Scottish Mortgage Investment Trust : Annual Report and Financial Statements 31 March 2023

Annual report and financial statements

31 March 2023

Scottish Mortgage aims to identify, own and support the world's most exceptional growth companies. We aim to provide long-term funding and support for the companies and entrepreneurs building the future of our economy.

Contents

1. Financial headlines
2. Introduction

Strategic report

1. Statement from the Chair

1. Managers' review

1. Stewardship and governance engagement

1. One year summary
2. Five year summary
3. Ten year record

1. Portfolio executive summary

1. Distribution of total assets
2. Thirty largest holdings and twelve month performance
3. Private companies summary

1. Long term investment
2. List of investments

1. Business review

Financial report

1. Independent auditors' report

1. Income statement
2. Balance sheet
3. Statement of changes in equity
4. Cash flow statement
5. Notes to the financial statements

Shareholder information

96 Annual general meeting

1. Further shareholder information
2. Analysis of shareholders
3. Investing in Scottish Mortgage
4. Communicating with shareholders

106 Glossary of terms and alternative performance measures

Governance report

1. Directors and management
2. Directors' report

1. Corporate governance report

1. Audit Committee report

1. Directors' remuneration report

61 Statement of Directors' responsibilities in respect of the annual report and financial statements

Investor disclosure document

The UK Alternative Investment Fund Managers Regulations requires certain information to be made available to investors prior to their investment in the Company. The Company's Investor Disclosure Document is available for viewing at scottishmortgage.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 UK Listing Authority. They are not authorised or regulated by the Financial Conduct Authority.

Scottish Mortgage Investment Trust PLC currently conducts its affairs, and intends to continue to conduct its affairs, so that the Company's ordinary shares can qualify to be considered as a mainstream investment product and can be recommended by Independent Financial Advisers to ordinary retail investors in accordance with the rules of the Financial Conduct Authority in relation to non-mainstream investment products.

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

If you are in any doubt as to the action you should take you should consult your stockbroker, bank manager, solicitor, accountant or other independent financial advisor authorised under the Financial Services and Markets Act 2000 immediately if you are in the United Kingdom or, if not, another appropriately authorised financial adviser.

If you have sold or otherwise transferred all of your holding in Scottish Mortgage Investment Trust PLC, please forward this document, together with accompanying documents, but not your personalised Form of Proxy, as soon as possible to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was or is being effected for delivery to the purchaser or transferee.

SCOTTISH MORTGAGE INVESTMENT TRUST PLC	01

Financial headlines

Year to 31 March 2023

Share Price* (33.5%)	NAV* (19.7%)	NAV* (17.8%)	Benchmark*† (0.9%)
	(borrowings at book value)	(borrowings at fair value#)

• Source: Refinitiv/Baillie Gifford. All figures are stated on a total return basis. Total return is an Alternative Performance Measure - see Glossary of Terms and Alternative Performance Measures on pages 106 to 108. Comparatives for 2022 can be found on page 20.

Share price, NAV and benchmark

(figures rebased to 100 at 31 March 2022)

Share price total return#

NAV total return (after deducting borrowings at fair value)#

Benchmark† total return#

Premium/(Discount)#

Premium/(Discount) (after deducting borrowings at fair value#) plotted as at month end dates

110

100

90

80

70

60

M

A

M

J

J

A

S

O

N

D

J

F

M

2022

2023

5%

0%

(5%)

(10%)

(15%)

(20%)

M

A

M

J

J

A

S

O

N

D

J

F

M

2022

2023

Source: xxxxxxxx.

Longer term performance

	1 year	3 years	5 years	10 years
Share price	(33.5%)	19.7%	57.1%	347.0%
NAV	(17.8%)	50.8%	96.3%	431.5%
Benchmark†	(0.9%)	56.0%	62.0%	180.8%

All figures are stated on a total return basis# for period to 31 March 2023.

Source: Refinitiv/Baillie Gifford. See disclaimer on page 104.

• Benchmark: FTSE All-World Index (in sterling terms).

#Alternative Performance Measure - see Glossary of Terms and Alternative Performance Measures on pages 106 to 108.

Past performance is not a guide to future performance. See disclaimer on page 104.

02

ANNUAL REPORT AND FINANCIAL STATEMENTS 2023

SHAREHOLDER INFORMATION

An introduction to Scottish Mortgage

Our purpose

Scottish Mortgage aims to identify, own and support the world's most exceptional growth companies.

We aim to provide long-term funding and support for the companies and entrepreneurs building the future of our economy.

Our unconstrained approach enables us to have the broadest opportunity set spanning both public and private companies across the globe.

We see it as our duty to maximise total returns and limit fees so that shareholders keep more of the returns.

Our philosophy

What we do

Finding outliers

• The core of what we do is try to identify those big drivers of change and exploit those opportunities.
• Identifying robust companies with visionary leadership
  - can we find a company that can scale, run by people we trust?
• Only a small number of companies matter, what we aim to do is find the few that generate those extreme returns.

How we do it

Long-term patient capital

• We believe that the long-time horizon with which we approach investing is the source of much of our distinctiveness and edge versus the market.
• We are resolutely long term through the good times and the bad.
• Progress is rarely a straight line; we are comfortable with the notion that extreme returns and smooth performance are mutually exclusive.

Who helps us

External insights - academics, scientists and founders

• We want to build relationships with people far more clever and interesting than ourselves.
• We can learn so much more about the future by engaging with those whose timeframes and perspectives are aligned with ours.
• By engaging with the 'philosophers of change' i.e. academics and scientists, we get diversity of thought which is largely lacking in financial markets.

When we do it

Public and private companies

• We seek to break down the artificial divide that exists between public and private companies by partnering with great growth companies on all stages
  of their journey.
• As an investment company, our evergreen structure means we are not time limited and thus have the flexibility to hold companies for as long as we see there is an opportunity for them to make outsized returns.
• Private companies offer a lens into the future - this gives us differentiated insights into how we manage shareholders' capital. Our reputation as a long-term, patient and committed investor gives us access to an inner sanctum of knowledge as to which companies are emerging that have the potential to shape our future.

Why we do it

Being partners not investors will have a genuine impact

• While on paper we may be called investors, our mindset is not that. We see ourselves as partners for the long term to our companies.
• We believe that the most promising ideas will always begin small, with an individual or group of individuals, a massive opportunity, and an audacious idea. We look to align ourselves with companies whose trajectory looks promising and where our support, influence, and shareholders' capital, can accelerate their progress.

Our mission is to identify forward-thinking companies, often still led by their visionary founders. Companies that are set to change the world. Why? Because we believe these outliers create the most exceptional growth

• Innovation has the potential to change the world and have genuine impact. We, as providers of capital, can accelerate that change.

SCOTTISH MORTGAGE INVESTMENT TRUST PLC	03
SHAREHOLDER INFORMATION

Invest in progress

As a shareholder you will be a part of...

Providing capital

to the most

INNOVATIVE

growth companies

in the world.

Supporting those

visionary entrepreneurs

who are IMAGINING

what the future might look like.

Engaging with

INTRIGUING minds in

academic, scientific and entrepreneurial communities.

Participating in true, long-term IMPACT through engaging with companies who are transforming industries which will benefit societies and our environment.

Our structure

Scottish Mortgage is an investment trust but how does this structure benefit our shareholders?

Company status

Just like other public companies, Scottish Mortgage can and does borrow money to make additional investments. This financial gearing can amplify investment returns.

Our shareholders have rights, and we seek their approval, via votes, if we want to make significant changes.

A board of directors looks after the interests of our shareholders. They meet several times a year and are responsible for various things, such as overseeing performance.

Scottish Mortgage has paid a modest but growing dividend for several decades. Our structure means we can utilise reserves and smooth income payments over time.

Permanent capital

The closed-ended structure provides a pool of permanent capital. Unlike open-ended funds, the portfolio remains intact and is not impacted by shareholder demand.

We have the freedom to invest for the long term and hold assets that can be harder to buy and sell - such as private companies.

Our extended time horizons are matched by our companies. This alignment underpins the prospect of enduring relationships.

Accessibility

Listed on the London Stock Exchange, Scottish Mortgage provides intra-day liquid access, and our shares are openly tradeable for investors from around the world.

There are no performance fees or minimum investment restrictions.

Shareholders could benefit from simplified tax reporting when compared with other structureS that hold private companies.

Democratising access to private companies

We offer shareholders liquid access to private companies

• a distinct offering in today's market.

We own companies uninterrupted on their journey from private to public

• shareholders benefit from long-term compounded returns.

Access to private companies is dependent upon relationships and reputation

• our shareholders benefit from the access we enjoy but without paying fees normally associated with private equity funds.

Underpinning everything is a genuine commitment to low costs. We believe our duty to shareholders is to limit fees. Put simply, lower charges directly translate into shareholders keeping more of the returns generated from their investment.

Our scale and commitment to low costs enables us to offer genuine value for money.

Although there are benefits to the investment trust structure, there are also risks involved. To make sure you are comfortable with these risks, please see page 102 for more information.