The share price total return for the same period was 25.2%.

Several names contributed positively to performance, including medtech distributor Addlife, specialty chemicals distributor IMCD, and heat pump manufacturer Nibe.

Five holdings were sold, and twelve new positions initiated during the twelve month period. Portfolio turnover was 19%.

The portfolio now contains three unlisted companies accounting for 4.5% of total assets as at 30 September 2021 (2020: 0.9% in one company). These are Swedish battery manufacturer Northvolt, German transport services company FlixMobility, and German digital freight-forwarder sennder Technologies.

The net revenue return for the year was 0.42p per share (2020: 0.42p). A final dividend of 0.35p per share is being recommended (2020: 0.35p).

At this year’s Annual General Meeting, the Directors will be seeking shareholder approval to increase the permitted investment in unlisted investments from the current 10% to a proposed 20% of total assets.

Michael MacPhee, chairman, said: “I am pleased to report that the Company’s portfolio has delivered positive absolute and relative returns over the year to 30 September 2021, building on the returns of the prior year.

“Baillie Gifford has been managing the portfolio since the end of November 2019. Over those 22 months, the NAV total return has been 69.2% compared to a total return of 22.7% for the FTSE Europe ex UK Index, in sterling terms.”

He added: “Despite Covid-19 and potentially because of it, entrepreneurship in Europe seemingly remains vibrant. Not being beholden to an index and having a long-term investment outlook has meant that, although the market continues to be heavily influenced by binary narratives, such as lockdown beneficiaries versus beneficiaries of re-opening, or preoccupied with the false dichotomy of the growth versus value debate, the portfolio managers have focused on what they can control: finding the companies that will progress through current events and emerge with an even more dominant position and strong prospects.

“For example, if inflation, inefficiency or shortage of supply is the question, it is reassuring to know, as our managers discuss in their review, that our companies are frequently at the forefront of finding the answer.

“Our managers remain vigilant to investment opportunities at attractive valuations in sustainable businesses with special cultures that provide the best chance of producing significant absolute returns over the coming years. They and the Board remain enthused by the scope and scale of investable opportunities.”