% p.a. + turnover-related top up 5-yearly | Park Resorts Limited | C | 17,200 | 1.8 | 19,250 | | Otford | Public House 5-yearly open market review | Spirit Pub Company (Managed) Limited (Greene King plc) | C | 1,650 | 0.2 | 1,700 | | Ringwood | Hotel CPI-linked with 4% cap | Premier Inn Hotels Limited | B | 7,700 | 0.8 | 8,350 | | Southend-on-Sea* | Warehouse Fixed increases 5-yearly (2.5% compounded) | Booker Limited | C | – | – | 8,500 | | Taunton* | Bowling Alley RPI-linked until 2024, then 5-yearly open market | Mitchells & Butlers Retail (No.2) Limited (sublet to Hollywood Bowl Group plc) | A | – | – | 3,900 | | Witney | Industrial RPI-linked collar 2% cap 4% | James Donaldson Group Limited | A | 15,200 | 1.5 | 14,700 | | | | | | **90,350** | **9.3** | **95,450** | * Sold during the year. # See glossary of terms and alternative performance measures on pages 118 to 120. † Purchased during the period. 30 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. # **Property portfolio by sector:** ![img-26.jpeg](img-26.jpeg) | Sector | 2025 % | 2024 % | | --- | --- | --- | | 1 Roadside | 22.7 | 20.8 | | 2 Caravan Park | 19.0 | 19.8 | | 3 Industrial | 16.8 | 24.2 | | 4 Hotels | 15.2 | 15.4 | | 5 Shops | 11.5 | 11.0 | | 6 Garden Centre | 10.6 | - | | 7 Pubs | 4.2 | 4.4 | | 8 Bowling Alley | - | 4.4 | # **Property portfolio income by review pattern:** ![img-27.jpeg](img-27.jpeg) | Review pattern | 2025 % | 2024 % | | --- | --- | --- | | 1 Retail price index (annual) | 55.7 | 49.7 | | 2 Fixed increases (five yearly) | 17.4 | 15.5 | | 3 Consumer price index (five yearly) | 15.9 | 16.5 | | 4 Open market (five yearly) | 6.2 | 12.3 | | 5 Retail price index (five yearly) | 4.8 | 6.0 | # **Property performance and key features:** | | 2025 | 2024 | | --- | --- | --- | | Return on SAINTS property portfolio (%) | 4.0 | 8.3 | | Return on MSCI UK Quarterly Property Index (%)* | 5.8 | 5.2 | | Weighted average unexpired lease term (years) | 17.5 | 16.0 | | Weighted average unexpired lease term (breaks included) (years) | 16.4 | 15.0 | \* © 2025 MSCI Inc. All rights reserved. 31 --- Strategic report # One year summary* The following information illustrates how SAINTS has performed over the year to 31 December 2025. | | Notes ^{†} | 31 December 2025 | 31 December 2024 | % change | | --- | --- | --- | --- | --- | | Total assets (before deduction of borrowings)^{†} | | £973.4m | £1,047.4m | | | Borrowings (book value) | 12 | £94.8m | £94.7m | | | Shareholders' funds | 14 | £878.6m | £952.7m | | | Net asset value per ordinary share (borrowings at fair value)^{†} | | 555.4p | 557.8p | (0.4) | | Net asset value per ordinary share (borrowings at book value) | | 536.1p | 539.3p | (0.6) | | Share price^{†} | | 516.0p | 498.5p | 3.5 | | Benchmark^{†} | | | | 12.5 | | (Discount)/premium – (borrowings at fair value)^{†} | | (7.1%) | (10.6%) | | | (Discount)/premium – (borrowings at book value)^{†} | | (3.8%) | (7.6%) | | | Revenue earnings per ordinary share | 7 | 15.65p | 14.50p | 7.9 | | Dividends paid and payable in respect of the year | 8 | 15.92p | 14.875p | 7.0 | | Ongoing charges^{†} | | 0.60% | 0.58% | | | Active share^{†} | | 86% | 86% | | | **Year to 31 December** | | **2025** | **2024** | | | **Total returns (%)^{††}** | | | | | | Net asset value (borrowings at fair value) | | 2.4 | 6.1 | | | Net asset value (borrowings at book value) | | 2.3 | 5.6 | | | Share price | | 6.8 | (4.2) | | | Benchmark^{†} | | 14.7 | 19.8 | | * For a definition of terms see glossary of terms and alternative performance measures on pages 118 to 120. † Alternative performance measure – see glossary of terms and alternative performance measures on pages 118 to 120. † The Company's benchmark is the FTSE All-World Index (in sterling terms). † Source: LSEG/Baillie Gifford and relevant underlying data providers. See disclaimer on page 112. † See notes to the financial statements on pages 88 to 103. Past performance is not a guide to future performance. 32 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. | Year to 31 December | 2025 | 2025 | 2024 | 2024 | | --- | --- | --- | --- | --- | | Year's high and low | High | Low | High | Low | | Net asset value (borrowings at fair value)† | 586.6p | 511.9p | 575.0p | 528.5p | | Net asset value (borrowings at book value) | 566.7p | 492.0p | 558.0p | 511.5p | | Share price | 525.0p | 454.5p | 535.0p | 485.5p | | Premium/(discount) – borrowings at fair value† | (7.1%) | (13.9%) | (0.8%) | (12.4%) | | Premium/(discount) – borrowings at book value† | (3.8%) | (11.0%) | 2.0% | (9.4%) | | Year to 31 December | 2025 | 2024 | | --- | --- | --- | | **Net return per ordinary share** | | | | Revenue | 15.65p | 14.50p | | Capital | (5.13p) | 14.62p | | **Total** | **10.52p** | **29.12p** | † Alternative performance measure – see glossary of terms and alternative performance measures on pages 118 to 120. Past performance is not a guide to future performance. 33 --- Strategic report # Five year summary The following charts provide a comparison of SAINTS' dividends to inflation, dividend growth and performance relative to the benchmark* index over the five year period to 31 December 2025. ## Dividend versus Inflation (figures rebased to 100 at 31 December 2020) ![img-28.jpeg](img-28.jpeg) Source: LSEG and relevant underlying index providers†. ## Premium/(discount)‡ to net asset value (plotted on a monthly basis) ![img-29.jpeg](img-29.jpeg) Source: LSEG/Baillie Gifford and relevant underlying index providers†. The premium/(discount) is the difference between SAINTS' quoted share price and its underlying net asset value. * The Company's benchmark is the FTSE All-World Index (in sterling terms). † See disclaimer on page 112. ‡ Alternative performance measure – see glossary of terms and alternative performance measures on pages 118 to 120. Past performance is not a guide to future performance. 34 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ### Five year quarterly dividends paid (pence) ![img-30.jpeg](img-30.jpeg) Source: LSEG/Baillie Gifford and relevant underlying index providers†. ### Five year total return* performance (figures rebased to 100 at 31 December 2020) ![img-31.jpeg](img-31.jpeg) Source: LSEG/Baillie Gifford and relevant underlying index providers†. * The Company’s benchmark is the FTSE All-World Index (in sterling terms). † See disclaimer on page 112. ‡ Alternative performance measure – see glossary of terms and alternative performance measures on pages 118 to 120. Past performance is not a guide to future performance. 35 --- Strategic report # Ten year record ## Revenue | Year to 31 December | Gross revenue £'000 | Available for ordinary shareholders £'000 | Earnings per ordinary share * p | Dividend per ordinary share (net) p | Ongoing charges † % | Gearing ratios | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | Equity gearing † % | Gross gearing † % | | 2015 | 18,626 | 13,913 | 10.47 | 10.70 | 0.93 | 2 | 24 | | 2016 | 18,630 | 13,939 | 10.46 | 10.825 | 0.87 | 0 | 19 | | 2017 | 20,484 | 15,213 | 11.33 | 11.10 | 0.80 | (6) | 17 | | 2018 | 21,743 | 16,230 | 11.75 | 11.50 | 0.76 | (6) | 17 | | 2019 | 22,950 | 17,096 | 11.87 | 11.875 | 0.77 | (3) | 14 | | 2020 | 23,568 | 17,519 | 11.41 | 12.00 | 0.70 | (7) | 11 | | 2021 | 27,980 | 21,820 | 12.79 | 12.675 | 0.62 | (4) | 10 | | 2022 | 30,043 | 24,346 | 13.82 | 13.82 | 0.59 | (2) | 11 | | 2023 | 30,078 | 23,960 | 13.48 | 14.10 | 0.58 | (2) | 10 | | 2024 | 32,387 | 25,822 | 14.50 | 14.875 | 0.58 | (2) | 10 | | **2025** | **32,714** | **26,322** | **15.65** | **15.92** | **0.60** | **(2)** | **11** | ## Capital | At 31 December | Total assets £'000 | Debenture stocks and loans £'000 | Shareholders' funds £'000 | Net asset value per share (nominal/par) † p | Net asset value per share (book) p | Net asset value per share (fair) † p | Share price p | Premium/ (discount) † (book) % | Premium/ (discount) (fair) † % | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 2015 | 433,209 | 84,756 | 348,453 | 265.2 | 261.7 | 247.5 | 261.5 | (0.1) | 5.7 | | 2016 | 515,622 | 84,112 | 431,510 | 326.6 | 323.5 | 309.2 | 324.0 | 0.2 | 4.8 | | 2017 | 581,366 | 83,428 | 497,938 | 368.7 | 366.2 | 355.6 | 368.0 | 0.5 | 3.5 | | 2018 | 566,154 | 82,701 | 483,453 | 345.0 | 343.0 | 336.4 | 351.0 | 2.3 | 4.3 | | 2019 | 682,418 | 81,930 | 600,488 | 408.4 | 407.1 | 400.9 | 426.0 | 4.6 | 6.3 | | 2020 | 812,270 | 81,108 | 731,162 | 450.4 | 449.7 | 446.1 | 464.0 | 3.2 | 4.0 | | 2021 | 1,025,346 | 95,161 | 930,185 | 529.8 | 529.7 | 528.4 | 541.0 | 2.1 | 2.4 | | 2022 | 941,388 | 94,714 | 846,674 | 478.9 | 479.0 | 495.5 | 508.0 | 6.1 | 2.5 | | 2023 | 1,029,912 | 94,728 | 935,184 | 524.3 | 524.5 | 539.4 | 535.0 | 2.0 | (0.8) | | 2024 | 1,047,435 | 94,742 | 952,693 | 539.2 | 539.3 | 557.8 | 498.5 | (7.6) | (10.6) | | **2025** | **973,382** | **94,756** | **878,626** | **536.0** | **536.1** | **555.4** | **516.0** | **(3.8)** | **(7.1)** | For a definition of terms see glossary of terms and alternative performance measures on pages 118 to 120. * The calculation of earnings per ordinary share is based on the revenue column of the return on ordinary activities after taxation in the Income statement and the weighted average number of ordinary shares in issue. † Alternative performance measure – see glossary of terms and alternative performance measures on pages 118 to 120. Past performance is not a guide to future performance. 36 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ### Cumulative performance (taking 2015 as 100) | At 31 December | Net asset value per share (fair) † | Net asset value (fair) total return † | Share price | Share price total return † | Benchmark # | Benchmark # total return † | Earnings per ordinary share * | Dividends per ordinary share (net) | Consumer price index | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 2015 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | 100 | | 2016 | 125 | 130 | 124 | 129 | 126 | 130 | 100 | 101 | 102 | | 2017 | 144 | 155 | 141 | 151 | 140 | 147 | 108 | 104 | 105 | | 2018 | 136 | 151 | 134 | 148 | 132 | 142 | 112 | 107 | 107 | | 2019 | 162 | 186 | 163 | 185 | 157 | 174 | 113 | 111 | 108 | | 2020 | 180 | 213 | 177 | 208 | 174 | 197 | 109 | 112 | 109 | | 2021 | 213 | 258 | 207 | 248 | 205 | 236 | 122 | 118 | 115 | | 2022 | 200 | 249 | 194 | 240 | 186 | 219 | 132 | 129 | 127 | | 2023 | 218 | 278 | 205 | 259 | 210 | 253 | 129 | 132 | 132 | | 2024 | 225 | 296 | 191 | 249 | 247 | 303 | 138 | 139 | 135 | | **2025** | **224** | **303** | **197** | **265** | **278** | **348** | **149** | **149** | **139** | #### Compound annual returns | 5 year | 4.5% | 7.3% | 2.1% | 5.0% | 9.8% | 12.1% | 6.5% | 5.8% | 5.1% | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 10 year | 8.4% | 11.7% | 7.0% | 10.3% | 10.8% | 13.3% | 4.1% | 4.1% | 3.4% | ### Ten year total return† performance ![img-32.jpeg](img-32.jpeg) For a definition of terms see glossary of terms and alternative performance measures on pages 118 to 120. # The Company's benchmark is the FTSE All-World Index (in sterling terms). * The calculation of earnings per ordinary share is based on the revenue column of the return on ordinary activities after taxation in the Income statement and the weighted average number of ordinary shares in issue. † Alternative performance measure – see glossary of terms and alternative performance measures on pages 118 to 120. Past performance is not a guide to future performance. 37 --- Strategic report # Environmental, social and governance The Company publishes an annual stewardship report which includes examples of engagement on environmental, social and governance ('ESG') matters, as well as setting out the Managers' approach to proxy voting. The annual stewardship report is available on the Company's website saints-it.com. ![img-33.jpeg](img-33.jpeg) ![img-34.jpeg](img-34.jpeg) 38 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. # Business review ## Business model ### Business and status The Company is an investment company within the meaning of section 833 of the Companies Act 2006 and carries on business as an investment trust. Investment trusts are UK public listed companies and their shares are traded on the London Stock Exchange. They invest in a portfolio of assets in order to spread risk. The Company has a fixed share capital although, subject to shareholder approvals sought annually, it may purchase its own shares or issue shares. The price of the Company's shares is determined, like other listed shares, by supply and demand. The Company has been approved as an investment trust by HM Revenue & Customs subject to the Company continuing to meet the eligibility conditions. The Directors are of the opinion that the Company has continued to conduct its affairs so as to enable it to comply with the ongoing requirements of section 1158 of the Corporation Tax Act 2010 and the Investment Trust (Approved Company) (Tax) Regulations 2011. The Company is an Alternative Investment Fund for the purposes of the UK Alternative Investment Fund Managers Regulations. ### Objective and policy SAINTS' objective is to deliver real dividend growth by increasing capital and growing income. SAINTS' policy is to invest mainly in equity markets, but other investments may be held from time to time including bonds, property and other asset classes. The Board believes that a flexible approach to investment is important. As market valuations across and within different asset classes vary over time, the ability to adjust asset allocation and portfolio positioning in response to these variations is important. There are no pre-defined maximum or minimum exposure levels for asset classes, sectors or regions. The Board also believes that a medium to long term approach is likely to lead to the best investment returns. SAINTS' performance in any one year is likely to differ from that of its benchmark index, sometimes by a significant amount. Financial markets are volatile, particularly over short time periods, but the Manager is encouraged to view such volatility as giving rise to investment opportunities rather than as a risk to be avoided. In order to achieve real growth in the dividend, the income generated from SAINTS' assets needs to grow over the medium to longer term at a faster rate than inflation. Consequently, the focus of the portfolio is on listed equities. Investments are regularly considered and made in a broad range of other asset types and markets. Derivative and structured instruments may also be used with prior Board approval, either to hedge an existing investment or a currency exposure or to exploit an investment opportunity. The equity portfolio consists of shares listed both in the UK and in overseas markets. The portfolio is diversified across a range of holdings with little regard paid to the weighting of individual companies in the benchmark index. The number of individual companies will vary over time and the portfolio is managed on a global basis rather than as a series of regional sub-portfolios. 39 --- Strategic report Investments are made in markets other than listed equity markets when prospective returns appear to be superior to those from equity markets or are considered likely to exceed SAINTS' borrowing costs. The list of these other investments will vary from time to time as opportunities are identified but include investment grade bonds, high yield bonds, property, forestry, private equity and other asset types. As an investment trust, SAINTS is able to borrow money and does so when the Board and Managers have sufficient conviction that the assets funded by borrowed monies will generate a return in excess of the cost of borrowing. Whenever long term borrowings cannot be fully invested in such manner, the borrowed funds are used to purchase a diversified portfolio of similar maturity bonds to the borrowings. This has the effect of hedging out much of the interest rate risk and removing the mismatch between borrowing costs and associated investment returns. Gearing levels are discussed by the Board and Managers at every Board meeting and monitored between meetings. The Board will not take out additional borrowings if this takes the level of effective gearing beyond 130%. The starting position for investment of shareholders' funds is 100% exposure to equity markets. The allocation to equity markets at any point in time will reflect the Board's and Managers' views on prospective returns from equities and the full range of alternative investment opportunities but, in broad terms, SAINTS will gear up through the use of borrowings if equity markets look undervalued and will hold cash or invest in non-equity assets when equity markets look overvalued. The exposure to listed equities is set within a range of 75% to 125% of shareholders' funds in normal circumstances. The number of individual equities held will vary over time but, in order to diversify risk, will typically be in a range between 50 and 100. The Board monitors the aggregate exposure to any one entity across the whole investment portfolio. The maximum exposure at time of investment to any one entity is 15% of total assets. The Board is notified in advance of any transaction that would take an individual equity holding above 5% of shareholders' funds. SAINTS does from time to time invest in other UK listed investment companies. The maximum permitted investment in such companies is 15% of gross assets. An overview by the Manager is given on pages 15 to 19 and a detailed analysis of the Company's investment portfolio held at the year end is set out on pages 21 to 31. ### **Board oversight** Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford & Co, has been appointed by the Company as its Alternative Investment Fund Manager (AIFM). The investment management function has been delegated to Baillie Gifford & Co and the management of the property portfolio to OLIM Property Limited. When assessing the performance of the Company and the Managers, the Board looks at dividend growth, share price and at net asset value total returns relative to inflation and the benchmark total return. The Board believes it is appropriate to make this assessment over a medium to long term timeframe, a minimum of five years, in accordance with the medium to long term approach taken to investment. The Board monitors closely the activities of the Managers, the composition of the investment portfolio and the level of gearing. The Board sets a number of guidelines and places limits and restrictions on the Managers in order to minimise the risk of permanent loss of capital. Within these constraints, the Board encourages the Managers to maximise long term capital and income growth rather than minimise short term volatility in the capital value of the investment portfolio. The main source of both long term return and short term volatility in SAINTS' portfolio is likely to be the investments in listed equities. The Board also monitors SAINTS' revenue position and receives regular estimates from the Managers of likely income growth. The level of dividend in any one year is set after assessing the income generated by the portfolio in that year, the level of revenue reserves and long term trends in income. OLIM Property Limited provide the Board with quarterly updates and meet with the Board at least once a year or otherwise when required. Annually, the Board receive a report from Baillie Gifford & Co Limited detailing its review of OLIM's asset allocation policy, business continuity plan and any breaches, errors or complaints recorded. 40 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ## Discount/premium The Company annually seeks shareholder authority to buy back its own shares at a discount to net asset value and to hold such shares in treasury as well as to issue new shares and sell treasury shares at a premium to net asset value. The Company can issue shares at such times as the premium indicates that demand is not being met by natural liquidity in the market. Buy-back powers have been used in the past in circumstances when large lines of stock cannot be absorbed by the market. The discount or premium, in absolute terms and relative to other similar investment trust companies, and the composition of the share register are discussed at every Board meeting. While there is no discount target, the Board is aware that discount volatility is unwelcome to many shareholders and that share price performance is the measure used by most investors. The Board oversees the Managers' marketing programme which is designed to stimulate demand for the Company's shares, provide effective communication to existing and potential shareholders and maintain the profile of the Company. During the year to 31 December 2025, the Company issued no ordinary shares at a premium to net asset value (2024 – no shares issued). 12,764,384 shares were bought back at a cost of £65,369,000 and held in treasury (2024 – 1,665,185 shares bought back at a cost of £8,529,000). Between 1 January 2026 and 16 February 2026, the Company bought back 760,000 shares into treasury at a cost of £3,955,000. 15,189,569 shares were held in treasury as at 16 February 2026. ## Borrowings As at 31 December 2025, the Company had £95m of long term secured privately placed loan notes as detailed on page 95. ## Performance At each Board meeting, the Directors consider a number of performance measures to assess the Company's success in achieving its objectives. ## 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: - dividend per share; - earnings per share; - the movement in net asset value per ordinary share (after deducting borrowings at fair value) compared to the benchmark; - the movement in the share price; - the premium/discount (after deducting borrowings at fair value); and - ongoing charges. An explanation of these measures can be found in the glossary of terms and alternative performance measures on pages 118 to 120. The one, five and ten year records of the KPIs are shown on pages 32 to 37. In addition to the above, the Board considers peer group comparative performance. ## Principal and emerging risks As explained on pages 64 and 66, there is an ongoing process for identifying, evaluating and managing the risks faced by the Company on a regular basis. The Directors confirm they have carried out a robust assessment of the principal and emerging risks facing the Company including those that would threaten its business model, future performance, regulatory compliance, solvency or liquidity. There have been no significant changes to the principal risks during the year. A description of these risks and how they are being managed or mitigated is set out on the following pages. An upwards arrow, dash or downwards arrow has been included to show if the risk level has increased, not changed or decreased since it was reported in last year's Annual Report and Financial Statements. 41 --- Strategic report ## Financial risk ### What is the risk? The Company's assets consist mainly of listed securities and its principal and emerging risks are therefore market related and include market risk (comprising currency risk, interest rate risk and other price risk), liquidity risk and credit risk. An explanation of those risks and how they are managed is contained in note 18 to the Financial Statements on pages 97 to 103. ### How is it managed? The Board has considered the impact of heightened market volatility arising from market concentration and macroeconomic factors, including inflation, continued high interest rates and monetary policy. To mitigate financial risk at each Board meeting the Manager provides an investment policy paper which includes a detailed explanation of significant stock selection decisions and the overall rationale for holding the current portfolio. Consideration is given to portfolio movements and the top and bottom contributors to performance. The investment approach is considered in detail at the annual Strategy meeting. The value of the Company's investment portfolio and its income stream would be affected by any currency movements, but the Board believes the nature and diversification of the Company's equity portfolio moderates such risks. ### Rating and change ### Current assessment of risk Risk level: High This risk is considered to have increased. Although interest rates have reduced from recent highs, inflation remains above central bank targets and the prospect of market volatility remains from deteriorating geopolitical stability or an unwinding of the AI investment boom. ## Investment strategy risk ### What is the risk? Pursuing an investment strategy to fulfil the Company's objective which the market perceives to be unattractive or inappropriate, or the ineffective implementation of an attractive or appropriate strategy, may lead to reduced returns for shareholders and, as a result, a decreased demand for the Company's shares. This may lead to the Company's shares trading at a widening discount to their net asset value. ### How is it managed? To mitigate this risk, the Board regularly reviews the Company's objective, investment policy and strategy. It also monitors performance and investment risk including adherence to investment guidelines and restrictions. ### Rating and change ### Current assessment of risk Risk level: High This risk is considered to be elevated as the Company's investment style is currently out of favour and it continues to underperform the wider market and lag its peer group. Performance is considered in more detail in the Managers' Review on pages 15 to 19. ## Discount risk ### What is the risk? The discount/premium at which the Company's shares trade relative to its net asset value can change. The risk of a widening discount is that it may undermine investor confidence in the Company and adversely affect returns for shareholders. ### How is it managed? The Board monitors the level of discount/premium at which the shares trade and the Company has authority to buy back its existing shares when deemed by the Board to be in the best interests of the Company and its shareholders. The Board also monitors and oversees marketing and the communication of the Company's investment strategy with a view to stimulating demand for SAINTS' shares. ### Rating and change ### Current assessment of risk Risk level: High The Company's shares traded at a discount throughout the year. The Company's shares traded at an average discount of 10.0% and it bought back 12,764,384 shares. The discount at the year end was 7.1%. No shares were issued during the year. ![img-35.jpeg](img-35.jpeg) 42 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ## Climate and governance risk ### What is the risk? Perceived Environmental, Social and Governance ('ESG') weaknesses in an investee company may make its shares less attractive to investors and adversely affect its share price including through any direct impact on its operations or management (for example an industrial accident or spillage). Environmental factors are also important for the property investments, where issues such as flood risk or deleterious materials may reduce a property's attractiveness, valuation or rental prospects. Repeated failure by the Investment Manager or Property Manager to identify ESG weaknesses could lead to the Company's own shares being less attractive to investors, adversely affecting its own share price. ### How is it managed? This is mitigated by the Investment Managers' strong ESG stewardship and engagement policies, and the Board's own ESG policy, which is available to view on the Managers' website: saints-it.com, both of which have been adopted by the Company, and which are fully integrated into the investment process as well as the extensive up-front and ongoing due diligence which the Investment Manager undertakes on each investee company. The due diligence conducted by the Investment Manager and Property Manager includes assessment of the risks inherent in climate change (see page 67). The Directors have considered the impact of climate change on the Financial Statements of the Company and this is included in note 1 to the Financial Statements on pages 88 to 89. ### Rating and change ### Current assessment of risk Risk level: Moderate The Investment Manager and Property Manager continued to employ strong ESG stewardship and engagement policies. ## Regulatory risk ### What is the risk? Failure to comply with applicable legal and regulatory requirements such as the tax rules for investment companies, the UK Listing Rules and the Companies Act 2006 could lead to suspension of the Company's Stock Exchange listing, financial penalties, a qualified audit report or the Company being subject to tax on capital gains. Changes to the regulatory environment could negatively impact the Company. ### How is it managed? To mitigate this risk, Baillie Gifford's Business Risk, Internal Audit and Compliance departments provide regular reports to the Audit Committee on Baillie Gifford's monitoring programmes. Major regulatory change could impose disproportionate compliance burdens on the Company. In such circumstances representation is made to ensure that the special circumstances of investment trusts are recognised. Shareholder documents and announcements, including the Company's published Interim and Annual Report and Financial Statements, are subject to stringent review processes, and procedures are in place to ensure adherence to the Transparency Directive and the Market Abuse Directive with reference to inside information. ### Rating and change ### Current assessment of risk Risk level: Low This risk is considered to be unchanged. All control procedures were working effectively and there were no material regulatory changes that have impacted the Company during the year. ![img-36.jpeg](img-36.jpeg) 43 --- Strategic report ## Custody and depositary risk ### What is the risk? Safe custody of the Company's assets may be compromised through control failures by the Depositary, including breaches of cyber security incidents. ### How is it managed? To mitigate this risk, the Board receives six-monthly reports from the Depositary confirming safe custody of the Company's assets held by the Custodian. Cash and portfolio holdings are independently reconciled to the Custodian's records by the Managers. The Custodian's assured internal controls assurance reports are reviewed by Baillie Gifford's Business Risk Department and a summary of the key points is reported to the Audit Committee and any concerns investigated. ### Rating and change ### Current assessment of risk Risk level: Low This risk is considered to be unchanged. All control procedures were working effectively. ## Operational risk ### What is the risk? Failure of Baillie Gifford's systems or those of other third party service providers could lead to an inability to provide accurate reporting and monitoring or a misappropriation of assets. ### How is it managed? To mitigate this risk, Baillie Gifford has a comprehensive business continuity plan which facilitates continued operation of the business in the event of a service disruption or major disaster. The Audit Committee reviews Baillie Gifford's Report on Internal Controls and reports by other key third party providers are reviewed by Baillie Gifford on behalf of the Board and a summary of the key points is reported to the Audit Committee and any concerns investigated. The other key third party service providers have not experienced significant operational difficulties affecting their respective services to the Company. ### Rating and change ### Current assessment of risk Risk level: Low This risk is considered to be unchanged. All control procedures were working effectively. ## Leverage risk ### What is the risk? The Company may borrow money for investment purposes (sometimes known as 'gearing' or 'leverage'). If the investments fall in value, any borrowings will magnify the extent of this loss. If loan covenants are breached, the Company may have to sell investments to repay borrowings. The Company can also make use of derivative contracts. ### How is it managed? To mitigate this risk, all borrowings require the prior approval of the Board and leverage levels are discussed by the Board and Managers at every meeting and covenant levels are monitored regularly. Details of the Company's current borrowings can be found in note 12 on page 95. The majority of the Company's investments are in quoted securities that are readily realisable. Further information on leverage can be found on page 112 and the glossary of terms and alternative performance measures on pages 118 to 120. ### Rating and change ### Current assessment of risk Risk level: Low This risk is considered to be unchanged. The Company has long term borrowings in place in form of its loan notes, which have maturity dates in 2036, 2045 and 2049. ![img-37.jpeg](img-37.jpeg) 44 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ## Political risk ### What is the risk? Political change in areas in which the Company invests or may invest may have practical consequences for the Company. ### How is it managed? Political developments are closely monitored and considered by the Board and Managers. The Board continues to assess the potential consequences for the Company's future activities including those which may arise from growing protectionism. The Board also remains watchful of broader geopolitical tensions and the associated potential for trade disruption and armed conflict. The Board considers the nature and diversification of the Company's investments provides a good degree of protection against such political risks. ### Rating and change ### Current assessment of risk Risk level: High This risk is considered to be elevated as governments and consumers around the world continue to assess the impact of heightened geopolitical tensions and conflicts as well as challenging macroeconomic economic conditions. ## Cyber security risk ### What is the risk? A cyber attack on Baillie Gifford's network or that of a third party service provider could impact the confidentiality, integrity or availability of data and systems. Emerging technologies, including AI and quantum computing capabilities, may introduce new, and increase existing information security risks that impact operations. ### How is it managed? To mitigate this risk, the Audit Committee reviews Reports on Internal Controls published by Baillie Gifford and other third party service providers. Baillie Gifford's Business Risk Department report to the Audit Committee on the effectiveness of information security controls in place at Baillie Gifford and its business continuity framework. Cyber security due diligence is performed by Baillie Gifford on third party service providers which includes a review of crisis management and business continuity frameworks. ### Rating and change ### Current assessment of risk Risk level: Moderate This risk is considered to be increasing due to recent indications that the continuation of geopolitical tensions and an observed increase in malign cyber activity. Emerging technologies, including AI, could potentially increase information security risks. In addition, service providers operate a hybrid approach of remote and office working, thereby increasing the potential of a cyber security threat. ## Emerging risks As explained on pages 64 and 66, the Board has regular discussions on principal risks and uncertainties, including any risks which are not an immediate threat but could arise in the longer term. The Board considers that the certain key emerging risks arise from the interconnectedness of global economies and the related exposure of the investment portfolio to escalating geopolitical tensions and to cyber security risks. At each Board meeting the Board consider global economic and geopolitical factors and how these might impact the Company and its portfolio, with any concerns raised with the Investment Managers. The Board also considers the Investment Managers' interaction with the investee companies and its ability to assess companies' resilience. The Managers monitor certain emerging risks and have established a group to manage the response to any future events that might result in heightened levels of market volatility. Regular exercises are carried out to test the Managers' response to various scenarios. ![img-38.jpeg](img-38.jpeg) 45 --- Strategic report ## Viability statement In accordance with provision 31 of the UK Corporate Governance Code, the Directors have assessed the prospects of the Company. The Directors have elected to do this over a period of five years, which they continue to believe to be appropriate as it reflects the longer term investment strategy of the Company in terms of both investment horizon and income growth, and to be a period during which, in the absence of any adverse change to the regulatory environment and to the tax treatment afforded to UK investment trusts, they do not currently expect there to be any significant change to the current principal risks facing SAINTS nor to the controls in place to effectively mitigate those risks. Moreover, the Directors do not envisage any significant change in strategy or any events which would prevent the Company from operating over a period of five years. In considering the viability of the Company, the Directors have conducted a robust assessment of each of the principal and emerging risks and uncertainties detailed on pages 41 to 45 and in particular the impact of market risk where a significant fall in global equity markets would adversely impact the value of the investment portfolio. The Directors have also considered the Company's income and expenses and dividend policy having undertaken a review of revenue projections over a five year period and its liquidity in the context of the majority of its investments being listed equities which are readily realisable and so capable of being sold to provide funding if required. Leverage comprising private placement debt totalling £95m: £40m repayable in April 2045, £40m repayable in April 2049 and £15m repayable in June 2036, has also been considered with specific leverage and liquidity stress testing conducted during the year, including consideration of the risk of further market deterioration resulting from increasing geopolitical tensions. The stress testing did not indicate any matters of concern. In addition, all of the key operations required by the Company are outsourced to third party service providers and it is reasonably considered that alternative providers could be engaged at relatively short notice. Based on the Company's processes for monitoring revenue projections, share price discount/premium, the Managers' compliance with the investment objective, asset allocation, the portfolio risk profile, leverage, counterparty exposure, liquidity risk and financial controls, the Directors have concluded that there is a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the next five years. ## Promoting the success of the Company (section 172 statement) Under section 172 of the Companies Act 2006, the directors of a company must act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters and to the extent applicable) to: a) the likely consequences of any decision in the long term, b) the interests of the company's employees, c) the need to foster the company's business relationships with suppliers, customers and others, d) the impact of the company's operations on the community and the environment, e) the desirability of the company maintaining a reputation for high standards of business conduct, and f) the need to act fairly as between members of the company. In this context, having regard to the Company being an externally-managed investment company with no employees, the Board considers the Company's key stakeholders to be: its shareholders; its externally-appointed Managers (Baillie Gifford and OLIM Property); its portfolio companies; other professional service providers (corporate broker, registrar and depositary); lenders; wider society and the environment. The Board considers that the interests of the Company's key stakeholders are aligned, in terms of wishing to see the Company deliver sustainable long-term growth, in line with the Company's stated objective and strategy, and meet the highest standards of legal, regulatory, and commercial conduct, with the differences between stakeholders being merely a matter of emphasis on those elements. 46 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. The Board's methods for assessing the Company's progress in the context of its stakeholders' interests are set out below. | Stakeholder | Why we engage | How we engage and what we do | | --- | --- | --- | | Shareholders | Shareholders are, collectively, the Company's owners; providing them with a return for their investment in accordance with the Company's investment policy and objective is the reason for its existence. | The Board places great importance on communication with shareholders. The Annual General Meeting provides the key forum for the Board and Managers to present to shareholders on the Company's performance, future plans and prospects. It also allows shareholders the opportunity to meet with the Board and Managers and raise questions and concerns. The Chair is available to meet with shareholders as appropriate. The Managers meet regularly with shareholders and their representatives, reporting their views back to the Board. Directors also attend certain shareholder presentations, in order to gauge shareholder sentiment first hand. Shareholders may also communicate with members of the Board at any time by writing to them at the Company's registered office or to the Company's broker. These communication opportunities help inform the Board when considering how best to promote the success of the Company for the benefit of all shareholders over the long term. | | Baillie Gifford – Managers and Secretaries OLIM – Property Manager | The Company's Board has delegated the management of the Company's portfolio to Baillie Gifford and the management of the Company's property portfolio to OLIM Property. The administration of the Company's operations including fulfilment of regulatory and taxation reporting requirements, to Baillie Gifford. Baillie Gifford is therefore responsible for the substantial activities of the Company and has the most immediate influence on its conduct towards the other stakeholders, subject to the oversight and strategic direction provided by the Board. | The Board seeks to engage with its Managers and Secretaries, and other service providers, in a collaborative and collegiate manner, encouraging open and constructive discussion and debate, while also ensuring that appropriate and regular challenge is brought and evaluation conducted. This approach aims to enhance service levels and strengthen relationships with the Company's providers, with a view to ensuring the interests of the Company's shareholders are best served by keeping cost levels proportionate and competitive, and by maintaining the highest standards of business conduct. | | Portfolio companies | As all of the Company's operations are conducted by third party professional providers, it is the companies held in its investment portfolio which have the primary real-world impact in terms of social and environmental change, both positively and negatively, as well as generating, through their commercial success, the investment growth sought by the Company's shareholders. The investee companies have an interest in understanding their shareholders' investment rationale in order to assure themselves that long-term business strategies will be supported. | The Board is cognisant of the need to consider the impact of the Company's investment strategy and policy on wider society and the environment. The Board considers that its oversight of environmental, social and governance ('ESG') matters is an important part of its responsibility to all stakeholders and the Board has published its own ESG policy. The Board's review of the Managers includes an assessment of their ESG approach and its application in making investment decisions. The Board regularly reviews Governance Engagement reports, which document the Managers' interactions with investee companies on ESG matters (see page 38). | | Investment platforms | Investment platforms provide an interface with shareholders who invest in the Company indirectly. | The Managers liaise with the various investment platforms on strategies for improving communications with the Company's shareholders who hold their shares via these platforms. An annual timetable of key dates is published on the Company's website, for the ease of reference of such shareholders. Further details on how to vote via an investment platform can be found on pages 105 and 111. | 47 --- Strategic report | Stakeholder | Why we engage | How we engage and what we do | | --- | --- | --- | | Brokers | The Company's brokers provide an interface between the Company's Board and its institutional shareholders. | The Company's brokers regularly attend Board meetings, and provide reports to those meetings, in order to keep the Board apprised of shareholder and wider market sentiment regarding the Company. They also arrange forums for shareholders to meet the Chair, or other Directors, outwith the normal general meeting cycle. | | Registrars | The Company's registrars provide an interface with those shareholders who hold the Company's shares directly. | The Company Secretaries liaise with the registrars to ensure the frequency and accuracy of communications to shareholders is appropriate, and monitor shareholder correspondence to ensure that the level of service provided by the registrars is acceptable. The Managers' risk function reviews the registrars' internal controls report and reports on the outcome of this review to the Audit Committee. | | Depository and custodian | The depository and custodian are responsible for the safekeeping of the Company's financial instruments, as set out in more detail on page 56. | The Depository provides the Audit Committee with a report on its monitoring activities. The Board and Managers seek to engage with the depository and custodian in a collaborative and collegiate manner, encouraging open and constructive discussion and debate, while also ensuring that appropriate and regular challenge is brought and evaluation conducted. This approach aims to enhance service levels and strengthen relationships with the Company's providers, with a view to ensuring the interests of the Company's shareholders are best served by keeping cost levels proportionate and competitive, and by maintaining the highest standards of business conduct. | | Lenders | Lenders such as holders of debt instruments (bonds and private placement loan notes) and banks providing fixed or revolving credit facilities provide the Company's gearing and have an interest in the Company's ongoing financial health and viability. | The Company's legal advisers review all legal agreements in connection with the Company's debt arrangements and advise the Board on the appropriateness of the terms and covenants therein. The Managers and Secretaries ensure that the frequency and accuracy of reporting on, for example, covenant certification, is appropriate and that correspondence from the lenders receives a prompt response. | | AIC/industry peers | The Association of Investment Companies ('AIC') and the Company's investment trust industry peers have an interest in the Company's conduct and performance, as adverse market sentiment towards one investment trust can affect attitudes towards the wider industry. | The Company is a member of the AIC, and the Directors and/or the Managers and Secretaries (as appropriate) participate in technical reviews, requests for feedback on proposed legislation or regulatory developments, corporate governance discussions and/or training. | | Wider society and the environment | No entity, corporate or otherwise, can exist without having an influence on the society in which it operates or utilising the planet's resources. Through its third-party relationships, as noted above, the Company seeks to be a positive influence and, in circumstances where that is not possible, to mitigate its negative impacts insofar as is possible. | The Board and Managers' interactions with the various stakeholders as noted above form the principal forms of direct engagement with wider society and in respect of the environment (commercial, financial, and in terms of planetary health and resources). | 48 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. The Board recognises the importance of maintaining the interests of the Company and its stakeholders in aggregate, firmly front of mind in its key decision making and Baillie Gifford & Co Limited, the Company Secretaries are at all times available to the Board to ensure that suitable consideration is given to the range of factors to which the Directors should have regard. In addition to ensuring that the Company's stated investment objective was being pursued, key decisions and actions during the year which required the Directors to have regard to applicable section 172 factors included: - The Company bought back 12,764,384 of the Company's own shares into treasury at a discount to net asset value, for subsequent reissue, in order to ensure the Company's shareholders found liquidity for their shares when natural market demand was insufficient, and on terms that enhance net asset value for remaining shareholders; and - as part of the Board's succession planning, Angus Macpherson was appointed as a Director and Chairman Designate to the Board on 1 September 2025. This appointment is consistent with the AIC Corporate Governance Code principle that 'a successful company is led by an effective board, whose role is to promote the long-term sustainable success of a company, generating value for shareholders and contributing to wider society'. ### **Employees, human rights and community issues** The Board recognises the requirement to provide information about employees, human rights and community issues. As the Company has no employees, all its Directors are non-executive and all its functions are outsourced, there are no disclosures to be made in respect of employees, human rights and community issues. Further information on the Company's approach to environmental, social and governance (ESG) matters are provided on page 67. ### **Gender representation** As at 31 December 2025, and the date of this report, the Board comprises six Directors, three male and three female. The Company has no employees. The Board's policy on diversity is set out on page 63. ### **Environmental, social and governance policy** Details of the Company's policy on socially responsible investment can be found under Corporate Governance and Stewardship on page 67. The Company considers that it does not fall within the scope of the Modern Slavery Act 2015 and it is not, therefore, obliged to make a slavery and human trafficking statement. In any event, the Company considers its supply chains to be of low risk as its suppliers are typically professional advisers. A statement by the Managers under the Act has been published on the Managers' website at bailliegifford.com. ### **Future developments of the Company** The outlook for the Company for the next 12 months is set out in the Chairman's statement on pages 05 to 09 and the Managers' review on pages 15 to 19. The Strategic report, which includes pages 05 to 49, was approved by the Board on 18 February 2026. Lord Macpherson of Earl's Court Chairman 49 --- # Governance report This governance report, which includes pages 51 to 75 outlines the Board's approach to the governance of your Company. We believe that good governance builds better outcomes and we are committed to high standards of corporate governance and transparency. --- The Scottish American Investment Company P.L.C. # Directors and management ## Directors ![img-39.jpeg](img-39.jpeg) **Lord Nicholas Macpherson of Earl's Court, GCB** Chairman Appointed 2016 Lord Macpherson of Earl's Court, GCB joined the Board in 2016 and was appointed Chairman on 5 April 2022. He was Permanent Secretary to the Treasury from 2005 to 2016, leading the department through the global economic and financial crisis. He is currently chairman of C Hoare and Co, a Visiting Professor at King's College, London and was a non-executive director of British Land plc. ![img-40.jpeg](img-40.jpeg) **Karyn Lamont, CA** Director Appointed 2019 Karyn Lamont, CA joined the Board in 2019 and became Chairman of the Audit Committee in 2020. Karyn is a chartered accountant and former audit partner at PricewaterhouseCoopers. She has over 25 years' experience providing audit and other services to a range of clients across the UK's financial services sector, including a number of investment trusts. Karyn is audit committee chairman of The North American Income Trust plc, The Scottish Building Society, Iomart Group and a trustee of Golden Charter Trust. She was also a director of Ediston Property Investment Company plc. ![img-41.jpeg](img-41.jpeg) **Dame Mariot Leslie** Director Appointed 2019 Dame Mariot Leslie joined the Board in 2019. She was a member of the Diplomatic Service from 1977 until her retirement in 2014. In the course of her career she represented the UK overseas in Singapore, Germany, France and Italy, ran the FCO's Policy Planning Staff, and was a member of the British Government's Joint Intelligence Committee. She was the British Ambassador to Norway from 2002 to 2006 and the UK's Permanent Representative to NATO from 2010 to 2014. 51 --- Governance report ![img-42.jpeg](img-42.jpeg) **Angus Macpherson** Director Appointed 2025 Angus Macpherson was appointed to the Board in September 2025. Angus is Chairman of Noble and Company (UK) Limited, an independent boutique Scottish corporate finance business. He has over thirty-five years of investment experience, and is an experienced chairman and director of investment trusts, serving on a number of Boards since 2010. He is currently Chairman of Templeton Emerging Markets Investment Trust plc, and a non-executive director of Schroder Japan Growth Fund plc and of Hampden and Co plc. ![img-43.jpeg](img-43.jpeg) **Christine Montgomery** Director Appointed 2022 Christine Montgomery joined the Board in 2022. She has over 30 years of investment management experience, most recently as Head of Global Equities for Australian Super in Melbourne from 2016 to 2019 and previously held senior global equity roles at Fidelity Worldwide Investments, Franklin Templeton Investments and Aegon. Christine is a non-executive director of Dunedin Income and Growth Investment Trust. ![img-44.jpeg](img-44.jpeg) **Padmesh Shukla** Director Appointed 2024 Padmesh Shukla joined the Board in February 2024. He is the Chief Investment Officer of the Transport For London ('TFL') Pension Fund, and has over 25 years of investment experience, including 12 years in his current role at TFL. He was formerly head of Climate Change Financing at the London Development Agency, and prior to that he had worked at the World Bank, as a Researcher at Harvard and in real estate. He is currently a member of the Church of England Pensions Investment Committee. All Directors are members of the Nomination Committee and all Directors, with the exception of Lord Macpherson of Earl's Court, are members of the Audit Committee. Lord Macpherson stepped down from the Audit Committee in July 2022. 52 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ## Managers and secretaries The Company has appointed Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford & Co, as its Alternative Investment Fund Manager and Company Secretary. Baillie Gifford & Co Limited has delegated investment 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 management firm formed in 1927 out of the legal firm Baillie & Gifford, WS, which had been involved in investment management since 1908. Baillie Gifford is one of the largest investment trust managers in the UK and currently manages twelve investment trusts. Baillie Gifford also manage a listed investment company, unit trusts and open ended investment companies, together with investment portfolios on behalf of pension funds, charities and other institutional clients, both in the UK and overseas. Funds under the management or advice of Baillie Gifford total around £193 billion as at 16 February 2026. Based in Edinburgh, it is one of the leading privately owned investment management firms in the UK, with 62 partners and a staff of around 1,600. SAINTS is managed by James Dow and Ross Mathison. They work closely with the other specialist equity, bond and multi-asset class investors at Baillie Gifford (see further information on the portfolio managers on page 14). Baillie Gifford & Co and Baillie Gifford & Co Limited are both authorised and regulated by the Financial Conduct Authority. ## Property manager The Company, Baillie Gifford & Co Limited and OLIM Property Limited, a specialist property manager, have entered a tripartite agreement to appoint OLIM Property Limited as property manager. OLIM Property is an FCA regulated property investment manager of UK commercial property portfolios, with individual discretionary mandates for pension funds, investment trusts and Oxford colleges. OLIM Property is owner managed with a dedicated and highly experienced team and has a 38 year record of pioneering commercial property investment expertise and consistent outperformance. The first three client mandates in 1986 were for Value and Income Trust PLC (now known as Value and Indexed Property Income Trust PLC), an Oxford College and a FTSE 100 Company's Pension Fund. Their office is based at 15 Queen Anne's Gate in Central London, adjacent to St James's Park. ## Matthew Oakeshott – chairman Joint founder of OLIM where he managed UK commercial property and equity portfolios from 1986 to 2006 and purely commercial property since then. S.G. Warburg & Co 1976, Director of Warburg Investment Management 1978. Investment Manager of Courtaulds Pension Fund 1981 to 1985. He led a management buyout of OLIM Property in 2012. 53 --- Governance report # **Louise Cleary – managing director** Qualified as a Member of the Royal Institution of Chartered Surveyors in 1996. She has over 20 years' experience of commercial property investment at Hermes Real Estate Investment Management, Land Securities and Asda Property Holdings and joined OLIM in 2009 and OLIM Property in 2012. # **Sarah Martin – director** Qualified as a Member of the Royal Institution of Chartered Surveyors in 2008. She has over 15 years' experience at the Estates Gazette, JLL/King Sturge and joined OLIM Property in 2019. # **Jo West – investment analyst** Qualified as a Member of the Royal Institution of Chartered Surveyors in 1992. She has 20 years of commercial property valuation and investment experience at Donaldsons, Gooch & Wagstaff, CBRE and British Land and joined OLIM Property in 2018. 54 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. # Directors’ report **The Directors present their Report together with the Financial Statements of the Company for the year to 31 December 2025.** ## Corporate governance The Corporate Governance Report is set out on pages 60 to 67 and forms part of this Report. ## Managers and Company Secretaries Baillie Gifford & Co Limited, a wholly owned subsidiary of Baillie Gifford & Co, has been appointed as the Company’s Alternative Investment Fund Manager (AIFM) and Company Secretary. Baillie Gifford & Co Limited has delegated investment 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. The management of the property portfolio has been delegated to OLIM Property Limited. The Investment Management Agreement between the AIFM and the Company sets out the matters over which the Managers have authority in accordance with the policies and directions of, and subject to restrictions imposed by, the Board. The Investment Management Agreement is terminable on not less than six months’ notice. Compensation fees would only be payable in respect of the notice period if termination were to occur within a shorter notice period. The annual management fee is 0.45% of the first £500 million of total assets and 0.35% of the remaining total assets, total assets being the value of all assets held (excluding the property portfolio) less all liabilities, other than any liability in the form of debt intended for investment purposes, calculated on a quarterly basis. The Board is of the view that calculating the fee with reference to performance would be unlikely to exert a positive influence on performance. 55 --- Governance report The Property Management Agreement sets out the matters over which OLIM Property Limited has discretion and those matters which require Board approval. The Property Management Agreement is terminable on three months' notice. The annual fee is 0.5% of the value of the property portfolio, subject to a minimum quarterly fee of £6,250. ## Investment management The Board considers the Company's investment management arrangements on an ongoing basis and a formal review is conducted annually, most recently in November 2025. The Board used an external evaluation platform and considered, amongst others, the following topics in its review: - Baillie Gifford's investment process and the results achieved to date; - the property management service provided by OLIM Property Limited; - Investment performance; - The marketing efforts undertaken by Baillie Gifford; - The relationship with Baillie Gifford and OLIM; and - Comparative peer group charges and fees. Following this process the results were reviewed and discussed by the Board. Investment processes were found to be strong whilst the Board acknowledged that short-term performance has fallen behind benchmark and remains a key focus of Board discussions with Baillie Gifford. The Board's relationship with both Baillie Gifford and OLIM remain strong and both the investment management and property management fees remain competitive. The one area in which the Board is looking for an improvement over the next year is that we aim to see increased marketing, making the case for SAINTS specifically. At this review the Board concluded that the continuing appointment of Baillie Gifford & Co Limited as AIFM, and the delegation of investment management services to Baillie Gifford & Co and the further sub-delegation of dealing activity and transaction reporting to Baillie Gifford Overseas Limited and Baillie Gifford Asia (Hong Kong) Limited and the delegation of the management of the property portfolio to OLIM Property Limited, on the terms agreed, is in the interests of the Company and shareholders as a whole. ## Secretarial and administrative The Board considers its company secretarial and administrative needs separately from its investment management arrangements and considers, amongst others, the following: - Timeliness and accuracy of information provided; - A sense of working for the Company rather than the Manager; - Ability to manage issues between meetings; - Direct and opportunity costs of an alternative; The review process highlighted excellent reporting to the Board by Baillie Gifford & Co Limited acting as Company Secretary. As it would impose additional costs on the Company to employ a third party company secretary separate from the Investment Managers and as the existing arrangements are working well, the Board considers employing Baillie Gifford & Co Limited as company secretary is in the interests of the Company and shareholders as a whole. ## Depositary In accordance with the UK Alternative Investment Fund Managers ('AIFM') Regulations, the AIFM must appoint a Depositary to the Company. The Bank of New York Mellon (International) Limited has been appointed as the Company's Depositary. The Depositary's responsibilities include cash monitoring, safe keeping of the Company's financial instruments, verifying ownership and maintaining a record of other assets and monitoring the Company's compliance with investment limits and leverage requirements. The custody function is also undertaken by The Bank of New York Mellon (International) Limited. ## Directors Information about the Directors, including their relevant experience, can be found on pages 51 to 52. With the exception of the Chairman, all Directors will retire at the Annual General Meeting and offer themselves for re-election. The Chairman has indicated his intention to step down from the Board and is not seeking re-election at the Annual General Meeting. Following formal performance evaluation, the Board concluded that the performance of each of the Directors continues to be effective and each remains committed to the Company. Their contribution to the Board is greatly valued and the Board recommends their re-election to shareholders. 56 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ## Director indemnification and insurance The Company has entered into qualifying third party deeds of indemnity in favour of each of its Directors. The deeds, which were in force during the year to 31 December 2025 and up to the date of approval of this Report, cover any liabilities that may arise to a third party, other than the Company, for negligence, default or breach of trust or duty. The Directors are not indemnified in respect of liabilities to the Company, any regulatory or criminal fines, any costs incurred in connection with criminal proceedings in which the Director is convicted or civil proceedings brought by the Company in which judgement is given against him/her. In addition, the indemnity does not apply to any liability to the extent that it is recovered from another person. The Company maintains Directors' and Officers' Liability Insurance. ## Conflicts of interest Each Director submits a list of potential conflicts of interest to the Nomination Committee on an annual basis. The Committee considers these carefully, taking into account the circumstances surrounding them and makes a recommendation to the Board on whether or not the potential conflicts should be authorised. Board authorisation is for a period of one year. Having considered the lists of potential conflicts there were no situations which gave rise to a direct or indirect interest of a Director which conflicted with the interests of the Company. ## Dividends The Board recommends a final dividend of 4.595p per ordinary share which, together with the interim dividends already paid, makes a total of 15.92p for the year. If approved, the recommended final dividend on the ordinary shares will be paid on 24 April 2026 to shareholders on the register at the close of business on 27 February 2026. The ex-dividend date is 26 February 2026. The Company's Registrar offers a Dividend Reinvestment Plan (see page 111) and the final date for the receipt of elections for reinvestment of this dividend is 1 April 2026. ## Share capital ### Capital structure The Company's capital structure (excluding treasury shares) consists of 163,886,374 ordinary shares of 25p each (2024 – 176,650,758 ordinary shares). There are no restrictions concerning the holding or transfer of the Company's ordinary shares and there are no special rights attaching to any of the shares. ### Dividends The ordinary shares carry a right to receive dividends. Interim dividends are determined by the Directors, whereas the proposed final dividend is subject to shareholder approval. ### Capital entitlement On a winding up, after meeting the liabilities of the Company, the surplus assets will be paid to ordinary shareholders in proportion to their shareholdings. ### Voting Each ordinary shareholder present in person or by proxy is entitled to one vote on a show of hands and, on a poll, to one vote for every share held. Information on the deadlines for proxy appointments can be found on pages 107 to 109. ## Major interests disclosed in the Company's shares | Name | No. of ordinary 25p shares notified as at 31 December 2025 | % of issue | | --- | --- | --- | | 1607 Capital Partners | 8,660,798 | 5.3 | | Rathbones | 8,170,533 | 5.0 | Holdings above are stated as per the most recent notification to a Regulatory Information Service. There have been no changes to the major interests in the Company's shares disclosed between 31 December 2025 and 16 February 2026. ## Annual General Meeting ### Share issuance authority Resolution 12 in the Notice of Annual General Meeting seeks to renew the Directors' general authority to issue shares up to an aggregate nominal amount of £13,457,925.75. This amount represents approximately 33% of the Company's total ordinary share capital in issue at 16 February 2026, being the latest practicable date prior to the publication of this document, and meets institutional guidelines. No issue of ordinary shares will be made pursuant to the authorisation in Resolution 12 which would effectively alter the control of the Company without the prior approval of shareholders in general meeting. 57 --- Governance report Resolution 13, which is proposed as a special resolution, seeks to renew the Directors' authority to issue shares or sell shares held in treasury on a non pre-emptive basis (i.e. without first offering such shares to existing shareholders pro-rata to their existing holdings) for cash up to an aggregate nominal amount of £4,078,159.25 (representing approximately 10% of the issued ordinary share capital of the Company as at 16 February 2026, being the latest practicable date prior to the publication of this document). The authorities sought in Resolutions 12 and 13 will continue until the conclusion of the Annual General Meeting to be held in 2027 or on the expiry of 15 months from the passing of this resolution, if earlier. Such authorities will only be used to issue shares or sell shares from treasury at, or at a premium to, net asset value and only when the Directors believe that it would be in the best interests of the Company to do so. See further in this regard under the heading 'authority to issue shares at a discount to net asset value (with borrowings valued at book)' below. During the year to 31 December 2025, no shares were issued by the Company. #### **Authority to issue shares at a discount to Net Asset Value (with borrowings valued at book)** As noted above, the Board believes that issuing shares to meet unsatisfied demand in the marketplace is generally in the best interests of the Company. Shareholders are asked on an annual basis to grant the Directors customary share allotment and issuance authorities (see 'share issuance authorities' above). In order to facilitate non pre-emptive share issuance, either of new ordinary shares or of any shares which are held by the Company in treasury. Even where such authorities are in place, however, the UK Listing Rules prohibit the issue of shares, whether new or from treasury, for cash at a price below the net asset value per share ('NAV') of the shares which are then in issue, unless the new shares are first offered to existing shareholders pro-rata to their existing holdings. As stated previously, the Board considers NAV (assets less liabilities) on the basis of the Company's borrowings valued at their book value to be the prudent measure when determining the price at which to issue shares. It remains the Directors' firm intention only to issue shares at, or at a premium to, NAV calculated on this measure. In order, though, to guard against a technical breach of the UK Listing Rules prohibition mentioned above, by virtue of an inadvertent share issuance at a discount to NAV with borrowings at book (due, for example, to challenges in estimating intra-day market movements), the Board is again this year proposing an additional annual resolution which, paradoxically, seeks to authorise the Directors to issue shares at a discount to NAV at book. Resolution 14 is being proposed, therefore, solely for this technical purpose and specifically in the context of the Directors' continued intention only to issue shares on a basis which protects or enhances shareholder value. #### **Market purchase of own shares** The Company's buy-back authority was last renewed at the AGM on 8 April 2025 in respect of 25,733,035 shares of 25p each (equivalent to 14.99% of its then issued share capital). During the year to 31 December 2025, 12,764,384 shares were bought back at a cost of £65,369,000 and held in treasury (2024 – 1,665,185 shares bought back at a cost of £8,529,000). Between 1 January and 16 February 2026, the Company bought back 760,000 shares into treasury at a cost of £3,955,000. 15,189,569 shares were held in treasury as at 16 February 2026. The principal reasons for share buy-backs are: i. to enhance the net asset value for continuing shareholders by purchasing shares at a discount to the prevailing net asset value; and ii. to address any imbalance between the supply of and demand for SAINTS' shares that results in a discount of the quoted market price to the published net asset value per share. The Company may hold bought back shares in treasury and then: i. sell such shares (or any of them) for cash (or its equivalent under the Companies Act 2006); or ii. cancel the shares (or any of them). Shares will only be re-sold from treasury at a premium to net asset value per ordinary share. The Directors are seeking shareholders' approval at the Annual General Meeting to renew the authority to make market purchases of up to 24,452,643 ordinary shares in issue (excluding treasury shares) as at 16 February 2026, being the latest practicable date prior to the publication of this document or, if less, the number representing approximately 14.99% of the Company's ordinary shares in issue at the date of passing of the resolution, such authority to expire at the Annual General Meeting of the Company to be held in 2027. Such purchases will only be made through the market for cash at prices below the most recently calculated net asset value per ordinary share, which will result in an increase in value of the remaining ordinary shares. 58 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. Any such shares purchased shall either be held in treasury or cancelled. In accordance with the UK Listing Rules of the UK Listing Authority, the maximum price (excluding expenses) that may be paid on the exercise of the authority must not exceed the higher of: i. 5 per cent above the average closing price on the London Stock Exchange of an ordinary share over the five business days immediately preceding the date of purchase; and ii. an amount equal to the higher of the price of the last independent trade of an Ordinary Share and the highest current independent bid for an Ordinary Share on the trading venue where the purchase is carried out. The minimum price (exclusive of expenses) that may be paid will be 25p per share. Purchases of shares will be made within guidelines established, from time to time, by the Board. The Company does not have any warrants or options in issue. Your attention is drawn to Resolution 15 in the Notice of Annual General Meeting. ### Articles of Association The Company's Articles of Association may only be amended by special resolution at a general meeting of shareholders. ### Financial instruments The Company's financial instruments comprise its investment portfolio, cash balances, borrowings and debtors and creditors that arise directly from its operations such as sales and purchases awaiting settlement and accrued income. The financial risk management objectives and policies arising from its financial instruments and the exposure of the Company to risk are disclosed in note 18 to the Financial Statements on pages 97 to 103. ### Disclosure of information to Auditor The Directors who held office at the date of approval of this Directors' Report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's Auditor is unaware; and each Director has taken all the steps that they ought to have taken as a Director to make themselves aware of any relevant audit information and to establish that the Company's Auditor is aware of that information. ### Independent Auditor The Auditor, Ernst & Young LLP, is willing to continue in office and in accordance with section 489 and section 491(1) of the Companies Act 2006, resolutions concerning Ernst & Young LLP's reappointment and remuneration will be submitted to the Annual General Meeting. ### Post balance sheet events The Directors confirm that there have been no significant post balance sheet events up to 18 February 2026 that require disclosure in the Financial Statements. ### Greenhouse gas emissions and Streamlined energy and carbon reporting ('SECR') All of the Company's activities are outsourced to third parties. The Company therefore has no greenhouse gas emissions to report from its operations, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013. For the same reasons as set out above, the Company considers itself to be a low energy user under the SECR regulations and therefore is not required to disclose energy and carbon information. ### Bribery Act The Company has a zero tolerance policy towards bribery and is committed to carrying out business fairly, honestly and openly. The Managers also adopt a zero tolerance approach and have policies and procedures in place to prevent bribery. ### Criminal Finances Act 2017 The Company has a commitment to zero tolerance towards the criminal facilitation of tax evasion. ### Recommendation The Board unanimously recommends you to vote in favour of the resolutions to be proposed at the Annual General Meeting as, in its opinion, they are in the best interests of the shareholders as a whole. On behalf of the Board Lord Macpherson of Earl's Court Chairman 18 February 2026 59 --- Governance report # Corporate governance report The Board is committed to achieving and demonstrating high standards of Corporate governance. This statement outlines how the principles of the 2024 UK Corporate Governance Code ('the Code'), which can be found at frc.org.uk, and the relevant principles of the Association of Investment Companies ('AIC') Code of Corporate Governance ('AIC Code') issued in 2024 were applied throughout the financial year. The AIC Code provides a framework of best practice for investment companies and can be found at theaic.co.uk. ## Compliance The Board confirms that the Company has complied throughout the year under review with the relevant provisions of the Code and the recommendations of the AIC Code. The Code includes provisions relating to the role of the chief executive, executive directors' remuneration and the need for an internal audit function. Given that the Company is an externally managed investment trust, the Board considers these provisions are not relevant to the Company (the need for an internal audit function specific to the Company has been addressed on page 69). Details of the Board's view on Directors who have served on the Board for more than nine years can be found under the Independence of Directors and Policy on Chairman's and Directors' tenure sections of this Report on pages 62 and 63. The FRC has confirmed that AIC member companies who report against the AIC Code will be meeting their obligations in relation to the UK Code (the AIC Code can be found at theaic.co.uk). ## The Board The Board has overall responsibility for the Company's affairs. It has a number of matters formally reserved for its approval including strategy, investment policy, currency hedging, gearing, treasury matters, dividend and corporate governance policy. A separate meeting devoted to strategy is held each year. The Board also reviews the Financial Statements, investment transactions, revenue budgets and investment performance of the Company. Full and timely information is provided to the Board to enable the Board to function effectively and to allow Directors to discharge their responsibilities. 60 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. # Board of Directors Comprises independent non-executive Directors Chairman: Lord Macpherson of Earl's Court Senior Independent Director: Dame Mariot Leslie # Audit Committee Chairman: Karyn Lamont # Purpose To provide oversight of: - the financial reporting process; - the audit process; - the Company's system of internal controls; and - compliance with laws and regulations. # Nomination Committee Chairman: Lord Macpherson of Earl's Court # Purpose To oversee: - Board recruitment; - succession planning; and - Board appraisals including identifying training needs. # Third-party service providers appointed by the Board Alternative Investment Fund Managers and Company Secretary: Baillie Gifford & Co Limited (wholly owned subsidiary of Baillie Gifford & Co) Dealing activity and transaction reporting: Baillie Gifford Overseas Limited and Baillie Gifford Asia (Hong Kong) Limited Property manager: OLIM Property Limited Ernst & Young LLP Auditor The Bank of New York Mellon (International) Limited Depository Computershare Investor Services PLC Registrar Winterflood Investment Trusts Company Broker 61 --- Governance report The Board currently comprises six Directors all of whom are non-executive. The Chairman is responsible for organising the business of the Board, ensuring its effectiveness and setting its agenda. The executive responsibility for investment management has been delegated to the Company's Alternative Investment Fund Manager ('AIFM'), Baillie Gifford & Co Limited, and, in the context of a Board comprising entirely non-executive Directors, there is no chief executive officer. The Senior Independent Director is Dame Mariot Leslie. The Directors believe that the Board has a balance of skills and experience which enables it to provide effective strategic leadership and proper governance of the Company. Information about the Directors, including their relevant experience, can be found on pages 51 and 52. There is an agreed procedure for Directors to seek independent professional advice if necessary at the Company's expense. ## Appointments The terms and conditions of Directors' appointments are set out in formal letters of appointment which are available for inspection on request. Under the provisions of the Company's Articles of Association, a Director appointed during the year is required to retire and seek election by shareholders at the next Annual General Meeting. The Board has agreed that all the Directors will retire at each Annual General Meeting and, if appropriate, offer themselves for re-election. ## Independence of Directors All Directors are considered by the Board to be independent of the Managers and free of any business or other relationship which could interfere with the exercise of their independent judgement. The Directors recognise the importance of succession planning for company boards and review the Board composition annually. The Board is of the view that length of service will not necessarily compromise the independence or contribution of Directors of an investment trust company, where continuity and experience can be a benefit to the Board. The policy on Chairman's and Directors' tenure is on page 63. ## Meetings There is an annual cycle of Board meetings which is designed to address, in a systematic way, overall strategy, review of investment policy, investment performance, marketing, revenue budgets, dividend policy and communication with shareholders. The Board considers that it meets sufficiently regularly to discharge its duties effectively. The following table shows the attendance record for the core Board and Committee meetings held during the year. The Annual General Meeting was attended by all Directors. ### Directors' attendance at meetings | | Board | Audit Committee | Nomination Committee | | --- | --- | --- | --- | | **Number of meetings** | **5** | **3** | **1** | | Lord Macpherson of Earl's Court* | 5 | 3 | 1 | | Karyn Lamont | 5 | 3 | 1 | | Angus Macpherson† | 2 | 1 | 1 | | Christine Montgomery | 5 | 3 | 1 | | Dame Mariot Leslie | 5 | 3 | 1 | | Padmesh Shukla | 5 | 3 | 1 | \* Lord Macpherson of Earl's Court ceased to be a member of the Audit Committee when he became Chairman of the Board on 5 April 2022 but attends by invitation † Appointed a Director 1 September 2025 ## Nomination Committee The Nomination Committee consists of the whole Board due to the ongoing small size of the Board and the Chairman of the Board is Chairman of the Committee. The Committee meets on an annual basis and at such other times as may be required. The Committee has written terms of reference which include reviewing the Board composition, Board appraisal, succession planning, training and identifying and nominating new candidates for appointment to the Board. The Committee also considers whether Directors should be recommended for re-election by shareholders. The Committee is responsible for considering Directors' potential conflicts of interest and for making recommendations to the Board on whether or not any potential conflicts should be authorised. 62 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. During 2025, the Committee engaged an external search consultancy, Odgers, to recruit a new Director and Chairman designate to join the Board. The appointment process was led by Dame Mariot Leslie, the Senior Independent Director. Angus Macpherson was identified as the preferred candidate and it was announced on 26 August 2025 that he would be appointed to the Board on 1 September 2025. The Committee believes that Mr Macpherson's knowledge and experience will be of great benefit to the Company. Odgers, which has no other connection with the Company or any of the Directors, was specifically tasked with identifying candidates with the best range of skills and experience to complement those of the existing Directors, while also considering the promotion of diversity on the Board as an integral part of the recruitment process. ### Diversity policy Appointments to the Board are made on merit and based on objective criteria, including the promotion of diversity of gender, social and ethnic backgrounds, and cognitive and personal strengths. The priority in succession planning and appointing new Directors is to identify candidates with the best range of skills and experience to complement those of the existing Directors, with a view to ensuring that the Board remains well placed to help the Company achieve its investment and governance objectives. ### Board diversity The following disclosures are provided in respect of the UK Listing Rules targets that: i) 40% of a board should be women; ii) at least one senior role should be held by a woman; and iii) at least one board member should be from a non-white ethnic background, as defined by the Office of National Statistics ('ONS') criteria. As an externally managed investment company with no chief executive officer (CEO) or chief financial officer (CFO), the roles which qualify as senior under FCA guidance are Chair and Senior Independent Director (SID). The Board also considers Audit Committee Chairman to represent a senior role within this context and this role is performed by a woman. At 31 December 2025, which shall be used as the reference date for the disclosures, the Board complies in all respects with the UK listing Rules targets. | Gender | Number | % | Senior roles | | --- | --- | --- | --- | | Men | 3 | 50 | 1 | | Women | 3 | 50 | 1* | | Prefer not to say | – | – | – | * The Board also considers Audit Committee Chairman to be a senior role. The role of Audit Committee Chairman is currently held by a woman. | Ethnic background | Number | % | Senior roles | | --- | --- | --- | --- | | White | 5 | 83 | 2* | | Asian/Asian British | 1 | 17 | – | | Prefer not to say | – | – | – | * The Board also considers Audit Committee Chairman to be a senior role. The current Audit Committee Chairman's ethnic background is white. ### Policy on Chairman's and Directors' tenure The Board of SAINTS considers that the tenure of its Chairman and Directors should be driven by how shareholders' interests can best be served and, in particular, in a way which prioritises the effective functioning of the Board. It notes that as well as the effectiveness and independence of the Chairman and Directors, the ongoing balance, experience and diversity of the whole Board are relevant factors. Whilst it recognises the need for regular Board refreshment, the Board also believes that continuity is vitally important. Consequently, the Board firmly believes it is helpful at any given time to have some longer serving members on the Board. The Committee's terms of reference are available on request from the Company and from the SAINTS' page on the Managers' website: saints-it.com. 63 --- Governance report ## Performance evaluation The Board undertakes an annual evaluation of its effectiveness, including the performance of the Chairman, each Director, and of the Board as a whole and its Committees. During the year to 31 December 2025 the Board carried out a more rigorous appraisal using an external evaluation platform. The Chairman and each Director completed a performance evaluation questionnaire and each Director had an interview with the Chairman. The appraisal of the Chairman was led by Dame Mariot Leslie. The appraisals and evaluations considered, amongst other criteria: - the balance of skills of the Board, - training and development requirements, - the contribution of individual Directors, and - and the overall effectiveness of the Board and its Committees. Following this process the results were reviewed and discussed by the Board and it was concluded that there was a diverse range of skills within the Board, and the performance of each Director, the Chairman, the Board and its Committees continues to be effective and the Directors remain committed to the Company. A review of the Chairman's and other Directors' commitments was carried out and the Nomination Committee is satisfied that they are capable of devoting sufficient time to the Company. There were no significant changes to the Chairman's other commitments during the year. The UK Corporate Governance Code provides that FTSE 350 companies should have an externally facilitated Board performance review at least every three years. An external review of the Board was due in the period, the last review being carried out during the year ended 31 December 2022. However, the Board decided not to undertake such a review in the year in light of the planned retirement of the Chairman at the Company's AGM on 17 April 2026 and the appointment of Angus Macpherson as Chairman thereafter. The Board considered it would be more effective for the externally facilitated review to be commissioned and overseen by the incoming Chairman, ensuring that its scope and recommendations are aligned with the Board's leadership transition and future priorities. The Board therefore intends to commission an externally facilitated performance review ahead of the Nomination Committee meeting scheduled for November 2026 and will disclose the identity of the external reviewer and the principal findings and actions arising from the review in the Company's next annual report. ## Induction and training New Directors are provided with an induction programme which is tailored to the particular circumstances of the appointee. Briefings were provided during the year on regulatory matters. Directors receive other relevant training as necessary. ## Remuneration Committee As all the Directors are non-executive, there is no requirement for a separate Remuneration Committee. Directors' fees are considered by the Board as a whole within the limits approved by shareholders. The Company's policy on remuneration is set out in the Directors' Remuneration report on page 71. ## Management Engagement Committee The Directors have considered that a separate Management Engagement Committee is not required given the small size of the Board. ## Audit Committee The report of the Audit Committee is set out on pages 68 to 70. ## Internal controls and risk management The Directors acknowledge their responsibility for the Company's risk management and internal controls systems and for reviewing their effectiveness, including with regard to preparation of the Company's Annual Report and Financial Statements. These systems are designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable but not absolute assurance against material misstatement or loss. 64 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. The Board confirms that there is a continuing process for identifying, evaluating and managing the significant risks faced by the Company in accordance with the FRC guidance 'Guidance on Risk Management, Internal Control and Related Financial and Business Reporting'. The practical measures to be taken in relation to the design, implementation and maintenance of control policies and procedures to safeguard the Company's assets and to manage its affairs properly, including the maintenance of effective operational and compliance controls have been delegated to the Managers and Secretaries. The Board oversees the functions delegated to the Managers and Secretaries and the controls managed by the AIFM in accordance with the UK Alternative Investment Fund Managers Regulations (as detailed below). Baillie Gifford & Co's Internal Audit and Compliance Departments and the AIFM's permanent risk function provide the Audit Committee with regular reports on their monitoring programmes, including their review of the controls reports of the Registrar, Computershare, the property administrator, Workman, and the their review of the controls at the Property Manager, OLIM. The reporting procedures for these departments are defined and formalised within a service level agreement. Baillie Gifford & Co conducts an annual review of its system of internal controls which is documented within an internal controls report which complies with ISAE 3402 – Assurance Reports on Internal Controls of Service Organisations made available to Third Parties. This report is independently reviewed by Baillie Gifford & Co's Auditor and a copy is submitted to the Audit Committee. A report identifying the material risks faced by the Company and the key controls employed to manage these risks is reviewed by the Audit Committee. These procedures ensure that consideration is given regularly to the nature and extent of risks facing the Company and that they are being actively monitored. Where changes in risk have been identified during the year they also provide a mechanism to assess whether further action is required to manage these risks. The Directors confirm that they have reviewed the effectiveness of the Company's risk management and internal controls systems which accord with the FRC 'Guidance on Risk Management, Internal Control and Related Financial and Business Reporting', and they have procedures in place to review their effectiveness on a regular basis. No significant weaknesses were identified in the year under review and at 31 December 2025 the control procedures were operating effectively. The Board confirms that these procedures have been in place throughout the Company's financial year and continue to be in place up to the date of approval of this report. During the year the Audit Committee considered the changes required by the new AIC Corporate Governance Code, published 2024. Within the new Code, Provision 34, effective for accounting periods starting on or after 1 January 2026, requires boards to monitor and, at least annually, review the effectiveness of the company's risk management and internal control framework. The monitoring and review should cover all material controls including financial, operational, reporting and compliance. Boards are required to report on that review in their annual report providing; a description of how the board has monitored and reviewed the effectiveness of the framework, a declaration of the material controls as at the balance sheet date, and description of any material controls not operating effectively as at the balance sheet date and action taken to improve them. In preparation for reporting against Provision 34, the Audit Committee carried out a review of the Company's risk matrix and principal risks and have agreed a timeline with the Managers and Secretaries to develop an appropriate process for the identification of material controls, how assurance will be obtained and the evidence to support the Board's attestation in this regard in the 2026 Annual Report and Financial Statements. As noted above, effective risk management and internal control systems were in place during the year under review and Provision 34 is expected to result in changes to disclosures in the Annual Report and Financial Statements rather than an overhaul of risk management and internal controls. 65 --- Governance report To comply with the UK Alternative Investment Fund Managers Regulations, The Bank of New York Mellon (International) Limited act as the Company's Depositary and Baillie Gifford & Co Limited as its AIFM. The Depositary's responsibilities include cash monitoring, safe keeping of the Company's financial instruments, verifying ownership and maintaining a record of other assets and monitoring the Company's compliance with investment limits and leverage requirements. The Depositary is liable for the loss of financial instruments held in custody. The Depositary will ensure that any delegate segregates the assets of the Company. The Company's Depositary also acts as the Company's Custodian. The Custodian prepares reports on its key controls and safeguards which are independently reviewed by its appointed auditors, KPMG LLP. The reports are reviewed by Baillie Gifford's Business Risk Department and a summary of the key points is reported to the Audit Committee and any concerns are investigated. The Depositary provides the Audit Committee with a report on its monitoring activities. The AIFM has established a permanent risk management function to ensure that effective risk management policies and procedures are in place and to monitor compliance with risk limits. The AIFM has a risk management policy which covers the risks associated with the management of the portfolio, and the adequacy and effectiveness of this policy is reviewed and approved at least annually. This review includes the risk management processes and systems and limits for each risk area. The risk limits, which are set by the AIFM and approved by the Board, take into account the objectives, strategy and risk profile of the portfolio. These limits including leverage (see page 112) are monitored and the sensitivity of the portfolio to key risks is undertaken periodically as appropriate to ascertain the impact of changes in key variables in the portfolio. Exceptions from limits monitoring and stress testing undertaken by Baillie Gifford's Business Risk Department are escalated to the AIFM and reported to the Board along with any remedial measures being taken. ## Going concern In accordance with The Financial Reporting Council's guidance on going concern and liquidity risk, the Directors have undertaken a rigorous review of the Company's ability to continue as a going concern. An explanation of the Company's principal and emerging risks and how they are managed is contained on pages 41 to 45 and in note 18 to the Financial Statements. The Board has, in particular, considered heightened geopolitical tensions and conflicts and macroeconomic concerns, including inflation rates remaining above central bank targets and correspondingly elevated interest rate, alongside specific leverage and liquidity stress testing, but does not believe the Company's going concern status is adversely 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 and 'fall-to-breach' levels are reviewed by the Board on a regular basis. The Company has no short term borrowings. 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) 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, as set out in the viability statement on page 46 and revenue estimates prepared to 31 December 2027, that the Company will continue in operational existence for the assessed period to 18 February 2027, which is at 12 months from the date of approval of these Financial Statements. ## Relations with shareholders The Board places great importance on communication with shareholders. The Managers meet regularly with shareholders and their representatives and report shareholders' views to the Board. The Chairman is available to meet with shareholders as appropriate. Shareholders wishing to communicate with any members of the Board may do so by writing to them at the Company's registered office or through the Company's broker, Winterflood (see contact details on page 121). The Company's Annual General Meeting provides a forum for communication with all shareholders. The level of proxies lodged for each resolution is announced at the meeting and published at saints-it.com subsequent to the meeting. 66 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. The notice period for the Annual General Meeting is at least twenty working days. Shareholders and potential investors may obtain up-to-date information on the Company at saints-it.com. ### **Corporate governance and stewardship** The Company has given discretionary voting powers to Baillie Gifford & Co. The Managers vote against resolutions they consider may damage shareholders' rights or economic interests and report their actions to the Board. The Company believes that it is in the shareholders' interests to consider environmental, social and governance ('ESG') factors when selecting and retaining investments and have asked the Managers to take these issues into account as long as the investment objectives are not compromised. The Managers do not exclude companies from their investment universe purely on the grounds of ESG factors but adopt a positive engagement approach whereby matters are discussed with management with the aim of improving the relevant policies and management systems and enabling the Managers to consider how ESG factors could impact long term investment returns. The Managers' statement of compliance with the UK Stewardship Code can be found on the Managers' website at bailliegifford.com. The Managers' policy has been reviewed and endorsed by the Board. Baillie Gifford & Co, the Managers, has considered the Sustainable Finance Disclosures Regulation ('SFDR') and further details can be found on page 113. The Managers, Baillie Gifford & Co, are signatories to the United Nations Principles for Responsible Investment and are also members of the International Corporate Governance Network. ### **Climate change** The Board recognises that climate change poses a serious threat to our environment, our society and to economies and companies around the globe. Addressing the underlying causes is likely to result in companies that are high emitters of carbon facing greater societal and regulatory scrutiny and higher costs to account for the true environmental impact of their activities. The Manager has engaged an external provider to map the carbon footprint of the equity portfolio using the information to prioritise engagement and understand what higher emitting companies are doing to manage climate risk better. The Managers utilise data sourced from a third party provider, MSCI, to map the carbon footprint of The Scottish American Investment Company's equity portfolio which is estimated to be 67.6% lower than the Company's benchmark (FTSE All-World Index in sterling terms) and is based on 96.9% of the value of the Company's equity portfolio which reports on carbon emissions and other carbon related characteristics. Carbon intensity measures the carbon efficiency of the portfolio per unit of output and assesses the portfolio's exposure to carbon-intensive companies. In evaluating property investments, OLIM, the property manager, reviews environmental and flood risk reports, surveys of sustainable transport links, energy performance certificates and proactively encourages green initiatives such as installing electric vehicle charging points, solar panels or other upgrades to improve energy performance ratings. The provision of property valuations is carried out by Savills and CBRE, external valuers, and environmental and flooding risk considerations are taken into account when arriving at the property valuations. Baillie Gifford's Task Force on Climate-Related Financial Disclosures ('TCFD') Climate Report is available on the Managers' website at bailliegifford.com. A Company specific TCFD climate report is also available on the Company's page of the Managers' website at saints-it.com. The Managers, Baillie Gifford & Co, are signatories to the Carbon Disclosure Project. On behalf of the Board Lord Macpherson of Earl's Court 18 February 2026 67 --- Governance report # Audit Committee report The Audit Committee consists of all independent Directors for the year to 31 December 2025 with the exception of the Chairman of the Board, Lord Macpherson of Earl's Court, who stepped down from the Audit Committee in April 2022. The members of the Committee consider that they have the requisite financial skills and experience to fulfil the responsibilities of the Committee. Ms Lamont, the Chairman of the Committee, is a Chartered Accountant. The Committee's authority and duties are clearly defined within its written terms of reference which are available at saints-it.com. The terms of reference are reviewed annually. The Committee's effectiveness is reviewed on an annual basis as part of the Board's performance evaluation process. At least once a year the Committee meets with the external Auditor without any representative of the Manager being present. ## Main activities of the Committee The Committee met three times during the year. Ernst & Young LLP, the external Auditor, attended the Interim Accounts meeting in July 2025 and the Final Accounts meeting in February 2026. 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. At a meeting in December 2025 the Committee reviewed the Company's risks and internal controls. The matters considered, monitored and reviewed by the Committee during the course of the year included the following: - The preliminary results announcement and the Annual and Interim Reports; - The Company's accounting policies and practices; - The regulatory changes impacting the Company; - The fairness, balance and understandability of the Annual Report and Financial Statements and whether it provided the information necessary for shareholders to assess the Company's performance, business model and strategy; - The effectiveness of the Company's internal control environment; - Re-appointment, remuneration and engagement letter of the external Auditor; - Whether the audit services contract should be put out to tender; - The policy on the engagement of the external Auditor to supply non-audit services; 68 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. - The independence, objectivity and effectiveness of the external Auditor; - The need for the Company to have its own internal audit function; - Internal controls reports received from the Managers and other service providers; and - The arrangements in place within Baillie Gifford & Co whereby their staff may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. ### **Internal audit** The Committee continues to believe that the compliance and internal controls systems and the internal audit function in place within the Investment Managers provide sufficient assurance that a sound system of internal control which safeguards shareholders' investment and the Company's assets is maintained. An internal audit function, specific to the Company is therefore considered unnecessary. ### **Financial reporting** The Committee considers that the most significant issue likely to affect the Financial Statements is the valuation of the property investments which represent 9.3% of total assets. Other key issues are the existence and legal title of the property as well as the valuation, existence and legal title of the equity and bond investments which represent 90.5% of total assets. The majority of the investments are in quoted securities and market prices are readily available from independent external pricing sources. The Committee reviewed the Managers' Report on Internal Controls which details the controls in place regarding recording and pricing of investments, the reconciliation of investment holdings to third party data and the accurate recording of investment income. The properties are externally valued by professionally qualified independent valuers biannually, on a fair value, open market basis. SAINTS' property portfolio has been valued biannually by Savills since 2014. Best-practice guidance suggests valuer rotation every ten years for regulated purpose valuations. New rules introduced by RICS (the Royal Institution of Chartered Surveyors) in 2024, which apply at the individual asset level, make valuer rotation mandatory. They introduce a time limit of five years for a lead responsible valuer, a limit of 10 years for the valuation firm, and a three-year break after a valuer rotates off an engagement. To comply with the rules, the Board engaged CBRE to value the majority of the portfolio, with Savills continuing to value those properties where CBRE is barred under the three-year break rule, until the three-year period has been met. The Committee review the property valuations by CBRE and Savills twice a year. The Committee considered the factors, including heightened geopolitical tensions, that might affect the Company's viability over a period of five years and its ability to continue as a going concern for at least twelve months from the date of signing of the Financial Statements, together with the reports from the Managers on the cash position and cash flow projections of the Company, the liquidity of the investment portfolio, compliance with debt covenants and the Company's ability to meet its obligations as they fall due. The Committee also reviewed the viability statement on page 46 and the statement on going concern on page 66 including the impact of increasing geopolitical tensions. Following this assessment, the Committee recommended to the Board the appropriateness of the going concern basis in preparing the Financial Statements and confirmed the accuracy of the viability statement and statement on going concern. The Managers and Auditor confirmed to the Committee that they were not aware of any material misstatements in the context of the Financial Statements as a whole and that the Financial Statements are in accordance with applicable law and accounting standards. 69 --- Governance report ## Internal controls and risk management The Committee reviewed the effectiveness of the Company's risk management and internal controls systems as described on pages 64 to 66. No significant weaknesses were identified in the year under review. ### External Auditor To fulfil its responsibility regarding the independence of the external Auditor, the Committee reviewed: - The audit plan for the current year; - A report from the Auditor describing their arrangements to manage auditor independence and received confirmation of their independence; and - The proposed audit fee and the extent of non-audit services provided by the external Auditor. For the year to 31 December 2025 the audit fee was £85,750 and there were no non-audit fees. To assess the effectiveness of the external Auditor, the Committee reviewed and considered: - The Auditor's fulfilment of the agreed audit plan; - Feedback from the Secretaries on the performance of the audit team; - The Audit Quality Inspection Report from the FRC; and - Detailed discussion with audit personnel to challenge audit processes and deliverables. To fulfil its responsibility for the oversight of the external audit process, the Committee considered and reviewed: - The Auditor's engagement letter; - The Auditor's proposed audit strategy; - The audit fee; and - A report from the Auditor on the conclusion of the audit. The audit partner responsible for the audit will be rotated at least every five years in accordance with professional and regulatory standards in order to protect independence and objectivity and to provide fresh challenge to the business. 2025 will be the fourth year Ms Caroline Mercer, the current partner, has held this role and she will continue as audit partner until the conclusion of the 2026 audit. Ernst & Young LLP has confirmed that it believes that it is independent within the meaning of regulatory and professional requirements and that the objectivity of the audit partner and staff is not impaired. Having carried out the review described above, the Committee is satisfied that the Auditor remains independent and effective for the purposes of this year's audit. There are no contractual obligations restricting the Committee's choice of external Auditor. ### Accountability and audit The respective responsibilities of the Directors and the Auditor in connection with the Financial Statements are set out on pages 75 to 83. On behalf of the Board Karyn Lamont Audit Committee Chairman 18 February 2026 70 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. # Directors’ remuneration report **This report has been prepared in accordance with the requirements of the Companies Act 2006.** ## Statement by the Chairman The Directors’ Remuneration Policy is subject to shareholder approval every three years or sooner if an alteration to the policy is proposed. As the Remuneration Policy was last approved by shareholders at the Annual General Meeting in April 2023, shareholders’ approval of the policy will be sought at the Annual General Meeting to be held on 17 April 2026. The Board reviewed the level of fees during the year and determined that, as fees were last increased on 1 January 2023, it was appropriate to increase fees for the coming year. With effect from 1 January 2026 Directors’ fees will increase from £28,000 to £31,000, the fee for the Chairman of the Board will increase from £46,000 to £47,000, and the additional fee for the Chairman of the Audit Committee will increase from £6,000 to £7,000. The increases in the Directors’ fees reflect the Board’s policy to determine the level of Director’s remuneration having regards to the time commitments, increased risks and responsibilities of the role and the amounts payable to non-executive Directors in the industry generally in order to ensure that remuneration levels do not deter candidates from applying for potential positions on the Board. To that end independent research on the fee levels of Directors of peer group companies, as well as industry norms, has been considered. ## Directors’ remuneration policy The Board is composed wholly of non-executive Directors, none of whom has a service contract with the Company. There is no separate remuneration committee and the Board as a whole considers changes to Directors’ fees from time to time. 71 --- Governance report The Board's policy is that the remuneration of Directors should be set at a reasonable level that is commensurate with the duties and responsibilities of the role and consistent with the requirement to attract and retain Directors of the appropriate quality and experience. The Board believes that the fees paid to the Directors should reflect the experience of the Board as a whole, be fair and should take account of the level of fees paid by comparable investment trusts. Baillie Gifford & Co Limited, the Company Secretaries, provides comparative information when the Board considers the level of Directors' fees. Any views expressed by shareholders on the fees being paid to Directors will be taken into consideration by the Board when reviewing the Board's policy on remuneration. Non-executive Directors are not eligible for any other remuneration or benefits apart from the reimbursement of allowable expenses. There are no performance conditions relating to Directors' fees and there are no long term incentive schemes or pension schemes. No compensation is payable on loss of office. ## Limits on Directors' remuneration The fees for the Directors are payable monthly in arrears and are determined within the limits set out in the Company's Articles of Association. The aggregate limit of Directors' fees is currently set at £250,000 per annum. Any change to this limit requires shareholder approval. The basic and additional fees payable to Directors in respect of the year ended 31 December 2025 and the fees payable in respect of the year ending 31 December 2026 are set out in the table below. The fees payable to the Directors in the subsequent financial periods will be determined following an annual review of the Directors' fees. | | Expected fees for the year ending 31 December 2026 £ | Fees for the year ended 31 December 2025 £ | | --- | --- | --- | | Non-executive Director fee | 31,000 | 28,000 | | Additional fee for Chairman | 16,000 | 18,000 | | Additional fee for Chairman of the Audit Committee | 7,000 | 6,000 | ## Annual report on remuneration An ordinary resolution for the approval of this report will be put to the members at the forthcoming Annual General Meeting. The law requires the Company's Auditor to audit certain of the disclosures provided in this report. Where disclosures have been audited, they are indicated as such. The Auditor's opinion is included in their report on pages 77 to 83. ### Directors' remuneration for the year (audited) The Directors who served during the year received the following remuneration in the form of fees and taxable benefits. This represents the entire remuneration paid to the Directors. | Name | 2025 Fees £ | 2025 Taxable benefits* £ | 2025 Total £ | 2024 Fees £ | 2024 Taxable benefits* £ | 2024 Total £ | | --- | --- | --- | --- | --- | --- | --- | | Lord Macpherson of Earl's Court (Chairman) | 46,000 | 3,783 | **49,783** | 46,000 | 1,659 | **47,659** | | Bronwyn Curtis (retired 4 April 2024) | – | – | – | 7,424 | 1,514 | **8,938** | | Karyn Lamont | 34,000 | 1,805 | **35,805** | 34,000 | 120 | **34,120** | | Angus Macpherson (appointed 1 September 2025) | 9,333 | 782 | **10,115** | n/a | n/a | **n/a** | | Dame Mariot Leslie | 28,000 | 1,425 | **29,425** | 28,000 | 574 | **28,574** | | Christine Montgomery | 28,000 | 1,597 | **29,597** | 28,000 | 1,681 | **29,681** | | Padmesh Shukla (appointed 20 February 2024) | 28,000 | 1,167 | **29,167** | 24,195 | 963 | **25,158** | | | **173,333** | **10,559** | **183,892** | **167,619** | **6,511** | **174,130** | \* Comprises travel and subsistence expenses incurred by Directors in the course of travel to attend Board and Committee meetings. 72 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ## Annual percentage change in Directors' remuneration This represents the annual percentage change in the entire remuneration paid to the Directors. | Name | % from 2024 to 2025 | % from 2023 to 2024 | % from 2022 to 2023 | % from 2021 to 2022 | % from 2020 to 2021 | | --- | --- | --- | --- | --- | --- | | Lord Macpherson of Earl's Court (Chairman) | 4.5 | (1.6) | 22.1 | 56.1 | (0.7) | | Bronwyn Curtis (retired 4 April 2024) | n/a | (71.4) | 12.8 | 8.7 | (1.4) | | Karyn Lamont | 4.9 | 0.4 | 13.3 | – | 8.3 | | Angus Macpherson (appointed 1 September 2025) | n/a | n/a | n/a | n/a | n/a | | Dame Mariot Leslie | 3.0 | (1.5) | 16.1 | – | – | | Christine Montgomery | (0.3) | 5.0 | 51.3 | n/a | n/a | | Padmesh Shukla (appointed 20 February 2024) | 15.9 | n/a | n/a | n/a | n/a | | Peter Moon (retired 5 April 2022) | n/a | n/a | n/a | (70.8) | 0.2 | The Directors at the year end, and their interests in the Company at 31 December are shown in the following table. There have been no changes intimated in the Directors' interests up to 16 February 2026. ### Directors' interests (audited) | Name | Nature of interest | Ordinary 25p shares held at 31 December 2025 | Ordinary 25p shares held at 31 December 2024 | | --- | --- | --- | --- | | Lord Macpherson of Earl's Court (Chairman) | Beneficial | 129,300 | 125,000 | | Karyn Lamont | Beneficial | 2,000 | 2,000 | | Angus Macpherson (appointed 1 September 2025) | Beneficial | 20,000 | n/a | | Christine Montgomery | Beneficial | 15,000 | 15,000 | | Dame Mariot Leslie | Beneficial | 10,000 | 10,000 | | Padmesh Shukla (appointed 20 February 2024) | Beneficial | 2,001 | 2,001 | Under the Articles of Association, each Director is required to hold at least 2,000 shares in the Company. ### Statement of voting at Annual General Meeting At the last Annual General Meeting, of the proxy votes received in respect of the Directors' Remuneration Report, 97.8% were in favour, 1.8% were against and votes withheld were 0.4%. At the last Annual General Meeting at which the Directors' Remuneration Policy was considered (April 2023), 96.9% were in favour, 2.5% against and votes withheld were 0.6%. ### Relative importance of spend on pay The table below shows the actual expenditure during the year in relation to Directors' remuneration and distributions to shareholders. | | 2025 £'000 | 2024 £'000 | Change % | | --- | --- | --- | --- | | Directors' remuneration | 184 | 174 | 5.7 | | Dividends paid to shareholders | 26,397 | 25,834 | 2.2 | 73 --- Governance report ## Company performance The following graph compares the total return (assuming all dividends are reinvested) to ordinary shareholders compared to the total shareholder return on a notional investment made up of shares in the component parts of the FTSE All-Share Index. This index was chosen for comparison purposes, as it is a widely used measure of performance for UK listed companies. It also shows the total returns of the FTSE All-World Index (in sterling terms), which is the Company's benchmark. ### Performance graph ![img-45.jpeg](img-45.jpeg) Source: LSEG and relevant underlying index providers. See disclaimer on page 112. All figures are total returns (see glossary of terms and alternative performance measures on pages 118 to 120). * The Company's benchmark is the FTSE All-World Index (in sterling terms). Past performance is not a guide to future performance. ## Approval The Directors' Remuneration Report on pages 71 to 74 was approved by the Board of Directors and signed on its behalf on 18 February 2026. Lord Macpherson of Earl's Court Chairman 74 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. # Statement of Directors' responsibilities in respect of the Annual Report and the Financial Statements The Directors are responsible for preparing the Annual Report, and the Financial Statements in accordance with applicable law and regulations. Company law requires the Directors to prepare Financial Statements for each financial year. Under that law they are required to prepare the Financial Statements in accordance with United Kingdom Accounting Standards including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of its profit or loss for that year. In preparing these Financial Statements, the Directors are required to: - select suitable accounting policies and then apply them consistently; - make judgements and accounting estimates that are reasonable and prudent; - state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the Financial Statements; - assess the Company's ability to continue as a going concern, disclosing as applicable, matters related to going concern; and - use 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. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the Financial Statements comply with the Companies Act 2006. They are 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. Under applicable law and regulations, the Directors are also responsible for preparing a Strategic report, Directors' report, Directors' remuneration report and Corporate governance statement that complies with that law and those regulations. The Directors have delegated responsibility to the Managers for the maintenance and integrity of the Company's page on the Managers' website. Legislation in the United Kingdom governing the preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions. ## Responsibility statement of the Directors in respect of the annual financial report We confirm that to the best of our knowledge: - the Financial Statements, which have been prepared in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) including FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; - the Strategic Report includes a fair review of the development and performance of the business and the position of the issuer, together with a description of the principal risks and uncertainties that the issuer and business faces; and - the Annual Report and Financial Statements taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy. On behalf of the Board Lord Macpherson of Earl's Court 18 February 2026 ### Notes The following notes relate to financial statements published on a website and are not included in the printed version of the Annual Report and Financial Statements: - The maintenance and integrity of the Baillie Gifford & Co website is the responsibility of Baillie Gifford & Co; the work carried out by the auditors does not involve consideration of these matters and accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website. - Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 75 --- # Financial report The Financial Statements for the year to 31 December 2025 are set out on pages 77 to 103 have been prepared in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. --- The Scottish American Investment Company P.L.C. # Independent auditor's report to the members of Scottish American Investment Company P.L.C. ## Opinion We have audited the financial statements of The Scottish American Investment Company P.L.C. ("the Company") for the year ended 31 December 2025 which comprise of the Income Statement, the Balance Sheet, the Statement of Changes in Equity, the Cash Flow Statement and the related Notes 1 to 22, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" (United Kingdom Generally Accepted Accounting Practice). In our opinion, the financial statements: - give a true and fair view of the Company's affairs as at 31 December 2025 and of its profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and - have been prepared in accordance with the requirements of the Companies Act 2006. ## Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. ## Independence We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by the FRC's Ethical Standard were not provided to the Company and we remain independent of the Company in conducting the audit. ## Conclusions relating to going concern In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors' assessment of the Company's ability to continue to adopt the going concern basis of accounting included - Confirming our understanding of the Company's going concern assessment process by engaging with the Directors and the Company Secretary to determine if all key factors that we have become aware of during our audit were considered in their assessment. - Inspecting the Directors' assessment of going concern, including the revenue forecast, for the period to 18 February 2027 which is at least twelve months from the date the financial statements are authorised for issue. In preparing the revenue forecast, the Company has concluded that it is able to continue to meet its ongoing costs as they fall due. - Reviewing the factors and assumptions, including the impact of the current economic environment, as applied to the revenue forecast and the liquidity assessment of the investments. We considered the appropriateness of the methods used to calculate the revenue forecast and the liquidity assessment and determined, through testing of the methodology and calculations, that the methods, inputs and assumptions utilised were appropriate to be able to make an assessment for the Company. 77 --- Financial report - Assessing the risk of breaching the debt covenants as a result of a reduction in the value of the Company's portfolio. We independently calculated the Company's compliance with debt covenants and we performed reverse stress testing in order to identify what factors would lead to the Company breaching the financial covenants. We considered the mitigating factors included in the covenant calculations that are within the control of the Company. - Reviewing the Company's assessment of the liquidity of investments held and evaluated the Company's ability to sell those investments in order to cover working capital requirements should revenue decline significantly - Reviewing the Company's going concern disclosures included in the annual report in order to assess that the disclosures were appropriate and in conformity with the reporting standards. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period to 18 February 2027, which is at least 12 months from when the financial statements are authorised for issue. In relation to the Company's reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the Directors' statement in the financial statements about whether the Directors considered it appropriate to adopt the going concern basis of accounting. Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Company's ability to continue as a going concern. ## Overview of our audit approach | Key audit matters | - Risk of incomplete or inaccurate revenue recognition - Risk of incorrect valuation or ownership of the investment portfolio | | --- | --- | | Materiality | - Overall materiality of £8.79m which represents 1% of shareholders' funds. | ## An overview of the scope of our audit ### Tailoring the scope Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for the Company. This enables us to form an opinion on the financial statements. We take into account size, risk profile, the organisation of the Company and effectiveness of controls, the potential impact of climate change and changes in the business environment when assessing the level of work to be performed. All audit work was performed directly by the audit engagement team with input from our valuation specialists in auditing the investment property valuations. ### Climate change Stakeholders are increasingly interested in how climate change will impact companies. The Company has determined that the most significant future impacts from climate change on its operations will be from Environmental, Social and Governance matters in investee companies and environmental factors such as flood risk potentially impacting the attractiveness and valuation of investment property. This could lead to the Company's own shares being less attractive to investors, adversely affecting its own share price. This is explained on pages 41 to 45 in the principal and emerging risks section, which form part of the "Other information," rather than the audited financial statements. Our procedures on these disclosures therefore consisted solely of considering whether they are materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appear to be materially misstated. Our audit effort in considering the impact of climate change on the financial statements was focused on the adequacy of the Company's disclosures in the financial statements as set out in Note 1 and concluded that there was no further impact of climate change to be taken into account as the quoted investments are valued based on market pricing as required by FRS 102. Investment properties are valued by an independent valuer in accordance with RICS Valuation Standards. The valuation standards require sustainability, including physical risks such as flooding, to be assessed for fair value implications. We also challenged the Directors' considerations of climate change risks in their assessment of going concern and viability and associated disclosures. 78 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ## Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters. | Risk | Our response to the risk | Key observations communicated to the Audit Committee | | --- | --- | --- | | **Incomplete or inaccurate revenue recognition** *(as described on page 69 in the Audit Committee Report and as per the accounting policy set out on page 88).* The total revenue for the year to 31 December 2025 was £32.71m (2024: £32.39m), being £25.89m dividend income (2024: £25.57m), £0.80m bond income (2024: £1.06m), £5.67m rental income (2024: £5.54m) and £0.35m (2024: £0.22m) other income. There is a risk of incomplete or inaccurate recognition of revenue through the failure to recognise proper income entitlements or to apply an appropriate accounting treatment. Additionally, in accordance with the AIC SORP, special dividends received by the Company can be included in either the revenue or capital columns of the Income Statement depending on the commercial circumstances behind the payments. | We have obtained an understanding of Baillie Gifford's processes and controls surrounding revenue recognition by performing walkthrough procedures. For all interest and dividends received and accrued, we recalculated the income by multiplying the investment holdings at the coupon or ex-dividend date, traced from the accounting records, by the coupon rate or dividend per share, which was agreed to an independent data vendor. We also agreed all exchange rates to an independent data vendor and agreed a sample of income received to the bank statements. For all dividends accrued at the year end, we reviewed the investee company announcement to assess whether the dividend entitlements arose prior to 31 December 2025 and agreed the subsequent cash receipts to post-year end bank statements where received. To test completeness of recorded income, we verified that the interest and expected dividends for each investee company held during the year had been recorded as income with reference to investee company announcements obtained from an independent data vendor. For rental income, we verified all rental rates to lease agreements, recalculated all the rental amount and agreed rental receipts to bank statements. Where applicable, we recalculated amounts recorded as prepayments in advance. We have calculated the rent-free receivables and have agreed these to the receivables reconciliation. We tested that all the expected rent receipts had been recorded with reference to executed lease agreements of property held within the period to ensure completeness. For all investments held during the year, we inspected the type of dividends paid with reference to an external data vendor to identify those which were special dividends. The Company received seven special dividends of which none exceeded our testing threshold. We assessed the appropriateness of management's classification for a sample of one special dividend as revenue by reviewing the underlying rationale of the distribution. | The results of our procedures identified no material misstatement in relation to incomplete or inaccurate revenue recognition. | 79 --- Financial report | Risk | Our response to the risk | Key observations communicated to the Audit Committee | | --- | --- | --- | | **Incorrect valuation or ownership of the investment portfolio** *(as described on page 69 in the Audit Committee Report and as per the accounting policy set out on page 88).* The valuation of the investment portfolio as at 31 December 2025 was £970.22m (2024: £1,043.80m) consisting of quoted investments with an aggregate value of £879.87m (2024: £948.35m), and investment property with an aggregate value of £90.35m (2024: £95.45m). The valuation of the assets held in the investment portfolio is the key driver of the Company's net asset value and total return. Incorrect investment pricing, or a failure to maintain proper legal title to the investments held by the Company could have a significant impact on the portfolio valuation and the return generated for shareholders. The fair value of quoted investments is determined by reference to bid value or the last traded price depending on the convention of the exchange on which the investment is quoted. Investments in property are held at fair value. Fair value of the property investments is estimated by an independent professional valuer (Savills and CBRE) on an open market basis. The valuation of the property investments, and the resultant impact on the unrealised gains/(losses), is the area requiring the most significant judgment and estimation in the preparation of the financial statements. | We obtained an understanding of Baillie Gifford's and OLIM's processes and controls surrounding legal title, investment pricing and unrealised gains and losses by performing walkthrough procedures. **Listed equity and bond portfolio ('the quoted investments') procedures** For all quoted investments in the portfolio, we have compared the market prices and exchange rates applied to an independent pricing vendor and recalculated the investment valuations as at the year end. We have inspected the stale pricing reports produced by Baillie Gifford to identify prices that have not changed within one business day and verified whether the quoted price is a fair value through review of trading activity. **Investment Property procedures** We agreed the value of all the properties in the investment portfolio held at the year end to the open market valuations included in the valuation report provided by Savills and CBRE ('the property valuers'). We agreed the inputs used by the property valuers in the valuations to source data. We engaged our property valuation specialist team to undertake a review of the valuations for a sample of 6 investment properties including the calculation of a reasonable valuation range. This review included the following procedures: - Reviewed and challenged the assumptions used by the property valuers in undertaking their valuation and an assessment of the valuation methodology adopted. - Undertook discussions with the property valuers which included an overview of the properties' characteristics including the covenant strength of the tenants, occupancy and rent cover. The audit team reviewed and challenged the valuation movements on the remaining 4 investment properties with reference to the applicable regional and sectoral real estate index. We recalculated the unrealised gains/(losses) on all investment properties as at the year-end using the book-cost reconciliation and reviewed the fair value hierarchy disclosure. For all purchases and sales of property investments we obtained supporting documents including purchase agreements from OLIM Property Limited ('the Investment Property Manager') and have agreed these to the purchase cost or sales proceeds per the accounting records and to the bank statements. We compared the sale price to the last valuation produced by the property valuers and challenged any material differences. We have tested the ownership by comparing the Company's investment holdings at 31 December 2025 to an independent confirmation received directly from the Company's Custodian or solicitor, testing any reconciling items to supporting documentation. | The results of our procedures identified no material misstatement in relation to the risk of incorrect valuation or ownership of the investment portfolio. | ## Our application of materiality We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit and in forming our audit opinion. ## Materiality *The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the economic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our audit procedures.* 80 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. We determined materiality for the Company to be £8.79m (2024: £9.52m), which is 1% (2024: 1%) of shareholders' funds. We believe that shareholders' funds provides us with a materiality aligned to the key measure of the Company's performance. ### **Performance materiality** *The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.* On the basis of our risk assessments, together with our assessment of the Company's overall control environment, our judgement was that performance materiality was 75% (2024: 75%) of our planning materiality, namely £6.59m (2024: £7.15m). We have set performance materiality at this percentage due to our past experience of the audit that indicates a lower risk of misstatements, both corrected and uncorrected. Given the importance of the distinction between revenue and capital for investment trusts, we have applied a separate testing threshold for the revenue column of the Income Statement of £1.48m (2024: £1.46m), being our reporting threshold. ### **Reporting threshold** *An amount below which identified misstatements are considered as being clearly trivial.* We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of £0.44m (2024: £0.47m), which is set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of other relevant qualitative considerations in forming our opinion. ### **Other information** The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The Directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact. We have nothing to report in this regard. ### **Opinions on other matters prescribed by the Companies Act 2006** In our opinion the part of the Directors' remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006. In our opinion, based on the work undertaken in the course of the audit: - the information given in the strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and - the strategic report and Directors' reports have been prepared in accordance with applicable legal requirements; ### **Matters on which we are required to report by exception** In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or Directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with the accounting records and returns; or - certain disclosures of Directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit 81 --- Financial report ## Corporate Governance Statement We have reviewed the Directors' statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Company's compliance with the provisions of the UK Corporate Governance Code specified for our review by the UK Listing Rules. Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit: - Directors' statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out on page 66; - Directors' explanation as to its assessment of the Company's prospects, the period this assessment covers and why the period is appropriate set out on page 46; - Director's statement on whether it has a reasonable expectation that the Company will be able to continue in operation and meets its liabilities set out on page 46; - Directors' statement on fair, balanced and understandable set out on page 75; - Board's confirmation that it has carried out a robust assessment of the emerging and principal risks set out on pages 41 to 45; - The section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on pages 64 to 66; and; - The section describing the work of the audit committee set out on pages 68 to 70. ## Responsibilities of the Directors As explained more fully in the Directors' responsibilities statement set out on page 75, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. ## Auditor's responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. ### Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the Company and management. - We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant are United Kingdom Generally Accepted Accounting Practice, the Companies Act 2006, the Association of Investment 82 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. Companies Code of Corporate Governance, The Association of Investment Companies Statement of Recommended Practice, the UK Listing Rules, the UK Corporate Governance Code, Section 1158 of the Corporation Tax Act 2010 and The Companies (Miscellaneous Reporting) Regulations 2018. - We understood how the Company is complying with those frameworks through discussions with the Audit Committee and Company Secretary and review of Audit Committee meeting papers and Board minutes. - We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur by testing specific accounting journal entries and considering the key risks impacting the financial statements. We identified a fraud risk with respect to the incorrect valuation of investment properties and the resulting impact on unrealised gains and losses. Further discussion of our approach is set out in the section on key audit matters above. - Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved review of the reporting to the Directors by the Manager with respect to the application of the documented policies and procedures and review of the financial statements to ensure compliance with the reporting requirements of the Company. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report. ## Other matters we are required to address Following the recommendation from the audit committee, we were appointed by the Company on 1 April 2022 to audit the financial statements for the year ending 31 December 2022 and subsequent financial periods. The period of total uninterrupted engagement including previous renewals and reappointments is 4 years, covering the years ending 31 December 2022 to 31 December 2025. - The audit opinion is consistent with the additional report to the Audit Committee. ## Use of our report This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed. Caroline Mercer (Senior statutory auditor) for and on behalf of Ernst & Young LLP, Statutory Auditor Edinburgh 18 February 2026 83 --- Financial report # Income statement For the year ended 31 December 2025 (with comparatives as at 31 December 2024) | | Notes | 2025 Revenue $'000 | 2025 Capital $'000 | 2025 Total $'000 | 2024 Revenue $'000 | 2024 Capital $'000 | 2024 Total $'000 | | --- | --- | --- | --- | --- | --- | --- | --- | | Gains/(losses) on investments – securities | 9 | – | (2,552) | (2,552) | – | 28,654 | 28,654 | | Gains/(losses) on investments – property | 9 | – | (1,976) | (1,976) | – | 1,887 | 1,887 | | Currency gains/(losses) | 14 | – | 258 | 258 | – | (26) | (26) | | Income | 2 | 32,714 | – | 32,714 | 32,387 | – | 32,387 | | **Gross return** | | **32,714** | **(4,270)** | **28,444** | **32,387** | **30,515** | **62,902** | | Management fees | 3 | (1,035) | (3,105) | (4,140) | (1,091) | (3,271) | (4,362) | | Other administrative expenses | 4 | (1,424) | – | (1,424) | (1,349) | – | (1,349) | | **Net return before finance costs and taxation** | | **30,255** | **(7,375)** | **22,880** | **29,947** | **27,244** | **57,191** | | Finance costs of borrowings | 5 | (711) | (2,133) | (2,844) | (711) | (2,134) | (2,845) | | **Net return on ordinary activities before taxation** | | **29,544** | **(9,508)** | **20,036** | **29,236** | **25,110** | **54,346** | | Tax on ordinary activities | 6 | (3,222) | 885 | (2,337) | (3,414) | 940 | (2,474) | | **Net return on ordinary activities after taxation** | | **26,322** | **(8,623)** | **17,699** | **25,822** | **26,050** | **51,872** | | **Net return per ordinary share** | **7** | **15.65p** | **(5.13p)** | **10.52p** | **14.50p** | **14.62p** | **29.12p** | A final dividend for the year of 4.595p is proposed (2024 – 4.175p), making a total dividend for the year of 15.92p (2024 – 14.875p). More information on dividend distributions can be found in note 8 on page 92. The total column of the Income statement represents the profit and loss account of the Company. The supplementary revenue and capital columns are prepared under guidance published by the Association of Investment Companies. All revenue and capital items in this statement derive from continuing operations. A Statement of comprehensive income is not required as there is no other comprehensive income. The accompanying notes on pages 88 to 103 are an integral part of the Financial Statements. 84 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. # Balance sheet As at 31 December 2025 (with comparatives as at 31 December 2024) | | Notes | 2025 £'000 | 2025 £'000 | 2024 £'000 | 2024 £'000 | | --- | --- | --- | --- | --- | --- | | **Fixed assets** | | | | | | | Investments – securities | 9 | 879,868 | | 948,345 | | | Investments – property | 9 | 90,350 | | 95,450 | | | | | | 970,218 | | 1,043,795 | | **Current assets** | | | | | | | Debtors | 10 | 4,584 | | 4,474 | | | Cash and cash equivalents | 18 | 3,521 | | 2,818 | | | | | 8,105 | | 7,292 | | | **Creditors** | | | | | | | Amounts falling due within one year | 11 | (4,941) | | (3,652) | | | **Net current assets** | | | 3,164 | | 3,640 | | **Total assets less current liabilities** | | | **973,382** | | **1,047,435** | | **Creditors** | | | | | | | Amounts falling due after more than one year | 12 | | (94,756) | | (94,742) | | **Net assets** | | | **878,626** | | **952,693** | | **Capital and reserves** | | | | | | | Share capital | 13 | | 44,579 | | 44,579 | | Share premium account | 14 | | 186,100 | | 186,100 | | Capital redemption reserve | 14 | | 22,781 | | 22,781 | | Capital reserve | 14 | | 608,421 | | 682,413 | | Revenue reserve | 14 | | 16,745 | | 16,820 | | **Shareholders' funds** | | | **878,626** | | **952,693** | | **Net asset value per ordinary share*** | **15** | | **536.1p** | | **539.3p** | The Financial Statements of The Scottish American Investment Company P.L.C. (company registration number SC000489) were approved and authorised for issue by the Board and were signed on 18 February 2026. Lord Macpherson of Earl's Court Chairman The accompanying notes on pages 88 to 103 are an integral part of the Financial Statements. * See glossary of terms and alternative performance measures on pages 118 to 120. 85 --- Financial report # Statement of changes in equity ## For the year ended 31 December 2025 | | Notes | Share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Capital reserve £'000 | Revenue reserve £'000 | Shareholders' funds £'000 | | --- | --- | --- | --- | --- | --- | --- | --- | | Shareholders' funds at 1 January 2025 | | 44,579 | 186,100 | 22,781 | 682,413 | 16,820 | **952,693** | | Shares bought back into treasury | 13 | – | – | – | (65,369) | – | **(65,369)** | | Net return on ordinary activities after taxation | 7 | – | – | – | (8,623) | 26,322 | **17,699** | | Dividends paid in the year | 8 | – | – | – | – | (26,397) | **(26,397)** | | **Shareholders' funds at 31 December 2025** | | **44,579** | **186,100** | **22,781** | **608,421** | **16,745** | **878,626** | ## For the year ended 31 December 2024 | | Notes | Share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Capital reserve £'000 | Revenue reserve £'000 | Shareholders' funds £'000 | | --- | --- | --- | --- | --- | --- | --- | --- | | Shareholders' funds at 1 January 2024 | | 44,579 | 186,100 | 22,781 | 664,892 | 16,832 | **935,184** | | Shares bought back into treasury | 13 | – | – | – | (8,529) | – | **(8,529)** | | Net return on ordinary activities after taxation | 7 | – | – | – | 26,050 | 25,822 | **51,872** | | Dividends paid in the year | 8 | – | – | – | – | (25,834) | **(25,834)** | | **Shareholders' funds at 31 December 2024** | | **44,579** | **186,100** | **22,781** | **682,413** | **16,820** | **952,693** | The accompanying notes on pages 88 to 103 are an integral part of the Financial Statements. 86 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. # Cash flow statement For the year ended 31 December 2025 (with comparatives as at 31 December 2024) | | Notes | 2025 £'000 | 2025 £'000 | 2024 £'000 | 2024 £'000 | | --- | --- | --- | --- | --- | --- | | Net return on ordinary activities before taxation | | 20,036 | | 54,346 | | | *Adjustments to reconcile company profit before tax to net cash flow from operating activities* | | | | | | | Net (gains)/losses on investments – securities | | 2,552 | | (28,654) | | | Net (gains)/losses on investments – property | | 1,976 | | (1,887) | | | Currency (gains)/losses | | (258) | | 26 | | | Finance costs of borrowings | | 2,844 | | 2,845 | | | *Other capital movements* | | | | | | | Changes in debtors | | 464 | | (1,001) | | | Change in creditors | | (128) | | 620 | | | Other non-cash changes | | 9 | | 63 | | | *Taxation* | | | | | | | Overseas withholding tax | | (2,406) | | (2,398) | | | **Cash from operations** | | | 25,089 | | 23,960 | | Interest paid | | | (2,831) | | (2,845) | | **Net cash inflow/(outflow) from operating activities** | | | **22,258** | | **21,115** | | **Cash flows from investing activities** | | | | | | | Acquisitions of investments – securities | | (126,852) | | (128,263) | | | Acquisitions of investments – property | | (9,972) | | (32,867) | | | Disposals of investments – securities | | 192,250 | | 163,969 | | | Disposals of investments – property | | 13,096 | | 5,654 | | | **Net cash inflow/(outflow) from investing activities** | | | **68,522** | | **8,493** | | **Cash flows from financing activities** | | | | | | | Equity dividends | | (26,397) | | (25,834) | | | Shares bought back | 13 | (63,938) | | (8,270) | | | **Net cash inflow/(outflow) from financing activities** | | | **(90,335)** | | **(34,104)** | | **Increase/(decrease) in cash and cash equivalents** | | | **445** | | **(4,496)** | | Exchange movements | | | 258 | | (26) | | Cash and cash equivalents at start of year | 17 | | 2,818 | | 7,340 | | **Cash and cash equivalents at end of year** | **17** | | **3,521** | | **2,818** | The accompanying notes on pages 88 to 103 are an integral part of the Financial Statements. 87 --- Financial report # Notes to the Financial Statements ## 01 Principal accounting policies The Financial Statements for the year to 31 December 2025 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 fair value 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 heightened geopolitical tensions and conflicts and macroeconomic concerns, including increased inflation and interest rates, 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. 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 set out in the viability statement on page 46 which assesses the prospects of the Company over a period of five years, that the Company will continue in operational existence until 18 February 2027, which is 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 United Kingdom accounting standards and with the AIC's Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' issued in November 2014 and updated in July 2022 with consequential amendments. In order to reflect better the activities of the Company and in accordance with guidance issued by the AIC, supplementary information which analyses the profit and loss account between items of a revenue and capital nature has been presented in the Income statement. The Directors have determined the Company's functional currency to be sterling as the Company's shareholders are predominantly based in the UK and the Company and its investment 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. The Company has only one material segment being that of an investment trust company investing in a portfolio of long term investments. ### b. Investments Purchases and sales of investments in securities are accounted for on a trade date basis. Purchases and sales of investments in property are accounted for on a completion date basis. Investments in securities are classified as held at fair value through profit and loss upon initial recognition. The fair value of listed security investments traded on an active market is bid value or, in the case of holdings on certain recognised overseas exchanges, last traded prices. The fair value of other listed security investments uses valuation techniques, determined by the Directors, based upon latest dealing prices, stockbroker valuations, net asset values and other information, as appropriate. Changes in the fair value of investments in securities and gains and losses on disposal are recognised as capital items in the Income statement. Investments in property are initially measured at cost, being consideration plus transaction costs. After initial recognition, properties are measured at fair value. Changes in fair value and gains and losses on disposal are recognised as capital items in the Income statement. The fair value of the property investments held at the year end has been estimated by independent professional valuers in accordance with the RICS appraisal and valuation manual. In preparing these Financial Statements the Directors have considered the impact of climate change risk as a principal risk as set out on page 43. In line with FRS 102 investments are valued at fair value, being primarily quoted prices for investments in active markets at the Balance sheet date, and therefore reflect market participants view of climate change risk. Investment property is valued by an independent valuer in accordance with RICS Valuation Standards. The valuation standards require sustainability, including physical risk such as flooding, to be assessed for fair value implications. ### c. Cash and cash equivalents Cash includes cash in hand and deposits repayable on demand. Deposits are repayable on demand if they can be withdrawn at any time without notice and without penalty or if they have a maturity or period of notice of not more than one working day. ### d. Income i. Income from equity investments is brought into account on the date on which the investments are quoted ex-dividend or, where no ex-dividend date is quoted, when the Company's right to receive payment is established. 88 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ii. Income from debt securities is recognised on an effective interest rate basis. Where income returns are for a non-fixed amount, the impact of these returns on the effective interest rate is recognised once such returns are known. If it is not probable that a return will be received, its recognition is deferred until that doubt is removed. iii. Unfranked investment income includes the taxes deducted at source. iv. Interest receivable on deposits is recognised on an accruals basis. v. If scrip is taken in lieu of dividends in cash, the net amount of the cash dividend declared is credited to the revenue account. Any excess in the value of the shares received over the amount of the cash dividend foregone is recognised as capital. vi. Rental income, excluding VAT, arising on investment properties, is accounted for on a straight line basis over the lease term. e. Expenses All expenses are accounted for on an accruals basis and include irrecoverable VAT where applicable. Expenses are charged through the revenue account except as follows: i. where they relate directly to the acquisition or disposal of an investment, in which case they are recognised as capital; and ii. where they are connected with the maintenance or enhancement of the value of investments. In this respect investment and property management fees are allocated 25% to revenue and 75% to capital, in line with the Board's expectation of returns from the Company's investments over the long term in the form of revenue and capital respectively. f. Long term borrowings and finance costs Long term borrowings are carried in the Balance sheet at amortised cost, representing the cumulative amount of net proceeds on issue plus accrued finance costs. The finance costs of such borrowings are allocated 25% to revenue and 75% to capital, in line with the Board's expectation of returns from the Company's investments over the long term in the form of revenue and capital respectively. Finance costs include the difference between the repayable value on maturity and the proceeds received on issue and costs of issuance which are written off on an effective interest rate basis over the life of the borrowings. Gains and losses on the repurchase or early settlement of debt is wholly charged to capital. g. Taxation The tax effect of different items of income and expenditure is allocated between revenue and capital on the same basis as the particular item to which it relates, under the marginal method, using the Company's effective tax rate for the accounting period. Deferred taxation is provided on all timing differences, calculated at the current tax rate relevant to the benefit or liability. Deferred tax assets are recognised only to the extent that it will be more likely than not that there will be taxable profits from which underlying timing differences can be deducted. h. Foreign currencies Transactions involving foreign currencies are converted at the rate ruling at the time of the transaction. Monetary assets and liabilities and fixed asset investment in foreign currencies are translated at the closing rates of exchange at the Balance sheet date. Any gain or loss arising from a change in exchange rate subsequent to the date of the transaction is included as an exchange gain or loss in the Income statement as capital or revenue as appropriate. i. Capital reserve Gains and losses on disposal of investments, changes in fair value of investments held, exchange differences of a capital nature and the amounts by which other financial assets and liabilities valued at fair value differ from their book value are dealt with in this reserve. Purchases of the Company's own shares and issuance proceeds are both recognised in this reserve. 75% of management fees and finance costs are allocated to the capital reserve in accordance with the Company's objective of combining capital and income growth. j. Significant estimates and judgements The preparation of the Financial Statements requires the use of estimates and judgements that affect the reported amounts of assets and liabilities at the reporting date. However, uncertainty about those estimates and judgements could result in an actual outcome which may differ from these estimates. The Directors believe that the most significant estimation and uncertainty relates to the valuation of the property portfolio. External, independent professional valuers who hold a recognised and relevant professional qualification and have recent experience in the location and class of the investment property being valued, are used to determine the property fair values which are based on recent, comparable market transactions on an arm's length basis. Calculation of the fair value of property involves some inputs that must be estimated and are sometimes unobservable and based on the valuer's judgement. The key inputs requiring estimation and judgement are: i. Estimated Realisable Value ("ERV"): the independent valuer's assessment of the rental income that could be achieved in the open market for the investment property; ii. yield: the anticipated rate of return from rental income; and iii. expected rental growth: the independent valuer's assessment of the likely rental income that will be achievable in the open market in future periods. Other factors including the condition and location of the property, rental yields within the market and the length and value of rental agreements in place, are considered. If there is space please make this the start of a new paragraph. As valuation outcomes may differ from the fair value estimates a sensitivity analysis is provided in Property sensitivity analysis in Note 19 on pages 102 to 103 to illustrate the effect on the Financial Statements of an over or under estimation of fair values. k. Leases The properties held by the Company met the definition of investment property. Leases for which the Company is a lessor are classified as finance or operating leases. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases. All the properties are leased out under operating leases. Where lease incentives or temporary rent reductions have been granted these are recognised on a straight-line basis over the expected term of the lease. 89 --- Financial report ## 02 Income | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | **Income from investments** | | | | UK dividends | 3,282 | 2,402 | | Overseas dividends | 22,609 | 23,168 | | Overseas interest | 803 | 1,058 | | | **26,694** | **26,628** | | **Other income** | | | | Deposit interest | 97 | 180 | | Rental income | 5,671 | 5,542 | | Other income | 252 | 37 | | | **6,020** | **5,759** | | **Total income** | **32,714** | **32,387** | | **Total income comprises:** | | | | Dividends from financial assets classified at fair value through profit or loss | 25,891 | 25,570 | | Interest from financial assets designated at fair value through profit or loss | 803 | 1,058 | | Interest from financial assets not at fair value through profit or loss | 97 | 180 | | Other income not from financial assets | 5,923 | 5,579 | | | **32,714** | **32,387** | ## 03 Management fees | | 2025 Revenue £'000 | 2025 Capital £'000 | 2025 Total £'000 | 2024 Revenue £'000 | 2024 Capital £'000 | 2024 Total £'000 | | --- | --- | --- | --- | --- | --- | --- | | Investment management fee | 920 | 2,761 | 3,681 | 973 | 2,918 | 3,891 | | Property management fee | 115 | 344 | 459 | 118 | 353 | 471 | | | **1,035** | **3,105** | **4,140** | **1,091** | **3,271** | **4,362** | Details of the Investment Management Agreement and Property Management Agreement are disclosed on page 55. Baillie Gifford & Co Limited's annual management fee is 0.45% of the first £500 million of total assets and 0.35% of the remaining total assets, total assets being the value of all assets held (excluding the property portfolio) less all liabilities, other than any liability in the form of debt intended for investment purposes, calculated on a quarterly basis. No secretarial fee is payable. OLIM Property Limited receives an annual property management fee of 0.5% of the value of the property portfolio, subject to a minimum quarterly fee of £6,250. 90 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ## 04 Other administrative expenses – all charged to revenue | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | General administrative expenses | 540 | 478 | | Marketing* | 399 | 390 | | Custodian/depository fees | 182 | 188 | | Auditor's remuneration – statutory audit of Company's Annual Financial Statements | 86 | 83 | | Directors' fees (see Directors' remuneration report on page 72) | 173 | 168 | | Registrar fees | 44 | 42 | | | **1,424** | **1,349** | * The Company is part of a marketing programme which includes all the Investment Trusts managed by the Manager. The marketing strategy has an ongoing objective to stimulate demand for the Company's shares. The cost of this marketing strategy is borne in partnership by the Company and the Manager. The Manager matches the Company's marketing contribution and provides the resource to manage and run the programme. ## 05 Finance costs of borrowings | | 2025 Revenue £'000 | 2025 Capital £'000 | 2025 Total £'000 | 2024 Revenue £'000 | 2024 Capital £'000 | 2024 Total £'000 | | --- | --- | --- | --- | --- | --- | --- | | **Financial liabilities at amortised cost:** | | | | | | | | Loan notes interest (see note 12) | 711 | 2,133 | 2,844 | 711 | 2,134 | 2,845 | ## 06 Tax on ordinary activities | | 2025 Revenue £'000 | 2025 Capital £'000 | 2025 Total £'000 | 2024 Revenue £'000 | 2024 Capital £'000 | 2024 Total £'000 | | --- | --- | --- | --- | --- | --- | --- | | UK corporation tax | 913 | (913) | – | 977 | (977) | – | | Overseas taxation | 2,337 | – | 2,337 | 2,474 | – | 2,474 | | Double taxation relief | (28) | 28 | – | (37) | 37 | – | | | **3,222** | **(885)** | **2,337** | **3,414** | **(940)** | **2,474** | | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | The tax charge for the year is lower than the standard rate of corporation tax in the UK of 25% (2024 – 25%) | | | | The differences are explained below: | | | | Net return on ordinary activities before taxation | 20,033 | 54,346 | | Net return on ordinary activities before taxation multiplied by the standard rate of corporation tax in the UK of 25% (2024 – 25%) | 5,008 | 13,587 | | Capital returns not taxable | 1,068 | (7,629) | | Income not taxable | (6,472) | (6,302) | | Taxable loss not utilised | 396 | 344 | | Overseas tax | 2,337 | 2,474 | | **Total tax charge for the year** | **2,337** | **2,474** | 91 --- Financial report ## 06 Tax on ordinary activities (continued) As at 31 December 2025 the Company had surplus management expenses and losses on non-trading loan relationships of £44,629,000 (2024 – £42,932,000). No deferred tax asset has been recognised in respect of these amounts because the Company is not expected to generate taxable income in a future period in excess of the deductible expenses of that future period and, accordingly, it is unlikely that the Company will be able to reduce future tax liabilities through the use of existing surplus expenses. Due to the Company's status as an investment trust, and the intention to continue meeting the conditions required to obtain approval in the foreseeable future, the Company has not provided for deferred tax on any capital gains and losses arising on the revaluation or disposal of investments. ## 07 Net return per ordinary share | | 2025 Revenue | 2025 Capital | 2025 Total | 2024 Revenue | 2024 Capital | 2024 Total | | --- | --- | --- | --- | --- | --- | --- | | Net return per ordinary share | 15.65p | (5.13p) | 10.52p | 14.50p | 14.62p | 29.12p | Revenue return per ordinary share is based on the net revenue on ordinary activities after taxation of £26,322,000 (2024 – £25,822,000) and on 168,163,933 (2024 – 178,117,932) ordinary shares of 25p, being the weighted average number of ordinary shares in issue during the year. Capital return per ordinary share is based on the net capital loss for the financial year of £8,623,000 (2024 – net capital gain of £26,050,000), and on 168,163,933 (2024 – 178,117,932) ordinary shares, being the weighted average number of ordinary shares in issue during the year. There are no dilutive or potentially dilutive shares in issue. ## 08 Ordinary dividends | | 2025 | 2024 | 2025 £'000 | 2024 £'000 | | --- | --- | --- | --- | --- | | **Amounts recognised as distributions in the year:** | | | | | | Previous year's final (paid 11 April 2025) | 4.175p | 3.80p | 7,265 | 6,776 | | First interim (paid 19 June 2025) | 3.625p | 3.45p | 6,215 | 6,152 | | Second interim (paid 18 September 2025) | 3.750p | 3.55p | 6,361 | 6,330 | | Third interim (paid 11 December 2025) | 3.950p | 3.70p | 6,556 | 6,576 | | | **15.500p** | **14.50p** | **26,397** | **25,834** | We also set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of section 1158 of the Corporation Tax Act 2010 are considered. The revenue available for distribution out of current year profits by way of dividend for the year is £26,322,000 (2024 – £25,822,000). | | 2025 | 2024 | 2025 £'000 | 2024 £'000 | | --- | --- | --- | --- | --- | | **Dividends paid and payable in respect of the year:** | | | | | | First interim (paid 19 June 2025) | 3.63p | 3.45p | 6,215 | 6,152 | | Second interim (paid 18 September 2025) | 3.750p | 3.55p | 6,361 | 6,330 | | Third interim (paid 11 December 2025) | 3.950p | 3.70p | 6,556 | 6,576 | | Current year's proposed final dividend (payable 24 April 2026) | 4.595p | 4.175p | 7,531 | 7,375 | | | **15.920p** | **14.875p** | **26,663** | **26,433** | 92 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ## 09 Investments | As at 31 December 2025 | Level 1 £'000 | Level 2 £'000 | Level 3 £'000 | Total £'000 | | --- | --- | --- | --- | --- | | **Securities** | | | | | | Listed equities | 863,699 | – | – | **863,699** | | Bonds | – | 16,169 | – | **16,169** | | **Property** | | | | | | Freehold | – | – | 90,350 | **90,350** | | Total financial asset investments | **863,699** | **16,169** | **90,350** | **970,218** | | As at 31 December 2024 | Level 1 £'000 | Level 2 £'000 | Level 3 £'000 | Total £'000 | | --- | --- | --- | --- | --- | | **Securities** | | | | | | Listed equities | 937,287 | – | – | **937,287** | | Bonds | – | 11,058 | – | **11,058** | | **Property** | | | | | | Freehold | – | – | 95,450 | **95,450** | | Total financial asset investments | **937,287** | **11,058** | **95,450** | **1,043,795** | Investments in securities and property are financial assets held at fair value through profit or loss on initial recognition. In accordance with FRS 102 the tables above provide an analysis of these investments based on the fair value hierarchy described below which reflects the reliability and significance of the information used to measure their fair value. ### Fair value hierarchy The fair value hierarchy used to analyse the fair values of financial assets is described below. The levels are determined by the lowest (that is the least reliable or least independently observable) level of input that is significant to the fair value measurement for the individual investment in its entirety as follows: **Level 1** – using unadjusted quoted prices for identical instruments in an active market; **Level 2** – using inputs, other than quoted prices included within Level 1, that are directly or indirectly observable (based on market data such as quoted prices for similar instruments in active markets, broker quoted prices, or yield curves); and **Level 3** – using inputs that are unobservable (for which market data is unavailable). | | Equities £'000 | Bonds £'000 | Property £'000 | 2025 Total £'000 | 2024 Total £'000 | | --- | --- | --- | --- | --- | --- | | Cost of investments at start of year | 634,994 | 12,328 | 83,389 | **730,711** | 682,619 | | Investment holding gains/(losses) at start of year | 302,293 | (1,270) | 12,061 | **313,084** | 339,191 | | Value of investments at start of year | **937,287** | **11,058** | **95,450** | **1,043,795** | **1,021,810** | | **Analysis of transactions during the year:** | | | | | | | Purchases at cost | 118,978 | 7,874 | 9,972 | **136,824** | 161,130 | | Sales proceeds received | (189,327) | (3,428) | (13,096) | **(205,851)** | (169,623) | | Amortisation of fixed income book cost | – | (22) | – | **(22)** | (63) | | Gains/(losses) on investments | (3,239) | 687 | (1,976) | **(4,528)** | 30,541 | | Value of investments at end of year | **863,699** | **16,169** | **90,350** | **970,218** | **1,043,795** | | Cost of investments at end of year | 621,239 | 15,902 | 79,534 | **716,675** | 730,711 | | Investment holding gains/(losses) at end of year | 242,460 | 267 | 10,816 | **253,543** | 313,084 | | Value of investments at end of year | **863,699** | **16,169** | **90,350** | **970,218** | **1,043,795** | 93 --- Financial report ## 09 Investments (continued) The company received £205,851,000 (2024 – £169,623,000) from investments sold in the year. The book cost of these investments when they were purchased was £150,839,000 (2024 – £112,975,000). 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 £651,000 (2024 – £1,773,000) and £178,000 (2024 – £200,000) were suffered on purchases and sales in the year respectively. The properties were valued on an open market basis by CBRE and Savills as at 31 December 2025. | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | **Gains/(losses) on investments** | | | | **Securities:** | | | | Gains/(losses) on sales | 55,744 | 54,800 | | Changes in investment holding gains/(losses) | (58,296) | (26,146) | | | **(2,552)** | **28,654** | | **Property:** | | | | Gains/(losses) on sales | (731) | 1,848 | | Changes in investment holding gains/(losses) | (1,245) | 39 | | | **(1,976)** | **1,887** | | | **(4,528)** | **30,541** | ## 10 Debtors | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | **Amounts falling due within one year:** | | | | Accrued income and prepaid expenses | 1,094 | 1,499 | | Investment sales awaiting settlement | 505 | – | | Taxation recoverable | 2,985 | 2,975 | | | **4,584** | **4,474** | ## 11 Creditors – amounts falling due within one year | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | Interest payable | 637 | 637 | | Rental income prepaid | 988 | 813 | | Share buybacks for subsequent settlement | 1,431 | 259 | | Other creditors and accruals | 1,885 | 1,943 | | | **4,941** | **3,652** | Included in other creditors and accruals is £898,000 (2024 – £958,000) in respect of the management fees due to Baillie Gifford & Co Limited and £113,000 (2024 – £119,000) in respect of management fees due to OLIM Property Limited. 94 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ## 12 Creditors – amounts falling due after more than one year | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | £15m Series C 2.23% 25 June 2036 | 14,946 | 14,941 | | £40m Series A 3.12% 11 April 2045 | 39,906 | 39,901 | | £40m Series B 3.12% 11 April 2049 | 39,904 | 39,900 | | | **94,756** | **94,742** | The main covenants for the loan notes which are tested monthly are that net tangible assets shall not fall below £120,000,000 and gross borrowings shall not exceed 40% of the Company's adjusted assets. ## 13 Share capital | | 2025 Number | 2025 £'000 | 2024 Number | 2024 £'000 | | --- | --- | --- | --- | --- | | Allotted, called-up and fully paid ordinary shares of 25p each | 163,886,374 | 40,972 | 176,650,758 | 44,163 | | Treasury shares of 25p each | 14,429,569 | 3,607 | 1,665,185 | 416 | | | **178,315,943** | **44,579** | **178,315,943** | **44,579** | The Company's shareholder authority permits it to hold shares bought back in treasury. Such treasury shares may be subsequently either sold for cash at a premium to net asset value per ordinary share or cancelled. At 31 December 2025, the Company had authority to buy back 17,671,394 ordinary shares. During the year to 31 December 2025, no ordinary shares were bought back for cancellation (2024 – no ordinary shares) and 12,764,384 (2024 – 1,665,185) ordinary shares were bought back into treasury at a cost of £65,369,000 (2024 – £8,529,000). Under the provisions of the Company's Articles of Association, share buy-backs are funded from the capital reserve. The Company has authority to allot shares under section 551 of the Companies Act 2006. During the year, no shares were issued (2024 – no shares were issued). ## 14 Capital and reserves | | Share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Capital reserve £'000 | Revenue reserve £'000 | Shareholders' funds £'000 | | --- | --- | --- | --- | --- | --- | --- | | At 1 January 2025 | 44,579 | 186,100 | 22,781 | 682,413 | 16,820 | **952,693** | | Losses on investments – securities | – | – | – | (2,552) | – | **(2,552)** | | Losses on investments – property | – | – | – | (1,976) | – | **(1,976)** | | Shares bought back into treasury | – | – | – | (65,369) | – | **(65,369)** | | Management fees charged to capital | – | – | – | (3,105) | – | **(3,105)** | | Finance costs charged to capital | – | – | – | (2,133) | – | **(2,133)** | | Other exchange differences | – | – | – | 258 | – | **258** | | Tax relief on management fee and finance costs | – | – | – | 885 | – | **885** | | Revenue return on ordinary activities after taxation | – | – | – | – | 26,322 | **26,322** | | Dividends paid in the year | – | – | – | – | (26,397) | **(26,397)** | | At 31 December 2025 | **44,579** | **186,100** | **22,781** | **608,421** | **16,745** | **878,626** | 95 --- Financial report ## 14 Capital and reserves (continued) | | Share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Capital reserve £'000 | Revenue reserve £'000 | Shareholders' funds £'000 | | --- | --- | --- | --- | --- | --- | --- | | At 1 January 2024 | 44,579 | 186,100 | 22,781 | 664,892 | 16,832 | **935,184** | | Gains on investments – securities | – | – | – | 28,654 | – | **28,654** | | Gains on investments – property | – | – | – | 1,887 | – | **1,887** | | Shares bought back into treasury | – | – | – | (8,529) | – | **(8,529)** | | Management fees charged to capital | – | – | – | (3,271) | – | **(3,271)** | | Finance costs charged to capital | – | – | – | (2,134) | – | **(2,134)** | | Other exchange differences | – | – | – | (26) | – | **(26)** | | Tax relief on management fee and finance costs | – | – | – | 940 | – | **940** | | Revenue return on ordinary activities after taxation | – | – | – | – | 25,822 | **25,822** | | Dividends paid in the year | – | – | – | – | (25,834) | **(25,834)** | | At 31 December 2024 | **44,579** | **186,100** | **22,781** | **682,413** | **16,820** | **952,693** | The capital reserve includes unrealised investment holding gains of £253,544,000 (2024 – gains of £313,084,000) as detailed in note 9. The share premium account and capital redemption reserve are not distributable. The revenue reserve and the capital reserve (to the extent it constitutes realised profits) are distributable. ## 15 Net asset value per ordinary share The net asset value per ordinary share and the net asset value attributable to the ordinary shareholders at the year end were as follows: | | 2025 | 2024 | 2025 £'000 | 2024 £'000 | | --- | --- | --- | --- | --- | | Ordinary shares of 25p | **536.1p** | **539.3p** | **878,626** | **952,693** | Net asset value per ordinary share is based on the net assets as shown above and on 163,886,374 (2024 – 176,650,758) ordinary shares, being the number of ordinary shares in issue at the year end. ## 16 Transactions with the managers and related parties The Directors' fees for the year and interests in the Company's shares at the end of the year are detailed in the Directors' remuneration report on pages 71 to 74. No Director has a contract of service with the Company. During the year no Director was interested in any contract or other matter requiring disclosure under section 412 of the Companies Act 2006. The management fee due to Baillie Gifford & Co Limited is set out in note 3 on page 90 and the amount accrued at 31 December 2025 is set out in note 11 on page 94. Details of the Investment Management Agreement are set out on page 55. The management fee due to OLIM Property Limited is set out in note 3 on page 90 and the amount accrued at 31 December 2025 is set out in note 11 on page 94. Details of the Property Management Agreement are set out on page 56. 96 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ## 17 Analysis of change in net debt | | 1 January 2025 £'000 | Cash flows £'000 | Exchange movement £'000 | Other non-cash changes £'000 | 31 December 2025 £'000 | | --- | --- | --- | --- | --- | --- | | Cash and cash equivalents | 2,818 | 445 | 258 | – | 3,521 | | Loan notes due in more than one year | (94,742) | – | – | (14) | (94,756) | | | **(91,924)** | **445** | **258** | **(14)** | **(91,235)** | | | 1 January 2024 £'000 | Cash flows £'000 | Exchange movement £'000 | Other non-cash changes £'000 | 31 December 2024 £'000 | | --- | --- | --- | --- | --- | --- | | Cash and cash equivalents | 7,340 | (4,496) | (26) | – | 2,818 | | Loan notes due in more than one year | (94,728) | – | – | (14) | (94,742) | | | **(87,388)** | **(4,496)** | **(26)** | **(14)** | **(91,924)** | ## 18 Financial instruments As an investment trust, the Company invests in equities and makes other investments so as to secure its investment objective of increasing capital and growing income in order to deliver real dividend growth. The Company borrows money when the Board and Managers have sufficient conviction that the assets funded by borrowed monies will generate a return in excess of the cost of borrowing. In pursuing its investment objective, the Company is exposed to a variety of risks that cause short term variation in the Company's net assets and could result in either a reduction in the Company's net assets or a reduction in the profits available for dividend. These risks are categorised here as market risk (comprising currency risk, interest rate risk and other price risk), liquidity risk and credit risk. The Board monitors closely the Company's exposures to these risks but does so in order to reduce the likelihood of a permanent reduction in the Company's net assets or its profits available for dividend rather than to minimise the short term volatility. The risk management policies and procedures outlined in this note have not changed substantially from the previous accounting period. ### Market risk The fair value or future cash flows of a financial instrument or other investment held by the Company may fluctuate because of changes in market prices. This market risk comprises three elements – currency risk, interest rate risk and other price risk. The Board reviews and agrees policies for managing these risks and the Company's Investment Manager both assesses the exposure to market risk when making individual investment decisions and monitors 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. ### Currency risk Certain of the Company's assets, liabilities and income are denominated in currencies other than sterling (the Company's functional currency and that in which it reports its results). Consequently, movements in exchange rates may affect the sterling value of those items. The Investment Manager monitors the Company's exposure to foreign currencies and reports to the Board on a regular basis. The Investment Manager assesses the risk to the Company of the foreign currency exposure by considering the effect on the Company's net asset value and income of a movement in the rates of exchange to which the Company's assets, liabilities, income and expenses are exposed. However, the country in which a company is listed is not necessarily where it earns its profits. The movement in exchange rates on overseas earnings may have a more significant impact upon a company's valuation than a simple translation of the currency in which the company is quoted. 97 --- Financial report # 18 Financial instruments (continued) # Currency risk (continued) Forward currency contracts are used periodically to limit the Company's exposure to anticipated future changes in exchange rates which might otherwise adversely affect the value of the portfolio of investments. Where appropriate, they are used also to achieve the portfolio characteristics that assist the Company in meeting its investment objectives. The Company had no foreign currency contracts in place during the years to 31 December 2025 or 2024. Cash amounts received in foreign currencies are converted to sterling on a regular basis. Exposure to currency risk through asset allocation, which is calculated by reference to the currency in which the asset or liability is quoted, is shown below. | At 31 December 2025 | Investments £'000 | Cash and cash equivalents £'000 | Loan notes £'000 | Other debtors and creditors £'000 | Net exposure £'000 | | --- | --- | --- | --- | --- | --- | | Australian dollar | 19,135 | – | – | – | 19,135 | | Brazilian real | 19,614 | – | – | 19 | 19,633 | | Chinese Yuan | 18,760 | – | – | – | 18,760 | | Danish kroner | 21,689 | – | – | 188 | 21,877 | | Euro | 125,287 | – | – | 1,427 | 126,714 | | Hong Kong dollar | 46,903 | – | – | – | 46,903 | | Japanese yen | 16,238 | – | – | – | 16,238 | | Singapore dollar | 13,905 | – | – | – | 13,905 | | Swedish kroner | 42,906 | – | – | – | 42,906 | | Swiss franc | 57,123 | – | – | 1,967 | 59,090 | | Taiwan dollar | 42,107 | – | – | 109 | 42,216 | | US dollar | 379,045 | 209 | – | 203 | 379,457 | | Other overseas currencies | 13,921 | – | – | 60 | 13,981 | | **Total exposure to currency risk** | **816,633** | **209** | **–** | **3,973** | **820,815** | | Sterling | 153,585 | 3,312 | (94,756) | (4,330) | 57,811 | | | **970,218** | **3,521** | **(94,756)** | **(357)** | **878,626** | | At 31 December 2024 | Investments £'000 | Cash and cash equivalents £'000 | Loan notes £'000 | Other debtors and creditors £'000 | Net exposure £'000 | | --- | --- | --- | --- | --- | --- | | Australian dollar | 16,136 | – | – | – | 16,136 | | Brazilian real | 13,531 | – | – | 17 | 13,548 | | Chinese Yuan | 19,366 | – | – | – | 19,366 | | Danish kroner | 35,029 | – | – | 262 | 35,291 | | Euro | 155,151 | – | – | 704 | 155,855 | | Hong Kong dollar | 53,308 | – | – | 230 | 53,538 | | Japanese yen | 13,013 | – | – | – | 13,013 | | Singapore dollar | 15,448 | – | – | – | 15,448 | | Swedish kroner | 38,523 | – | – | – | 38,523 | | Swiss franc | 69,667 | – | – | 2,097 | 71,764 | | Taiwan dollar | 36,814 | – | – | 96 | 36,910 | | US dollar | 398,370 | 84 | – | 721 | 399,175 | | Other overseas currencies | 14,375 | – | – | 70 | 14,445 | | **Total exposure to currency risk** | **878,731** | **84** | **–** | **4,197** | **883,012** | | Sterling | 165,064 | 2,734 | (94,742) | (3,375) | 69,681 | | | **1,043,795** | **2,818** | **(94,742)** | **822** | **952,693** | 98 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ### Currency risk sensitivity At 31 December 2025, if sterling had strengthened by 5% in relation to all currencies, with all other variables held constant, total net assets below, with a corresponding impact on total return on ordinary activities would have decreased by the amounts shown below. A 5% weakening of sterling against all currencies, with all other variables held constant, would have had a similar but opposite effect on the Financial Statement amounts. The analysis is performed on the same basis for 2024. | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | Australian dollar | 957 | 1,926 | | Brazilian real | 982 | 807 | | Chinese Yuan | 938 | 651 | | Danish kroner | 1,094 | 2,677 | | Euro | 6,336 | 7,793 | | Hong Kong dollar | 2,345 | 1,846 | | Japanese yen | 812 | 677 | | Singapore dollar | 695 | 772 | | Swedish kroner | 2,145 | 968 | | Swiss franc | 2,955 | 3,588 | | Taiwan dollar | 2,111 | 1,765 | | US dollar | 18,973 | 19,959 | | Other overseas currencies | 699 | 722 | | | **41,042** | **44,151** | ### Interest rate risk Interest rate movements may affect directly: - the fair value of any investments in fixed interest rate securities; - the level of income receivable on cash deposits; - the fair value of the Company's fixed-rate borrowings; and - the interest payable on any variable rate borrowings which the Company may take out. Interest rate movements may also impact upon the market value of the Company's investments other than its fixed income securities. The effect of interest rate movements upon the earnings of a company may have a significant impact upon the valuation of that company's equity. The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment decisions and when entering borrowing agreements. The Board reviews on a regular basis the amount of investments in cash and fixed income securities and the income receivable on cash deposits, floating rate notes and other similar investments. The Company finances part of its activities through borrowings at approved levels. The amount of such borrowings and the approved levels are monitored and reviewed regularly by the Board. Movements in interest rates, to the extent that they affect the fair value of the Company's fixed rate borrowings, may also affect the amount by which the Company's share price is at a discount or a premium to the net asset value. The interest rate risk profile of the Company's financial assets and liabilities at 31 December is shown below. 99 --- Financial report # 18 Financial instruments (continued) # Financial assets | | 2025 Fair value £'000 | 2025 Weighted average interest rate | 2025 Weighted average fixed rate period * | 2024 Fair value £'000 | 2024 Weighted average interest rate | 2024 Weighted average fixed rate period * | | --- | --- | --- | --- | --- | --- | --- | | **Fixed rate:** | | | | | | | | Euro denominated bonds | 1,725 | 7.52% | 22 years | 1,462 | 8.58% | 23 years | | Dominican peso denominated bonds | – | – | – | 720 | 9.18% | 1 years | | Indonesian rupiah denominated bonds | 3,703 | 6.05% | 13 years | 3,956 | 7.09% | 14 years | | Sterling denominated bonds | 8,372 | 5.51% | 12 years | – | – | – | | US dollar denominated bonds | – | – | – | 2,775 | 7.27% | 61 years | | **Floating rate:** | | | | | | | | Brazilian bonds (interest rate linked to Brazilian CPI) | 2,412 | 12.16% | 19 years | 2,145 | 11.69% | 20 years | | **Cash and short term deposits:** | | | | | | | | Other overseas currencies | 209 | – | n/a | 84 | – | n/a | | Sterling | 3,312 | 1.45% | n/a | 2,734 | 3.83% | n/a | * Based on expected maturity/redemption date. # Financial liabilities | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | **The interest rate risk profile of the Company's financial liabilities at 31 December was:** | | | | Fixed rate – sterling | 94,756 | 94,742 | | **The maturity profile of the Company's debt at 31 December was:** | | | | In more than five years | 94,756 | 94,742 | # Interest rate risk sensitivity An increase of 100 basis points in the durations, being a measure of each bond's sensitivity to changes in interest rates, as at 31 December 2025 would have decreased total net assets and total return on ordinary activities by £1,403,000 (2024 – decrease of £1,029,000) and would have decreased the net asset value per share (with borrowings at book value) by 0.9p (2024 – decrease of 0.6p). A decrease of 100 basis points would have had an equal but opposite effect. # Other price risk Changes in market prices other than those arising from interest rate risk or currency risk may also affect the value of the Company's net assets. The Board manages the market price risks inherent in the investment portfolio by ensuring full and timely access to relevant information from the Investment Manager. The Board meets regularly and at each meeting reviews investment performance, the investment portfolio and the rationale for the current investment positioning to ensure consistency with the Company's objectives and investment policies. # Other price risk sensitivity A full list of the Company's investments is shown on pages 26 to 30. In addition, various analyses of the portfolio by asset class and industrial sector are contained in the Strategic report. 98.3% (2024 – 98.4%) of the Company's net assets are invested in quoted equities. A 5% increase in quoted equity valuations at 31 December 2025 would have increased total assets and total return on ordinary activities by £43,185,000 (2024 – £46,864,000). A decrease of 5% would have had an equal but opposite effect. # Liquidity risk This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. Liquidity risk is mitigated as the majority of the Company's assets are investments in quoted securities that are readily realisable 100 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. The Company's holdings in direct property, which is not considered to be readily realisable, amount to 10.3% of net assets at 31 December 2025 (2024 – 10.0%). The Company has the power to take out borrowings, which give it access to additional funding when required. The Board gives guidance to the Investment Managers as to the maximum amount of the Company's resources that should be invested in any one holding and to the maximum aggregate exposure to any one entity (see investment policy on pages 39 and 40). The Board also sets parameters for the degree to which the Company's net assets are invested in quoted equities. #### Maturity profile The maturity profile of the Company's financial liabilities at 31 December was: | | 2025 Within 1 year £'000 | 2025 Between 1 and 5 years £'000 | 2025 More than 5 years £'000 | 2024 Within 1 year £'000 | 2024 Between 1 and 5 years £'000 | 2024 More than 5 years £'000 | | --- | --- | --- | --- | --- | --- | --- | | Repayment of loan notes | – | – | 95,000 | – | – | 95,000 | | Accumulated interest on loan notes | 2,831 | 11,322 | 43,024 | 2,831 | 11,322 | 46,304 | | Other creditors and accruals | 1,885 | – | – | 2,202 | – | – | | | **4,716** | **11,322** | **138,024** | **5,033** | **11,322** | **141,304** | The figures above represent undiscounted cash flows. #### Credit risk This is the risk that a failure of a counterparty to a transaction to discharge its obligations under that transaction could result in the Company suffering a loss. This risk is managed as follows: - where the Investment Manager makes an investment in a bond or other security with credit risk, that credit risk is assessed and then compared to the prospective investment return of the security in question; - the Board regularly receives information from the Investment Manager on the credit ratings of those bonds and other securities in which the Company has invested; - the Depositary is liable for the loss of financial instruments held in custody. The Depositary will ensure that any delegate segregates the assets of the Company. The Depositary has delegated the custody function to The Bank of New York Mellon (International) Limited. Bankruptcy or insolvency of the custodian may cause the Company's rights with respect to securities held by the custodian to be delayed. The Investment Manager monitors the Company's risk by reviewing the custodian's internal control reports and reporting its findings to the Board; - investment transactions are carried out with a large number of brokers whose creditworthiness is reviewed by the Investment Manager. Transactions are ordinarily undertaken on a delivery versus payment basis whereby the Company's custodian 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; - 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 Investment Manager of the creditworthiness of that counterparty. The Company's aggregate exposure to each such counterparty is monitored regularly by the Board; and - cash is only held at banks that have been identified by the Managers as reputable and of high credit quality. Credit quality of our banking provider is publicly available. 101 --- Financial report ## 18 Financial instruments (continued) ### Credit risk exposure The exposure to credit risk at 31 December was: | | 2025 £'000 | 2024 £'000 | | --- | --- | --- | | Bonds | 16,169 | 11,058 | | Cash and short term deposits | 3,521 | 2,818 | | Debtors and prepayments | 4,584 | 4,474 | | | **24,274** | **18,350** | None of the Company's financial assets are past due or impaired. ### Credit quality of bonds All of the bonds held by the Company as at 31 December 2025 received a credit rating from at least one of the S&P or Moody's agencies. All bonds had at least a minimum rating of BB (2024 – all bonds had a minimum rating of BB). ### 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 the long term borrowings which are stated at amortised cost. The fair value of the loan notes is calculated with reference to debt instruments of comparable maturity and yield. | | 2025 Par/nominal £'000 | 2025 Book £'000 | 2025 Fair £'000 | 2024 Par/nominal £'000 | 2024 Book £'000 | 2024 Fair £'000 | | --- | --- | --- | --- | --- | --- | --- | | 2.23% Series C loan notes 2036 | 15,000 | 14,946 | 11,116 | 15,000 | 14,941 | 10,662 | | 3.12% Series A loan notes 2045 | 40,000 | 39,906 | 26,766 | 40,000 | 39,902 | 26,268 | | 3.12% Series B loan notes 2049 | 40,000 | 39,904 | 25,282 | 40,000 | 39,900 | 25,123 | | | **95,000** | **94,756** | **63,164** | **95,000** | **94,743** | **62,053** | ## 19 Property sensitivity 10.3% of the Company's net assets are invested in direct property. ### Property sensitivity analysis The valuations of investment properties are sensitive to changes in the significant unobservable inputs. The all-risks yield ('ARY') is used by valuers when conducting sensitivity analysis for investment property. ARY is a single 'growth-implicit' metric, estimating the anticipated rate of return by factoring in all relevant risks and rewards. The ARY is determined by evaluating the correlation between annual rental income and fair value, incorporating the valuer's holistic judgement with reference to market evidence for comparable property and taking into account the various unique features of each property such as tenancy, property condition and location. A significant increase/(decrease) in the 'all risks yield' in isolation would result in a significantly (lower)/higher fair value. In order to reflect market conditions, the increase in yield assumption is 0.15% and the decrease in yield assumption is 0.15%. The Directors believe yield to be the most appropriate input for sensitivity analysis of the Company's property portfolio and have not presented a rental value input for the year to 31 December 2025. The sensitivity of the valuation to changes in yield inputs per class of investment property are shown below: | | Retail and leisure £'000 | Industrial £'000 | Total £'000 | | --- | --- | --- | --- | | **Estimated movement in fair value of investment properties at 31 December 2025 arising from:** | | | | | Increase in yield by 0.15% | (1,750) | (350) | **(2,100)** | | Decrease in yield by 0.15% | 1,865 | 350 | **2,215** | 102 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. | | Retail and leisure $'000 | Industrial $'000 | Total $'000 | | --- | --- | --- | --- | | **Estimated movement in fair value of investment properties at 31 December 2024 arising from:** | | | | | Increase in yield by 0.15% | (1,700) | (500) | **(2,200)** | | Decrease in yield by 0.15% | 1,850 | 550 | **2,400** | This represents the best estimate of a reasonable possible shift in yields, having regard to historical volatility of the value and yield. ## 20 Leases The Company has entered into operating leases over its portfolio of investment properties consisting of a mix of retail, leisure and industrial sites. These leases have terms of between 5 and 30 years. All leases include a clause to enable upward revision of the rental charge on either an annual or five yearly basis. The basis for rent revisions is agreed at the time the lease is written and can reflect RPI, CPI, market conditions, or fixed increases. Rental income recognised by the Company during the year is shown in note 2. Future minimum rentals under operating leases payable for each of the following periods are: | | 2025 $'000 | 2024 $'000 | | --- | --- | --- | | Due within 1 year | 5,843 | 5,757 | | Between 1 and 5 years | 23,372 | 23,027 | | More than 5 years | 66,460 | 57,602 | | | **95,675** | **86,385** | ## 21 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 deliver real dividend growth by increasing capital and growing income. The Company's investment policy, including how the Board discusses and monitors gearing levels, is set out on pages 39 and 40. 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 page 66 and on pages 41 to 45. The Company has the authority to issue and buy back its shares (see pages 57 to 59) and changes to the share capital during the year are set out in notes 13 and 14. The Company does not have any externally imposed capital requirements other than the covenants on its borrowings which are detailed in notes 11 and 12. ## 22 Subsequent events On 10 February 2026 the Company agreed the sale of the pub at Earley for £2,125,000 with the sale due to complete on 24 March 2026. 103 --- # Shareholder information --- The Scottish American Investment Company P.L.C. # Notice of Annual General Meeting ![img-46.jpeg](img-46.jpeg) ## Baillie Gifford™ ![img-47.jpeg](img-47.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 Friday, 17 April 2026 at 11.30am. You will find directions to the venue by scanning the QR code above. To accurately reflect the views of shareholders of the Company, the Board intends to hold the AGM voting on a poll. The Board encourages all shareholders to submit proxy voting forms as soon as possible and, in any event, by no later than 11.30am, on 15 April 2026. We would encourage shareholders to monitor the Company's website at saints-it.com. Should shareholders have questions for the Board or the Managers or any queries as to how to vote, they are welcome as always to submit them by email to enquiries@bailliegifford.com or call 0800 917 2113. Baillie Gifford may record your call. For details of how to vote your shares if held via a platform please refer to theaic.co.uk/how-to-vote-your-shares. By Rail: Edinburgh Waverley – approximately a 5 minute walk away By Bus: Lothian Buses local services include: 1, 3, 5, 7, 8, 10, 14, 15, 16, 25, 34 By Tram: Stops at St Andrew Square and Picardy Place ... Access to Waverley Train Station on foot 105 --- Shareholder information Notice is hereby given that the one hundred and fifty second Annual General Meeting of The Scottish American Investment Company P.L.C. ('SAINTS') will be held at the Registered Office of the Company, Calton Square, 1 Greenside Row, Edinburgh, EH1 3AN on Friday, 17 April 2026 at 11.30am. The Portfolio Managers responsible for SAINTS will give a short presentation on the investment outlook. The following resolutions will be proposed at the AGM: To consider, and, if thought fit, to pass the following resolutions as ordinary resolutions: 01. To receive and adopt the Financial Statements of the Company for the year to 31 December 2025 with the Reports of the Directors and of the Independent Auditor thereon. 02. To approve the Directors' Remuneration Policy. 03. To approve the Directors' Annual Report on Remuneration for the year to 31 December 2025. 04. To declare a final dividend. 05. To elect Angus Macpherson as a Director. 06. To re-elect Dame Mariot Leslie as a Director. 07. To re-elect Karyn Lamont as a Director. 08. To re-elect Christine Montgomery as a Director. 09. To re-elect Padmesh Shukla as a Director. 10. To re-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. 11. To authorise the Directors to determine the remuneration of the Independent Auditor of the Company. 12. That, in substitution for any existing authority, but without prejudice to the exercise of any such authority prior to the date hereof, the Directors of the Company be and they are hereby generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006 (the 'Act') to exercise all the powers of the Company to allot shares in the Company and to grant rights to subscribe for or to convert any security into shares in the Company ('Securities') provided that such authority shall be limited to the allotment of shares and the grant of rights in respect of shares with an aggregate nominal value of up to £13,457,925.75 (representing approximately 33 per cent of the nominal value of the issued share capital as at 16 February 2026), such authority to expire at the conclusion of the next Annual General Meeting of the Company after the passing of this resolution or on the expiry of 15 months from the passing of this resolution, whichever is the earlier, unless previously revoked, varied or extended by the Company in a general meeting, save that the Company may at any time prior to the expiry of this authority make an offer or enter into an agreement which would or might require Securities to be allotted or granted after the expiry of such authority and the Directors shall be entitled to allot or grant Securities in pursuance of such an offer or agreement as if such authority had not expired. To consider and, if thought fit, to pass resolution 13 as a special resolution: 13. That, subject to the passing of resolution 12 above, and in substitution for any existing power but without prejudice to the exercise of any such power prior to the date hereof, the Directors of the Company be and they are hereby generally empowered, pursuant to sections 570 and 573 of the Companies Act 2006 (the 'Act'), to allot equity securities (within the meaning of section 560(1) of the Act), for cash pursuant to the authority given by resolution 12 above and by the sale of treasury shares as if section 561(1) of the Act did not apply to any such allotment of equity securities, 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 up to an aggregate nominal value of £4,078,159.25 being approximately 10% of the nominal value of the issued share capital of the Company, as at 16 February 2026. 106 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. To consider and, if thought fit, to pass resolution 14 as an ordinary resolution: 14. That the Directors be authorised, for the purposes of LR 15.4.11 of the UK Listing Rules of the UK Listing Authority, to issue further ordinary shares (including selling treasury shares) for cash at a price below the net asset value per share of those shares (with borrowings valued at book) without first offering those shares pro rata to existing shareholders. To consider and, if thought fit, to pass resolution 15 as a special resolution: 15. That, in substitution for any existing authority but without prejudice to the exercise of any such authority prior to the date hereof, the Company be and is hereby generally and unconditionally authorised, pursuant to and in accordance with section 701 of the Companies Act 2006 (the 'Act') to make market purchases (within the meaning of section 693(4) of the Act) of fully paid ordinary shares of 25 pence each in the capital of the Company ('ordinary shares') (either for retention as treasury shares or for cancellation), provided that: a. the maximum aggregate number of ordinary shares hereby authorised to be purchased is 24,452,643, or, if less, the number representing approximately 14.99% of the issued ordinary share capital of the Company as at the date of the passing of this resolution; b. the minimum price (excluding expenses) which may be paid for each ordinary share is 25 pence; c. the maximum price (excluding expenses) which may be paid for each ordinary share shall not be more than the higher of: i. 5 per cent. above the average closing price on the London Stock Exchange of an ordinary share over the five business days immediately preceding the date of purchase; and ii. an amount equal to the higher of the last independent trade of an Ordinary Share and the highest current independent bid for an Ordinary Share on the trading venue where the purchase is carried out; and d. unless previously varied, revoked or renewed by the Company in a general meeting, the authority hereby conferred shall expire at the conclusion of the Company's Annual General Meeting to be held in respect of the financial year ending 31 December 2026, save that the Company may, prior to such expiry, enter into a contract to purchase ordinary shares under such authority which will or might be completed or executed wholly or partly after the expiration of such authority and may make a purchase of ordinary shares pursuant to any such contract. By Order of the Board Baillie Gifford & Co Limited Company Secretary 18 February 2026 ## Notes 01. As a member you are entitled to appoint a proxy or proxies to exercise all or any of your rights to attend, speak and vote at the AGM. A proxy need not be a member of the Company but must attend the AGM to represent you. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You can only appoint a proxy using the procedure set out in these notes and the notes to the proxy form. You may not use any electronic address provided either in this notice or any related documents (including the Financial Statements and proxy form) to communicate with the Company for any purpose other than those expressly stated. 02. To be valid any proxy form or other instrument appointing a proxy, together with any power of attorney or other authority under which it is signed or a certified copy thereof, must be received by post or (during normal business hours only) by hand at the Registrars of the Company at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY or epoxyappointment.com no later than two days (excluding non-working days) before the time of the meeting or any adjourned meeting. 107 --- Shareholder information 1. 03. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual and/or by logging on to the website euroclear.com/CREST. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. 2. 04. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a 'CREST Proxy Instruction') must be properly authenticated in accordance with Euroclear UK & 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, in order to be valid, be transmitted so as to be received by the Company's registrar (ID 3RA50) no later than 2 days (excluding non-working days) before the time of the meeting or any adjournment. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Application Host) from which the Company's registrar is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means. 3. 05. 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/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 service by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. 4. 06. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001. 5. 07. 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. 6. 08. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001 and section 311 of the Companies Act 2006 the Company specifies that to be entitled to attend and vote at the AGM (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 48 hours (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. 7. 09. Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy information rights (a 'Nominated Person') may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the Annual General Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights. 108 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. 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 accounts, 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 saints-it.com. 13. Members have the right to ask questions at the meeting in accordance with section 319A of the Companies Act 2006. 14. As at 16 February 2026 (being the last practicable date prior to the publication of this notice) the Company's issued share capital (excluding treasury shares) consisted of 163,126,374 ordinary shares, carrying one vote each. Therefore, the total voting rights in the Company as at 16 February 2026 were 163,126,374 votes. 15. Any person holding 3% or more of the total voting rights of the Company who appoints a person other than the Chairman of the meeting as his/her proxy will need to ensure that both he/she and his/her proxy complies with their respective disclosure obligations under the UK Disclosure and Transparency Rules. 16. No Director has a contract of service with the Company. 109 --- Shareholder information # Further shareholder information ## 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 SAINTS you can do so online. There are a number of companies offering real time online dealing services – find out more by visiting the investment trust pages at bailliegifford.com. ## Sources of further information on the Company The price of shares is quoted daily in the Financial Times and can also be found on SAINTS' page of the Baillie Gifford website at saints-it.com, Trustnet at trustnet.com and on other financial websites. Company factsheets are also available on the Baillie Gifford website and are updated monthly. These are available from Baillie Gifford on request. ## SAINTS share identifiers ISIN GB0007873697 Sedol 0787369 Ticker SAIN Legal Entity Identifier 549300NF03XVC5IFB447 ## AIC The Company is a member of the Association of Investment Companies. ## Dividend dates The table below gives the actual and anticipated quarterly dividend dates. The ex-dividend date is the date on which entitlement to receive the net dividend is established. The record date is the date on which shares must be registered following purchase to receive the dividend direct. Otherwise you will have to claim it from the agent through whom you purchased your shares. The DRIP election date is the final date for electing to participate in the Dividend Reinvestment Plan (see page 111 for more details) for that dividend. ## Dividend dates for 2026 | | Final 2025 | First interim * | Second interim * | Third interim * | | --- | --- | --- | --- | --- | | Dividend announced | 19/02/26 | 12/05/26 | 04/08/26 | 05/11/26 | | Ex-dividend date | 26/02/26 | 21/05/26 | 13/08/26 | 12/11/26 | | Record date | 27/02/26 | 22/05/26 | 14/08/26 | 13/11/26 | | DRIP election date | 01/04/26 | 28/05/26 | 26/08/26 | 19/11/26 | | Dividend paid | 24/04/26 | 18/06/26 | 17/09/26 | 10/12/26 | * Anticipated dates. ## Announcement of results and reports SAINTS' results for the half year to 30 June will be announced in July/August and the results for the year to 31 December will be announced in mid February. The Interim Report will be posted to shareholders in August and the Annual Report in February/March. The 2026 AGM is being held on 17 April. ## How you are taxed - **Capital** As an investment trust, SAINTS pays no capital gains tax. This means that, while assets remain invested in SAINTS, they are managed free of such tax. However, should you decide to sell your SAINTS' shares, you may be subject to capital gains tax. If you held SAINTS' shares on or before 31 March 1982 the market value of the ordinary shares (adjusted for present capital) on that date of 33.125p will be required for your capital gains tax computation. - **Income** The dividends you receive from your SAINTS' shares are taxed as income. Dividends received should be declared on your Tax Return. For further information, please visit the hmrc.gov.uk website. Shareholders are recommended to consult their professional adviser as to their tax position. 110 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ## 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 1282. This helpline also offers an automated self-service functionality (available 24 hours a day, 7 days a week) which allows you to: - hear the latest share price; - confirm your current share holding balance; - confirm your payment history; and - order Change of Address, Dividend Bank Mandate 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; - update bank mandates and change address details; and - use online dealing services; and - pay dividends directly into your overseas bank account in your chosen local currency. To take advantage of this service, please log in at investorcentre.co.uk and enter your Shareholder Reference Number and Company Code (this information can be found on the last dividend voucher or your share certificate). ## Dividend reinvestment plan Computershare operate a Dividend Reinvestment Plan which can be used to buy additional shares instead of receiving your dividend via cheque or into your bank account. For further information log in to investorcentre.co.uk and follow the instructions or telephone 0370 707 1694. ## Electronic proxy voting If you hold stock in your own name you can choose to vote by returning proxies electronically at epoxyappointment.com. If you have any questions about this service please contact Computershare on 0370 707 1282. ## 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. ## Voting via an Investment Platform If you are a shareholder who holds shares via a platform, you should be able to exercise your right to vote by contacting the platform provider directly. You can instruct the platform how to vote your shares or ask to be appointed as a proxy in respect of your shareholding should you wish to attend, speak and vote at the Annual General Meeting. Further guidance can be obtained from your platform provider or the Association of Investment Companies at the aic.co.uk/how-to-vote-your-shares. ## SAINTS 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. ## Analysis of shareholders at 31 December | | 2025 Number of shares held | 2025 % | 2024 Number of shares held | 2024 % | | --- | --- | --- | --- | --- | | Institutions | 31,304,008 | 19.1 | 28,930,375 | 16.4 | | Intermediaries | 121,607,832 | 74.2 | 136,333,071 | 77.2 | | Individuals | 8,286,351 | 5.1 | 9,914,924 | 5.6 | | Marketmakers | 2,688,183 | 1.6 | 1,472,388 | 0.8 | | | **163,886,374** | **100.0** | **176,650,758** | **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 saints-it.com. 111 --- Shareholder information ## Alternative Investment Fund Managers Regulations ('AIFM') In accordance with the AIFM Regulations, information in relation to the Company's leverage and the remuneration of the Company's AIFM, Baillie Gifford & Co Limited, is required to be made available to investors. In accordance with the Regulations, the AIFM remuneration policy is available at bailliegifford.com or on request (see contact details on page 116). The numerical remuneration disclosures in respect of the AIFM's relevant reporting periods are also available at bailliegifford.com. The Company's maximum and actual leverage levels (see glossary of terms and alternative performance measures on pages 118 to 120) at 31 December 2025 are as follows: ### Leverage exposure | | Gross method | Commitment method | | --- | --- | --- | | Maximum limit | 3.00:1 | 2.00:1 | | Actual | 1.10:1 | 1.10:1 | ### Automatic Exchange of Information In order to fulfil its legal obligations under UK tax legislation relating to the automatic exchange of information, The Scottish American Investment Company P.L.C. is required to collect and report certain information about certain shareholders. The legislation requires investment trust companies to provide personal information to HMRC on certain investors who purchase shares in investment trusts. Accordingly, The Scottish American Investment Company P.L.C. will have to provide information annually to the local tax authority on the tax residencies of a number of non-UK based certificated shareholders and corporate entities. Shareholders, excluding those whose shares are held in CREST, who come on to the share register will be sent a certification form for the purposes of collecting this information. For further information, please see HMRC's Quick Guide: Automatic Exchange of Information – information for account holders gov.uk/guidance/automatic-exchange-of-information-account-holders. ## Third party data provider disclaimer No third party data provider ('Provider') makes any warranty, express or implied, as to the accuracy, completeness or timeliness of the data contained herewith nor as to the results to be obtained by recipients of the data. No Provider shall in any way be liable to any recipient of the data for any inaccuracies, errors or omissions in the index data included in this document, regardless of cause, or for any damages (whether direct or indirect) resulting therefrom. No Provider has any obligation to update, modify or amend the data or to otherwise notify a recipient thereof in the event that any matter stated herein changes or subsequently becomes inaccurate. Without limiting the foregoing, no Provider shall have any liability whatsoever to you, whether in contract (including under an indemnity), in tort (including negligence), under a warranty, under statute or otherwise, in respect of any loss or damage suffered by you as a result of or in connection with any opinions, recommendations, forecasts, judgements, or any other conclusions, or any course of action determined, by you or any third party, whether or not based on the content, information or materials contained herein. ## FTSE Index data Source: London Stock Exchange Group plc and its group undertakings (collectively, the 'LSE Group'). © LSE Group 2025. FTSE Russell is a trading name of certain of the LSE Group companies. 'FTSE®' 'Russell®', 'FTSE Russell®', is/are a trade mark(s) of the relevant LSE Group companies and is/are used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company's express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication. 112 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. # Sustainable Finance Disclosure Regulation ('SFDR') The EU Sustainable Finance Disclosure Regulation ('SFDR') does not have a direct impact in the UK due to Brexit, however, it applies to third-country products marketed in the EU. As SAINTS is marketed in the EU by the AIFM, Baillie Gifford & Co Limited, via the National Private Placement Regime ('NPPR') the following disclosures have been provided to comply with the high-level requirements of SFDR. The AIFM has adopted Baillie Gifford & Co's ESG Principles and Guidelines as its policy on integration of sustainability risks in investment decisions. Baillie Gifford & Co believes that a company cannot be financially sustainable in the long run if its approach to business is fundamentally out of line with changing societal expectations. It defines 'sustainability' as a deliberately broad concept which encapsulates a company's purpose, values, business model, culture, and operating practices. Baillie Gifford & Co's approach to investment is based on identifying and holding high quality growth businesses that enjoy sustainable competitive advantages in their marketplace. To do this it looks beyond current financial performance, undertaking proprietary research to build up an in-depth knowledge of an individual company and a view on its long-term prospects. This includes the consideration of sustainability factors (environmental, social and/or governance matters) which it believes will positively or negatively influence the financial returns of an investment. The likely impact on the return of the portfolio from a potential or actual material decline in the value of investment due to the occurrence of an environmental, social or governance event or condition will vary and will depend on several factors including but not limited to the type, extent, complexity and duration of an event or condition, prevailing market conditions and existence of any mitigating factors. Whilst consideration is given to sustainability matters, there are no restrictions on the investment universe of the Company, unless otherwise stated within its Investment Objective & Policy. Baillie Gifford & Co can invest in any companies it believes could create beneficial long-term returns for investors. However, this might result in investments being made in companies that ultimately cause a negative outcome for the environment or society. The underlying investments do not take into account the EU criteria for environmentally sustainable economic activities established under the EU Taxonomy Regulation. More detail on the Investment Managers' approach to sustainability can be found in the ESG Principles and Guidelines document, available publicly on the Baillie Gifford website bailliegifford.com and by scanning the QR code below. ![img-48.jpeg](img-48.jpeg) 113 --- Shareholder information ![img-49.jpeg](img-49.jpeg) Elevated road tunnel, Spain. © Artur Debat/Getty Images. 114 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. # Communicating with shareholders ![img-50.jpeg](img-50.jpeg) Trust magazine ![img-51.jpeg](img-51.jpeg) A SAINTS web page at saints-it.com ## Promoting SAINTS Baillie Gifford carries out extensive marketing activity to promote SAINTS to institutional, intermediary and direct investors. ## Trust magazine **Trust** is the Baillie Gifford investment trust magazine which is published twice a year. It provides an insight to our investment approach by including interviews with our fund managers, as well as containing investment trust news, investment features and articles about the trusts managed by Baillie Gifford, including SAINTS. **Trust** plays an important role in helping to explain our products so that readers can really understand them. For a copy of **Trust**, please contact the Baillie Gifford Client Relations Team (see contact details on page 116). You can subscribe to Trust magazine or view a digital copy at bailliegifford.com/trust. ## SAINTS on the Web Up-to-date information about SAINTS, including a monthly commentary, recent portfolio information and performance figures can be found on SAINTS' page of the Managers' website at saints-it.com. You can also find a brief history of SAINTS, an explanation of the effects of gearing and a flexible performance reporting tool. If you are interested in investing directly in SAINTS, you can do so online. There are a number of companies offering real time online dealing services – find out more on the Platforms section of the Managers' website: bailliegifford.com. ## Suggestions and questions Any suggestions on how communications with shareholders can be improved are welcomed, so please contact the Baillie Gifford Client Relations Team and give them your suggestions. They will also be very happy to answer questions that you may have about SAINTS. 115 --- Shareholder information ### Client relations team contact details You can contact the Baillie Gifford Client Relations Team by telephone, email or post: Telephone: 0800 917 2113 Your call may be recorded for training or monitoring purposes. Email: enquiries@bailliegifford.com Website: bailliegifford.com Address: Baillie Gifford Client Relations Team Calton Square 1 Greenside Row Edinburgh EH1 3AN **Please note that Baillie Gifford is not permitted to give financial advice. If you would like advice, please ask an authorised intermediary.** ### SAINTS specific queries Please use the following contact details: Email: saints@bailliegifford.com Website: saints-it.com 116 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. # Insights ![img-52.jpeg](img-52.jpeg) ## SAINTS spotlight: compounders weathering change In a changing world, resilient compounders drive SAINTS' long-term growth despite the market shifts and uncertainty. ![img-53.jpeg](img-53.jpeg) ## Profile of a returning industry veteran After nearly 20 years leading global equity teams, Alistair Way returns to Baillie Gifford. ![img-54.jpeg](img-54.jpeg) ## SAINTS: fallen to earth? Scottish American Investment Company manager James Dow discusses the trust's quality holdings and long-term growth drivers. ![img-55.jpeg](img-55.jpeg) ![img-56.jpeg](img-56.jpeg) ![img-57.jpeg](img-57.jpeg) 117 --- Shareholder information # Glossary of terms and alternative performance measures ('APM') An alternative performance measure 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. ## 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). ## Net Asset Value ('NAV') Also described as shareholders' funds, net asset value is the value of total assets less liabilities (including borrowings). Net asset value can be calculated on the basis of borrowings stated at book value and fair value. An explanation of each basis is provided below. The net asset value per share is calculated by dividing this amount by the number of ordinary shares in issue excluding any shares held in treasury. ## Net Asset Value (borrowings at book value) Borrowings are valued at adjusted net issue proceeds. Book value approximates amortised cost. ## Net Asset Value (borrowings at fair value) (APM) Borrowings are valued at an estimate of their market worth. This indicates the cost to the Company of repaying its borrowings under current market conditions. It is a widely reported measure across the investment trust industry. | | 31 December 2025 | 31 December 2024 | | --- | --- | --- | | Shareholders' funds (borrowings at book value) | £878,626,000 | £952,693,000 | | Add: book value of borrowings | £94,756,000 | £94,742,000 | | Less: fair value of borrowings | (£63,164,000) | (£62,053,000) | | **Shareholders' funds (borrowings at fair value)** | **£910,218,000** | **£985,382,000** | | Shares in issue at year end | 163,886,374 | 176,650,758 | | **Net asset value per ordinary share (borrowings at fair value)** | **555.4p** | **557.8p** | ## Net Asset Value (borrowings at par value) (APM) Borrowings are valued at nominal par value. A reconciliation from shareholders' funds (borrowings at book value) to net asset value after deducting borrowings at par value is provided below. | | 31 December 2025 | 31 December 2024 | | --- | --- | --- | | Shareholders' funds (borrowings at book value) | £878,626,000 | £952,693,000 | | Add: book value of borrowings | £94,756,000 | £94,742,000 | | Less: par value of borrowings | (£95,000,000) | (£95,000,000) | | **Shareholders' funds (borrowings at par value)** | **£878,382,000** | **£952,435,000** | | Shares in issue at the year end | 163,886,374 | 176,650,758 | | **Net asset value per ordinary share (borrowings at par value)** | **536.0p** | **539.2p** | 118 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. ## Premium/(discount) (APM) As stockmarkets and share prices vary, an investment trust's share price is rarely the same as its NAV. When the share price is lower than the NAV 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. | | 2025 NAV (book) | 2025 NAV (fair) | 2024 NAV (book) | 2024 NAV (fair) | | --- | --- | --- | --- | --- | | Closing NAV per share | 536.1p | 555.4p | 539.3p | 557.8p | | Closing share price | 516.0p | 516.0p | 498.5p | 498.5p | | **Premium/(discount)** | **(3.8%)** | **(7.1%)** | **(7.6%)** | **(10.6%)** | ## Ongoing charges (APM) The total expenses (excluding borrowing costs) incurred by the Company as a percentage of the average net asset value (with borrowings at fair value). The ongoing charges have been calculated on the basis prescribed by the Association of Investment Companies. A reconciliation from the expenses detailed in the Income statement on page 84 is provided below. | | 31 December 2025 | 31 December 2024 | | --- | --- | --- | | Investment management fee | £4,140,000 | £4,362,000 | | Other administrative expenses | £1,424,000 | £1,349,000 | | **Total expenses** | **(a) £5,564,000** | **£5,711,000** | | Average daily cum-income net asset value (with borrowings at fair value) | (b) 924,735,000 | £991,710,000 | | **Ongoing charges** | **(a) + (b) (expressed as a percentage)** | **0.60%** | | | | **0.58%** | ## Total return (APM) The total return is the return to shareholders after reinvesting the net dividend on the date that the share price goes ex-dividend. | | 2025 NAV (book) | 2025 NAV (fair) | 2025 Share price | 2024 NAV (book) | 2024 NAV (fair) | 2024 Share price | | --- | --- | --- | --- | --- | --- | --- | | Opening NAV per share/share price | (a) 539.3p | 557.8p | 498.5p | 524.5p | 539.4p | 535.0p | | Closing NAV per share/share price | (b) 536.1p | 555.4p | 516.0p | 539.3p | 557.8p | 498.5p | | Dividend adjustment factor* | (c) 1.029208 | 1.028147 | 1.031343 | 1.026922 | 1.026106 | 1.028650 | | **Adjusted closing NAV per share/share price** | **(d) = (b) x (c) 551.8p** | **571.0p** | **532.2p** | **553.8p** | **572.4p** | **512.8p** | | **Total return** | **(d) + (a) -1 2.3%** | **2.4%** | **6.8%** | **5.6%** | **6.1%** | **(4.2%)** | * The dividend adjustment factor is calculated on the assumption that the dividends paid out by the Company are reinvested into the shares of the Company at the cum income NAV/share price at the ex-dividend date. ## Active share (APM) Active share, a measure of how actively a portfolio is managed, is the percentage of the listed equity 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. 119 --- 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. Gross gearing is the Company's borrowings expressed as a percentage of shareholders' funds. | | 31 December 2025 | 31 December 2024 | | --- | --- | --- | | Borrowings at book value | £94,756,000 | £94,742,000 | | Shareholders' funds | £878,626,000 | £952,693,000 | | **Gross gearing** | **11%** | **10%** | Equity gearing is the Company's borrowings adjusted for cash, bonds and property expressed as a percentage of shareholders' funds. | | 31 December 2025 | 31 December 2024 | | --- | --- | --- | | Borrowings at book value | £94,756,000 | £94,742,000 | | Less: cash and cash equivalents | (£3,521,000) | (£2,818,000) | | Less: bond investments | (£16,169,000) | (£11,058,000) | | Less: direct property investments | (£90,350,000) | (£95,450,000) | | Adjusted borrowings | (£15,284,000) | (£14,584,000) | | Shareholders' funds | £878,626,000 | £952,693,000 | | **Equity gearing** | **(2%)** | **(2%)** | ## Leverage (APM) For the purposes of the Alternative Investment Fund Managers (AIFM) Regulations, leverage is any method which increases the Company's exposure, including the borrowing of cash and the use of derivatives. It is expressed as a ratio between the Company's exposure and its net asset value and can be calculated on a gross and a commitment method. Under the gross method, exposure represents the sum of the Company's positions after the deduction of sterling cash balances, without taking into account any hedging and netting arrangements. Under the commitment method, exposure is calculated without the deduction of sterling cash balances and after certain hedging and netting positions are offset against each other. ## Collar and cap A clause in a lease agreement which sets out the minimum (collar) and maximum (cap) limits by which rent can be increased during rent review negotiations. ## Unexpired lease term The length of time remaining on a rental lease agreement. Rental lease agreements may contain a break clause allowing one or both parties to agree to end the lease agreement at an earlier date. ## Energy performance certificate (EPC) An energy performance certificate rates a property's energy efficiency from A (most efficient) to G (least efficient). This certificate indicates potential energy costs, environmental impacts and is vital in promoting energy efficiency. 120 Annual Report and Financial Statements 2025 --- The Scottish American Investment Company P.L.C. # Company information Directors Chairman: Lord Macpherson of Earl's Court, GCB Karyn Lamont, CA Dame Mariot Leslie Angus Macpherson Christine Montgomery Padmesh Shukla Alternative Investment Fund Managers and Company Secretaries Baillie Gifford & Co Limited Calton Square 1 Greenside Row Edinburgh EH1 3AN T: +44 (0)131 275 2000 bailliegifford.com Company Broker Winterflood Investment Trusts The Atrium Building Cannon Bridge 25 Dowgate Hill London EC4R 2GA Registrar Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS99 6ZZ T: +44 (0)370 707 1282 Company details saints-it.com Company Registration No. SC000489 ISIN: GB0007873697 Sedol: 0787369 Ticker: SAIN Legal Entity Identifier: 549300NF03XVC5IFB447 Depository The Bank of New York Mellon (International) Limited 160 Queen Victoria Street London EC4V 4LA Independent Auditor Ernst & Young LLP Chartered Accountants and Statutory Auditors Atria One 144 Morrison Street Edinburgh EH3 8EX Further information Client Relations Team Baillie Gifford & Co Calton Square 1 Greenside Row Edinburgh EH1 3AN T: +44 (0)800 917 2113 enquiries@bailliegifford.com Registered Office Calton Square 1 Greenside Row Edinburgh EH1 3AN 121 --- saints-it.com ![img-58.jpeg](img-58.jpeg) Calton Square, 1 Greenside Row, Edinburgh EH1 3AN Telephone +44 (0)131 275 2000