RNS Announcement

The Schiehallion Fund Limited

Regulated Information Classification: Annual Financial and Audit Reports

Legal Entity Identifier: 213800NQOLJA1JCWXQ56

Results for the year to 31 January 2023

‡      Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

27 March 2023

For further information please contact:

Alex Blake, Baillie Gifford & Co

Tel: 0131 275 2000

Jonathan Atkins, Four Communications

Tel: 0203 920 0555 or 07872 495396

The following is the Preliminary Results Announcement for the year to 31 January 2023 which was approved by the Board on 27 March 2023.

Chairperson's Statement

The Schiehallion Fund Limited (the 'Company' or 'Schiehallion') seeks to generate capital growth for investors through long-term minority investments in later stage private businesses that the Company considers to have transformational growth potential and to have the potential to become publicly traded.

The last year has been a period of great public market share price volatility. Public market prices are incorporated into the Company's private company valuation process and have, therefore, impacted the Company's carrying values of its investments. The Company's valuation policy is set out on page 14 of the Annual Report and Financial Statements.

The Board meets quarterly with the Company's portfolio managers and holds meetings to review the Company's investment valuations twice a year. We also have regular contact with the Investment Manager outside of formal Board meetings. Last week, I visited one of the Company's larger investments and two potential investments with the portfolio manager. The Investment Manager has a dedicated Private Companies investment team, supported by a specialist operations team that ensures that investments are monitored at all stages. Details of the Investment Manager's resources are set out on page 26.

The Board has complete confidence in the Investment Manager's ability to scrutinise and oversee private company investments. In the view of the Board which includes a director who has 40 years of private equity and venture capital experience, the Investment Manager has the most rigorous process of any investor in this area. The Board is wholly committed to the aim of the company that seeks to generate returns of three times capital over a rolling 10 year period through long-term minority investments in later stage private businesses.

Investment Performance

During the financial year to 31 January 2023, the Company's ordinary share price and net asset value returned negative 56.6% and negative 24.5%, respectively. Over the period from 27 March 2019 (launch date) to 31 January 2023, the Company's ordinary share price and net asset value returned negative 8.0% and positive 19.8%, respectively.

During the financial year to 31 January 2023, the Company's C share price and net asset value returned negative 58.5% and negative 18.4%, respectively. During the period from admission to trading on 26 April 2021 to 31 January 2023, the Company's C share price and net asset value returned negative 60.5% and negative 20.0%, respectively.

Commentary on performance is included in the Investment Manager's review.

Share Price Discount

In each of the Company's previous Annual Reports, I noted the level of premium to net asset value at which the Company's shares have traded and explained that investors should bear in mind that shares bought at a high premium to net asset value can quickly lose substantial value if the premium is eroded. Unfortunately, this proved to be the case over the last 12 months as sentiment turned against growth stocks and private company investments. The ordinary shares derated from a 34.0% premium to net asset value at the start of 2022 to a 23.0% discount to net asset value at the year end. The C shares also derated from a 21.3% premium to net asset value to a 38.3% discount to net asset value over the same period.

Although there is no current intention to exercise the authority to purchase the Company's shares, the Company will be seeking authority to renew the buy-back authority for the ordinary shares at the forthcoming Annual General Meeting (AGM). The Company is also seeking authority at the AGM to purchase the Company's C shares. No shares were bought back during the year ended 31 January 2023.

The Company has a general authority to issue further shares if the Directors determine such issues to be in the best interests of shareholders and the Company as a whole. At 31 January 2023, the Company had authority, which was granted at the initial launch, to issue a further 242.75 million shares. This authority expires at the end of the period concluding immediately prior to the Annual General Meeting to be held in 2024 (or, if earlier five years from 15 March 2019, the date the special resolution was passed).

Deployment of Capital

The C shares will convert into ordinary shares once at least 85 per cent. of the net placing proceeds of the C share issue have been deployed. When the C shares were issued in April 2021, your Board said it would be reasonable to expect that the C share proceeds would be two-thirds invested within two years. As at 31 January 2023, approximately 79% of C share proceeds had been invested in 25 companies. There is commentary on the Company's portfolio in the Investment Manager's Review and Review of Investments on pages 12 to 24 of the Annual Report and Financial Statements.

Cost

The ongoing charges for the ordinary shares as at 31 January 2023 were 0.87%. Last year, the ongoing charges for the ordinary shares were 0.89%.

The ongoing charges for the C shares as at 31 January 2023 were 0.71%. Last year, the ongoing charges, for the period from 26 April 2021 to 31 January 2022, for the C shares were 0.38%. Management fees are not charged on cash and cash equivalents, so the ongoing charges have risen as the C share proceeds have been deployed. As at 31 January 2023, the C share capital has been 79% depoyed, increasing from 60% in the previous year.

Earnings and Dividend

The Company's priority is to generate capital growth over the long term. The Company therefore has no dividend target and will not seek to provide shareholders with a particular level of distribution. This period the net revenue return per ordinary share was a negative 0.98 cents (year to 31 January 2022, negative 1.47 cents) and the net revenue return per C share was negative 0.35 cents (period to 31 January 2022, negative 0.28 cents). The Board is recommending that no final dividend be paid.

Board

Members of the Board come from a broad variety of backgrounds and the Board can draw on a very extensive pool of knowledge and experience. Directors' biographies can be found on page 25 of the Annual Report and Financial Statements.

The Board undertook an external evaluation during the year and has considered its balance of skills, which was deemed to be suitable for the Company. All the Directors are subject to annual re-election at the AGM in May.

Annual General Meeting

The AGM will be held at 12 noon on Friday 12 May 2023 at the offices of Alter Domus in Guernsey. Shareholders are reminded that they are able to submit proxy voting forms before the applicable deadline on Wednesday 10 May 2023 and also to direct any questions for the Board or Manager in advance by email to trustenquiries@bailliegifford.com or by calling 0800 917 2112. (Please note that Baillie Gifford may record your call). Information on the resolutions can be found on pages 67 and 68 of the Annual Report and Financial Statements. The Directors consider that all resolutions to be put to shareholders are in their and the Company's best interests as a whole and recommend that shareholders vote in their favour.

Investment Outlook

The past year has been characterised by geo-political uncertainties, inflationary pressures, higher interest rates, increased cost of borrowing, and a recessionary environment. The macro context worsened the disruption caused by supply chains stemming in part from the covid-19 pandemic. Although inflationary pressures have begun to ease, these factors have collectively contributed to a challenging economic and market environment.

Despite the considerable uncertainties, the Board and the Investment Manager are optimistic about the outlook for the Company with its focus on the long-term and investing in companies with transformational potential. The Company solely invests in companies with exceptional growth potential which are not widely accessible in public markets. The potential of the companies in our portfolio is generally dependent on their ability to take advantage of opportunities. Therefore, the Board is positive about the growth prospects of these companies, and the pipeline of private companies that the Investment Manager has access to. The Board and the Investment Manager are confident in the investment outlook for the Company.

Dr Linda Yueh CBE

Chairperson

27 March 2023

Past performance is not a guide to future performance. For a definition of terms used see Glossary of Terms and Alternative Performance Measures at the end of this announcement.

Investment Managers' Review

The role of the annual Investment Managers' review is to look both backwards and forwards. Looking backwards, we are disappointed with what we delivered for shareholders over the last 12 months. However, looking forward to 2023 and beyond, we feel a sense of profound optimism for the portfolio and new opportunities.

Performance

Our aspiration is to generate a net return for the Company of approximately three times invested capital over rolling 10 year periods, measured on the basis of NAV total return on the portfolio. During the year to 31 January 2023, the NAV total return of the ordinary shares and the C shares was negative 24.5% and negative 18.4% respectively. The path to long-term capital growth is never straight, and periods of volatility and underperformance are inevitable. However, even in this context, 2022 was a year in which we stepped backwards rather than forwards. We are conscious that this has been particularly felt by newer investors, who did not experience the strong performance of the ordinary shares in the previous two financial years.

Across The Schiehallion Fund, poor NAV performance was driven by significant declines in the value of our holdings that had entered the public markets, markdowns in the carrying values of our private company investments due to reductions in the valuations of comparable public companies and indices, and poor operational performance from some portfolio companies. Pain for both ordinary and C shareholders was exacerbated by share price swings from significant premiums to NAV to discounts to NAV.

Portfolio

Whilst we can feel gloomy looking at investment returns over the last 12 months, we only need to look at the companies in The Schiehallion Fund to start feeling more optimistic. We believe shareholder's capital is invested in some of the best private companies in the world, capable of delivering outsized investment returns over the long run. This is not without risk, or even in some cases, controversy. As we exited 2022, the five largest holdings were SpaceX, Scopely, ByteDance, Solugen, and Wise. It would be hard to imagine a more diverse set of businesses than those making money selling access to space, virtual in-game goods, advertising, speciality chemicals, and foreign exchange. In each of these companies, there are strong founders, robust competitive advantages, and huge addressable markets. The average growth rate of these companies was approximately 50% and three of the five are profitable.

It is not just at the top end of the portfolio where the quality of companies and the scale of potential upside gives us real optimism. Looking at the whole portfolio, the average revenue growth rate was just over 50% in the last 12 months. Holdings such as Databricks are helping organisations use advances in AI to improve their use of data to inform product development and decision-making. Away, a direct-to-consumer luggage business, has seen a significant upswing in its business after a tough time during Covid-19. McMakler, a digital German real estate broker,

is weathering a tough operating environment but (we believe) taking significant share from its competitors. We hope the extra detail around portfolio companies included in the review of investments on pages 17 to 24 in the Annual Report and Financial Statements will help convey this excitement and optimism to shareholders.

Of course, some companies met challenges in 2022. Consumer-facing companies that saw leaps forward in demand in 2020-2022 saw growth rates come back as consumer spending retrenched, and they started to lag those big increases. We saw this in companies such as Affirm, Warby Parker, Masterclass and Pet Circle. Epic Games faced another kind of challenge in a large fine by the FTC for historical issues around online child protection and payment practices. These issues have long since been rectified, but it was nevertheless short of the standards we expect of our companies.

Investing in late-stage private companies

We typically invest in late-stage private companies that are scaling up and becoming profitable.  At the stage we invest, founders are no longer looking for the operational support traditional venture capital firms offer. Instead, we provide long-term patient capital to fund further expansion, often holding businesses after they have listed on public markets, to capture their full growth potential.

One of the benefits of investing in late-stage private companies is that these companies tend to have well-established financing teams and diversified banking relationships. This benefit was evident during the recent uncertainty in the banking sector. We engaged with all the private companies in our portfolios to help better understand their banking relationships and any potential impacts. The vast majority of investee companies had no material exposure to Silicon Valley Bank. In addition, we were reassured by the Federal Reserve's announcements that deposits would be accessible and that affected companies were able to access their deposits and continue with business as usual.

Deployment

2022 was also a frustrating year for deployment. Our universe has no shortage of attractive companies, but we made fewer investments in the last 12 months than in any year since inception. Three factors drove this. Firstly, many good companies chose not to raise due to adverse market conditions. Secondly, there was often a mismatch between companies' valuation expectations and what we believed reflected market conditions. This led to us walking away from opportunities after deep diligence based on price. Finally, in one notable instance where we found a good business at a compelling price, misalignments uncovered in our legal due diligence process caused us to walk away from the investment.

The net result was that deployment from the C-Share pool was slower than anticipated.

During the year, we invested in two new companies, Kepler Computing and Merlin Labs; further information on each is included in the review of investments. We also added to existing investments in Loft, Northvolt, Affirm, Brex, Databricks, Faire Wholesale, Solugen, Tempus and Ver Se. As at 31 January 2023, approximately 79% of C share proceeds had been deployed.

Looking Forward

From a deployment perspective, 2023 has got off to a good start. We are currently in deep diligence on companies in the US, China, Italy, and Israel. In all these instances, price realism exists, sometimes at valuations below previous rounds. We believe normalising down rounds is essential for high-growth private markets. Far from viewing it as a marker of failure, we applaud those founders and boards willing to adjust their expectations to market norms. We have more respect for those companies that raise rounds at lower valuations than those that use artificial means to maintain valuations set in an environment that no longer exists.

Most of the capital we have deployed from Schiehallion has been primary investment into companies. Companies create and issue new shares, with the capital we use to buy them going directly onto the companies' balance sheets. This is our preferred means of investment as it gives companies extra resources to fund their growth. Put another way, the investment itself favourably twists the odds and magnitude of success. This contrasts with secondary investment, where shares are bought from existing investors, with none of the capital going to the company's benefit in the same direct manner. Our preference has always been, and will continue to be, for primary over secondary investment, but in the current environment, we are seeing some compelling secondary opportunities that are too good to ignore. Early investors at the end of their fund life are coming under pressure to realise gains and return capital to their clients. This is giving rise to a spike in the supply of shares in private companies, with a corresponding decline in the price at which we can buy these shares. We have been more actively exploring this market in conjunction with our dealing team. Though we have not yet transacted in this manner, we see it as an extra string to our bow that, over time, has the potential to broaden the opportunity set for The Schiehallion Fund.

We want to finish by thanking shareholders for their support in 2022. As we look into 2023, we see strong reasons for optimism for both our existing holdings and new opportunities. Our proposition around long-termism and alignment with companies is more relevant today than it ever had been and we maintain our conviction that this will lead to attractive returns for shareholders.

Peter Singlehurst

27 March 2023

Past performance is not a guide to future performance.

For a definition of terms used see Glossary of Terms and Alternative Performance Measures at the end of this announcement.

Valuing Private Companies

We hold our private company investments at 'fair value' i.e., the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Valuations are adjusted both during regular valuation cycles and on an ad hoc basis in response to 'trigger events'. Our valuation process ensures that private companies are valued in both a fair and timely manner.

The valuation process is overseen by a valuations committee at Baillie Gifford which takes advice from an independent third party (S&P Global). The valuations committee is independent from the portfolio managers, as well as Baillie Gifford's Private Companies Specialist team, with all voting members being from different operational areas of the firm, and the portfolio managers only receive final valuation notifications once they have been applied.

We revalue private company investments on a three-month rolling cycle, with one-third of the holdings reassessed each month. For Schiehallion, and our investment trusts, the prices are also reviewed twice per year by the respective boards and are subject to the scrutiny of external auditors in the annual audit process. Recent market volatility has meant that recent pricing has moved much more frequently than would have been the case with the quarterly valuations cycle.

Beyond the regular cycle, the valuations committee also monitors each of the private company investments for certain 'trigger events'. These may include changes in fundamentals; a takeover approach; an intention to carry out an Initial Public Offering ('IPO'); or changes to the valuation of comparable public companies.

The valuations committee also monitors relevant market indices on a weekly basis and updates valuations in a manner consistent with our external valuer's (S&P Global) most recent valuation report where appropriate. When market volatility is particularly pronounced the team do these checks daily. Any ad hoc change to the fair valuation of any holding is implemented swiftly and reflected in the next published NAV. There is no delay.

* Data reflecting year to 31 January 2023

During the year, most valuations have resulted in decreases.

† Alternative performance measure, see Glossary of Terms and Alternative Performance Measures at the end of this announcement.

Share prices have decreased less than headline valuations because Schiehallion typically holds preference stock, which provides downside protection. The share price movement reflects a probability weighted average of both the regular valuation, which would be realised in an IPO, and the downside protected valuation, which would normally be triggered in the event of a corporate sale or liquidation.

Approach to Environmental, Social and Governance Considerations (ESG)

The environmental, social and governance considerations at play when Baillie Gifford's Private Companies Team researches late-stage private companies.

ESG In Our Philosophy

Over our long-term horizon, we believe there is a convergence between what is good for a business and what is good for the world at large. The conventional wisdom that there is tension between profitability and doing the right thing is based on short-term thinking. Over our investment horizon, we believe profitability depends not only on a company's ability to serve customers well but also on its ability to do this without jeopardising its social licence to operate.

As such, we don't break out consideration of a company's role

in the broader system from our core investment work, under ESG or any other rubric. These considerations are core to long-term investing. It is the long-term nature of the growth ambition within our investment philosophy that causes us to pay special attention to the positive and/or negative externalities produced by a company's operations. Over five-year-plus periods, these can have profound impacts on a company's relationship with customers, regulators and staff. They can hugely help or hinder the growth of a business.

This is not about being a moral conscience for our clients. Rather, it is a vital part of practising the philosophy that we believe will grow the value of their capital over the long term.

ESG In Our Process

The Private Companies Team structures our research into potential investments by using a proprietary '10 Questions' research framework. These questions aim to address issues such as the scale of the opportunity, the competitive edge and potential returns, whilst others focus specifically on ESG related topics.

Question Four ('How does the company's culture help it achieve the leadership's long-term business vision?') asks about the stakeholders within a firm, the culture within the workplace, and whether it cultivates a healthy organisational mindset capable of delivering the mission. We have declined companies in the past based on negative behaviours toward staff as part of this question. Meanwhile, Question Five asks about external stakeholders ('Do the company's customers like them?'). This question is geared towards ecosystem impact in terms of opportunities and potential strengths, not just uncovering risks. Question Six explores the E and S of ESG in greater depth ('How do environmental and social factors create opportunities and risks?').

Ultimately, this approach enables us to explore the inevitable grey areas. Companies, like economies, are complex ecosystems.

Judging such a system as 'good' or 'bad' based on a single metric or factor strikes us as profoundly unwise. Factors must be weighed together. Consideration must be subjective and nuanced. The key data points are inherently qualitative. We would be doing our clients and our companies a disservice if we portrayed it as anything else.

Our Stewardship Principles for Public Companies

Prioritisation of long-term value creation

We encourage company management and their boards to be ambitious and focus their investments on long-term value creation. We understand that it is easy for businesses to be influenced by short-sighted demands for profit maximisation but believe these often lead to sub-optimal long-term outcomes. We regard it as our responsibility to steer businesses away from destructive financial engineering towards activities that create genuine economic value over the long run. We are happy that our value will often be in supporting management when others do not.

A constructive and purposeful board

We believe that boards play a key role in supporting corporate success and representing the interests of minority shareholders. There is no fixed formula, but it is our expectation that boards have the resources, cognitive diversity and information they need to fulfil these responsibilities. We believe that a board works best when there is strong independent representation able to assist, advise and constructively test the thinking of management.

Long-term focused remuneration with stretching targets

We look for remuneration policies that are simple, transparent and reward superior strategic and operational endeavour. We believe incentive schemes can be important in driving behaviour, and we encourage policies which create alignment with genuine long-term shareholders. We are accepting of significant pay-outs to executives if these are commensurate with outstanding long-run value creation, but plans should not reward mediocre outcomes. We think that performance hurdles should be skewed towards long-term results and that remuneration plans should be subject to shareholder approval.

Fair treatment of stakeholders

We believe it is in the long-term interests of companies to maintain strong relationships with all stakeholders, treating employees, customers, suppliers, governments and regulators in a fair and transparent manner. We do not believe in one-size-fits-all governance and we recognise that different shareholder structures are appropriate for different businesses. However, regardless of structure, companies must always respect the rights of all equity owners.

Sustainable business practices

We look for companies to act as responsible corporate citizens, working within the spirit and not just the letter of the laws and regulations that govern them. We believe that corporate success will only be sustained if a business's long-run impact on society and the environment is taken into account. Management and boards should therefore understand and regularly review this aspect of their activities, disclosing such information publicly alongside plans for ongoing improvement.

*      For a definition of terms used, see Glossary of Terms and Alternative Performance Measures at the end of this announcement.

  List of Investments at 31 January 2023

†      During the year Zymergen was taken over by Ginkgo Bioworks.

Allocation of Net Assets

As at 31 January 2023

*      Alternative performance measure, see Glossary of Terms and Alternative Performance Measures at the end of this announcement.

Distribution of Net Assets

Ordinary Shares

Geographical                                                                                                Sectoral

C Shares

Geographical                                                                                                Sectoral

                                         The above sectoral distribution is not derived from any index.

Statement of Comprehensive Income

The total column of this Statement represents the Statement of Comprehensive Income 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.

Statement of Financial Position

As at 31 January

Statement of Changes in Equity

For the year ended 31 January 2023

For the year ended 31 January 2022

The capital reserve includes investment holding gains of US$• (2022 - US$255,767,0000).

Statement of Cash Flows

*      Cash from operations includes interest received of US$700.000 (2022 - US$1,000).

Notes to the Financial Statements

1.   Principal Accounting Policies

The Financial Statements for the year to 31 January 2023 have been prepared in accordance with International Financial Reporting Standards ('IFRS').

2.   Income

3.   Investment Management Fee

Details of the Investment Management Agreement are set out on page 27 of the Annual Report and Financial Statements. Under the terms of the Investment Management Agreement and with effect from the date the Company's ordinary shares were admitted to trading on the Specialist Fund Segment of the Main Market of the London Stock Exchange, the Investment Manager is entitled to an annual fee (exclusive of VAT, which shall be added where applicable) of: 0.9% on the net asset value excluding cash or cash equivalent assets up to and including US$650 million; 0.8% on the net asset value excluding cash or cash equivalent assets exceeding US$650 million up to and including US$1.3 billion; and 0.7% on the net asset value excluding cash or cash equivalent assets exceeding US$1.3 billion. Management fees are calculated and payable quarterly.

Cash equivalents include US Treasury Bills.

4.   Other Administrative Expenses

In the year to 31 January 2023 there were no fees paid to the Auditor, KPMG Channel Islands Limited, in respect of non-audit services. In the year to 31 January 2022 non-audit fees paid to the Auditor amounted to US$83,000 in respect of procedural services related to the issuance of the Company's C shares. As these costs related to the issuance of the C shares, they are capital in nature and included within the costs of issuing shares

5.   Earnings per Share

6.   Ordinary Dividends

There were no dividends paid or proposed in respect of the year to 31 January 2023 (2022 - US$nil).

7.   Financial Instruments

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); and

Level 3 - using inputs that are unobservable (for which market data is unavailable).

The valuation techniques used by the Company are explained in the accounting policies on page 50 of the Annual Report and Financial Statements. Transfers between levels of the fair value hierarchy take place when the criteria for recognition in another level are met, such as the listing of an investment.

*      The investments in preference shares are not classified as equity holdings as they include liquidation preference rights that determine the repayment (or multiple thereof) of the original investment in the event of a liquidation event such as a take-over.

During the year ended 31 January 2023, investments with a fair value (IPO price) of US$nil (2022 - US$197,699,000) were transferred from Level 3 to Level 1 on becoming listed.

Investments in securities are financial assets held at fair value through profit or loss. In accordance with IFRS 13, the table above provides an analysis of these investments based on the fair value hierarchy described above, which reflects the reliability and significance of the information used to measure their fair value.

*      Includes holdings in preference shares, promissory notes, ordinary shares and warrants.

The purchases and sales proceeds figures above include transaction costs of US$99,000 (2022 - US$99,000) and US$nil (2022 - US$nil) respectively.

8.   Share capital

By way of a special resolution dated 15 March 2019 the Directors have a general authority to allot up to 720,000,000 ordinary shares or C shares, such figure to include the ordinary shares issued at the initial placing. 477,250,000 ordinary shares were issued at the Company's initial placing. During the year to 31 January 2023, the Company issued no ordinary and no C shares. In the period from 31 January 2023 to

24 March 2023 no further shares were issued. Consequently, the Company has the authority to issue a further 219,570,000 ordinary shares under the existing authority which expires at the end of the period concluding immediately prior to the Annual General Meeting of the Company to be held in 2024 (or, if earlier, five years from the date of the resolution).

By way of a special resolution dated 18 March 2021, the Directors have a general authority to allot up to 700,000,000 C shares. On 26 April 2021, the Company issued 700,000,000 C shares of US$1 each and raised net proceeds of US$694,802,000. The issue costs of US$5,198,000 consisted of mainly broker commission (US$4,066,000), legal fees (US$601,000) and listing fees (US$396,000).

By way of an ordinary resolution passed on 12 May 2022, the Directors of the Company have general authority to make market purchases of up to 75,014,457 ordinary shares, being 14.99% of the ordinary shares in issue. This authority will expire at the end of the period concluding immediately prior to the second Annual General Meeting of the Company to be held on 12 May 2023. No shares have been bought back during the year ended 31 January 2023 hence the authority remains at 75,014,457 ordinary shares.

Holders of ordinary shares have the right to receive income and capital from assets attributable to such share class. Assets are allocated through the appreciation and realisation of investments acquired using the proceeds of the ordinary share issue. Ordinary shareholders have the right to receive notice of general meetings of the Company and have the right to attend and vote at all general meetings.

Holders of C shares have the right to receive income and capital from assets attributable to such share class. Assets are allocated through the appreciation and realisation of investments acquired using the proceeds of the C share issue. C shareholders have the right to receive notice of general meetings of the Company and have the right to attend and vote at all general meetings.

9.   The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 January 2023 but is derived from those accounts.

10.  The Annual Report and Financial Statements will be available on the Managers' website schiehallionfund.com‡ on or around 31 March 2023.

‡      Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

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

Total value of all assets held less current liabilities, other than liabilities in the form of borrowings.

Net Asset Value

Also described as shareholder funds, net asset value ('NAV') is the value of total assets less liabilities (including borrowings). The NAV per share is calculated by dividing this amount by the number of ordinary shares or C shares as applicable, in issue.

Net Current Assets

Net current assets comprise current assets less current liabilities excluding borrowings.

Premium / (Discount) / (APM)

As stockmarkets and share prices vary, the Company'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.

Capital Deployed (APM)

Capital deployed reflects cumulative amounts invested since inception of the Company.

Internal Rate of Return (IRR) (APM)

The IRR indicates the annualised rate of return for the Company's investment portfolio.

Gross Multiple on Invested Capital (MOIC) (APM)

The MOIC expresses, as a multiple, how much return the Company has made on investment realisations and income, relative to its book cost.

Ongoing Charges (APM)

The total recurring expenses (excluding the Company's costs of dealing in investments and borrowing costs) incurred by the Company as a percentage of the average net asset value (with debt at fair value).

*      The total expenses above cover the period 26 April 2021 to 31 January 2022, a period of 280 days.

Leverage (APM)

For the purposes of the Alternative Investment Fund Managers Directive, 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 US dollar 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.

Average Revenue Growth Rate (APM)

Calculated by taking an average of the total of each investee company's last 12 months revenue growth (as a percentage).

Average Movement at Private Company Level/Per Instrument (APM)

Calculated by taking an average of all valuation movements (as a percentage) by company and by line of share class.

Average Mark-Down at Private Company Level/Per Instrument (APM)

None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

You can find up to date performance information about The Schiehallion Fund on the Schiehallion Fund page of the Managers' website at schiehallionfund.com‡

The Schiehallion Fund Limited is managed by Baillie Gifford, the Edinburgh based fund management group with around £ billion under management and advice in active equity and bond portfolios for clients in the UK and throughout the world (as at • March 2023). The Administrator, Secretary and Designated Manager is Alter Domus (Guernsey) Limited.

‡              Neither the contents of the Managers' website nor the contents of any website accessible from hyperlinks on the Managers' website (or any other website) is incorporated into, or forms part of, this announcement.

Past performance is not a guide to future performance.  The value of an investment and any income from it is not guaranteed and may go down as well as up and investors may not get back the amount invested.  This is because the share price is determined by the changing conditions in the relevant stock markets in which the Company invests and by the supply and demand for the Company's shares.

27 March 2023

For further information please contact:

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 Schiehallion 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 Governance and Sustainable Principles and Guidelines as its policy on integration of sustainability risks in investment decisions.

More detail on the Investment Manager's approach to sustainability can be found in the Governance and Sustainability Principles and Guidelines document, available publicly on the Baillie Gifford website bailliegifford.com.

Taxonomy Regulation

The Taxonomy Regulation establishes an EU-wide framework of criteria for environmentally sustainable economic activities in respect of six environmental objectives. It builds on the disclosure requirements under the SFDR by introducing additional disclosure obligations in respect of AIFs that invest in an economic activity that contributes to an environmental objective.

The Company does not commit to make sustainable investments as defined under SFDR. As such, the underlying investments do not take into account the EU criteria for environmentally sustainable economic activities.

Alex Blake, Baillie Gifford & Co

Tel: 0131 275 2859

Jonathan Atkins, Director, Four Communications

Tel 0203 697 4200 or 07803 758810

- ends -