## The Global
## Smaller
## Companies
## Trust PLC
### Company Number: 28264
## Annual Report and
## Financial Statements
## for the year ended
## 30 April 2024
## Contents

| Strategic Report | Financial Report |
| --- | --- |
| Company Overview 1 | Income Statement 72 |
| Financial Highlights 2 | Statement of Changes in Equity 73 |
| Chairman’s Statement 3 | Balance Sheet 74 |
| Lead Manager’s Review 8 | Statement of Cashflows 75 |
| Investment Manager’s Investment Philosophy | Notes to the Financial Statements 76 |

and Process 18
Investment Case Studies 20 Notice of Annual General Meeting 92
Responsible Investment 23

| Thirty Largest Holdings 27 | Other Information |
| --- | --- |
| List of Investments 29 | Management and Advisers 97 |
| Ten Year Record 32 | Additional Information for Shareholders 98 |
| Purpose, Strategy and Business Model 34 | How to Invest 99 |
| Promoting Success 37 | 25 Year Historical Information 100 |
| Principal and Emerging Risks 38 | Alternative Performance Measures 102 |
| Key Performance Indicators 40 | Glossary of Terms 105 |
| Principal Policies 41 | Analysis of Ordinary Shareholders 107 |

Governance Report
Directors 44
Directors’ Report 46
Chairman’s Statement on Corporate Governance 52
Applying the principles of the AIC Code 54
2024-25 Financial year events
Report of the Audit and
Management Engagement Committee 56
Annual General Meeting 13 August 2024
Report of the Nomination Committee 60
Final dividend payable 20 August 2024
Directors' Remuneration Report 62
Half-yearly results for 2024 announced December 2024
Statement of Directors’ Responsibilities 65
Interim dividend payable January 2025
Independent Auditor’s Report 66 Final Results for 2025 announced June 2025
Overview
Chairman’s StatementOverview Auditor’s Report
## Company Overview
Strategic Report Governance Report Financial Report Notice of Meeting
### The Global Smaller Companies Trust PLC (the ‘Company’) was founded in 1889 with an initial capital of
### £1m. The Company's net assets had a value of £870.1m as at 30 April 2024 (2023: £859.4m).
### Objective
### To invest in smaller companies worldwide in order to secure a high total return.
### Investment team
### A well resourced and experienced investment management team at Columbia Threadneedle
### Investments aims to identify the best smaller company opportunities listed on global stock markets.
### Investment approach
### A focus on quality. We look for high quality, well managed companies delivering strong returns with a
### track record of profitability.
### Price matters. Portfolio holdings should be attractively valued both in absolute terms and compared to
### peers.
### The benefits of diversification. We seek to create a well spread and balanced portfolio avoiding over
### exposure to any one company, sector or market.
### A dividend hero
### By investing in a portfolio of growing, high quality listed companies, the Company’s own dividend has
### risen for 54 consecutive years.
### The Company is suitable for retail investors in the UK, professionally advised private clients and
### institutional investors who seek growth over the long term and who understand and are willing to accept
### the risks, as well as the rewards, of exposure to smaller companies.
## Visit our website at globalsmallercompanies.co.uk
The Company is registered in England and Wales with company registration number 28264
Legal Entity Identifier: 2138008RRULYQP8VP386
DIVIDEND
HERO
Forward-looking statements
This document may contain forward-looking statements with respect to the financial condition, results of operations and business of the Company. Such statements Other Information
involve risk and uncertainty because they relate to future events and circumstances that could cause actual results to differ materially from those expressed or
implied by forward-looking statements. The forward-looking statements are based on the Directors’ current view and on information known to them at the date of this
document. Nothing should be construed as a profit forecast.
Report and Financial Statements 2024 | 1
## Financial Highlights year to 30 April 2024
## 9.0% 12.7% 2.81p -10.0%
Net Asset Value (‘NAV’) total Share price total return Total Dividend Discount
(3)

| return |  |  | Share price total |  | Total Dividend | of 2.81 | The Company's shares |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | (1) |  | (1) |  |  |  |  |
| NAV with debt at fair value |  |  | return | of 12.7% (2023: | pence (2023: 2.30p), the |  | ended the year at a |  |
|  | (1) |  |  |  |  |  |  | (1) |
| total return | of 9.0% (2023: |  | -6.2%). |  | 54th consecutive annual |  | discount | to NAV of |
| -2.9%) versus 11.3% for the |  |  | The share price ended the year |  | increase, up by 22.2% |  | 10.0% (2023: 12.7%). |  |
| Benchmark (2023: -2.1%). |  |  | at 160.2p (2023: 144.6p). |  | (2023: up by 25.0%). |  |  |  |

The NAV with debt at fair value rose
to 178.1p from 165.7p.
### Delivering high total returns over the long term
In the last ten years the Company has turned a £1,000 investment, with dividends reinvested, into
£2,144, a compound annual total return of 7.9%.

|  | (1),(4) |  |  | (4) |
| --- | --- | --- | --- | --- |
| NAV |  | per share at 30 April – pence | Mid-market price | per share at 30 April – pence |
| 180p |  |  | 160p |  |
| 160p |  |  | 140p |  |

140p
120p
120p
100p
100p
80p
80p

| 60p |  |  | 60p |  |
| --- | --- | --- | --- | --- |
| 40p |  |  | 40p |  |
| 20p |  |  | 20p |  |
| 0p |  |  | 0p |  |
| Source: Columbia Threadneedle Investments |  |  | Source: Columbia Threadneedle Investments |  |
|  | (3),(4) |  |  | (1) |
| Dividends |  | – pence per share | Share price premium/(discount) | at 30 April – % |

0%
2.5p
-2%
2.0p -4%
1.5p -6%
-8%
1.0p
-10%

| 0.5p | -12% |
| --- | --- |
| 0.0p | -14% |
| Source: Columbia Threadneedle Investments | Source: Columbia Threadneedle Investments |

The dividend has increased every year for the past 54 years and over the last ten years is up 13.4%
compound per annum, compared with inflation (RPI) of 4.2% compound per annum.
Potential investors are reminded that the value of investments and the income from dividends may go down as well as up and
investors may not receive back the full amount invested. Tax benefits may vary from statutory changes and their value will
depend on individual circumstances.
(1) See Alternative Performance Measures on pages 102 and 104.
(2) See Glossary of terms on page 105 for explanation of “Benchmark”.
(3) Total dividend comprises an interim dividend (paid on 25 January 2024) of 0.68 pence and a final dividend for 2024 of 2.13 pence (payable on 20 August 2024), subject to
200p 3.0p 180p 2% shareholder approval at the AGM.
(4) Comparative figures for the years prior to 2020 have been restated due to the sub-division of each existing ordinary share of 25p into ten new ordinary shares of 2.5p each on
31 October 2019.
2 | The Global Smaller Companies Trust PLC
2024202320222021202020192018201720162015 2024202320222021202020192018201720162015 2024202320222021202020192018201720162015 2024202320222021202020192018201720162015
Chairman’s Statement
Chairman’s StatementOverview Auditor’s Report
## Chairman’s Statement
### “The Manager has put together a portfolio of investments in high quality businesses
### that are attractively valued and we look forward with optimism.”
### Anja Balfour, Chairman
Strategic Report Governance Report Financial Report Notice of Meeting
Dear Shareholder, of the year. Sadly, geopolitical tensions continued to rise in the
year with conflict breaking out in the Middle East, exacerbating an
It was pleasing to see equity markets bounce back during the already tense backdrop with the war in Ukraine showing no sign of
financial year under review. Foremost in investors' minds was ending soon and unease between China and the US growing.
the outlook for inflation and interest rates. While inflation fell
significantly in most parts of the world, tight labour markets Given these uncertainties, it was only natural that investors
meant that it remained higher than central bank targets and as gravitated towards the safety that larger companies offer and
a consequence authorities delayed cutting interest rates. As smaller companies lagged as a consequence. In the US, market
the year progressed it became increasingly evident that within returns were driven by a handful of larger companies that were in
developed economies consumers were operating at two different some way exposed to the fast-growing areas of Artificial Intelligence
speeds: spending by higher income earners was supported by (‘AI’) and cloud computing. On the whole, developed market
rising asset prices and interest income whilst consumption by the equities performed well, particularly in North America and Japan.
lower income cohort was hampered by higher costs of living that A sense of optimism returned to Japan with corporations adopting
were not sufficiently covered by wage increases. Despite this mixed more shareholder-friendly policies and the country moving from
consumer environment, the global economy continued to grow and deflation to inflation. It was very encouraging to see Japanese
performed significantly better than had been feared at the start smaller companies deliver earnings growth well in excess of other
major developed markets in this financial year. China was laden by
a slowdown in its domestic economy, which appears to be working
Inflation by country (% change in CPI year on year)
through a downturn in its real estate sector. Outside of China,
emerging markets showed strength, especially in the case of India.
10.0
Four years on from the onset of the COVID 19 pandemic, several
8.0 industries were still adjusting to a new environment, with some
suffering from normalisation in activity levels and others benefitting
6.0
from recovery. On the bright side, this did create opportunities for
4.0 your Company to purchase interests in high quality businesses with
12.0 good long term prospects at attractive valuations. As businesses
2.0
and investors became more confident that interest rates had
peaked, capital markets transactions picked up, resulting in
0.0
increased takeover activity and it was pleasing that your Company
-2.0 was a beneficiary of this. The Company has several holdings that
May May May Mar
Other Information
21 22 23 24 have been owned for many years, initially bought when they were
US UK Europe Japan China India much smaller businesses. Many of them delivered another year of
Source: Columbia Threadneedle Investments shareholder value creation. In the Lead Manager’s Review you will
Report and Financial Statements 2024 | 3
(Discount)/premium compared to UK Investment Companies (ex 3i) over 10 years
5
0
-5
-10
-15
-20

| 2014 2015 2016 2017 2018 2019 202220212020 |  |  |  | 2023 | 2024 |
| --- | --- | --- | --- | --- | --- |
|  | The Global Smaller Companies TrustUK Investment Companies (Ex 3i) | UK Investment Companies (Ex 3i) | The Global Smaller Companies Trust |  |  |
|  |  | (period mean) | (period mean) |  |  |

Source: Columbia Threadneedle Investments
be pleased to learn that we have added to this cohort of long term geopolitical outlook. There have been outflows from UK based
winners; companies that we think will be instrumental in generating equity funds in general and smaller company funds have been hurt
future returns for your Company. even more than larger company funds by this trend. Starting the
financial year at 12.7%, your Company’s discount reached 17.7%
Performance and the Discount in July 2023 before closing at 10.0%, still some way from the
Having fallen by 6.3% in the first half of the financial year, the Board’s target of less than 5%. The narrower discount meant that
Company’s Net Asset Value (‘NAV’) total return (with long term the share price rose by 10.8% over the year, or by 12.7% on a total
borrowings at fair value) recovered well in the second half to end return basis, ahead of the Benchmark.
the financial year up 9.0%.
The Board continue to believe that a consistently applied share
The total return from the Company’s Benchmark, a blend of two buyback approach is in shareholder’s best interests, providing
indices, the MSCI All Country World ex UK Small Cap Index net liquidity for those in need of an exit along with NAV accretion to
(80%) and the Deutsche Numis UK Smaller Companies (excluding remaining holders. The pace of buybacks stepped up compared
investment companies) Index (20%) for the year to 30 April 2024 to previous years with some 30.2m shares bought back,
was 11.3%. Longer term total returns from the NAV, Benchmark and representing 5.8% of the starting share capital (2023: 24.6m
share price are shown in the following table, highlighting the strong shares) repurchased across some 214 trading days, enhancing
returns that the asset class has delivered to patient investors. the NAV by 0.6% in the process. The chart above illustrates the
Company’s discount (and premium) over the last 10 years and
that of the wider investment trust sector, providing a reminder
Performance: Total returns over the long-term
that discounts/premiums in the investment trust sector tend to

|  | 1 year |  | 3 years |  | 5 years |  | 10 years |  | 25 years |  | be cyclical. Good investment performance, share repurchases |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | % |  | % |  | % |  | % |  | % | and increased interest in the shares from both existing and new |
| Company NAV |  |  |  |  |  |  |  |  |  |  | investors will be key in helping to address the discount in the |

9.0 5.5 34.6 136.6 859.8
total return medium term.
Benchmark
11.3 5.6 39.8 135.0 717.6
total return Given the attractive relative and absolute valuations on offer in
Company equities of smaller companies, marketing activity over a number
share price 12.7 -1.0 27.2 114.4 1,016.9
of channels increased significantly over the course of the year.
total return
In order to seek to maximise the effectiveness of our marketing
Source: Columbia Threadneedle Investments initiatives, the Board engaged a specialist third party marketing
agency to sharpen the Company’s principal selling points. The
Over the last few years UK investment trust company discounts Global Smaller Companies Trust offers a simple, lower risk way
have widened, given increased caution around the economic and to access the faster growth potential of the world’s most exciting
Premium/(Discount) to NAV (%)
4 | The Global Smaller Companies Trust PLC
Chairman's Statement

# Geographical performance (total return sterling adjusted) for the year ended 30 April 2024

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

*Performance of the Rest of World portfolio is shown here against both the Asian and Latin American smaller company indices.

smaller companies; it uses a long-term approach to investing in high quality businesses that are undervalued and this has resulted in a track record of delivering strong total returns to shareholders with lower levels of volatility.

# Dividends

It was another positive year on the income front. Revenue returns per share rose by a healthy 21.4% (2023: 28.6%) as income from both UK and overseas based holdings grew strongly. Following on from the 7.9% increase in the interim dividend, the Board has decided to recommend the payment of a final dividend of 2.13p, meaning the full year payment will be up by 22.2% to 2.81p. This will be paid to shareholders on 20 August 2024 and will be the 54th consecutive increase in the Company's dividend.

# Costs

Ongoing charges (excluding performance fees from collective holdings) for the year reduced slightly over the year moving from 0.79% to 0.78%. Ongoing charges including performance fees from collective holdings were 0.80% (2023: 0.79%). These remain low compared to many smaller company funds in the market.

# Performance by Region

The Lead Manager's Review starting on page 8 covers the year from a market and portfolio view in detail.

The chart above shows how our regional portfolios performed in the year compared to their relevant local smaller company indices. Relative to the local small cap market returns, we were behind in North America and the UK, while in Europe we were ahead. After careful consideration and following extensive discussions with the Board, the Manager insourced approximately half of the Company's exposure to Japanese equities, making further use of the additional

# Geographical distribution of the investment portfolio as at 30 April 2024

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

The percentages in brackets are as at 30 April 2023

Source: Columbia Threadneedle Investments

resources available at Columbia Threadneedle Investments. This is covered in more detail in the Lead Manager's Review. It was pleasing to see early results from this change with the Japanese portfolio on the whole outperforming its benchmark in the year. The Rest of World portfolio of collectives was behind its benchmark, hurt by widening discounts on the two investment trust companies held.

# Asset Allocation

Asset allocation positioning hurt relative performance in the year, largely reflecting the fact that we were overweight the UK and underweight North America. Over the course of the year, there were some movements in absolute geographic weightings. Our exposure to Asian markets increased at the expense of North America, the UK and Europe. The Manager believes that smaller company valuations are more attractive in the UK, Europe and Japan in comparison to North America and this is reflected in our year-end positioning.

Report and Financial Statements 2024 | 5

Chairman's Statement
The following table shows the weightings of the portfolio versus the Benchmark at the end of the financial year.

#### Geographical weightings of the portfolio and the Benchmark

|   | Portfolio weight (%) | Benchmark weight (%)  |
| --- | --- | --- |
|  UK | 24.7 | 20.0  |
|  Europe | 11.5 | 9.6  |
|  North America | 40.8 | 46.4  |
|  Japan | 9.5 | 8.4  |
|  Rest of World | 13.5 | 15.6  |

Source: Columbia Threadneedle Investments

#### Gearing Policy

The Board remains of the view that making use of our borrowing powers over the long term will serve to enhance shareholder returns as markets rise over time. At the end of the financial year, effective gearing was 4.7% compared to 5.2% a year earlier. Borrowings were made up of £35m 2.26% sterling loan notes maturing in 2039 and £16.5m of drawings in US dollars, Yen and Euros under our revolving credit facility. Reflecting the predominantly fixed rate nature of the debt, our borrowing costs remain low, although they have risen as interest rates have moved up.

#### Environmental, Social and Governance ('ESG')

While your Company is not an ESG labelled fund, the investment management team carefully considers ESG factors in making their stock selections. Analysis in this regard from the Manager's Responsible Investments team has continued to be useful, with regular input provided to the fund managers on specific topics of interest and new ESG developments. Engagement with the management teams of companies held in the portfolio has continued and some examples of this work are outlined in the Responsible Investment report on pages 23 to 26.

#### Board Changes

As reported in the Half-Year Report, having followed a formal recruitment process, the Company was pleased to appoint two new non-executive Directors, Bulbul Barrett and Randeep Grewal, with effect from 1 December 2023. On 11 December 2023, David Stileman retired from the Board and Jo Dixon will also retire following the conclusion of the forthcoming Annual General Meeting. Jo is the Chairman of the Audit and Management Engagement Committee and the Senior Independent Director and following her retirement Nick Bannerman and Graham Oldroyd will fulfil these roles respectively.

David and Jo were appointed in 2015, and both have contributed significantly to the Company, bringing their wide-ranging experience to the Board. We record our appreciation and gratitude to David and Jo for their dedicated service to the Company and wish them well for the future.

#### Retirement of Peter Ewins

Peter Ewins stepped down as joint Lead Manager on 1 May 2024 and will retire from Columbia Threadneedle Investments this summer. Since he became Lead Manager of the portfolio in August 2005 he and his team produced excellent returns for shareholders. In fact, the NAV total return was 517.6%, virtually matched by a share price total return of 517.0% over his tenure. This was achieved with lower volatility than a number of other smaller company investment vehicles over this period. We are extremely grateful for Peter's dependable contribution and dedicated service and for his mentorship of Nish Patel, our new Lead Manager. We wish Peter a long and happy retirement.

#### Annual General Meeting

The Annual General Meeting will take place at The Chartered Accountants Hall, 1 Moorgate Place, London EC2R 6EA on Tuesday, 13 August 2024 at 12.00 noon. We hope as many shareholders as possible will attend. Nish Patel, the Lead Manager, will give a review of the year together with his view on the outlook. We will also be streaming the meeting live on the internet so that those shareholders who cannot attend in person will be able to view the proceedings. The live stream can be accessed by registering here: https://www.investormetcompany.com/the-global-smaller-companies-trust-plc/register.

Voting on all resolutions at the AGM will be conducted by way of a poll, the results of which will be announced and posted on the Company's website following the meeting. You are therefore encouraged to lodge your votes prior to the meeting by completing your form of proxy or form of direction in accordance with the instructions shown. Their completion and return will not preclude you from attending the meeting or from shareholders voting in person. Shareholders who are unable to attend the AGM are requested to submit any questions they may have with regard to the resolutions proposed at the AGM or the performance of the Company in advance of the meeting to gscagm@columbiathreadneedle.com. Following the AGM, the Lead Manager's presentation will be available on the Company's website at globalsmallercompanies.co.uk.

#### Outlook

In the near term investors are likely to continue to pay particular attention to the direction of inflation and labour markets in major economies as well as geopolitical developments more widely. Our Manager will continue to focus on identifying companies that will do

6 | The Global Smaller Companies Trust PLC
Chairman’s Statement
well regardless of what happens in the wider economy. The fund Chairman’s StatementOverview Auditor’s Report
management team are still finding such opportunities within our
very extensive investment universe and the Board has confidence
in the Manager’s lengthy experience in investing in this asset class.
Despite the recent underperformance of smaller companies
relative to larger companies, it remains an attractive asset class
over the long term. Smaller companies have the potential to
Strategic Report Governance Report Financial Report Notice of Meeting
deliver faster earnings growth as well as valuation expansion as
they are more widely recognised. Furthermore, it is an area where
active management can genuinely add value. The Manager has
constructed a portfolio of investments in high quality businesses
that are attractively valued and we look forward with optimism.
Anja Balfour
Chairman
25 June 2024
Other Information
Report and Financial Statements 2024 | 7
# Lead Manager's Review

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

"We are optimistic that in time equity market returns will broaden to include the faster growing area of smaller companies and that our shareholders will benefit from this."

Nish Patel, Lead Manager

Having worked with Peter Ewins and the wider team on the management of the Company's assets since 2007, I am honoured to write to you for the first time as the Company's Lead Manager following Peter Ewins retirement and am excited by the opportunity of building on the Company's impressive long-term performance record.

## Performance

The Company's NAV total return and share price total return were 9.0% and 12.7% respectively in the financial year. This compared to an 11.3% rise in the Benchmark. Whilst the NAV total return lagged the Benchmark, performance improved as the year progressed: the Company's NAV underperformed in the first half of the financial year but was ahead in the second half. Pleasingly, a narrowing in the discount to NAV meant that the share price total return for the year was ahead of the Benchmark.

As of the end of the financial year the Company's NAV has outperformed its global smaller company investment trust peers over 3 years. As has been the case in recent financial years our investment income was strong again, allowing the Board to recommend an inflation-beating 22.2% increase in the annual dividend. The Company's dividend per share has grown by 13.4% compounded over the last 10 years, one of the fastest rates of growth across the investment trust market. This reflects the financial success of the companies held in our portfolio.

## Economy and Market Backdrop

The 12 months ended 30 April 2024 was another year of surprises in the financial markets. The world economy remained remarkably resilient despite a rapid rise in global interest rates over the last two years. In the developed markets a resolute consumer was helped by a tight labour market, excess savings

and an easing of inflation in goods prices. Inflation in services prices has been slower to come down than expected, especially in the US, and as a result central banks delayed the cutting of interest rates.

From an equity market perspective the financial year was a story of two halves. From the beginning of May until the end of October the market struggled, especially smaller companies as stubborn inflation led to interest rate increases from central banks. Furthermore, geopolitical tensions escalated with conflict breaking out in the Middle East. At the start of the second half of the year, lower than expected inflation data created enthusiasm over potential cuts in interest rates. Expectations rose that inflation could be tamed without a meaningful economic downturn and this propelled markets higher. The stock market remained strong at the end of the financial year, even as the probability of multiple interest rate cuts receded. As investor sentiment improved, we saw a return to favour of the more speculative parts of the market such as

Industrial classification of the investment portfolio as at 30 April 2024

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

The percentages in brackets are as at 30 April 2023

Source: Columbia Threadneedle Investments

8 | The Global Smaller Companies Trust PLC
Strategic Report

profitless, early stage companies – the sorts of businesses that we avoid.

As an investment theme, AI burst on the scene in 2023. This technology, which allows computers and machines to simulate human intelligence and problem-solving capabilities, partly led to narrow stock market performance in the year with the information technology sector producing the largest gains in many markets, especially the US. Other sectors that did well in most markets were industrials and energy. On the other hand the more defensive parts of the market such as telecommunications, utilities and healthcare lagged.

Over the year, optimism grew that the US economy would enjoy a 'soft landing.' The UK economy remained sluggish and briefly entered a slight technical recession in early 2024 as consumers grappled with a higher cost of living and interest sensitive sectors such as housing slowed. The UK equity market continues to see outflows from retail and institutional investors and the valuation discounts that this has created have not gone unnoticed, as evidenced by a rise in takeover activity, share repurchases and foreign listings. European growth decelerated as the year went on because of a slowdown in Germany, where higher energy costs hampered the country's important industrial sector. On the other hand, Spain and some other southern European countries were helped by a buoyant tourism industry. Thirty four years after Japan's asset bubble burst, the Nikkei 225 index finally surpassed its prior all time high set in 1989. Japan has benefitted from optimism over corporate reform, the lower yen has helped exporters and inflation has returned to and stayed at a level greater than 2%. Consequently, the Bank of Japan recently ended its negative interest rate policy.

Currency movements relative to sterling in the year ended 30 April 2024

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

Source: Columbia Threadneedle Investments

The expected recovery in economic activity in China after the COVID related reopening did not really materialise. In addition the local property market continued to suffer from oversupply. Strong consumer spending, investment in infrastructure and burgeoning export and manufacturing sectors led to a year of strong growth in India and other parts of Asia such as Vietnam, The Philippines and Indonesia. Latin America managed to shrug off slower demand from China for its commodities. The region's spirits were lifted by political change, lower interest rates and potential growth from the relocation of manufacturing facilities away from China.

Many of our companies that were exposed to spending by governments on infrastructure did well, especially those with a

Table of total returns (sterling)

|   | 1 year |   | 3 years |   | 5 years |   | 10 years |   | 15 years  |   |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|   |  Regional Portfolio | Regional Benchmark | Regional Portfolio | Regional Benchmark | Regional Portfolio | Regional Benchmark | Regional Portfolio | Regional Benchmark | Regional Portfolio | Regional Benchmark  |
|  UK | 5.2% | 7.2% | -4.8% | -3.8% | 15.8% | 19.8% | 104.8% | 63.5% | 545.0% | 333.0%  |
|  Europe | 4.5% | 4.1% | -14.1% | -2.7% | 23.6% | 36.4% | 102.1% | 117.3% | 451.9% | 359.2%  |
|  North America | 10.3% | 13.4% | 13.9% | 0.1% | 49.7% | 37.8% | 196.2% | 170.4% | 582.8% | 486.5%  |
|  Japan | 10.1% | 8.6% | 3.3% | 6.3% | 20.4% | 21.1% | 135.2% | 144.2% | 282.9% | 265.0%  |
|  Rest of World | 10.8% | 16.9% | 12.8% | 13.1% | 32.6% | 53.9% | 82.1% | 125.1% | 326.6% | 298.2%  |

The regional benchmarks used are Deutsche Numis UK Smaller Companies (excluding investment companies) Index (UK), MSCI Europe Ex UK Small Cap Index net (Europe), MSCI North American Small Cap Index net (North America), MSCI Japan Small Cap Index net (Japan) and MSCI All Country Asia Pacific ex Japan Small Cap Index net (Rest of World).

Source: Columbia Threadneedle Investments

Report and Financial Statements 2024 | 9

Strategic Report
North American footprint. Some of our holdings also benefitted holdings outperformed. More detail around what drove relative
from increased defence budgets, the ongoing recovery in the performance of all the portfolios in the year follows in the next
aerospace market and work related to energy transition. These few pages.
industries seem to be areas of growth for years to come and
the Company has good exposure here. It was very pleasing to Asset Allocation Changes
see further development of several of our longer-term holdings Asset allocation for the Company is largely the end result of
in companies that have strong competitive positions with long our bottom-up stock selection and reflects where we are finding
runways for growth. These winners in the year were from a wide attractive investment opportunities. Similar to the last financial
range of industries including retail, online platforms, insurance year, we remain overweight to the UK and Europe, where in
and distribution. On a similar note, in emerging markets, recent years we have found many attractive investments that
through our collective fund holdings, we were beneficiaries of we still think are not fairly valued by the stock market. The
the greater acceptance of consumer brands by a growing middle Company’s exposure to Japan and the Rest of the World rose
class, particularly in India. The adoption of AI helped some in the year in absolute terms and relative to the benchmark.
of our companies in the year, although there were also some There are more appealing investments in these parts of
perceived losers from this as well. As takeover activity resumed the world than in North America where the region’s stronger
post a potential peak in interest rates, we saw trade and private economic performance is largely reflected in share prices and,
equity interest in our holdings with seven investments that we consequently, valuations look more demanding.
held receiving takeover bids in the year.
Our weighting in industrials grew in the year. As mentioned
Despite the passing of the pandemic, businesses still suffered previously, the sector was out of favour but we think the long
from knock-on effects. Demand normalisation and de-stocking term prospects are good because of trends such as near-
persisted in several sectors such as electronics, chemicals, shoring, increased fiscal spending and automation. With a
life sciences, leisure goods and luxury. The valuations of some potential peak in interest rates, the prospects for interest rate
high-quality businesses in these sectors fell to attractive sensitive companies changed in the year and so our exposure
levels and as a result we initiated some new holdings in these to the financials and real estate sectors was increased. Profits
areas. Real estate has been hindered by higher interest rates, were taken in basic materials and consumer staples.
with the outlook for office assets deteriorating because of
changed working practices after COVID 19. However valuations Gearing
in the sector are now looking more attractive, especially for The Company's gearing level was maintained during the year, in
companies exposed to more resilient sub-sectors such as line with the Board’s policy to make use of borrowings through
industrial, healthcare and leisure assets. Several businesses the cycle to enhance shareholder returns. At the year end the
have highlighted the negative effect that depleted savings and a effective gearing, taking account of short-term liquidity, was
higher cost of living is having on lower income consumers. After 4.7%, compared to 5.2% twelve months earlier. The Company
a long period of contraction because of inventory reduction, benefits from a competitive cost of borrowing through the 20
supply chain issues and rising costs, the industrial sector is year private placing undertaken in 2019 at 2.26%. In the future,
showing signs of stabilisation and given the favourable long- if the right market conditions and many attractive investment
term prospects for this sector, along with attractive valuations, opportunities present themselves, the Company would consider
we increased our exposure here. using a small amount of tactical gearing.
Regional Portfolio Performance
The North American and UK portfolios continue to represent
around two thirds of the Company’s assets and they have
delivered very good performance over the long term. In terms
of stock selection, this year was more challenging for both
of them. After a very difficult first half, it was encouraging to
see performance pick up meaningfully in these markets in
the last four months of the financial year. The Rest of World
portfolio also lagged in the year, not helped by the widening
of discounts seen in the investment trust market. Positively,
our European portfolio had a good year and our Japanese
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Boot Barn’s attractively presented stores continue to be rolled out across North America.
In the regional reviews that follow, performance figures in company delivered very good earnings growth as rising demand
relation to the portfolio and indices are all expressed in sterling led to greater industry capacity utilisation and as a result of
total return terms, while individual company performance is higher spot rates; the share price climbed 52% in the year. In
shown in local currency terms. addition, the supply of barges appears tight and the company’s
power generation business is growing rapidly. Curtiss-Wright
North American Review One year is a manufacturer of niche, mission-critical components for
Portfolio Performance 10.3% the aerospace, industrial, defence and power verticals. Most
MSCI North American Small Cap Index (net) 13.4% of its businesses are progressing well because of supportive,
S&P 500 Index 23.3% long-term trends such as increased spending on defence and
growth in the production of commercial aircraft. Boot Barn
In the financial year, the North American portfolio Holdings operates a retail chain that specialises in western
underperformed the MSCI North American Small Cap Index. and work wear. The company faces challenging comparatives in
Good stock selection in healthcare and materials was offset by the first half of this calendar year. Nevertheless, optimism rose
adverse stock selection in information technology, energy and that revenues and earnings would surpass expectations due to
consumer discretionary. improvement in demand – this led to a rerating of the shares.
CDW is a value-added reseller of technology products. The
Construction materials companies had another good year and company’s market share is growing in this fragmented industry
it was good to see Eagle Materials, a producer of cement and because of significant scale advantages. It is also benefitting
gypsum wallboard, deliver the largest positive stock contribution from good demand and growth in its higher margin cloud,
in the portfolio for the second year running. Its shares were up cybersecurity and services businesses. Brown & Brown, a US
70%. Martin Marietta Materials, a business more focused on insurance broker to small and medium sized businesses, rallied
aggregates, also contributed strongly. Both of these companies 28%. It delivered solid organic growth as insurance prices
reported strong earnings growth because of price increases on climbed in the year, higher interest rates helped investment
their products. The outlook for construction of US infrastructure income and good progress was made on its acquisition
is bright because of the passage of the ‘Infrastructure and strategy. Takeover bids at appropriate valuations are always
Investment and Jobs Act’ in 2021. A recovery in housing welcome and MDC Holdings, a Denver based housebuilder,
construction might lead to further earnings growth from these received a bid from Japanese housebuilder Sekisui House at a
companies. 19% premium.
Other Information
Kirby is an owner and operator of tank barges that transport As ever, there were disappointments in the portfolio. Earnings
commodities along the US inland and coastal waterways. The of LKQ Corp, a distributor of car parts, were hurt by a slowdown
Report and Financial Statements 2024 | 11
in organic revenue growth because of fewer insurance funded disappointment created an opportunity to buy the shares
car repairs, lower scrap metal prices and weakness in the at an attractive valuation. Over the year, bond yields were
recreational vehicle market. In addition, a labour strike in volatile and this created opportunities to purchase interest
Germany affected profitability negatively, and the share price fell rate sensitive quality cyclical stocks at attractive valuations.
back 24%. Unfortunately, SSR Mining, a precious metals mining Frontdoor is a very well managed provider of home warranty
company, suffered from a landslide at one of its largest mines plans in the US through its well known ‘American Home Shield’
in Turkey, leading to a sharp fall in the share price. De-stocking brand. Sales have slowed along with housing transactions,
affected many industries in the year: American Vanguard, a however this should reverse as mortgage rates fall and market
producer of crop protection chemicals, was not immune to this penetration of home warranty plans in general rises. We took
and an industry inventory reduction led to a decline in sales the opportunity to add on weakness to our holdings in the
and earnings. Shares of GrafTech International, a vertically aforementioned Healthcare Realty Trust and PRA Group.
integrated producer of graphite electrodes, were affected by
the cyclical downturn in the steel industry in Europe, increased Following a cyclical recovery, diversified agricultural business
competition in North America and a technical overhang caused The Andersons reached our estimate of intrinsic value so we
by the sale of a large shareholding. QuidelOrtho develops sold our position. Profits were taken in Eagle Materials, Martin
and manufactures diagnostic tests. Post COVID, the company Marietta Materials and The Ensign Group (an operator of
endured a harsher slowdown than expected in its respiratory nursing and rehabilitative care facilities). We lost our confidence
business. PRA Group purchases and collects charged off credit in the management team of Lundin Mining (a copper miner) as
card receivables. Lower collections from customers and higher a poor health and safety culture culminated in a fatality at one
expenses disappointed the stock market. Investors shunned of its mines, hence we sold our holding.
Genpact (a business process outsourcer) as they worried about
potential disruption to some of its businesses because of AI UK Review One year
and the shares declined 30%. With customers slower to start Portfolio Performance 5.2%
projects, the company’s expectations for 2024 underwhelmed Deutsche Numis UK Smaller Companies (excluding investment 7.2%
investors. Like many other real estate businesses, Healthcare companies) Index
Realty Trust was affected by the outlook for higher for longer FTSE All-Share Index 7.3%
interest rates. Furthermore it took longer than expected to
integrate a recent acquisition. UK equities mirrored the pattern seen elsewhere in the world,
with smaller company stocks, as measured by the Deutsche
Over the last couple of years the industrial sector has been Numis index shown above, lagging the FTSE All-Share Index
adversely affected by de-stocking, supply chain related delays total return. Our portfolio underperformed, although we regained
and higher costs. We think that the sector is close to bottoming some relative performance in the second half of the year.
and accordingly we have increased our exposure here. MSC
Industrial Direct, a distributor of metal working related products A weaker underlying economic backdrop following a period
to the manufacturing sector in the US, is an example of a of rising interest rates was bound to impact upon the trading
company to which we have added. We also initiated a holding of companies. Consumer spending slowed and video game
in Standex International, a manufacturer of niche industrial developer Team17 Group saw a slowdown in demand in
products such as connectors, sensors and magnets for a common with the sector, after a pandemic-driven boom. Shares
diverse range of end markets. The company’s strong innovation in Treatt, the natural ingredients supplier to the food and
culture and focus on offering its customer a compelling value beverages market, fell by 26% as customer de-stocking took
proposition has led to market leading positions. Earnings a toll on sales. Luxury watch and jewellery retailer Watches
growth can come from continued product development, of Switzerland fell in the second half of the year following a
particularly in higher growth industries such as renewables, slowdown in business levels, especially in the UK. Furthermore,
automation and space as well as entry into adjacent markets. concerns grew that there would be a curtailment of supply of
Rolex watches to Watches of Switzerland after Rolex bought
We have closely monitored the progress of Skechers USA for watch retailer Burcherer. There will always tend to be individual
some time. The company has a very well recognised brand stock specific issues in any year and, as reported in the half
that is based on comfort, design and affordability and it year review, our decision to back the float of payments services
has the opportunity to develop new products and enter into company CAB Payments back-fired, as the business produced
new markets over the coming years. A short term earnings a major profit warning shortly afterwards prompting us to sell.
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Hostelworld’s position as the leading travel portal in the global
hostel market is driving strong growth in revenues and profits.
Some of the more cyclical companies in the portfolio saw an continued its strong performance from the previous year,
understandable weakness in their results. XP Power shares with its gradual expansion on an organic basis supported by
fell as the company reported weaker demand from their large sensible acquisitions continuing to drive better than expected
semiconductor customers, necessitating a share placing profits and the shares rose 49%. Promotional products
to address a weaker balance sheet position. We supported company 4imprint Group, featured on page 21 in a case study,
this fund raise given the potential we see for a recovery in was another winner in the year, up by 49% as its successful
profitability as the customer de-stocking phase comes to an marketing approach continued to deliver excellent results.
end. SIG shares fell too, as the company faced a challenging
backdrop in both commercial and residential construction While construction markets have been more difficult, Kier
markets, leading to downgraded profit forecasts. Specialist Group shares rose 77%. The company continued to benefit
IT staffing and consultancy business FDM Group shares fell from its exposure to major infrastructure projects, supporting
by 40% as the company experienced weaker than expected a strong order book. This provided good forward visibility, with
demand, meaning that the utilisation of its consultant team was the company’s positive cash flow performance over the year
reduced. In the real estate sector, property valuations came leading to further de-leveraging, allowing for a return to dividend
under pressure from the rise in interest rates and bond yields. payments. Shares in building products supplier Genuit were
Worst hit was CLS Holdings, the pan European office specialist, also up, with the new strategy put in place by the recently hired
with the company seeing higher vacancy rates and with valuers CEO bearing fruit and self-help on efficiencies off-setting some
taking a cautious approach to the value of less prime office of the volume challenges. The other strong performer in the
assets on shorter leases amid the evolution of work practices sector was door and windows hardware supplier Tyman. The
post the pandemic. company announced a recommended offer from a US peer late
in the year. On the subject of takeovers, our performance in
More positively, the portfolio contained a number of strong the second half also benefitted from a bid from private equity
performers. Top of the list was a company which we highlighted for wealth and asset management business Mattioli Woods,
in a case study last year; Ashtead Technology, with the shares following on from the first half offer for The Restaurant Group.
more than doubling, up 140%. This company, which supplies While we are sad to see high quality smaller companies like
specialist equipment and services into global offshore energy these leave the UK market, their exit is symptomatic of the
and renewables markets, benefitted from a strong backdrop in valuation attractions within the UK stock market at present.
both sectors, while profits were also enhanced by an accretive
Other Information
and sensible acquisition. Kitwave Group, the wholesale Other strong performers worthy of mention in the year include
supplier of confectionery and other food and beverages Hollywood Bowl Group, Baltic Classifieds Group, Luceco and
products into the independent convenience store channel, Mercia Asset Management. The former’s results gained as
Report and Financial Statements 2024 | 13
trading remained firm and management articulated a longer A number of consumer facing companies did well. CTS
term growth plan highlighting more clearly the potential in Eventim is the world leader in providing ticketing services for
the Canadian market for the business. Baltic Classifieds events such as concerts and will be the provider for the Paris
Group continued to benefit from the growth in demand across Olympics. Results have shown very good growth following the
its leading advertising portals in the Baltic states. Lighting difficult period during the COVID 19 related lockdowns. Lotus
products supplier Luceco rose 53% as management was able Bakeries has seen strong growth for its ‘Biscoff’ related
to increase its profit guidance with the de-stocking phase in its products such as cookies, especially in the US. They also
sector coming to an end. Finally, Mercia Asset Management successfully passed on higher costs to their customers through
shares responded well to news that the company had won price increases.
significant new regional private equity mandates from the
British Business Bank. In financials, Storebrand benefits from a concentrated
insurance and asset management market in Scandinavia.
Portfolio activity was driven partly by adding to cyclical stock This helps client retention (leading to low marketing costs).
holdings where share prices had fallen too far, including Crest Higher interest rates and better solvency enabled Storebrand
Nicholson and Marshalls in the building sectors, insurer to return more cash to shareholders. Long held Ringkjoebing
Lancashire Holdings, specialty chemicals supplier Elementis, Landbobank also operates in a concentrated market with only
recruiter PageGroup and property company Warehouse REIT. a small number of competitors in Danish banking. Results
We always seek new opportunities to keep the portfolio fresh, have been very strong and the quality of the loan book is
and this year we started 10 new holdings. Within financials excellent, enabling high returns on tangible equity. Within
we started holdings in alternatives asset manager Foresight industrials, Accelleron, recently spun out of ABB, rallied 47%.
Group, where we see attractive medium term potential for It has a leading market position in the design and production
growth in assets under management as infrastructure and of turbochargers that improve engine fuel efficiency. The OMT
renewables investment trends continue to look favourable, acquisition brings them into the fuel injection market, offering
and JTC, the fund administration and services group which the company another exciting growth avenue. Swimming pool
continues to execute on building its global footprint. A holding supplies company Fluidra announced better than expected
in NIOX Group was initiated in the year. This is a very well results despite de-stocking in the sector, with cost savings also
managed healthcare company that sells FENO (fractional supporting profits.
exhaled nitric oxide) testing devices and consumables. The
business has limited competition and is highly profitable. It On the negative side, the French cognac producer Remy
can grow over the long term through further penetration of its Cointreau faced a perfect storm last year. We purchased
products amongst respiratory specialists. our holding in early 2023 knowing that the US business was
facing a near-term slowdown but appreciating that China
European Review One year could pick up the slack. Since purchase, the US continued to
Portfolio Performance 4.5% deteriorate and in China growth failed to materialise, with the
MSCI Europe Ex UK Small Cap Index (net) 4.1% company facing the additional headwind of the imposition of
FTSE All-World Developed Europe ex UK Index 9.5% tariffs on imports. Whilst disappointing so far, we believe that
end markets can recover given the quality of the company’s
The European portfolio had a solid year and outperformed its products and brands. The valuation is also depressed and
benchmark due to good stock selection in the technology and so we have kept our holding. Shares of high-pressure pumps
consumer discretionary sectors. This was partially offset by and hydraulic equipment company Interpump fell 18%. The
adverse stock selection in industrials. company suffered from customer de-stocking and challenging
prior year comparisons. Similarly, inventory reduction and
Strong performers within the portfolio included ASM weak bicycle markets thwarted MIPS, the Swedish producer of
International and BE Semiconductor Industries, which offer helmet safety technology. Coor, the Swedish listed integrated
critical products in the manufacturing chain for semiconductors, facilities manager suffered from two contract losses and
and their shares soared 83% and 57% respectively. Results have margin pressure as they struggled to pass on higher costs to
been strong, assuaging fears of these companies being caught their clients; the stock was down 41%. SIG Group, the food
up in the industry-wide slowdown in semiconductor demand and beverage packaging specialist, reported subdued trading
and both were clear beneficiaries of the growth of AI and cloud conditions in the Americas. Growth elsewhere however, was
computing. encouraging, especially in the Asia Pacific region. Switzerland
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Surgical Science Sweden equipment is used by clinicians to practice surgical procedures such as a laparoscopy.
based life sciences equipment producer Tecan Group was held from the investment community, the valuation became too
back by the wider funding pressures seen in the biotechnology stretched for our liking and so we exited. We also sold Alten,
industry. Carel Industries, which specialises in components and the French IT consulting business, as demand seems to be
technology for air conditioners and refrigerators, suffered from weakening and results showed worryingly high costs. Verallia,
lower demand in its heat pump and refrigeration businesses. the French glass bottle manufacturer which supplies the wine
Schoeller-Bleckmann, the Austrian-based oil field drilling trade, has a strong business model but its market backdrop has
equipment producer, delivered good results but the market become more challenging and we decided to sell. We retained
seems a little concerned about the sustainability of these trends our holding in its peer Vidrala, where the valuation looked more
given increasing competition. attractive. We also recently sold Merlin Properties, reflecting
our concerns about the outlook for the office sector in Spain,
During the year we purchased a holding in Elis, the European reinvesting the proceeds in Argan, an industrial and logistics
leader in textile rental. The company has strong scale and property developer, where the outlook seems brighter.
local density advantages. It can grow through acquisitions and
continued outsourcing by the industries it serves. In Germany Japanese Review One year
we invested in Stabilus, the auto component supplier. It is Portfolio Performance 10.1%
transforming its end market exposure and now has a meaningful MSCI Japan Small Cap Index (net) 8.6%
presence in the fast growing industrial automation sector but Topix Index 18.6%
the improved quality of the business does not yet appear to be
recognised by the stock market. A strong brand, good technology The Japanese portfolio was ahead of the MSCI Japan Small Cap
and competitive prices is helping Nordnet (a share trading Index. Similar to other markets, small caps underperformed
platform in Scandinavia) to win new customers. The shares were large caps. In the financial year we came to the decision to
bought at an attractive valuation. Surgical Science Sweden, sell our holdings in the abrdn SICAV I - Japanese Smaller
a market leader in surgical simulation software generates Companies Sustainable Equity Fund and the Baillie Gifford
recurring revenues and high margins. It should see continued Japanese Smaller Companies Fund. These funds had not
growth from the increased adoption of robotic assisted surgery. performed well for some time. Following extensive due diligence,
Other Information
we decided to use the proceeds from these sales to invest in
The aforementioned Lotus Bakeries has been a very successful a portfolio of around 30 individual Japanese smaller company
investment for us. Following good results and positive coverage equities. We have been able to select these stocks directly,
Report and Financial Statements 2024 | 15
drawing on the skills of fund managers focusing on Japanese competitive advantage as a consequence of scale and superior
equities within Columbia Threadneedle Investments, who have a technology and this should lead to further market share
strong record of performance in this market. In addition to being gains. Kinden designs and builds infrastructure. It provides
a demonstration of the depth of the investment team within end-to-end services to its customers and has a strong project
Columbia Threadneedle Investments, this change of approach execution track record. Decarbonisation and rising spending
will lower the cost of the management of the Company’s on infrastructure projects can support earnings growth at
exposure to Japan as the fee payable to Columbia Threadneedle this company. Both of these companies are becoming more
Investments is lower than what was being incurred by holding shareholder friendly by increasing distributions. We thought the
the two funds which have been sold. We continue to hold investment theses no longer applied for Solasto and personal
our position in the Eastspring Investments Japan Smaller care products business MTG so both of those holdings were
Companies Fund which represents just over half of our sold.
Japanese exposure now.
Our holding in Eastspring Investments Japan Smaller
The new Japanese portfolio outperformed its benchmark from Companies Fund (which represents just over half of our
inception in September 2023 through to the financial year end. exposure to Japan) had another good year with value as a style
Good stock selection in the industrials, consumer discretionary outperforming growth by a wide margin. The fund outperformed
and real estate sectors was partially offset by adverse stock its benchmark thanks to good stock selection in the
selection in the information technology, materials and health industrials and financials sectors and by avoiding companies
care sectors. in the technology sector that were impacted by inventory
rationalisation. Mis-pricings still exist in the Japanese market
The market warmed to the prospect of a semiconductor and the managers have been recently finding good opportunities
industry-led recovery in earnings at Ebara, a manufacturer of within the technology sector and some of the more defensive
pneumatic and hydraulic pumps. Niterra manufactures spark parts of the market.
plugs for the auto industry. Its shares did well as the company
continued to win market share. Sanwa Holdings, a producer The Company’s combined Japanese portfolio is attractively
of building products, reported strong domestic profit and order valued and well positioned to benefit from the trend of
growth. Negative real interest rates in Japan helped the real improving corporate governance in Japan.
estate sector and Tosei was a beneficiary of this. Diversified
trading house Sojitz announced an ambitious medium term Rest of World Review One year
plan that is more shareholder friendly. It also raised its dividend Portfolio Performance 10.8%
guidance. Regional banks such as Gunma Bank and Nishi- MSCI All Country Asia Pacific ex Japan Small Cap Index (net) 16.9%
Nippon Financial Holdings delivered good results due to benign MSCI EM Latin American Small Cap Index 14.5%
credit losses and the monetisation of non-core assets.
The Rest of World portfolio in the context of the Company
The slowdown in China made it a difficult period for Rohto mainly revolves around Asia, incorporating both developed and
Pharmaceutical, a manufacturer of pharmaceutical and emerging markets, although we also have some exposure to
cosmetics products. There were concerns over the balance Latin America and other regions outside of the main developed
sheet of INFRONEER Holdings, a provider of infrastructure markets. In the year, returns from Asian small caps were
construction services after the company made a large somewhat better than larger stocks, pleasingly bucking the
acquisition. Daiwabo Holdings distributes technology products. global trend, although our portfolio lagged.
The company faced challenging comparatives this year and
found it difficult to maintain the same level of activity as in We use third party managed collectives to gain exposure to
the prior year. QOL Holdings (a pharmacy chain operator) and these markets. Over the year, the best performer of our four
JustSystems (application software) released disappointing holdings was The Scottish Oriental Smaller Companies Trust.
earning figures, with declines in profit margins in both This delivered a share price return of 11.2%, which would have
businesses. Contracted medical services Solasto found it been better had the discount not widened quite considerably.
difficult to pass on higher IT and labour costs to its customers. Performance was helped by its large exposure to India, where
share prices have been supported by strong economic growth
Recent purchases included pharmaceutical wholesale and increased investor interest in the stock market. The team
distributor Toho Holdings. The company has a strong have taken selective profits in this market following the run-up
16 | The Global Smaller Companies Trust PLC
Strategic Report
in valuations. Stock selection was also good, particularly in the banks and potential cuts in interest rates, the environment for Chairman’s StatementOverview Auditor’s Report
consumer and real estate sectors. However, the company's stock markets looks constructive. Over the last few years, we
overweight positions in Indonesia and underweight positions in have seen global equity market returns driven by the US and
information technology and Taiwan worked against it in the year. larger companies, particularly in the technology sector. This
It continues in the main to provide us with a good exposure has created better relative opportunities in other regions and
to fast growing and high quality consumer businesses in Asia, sectors and smaller companies in general. We have seen this
which should compound steadily over the years. sort of behaviour in the past and history tells us that leadership
of markets tends to trend in cycles. We are optimistic that, in
Strategic Report Governance Report Financial Report Notice of Meeting
Utilico Emerging Markets Trust’s NAV outperformed emerging time, equity market returns will broaden to include the faster
markets and utilities indices but lagged the MSCI Emerging growing area of smaller companies and that our shareholders
Markets Small Cap Index in the year. The company has holdings will benefit from this.
in several port operators that saw good volume growth in their
markets. Operational performance from its investments in At the same time, the world economy and markets face several
various electricity, water and telecommunication assets was cross-currents and there are many uncertainties. ‘Soft landings’
also encouraging and exposure to data centre assets has been have historically been difficult to engineer and we do not yet
built up. An unlisted investment in an electric vehicle-related know if central banks have been successful in this regard.
business took a write-down and this did impact negatively Inflation may prove persistent because of longer term factors
on performance. This remains a well-managed portfolio of such as deglobalisation and the increasing bargaining power
infrastructure assets that should continue to benefit from of labour and there may still be knock-on effects from a period
increased investment in the years to come. This should result of higher interest rates. In addition, upcoming elections create
in rising dividends for shareholders over the medium term. As uncertainty and geopolitical tensions may be here to stay.
with The Scottish Oriental Smaller Companies Trust, a widening Against this backdrop of uncertainty, complacency has crept
in discount held back the share price return for us in the into pockets of the equity markets and in some cases investors
year under review. Positively, both companies are buying back are not being adequately compensated for the risks that they
shares. are bearing.
The Pinebridge Asia ex Japan Small Cap Fund delivered good In the past the Company successfully applied the investment
stock selection in the year. However, this was more than offset philosophy of taking a long term and conservative approach
by the fund's overweight and underweight positions in China to investing in high quality businesses when they became
and India respectively, which worked against it on a relative available at attractive valuations. With the change in Lead
to benchmark basis. This positioning reflects the Pinebridge Manager, shareholders should take comfort that this approach
investment team’s view that there are many more attractively will not change. In the current environment where there is a
valued opportunities presently in China compared to India. wide range of possible outcomes, we are convinced that this
Performance improved as the year progressed and long term investment philosophy is the right one to follow. In the future,
performance remains ahead of benchmark and peers. following on from the partial in-sourcing of the Japanese
portfolio, we will continue to look for opportunities to further
The Schroder ISF Global Emerging Markets Smaller leverage the additional investment capabilities available to us
Companies Fund benefited from solid stock selection in Korea, within Columbia Threadneedle Investments. In a gradual and
China and the materials sector in the year. However, the fund pragmatic way, it is also our intention to look to slightly reduce
was underweight to the outperforming Indian and Taiwanese the number of holdings in the portfolio in order to achieve the
markets and faced individual stock challenges in the technology right balance between conviction and sufficient diversification.
sector, leading to portfolio returns that lagged the market.
We have confidence that over the coming years our diversified
We continue to keep other funds under review for the Rest portfolio of businesses is well positioned to successfully
of World portfolio but would want to retain only a short list of navigate the obstacles that will inevitably appear and to create
holdings to avoid over-diversification. additional value for our shareholders.
Other Information

| Outlook | Nish Patel |
| --- | --- |
| With economic growth expected to continue at a solid rate, | Lead Manager |
| inflation slowly subsiding towards levels targeted by central | 25 June 2024 |

Report and Financial Statements 2024 | 17
## Investment Manager's
## Investment Philosophy and Process
One of the attractions of the Company’s investment mandate is sheets as this promotes financial resilience. An appreciation
the breadth of opportunities in the listed global smaller companies of the Environmental Social and Governance (ESG) risks and
market, with many thousands of listed companies to choose from. opportunities around any potential investment is also a key part of
This is a large, diversified universe of exciting opportunities and is our analytical work.
not necessarily well researched or understood. This can present
anomalies between price and value that we, as disciplined stock Assessing the quality of the management teams we partner with
pickers, can take advantage of to deliver superior investment is a critical part of the overall investment process. Management
performance over the long term. Columbia Threadneedle teams of smaller companies have a crucial role to play in the
Investments has significant assets under management and a large evolution of their businesses. How they are motivated, rewarded
and experienced team of smaller company focused fund managers and allocate capital is key to a company’s development, for
with significant support from globally located research analysts. As better or for worse. We want to invest alongside management
a result of this scale, we have excellent corporate access and are teams who make good long-term decisions with a track record of
well placed to find exceptional investment opportunities. operational success and are rewarded for doing so. We also want
management teams to be open communicators with the financial
Our philosophy towards investing is based on a belief that markets. There will often be short-term challenges for smaller
investing in high quality smaller companies, run by strong companies but those management teams which clearly identify
management teams, where the price we pay for our investment is the issues that they are facing, and how they are addressing them,
attractive, will generate respectable risk adjusted returns for our will earn greater support over the long term.
shareholders. The team take a long-term, conservative approach
to investing in this faster growth but higher risk asset class. While we believe the evolution of a company’s profits and
cash generation will ultimately be the principal determinant of
We look at each potential investment through the same lens. The shareholder returns, the fact is that many high-quality businesses
starting point is an assessment of the core quality of the business with good management teams may become overvalued in the
franchise. This will usually be ascertained through rigorous stock market. We therefore need to carefully assess the price at
analysis of the investee company and face to face meetings or which it makes sense for us to invest. We do this by looking at a
calls with the management team, sometimes involving visits to number of different metrics including historic multiples that the
business operations. We want to fully understand the business’s company and its peers have traded at in the stock market, the
product or service offering and whether it has sustainable prospective growth rate of the business and recently negotiated
competitive advantages over peers. In addition, we seek to transactions of similar businesses in the public or private markets.
understand the industry that potential investments operate in and In addition, looking at projected cash flows and profits informs
the bargaining power of the company’s customers and suppliers. a view around the price that we should be happy to pay for the
Evaluation of these factors help us to determine if the company’s investment now.
financial returns are durable and if the business has pricing
power; this is particularly important in an environment of higher Maintaining valuation discipline is crucial to long-term returns and
inflation. We want companies that we invest in to have good cash often requires patience. Companies that reach our quality hurdle
flow characteristics as this indicates superior accounting quality, but do not appear attractively valued are placed on our watch
reduces the risk of funding difficulties and creates optionality list. This allows us to act quickly to buy in when the opportunity
for further growth. This also means that we will generally avoid presents itself. We have also had many cases in the past where
conceptual and speculative companies without a track record we have sold a stock on valuation grounds and then re-purchased
of profitability. We like our holdings to have strong balance it at a later stage when the shares have de-rated. The depth and
18 | The Global Smaller Companies Trust PLC
Strategic Report
Chairman’s StatementOverview Auditor’s Report
### • Trends in metrics important Attractive High • Well articulated model
• Range of valuation measures • Competitive advantages
### Price Quality
used • Free cash flow generative
### Business
• Repeatability of returns • Pricing power/scale
### Quality
Strategic Report Governance Report Financial Report Notice of Meeting
• Conviction in value appreciation • Favourable industry structure/
conditions
• Financial strength
• Capable operators • Diversified customer/supplier/
• Rational product set
### • Good capital allocators Strong • ESG and Sustainability
• Aligned interests
### Management
• Prudent
• Transparent with shareholders Source: Columbia Threadneedle Investments
experience of the team in terms of monitoring many potential sectors such as technology. Investing in the best opportunities
investments means that we are able to keep refreshing the within slower growing or more mature industries can often prove
investment portfolio when existing holdings reach or exceed our more lucrative.
assessed valuations.
The Company provides geographic diversification by investing in
Ultimately this approach should lead to a portfolio of higher quality more than 40 countries in both developed and emerging markets.
smaller companies with the following characteristics: We monitor the geographic weightings of our portfolio against the
• Proven business models that have scale advantages, a Benchmark index, but the location of where a company is listed
superior product or offering, valuable brands or intellectual does not always provide a true indication of where it is exposed.
property From time to time a particular macro-economic issue or geopolitics
• Management teams that have the right balance of may provoke us to change geographic allocations, though
entrepreneurial flair, consistent operational delivery and individual stock idea flow will tend to be more important in driving
rational capital allocation track records exposure changes.
• Higher growth rates, margins and returns on capital than the
market In relation to our approach to investment in Japan and the Rest
• Superior cash flow generation and strong balance sheets that of World (Asia, Latin America and some other smaller markets
provide resilience and opportunity for value added capital outside of the main regions) we have for many years used third
deployment party managed collectives to gain exposure to these markets. As
mentioned earlier in the report, during the last year and following
While individual stock decisions are obviously key, we spend a lot an extensive period of due diligence, we decided to allocate a part
of time considering the balance of the investment portfolio both on of our Japanese market allocation to a team of portfolio managers
an overall basis and across the regional portfolios. While, clearly, focussed on Japanese equities within Columbia Threadneedle
we want to skew investment towards faster growing areas where Investments. In the year ahead we will continue to keep the
returns will be best, we also want the Trust to provide investors approach to investing in collectives under review and at the same
Other Information
with a well-diversified portfolio. Previous periods of time such as time monitor the range of alternative funds that could be used
around the year 2000 and in recent years have shown us the risks within the portfolio.
that can arise when investors become too focused on favoured
Report and Financial Statements 2024 | 19
## Investment Case Study - WEX (North America)
WEX was founded in Maine in 1983, it is a leading provider When we invested in WEX almost ten years ago, the quality of
of niche payment processing services for commercial and the business model was very apparent, however, at the time we
government customers in the transportation, health benefits and believed that the stock market had underappreciated the growth
travel industries. The company’s fuel payment cards enable over opportunity ahead of the company and that the shares were
600,000 customers with large vehicle fleets to closely monitor undervalued as a consequence. The management team had
and reduce their expenditure on fuel. a strong track record and its strategy to bolt new geographies
and sectors on to the company’s already established technology
WEX has invested heavily in technology and it has a long track infrastructure seemed sensible and likely to work. We invested in
record of successfully managing complex payment networks for the company at a 6% free cash flow yield, which we thought was
its customers. Customers find WEX’s technology platform easy to attractive given the durability of the business model and the long
use and value the data and analytics that it produces. The trust term growth prospects on offer.
that WEX has built with its customers over the years means that a
high proportion of the company’s revenues are recurring in nature. Since our initial investment, WEX’s revenues and EPS have
The business’s very high profit margins have persisted over time more than tripled. The electronic payments industry is growing
and this is testament to its strong competitive position and the at the expense of legacy manual processes and this provides
significant barriers that exist for a would-be rival to enter into this a tailwind for WEX for years to come. Over the long term WEX’s
industry. mobility business should continue to grow at a mid single
digit percentage rate from the addition of new customers and
We initially met the company on a research trip in the US in 2010 products. Newer areas such as health benefits and travel offer
when WEX was a smaller but highly cash generative business faster organic growth as these areas are more complex and are
with ambitions to replicate their initial success in fuel payment underpenetrated. WEX also has the opportunity to acquire smaller
cards in other verticals with similar characteristics, such as the competitors in the company’s current markets.
administration and payment of employee health benefits and
corporate travel expenses.
20 | The Global Smaller Companies Trust PLC
Strategic Report
Chairman’s StatementOverview Auditor’s Report
## Investment Case Study - 4imprint Group (UK)
Strategic Report Governance Report Financial Report Notice of Meeting
4imprint Group is mostly a US business that happens to be listed of sales growth. The long tenured management team have a
on the London Stock Exchange; it was founded in 1985 as Nelson strong track record of operational execution and capital allocation.
Marketing in Indiana. It is a supplier of branded promotional
products that are given away by companies to employees and We have owned the shares since 2015. When we initiated our
potential or existing customers. These could be flasks, sweatshirts holding in 4imprint Group, we believed that the shares were out
or screwdriver sets branded with their customer’s logo. 4imprint of favour and undervalued because based on the company’s
Group designs, markets and sells the products, however the history there was a misperception that it was a cyclical business
products themselves are manufactured, branded and distributed with an onerous pension scheme. However, we discovered that
by third party suppliers. the business had largely addressed these concerns. A shift in
the marketing mix away from paper catalogues meant that the
4imprint Group is by far the market leader in selling to SMEs and company could now be much more responsive in cutting costs if it
has consistently grown its market share over time because of the saw a deterioration in demand. In addition, the management team
company’s very strong competitive advantages that are mostly used the company’s prodigious cash generation to strengthen
related to scale. The business offers a wider range of products its pension position. Since purchase the company’s sales have
to its customers than its peers. Additionally, because of the compounded at over 13% pa, well in excess of the industry.
company’s significant purchasing power in a fragmented supply With more focussed marketing, profit margins have expanded
chain it can sell these products at very competitive prices. It is significantly. Dividends have grown and the company’s valuation
also the only business in its industry large enough to advertise has rerated to a more appropriate level. 4imprint Group has
on national television. Despite this strong position, the company’s rewarded us with a total return over 800% over the last 9 years.
market share is only 5% in this very fragmented industry, leaving We think there are plenty of growth opportunities left for the
plenty of runway for further gains. In contrast to many high growth company to pursue in the years ahead.
Other Information
businesses that consume cash, 4imprint Group’s capital light
model has a history of generating free cash flow growth in excess
Report and Financial Statements 2024 | 21
## Investment Case Study - Acceleron Industries (Europe)
Acceleron Industries was originally part of the Swiss industrial The shares were undervalued at the time of our purchase because
company ABB and was spun out through an IPO in October 2022. of technical factors as ABB shareholders sold their holdings in
It develops, produces and services turbochargers and related Acceleron Industries following the IPO. Given the company serves
components for engines in several off-highway sectors including the fossil fuel powered engines industry, we believe there were
marine, power, oil and gas and rail. The company’s products are also some investor misconceptions about the growth potential of
good for the environment in that they lead to lower usage of fossil the business and we were able to buy a holding at an attractive
fuels and a reduction in engine emissions. multiple of cash flow.
Acceleron Industries pioneered turbocharger technology in 1924 Decarbonisation and regulations related to energy efficiency
and ever since then has continued to invest in research and create reliable growth tailwinds behind the company. In addition,
development to further improve its offering and lower overall management have an ambitious growth strategy that involves
engine running costs for its customers. With approximately 40% entering into the adjacent high speed diesel market, geographic
to 60% market shares across the range from low to medium expansion, development of new products and services and
speed and high speed gasoline verticals, Acceleron Industries opportunistic acquisitions. As management execute on these
is by far the leader in the off-highway market. This is a lower exciting growth initiatives we have a high level of confidence that
volume, but more customised segment of the turbocharger the company will be more valuable in the future.
industry. The business has highly visible and recurring revenues
from its installed base of 180,000 turbocharger units that require
regular servicing through the company’s global service network.
The quality of Acceleron Industries' business model shows up in
consistently high profit margins and returns as well as strong cash
flow generation.
22 | The Global Smaller Companies Trust PLC
Strategic Report
Chairman’s StatementOverview Auditor’s Report
## Responsible Investment
### We believe investing responsibly is fundamental to long-term wealth creation. The Company has not set
### out to be an investment trust with any ESG or sustainability characteristics, however we have a Manager
### that integrates the consideration of financially material environmental, social, and governance (‘ESG’)
### factors into its research and investment process and encourages stronger ESG practices to be adopted by
Strategic Report Governance Report Financial Report Notice of Meeting
### issuers through its engagement and voting activities.
Our approach in the first instance rather than simply divesting or excluding
We believe that good financial outcomes are more likely to be investment opportunities is also part of this approach.
achieved if we fully understand the risks and opportunities that
relate to the markets in which we invest. Integrating material ESG The Manager’s Corporate Governance Guidelines set out its
considerations into our investment research and stewardship can expectations of the management of investee companies in terms
help inform our investment decision-making. We need to ensure of good corporate governance. This includes the affirmation of
the companies we invest in have a robust approach to managing responsibility for reviewing internal ethics policies and ensuring
financially material environmental and social risks. We also expect that there is an effective mechanism for the internal reporting
good governance practices which we believe better positions of wrongdoing, whether within the investee company itself, or
issuers to manage risks, identify opportunities, and deliver involving other parties, such as suppliers, customers, contractors
sustainable growth. or business partners. The Manager is a signatory to the United
Nations Principles for Responsible Investment (‘UNPRI’) under
There are two strands to the Board’s approach to responsible which signatories contribute to the development of a more
investment: sustainable global financial system. As a signatory the Manager
• The Company’s own responsibilities on matters such as aims to incorporate the consideration of financially material ESG
governance; and factors into its investment processes.
• The impact the Company has through the investments that are
made on its behalf by its Manager. ESG and the Investment Process
During 2023, as part of the integration of the Manager's business
The Company’s compliance with the AIC Code of Corporate with Columbia Threadneedle Investments, the Manager undertook
Governance is detailed in the Corporate Governance Statement an extensive project to join all investment teams together on a
on pages 52 to 53. In addition, the Principal Policies statement single Order Management System (‘OMS’). This was completed
on pages 41 to 43 notes the Company’s policies towards board in October 2023 and helped to expand the availability of the
diversity and inclusion, integrity and business ethics and the Manager's ESG integration tools, through the combined OMS.
Modern Slavery Act 2015. These tools use data from many sources to enhance and inform
the integration of ESG considerations into investment research,
The Board recognises that the most material way in which the portfolio construction and risk monitoring, by giving a clear picture
Company can have an impact is through responsible ownership of of the ESG considerations that are financially relevant to different
its investments. The Company has not set out to be an investment investment opportunities. Key tools include:
trust with any ESG or sustainable characteristics, however the • ESG materiality ratings;
Manager engages actively with the management of investee • Sustainable Development Goals (‘SDG’) mapping tool;
companies to encourage high standards of ESG practice. • Net Zero Framework;
• Good governance model;
Responsible Ownership • Exclusions framework; and
Engaging actively with companies on significant ESG matters to • Controversy rating.
reduce risk, improve performance, encourage best practice and
Other Information
underpin long-term investor value forms a fundamental part of the These tools mark a starting point for the Manager’s ESG
Manager’s approach towards responsible investment. Engagement assessment and the Responsible Investment team at the
Manager hosted training sessions on them as well as thematic
Report and Financial Statements 2024 | 23
ESG topics. The Fund Manager works with the Responsible analysis. Specialism within the Responsible Investment team
Investment analysts to ensure that those performing the work allows the fund managers to talk to those who understand the key
on individual investment opportunities for the Company are well ESG issues relating to a particular sector.
informed in what to look for in relation to the ESG aspects of their
Portfolio case study: Bodycote
Where numerous industrial companies have now moved into the
role of middlemen, in our view better energy management can
be a valuable differentiator from competitors. We expect that
this will become gradually more noteworthy as customers look
to decarbonise their supply chain as GHG (Greenhouse Gases)
emissions targets extend to consider Scope 3. In some cases
companies will therefore opt to outsource energy inefficient parts
of their processes.
Bodycote is a priority company for stewardship on
decarbonisation. It has a valuable role to play in the industrial
transition story. Bodycote offers third-party heat treatment
services for customers in the energy, general industrial and
aerospace and defence sectors. Bodycote reports that it can
deliver its clients 10-40% reductions in emissions compared
to if the customers had performed the process themselves.
As regulatory pressures and stakeholder expectations around
decarbonisation grow, we expect that companies will increasingly
assess their supply chains for chances to reduce emissions.
In our view service providers like Bodycote, which can evidence
emissions reductions through their offerings, could find
themselves well-positioned to capitalize on this.
Thermal spray coating of a component in a Bodycote
facility.
## Engagement
Corporate Governance 44.74%
## 76
Labour Standards 26.31%
Climate Change 11.84%
issues raised at
Human Rights 9.21%
50 companies
Business Conduct 3.95%
across 7
Environmental Stewardship 3.95%
countries
During the year ended 30 April 2024, the Responsible Investment for discussion were corporate governance, labour standards and
team engaged with the management of 50 companies in the climate change. Examples of this engagement follow.
Company's portfolio, across 7 countries. The most common topics
24 | The Global Smaller Companies Trust PLC
Strategic Report
Engagement examples in the year: Chairman’s StatementOverview Auditor’s Report
Engagement
Martin Marietta Materials
Martin Marietta Materials is a natural resource-based building materials company that supplies aggregates through its network of quarries and distribution yards
and also provides cement and downstream products like mixed concrete and paving services.
The Manager spoke to the CEO of Martin Marietta Materials about its climate strategy. The company has recently published its first scope 2 emissions targets,
disclosed its Carbon Disclosure Project water and climate statistics for the first time, and set an ambition to be net-zero emissions overall. These are clear steps Strategic Report Governance Report Financial Report Notice of Meeting
in the right direction from the management. The Manager also discussed the implications of the sale of the Hunter cement plant to CRH, which now leaves the
company with only one cement asset in Texas. The Manager was curious to hear that Martin Marietta Materials say it is a marginal environmental positive to no
longer hold the Hunter asset; as it will make the net-zero implementation more straight forward.
The Manager encouraged more transparency around how the business is aligning its capital strategy at its last Texas cement plant with its net-zero trajectory. The
Manager also suggested setting water targets.
Encompass Health
Encompass Health is an owner and operator of inpatient rehabilitation hospitals in the United States. The Manager spoke with Encompass’ General Counsel and
Chief Investor Relations about a number of ESG topics.
The Manager first asked whether the company would consider conducting a double materiality assessment to give more structure to its ESG strategy, to which
the company informed us they will not. The company confirmed they will update their sustainability disclosures in the next few months. We reiterated it is normal
practice to release an annual sustainability report, rather than ad-hoc updates and the company stated it will take this into consideration.
The Manager commended the company’s disclosure on DEI, in particular the comparison between its workforce diversity and the communities they serve. Overall,
Encompass’ staff match the demographics it serves, which the Manager views as positive. The company also shared that they will disclose their first EEO-1 form
this year - something the Manager has engaged with the company on in previous conversations and we congratulated them on this step. Finally, the company
also shared that its employee engagement results have significantly outperformed the healthcare benchmark, which we view as positive.
Genus
Genus is a UK-based animal genetics company – Genus supplies cattle and pig farmers with breeding animals that possess desirable characteristics, enabling
them to produce quality meat and milk. The Manager spoke to Genus' CFO and Global Lead Environment and Sustainability Manager on a number of social
topics.
The Manager encouraged the company to disclose its policy on antimicrobial resistance (AMR) – while the company is very restrictive when it comes to
prescribing antibiotics (e.g. they do not use growth antibiotics) the Manager considers it important for them to be more transparent on this point given the
significant health threat it represents.
The company also shared more information on its employee surveys and efforts on DEI. The Manager encouraged the company to provide stakeholders with more
high-level information on employee satisfaction in light of the materiality of human capital management in high-skilled sectors such as Genus'. The Manager
also encouraged the company to increase efforts on inclusion and equity as we believe that the company could benefit from additional DEI targets across
different levels of the organization beyond its target for women in management.
Finally, the Manager discussed the company's human rights due diligence process with regard to modern slavery, which is a high risk area in agriculture. The
company hires farm staff directly and not through hiring agencies and in the Manager's view has adequate processes in place to check for modern slavery and
human trafficking. The Manager considered this call very constructive with the company receptive of our feedback.
Other Information
Report and Financial Statements 2024 | 25
## Voting on portfolio investments
As noted previously, the Manager’s Corporate Governance www.columbiathreadneedle.com. We expect the Company’s shares
Guidelines set out expectations of the boards of investee to be voted on all holdings where possible. During the year, the
companies in terms of good corporate governance. The Board Manager voted at 196 meetings of investee companies held in the
expects to be informed by the Manager of any sensitive voting Company's portfolio. The Manager did not support management's
issues involving the Company’s investments and receives an recommendations on at least one resolution at approximately
annual record of votes against, or abstentions on, management 45% of all meetings. With respect to all items voted, the Manager
resolutions at investee annual meetings. In the absence of supported over 91% of all management resolutions.
explicit instructions from the Board, the Manager is empowered
to exercise discretion in the use of the Company’s voting rights One of the most contentious voting issues remained
and votes on all investee company resolutions. The Manager is compensation. Either by voting against or abstaining, the
a signatory to the UK Stewardship Code 2020 and, as required Manager did not support approximately 16% of all management
by the FRC, has reported on how it has applied the Code in its resolutions relating to pay, often due to either poor disclosure or a
Stewardship Report 2023. This report is available at misalignment of pay with long-term performance.
## Climate change
Of all the ESG issues, climate change is one of the most important, to those calculated last year. The Company's UK and European
both in terms of the scale of potential impact and in how widespread portfolios still have relatively limited exposure to sectors which have
this could be across sectors and regions. It is important that a high emissions intensity in comparison to the local small cap
considerations around climate change risks and opportunities indices. However, the North American portfolio's carbon intensity
are incorporated into the investment management process. For score remains higher than its benchmark mainly due to the high
the fifth year, we are disclosing, as best we can, the portfolio emissions from three particular stocks; Eagle Materials, Martin
(1)
weighted carbon intensity of the Company's investments, in line Marietta Materials and Kirby.
with the recommendations of the Task Force on Climate-related
Financial Disclosures ('TCFD'). This is based on the greenhouse Since the last report, we have intensified our focus on the materials
gas emissions produced by each investee company, per US$1m of and building supplies industry, given this sector's contribution to the
revenue, and aggregated for the Company as a whole. We aim to overall carbon intensity of the Company's assets. This included the
use the information for analysis and for benchmark comparisons, calls with Martin Marietta Materials as outlined earlier above.
but do not set targets based on it. There are constraints on the
analysis of the carbon intensity of the total portfolio as data sources We are pleased to see better coverage of smaller companies in
are limited, especially for smaller companies. this year's carbon intensity analysis. However, we are mindful that
the data does not provide a full picture of climate risks as it does
Coverage continues to improve, and this year data was available for not capture the innovation that companies may be undertaking
92% of the UK, European and North American portfolios by weight. to find solutions and to enhance their future emissions. Due to
The weighted average carbon intensity for these regional portfolios the company specific complexities of understanding individual
was 161.58 vs the combined relevant benchmarks carbon intensity company emissions profiles, engagement is a key pillar of Columbia
of 117.08. Threadneedle's approach.
To remain consistent with previous disclosure we continue to report In 2024 the Manager will continue focusing on its priority
on carbon intensity at a regional level. For UK, European and North engagement themes: climate change; environmental stewardship;
American regions at the end of April 2024, the carbon intensity of public health; labour standards; human rights; corporate governance
the holdings was 27% less, 48% less and 80% more respectively and business conduct. The Manager will identify and prioritise
against the relevant benchmark. companies for engagement based on a number of financially
material factors including: the impact of ESG factors; the investment
The variation across regions is influenced to a degree by the stocks team’s and research analysts’ judgement and expertise; previous
excluded by the analysis, but also by the nature of the holdings and engagement track record and level of exposure.
sector positioning. The pattern of these intensity results is similar
(1) Carbon intensity – this is measured in tons of CO2 equivalent (i.e. including the basket of six Kyoto gases) of Scope 1 and 2 emissions, divided by $1million of
sales at a company level. This is aggregated to portfolio level using a weighted average (by holding).
26 | The Global Smaller Companies Trust PLC
Strategic Report

# Thirty Largest Holdings

|  30 April 2024 | 30 April 2023 |  | % of total investments | Value £m  |
| --- | --- | --- | --- | --- |
|  1 | 1 | **Eastspring Investments Japan Smaller Companies Fund** Japan Fund providing exposure to Japanese smaller companies. | 5.0 | 45.5  |
|  2 | 2 | **Pinebridge Asia ex Japan Small Cap Fund** Rest of World Fund providing exposure to Asian smaller companies. | 3.8 | 34.4  |
|  3 | 4 | **Schroder ISF Global Emerging Markets Smaller Companies Fund** Rest of World Fund providing exposure to Emerging Markets smaller companies. | 3.7 | 33.3  |
|  4 | 5 | **The Scottish Oriental Smaller Companies Trust** Rest of World Investment company providing exposure to Asian smaller companies. | 3.5 | 32.0  |
|  5 | 6 | **Utilico Emerging Markets Trust** Rest of World Investment company focusing on utility and infrastructure companies in Emerging Markets. | 2.5 | 22.8  |
|  6 | 7 | **Eagle Materials** United States A US producer of construction materials, including cement, aggregates, concrete, gypsum wallboard and recycled paperboard. | 2.1 | 19.1  |
|  7 | 10 | **Kirby** United States Operator of a fleet of inland barges in the US, also a provider of repair services to marine and other end markets. | 2.1 | 18.9  |
|  8 | 9 | **The Ensign Group** United States Operator of skilled nursing facilities, rehabilitative care facilities, also provides home health and assisted living services mainly for post-acute care. | 1.4 | 12.8  |
|  9 | 13 | **Graphic Packaging** United States A vertically integrated producer of printed paperboard cartons for food and beverage products. | 1.4 | 12.7  |
|  10 | 11 | **Wheaton Precious Metals** United States A precious metals company receiving production royalties from mines operated by third parties. | 1.4 | 12.6  |
|  11 | 8 | **LKQ Corp** United States A distributor of alternative car parts. | 1.3 | 11.8  |
|  12 | 14 | **Brown & Brown** United States Insurance broker, now the fifth largest global independent company in the market. | 1.3 | 11.7  |
|  13 | 25 | **Curtiss-Wright** United States Producer of mission critical components, serving the aerospace, defence and power industries. | 1.2 | 11.4  |
|  14 | 26 | **Boot Barn Holdings** United States US retailer of western and work wear. | 1.2 | 11.0  |
|  15 | 15 | **Martin Marietta Materials** United States Aggregates and cement producer that serves the construction industry. | 1.2 | 10.7  |

Strategic Report

Report and Financial Statements 2024 | 27
|  30 April 2024 | 30 April 2023 |  | % of total investments | Value £m  |
| --- | --- | --- | --- | --- |
|  16 | 18 | **Avnet** United States Distributor of computer products, semiconductors and electronic components. | 1.2 | 10.5  |
|  17 | 19 | **WSP Global** Canada Canada based global engineering consultancy business. | 1.1 | 10.1  |
|  18 | 24 | **Encompass Health** United States Leading US provider of post acute care in facility and home based settings. | 1.1 | 9.9  |
|  19 | 21 | **WEX** United States An operator of payment networks. | 1.1 | 9.8  |
|  20 | 22 | **Spectrum Brands** United States A global consumer products company that through its subsidiaries sells personal care items, household appliances, specialty pet supplies and lawn and garden products. | 1.0 | 9.3  |
|  21 | 36 | **CDW** United States Information technology products and services provider. | 1.0 | 9.0  |
|  22 | 16 | **Amdocs** United States Outsourced IT services provider to telecommunications sector. | 0.9 | 8.4  |
|  23 | 27 | **Essential Properties Realty Trust** United States US based real estate company focused on service sector based tenants. | 0.9 | 7.8  |
|  24 | 17 | **Molina Healthcare** United States Managed care business providing health insurance in the US under government programs. | 0.9 | 7.8  |
|  25 | 44 | **Kitwave Group** United Kingdom Wholesaler and distributor of packaged food products. | 0.8 | 7.7  |
|  26 | 33 | **Webster Financial** United States A Connecticut, USA based mid sized bank that focuses on commercial lending. | 0.8 | 7.6  |
|  27 | 35 | **Bristow** United States Provider of helicopter services for global energy and air sea rescue markets. | 0.8 | 7.5  |
|  28 | 63 | **Ashtead Technology** United Kingdom Oil field services equipment sales and rentals. | 0.8 | 7.0  |
|  29 | 43 | **4Imprint Group** United Kingdom Supplier of imprinted promotional merchandise. | 0.7 | 6.7  |
|  30 | 47 | **Hayward Holdings** United States Producer of residential swimming pool related equipment, systems and components. | 0.7 | 6.6  |

The value of the thirty largest equity holdings represents 46.9% (30 April 2023: 46.0%) of the Company's total investments.

28 | The Global Smaller Companies Trust PLC
Strategic Report
Chairman’s StatementOverview Auditor’s Report
## List of Investments

|  | 30 April 2024 |  |  | 30 April 2024 |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  |  | Value |  |  | Value |  |
| Quoted investments Holding |  | £’000s | Quoted investments Holding |  | £’000s | Strategic Report Governance Report Financial Report Notice of Meeting |
| UNITED KINGDOM |  |  | NIOX 3,343,470 2,340 |  |  |  |
| 4imprint Group 107,345 6,741 |  |  | On The Beach Group 1,363,764 1,969 |  |  |  |
| accesso Technology Group 355,419 2,346 |  |  | OSB Group 1,147,625 4,712 |  |  |  |
| Ascential 1,512,873 4,732 |  |  | PageGroup 603,167 2,691 |  |  |  |
| Ashtead Technology 858,357 7,013 |  |  | Paragon Banking Group 393,204 2,811 |  |  |  |
| Auction Technology 436,315 2,177 |  |  | Pebble Group 3,830,895 2,184 |  |  |  |
| Baltic Classifieds Group 1,869,709 4,347 |  |  | Pets At Home 646,295 1,888 |  |  |  |
| Begbies Traynor Group 2,479,195 2,678 |  |  | Qinetiq Group 902,829 3,102 |  |  |  |
| Bodycote 349,543 2,429 |  |  | Rathbones Group 142,139 2,328 |  |  |  |
| Boku 1,794,329 3,104 |  |  | Redde Northgate 809,593 3,113 |  |  |  |
| Breedon Group 1,053,423 3,813 |  |  | Ricardo 712,680 3,236 |  |  |  |
| Bytes Technology 595,610 2,908 |  |  | RWS Holdings 778,861 1,343 |  |  |  |
| Clarkson 57,337 2,225 |  |  | Shaftesbury Capital 4,122,816 5,553 |  |  |  |
| CLS Holdings 2,079,829 1,724 |  |  | SIG 2,919,953 764 |  |  |  |
| Crest Nicholson 1,554,833 2,889 |  |  | Sirius Real Estate 3,686,284 3,585 |  |  |  |
| Dalata Hotel Group 728,317 2,608 |  |  | Spire Healthcare 956,976 2,354 |  |  |  |
| Dominos Pizza Group 925,027 3,014 |  |  | Team17 Group 838,141 2,137 |  |  |  |
| Dowlais 1,833,225 1,498 |  |  | Telecom Plus 201,303 3,495 |  |  |  |
| Elementis 2,425,670 3,415 |  |  | Treatt 545,102 2,652 |  |  |  |
| Essentra 1,186,292 2,095 |  |  | Trifast 2,587,636 1,993 |  |  |  |
| FDM Group 504,173 1,739 |  |  | TT Electronics 1,434,418 2,560 |  |  |  |
| Foresight Group Holdings Ltd 597,024 2,621 |  |  | Tyman 1,118,415 4,216 |  |  |  |
| Gateley Holdings 1,311,229 1,573 |  |  | Vesuvius 722,794 3,473 |  |  |  |
| GB Group 1,071,059 3,080 |  |  | Victrex 138,337 1,751 |  |  |  |
| Genuit 829,448 3,621 |  |  | Warehouse REIT 2,653,795 2,120 |  |  |  |
| Genus 108,368 1,942 |  |  | Watches of Switzerland 257,182 871 |  |  |  |
| Globaldata 1,337,952 2,823 |  |  | Workspace Group 835,492 4,157 |  |  |  |
| Gooch & Housego 391,341 2,152 |  |  | Xaar 1,376,658 1,611 |  |  |  |
| Hilton Food Group 232,636 2,131 |  |  | XP Power 163,561 1,796 |  |  |  |
| Hollywood Bowl Group 1,279,552 4,363 |  |  | YouGov 215,695 1,877 |  |  |  |
| Hostelworld Group 1,699,536 2,736 |  |  | Zotefoams 884,126 3,448 |  |  |  |
| Ithaca Energy 1,678,910 1,988 |  |  | TOTAL UNITED KINGDOM 225,000 |  |  |  |
| JTC 288,947 2,468 |  |  | EUROPE |  |  |  |
| Just Group 3,916,675 4,058 |  |  | AUSTRIA |  |  |  |
| Keller Group 81,153 896 |  |  | Schoeller-Bleckmann 54,152 2,116 |  |  |  |
| Kier Group 3,522,837 4,728 |  |  | Total Austria 2,116 |  |  |  |
| Kitwave Group 1,995,966 7,684 |  |  | DENMARK |  |  |  |
| Lancashire Holdings 754,371 4,602 |  |  | Ringkjoebing Landbobank 25,975 3,509 |  |  |  |
| Loungers 1,416,587 3,400 |  |  | Royal Unibrew 44,968 2,726 |  |  |  |
| Luceco 2,030,173 3,354 |  |  | Total Denmark 6,235 |  |  |  |
| Marshalls 755,233 2,028 |  |  | FRANCE |  |  |  |
| Mercia Asset Management 13,202,826 4,357 |  |  | Argan 17,537 1,102 |  |  |  |
| Moneysupermarket.com 827,539 1,779 |  |  | Elis 187,412 3,380 |  |  | Other Information |
| Morgan Advanced Materials 1,201,969 3,774 |  |  | Lectra 91,800 2,501 |  |  |  |
| Next 15 Group 543,512 4,875 |  |  | Planisware 82,714 1,447 |  |  |  |
| Nexteq 1,561,225 2,342 |  |  | Remy Cointreau 18,320 1,399 |  |  |  |

Report and Financial Statements 2024 | 29

|  | 30 April 2024 |  |  | 30 April 2024 |  |
| --- | --- | --- | --- | --- | --- |
|  |  | Value |  |  | Value |
| Quoted investments Holding |  | £’000s | Quoted investments Holding |  | £’000s |
| Total France 9,829 |  |  | Total Sweden 19,415 |  |  |
| GERMANY |  |  | SWITZERLAND |  |  |
| CTS Eventim 56,408 4,003 |  |  | Accelleron 87,901 2,743 |  |  |
| Gerresheimer 31,137 2,680 |  |  | Inficon Holding 1,185 1,327 |  |  |
| Rational 4,228 2,878 |  |  | Kardex 11,579 2,460 |  |  |
| Stabilus 48,972 2,438 |  |  | Siegfried Holding 3,402 2,613 |  |  |
| Symrise 31,454 2,698 |  |  | SIG Group 109,855 1,760 |  |  |
| Total Germany 14,697 |  |  | Tecan Group 8,465 2,410 |  |  |
| IRELAND |  |  | Total Switzerland 13,313 |  |  |
| Bank of Ireland Group 364,208 3,124 |  |  | TOTAL EUROPE 104,099 |  |  |
| Glanbia 152,435 2,322 |  |  | NORTH AMERICA |  |  |
| Total Ireland 5,446 |  |  | CANADA |  |  |
| ITALY |  |  | SSR Mining 55,457 236 |  |  |
| Azimut 131,695 2,784 |  |  | WSP Global 83,600 10,129 |  |  |
| Carel Industries 141,031 2,281 |  |  | Total Canada 10,365 |  |  |
| Davide Campari 195,807 1,573 |  |  | UNITED STATES |  |  |
| Interpump 81,493 2,856 |  |  | Amdocs 125,485 8,408 |  |  |
| Total Italy 9,494 |  |  | American Vanguard 466,925 4,251 |  |  |
| NETHERLANDS |  |  | Avnet 268,208 10,459 |  |  |
| ASM International 5,087 2,586 |  |  | Boot Barn Holdings 129,259 10,990 |  |  |
| BE Semiconductor Industries 11,706 1,255 |  |  | Bristow Group 357,401 7,510 |  |  |
| IMCD 16,419 1,994 |  |  | Brown & Brown 179,953 11,719 |  |  |
| Total Netherlands 5,835 |  |  | Catalent 74,378 3,316 |  |  |
| NORWAY |  |  | CDW 46,758 9,032 |  |  |
| Atea 216,511 2,205 |  |  | Cognyte Software 1,014,382 5,509 |  |  |
| Nordic Semiconductor 188,946 1,675 |  |  | Curtiss-Wright 56,107 11,361 |  |  |
| Storebrand 409,702 3,159 |  |  | Dine Brands Global 52,108 1,836 |  |  |
| TGS 146,762 1,346 |  |  | Eagle Materials 95,179 19,057 |  |  |
| Tomra Systems 121,265 1,204 |  |  | Encompass Health 149,250 9,940 |  |  |
| Total Norway 9,589 |  |  | Essential Properties Realty Trust 372,137 7,828 |  |  |
| SPAIN |  |  | FB Financial 129,998 3,803 |  |  |
| Fluidra 162,118 2,747 |  |  | Frontdoor 106,657 2,613 |  |  |
| Vidrala 40,737 3,423 |  |  | Genpact 201,944 4,956 |  |  |
| Viscofan 38,453 1,960 |  |  | GrafTech International 1,760,902 2,405 |  |  |
| Total Spain 8,130 |  |  | Grand Canyon Education 62,565 6,497 |  |  |
| SWEDEN |  |  | Graphic Packaging 616,525 12,728 |  |  |
| Avanza 85,094 1,484 |  |  | GXO Logistics 140,559 5,575 |  |  |
| Engcon 247,889 1,627 |  |  | Hayward Holdings 609,143 6,606 |  |  |
| Hexpol 245,260 2,247 |  |  | Healthcare Realty Trust 568,140 6,452 |  |  |
| Indutrade 105,927 1,985 |  |  | Jefferies Financial Group 159,689 5,492 |  |  |
| Karnov 611,685 2,938 |  |  | Kirby 216,913 18,905 |  |  |
| MIPS 50,416 1,385 |  |  | Kosmos Energy 1,401,147 6,345 |  |  |
| Nordnet 136,095 1,961 |  |  | LKQ Corp 341,545 11,775 |  |  |
| Sdiptech 132,369 2,730 |  |  | Martin Marietta Materials 22,911 10,747 |  |  |
| Surgical Science Sweden 129,490 1,475 |  |  | MaxLinear 232,843 3,862 |  |  |
| Thule Group 69,231 1,583 |  |  | Molina Healthcare 28,553 7,799 |  |  |

30 | The Global Smaller Companies Trust PLC
Strategic Report
Chairman’s StatementOverview Auditor’s Report

|  | 30 April 2024 |  |  | 30 April 2024 |  |
| --- | --- | --- | --- | --- | --- |
|  |  | Value |  |  | Value |
| Quoted investments Holding |  | £’000s | Quoted investments Holding |  | £’000s |

Strategic Report Governance Report Financial Report Notice of Meeting

| MSC Industrial Direct 69,031 5,030 | QOL Holdings 131,200 1,183 |
| --- | --- |
| Nomad Foods 352,800 5,086 | Riken Keiki 33,800 667 |
| Plymounth Industrial REIT 394,962 6,583 | Rohto Pharmaceutical 53,500 836 |
| PRA Group 302,849 5,752 | Sangetsu 86,100 1,464 |
| Prosperity Bancshares 116,118 5,747 | Sankyo 155,000 1,350 |
| QuidelOrtho 66,280 2,146 | Sanwa Holdings 71,800 943 |
| Skechers USA 94,545 4,987 | SK Electronics 20,700 340 |
| Spectrum Brands 142,545 9,320 | Sojitz 93,200 1,915 |
| Standex International 41,870 5,778 | Sundrug 57,700 1,344 |
| Stericycle 90,886 3,245 | SWCC 38,200 809 |
| The Ensign Group 135,153 12,775 | Toho Holdings 40,600 775 |
| U.S. Physical Therapy 79,592 6,452 | Tokyo Steel 146,300 1,241 |
| United Bankshares 206,665 5,357 | TOMY 131,200 1,682 |
| Vail Resorts 22,562 3,414 | Tosei 150,000 1,873 |
| Viavi Solutions 528,109 3,332 | WingArc1st 96,400 1,311 |
| Vitesse Energy 266,058 4,709 | TOTAL JAPAN 86,896 |
| Webster Financial 217,002 7,592 | REST OF WORLD |
| WEX 58,340 9,850 | Pinebridge Asia ex Japan Small Cap Fund 51,345 34,412 |
| Wheaton Precious Metals 302,025 12,574 | Schroder ISF Global Emerging Markets Smaller |
| World Kinect 213,754 4,010 | Companies Fund 221,600 33,335 |
| Total United States 361,515 | The Scottish Oriental Smaller Companies Trust 2,418,586 32,046 |
| TOTAL NORTH AMERICA 371,880 | Utilico Emerging Markets Trust 10,101,596 22,830 |
| JAPAN | TOTAL REST OF WORLD 122,623 |

Amano 79,000 1,522
Daiwabo Holdings 104,200 1,451
TOTAL INVESTMENTS 910,498
Eastspring Investments Japan Smaller Companies
Fund 2,206,160 45,533
The number of investments in the portfolio is 213 (2023:194).
Ebara 23,900 1,588
Fujikura 183,700 1,363
Gunma Bank 219,400 1,068
Hosiden 133,200 1,332
INFRONEER Holdings 58,300 413
Justsystems 50,200 705
Kinden 52,400 801
Kokuyo 143,400 1,960
Macnica Holdings 21,700 775
Nichias 35,900 790
Nifco 27,200 527
Nippon Television Holdings 39,400 460
Nishi-Nippon Financial Holdings 199,800 2,021
Niterra 80,000 2,099
Nomura Real Estate Holdings 88,600 1,992
NSD 95,800 1,500 Other Information
PAL Group Holdings 131,100 1,263
Report and Financial Statements 2024 | 31
# Ten Year Record (unaudited)

All Company data are based on assets, liabilities, earnings and expenses as reported in accordance with the Company's accounting policies and are unaudited but derived from the audited Financial Statements or specified third-party data providers.

|  Assets at 30 April  |   |   |   |   |   |   |   |   |   |   |   |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  £'000s | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024  |
|  Net assets (before debt) | 441,086 | 555,092 | 591,602 | 767,979 | 872,704 | 904,220 | 761,515 | 1,051,029 | 1,000,086 | 911,462 | 921,525  |
|  Debenture and loans | 10,000 | - | - | - | 24,000 | 34,052 | 35,000 | 43,521 | 54,782 | 52,027 | 51,463  |
|  Convertible Unsecured Loan Stock | - | 38,129 | 38,410 | 34,697 | 21,873 | 15,549 | - | - | - | - | -  |
|  Net assets | 431,086 | 516,963 | 553,192 | 733,282 | 826,831 | 854,619 | 726,515 | 1,007,508 | 945,304 | 859,435 | 870,062  |

|  NAV with debt at par per share^{(1)} at 30 April  |   |   |   |   |   |   |   |   |   |   |   |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  pence | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024  |
|  NAV with debt at par per share ^{(1)} | 84.2 | 97.3 | 99.8 | 128.3 | 138.4 | 141.7 | 120.3 | 175.0 | 172.0 | 163.7 | 175.9  |
|  NAV with debt at fair value per share | n/a | n/a | n/a | n/a | n/a | n/a | 119.7 | 174.9 | 172.8 | 165.7 | 178.1  |
|  NAV (diluted) per share ^{(1)} | n/a | 97 | 99.5 | 126.4 | 136.9 | 140.6 | n/a | n/a | n/a | n/a | n/a  |
|  NAV total return % - 5 years |  |  |  |  |  |  |  |  |  |  | 34.6  |
|  NAV total return % - 10 years |  |  |  |  |  |  |  |  |  |  | 136.6  |

|  Share Price at 30 April  |   |   |   |   |   |   |   |   |   |   |   |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  pence | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024  |
|  Mid-market price per share ^{(1)} | 84.0 | 98.0 | 100.1 | 127.3 | 137.5 | 134.6 | 111.0 | 168.6 | 156.2 | 144.6 | 160.2  |
|  Share price high ^{(1)} | 88.0 | 102.5 | 102.4 | 129.9 | 141.5 | 149.5 | 150.0 | 168.6 | 177.0 | 162.2 | 160.8  |
|  Share price low ^{(1)} | 74.5 | 78.5 | 85.9 | 94.7 | 126.5 | 122.0 | 78.8 | 104.2 | 142.6 | 122.4 | 129  |
|  Share price total return % - 5 years |  |  |  |  |  |  |  |  |  |  | 27.2  |
|  Share price total return % - 10 years |  |  |  |  |  |  |  |  |  |  | 114.4  |

|  Revenue return after tax for the year ended 30 April  |   |   |   |   |   |   |   |   |   |   |   |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|   | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024  |
|  Available for ordinary shares - £'000s | 4,461 | 5,659 | 6,452 | 7,839 | 9,448 | 10,623 | 10,493 | 7,416 | 10,241 | 12,620 | 14,560  |
|  Return per share ^{(1)} | 0.93p | 1.09p* | 1.18p* | 1.38p* | 1.59p* | 1.76p* | 1.73p | 1.26p | 1.82p | 2.34p | 2.84p  |
|  Dividends per share ^{(1)} | 0.80p | 0.97p | 1.07p | 1.23p | 1.44p | 1.65p | 1.70p | 1.75p | 1.84p | 2.30p | 2.81p^{(1)}  |

* diluted

(1) Comparative figures for the years prior to 2020 have been restated due to the sub-division of each existing ordinary share of 25p into ten new ordinary shares of 2.5p each on 31 October 2019.

(2) Subject to approval of the final dividend of 2.13p at the 2024 AGM.

32 | The Global Smaller Companies Trust PLC
Strategic Report

# **Performance**

(rebased to 100 at 30 April 2014)

|   | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  NAV per share | 100 | 115.2* | 118.2* | 150.1* | 162.6* | 167.0* | 142.2** | 207.7** | 205.2** | 196.8** | 211.5**  |
|  Mid-market price per share | 100 | 116.7 | 119.2 | 151.5 | 163.7 | 160.2 | 132.1 | 200.7 | 186.0 | 172.1 | 190.7  |
|  Revenue return per share | 100 | 117.2 | 126.9 | 148.4 | 171.0 | 189.2 | 186.0 | 135.5 | 195.7 | 251.6 | 305.4  |
|  Dividends per share | 100 | 121.3 | 133.8 | 153.8 | 180.0 | 206.3 | 212.5 | 218.8 | 230.0 | 287.5 | 351.3^{(1)}  |
|  RPI | 100 | 100.9 | 102.2 | 105.8 | 109.4 | 112.7 | 114.4 | 117.8 | 130.9 | 145.8 | 150.6  |

\* diluted

\*\* NAV with debt at fair value

$^{(1)}$ Subject to approval of the final dividend of 2.13p at the 2024 AGM.

# **Costs of running the Company (ongoing charges/TER)**

for the year ended 30 April

|  Expressed as a percentage of average net assets | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  Ongoing charges* |  |  |  |  |  |  |  |  |  |  |   |
|  excluding performance fees | 0.76% | 0.79% | 0.85% | 0.84% | 0.83% | 0.79% | 0.75% | 0.78% | 0.75% | 0.79% | 0.78%  |
|  including performance fees | 0.78% | 1.08% | 0.85% | 0.86% | 0.83% | 0.79% | 0.75% | 0.78% | 0.75% | 0.79% | 0.80%  |
|  Total expense ratio |  |  |  |  |  |  |  |  |  |  |   |
|  excluding performance fees | 0.50% | 0.53% | 0.51% | 0.62% | 0.60% | 0.59% | 0.59% | 0.58% | 0.58% | 0.60% | 0.61%  |
|  including performance fees | 0.50% | 0.74% | 0.76% | 0.62% | 0.60% | 0.59% | 0.59% | 0.58% | 0.58% | 0.60% | 0.61%  |

# **Gearing**

|  at 30 April | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  Effective gearing | (1.3%) | 4.8% | 4.7% | 3.4% | 5.1% | 4.6% | (0.6%) | 3.8% | 4.6% | 5.2% | 4.7%  |
|  Fully invested gearing | 2.2% | 7.4% | 6.9% | 4.7% | 5.6% | 5.8% | 4.8% | 4.3% | 5.8% | 6.1% | 5.9%  |

Note: definitions of Alternative Performance Measures and a Glossary of Terms are provided on pages 102 to 107.

Strategic Report

Report and Financial Statements 2024 | 33
## Purpose, Strategy and Business Model
Purpose, Values and Culture outlined on pages 18 to 22 and a full list of investments appears
Our purpose is to provide an investment vehicle which meets on pages 29 to 31.
the needs of investors, whether large or small, who seek long-
term investment returns from global smaller companies in an Furthermore, as a listed closed-end investment company we are
accessible, cost effective way. Our investment objective is to invest not constrained by asset sales to meet redemptions and therefore
in smaller companies worldwide in order to secure a high total the Company is particularly well suited to long-term investment in
return. smaller, less liquid companies. Our share capital structure gives
us the flexibility to take a longer term view and stay invested while
To ensure that the Company’s purpose, values, strategy and taking advantage of volatile market conditions. Having the ability to
culture are aligned, the Board comprises Directors with a breadth borrow to invest gives us a significant advantage over a number of
of relevant skills and experience acting with professional integrity other investment fund structures.
who contribute in an open boardroom culture that both supports
and challenges the Manager and its other third party suppliers. Alignment of Values and Culture
It is important that the values, expectations and aspirations
Investment and Business Strategy of those charged with managing the assets align with those of
Our investment strategy is designed to produce outperformance our own. The Board has reviewed the Manager’s culture and
of the Benchmark and increases in dividends over the longer values as part of the annual assessment of its performance
term. We select well-managed publicly listed smaller companies and in determining whether its re-appointment is in the interests
with growth potential and market capitalisations that fall into the of shareholders. Columbia Threadneedle Investments is an
generally accepted local definition of a smaller company. organisation committed to helping establish a more sustainable
financial system. It is one of the earliest adopters of the United
Business Model Nations Principles for Responsible Investment (‘UNPRI’) and in
The Directors have a duty to promote the success of the Company. 2023, across each reporting module, it scored in line or above
As an investment company with no employees, we believe that the investment management median. The Manager has a culture
the best way to do this and to achieve our objective is to have of diversity and inclusion anchored by shared values and industry-
an effective and strong working relationship with our appointed leading employee engagement in keeping with the Board’s own
manager, Columbia Threadneedle Investment Business Limited expectations and beliefs.
(the ‘Manager’). Within policies set and overseen by the Board of
Directors, our Manager has been given overall responsibility for the Responsible Investment and ESG Impact
management of the Company’s assets, including asset allocation, Our Responsible Investment policies are aligned towards the
gearing, stock and sector selection as well as risk management delivery of sustainable investment performance over the longer
and engagement on Environmental, Social and Governance term. The direct impact of the Company’s activities is minimal
matters. The Board remains responsible for the matters listed on as it has no employees, premises, physical assets or operations
page 54. either as a producer or a provider of goods or services, while its
shareholders are effectively its customers. Consequently, it does
Our Manager’s focus is on individual company opportunities. not directly generate any greenhouse gas or other emissions
Exposure to the different geographic markets is adjusted within or pollution. The Company’s indirect impact occurs through the
specific ranges in light of the attraction of local valuations and investments that it makes and this is mitigated by the Manager's
the outlook for currencies, but stock selection is generally the Responsible Investment approach as explained on pages 23
main driver of the Company’s overall returns. Further information to 26.
regarding the Manager's Investment Philosophy and Process are
34 | The Global Smaller Companies Trust PLC
Strategic Report
Manager Evaluation The principal policies that support our investment and business Chairman’s StatementOverview Auditor’s Report
Investment performance and responsible ownership are strategy are set out on pages 41 to 43, whilst the Lead Manager’s
fundamental to delivering a sustainable high total return for our Review of activity in the year can be found on page 8. In the light
shareholders over the longer term and, therefore, an important of the Company’s strategy, investment processes and control
responsibility of the Directors is exercising a robust annual environment (relating to both the oversight of its service providers
evaluation of our Manager’s performance capabilities and and the effectiveness of the risk mitigation activities), we have set
resources. This is an essential element in the mitigation of risk, as out on page 39 our reasonable expectation that the Company will
outlined under Principal and Emerging Risks on page 38, and the continue in operation for at least the next five years.
Strategic Report Governance Report Financial Report Notice of Meeting
strong governance that is carried out by the Board of Directors, all
of whom are independent and non-executive. Lead Manager and the Management of the Assets
From the start of August 2005, Peter Ewins was the Lead
The process for the evaluation of our Manager for the year under Manager on behalf of our Manager, responsible for the allocation
review and the basis on which the re-appointment decision was of the assets on a regional basis and for the construction of
made are set out on page 50. The management fee is based on the investment portfolio including the selection of any smaller
the value of the Company’s net assets, thus aligning the Manager’s company investment funds utilised. Peter will retire this summer
interests with those of shareholders. and with effect from 1 May 2024 Nish Patel succeeded Peter
as the Lead Manager. Nish was appointed joint Lead Manager,
Managing Risks and Opportunities alongside Peter with effect from 1 January 2024 and has worked
We seek to make good use of our corporate structure and the closely with Peter for a long period of time, managing assets for
investment opportunities that produce a high total return for our the Company for more than 15 years. Our Manager has a team
shareholders over the longer term. Like all businesses, these of smaller company investment managers that support the Lead
opportunities do not come without risks and so the performance Manager in the selection of stocks for the North American, UK,
of our Manager is monitored at each Board meeting on a number European and Japanese stock markets. The Lead Manager is also
of levels. In addition to managing the investments, the ancillary assisted by other colleagues within the management company in
functions of administration, company secretarial, accounting and relation to the selection of managed funds used to gain exposure
marketing services are all carried out by the Manager. It reports to other global markets.
on the investment portfolio; the wider portfolio structure; risks;
compliance with borrowing covenants; income, dividend and Marketing
expense forecasts; errors; internal control procedures; marketing; With a large proportion of our shareholders being retail investors
shareholder and other stakeholder issues, including the Company’s and savings or execution-only platforms representing a significant
share price discount or premium to NAV; and accounting and and growing element of our shareholder base, we remain focused
regulatory updates. on the optimal communication of the Company’s investment
proposition. This year, we have continued to work with the
Shareholders can assess the Company's financial performance Manager to enhance the public profile of the Company across
from the Key Performance Indicators that are set out on page different media channels. This has included a PR campaign with
40 and, on page 38, see what the Directors consider to be an external consultancy firm, greater use of video content on the
the Principal and Emerging Risks that it faces. The risk of not Company’s website, alongside several podcasts and webinars. The
achieving the Company’s objective of delivering a high total return use of webinars in particular allows direct interaction with engaged
for our shareholders over the longer term, or of consistently under- retail investors and the Investor Meets Company platform was
performing its Benchmark or competitors, may arise from any or again used in the year for this purpose. Columbia Threadneedle
all of poor stock selection, inappropriate asset allocation, weak Investments has continued to actively market its range of
market conditions, badly timed use of gearing, poor cost control, investment trusts during the year and the Manager has also been
loss of assets and service provider governance issues. on a number of regional roadshows to meet wealth managers,
both existing and potential new holders.
In addition to monitoring our Manager’s performance, capabilities,
available resources and its systems and controls, the Directors Key Stakeholders
also review the services provided by other principal suppliers. Whilst we hold our Manager to account for the management of our
Other Information
These include the Custodian and Depositary in their duties assets, we also recognise that relationship as being fundamental
towards the safeguarding of the assets. from a stakeholder perspective and as a working partnership in
Report and Financial Statements 2024 | 35
forming and developing our strategy. Our own engagement with Our lenders are important stakeholders whom we keep informed
our Manager is continuous, particularly through our regular Board through our monthly covenant compliance reporting in the first
meetings and, not least, the annual meeting that we dedicate instance. None of the financial covenants has been threatened
to the review of strategic matters. The debate at our strategy and we had no issues over liquidity or cause to engage with the
meeting in February included a review of the areas critical to the lenders in this regard during the year.
future success of the Company including investment strategy
and marketing. The relationships that our Manager has with the
companies in which we invest are of key importance and we
outline our approach on pages 18 to 22.
Albeit not in the traditional sense, we see our shareholders
as clients who we hope will stay with us and reap the benefits
of investing over the longer term. Many of our underlying
shareholders are young and hold their shares through their
parents in the Manager's savings plans and the Child Trust Fund
and Junior ISA accounts. The Child Trust Funds have now begun to
mature, meaning that, as each child turns 18, they have full control
over their holdings. As these accounts reach maturity, our focus is
on keeping as many of these young investors with us as possible.
The Manager writes to parents ahead of their account maturity
dates explaining the options and opportunities available to them.
Once 18, the young investor receives communications on options
available to them, and then quarterly reminded with their valuation
statement. Retention rates are currently in line with expectations.
With regard to our shareholders more generally, we engage by
reporting our activities and performance through the publication of
our half-year and annual reports. Most shareholders and savings
plan investors prefer not to receive such detailed information.
To avoid them losing this essential line of communication, we
instead make available a short notification summary covering the
main highlights of our half-year and annual results. Shareholders
and savings plan investors can access the full information on
our website as shown on page 1. Through our Manager, we also
ensure that savings plan investors are encouraged to participate
at shareholder meetings in addition to those members who hold
their shares directly on the main shareholder register. Details
of the proxy voting results on each resolution are published on
the Company's website where there is also a link to the daily
publication of our NAV and our monthly factsheet.
The Manager seeks to foster good relations with wealth managers
and underlying investors in promoting the Company’s investment
proposition and over the year a number of meetings, both virtual
and in-person, were held with existing and prospective investors.
These meetings are reported on regularly to the Board. The
Chairman and Senior Independent Director are always available to
meet with major shareholders.
36 | The Global Smaller Companies Trust PLC
Strategic Report

# Promoting Success

## Section 172 Statement

Section 172(1) of the Companies Act 2006 ('Section 172') requires that a Director must act in the way that they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members (i.e. shareholders) as a whole and, in doing so, have regard (amongst other matters) to the likely consequences of any decision in the long-term; the interests of the Company's shareholders; the need to foster the Company's business relationships with suppliers, customers and others; the impact of the Company's operations on the community and the environment; the desirability of the Company maintaining a reputation for high standards of business conduct; and the need to act fairly as between members of the Company.

The Directors have continued to act to promote the success of the Company for the benefit of its shareholders as a whole and in so doing, they have had regard to the matters set out in Section 172. This includes the likely consequences of their decisions in the longer term and how they have taken wider stakeholders' needs into account.

As noted on page 34, we have no employees, premises, assets or operations. Details of our key stakeholders are noted on pages 35 and 36. Our main working relationship is with the Manager. Recognising that sustainability is fundamental to achieving longer term success, we have continued to work closely with our Manager to develop further our investment strategy and underlying policies. This is not simply to achieve the Company's investment objective but to make sure it is done in an effective, responsible and sustainable way in the interests of shareholders, future investors and society at large. The portfolio activities undertaken by our Manager and the impact of decisions taken are set out in the Lead Manager's Review on pages 8 to 17. On pages 23 to 26 we have again reported on our approach towards responsible investment. We are very supportive of the Manager's approach, which focuses on engagement with the investee companies on ESG issues and how these link with the United Nations Sustainable Development Goals ('SDGs').

We use gearing to enhance returns, but this will have a negative impact at times of market shocks. We maintained a moderate level of gearing throughout the year. At the end of the year we had drawn down €6.8m, ¥557.5m and $9.8m (in total, the equivalent of £16.5m) of our £35m multi-currency revolving credit facility. The blended rate on this facility and the £35m private placement notes 2039 is 3.1%, which leaves us well placed to enhance investment returns over the long term and build on our performance record.

One of our Key Performance Indicators is dividend growth. This year has again seen our investment income grow, allowing us to once again increase the dividend significantly. This extends our record to 54 years of consecutive annual increases.

We bought back 30.2m shares in the year with the discount being over 5% throughout this period. We would only re-issue shares from treasury if the share price is at a premium to NAV. This policy is not only accretive to the NAV per share, it also helps moderate the absolute level and volatility of the discount or premium and provides liquidity in the shares.

As long-term investors we always look to the future and to the success of the Company in that context. We believe that the Company provides a clear investment choice, not only for investors large or small but also for those starting their investment journey. We continue to promote the Company through marketing and work towards the optimal delivery of the Company's investment proposition and to promote the success of the Company for the benefit of all shareholders, stakeholders and, through its valuable role as an investment vehicle, the community at large.

Strategic Report

Report and Financial Statements 2024 | 37
## Principal and Emerging Risks
The Board has carried out a robust review and assessment of the to the financial statements. Any emerging risks that are identified
Company’s principal and emerging risks and the uncertainties that and that are considered to be of significance are included on
could threaten its future success. This includes near-term risks the Company’s risk assessment together with any mitigations.
such as those posed by the recent integration of the Manager's These principal and emerging risks are reviewed regularly by
business with Columbia Threadneedle Investments and longer- the Audit and Management Engagement Committee and by the
term risks, such as climate change. The consequences for the Board. Russia's invasion of Ukraine and increased conflict in the
Company's strategy, business model, liquidity, future prospects Middle East have added to the continuing economic and market
and long term viability form an integral part of this review. uncertainty and political instability, with elections in the UK and
US also on the horizon. The principal risks are largely unchanged
The Board’s processes for monitoring the principal risks and from those reported in the prior year. Those identified as most
identifying emerging risks are set out on page 57 and in note 23 relevant to the assessment of the Company’s future prospects
Principal Risks Mitigation by strategy Actions taken on Principal Risks in the year
Service providers and systems security – Errors, fraud or control The ancillary functions of administration, company secretarial, The Audit and Management Engagement Committee and the Board have regularly reviewed
failures at service providers or loss of data through business accounting and marketing services are all carried out by the the Company’s risk management framework with the assistance of the Manager. Regular
continuity failure or cyber attacks could damage reputation Manager. Custody and depositary services are provided by third control reports are provided by the Manager which cover risk, compliance and oversight of
or investors’ interests or result in loss. Cyber risks remain party suppliers. its own third-party service providers, including IT security and cyber-threats. Reports from
heightened. the Depositary, which is liable for the loss of any of the Company’s securities and cash
The Board reviews and monitors the services provided and the held in custody unless resulting from an external event beyond its reasonable control,
effectiveness of service providers’ processes through the review were reviewed. The Board is satisfied that the continuity arrangements of all key suppliers
Unchanged throughout the year.
of internal controls reports and internal efficiency KPIs. continued to work well and as such, this risk is unchanged.
Investment performance – Inappropriate business strategy or Under our Business Model, a manager is appointed with the Columbia Threadneedle Investments has been retained as Manager and continues to
policy, or ineffective implementation, could result in poor returns capability and resources to manage the Company’s assets, asset deliver on the Company’s objective. It operates within a responsible investment culture
for shareholders. Failure to access the targeted market or meet allocation, gearing, stock and sector selection and risk. The under a corporate commitment to four key Sustainability Principles: Social Change,
investor needs or expectations, including Responsible Investment individual regional investment portfolios are managed to provide in Financial Resilience, Community Building and Environmental Impact. Through the Manager,
and climate change in particular, leading to significant pressure combination a well-diversified, lower volatility and lower risk overall the Company has the flexibility to innovate, adapt and evolve as Responsible Investment
on the share price. Political risk factors could also impact portfolio structure. The Board holds a separate strategy meeting necessities and expectations change. Marketing and investor relations campaigns continued
performance as could market shocks such as those experienced in each year and considers investment policy review reports from the throughout the year, including presentations by the Lead Manager to wealth managers,
relation to Covid-19 and the war in Ukraine. Manager at each Board meeting. private clients and institutions across the country. Detailed reports provided by the Lead
Manager have been reviewed by the Board at each of its meetings. Strong operational
The performance of the Company relative to its Benchmark, performance from the investment portfolio over the year has resulted in the dividend for the
its peers and inflation is a KPI measured by the Board on an year increasing by 22.2%. In overall terms, this risk is considered unchanged.
Unchanged throughout the year.
ongoing basis and is reported on page 40.
Discount/premium – A significant share price discount or premium The Board has established share buy-back and share issue Despite actively buying in shares on a regular, ongoing basis in order to address the
to the Company’s NAV per share, or related volatility, could lead policies, together with a dividend policy, which aim to moderate the imbalance between the supply and demand of the Company's shares, the discount has
to high levels of uncertainty or speculation and the potential to level and volatility of the share price discount or premium to the remained wider than desired although it did fall during the period. During the course of the
reduce investor confidence. Increased uncertainty in markets due NAV per share and it seeks shareholder approval each year for the year, the Manager has continued to increase marketing activity over a number of channels
to an event such as Covid-19 or the significant rise in inflation necessary powers to implement those policies. and has enhanced the messaging around the core investment proposition. This activity
could lead to falls and volatility in the Company’s NAV. aims to stimulate demand for the Company’s shares from existing and new investors.
The discount/premium to NAV at which the Company's shares Given the continued higher prevailing discount level the risk is considered to have remained
Unchanged throughout the year but trade is a KPI measured by the Board on an ongoing basis and is heightened during the year.
this risk has remained heightened. reported on page 40.
38 | The Global Smaller Companies Trust PLC
Strategic Report
Long-Term Viability: Five Year Horizon
Based on its assessment and
and viability were those relating to inappropriate business strategy, potential investment evaluation of the Company’s future Chairman’s StatementOverview Auditor’s Report
portfolio under-performance and its effect on the Company’s share price discount/ prospects, the Board has a reasonable
premium and dividends, as well as threats to security over the Company’s assets. Our expectation that the Company will be
able to continue in operation and meet
risk evaluation forms an inherent part of our strategy determination described on
its liabilities as they fall due over the
page 35.
coming five years. This period has
been chosen because it is consistent
Through a series of stress tests ranging from moderate to extreme scenarios, including with the advice provided by many
the impact of market shocks and based on historical information, but forward looking over investment advisers, that investors
should invest in equities for a minimum Strategic Report Governance Report Financial Report Notice of Meeting
the five years commencing 1 May 2024, the Board assessed the risks of:
of five years. The Company’s business
• Sustained high levels of inflation.
model, strategy and the embedded
• Potential illiquidity of the Company’s portfolio.
characteristics listed below have helped
• Substantial falls in investment values on the ability to meet loan covenant requirements define and maintain the stability of
and to repay and re-negotiate funding. the Company over many decades. The
• Significant falls in income on the ability to continue paying steadily-rising dividends and Board expects this to continue and
will continue to assess viability over
maintaining adequate revenue reserves.
subsequent five year rolling periods.
• The Company has a long-term
The Board also took into consideration the operational robustness of its principal service
investment strategy under which it
providers and the effectiveness of business continuity plans in place, potential effects of
invests mainly in readily realisable,
regulatory changes and the potential threat from competition. The Board’s conclusions are publicly listed securities and which
set out under ‘Long-Term Viability: Five Year Horizon’. restricts the level of borrowings.
• The Company’s business model
and strategy are not time limited
and, as a global investment trust
Principal Risks Mitigation by strategy Actions taken on Principal Risks in the year company, are unlikely to be adversely
impacted as a direct result of political
Service providers and systems security – Errors, fraud or control The ancillary functions of administration, company secretarial, The Audit and Management Engagement Committee and the Board have regularly reviewed
uncertainties.
failures at service providers or loss of data through business accounting and marketing services are all carried out by the the Company’s risk management framework with the assistance of the Manager. Regular
• The Company is inherently structured
continuity failure or cyber attacks could damage reputation Manager. Custody and depositary services are provided by third control reports are provided by the Manager which cover risk, compliance and oversight of
for long-term outperformance, rather
or investors’ interests or result in loss. Cyber risks remain party suppliers. its own third-party service providers, including IT security and cyber-threats. Reports from
than short-term opportunities, with
heightened. the Depositary, which is liable for the loss of any of the Company’s securities and cash
five years considered as a sensible
The Board reviews and monitors the services provided and the held in custody unless resulting from an external event beyond its reasonable control,
time-frame for measuring and
effectiveness of service providers’ processes through the review were reviewed. The Board is satisfied that the continuity arrangements of all key suppliers
assessing long-term investment
of internal controls reports and internal efficiency KPIs. continued to work well and as such, this risk is unchanged.
performance.
Investment performance – Inappropriate business strategy or Under our Business Model, a manager is appointed with the Columbia Threadneedle Investments has been retained as Manager and continues to
• The Company is able to take
policy, or ineffective implementation, could result in poor returns capability and resources to manage the Company’s assets, asset deliver on the Company’s objective. It operates within a responsible investment culture
advantage of its closed-end
for shareholders. Failure to access the targeted market or meet allocation, gearing, stock and sector selection and risk. The under a corporate commitment to four key Sustainability Principles: Social Change,
investment trust structure, such
investor needs or expectations, including Responsible Investment individual regional investment portfolios are managed to provide in Financial Resilience, Community Building and Environmental Impact. Through the Manager,
as having borrowing arrangements
and climate change in particular, leading to significant pressure combination a well-diversified, lower volatility and lower risk overall the Company has the flexibility to innovate, adapt and evolve as Responsible Investment
in place and the ability to secure
on the share price. Political risk factors could also impact portfolio structure. The Board holds a separate strategy meeting necessities and expectations change. Marketing and investor relations campaigns continued additional finance in excess of five
performance as could market shocks such as those experienced in each year and considers investment policy review reports from the throughout the year, including presentations by the Lead Manager to wealth managers, years.
relation to Covid-19 and the war in Ukraine. Manager at each Board meeting. private clients and institutions across the country. Detailed reports provided by the Lead
• There is rigid monitoring of the
Manager have been reviewed by the Board at each of its meetings. Strong operational
headroom under the Company’s bank
The performance of the Company relative to its Benchmark, performance from the investment portfolio over the year has resulted in the dividend for the
borrowing financial covenants.
its peers and inflation is a KPI measured by the Board on an year increasing by 22.2%. In overall terms, this risk is considered unchanged.
• Regular and robust review of
ongoing basis and is reported on page 40.
revenue and expenditure forecasts
is undertaken throughout the year
Discount/premium – A significant share price discount or premium The Board has established share buy-back and share issue Despite actively buying in shares on a regular, ongoing basis in order to address the
against a backdrop of large revenue
to the Company’s NAV per share, or related volatility, could lead policies, together with a dividend policy, which aim to moderate the imbalance between the supply and demand of the Company's shares, the discount has
and capital reserves.
to high levels of uncertainty or speculation and the potential to level and volatility of the share price discount or premium to the remained wider than desired although it did fall during the period. During the course of the
reduce investor confidence. Increased uncertainty in markets due NAV per share and it seeks shareholder approval each year for the year, the Manager has continued to increase marketing activity over a number of channels • The Company retains title to all
assets held by the Custodian which
to an event such as Covid-19 or the significant rise in inflation necessary powers to implement those policies. and has enhanced the messaging around the core investment proposition. This activity
are subject to further safeguards
could lead to falls and volatility in the Company’s NAV. aims to stimulate demand for the Company’s shares from existing and new investors. Other Information
imposed on the Depositary.
The discount/premium to NAV at which the Company's shares Given the continued higher prevailing discount level the risk is considered to have remained
trade is a KPI measured by the Board on an ongoing basis and is heightened during the year.
reported on page 40.
Report and Financial Statements 2024 | 39
## Key Performance Indicators
### The Board uses a number of performance measures to assess its performance in meeting
### the Company’s objective of securing a high total return. This is driven by NAV and share price
### performance, the Premium/Discount to NAV, Ongoing Charges and Dividend Growth, as well as
### regional performance against local benchmarks set out on page 9. Detailed commentary on
### these measures can be found in the Chairman’s Statement and Lead Manager’s Review. The key
### performance indicators are set out below.
(1)
Performance: Total return
1 Year % 3 Years % 5 Years % The Board’s policy is to secure a high total return

| NAV total return |  | 9.0 5.5 34.6 |  |
| --- | --- | --- | --- |
|  | (2) |  | This measures the Company’s NAV and share price total returns, which assume dividends paid |
| Benchmark | total return | 11.3 5.6 39.8 |  |

by the Company have been reinvested, relative to the Company’s Benchmark.
Share price total return 12.7 (1.0) 27.2
Source: Columbia Threadneedle Investments and Refinitiv Eikon
(1)
Premium/(discount) (including current period income)
The Board’s premium/discount policies are to moderate the level of share price
At 30 April % premium/discount and related volatility
2024 (10.0)
This is a measure of the divergence between the share price and the NAV per share. The
2023 (12.7)
Company issues shares or sells shares from treasury whilst the share price is at a premium
2022 (9.6)
and buys back shares when it is at a discount. In the latter case with the aim that it does not
2021 (3.6)
exceed 5% in normal market conditions.
2020 (7.3)
Source: Columbia Threadneedle Investments and Refinitiv Eikon
(1)

| Ongoing charges | (as a percentage of average net assets) |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  | % (excluding |  |  | % (including | The Board’s policy is to control the costs of running the Company |
| At 30 April | performance fees of |  |  |  | performance fees of |  |  |
|  |  | underlying funds) |  |  | underlying funds) |  |  |
| 2024 |  |  |  | 0.78 0.80 |  |  |  |
| 2023 |  |  |  | 0.79 0.79 |  |  |  |

This measures the running costs of the Company (including the ongoing costs of underlying
2022 0.75 0.75 funds and where applicable their performance fees) as a percentage of the average net
assets.
2021 0.78 0.78
2020 0.75 0.75
Source: Columbia Threadneedle Investments
Dividend growth
1 Year % 3 Years % 5 Years % The Board aims to continue its progressive dividend policy
Dividends 22.2 60.6 70.3
This compares the Company’s dividend growth rate to the rate of inflation.
Retail Prices Index 3.3 27.9 33.6
Source: Columbia Threadneedle Investments and Refinitiv Eikon
(1) See Alternative Performance Measures on pages 102 and 104
(2) See Glossary of terms on page 105 for explanation of Benchmark
40 | The Global Smaller Companies Trust PLC
Strategic Report
Chairman’s StatementOverview Auditor’s Report
## Principal Policies
### The Board has overall responsibility for the Company’s principal policies, which support its
### investment and business strategies in securing a high total return for our shareholders.
Strategic Report Governance Report Financial Report Notice of Meeting
Investment The Company invests mainly in quoted equities, including those
Our publicly stated Investment Policy is designed to help quoted on the Alternative Investment Market. It is able to invest
shareholders, prospective investors and stakeholders understand in other types of securities or assets, including collective funds.
the scope of our investment remit and constraints imposed under Investments in unquoted securities can be made with the prior
it. Any material change to the investment policy of the Company approval of the Board. No transaction can be made which would
can only be made with the prior approval of shareholders by way of result in a holding of the Company exceeding 10% of the value of
an ordinary resolution at a general meeting. the total portfolio. Derivative instruments, such as futures, options,
and warrants, can be used for efficient portfolio management up
Our remit is global. Risk diversification is achieved through to a maximum of 10% of the NAV at any one time.
geographic asset allocation and industry sector and stock
selection across a wide range of markets. Within the general The Company can borrow in either sterling or foreign currencies.
policy of maintaining a diversified portfolio, there are no specific Effective gearing is limited, in normal circumstances, to a
geographic or industry sector exposure limits for the publicly listed maximum of 20% of shareholders’ funds. The Company’s portfolio
equities. can also be hedged for currency movements.
The Board, with advice from the Manager, considers the foreign Under the Financial Conduct Authority’s Listing Rules, no more
exchange outlook, as this can affect both the asset allocation and than 10% of the Company’s total assets may be invested in
borrowing strategy, and can hedge the portfolio against currency other listed closed-ended investment companies, unless such
movements. No such hedging has been undertaken in the year investment companies have themselves published investment
under review. policies to invest no more than 15% of their total assets in other
closed-ended investment companies, in which case the limit is
At every Board meeting, the Lead Manager reports on portfolio 15%.
activity and investment performance and confirms adherence to
the investment restrictions and limitations set by the Board. The Borrowing
Lead Manager’s Review on pages 8 to 17 provides an overview of The Company has the flexibility to borrow over the longer term
the outcome from the application of the Investment Policy and the and to use short-term borrowings by way of loans. Borrowings,
underlying policies during the course of the year under review. which can be taken out in either sterling or foreign currency,
would normally be expected to fall within a range of 0-20% of
Investment Objective shareholders’ funds. In normal circumstances, the Board believes
The Company’s investment objective is to invest in smaller that structural gearing through the investment cycle is appropriate
companies worldwide in order to secure a high total return. for the enhancement of shareholder returns. Borrowing levels
and covenant headroom are monitored on an ongoing basis and
Investment Policy reported on at each Board meeting.
The Company pursues this investment objective by investing in a
large number of stocks in various industry sectors and geographic Dividend
locations. There are no specific sector or geographical exposure Our revenue account is managed with a view to delivering a
limits. Whilst the Company has a global orientation, its objective is rising income stream in real terms for shareholders. Prudent use
Other Information
to find attractively valued investment opportunities wherever they of revenue reserves established over many decades is made
may be and it is therefore not constrained to mandatory weightings whenever necessary to help meet any revenue shortfall.
per geographic region.
Report and Financial Statements 2024 | 41
The Board applies due diligence and determines dividend The overriding aim of the policy is to ensure that the Board
payments by taking account of income forecasts, brought forward is composed of the best combination of people to deliver the
distributable reserves, prevailing inflation rates, the Company’s Company’s objective. We apply the policy for the purpose of
dividend payment record and Corporation Tax rules governing appointing individuals that, together as a Board, will continue to
investment trust status. Risks to the Company’s dividend policy achieve that aim as well as ensuring optimal promotion of the
have been considered as part of the Principal and Emerging Risks Company’s investment proposition in the marketplace.
reviews noted on page 38. The consistent application of this
policy has enabled the payment of an increased dividend every In accordance with Listing Rule 9.8.6R (9), (10) and (11) the Board
year for the past 54 years. is required to disclose on a ‘comply or explain’ basis whether it
has met the following targets: (i) at least 40 per cent. of the Board
Discount/Premium should be women; (ii) at least one of the senior board positions
The Board operates a share buy-back policy under an authority should be held by a woman; and (iii) at least one member of the
given by shareholders. Under this policy the Company buys back Board should be from a minority ethnic background. The Board
shares for the benefit of shareholders when it sees value and, has provided the information set out in the following tables in
importantly, with a view to moderating discount volatility and relation to diversity; the data for which has been obtained through
to keeping the discount at no more than 5%, in normal market the completion of questionnaires by the individual Directors. As is
conditions. Shares are bought back at a discount to the NAV shown, the Company has met the targets.
per share and are either cancelled or held in treasury, the effect
(1)

| of which is an accretion to the NAV per share. The levels within | Board Gender as at 30 April 2024 |  |  |  |
| --- | --- | --- | --- | --- |
| which the policy operates are kept under review. |  | Number |  | Number of senior |
|  |  | of board | Percentage of | positions on the |

(3)
members board members Board
Shareholders have also authorised the Board to issue shares
Men 3 50% –
when they are trading at a premium to the NAV per share, with a
(2) (4)
Women 3 50% 2
view to moderating the premium and any associated volatility. As
Not Specified
with share buy-backs, such issues are only made when accretive – – –
/Prefer not to say
to the NAV.
(1) The Company has opted not to disclose against the number of Directors in executive
management as this is not applicable for an investment trust which does not have the
roles of CEO or CFO.
Board Diversity and Inclusion (2) This meets the Listing Rules target of 40%.
(3) The senior positions on the Board consist of the Chairman and the Senior Independent
Our policy towards the appointment of non-executive directors to
Director. The position of the Chairman of the Audit and Management Engagement
Committee is held by a woman however this is not currently defined as a senior
the Board is based on its belief in the benefits of having a diverse
position under the Listing Rules.
(4) This meets the Listing Rules target of at least one of the senior positions on the Board
range of experience, skills, length of service and backgrounds,
being held by a woman.
including gender and contributions from an international
perspective. The Board is conscious of the diversity targets set
out in the FCA Listing Rules and the Board complies with the AIC
Code of Corporate Governance in appointing appropriately diverse,
independent non-executive Directors who set the operational
and moral standards of the Company. The policy is always to
appoint the best person for the role and, by way of this policy
statement, we confirm that there is no discrimination on the
grounds of gender, race, ethnicity, religion, sexual orientation,
age, physical ability, educational, professional or socio-economic
background. The Board is committed to maintaining the highest
levels of corporate governance in terms of independence and
would normally expect the Directors to serve for a nine-year
term, although this may be adjusted for reasons of flexibility and
continuity. As each of the Audit and Management Engagement
Committee and Nomination Committee comprise all of the
Directors, the diversity policy applied to the Board generally
applies equally to each of the Company's Committees.
42 | The Global Smaller Companies Trust PLC
Strategic Report
(1)

| Board Ethnic Background as at 30 April 2024 |  |  |  |  | in the Company's portfolio raised social themes, including human | Chairman’s StatementOverview Auditor’s Report |
| --- | --- | --- | --- | --- | --- | --- |
|  | Number | Percentage |  | Number of senior | rights and labour standards. The Manager is an investor signatory |  |
|  | of board |  | of board | positions on the |  |  |

to the Workforce Disclosure Initiative (‘WDI’), which aims at
(3)
members members Board
enhancing relevant and material workforce related disclosure
White British or other
on a wide range of workforce issues, covering companies’ direct
White (including 4 66.6% 2
minority white groups) operations and supply chains. We are very supportive of the
Manager’s approach and whose formal statement can be found on

| Mixed/Multiple |  | (2) |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  | 1 16.7% |  | – |  |  |
| Ethnic Groups |  |  |  | its website. |  |
|  |  | (2) |  |  | Strategic Report Governance Report Financial Report Notice of Meeting |
| Asian/Asian British 1 16.7% |  |  | – |  |  |
| Black/African/ |  |  |  | Integrity and Business Ethics |  |
| Caribbean/Black | – – – |  |  | We apply a strict anti-bribery and anti-corruption policy insofar |  |

British
as it applies to the Directors of the Company and employees
Other ethnic group,
– – – of any organisation with which we conduct business, including
including Arab
the Manager. The Board ensures that adequate procedures are
Not Specified/Prefer
– – – in place and followed in respect of third-party appointments,
not to say
acceptance of gifts and hospitality and similar matters.
(1) The Company has opted not to disclose against the number of Directors in executive
management as this is not applicable for an investment trust which does not have
the roles of CEO or CFO.
(2) This meets the Listing Rules target that at least one board member should be from a
non-white ethnic background. On behalf of the Board
(3) The senior positions on the Board consist of the Chairman and the Senior
Independent Director. Anja Balfour
Chairman
Taxation 25 June 2024
As an investment trust company, it is essential that the Company
retains its tax status by complying at all times with Section 1158
of the Corporation Tax Act 2010 (‘Section 1158’) such that UK
Corporation Tax is not suffered on its capital gains. It also ensures
that correct taxation returns are submitted annually and any
taxation due is settled promptly. Where possible, all taxes suffered
in excess of taxation treaty rates on non-UK dividend receipts
are claimed back in a timely manner. The Board’s policy towards
taxation is one of full commitment to complying with applicable
legislation and statutory guidelines. In applying due diligence
towards the retention of Section 1158 status and adhering to its
tax policies, the Board receives regular reports from the Manager.
The Company has received approval from HMRC as an investment
trust under Section 1158 and has since continued to comply with
the eligibility conditions.
Modern Slavery Act 2015
Our own supply chain consists predominately of professional
advisers and service providers in the financial services industry,
which is highly regulated. We therefore believe that the potential
for acts of modern slavery or human trafficking in our own working
environment is extremely low.
The values we hold, our culture and the rationale for the
appointment of our Manager are explained on page 34. The
Other Information
Manager is an organisation committed to respecting human rights
and stands against all forms of slavery and human trafficking. In
the year under review, 35.5% of engagements with the companies
Report and Financial Statements 2024 | 43
## Directors
The Board of Directors comprise left to right: Anja Balfour, Graham Oldroyd, Nick Bannerman, Bulbul Barrett, Randeep Grewal and Jo Dixon
44 | The Global Smaller Companies Trust PLC
Governance Report
Chairman’s StatementOverview Auditor’s Report
Anja Balfour Bulbul Barrett
Chairman Appointed to the Board on 1 December 2023.
Appointed to the Board on 1 June 2015 and as Chairman on 30 Experience and contribution: Bulbul was previously Head of the
July 2020. She is also chairman of the Nomination Committee. Equities Product Group at DBS Bank Ltd London Branch and
Strategic Report Governance Report Financial Report Notice of Meeting
Experience and contribution: Anja brings in-depth investment has over 30 years’ experience with corporates and investment
knowledge, expertise and experience in international investment managers, having formerly been Head of Sales, MD Asian
management as well as leadership skills, most notably from her Equities at HSBC, Executive Director, Asian Equities at Goldman
other non-executive director and chairmanship roles. Previously Sachs, Director of Asian Equities at UBS and Associate Director,
she spent over 20 years as a fund manager, running Japanese Asian Equities at WI Carr.
and International Equity portfolios for Stewart Ivory, Baillie Gifford Other appointments: Bulbul is a Governor of Bradford College.
and latterly, Axa Framlington and was formerly chair of Schroder
Japan Trust plc until December 2022. Randeep Grewal
Other appointments: Anja is a non-executive director of AVI Appointed to the Board on 1 December 2023.
Global Trust PLC and a non-executive Director of Scottish Friendly Experience and contribution: Randeep has extensive experience
Assurance, where she chairs the Investment Committee. as a fund manager and analyst, having held the roles of Portfolio
Manager at Trium Multi-Strategy Hedge Fund, Senior Portfolio
Graham Oldroyd Manager at F&C Asset Management, Analyst at ICAP Equities
Appointed to the Board on 1 October 2019. and Senior Analyst and Portfolio Manager at Tudor Capital. Prior
Experience and contribution: Graham brings to the Board to the above, Randeep was an NHS Doctor, having trained as a
in-depth investment knowledge, expertise and experience in vascular surgeon.
international investment management from his present and Other appointments: Randeep is a non-executive director
past positions as a director of listed and unlisted European and chairman of Bellevue Healthcare Trust plc and is a non-
businesses across multiple sectors and geographies. executive director of The Monks Investment Trust PLC and Hox
Other appointments: Graham is non-executive chairman of MCF Therapeutics Limited.
Limited and he is a non-executive director of Tunstall Integrated
Healthcare Holdings Limited and Videndum plc. Josephine (Jo) Dixon
Senior Independent Director and Chairman of the Audit and
Nick Bannerman Management Engagement Committee.
Appointed to the Board on 1 October 2019. Appointed to the Board on 11 February 2015 and as Senior
Experience and contribution: Nick brings a combination of Independent Director on 30 July 2020.
investment, operational and management experience as well Experience and contribution: Jo is a chartered accountant and
as a wider business perspective from his current and past has a strong accounting and financial background. She also
business roles across multiple geographies. He is a chartered brings leadership skills from her other non-executive director
accountant and was chairman of Baillie Gifford Japan Trust PLC and chairmanship roles. She was formerly chairman of JPMorgan

| until December 2019. | European Growth & Income plc. |
| --- | --- |
| Other appointments: Nick is an executive director of James | Other appointments: Jo is a non-executive director of Alliance |
| Johnston & Co of Elgin Ltd and Johnston GmBH. | Trust PLC and Bellevue Healthcare Trust PLC. |

Other Information
All the Directors are members of the Audit and Management Engagement Committee and the Nomination Committee. With the
exception of Jo Dixon and Randeep Grewal who are both non-executive directors of Bellevue Healthcare Trust PLC, no other Director
has a shared directorship elsewhere with other Directors.
Report and Financial Statements 2024 | 45
# Directors' Report

The Directors submit the Annual Report and Financial Statements of the Company for the year ended 30 April 2024. Applying the principles of the AIC Code, the Chairman's Statement on corporate governance, the Directors' biographies, the Reports of the Nomination Committee and Audit and Management Engagement Committee and the Directors' Remuneration Report all form part of this Directors' Report.

## Statement Regarding the Annual Report and Financial Statements

The Directors consider that, following a detailed review and advice from the Audit and Management Engagement Committee, the Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy. The Audit and Management Engagement Committee has reviewed the draft Annual Report and Financial Statements for the purposes of this assessment. The market outlook for the Company can be found on pages 6, 7 and 17. Principal and emerging risks can be found on page 38 with further information on financial risks in note 23 to the financial statements. There are no instances where the Company is required to make disclosures in respect of Listing Rule 9.8.4R.

## Results and Dividends

The results for the year are set out in the attached financial statements. Subject to shareholder approval at the Annual General Meeting ('AGM') (Resolution 4), the recommended final dividend of 2.13 pence per share is payable on 20 August 2024 to shareholders on the register as at the close of business on 12 July 2024. This, together with the interim dividend of 0.68 pence per share, makes a total dividend of 2.81 pence per share and represents an increase of 22.2% over the comparable 2.30 pence per share paid in respect of the previous year. See note 9 to the financial statements.

## Company Status

The Company is registered as a public limited company and is an investment company as defined by Section 833 of the Act. The Company is registered in England and Wales with company registration number 28264 and is subject to the Financial Conduct Authority's ('FCA') Listing Rules, Disclosure Guidance and Transparency Rules ('DTRs') and other applicable legislation and regulations including company law, financial reporting standards, taxation law and its own articles of association. The Company's

Articles of Association may only be amended by the passing of a special resolution at a general meeting of the Company.

## Taxation

As set out on page 43 and in note 7 to the financial statements, the Company is exempt from UK Corporation Tax on its worldwide dividend income and from UK Corporation Tax on any capital gains arising from the portfolio of investments, provided it complies at all times with Section 1158. Dividends received from investee companies domiciled outside the UK are subject to taxation in those countries in accordance with relevant double taxation treaties.

## UK Financial Sanctions and Prevention of the Facilitation of Tax Evasion

The Board is fully committed to complying with all legislation, regulation and relevant guidelines including those relating to the UK financial sanctions regime in the context of the Company's business and also the UK's Criminal Finance Act 2017, designed to prevent tax evasion in the jurisdictions in which the Company operates. Professional advice is sought as and when deemed necessary.

## Greenhouse Gas Emissions and Taskforce for Climate-Related Financial Disclosures ('TCFD')

The Company is managed by a third party manager, it has no employees and all of its Directors are non-executive, with the day to day activities being carried out by third parties. The Company has no premises, consumes no electricity, gas or diesel fuel directly and consequently does not have a measurable carbon footprint. Therefore, it qualifies as a low energy user and is exempt from reporting under the Streamlined Energy & Carbon Reporting requirements. Further information on the Company's approach to Climate change can be found on page 23.

In accordance with the regulations set by the Financial Conduct Authority, a disclosure specific to the Company's portfolio will be published on the Manager's website. This report will provide

46 | The Global Smaller Companies Trust PLC
Governance Report

data on the portfolio's carbon footprint and the largest individual contributors to it by individual issuer and sector as well as the overall net zero alignment of the portfolio.

Under Listing Rule 15.4.29(R), the Company, as a listed closed-end investment company, is exempt from complying with the TCFD.

### Accounting and Going Concern

The financial statements, starting on page 72, comply with current UK Financial Reporting Standards, supplemented by the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('SORP'). The significant accounting policies of the Company are set out in note 2 to the financial statements. The unqualified auditor's opinion on the financial statements appears on page 66. Shareholders will be asked to approve the adoption of the Report and Financial Statements at the AGM (Resolution 1).

The Directors believe that, in light of the controls and monitoring processes that are in place, the Company has adequate resources to continue in operational existence for at least twelve months from the date of approval of the financial statements. In considering this, the Directors took into account the diversified portfolio of readily realisable securities which can be used to meet short-term funding commitments and the ability of the Company to meet all of its liabilities and ongoing expenses. For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements.

### Statement as to Disclosure of Information to the Auditor

Each of the Directors confirms that, to the best of their knowledge and belief, there is no information relevant to the preparation of the Annual Report and Financial Statements of which BDO LLP ('BDO' or the 'auditor') is unaware and they have taken all the steps a Director might reasonably be expected to have taken to be aware of relevant audit information and to establish that BDO is aware of that information.

### Re-appointment of Auditor

BDO has indicated its willingness to continue in office as auditor to the Company and a resolution proposing its re-appointment and authorising the Audit and Management Engagement Committee to determine its remuneration for the ensuing year will be put to shareholders at the AGM (Resolutions 10 and 11). Further information in relation to its re-appointment can be found on page 59.

### Capital Structure

Following a ten for one share split on 31 October 2019, each ordinary share of 25p was replaced with ten new ordinary shares of 2.5p each. As at 30 April 2024 there were 620,533,770 ordinary shares of 2.5p each ('ordinary shares') in issue, of which 125,835,954 were held in treasury. As at 20 June 2024 (being the latest practicable date before publication of this report) the number of ordinary shares held in treasury was 133,195,494.

All ordinary shares rank equally for dividends and distributions and carry one vote each. There are no restrictions concerning the transfer of securities in the Company, no special rights with regard to control attached to securities, no agreements between holders of securities regarding their transfer known to the Company and no agreement which the Company is party to that affects its control following a takeover bid. Details of the capital structure can be found in note 15 to the financial statements. The revenue profits of the Company (including accumulated revenue reserves) are available for distribution by way of dividends to the holders of the ordinary shares. Upon a winding-up, after meeting the liabilities of the Company, the surplus assets would be distributed to shareholders pro rata to their holdings of ordinary shares. Full details are set out in the Company's articles of association.

### Issue and Buy-back of Shares

At the annual general meeting held on 28 July 2023, shareholders authorised the Board to issue new ordinary shares or to sell shares from treasury up to 10% of the number of shares then in issue. Shareholders also renewed the Board's authority to purchase up to 14.99% of its own issued ordinary shares (excluding any shares held in treasury) at a discount to NAV per share.

No shares were issued during the year under review or have been issued between 30 April 2024 and 20 June 2024, being the latest practicable date before the publication of this report. In accordance with the policy of aiming to keep the discount at no more than 5% in normal market conditions, a total of 30,210,332 shares with a nominal value of £755,258 were bought back by the Company during the year, to be held in treasury, at prices between 129.11 pence and 161.12 pence and at an average price of 148.22 pence for a total consideration, including stamp duty and commissions, of £44,777,000. The shares bought back represented 5.76% of the shares in issue (calculated exclusive of any shares held in treasury) at 30 April 2023. The share buybacks in the year enhanced the NAV per share by approximately 0.91 pence. A further 7,359,540 shares have been bought back and placed into treasury since the year end.

Governance Report

Report and Financial Statements 2024 | 47
## Voting Rights and Proportional Voting

As at 20 June 2024 there were 620,533,770 ordinary shares listed, of which 133,195,494 shares were held in treasury. Therefore the total voting rights in the Company as at that date were 487,338,276.

Ordinary shareholders are entitled to vote on all resolutions which are proposed at general meetings of the Company. Each ordinary shareholder is entitled to one vote on a show of hands and, on a poll, to one vote for every ordinary share held.

Approximately 54% of the Company's share capital is held on behalf of non-discretionary clients through the Manager's Savings Plans. For those planholders who do not return their voting directions, the nominee company will vote their shares in proportion to the directions of those who do ('proportional voting'). Implementation of this arrangement is subject to a minimum threshold of 5% of the shares held in the savings plans being voted. A maximum limit of 668,000 shares that any one individual investor can vote, being approximately 5% of the minimum threshold, also applies. Any shares voted by an investor in excess of the maximum limit remain valid, but do not form part of the proportional voting basis. Planholders have the right to exclude their shares from the proportional voting arrangement.

## Substantial Interests in the Company's Share Capital

As at 30 April 2024 and since that date no notifications of significant voting rights have been received under the FCA's Disclosure Guidance and Transparency Rules.

## Borrowings

The Company has a one-year £35 million multi-currency revolving credit facility with The Royal Bank of Scotland International Limited. At the year-end, €6.8m, ¥557.5m and $9.8m (in total, the equivalent of £16.5m) were drawn down. The Company also has in issue £35 million fixed rate 20-year unsecured private placement notes at a coupon of 2.26% which mature in August 2039. Further information is provided in notes 12 and 14 to the financial statements.

## Remuneration Report

The Directors' Remuneration Report, which can be found on pages 62 to 64 provides detailed information on the remuneration arrangements for Directors of the Company. Shareholders are asked to approve the Remuneration Policy and the Directors' Remuneration Report annually. There have been no changes to the Remuneration Policy since it was last approved by shareholders at the AGM on 28 July 2023. Remuneration is set at a level commensurate with the skills and experience necessary for the effective stewardship of the Company and the expected

contribution of the Board as a whole in continuing to achieve the investment objective (**Resolutions 2 and 3**).

## Appointments to the Board

Under the articles of association of the Company, the number of Directors on the Board may be no more than twelve. Directors may be appointed by the Company by ordinary resolution or by the Board. All new appointments require prior Board approval and are subject to election by shareholders at the next annual general meeting. Institutional shareholders are given the opportunity to meet any newly appointed Director if they wish. An induction process is in place for new appointees and all Directors are encouraged to attend relevant training courses and seminars.

## Removal of Directors

The Company may, by special resolution, remove any Director before the expiration of their term of office and may, by ordinary resolution, appoint another person who is willing to act to be a Director in their place. The provisions under which a Director would automatically cease to be a Director are set out in the Company's articles of association.

## Contribution and Independence of Directors

The Board is composed solely of independent non-executive Directors. The Nomination Committee has considered each Director and the Board has concurred with its assessment that each Director continues to make a valuable and effective contribution and remains committed in their respective roles. Furthermore, no Director has a recent or current connection with the Manager and each remains independent in character and judgement, with no relationships or circumstances relating to the Company that are likely to affect that judgement. It is noted that Randeep Grewal, who was appointed to the Board on 1 December 2023, and Jo Dixon have an overlapping external directorship as both are non-executive directors of Bellevue Healthcare Trust plc, another listed company. Jo Dixon will retire at the conclusion of the Company's forthcoming AGM. The Nomination Committee has assessed this and concluded that neither this, nor any other external directorships held by the Directors, present a conflict or impacts their independence. The Board has therefore concurred with the Nomination Committee's assessment that all Directors are independent of the Manager and of the Company itself.

The following table sets out the Directors' meeting attendance in the year under review. The Board held a separate meeting in February 2024 to consider strategic issues and also met regularly in private sessions, without any representation from the Manager. In addition to its scheduled annual meeting, the Nomination Committee met on several other occasions as part of the process to recruit two new Directors.

48 | The Global Smaller Companies Trust PLC
Governance Report
Directors’ attendance The Company has granted a deed of indemnity to the Directors Chairman’s StatementOverview Auditor’s Report
in respect of liabilities that may attach to them in their capacity
Audit and
as Directors of the Company. This covers any liabilities that may
Management
arise to a third party for negligence, default or breach of trust or
Engagement Nomination
Board Committee Committee duty. This deed of indemnity is a qualifying third-party provision (as
No. of meetings 6 3 1 defined by section 234 of the Act) and has been in force throughout
(1) the year under review and remains in place as at the date of this
Anja Balfour 5 2 1
report. It is available for inspection at the Company’s registered
Nick Bannerman 6 3 1
Strategic Report Governance Report Financial Report Notice of Meeting
office during normal business hours and at the AGM. The Company
(2)
Bulbul Barrett 3 2 n/a
also maintains directors’ and officers’ liability insurance.
Jo Dixon 6 3 1
(2)
Randeep Grewal 3 2 n/a Safe Custody of Assets
(1)

| Graham Oldroyd |  | 6 | 3 | 1 | The Company’s listed investments are held in safe custody by |
| --- | --- | --- | --- | --- | --- |
|  | (3) |  |  |  | JPMorgan Chase Bank (the ‘Custodian’). Operational matters |
| David Stileman |  | 4 2 1 |  |  |  |

with the Custodian are carried out on the Company’s behalf by
(1) From 8 November 2023 until 18 February 2024, Graham Oldroyd was the interim
chairman in place of Anja Balfour the Manager in accordance with the provisions of the investment
(2) Appointed on 1 December 2023
(3) Retired on 11 December 2023 management agreement. The Custodian is paid a variable fee
dependent on the number of trades transacted and location of the
Election/Re-Election of Directors securities held.
The names of the Directors of the Company, along with their
biographical details, are set out on page 45 and are incorporated Depositary
into this report by reference. The skills and experience each JPMorgan Europe Limited (the ‘Depositary’) acts as the Company’s
Director brings to the Board for the long-term sustainable success Depositary in accordance with the Alternative Investment Fund
of the Company are also set out. Manager’s Directive (‘AIFMD’). The Depositary’s responsibilities,
which are set out in an Investor Disclosure Document on the
With the exception of Bulbul Barrett and Randeep Grewal, who Company’s website, include: cash monitoring; ensuring the
were both appointed on 1 December 2023 and David Stileman proper segregation and safe keeping of the Company’s financial
who retired on 11 December 2023, all Directors held office instruments that are held by the Custodian; and monitoring
throughout the year under review. the Company’s compliance with investment and leverage limits
requirements. The Depositary receives for its services a fee of
In accordance with the Company’s Articles of Association, any one basis point per annum, based on the Company’s net assets,
Director appointed by the Board shall hold office only until the next payable monthly in arrears.
Annual General Meeting and shall then be eligible for election.
Accordingly, Bulbul Barrett and Randeep Grewal will retire at the Although the Depositary has delegated the safekeeping of all
AGM, being the first such meeting following their appointment and, assets held within the Company’s investment portfolio to the
being eligible, offer themselves for election (Resolution 7 and 8). Custodian, in the event of loss of those assets that constitute
financial instruments under the AIFMD, the Depositary will be
In accordance with the AIC Code, the Board has agreed that all obliged to return to the Company financial instruments of an
Directors will retire annually. Jo Dixon is not standing for re-election identical type, or the corresponding amount of money, unless it can
and will retire at the conclusion of the forthcoming Annual General demonstrate that the loss has arisen as a result of an external
Meeting. Accordingly, Anja Balfour, Nick Bannerman and Graham event beyond its reasonable control, the consequences of which
Oldroyd will retire at the AGM and, being eligible, offer themselves would have been unavoidable despite all reasonable efforts to the
for re-election. (Resolutions 5, 6 and 9). contrary.
Directors’ Interests and Indemnification The Manager’s Fee
There were no contracts to which the Company was a party and in With effect from 1 May 2023, a tiered element to the management
which a Director is, or was, materially interested during the year. fee was introduced. The Manager is paid a management fee at the
Other Information
There are no agreements between the Company and its Directors rate of 0.55% per annum of the Company’s net asset value up to
concerning compensation for loss of office. £750m, excluding any investments made in third party collective
funds and at the rate of 0.5% per annum (up to 30 April 2023:
0.55%) of the Company’s net asset value in excess of £750m,
Report and Financial Statements 2024 | 49
excluding any investments made in third party collective funds. Any investments made in third party collective funds are subject to a charge of 0.275% per annum of their market value. The management fee is calculated and paid monthly in arrears.

The amount charged in the year under review was £4,198,000, a decrease of 3% from the £4,329,000 charged in the year to 30 April 2023.

Note 4 to the financial statements shows the apportionment of the management fee between capital and revenue.

### **Manager Evaluation Process**

The Manager's performance is considered by the Board at every meeting with a formal evaluation by the Audit and Management Engagement Committee each year. For the purposes of its ongoing monitoring, the Board receives detailed reports and views from the Lead Manager on investment policy, asset allocation, gearing and risk, including formal presentations on the North American, UK, European, Japanese and Rest of World portfolios at least annually. In evaluating the Manager's performance, the Board considers a range of factors including the investment performance of the portfolio as a whole, performance of the various regional sub-portfolios and the skills, experience and depth of the team involved in managing the Company's assets. The Board measures the overall relative success of the Company against the Benchmark and its peers, with each regional sub-portfolio being measured against relevant local small capitalisation indices. It also considers the resources and commitment of the Manager in all areas of its responsibility, including the marketing and administrative services provided to the Company. Portfolio performance, which is relevant in monitoring the Manager, is set out on pages 8 to 17.

### **Manager Re-appointment**

The annual evaluation that took place in April 2024 included presentations from the Joint Lead Managers and the Manager's Head of Investment Trusts. This focused primarily on investment performance and the services provided to the Company more generally. With regard to performance, the Company's NAV total return was ahead of the Benchmark over the ten years to 30 April 2024.

In light of the long-term investment performance of the Manager and the quality of the overall service provided, the Audit and Management Engagement Committee concluded that in its opinion the continuing appointment of the Manager on the terms agreed is in the interests of shareholders as a whole. The Board ratified this recommendation.

### **AGM and Online Viewing**

The Company's AGM will be held at The Chartered Accountants Hall, 1 Moorgate Place, London EC2R 6EA, on Tuesday 13 August 2024 at 12.00 noon. The meeting will also be streamed live on the internet so that those shareholders who cannot attend in person will be able to view the proceedings. The broadcast can be viewed by registering here: https://www.investormeetcompany.com/the-global-smaller-companies-trust-plc/register.

We encourage shareholders who cannot attend to lodge their votes to arrive by the deadline stated in the notice of meeting, appointing the chairman of the meeting as your proxy. Voting on all resolutions will be held on a poll, the results of which will be announced via a regulatory announcement and will be shown on the Company's website following the meeting.

### **Authority to Allot Shares and Sell Shares from Treasury (Resolutions 12 and 13)**

By law, directors are not permitted to allot new shares (or to grant rights over shares) unless authorised to do so by shareholders. In addition, directors require specific authority from shareholders before allotting new shares (or granting rights over shares) for cash or selling shares out of treasury without first offering them to existing shareholders in proportion to their holdings.

Resolution 12 gives the Directors the necessary authority to allot securities up to an aggregate nominal amount of £1,218,345.68 (48,733,827 ordinary shares), being equivalent to approximately 10% of the Company's issued share capital (calculated exclusive of the shares held in treasury) as at 20 June 2024, being the latest practicable date before the publication of the Notice of AGM. The authority and power will expire at the conclusion of the annual general meeting to be held in 2025 or, if earlier, 15 months from the passing of the resolution.

Resolution 13 empowers the Directors to allot such securities for cash, other than to existing shareholders on a pro-rata basis and also to sell treasury shares without first offering them to existing shareholders in proportion to their holdings up to an aggregate nominal amount of £1,218,345.68 (representing approximately 10% of the issued ordinary share capital of the Company as at 20 June 2024, calculated exclusive of the shares held in treasury).

These authorities provide the Directors with a degree of flexibility to increase the assets of the Company by the issue of new shares or the sale of treasury shares, in accordance with the policies set out on pages 41 to 43 or should any other favourable opportunities arise to the advantage of shareholders. Under no circumstances would the Directors issue new shares or sell treasury shares at a price which would result in a dilution of the NAV per ordinary share.

50 | The Global Smaller Companies Trust PLC
Governance Report

### Authority for the Company to Purchase its Own Shares (Resolution 14)

At the annual general meeting held on 28 July 2023 the Company was authorised to purchase up to approximately 14.99% of its own shares for cancellation or to be held in treasury. The number of shares remaining under that authority as at 30 April 2024 was 52,654,956 shares or 10.64% of the issued share capital exclusive of the number of shares held in treasury. Resolution 14 will authorise the renewal of such authority enabling the Company to purchase in the market up to a maximum of 73,052,007 ordinary shares (equivalent to approximately 14.99% of the issued share capital exclusive of treasury shares) and sets out the minimum and maximum prices at which they may be bought, exclusive of expenses, reflecting the requirements of the Act and the Listing Rules.

The Directors will continue to use this authority in accordance with the policies set out on pages 41 to 43. Under the Act, the Company is permitted to hold its own shares in treasury following a buy-back, instead of cancelling them. This gives the Company the ability to reissue treasury shares quickly and cost-effectively (including pursuant to the authority under Resolution 13) and provides the Company with additional flexibility in the management of its capital base. Such shares may be resold for cash but all rights attaching to them, including voting rights and any right to receive dividends, are suspended whilst they are held in treasury. If the Board exercises the authority conferred by Resolution 14, the Company will have the option of either holding in treasury or of cancelling any of its shares purchased pursuant to this authority and will decide at the time of purchase which option to pursue. Purchases of ordinary shares under the authority will be financed out of realised revenue and/or capital reserves and funded from the Company's own cash resources or, if appropriate, from short-term borrowings. This authority will expire at the conclusion of the annual general meeting to be held in 2025 or, if earlier, 15 months from the passing of the resolution. The Board intends to seek the renewal of such authority at subsequent annual general meetings.

### Notice Period for Meetings (Resolution 15)

The Act and the Company's articles of association provide that all general meetings (other than annual general meetings) can be convened on 14 days' notice. However, one of the requirements of the Shareholder Rights Directive is that all general meetings must be held on 21 clear days' notice, unless shareholders agree to a shorter notice period. The Board is of the view that it is in the Company's interests to have a shorter notice period which complies with the provisions of the Act and the Company's articles to allow all general meetings (other than an annual general meeting) to be called on 14 clear days' notice. The passing of Resolution 15 would constitute shareholders' agreement for the

purposes of the Shareholder Rights Directive (which agreement is required annually) and would therefore preserve the Company's ability to call general meetings (other than an annual general meeting) on 14 clear days' notice. The Board would utilise this authority to provide flexibility when merited and would not use it as a matter of routine. The Board intends to seek the renewal of such authority at subsequent annual general meetings.

### Form of Proxy for AGM Voting

If you are a registered shareholder you will receive a form of proxy for use at the AGM. You will also have the option of lodging your proxy vote electronically at www.eproxyappointment.com. For shares held through CREST, proxy appointments may be submitted via the CREST proxy voting system. Please either complete, sign and return the form of proxy in the envelope provided as soon as possible in accordance with the instructions or, alternatively, lodge your proxy vote via the Internet or the CREST proxy voting system.

All shareholders are strongly encouraged to vote in advance of the AGM and, to do so, all proxy appointments must be returned not later than 48 hours before the time appointed for holding the AGM.

### Form of Direction and Proportional Voting

If you are an investor in any of the Manager's Savings Plans you will receive a form of direction for use at the AGM and you will also have the option of lodging your voting directions using the Internet. The Manager operates a proportional voting arrangement, which is explained on page 48.

All forms of direction should be submitted as soon as possible in accordance with the instructions thereon and, in any event, not later than 12.00 noon on 6 August 2024, so that the nominee company can submit a form of proxy before the deadline for registered shareholders.

### Voting Recommendation

Your Board considers that the resolutions to be proposed at the AGM are in the best interests of the shareholders as a whole. It therefore recommends that shareholders vote in favour of each resolution, as is the intention of the Directors in respect of their own beneficial holdings.

**By order of the Board**
**Columbia Threadneedle Investment Business Limited**
**Company Secretary**
**25 June 2024**

Governance Report

Report and Financial Statements 2024 | 51
## Chairman’s Statement
## on corporate governance
Dear Shareholder, with. The proceedings at all Board and other meetings are fully
On page 45 you will find summary details of the Directors recorded through a process that allows any Director’s concerns
responsible for the governance of your Company, including mine as to be recorded by the Company Secretary in the minutes. The
your Chairman. Details are also available on the website as shown Board has the power to appoint or remove the Company Secretary
on page 1. The Company invests in a wide range of companies in accordance with the terms of the investment management
and, as a Board, we believe that good governance creates value agreement.
and expect the companies in which we invest to apply high
standards. In maintaining the confidence and trust of our own Composition of the Board and Committees
investors, we set out to adhere to the very highest standards The Board comprises six directors and maintains plans for orderly
of corporate governance, business and ethics transparency. We succession, ensuring that the right balance of skills, experience,
remain committed to doing so. knowledge, independence and diversity are in place for the Board
to operate effectively, as a whole. The Board currently meets the
Governance Overview diversity targets set out in the FCA Listing Rules as shown on
The Board has established an Audit and Management Engagement page 42.
Committee and a Nomination Committee. The role and
responsibilities of these committees are set out in their respective All Directors are members of the Audit and Management
reports which follow. As the Board has no executive directors and Engagement Committee and the Nomination Committee and this
no employees, and is comprised entirely of independent non- is noted under the Directors’ biographies on page 45, while the
executive directors, it does not have a Remuneration Committee. respective terms of reference can be found on the Company’s
Detailed information on the remuneration arrangements for the website. Further detail is given in respect of the composition of
Directors of the Company can be found in the Remuneration the Audit and Management Engagement Committee on page 57.
Report on pages 62 to 64 and in note 5 to the financial The Board considers that, given its size, it would be unnecessarily
statements. burdensome to establish separate committees which did not
include the entire Board and believes that this enables all
The Company has appointed the Manager to manage the Directors to be kept fully informed of any issues that arise.
investment portfolio as well as to carry out the day to day
management and administrative functions. An explanation of Compliance with the AIC Code of Corporate Governance
the reporting arrangements from the Manager is set out in the (the ‘AIC Code’)
Strategic Report on page 35 and in the Report of the Audit We have considered the Principles and Provisions of the AIC Code.
and Management Engagement Committee in respect of risk The AIC Code addresses the Principles and Provisions set out in
management and internal control on page 57. Explanations the UK Corporate Governance Code (the ‘UK Code’), as well as
concerning the Board’s appointment of the Manager, including setting out additional provisions on issues that are of specific
reference to the strength of their resources, measurement of relevance to the Company. Also, there are two main differences.
performance and alignment with the values of the Board can be In the AIC Code, both the nine year limit on chair tenure and the
found on page 35. restriction on the chair of the Board being a member of the Audit
Committee have been removed.
The Board has direct access to the company secretarial advice
and services of the Manager which, through the Company Anja Balfour, the Chairman, was appointed to the Board on 1 June
Secretary, is responsible for ensuring that Board and committee 2015 and then as Chairman on 30 July 2020 and at the date
procedures are followed and applicable regulations are complied of this report has now served for more than nine years. As set
52 | The Global Smaller Companies Trust PLC
Governance Report
out in the Report of the Nomination Committee, a succession Chairman’s StatementOverview Auditor’s Report
plan for the Board is in place to ensure continuity of corporate
knowledge and culture of the Board. The tenure policy relating to
the Directors, which includes the Chairman, is set out on page 60.
The Board considers that reporting against the Principles and
Provisions of the AIC Code, which has been endorsed by the
Financial Reporting Council, provides more relevant information
Strategic Report Governance Report Financial Report Notice of Meeting
to shareholders. By reporting against the AIC Code, the Company
meets its obligations in relation to the UK Code (and associated
disclosure requirements under paragraph 9.8.6 of the Listing
Rules) and as such does not need to report further on issues
contained in the UK Code which are not relevant to it as an
externally managed investment company.
The Board considers that the Company has complied with
the recommendations of the AIC Code, noting that provisions
relating to the role of the Chief Executive, executive directors’
remuneration, the need for an internal audit function and workforce
engagement are not relevant to the Company, being an externally
managed investment trust company. In particular, all of the
Company’s day to day management and administrative functions
have been delegated to the Manager. As a result, the Company
has no executive directors, employees or internal operations. As
explained in the Report of the Audit and Management Engagement
Committee, the Chairman of the Board is also a member of this
Committee, as permitted by the AIC code. Therefore, with the
exception of the need for an internal audit function, which is
addressed on pages 57 and 58, we have not reported further in
respect of these provisions. Copies of the UK Code and AIC Code
can be found on their respective websites: frc.org.uk and
theaic.co.uk.
Anja Balfour
Chairman
25 June 2024
Other Information
Report and Financial Statements 2024 | 53
## Applying the principles of the AIC code
Company Purpose intermediary for other Directors and shareholders. She leads the
Information relating to the Company’s purpose, values and culture annual evaluation of the Chairman. Jo Dixon will retire following
can be found on page 34. the conclusion of the forthcoming AGM on 13 August 2024
and Graham Oldroyd has agreed to fulfil this role, following her
Board Leadership retirement.
The Board is responsible for the effective stewardship of the
Company’s affairs and has in place a schedule of matters that In order to enable them to discharge their responsibilities, all
it has reserved for its decision, which are reviewed periodically. Directors have full and timely access to relevant information.
These are categorised and reviewed under strategy, policy, Directors are able to seek independent professional advice at the
finance, risk, investment restrictions, performance, marketing, Company’s expense in relation to their duties. No such advice was
appointments, the Board and public documents. It has taken during the year under review.
responsibility for all corporate strategic issues, principal policies
(set out on pages 41 to 43) and corporate governance matters Composition and Succession
which are all reviewed regularly. The Report of the Nomination Committee sets out on page 60 its
role and key responsibilities. The composition of the Board and
At each meeting the Board reviews the Company’s investment Committee members is set out in the Directors’ details on page
performance and considers financial analyses and other reports 45. The Company’s diversity policy is set out on page 42.
of an operational nature. The Board monitors compliance with the
Company’s objectives and is responsible for setting investment Board Evaluation and Effectiveness
and gearing limits within which the Lead Manager has discretion Each year the Board undertakes an evaluation of the effectiveness
to act, and thus supervises the management of the investment of individual Directors, the Board and its Committees. The
portfolio which is contractually delegated to the Manager. Board and Committee evaluation for the year under review was
The Board has responsibility for the approval of any unlisted carried out using a questionnaire and was followed by one-to-one
investments. discussions between the Chairman and each of the Directors. The
performance of the Chairman was included as part of the process
Division of Board Responsibilities and led separately by the Senior Independent Director. The findings
As an externally managed investment trust company, there are no of the evaluations were reviewed and discussed by the Board.
executive Directors; all Directors are non-executive. The Chairman
is responsible for the leadership and management of the Board There were no significant issues arising from the evaluation
and promotes a culture of openness, challenge and debate. The process and it was agreed that the Board and its Committees
Chairman sets the agenda for all Board meetings under a regular were functioning effectively. All Directors make an effective
programme of items in conjunction with the Company Secretary. contribution to the Board commensurate with their experience and
skills.
The Board has a strong working relationship with the Manager,
whose personnel, including the Lead Manager, attend and report Audit, Risk Management and Internal Control
to the Board at every meeting. Discussions at all levels are held in The Board has established an Audit and Management Engagement
a constructive and supportive manner with appropriate challenge Committee, the report of which is set out on pages 56 to 59.
and strategic guidance and advice from the Board whenever The report includes the rationale for the Company not having
necessary, consistent with the culture and values. established its own internal audit function; how the independence
and effectiveness of the external auditor is assessed; and how
Currently, Jo Dixon is the Senior Independent Director and acts the Board satisfies itself on the integrity of the Company’s financial
as an experienced sounding board for the Chairman and an statements. The report covers the process under which the Board
54 | The Global Smaller Companies Trust PLC
Governance Report
satisfied itself that the Annual Report and Financial Statements Chairman’s StatementOverview Auditor’s Report
presents a fair, balanced and understandable assessment of the
Company’s position and prospects. There is an explanation of
the procedures under which risk is managed and how the Board
oversees the internal control framework and determines the
nature and extent of the principal risks the Company is willing to
take in order to achieve its long-term strategic objectives. Further
information on the Company’s risk and control framework can be
Strategic Report Governance Report Financial Report Notice of Meeting
found on pages 57 and 58.
Relations with Shareholders and Stakeholders
The Company’s stakeholders, and the engagement undertaken
with them in the year under review, are set out on pages 35 to 36.
Remuneration
The Board’s remuneration policy is explained on page 62. As non-
executive Directors, fees are set at a level commensurate with
the skills and experience necessary for the effective stewardship
of the Company and the contribution towards the delivery of the
investment objective. The Company has no executive Directors
or employees. The fees paid to the Manager are charged at a
competitive rate on the Company’s net assets and are therefore
aligned with the Company’s purpose, its values, the successful
delivery of its long-term strategy and the interests of its
shareholders.
By order of the Board
Columbia Threadneedle Investment Business Limited
Company Secretary
25 June 2024
Other Information
Report and Financial Statements 2024 | 55
## Report of the Audit and
## Management Engagement Committee
Role of the Committee • Whether to change the Company’s current policy by
The primary responsibilities of the Committee are to ensure establishing its own Internal Audit function;
the integrity of the financial reporting and statements of the • The ISAE/AAF Report from the Manager and similar
Company; to oversee the preparation and audit of the annual controls reports from the Custodian and the Company’s
financial statements, the preparation of the half-yearly financial Share Registrar;
statements and the internal control and risk management • The performance of the Company’s third party service
processes; and to assess the performance of the Manager and providers and administrators, other than the Manager, and
review the fees charged. The Committee met on three occasions the fees charged in respect of those services;
during the year with representatives from the Manager, including • The performance of the Manager and their fees; and
the trust accountant, Head of Investment Trusts, Operational • The Committee’s terms of reference for approval by the
Risk Management and the Joint Lead Managers in attendance. Board.
A representative of the Company’s independent auditor, BDO,
attended the year end and half year meetings and met in private Comprehensive papers relating to each of these matters
session with the Committee. were prepared for discussion. These were debated by the
Committee and any recommendations were fully considered if
Specifically, the Committee considered, monitored and reviewed there was a judgement to be applied in arriving at conclusions.
the following matters: Recommendations were then made to the Board as appropriate.
• The audited annual results statement and annual report
and financial statements and the unaudited half-yearly report Following the change of ownership of the Manager in November
and financial statements, including advice to the Board as to 2021, the integration with Columbia Threadneedle Investments
whether the annual report and financial statements taken as is now almost complete, but the Audit and Management
a whole are fair, balanced and understandable; Engagement Committee has continued to monitor it from a
• The accounting policies of the Company; risk management and internal control perspective. A critical
• The principal and emerging risks faced by the Company and milestone was the move to a new order management system
the effectiveness of the Company’s risk management and (‘OMS’), Aladdin, which was successfully completed in October
internal control environment, including consideration of the 2023. The Audit and Management Engagement Committee has
assumptions underlying the Board’s ‘Long-Term Viability: received confirmation from the Manager that the systems of
Five Year Horizon’ statement; risk management and internal control have operated effectively
• How the Company has applied the principles of and throughout the year under review and thereafter to the date of this
complied with the provisions of the AIC Code; report.
• The effectiveness of the external audit process and the
current independence and objectivity of BDO; The Board retains ultimate responsibility for all aspects relating
• The appointment, remuneration and terms of engagement of to external financial statements and other significant published
the independent auditor; financial information as is noted in the Statement of Directors’
• The policy on the engagement of the external auditor Responsibilities on page 65. On broader control policy issues,
to supply non-audit services and approval of any such the Committee has considered, and is satisfied with, the Code of
services; Conduct and the Anti-Bribery and Anti-Corruption Policy to which
the Manager and its employees are subject. The Committee has
56 | The Global Smaller Companies Trust PLC
Governance Report
also considered the Manager’s Whistleblowing Policy, under which of these risks into the analyses underpinning the ‘Long-Term Chairman’s StatementOverview Auditor’s Report
its directors and staff may, in confidence, raise concerns about Viability: Five Year Horizon’ Statement on page 39 was fully
possible improprieties in financial reporting or other matters. considered and the Committee concluded that the Board’s
The necessary arrangements are in place for communication statement was soundly based. The period of five years was also
by the Manager to this Committee where matters might impact agreed as remaining appropriate for the reasons given in the
the Company with appropriate follow-up action. In the year under viability statement.
review there were no such concerns raised with the Committee.
Risk Management and Internal Control
Strategic Report Governance Report Financial Report Notice of Meeting
Composition of the Committee The Board has overall responsibility for the Company’s system
The Board recognises the requirement for the Committee as a of risk management and internal control, for reviewing its
whole to have competence relevant to the sector in which the effectiveness and ensuring that risk management and internal
Company operates and for at least one member to have recent control processes are embedded in the day-to-day operations
and relevant financial experience. All Directors of the Company which are managed by the Manager. The Committee has reviewed
are members of the Committee, including the Chairman of the and reported to the Board on those controls, which aim to
Board. In accordance with the AIC Code and given the size of the ensure that the assets of the Company are safeguarded, proper
Board it is considered appropriate for the Chairman of the Board accounting records are maintained and the financial information
to be a member of the Committee. All Committee members are used within the business and for publication is reliable. Control of
independent non-executive Directors. Jo Dixon, Chairman of the the risks identified, covering financial, operational, compliance and
Committee, is a Chartered Accountant and she is currently audit overall risk management, is exercised by the Committee through
committee chairman of other listed companies. Jo Dixon will retire regular reports provided by the Manager. The reports cover
following the conclusion of the forthcoming AGM and it is intended investment performance, performance attribution, compliance with
that Nick Bannerman, who is also a Chartered Accountant, will agreed and regulatory investment restrictions, financial analyses,
then become Chairman of the Committee. The other members of revenue estimates, performance of the third-party administrator
the Committee have a combination of financial, investment and of the Manager's Savings Plans and other relevant management
business experience through the senior posts held throughout issues.
their careers and all have a wide experience of the investment
trust sector. Details of the members can be found on page 45 The system of risk management and internal control is designed
and the Committee’s terms of reference can be found on the to manage rather than eliminate risk of failure to achieve
Company's website as shown on page 1. business objectives and can only provide reasonable, but not
absolute, assurance against material misstatement, or loss or
Management of Risk fraud. Further to the review by the Committee, the Board has
The Manager's Operational Risk Management team provides assessed the effectiveness of the Company’s system of risk
regular control report updates to the Committee covering risk and management and internal control. The assessment included a
compliance, while any significant issues of direct relevance to the review of the Manager's risk management infrastructure and
Company are required to be reported to the Committee and Board Report on Internal Controls for the period to 1 October 2023 (the
without delay. ‘ISAE/AAF Report’). The Committee also received confirmation
from the Manager that, subsequent to this date, on 2 October
A key risk summary is produced by the Manager in consultation 2023, the move to the Aladdin OMS was completed and there
with the Board to identify the risks to which the Company is had been no other significant changes to the control environment.
exposed, the controls in place and the actions being taken to The ISAE/AAF Report had been prepared by the Manager for
mitigate them. The Committee and Board has a robust process all of its investment trust clients in accordance with ISAE No.
for considering the resulting risk matrix at its meetings and 3402 and AAF 01/20. The ISAE/AAF Report from independent
dynamically reviews the significance of the risks and the reasons service auditor KPMG LLP sets out the Manager’s control policies
for any changes. and procedures with respect to the management of clients’
investments and maintenance of their financial records. The
The Company’s Principal and Emerging Risks are set out on page effectiveness of those controls is monitored by the Manager's
38 with additional information given in note 23 to the financial Audit and Compliance Committee, which received regular
Other Information
statements. The Committee noted the robustness of the Board’s internal audit reports. Procedures are also in place to capture
review of principal risks, and the identification of emerging risks, and evaluate any failings and weaknesses within the Manager's
and participated as Board members themselves. The integration control environment and those extending to any outsourced
Report and Financial Statements 2024 | 57
service providers to ensure that action would be taken to remedy External Audit Process and Significant issues
any significant issues. Any errors or breaches relating to the Considered by the Committee
Company are reported at each Committee and Board meeting In carrying out its responsibilities, the Committee has considered
by the Manager, including those relating to the administration the planning arrangements, scope, materiality levels and
of its savings plans and related complaint levels. No failings conclusions of the external audit for the year under review. The
or weaknesses material to the overall control environment and table below describes the significant judgements and issues
financial statements were identified in the period under review. considered by the Committee in conjunction with BDO in relation
The Committee also reviewed the internal control reports of the to the financial statements for the year and how these issues
Custodian and the Registrar and were satisfied that there were no were addressed. The Committee also included in their review the
material exceptions. areas of judgements, estimates and assumptions referred to in
note 2(c)(xi) to the financial statements. Likewise, the Committee
Through the reviews and reporting arrangements set out and reviewed the disclosure and description of Alternative Performance
by direct enquiry of the Manager and other relevant parties, the Measures provided on page 102 and is satisfied that the
Committee and the Board have satisfied themselves that there disclosure is fair and relevant. Procedures for investment valuation
were no material control failures or exceptions affecting the and existence and recognition of income were the main areas of
Company’s operations during the year under review nor to the date audit focus and testing.
of this Report.
The Committee met in June 2024 to discuss the final draft of the
Based on the processes and controls in place within the Manager, Annual Report and Financial Statements, with representatives of
the Committee has concluded, and the Board has concurred, BDO and the Manager in attendance. BDO submitted their year-
that there is no current need for the Company to have a separate end report and confirmed that they had no reason not to issue
internal audit function.
Significant Judgements and Issues considered by the Committee for the year ended 30 April 2024
Matter Action
Investment Portfolio Valuation
Although the Company’s portfolio of investments The Board reviewed the full portfolio valuation twice in the year.
is predominantly invested in listed securities
The Committee reviewed the Manager's ISAE/AAF Report on internal controls which is reported on by
quoted on recognised stock exchanges, errors in
an independent external service Auditor. This report indicated that the relevant systems and controls
the valuation could have a material impact on
surrounding daily pricing, cash and holdings reconciliations and security valuation had operated
the Company’s NAV per share.
satisfactorily.
Misappropriation of Assets
Misappropriation of the Company’s investments The Committee reviewed the Manager's ISAE/AAF Report, as previously referred to, and the Custodian's
or cash balances could have a material impact semi-annual report on internal controls which are reported on by independent external service Auditors.
on its NAV per share. Neither of these reports indicated any failures of controls over the existence and safe custody of the
Company’s investments and cash balances. The Company’s Depositary reported quarterly on the safe
custody of the Company’s investments and the operation of controls over the movement of cash in settlement
of investment transactions. Through these reports the Committee is satisfied that the assets remained
protected throughout the year.
Income Recognition
Incomplete controls over, or inaccurate The Committee’s review of the Manager’s ISAE/AAF Report, as previously referred to, indicated that there
recognition of, income could result in the were no control failures in the year. The Committee reviewed and approved at the interim and annual
Company misstating its revenue receipts accounts reporting meetings, any dividend receipts deemed to be capital (special) in nature by virtue of their
and associated tax, with consequences for payment out of investee company restructuring rather than ordinary business operations. In addition, the
overall performance, payment of dividends to Committee reviewed that all special dividends had been correctly treated in accordance with the Company’s
shareholders, and compliance with taxation accounting policy.
rules.
58 | The Global Smaller Companies Trust PLC
Governance Report

an unqualified audit report in respect of the Annual Report and Financial Statements. The Committee established that there were no material issues or findings arising which needed to be brought to the attention of the Board.

The Committee recognises the importance of continually improving non-financial reporting and the increased focus on the Strategic Report by investors and regulators. The Committee has carefully considered the disclosures made in the Annual Report and Financial Statements particularly in relation to the disclosures under section 172(1) of the Act including how wider stakeholder interests have been taken into account by the Directors while performing their duties and related disclosures with regard to ESG issues. The Committee has also had regard to the non-financial reporting requirements in the Act, which is an area of reporting that is expected to evolve further in coming years.

Consequently, the Committee recommended to the Board that the Annual Report and Financial Statements were in its view, fair, balanced and understandable in accordance with accounting standards, regulatory requirements and best practice.

The Independent Auditor's report, which sets out the unqualified audit opinion, the scope of the audit and the areas of focus, in compliance with applicable auditing standards, can be found on pages 66 to 71.

### Auditor Assessment, Independence and Re-appointment

The Committee reviews the re-appointment of the auditor every year and has been satisfied with the effectiveness of BDO's performance on its audit of the Company's financial statements. BDO has confirmed that they are independent of the Company and have complied with relevant auditing standards. In evaluating BDO, the Committee has taken into consideration the skills and experience of the firm and of the audit team. From direct observation and indirect enquiry of the Manager, the Committee is satisfied that BDO will continue to provide effective independent challenge in carrying out its responsibilities. Its fee was £47,000, excluding VAT (2023: £42,000).

Following professional guidelines, the Senior statutory auditor rotates at least every five years. Following an audit tender process in 2019, BDO was subsequently appointed as Auditor for the year ended 30 April 2020. Peter Smith, the current senior statutory auditor was engaged for the first time during the year ended 30 April 2020, which was BDO's first year as Auditor. Accordingly, the year ended 30 April 2024 represents Peter Smith's fifth and final year as the Senior Statutory auditor and BDO's fifth year as Auditor.

The Company has a duty to consider carefully the audit for value and effectiveness and, as part of its annual review, considers the need for putting the audit out to tender for reasons of quality, independence or value. The Company is required to carry out a tender every ten years with the next due no later than 2029.

The Committee confirms that the Company is in compliance with the requirements of the Statutory Audit Services for Large Companies Market Investigation (Mandatory Use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014. This order relates to the frequency and governance of tenders for the appointment of the external auditor and the setting of the policy on the provision of non-audit services.

### Non-audit Services

The Committee regards the continued independence of the external auditor to be a matter of the highest priority. The Company's policy with regard to the provision of non-audit services by the external auditor ensures that no engagement will be permitted if:

- the provision of the services would contravene any regulation or ethical standard;
- the auditor is not considered to be expert providers of the non-audit services;
- the provision of such services by the auditor creates a conflict of interest for either the Board or the Manager; and
- the services are considered to be likely to inhibit the auditor's independence or objectivity as auditor.

In particular, the Committee has a policy that the accumulated costs of all non-audit services sought from the auditor in any one year should not exceed 30% of the likely audit fees for that year and not exceed 70% cumulatively over three years. There were no non-audit services for the year ended 30 April 2024.

### Committee Evaluation

The activities of the Committee were considered as part of the Board evaluation process as noted on page 54. The evaluation found that the Committee continued to function well, with an appropriate balance of skills and experience.

Jo Dixon

Chairman

Audit and Management Engagement Committee

25 June 2024

Governance Report

Report and Financial Statements 2024 | 59
## Report of the Nomination Committee
Role of the Committee searches are undertaken in accordance with this objective and
The primary role of the Nomination Committee is to review and policy with the recruitment process open to a diverse range of
make recommendations with regard to Board structure, size and candidates.
composition. It takes into account the ongoing requirements of the
Company and the need to have a balance of knowledge, experience, The Board is of the view that length of service will not necessarily
skill ranges, diversity (including gender, race, ethnicity, religion, sexual compromise the independence or contribution of directors of an
orientation, age, physical ability, educational, professional and socio- investment trust company or, indeed, its chairman. This is because
economic background) and independence and considers succession continuity and experience can add significantly to the strength of
planning and tenure policy. All of the Committee’s responsibilities investment trust company boards where the characteristics and
have been carried out in the year under review and to date. The relationships tend to differ from those of other companies. Anja
Committee met once during the year and specifically considered, Balfour and Jo Dixon were both appointed to the Board in 2015 and
monitored and reviewed the following matters: at the date of this report have now served for more than nine years.
• the structure and size of the Board and its composition Two new Directors were appointed during the financial year to 30
particularly in terms of succession planning and the April 2024 as part of the Board's succession plan to enable future
experience and skills of the individual Directors and diversity retirements while ensuring continuity of corporate knowledge and
across the Board as a whole; culture of the Board. The Board is committed to maintaining the
• tenure policy; highest levels of corporate governance in terms of independence
• the criteria for future Board appointments and the methods of and, once the Board's current succession plan is complete, would
recruitment, selection and appointment; expect that in future the Chairman and Directors will serve for no
• the appointment of new Directors and the election/re-election more than a nine-year term, but this may be adjusted for reasons of
of those Directors standing for election/re-election at annual flexibility and continuity.
general meetings;
• the attendance and time commitment of the Directors in Appointments and Succession Planning
fulfilling their duties, including the extent of their other Appointments of all new non-executive Directors are made on a
directorships; formal basis, using professional search consultants as appropriate,
• each Director’s independence; and with the Nomination Committee agreeing the selection criteria and
• the authorisation of each Director’s situational conflicts of the method of recruitment, selection and appointment.
interests in accordance with the provisions of the Act and the
policy and procedures established by the Board in relation to During the year a search for new non-executive Directors was
these provisions. undertaken. An external search agency, Cornforth Consulting
(‘Cornforth’) which has no connection to the Company or the
Composition of the Committee Directors, was engaged to assist with the process. The search
As the Board has no executive directors or employees and is took place with clearly defined candidate criteria produced by the
comprised entirely of independent non-executive directors, all Committee based on merit and objective criteria. The selection
Directors are members of the Committee and it is chaired by Anja process was thorough and took into consideration the applications
Balfour. The terms of reference of the Committee can be found on that came through Cornforth and interviews with the shortlisted
the Company's website. candidates. The services provided by Cornforth were for the sole
purpose of recruiting the eventual appointees and there were no
Diversity and Tenure other business relationships in place with that company. Following
The Board’s policy on diversity and inclusion, including the diversity the recruitment process, it was agreed to appoint Bulbul Barrett
targets set out in the Listing Rules, is set out on page 42. Director and Randeep Grewal to the Board with effect from 1 December
2023.
60 | The Global Smaller Companies Trust PLC
Governance Report
David Stileman and Jo Dixon were both appointed to the Board Chairman’s StatementOverview Auditor’s Report
in 2015. David Stileman retired with effect from 11 December
2023 and Jo Dixon will retire at the conclusion of the Company's
forthcoming AGM on 13 August 2024. The Board approved a
recommendation from the Committee that following the retirement
of Jo Dixon, Nick Bannerman will become the Chairman of the Audit
and Management Engagement Committee and Graham Oldroyd,
the Senior Independent Director.
Strategic Report Governance Report Financial Report Notice of Meeting
Committee evaluation
The activities of the Nomination Committee were considered as
part of the Board evaluation process as reported on page 54.
Anja Balfour
Nomination Committee Chairman
25 June 2024
Other Information
Report and Financial Statements 2024 | 61
# Directors' Remuneration Report

## Directors' Remuneration Policy

The Board's policy is to set Directors' remuneration at a level commensurate with the skills and experience necessary for the effective stewardship of the Company and the expected contribution of the Board as a whole in continuing to achieve the investment objective. Time committed to the Company's business and the specific responsibilities of the Chairman, Senior Independent Director, Chairman of the Audit and Management Engagement Committee and the Directors and their retention are taken into account. The policy aims to be fair and reasonable in relation to comparable investment trust companies. This includes provision for the Company's reimbursement of all reasonable travel and associated expenses incurred by the Directors in attending Board and committee meetings, including those treated as a benefit in kind subject to tax and national insurance. This policy was last approved by shareholders at the Company's annual general meeting held on 28 July 2023 when 92.88% of the total votes received were cast in favour of the resolution and 7.12% were against. The Board has not subsequently received any views from shareholders in respect of the level of Directors' remuneration. The Board seeks approval of the policy annually and it will therefore be put to shareholders for approval at the forthcoming AGM (**Resolution 2**).

The Company's articles of association limit the aggregate fees payable to the Board to a total of £300,000 per annum. Within that limit, it is the responsibility of the Board as a whole to determine and approve the Directors' fees, following a recommendation from the Chairman and, in her case, from the Senior Independent Director. The fees are fixed and are payable in cash, quarterly in arrears. Directors are not eligible for bonuses, pension benefits, share options or long-term incentive schemes or other benefits. The Directors' fees are reviewed annually and have been increased with effect from 1 May 2024 to the levels shown in the following table.

The Board is composed solely of non-executive Directors, none of whom has a service contract with the Company, and therefore no remuneration committee has been appointed. Each Director has signed a terms of appointment letter with the Company, in each case including one month's notice of termination by either party. There is no provision for compensation for loss of office.

The letters of appointment are available for inspection at the Company's registered office during normal business hours and will be available for inspection at the Annual General Meeting. The Company also maintains Directors' and officers' liability insurance.

The dates on which each Director was appointed to the Board are set out under their biographies on page 45. Under the terms of their respective letters of appointment, each Director is subject to election at the first annual general meeting following their appointment and thereafter will continue subject to re-election at each subsequent annual general meeting in accordance with the provisions of the AIC Code. With the exception of Bulbul Barrett and Randeep Grewal, who were appointed with effect from 1 December 2023, the Directors were last re-elected at the annual general meeting held on 28 July 2023 and, with the exception of Jo Dixon, will stand for election or re-election at the AGM to be held on 13 August 2024. David Stileman retired as a Director with effect from 11 December 2023.

## Annual Statement

As Chairman of the Board, I confirm that effective 1 May 2023, for the year to 30 April 2024, the amounts paid to Directors increased by £1,500 per annum for the Chairman, £1,000 per annum for the Audit and Management Engagement Committee Chairman and £1,000 per annum for each of the other Directors.

## Future Policy Table

Following a review of the level of Directors' fees for the year to 30 April 2025, the Board concluded that the amounts paid to Directors would increase by £1,500 per annum for the Chairman and the Audit and Management Engagement Committee Chairman and £1,000 per annum for the other Directors.

Based on this, Directors' fees for specific responsibilities for the financial year to 30 April 2025 are set out in the following table. No additional fees are payable for membership of the Nomination Committee.

62 | The Global Smaller Companies Trust PLC
Governance Report
Annual fees for Board Responsibilities As at the latest practical date before the publication of this report, Chairman’s StatementOverview Auditor’s Report
there have been no changes to the Directors’ shareholdings. The
2025 2024 2023
Directors have no other share interests or share options in the
Year ended 30 April £’s £’s £’s
Company.
Chairman of the Board 50,500 49,000 47,500
Chairman of the Audit and Management
Policy Implementation
Engagement Committee 40,500 39,000 38,000
The Directors’ Remuneration Report is subject to an annual
Director 32,000 31,000 30,000
advisory vote and therefore an ordinary resolution for its approval
*The Senior Independent Director is paid an additional £1,500 per annum.
Strategic Report Governance Report Financial Report Notice of Meeting
will be put to shareholders at the forthcoming AGM. At the AGM
Annual Percentage Change held on 28 July 2023, shareholders approved the Remuneration
The following table sets out the annual percentage change in Report in respect of the year ended 30 April 2023, with 92.28% of
Directors’ fees for each Director who served in the financial the votes cast in favour of the resolution and 7.72% against.
year under review:
Relative Importance of Spend on Pay
Annual Percentage Change in Directors’ Remuneration for the The table below is shown to enable shareholders to assess the
years to 30 April
relative expenditure on Directors’ remuneration, excluding taxable
Directors’ Name 2024 2023 2022 2021 2020 benefits, compared to the shareholder distributions of dividends
(1)(5)
Anja Balfour -7.6 4.4 3.4 47.4 -7.5 and share buybacks.
(2)

| Nick Bannerman |  | 3.3 7.1 4.0 70.9 n/a |  |
| --- | --- | --- | --- |
|  | (3) |  | Actual expenditure |
| Bulbul Barrett |  | n/a n/a n/a n/a n/a |  |

Jo Dixon 2.5 11.3 7.6 3.5 7.7
Year ended 30 April 2024 2023 %
(3)
Randeep Grewal n/a n/a n/a n/a n/a
£’000s £’000s Change
(2)(5)
Graham Oldroyd 20.3 7.1 4.0 70.9 n/a Aggregate Directors’
196.4 178.0 10.3
(4) Remuneration
David Stileman n/a 7.1 4.0 0.0 0.0
Aggregate Dividends paid
(1) Appointed as Chairman of the Board with effect from 31 July 2020 12,186.0 10,305.0 18.3
to shareholders
(2) Appointed to the Board on 1 October 2019
(3) Appointed to the Board on 1 December 2023 Aggregate cost of ordinary
(4) Retired from the Board on 11 December 2023 44,777.0 35,804.0 25.1
shares repurchased
(5) From 8 November 2023 until 18 February 2024, Graham Oldroyd was the interim
chairman in place of Anja Balfour.
Directors’ Interests in the Company
There is no requirement in the Company’s Articles of Association
for the Directors to hold shares in the Company. The beneficial
shareholdings of the Directors who held office at the year end are
as follows:
Directors’ share interests (audited)
Year ended 30 April 2024 2023
Anja Balfour 51,816 51,696
Nick Bannerman 34,000 30,000
Bulbul Barrett 12,406 n/a
Jo Dixon 20,000 20,000
Randeep Grewal 6,213 n/a
Graham Oldroyd 40,134 27,597
Total 164,569 159,293
Other Information
Report and Financial Statements 2024 | 63
## Directors' Emoluments for the Year

The Directors who served during the year received the following amounts for services as non-executive Directors as well as reimbursement for expenses necessarily incurred:

### Fees for services to the Company

|  Year ended 30 April | Fees £'000s (audited) |   | Taxable Benefits^{(1)} £'000s (audited) |   | Total £'000s (audited) |   | Anticipated fees^{(2)}  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|   |  2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2025  |
|  **Director** |  |  |  |  |  |  |   |
|  Anja Balfour^{(3)} | 43.9 | 47.5 | 13.7 | 3.1 | 57.6 | 50.6 | 50.5  |
|  Nick Bannerman | 31.0 | 30.0 | 7.6 | 3.9 | 38.6 | 33.9 | 38.1  |
|  Bulbul Barrett^{(4)} | 13.0 | n/a | 0.4 | n/a | 13.4 | n/a | 32.0  |
|  Jo Dixon | 40.5 | 40.5 | 6.9 | 0.7 | 47.4 | 41.2 | 12.1  |
|  Randeep Grewal^{(4)} | 13.0 | n/a | 0.4 | n/a | 13.4 | n/a | 32.0  |
|  Graham Oldroyd | 36.1 | 30.0 | 4.9 | 1.2 | 41.0 | 31.2 | 33.1  |
|  David Stileman^{(5)} | 18.9 | 30.0 | 5.2 | 0.9 | 24.1 | 30.9 | n/a  |
|  **Total** | **196.4** | **178.0** | **39.1** | **9.8** | **235.5** | **187.8** | **197.7**  |

(1) Comprises amounts reimbursed for expenses incurred in carrying out business for the Company, which have been grossed up to include PRYE and NI contributions.

(2) Fees expected to be paid to the Directors during the year ended 30 April 2025. Taxable benefits are also anticipated but are not currently quantifiable.

(3) Highest paid Director.

(4) Appointed to the Board on 1 December 2023.

(5) Retired from the Board on 11 December 2023.

The information in the table above for the years ended 30 April 2023 and 2024 has been audited. The amounts paid by the Company to the Directors were for services as non-executive Directors.

### Company performance

A graph showing the Company's share price total return compared with the return on its Benchmark over the required ten year period is set out. From 1 May 2023, the weighting in the Benchmark calculation has been adjusted, making the new Benchmark: 20% Deutsche Numis UK Smaller Companies (excluding investment companies) Index and 80% MSCI All Country World ex UK Small Cap Index. The calculation of the MSCI index returns is now measured on a net of tax basis.

### Shareholder total return vs Benchmark total return over ten years

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

— The Global Smaller Companies Trust share price total return

— Benchmark total return (MSCI All Country World ex UK Small Cap Index net (80%) and the Deutsche Numis UK Smaller Companies (excluding investment companies) Index (20%)).

Source: State Street

On behalf of the Board

Anja Balfour

Chairman

25 June 2024

64 | The Global Smaller Companies Trust PLC
Governance Report
Chairman’s StatementOverview Auditor’s Report
## Statement of Directors’ Responsibilities
Strategic Report Governance Report Financial Report Notice of Meeting
The Directors are responsible for preparing the Annual Report Under applicable law and regulations, the Directors are also
and Financial Statements in accordance with applicable law and responsible for preparing a Strategic Report, Directors’ Report,
regulations. Directors’ Remuneration Report and Statement of Corporate
Governance that comply with that law and those regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors The Annual Report and Financial Statements is published
have prepared the financial statements in accordance with on the Company's website, as shown on page 1, which is
United Kingdom Accounting Standards, comprising FRS 102 maintained by the Manager. The Directors are responsible
‘The Financial Reporting Standard applicable in the UK and for the maintenance and integrity of the Company’s website.
Republic of Ireland’. The work undertaken by the auditor does not involve
consideration of the maintenance and integrity of the website
Under company law the Directors must not approve the financial and, accordingly, the auditor accepts no responsibility for any
statements unless they are satisfied that they give a true and changes that have occurred to the financial statements since
fair view of the state of affairs of the Company and of the profit they were initially presented on the website. Visitors to the
or loss of the Company for that period. In preparing these website need to be aware that legislation in the United Kingdom
financial statements, the Directors are required to: governing the preparation and dissemination of financial
• select suitable accounting policies and then apply them statements may differ from legislation in other jurisdictions.
consistently;
• make judgements and accounting estimates that are Each of the Directors, whose names and functions are listed
reasonable and prudent; in the Directors’ Report, confirm to the best of their knowledge
• state whether applicable UK Accounting Standards have been that:
followed, subject to any material departures disclosed and • the financial statements, prepared in accordance with
explained in the financial statements respectively; and applicable accounting standards, give a true and fair view
• prepare the financial statements on the going concern basis of the assets, liabilities, financial position and return of the
unless it is inappropriate to presume that the Company will Company;
continue in business. • the Strategic Report includes a fair review of the development
The Directors confirm that they have complied with the above and performance of the business and the position of the
requirements in preparing the financial statements. Further Company, together with a description of the principal risks and
details can be found in note 2 to the financial statements. uncertainties that it faces; and
• in the opinion of the Directors the Annual Report and
The Directors are responsible for keeping adequate accounting Financial Statements, taken as a whole, are fair, balanced
records that are sufficient to show and explain the Company’s and understandable and provide the information necessary
transactions and disclose with reasonable accuracy at any for shareholders to assess the Company’s position and
time the financial position of the company and enable them performance, business model and strategy.
to ensure that the financial statements comply with the Act.
They are also responsible for safeguarding the assets of
the Company and hence for taking reasonable steps for the On behalf of the Board
Other Information
prevention and detection of fraud and other irregularities. Anja Balfour
Chairman
25 June 2024
Report and Financial Statements 2024 | 65
## Independent Auditor’s Report to the
## members of The Global Smaller
## Companies Trust PLC
## Opinion on the financial statements Standard as applied to listed public interest entities, and we have
In our opinion the financial statements: fulfilled our other ethical responsibilities in accordance with these
• give a true and fair view of the state of the Company’s affairs requirements. The non-audit services prohibited by that standard
as at 30 April 2024 and of its profit for the year then ended; were not provided to the Company.
• have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and Conclusions relating to going concern
• have been prepared in accordance with the requirements of In auditing the financial statements, we have concluded that
the Companies Act 2006. the Directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate. Our
We have audited the financial statements of The Global Smaller evaluation of the Directors’ assessment of the Company’s ability to
Companies Trust PLC (the ‘Company’) for the year ended 30 continue to adopt the going concern basis of accounting included:
April 2024 which comprise the Income Statement, the Statement • Evaluating the appropriateness of the Directors’ method of
of Changes in Equity, the Balance Sheet, the Statement of assessing the going concern in light of market volatility and
Cash Flows and notes to the financial statements, including a the present uncertainties in economic recovery created by the
summary of significant accounting policies. The financial reporting current economic environment of high inflation and interest
framework that has been applied in their preparation is applicable rates, by reviewing the information used by the Directors in
law and United Kingdom Accounting Standards, including Financial completing their assessment.
Reporting Standard 102 The Financial Reporting Standard • Assessing the liquidity of the investment portfolio, which
applicable in the UK and Republic of Ireland (United Kingdom underpins the ability to meet the future obligations and operating
Generally Accepted Accounting Practice). expenses for a period of 12 months from the date of approval of
these financial statements.
## Basis for opinion • Reviewing the loan agreements to identify the covenants and
We conducted our audit in accordance with International assessing the likelihood of them being in breach based on the
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our Directors’ forecast and sensitivity analysis.
responsibilities under those standards are further described
in the Auditor’s responsibilities for the audit of the financial Based on the work we have performed, we have not identified
statements section of our report. We believe that the audit any material uncertainties relating to events or conditions that,
evidence we have obtained is sufficient and appropriate to individually or collectively, may cast significant doubt on the
provide a basis for our opinion. Our audit opinion is consistent Company’s ability to continue as a going concern for a period of
with the additional report to the audit committee. at least twelve months from when the financial statements are
authorised for issue.
Independence
Following the recommendation of the audit committee, we were In relation to the Company’s reporting on how it has applied the
appointed by the Board of Directors on 25 July 2019 to audit UK Corporate Governance Code, we have nothing material to add
the financial statements for the year ended 30 April 2020 and or draw attention to in relation to the Directors’ statement in the
subsequent financial periods. The period of total uninterrupted financial statements about whether the Directors considered it
engagement including retenders and reappointments is 5 appropriate to adopt the going concern basis of accounting.
years, covering the years ended 30 April 2020 to 30 April
2024. We remain independent of the Company in accordance Our responsibilities and the responsibilities of the Directors with
with the ethical requirements that are relevant to our audit of respect to going concern are described in the relevant sections of
the financial statements in the UK, including the FRC’s Ethical this report.
66 | The Global Smaller Companies Trust PLC
Independent Auditor’s Report
Chairman’s StatementOverview Auditor’s Report
Overview 2024 2023
Key audit matters Valuation and ownership of quoted investments
###  
Revenue Recognition
###  
Materiality Company financial statements as a whole
£8.7m (2023: £8.5m) based on 1% (2023: 1%) of Net assets.
Strategic Report Governance Report Financial Report Notice of Meeting
An overview of the scope of our audit Key audit matters
Our audit was scoped by obtaining an understanding of the Key audit matters are those matters that, in our professional
Company and its environment, including the Company’s judgement, were of most significance in our audit of the
system of internal control, and assessing the risks of material financial statements of the current period and include the most
misstatement in the financial statements. We also addressed significant assessed risks of material misstatement (whether
the risk of management override of internal controls, including or not due to fraud) that we identified, including those which
assessing whether there was evidence of bias by the Directors had the greatest effect on: the overall audit strategy, the
that may have represented a risk of material misstatement. 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,
Key audit matter How the scope of our audit addressed the key audit matter
Valuation and ownership of quoted investments (Note 10 on We responded to this matter by testing the valuation and ownership of the whole
Page 83) portfolio of quoted investments. We performed the following procedures:
The investment portfolio at the year-end comprised of listed equity • Confirmed the year-end bid price was used by agreeing to externally quoted prices;
investments held at fair value through profit or loss.
• Assessed if there were contra indicators, such as liquidity considerations, to suggest
There is a risk that the prices used for the listed investments held by the bid price was not the most appropriate indication of fair value by considering the
Company are not reflective of fair value and the risk that errors made in realisation period for individual holdings.
the recording of investment holdings result in the incorrect reflection of • Obtained direct confirmation of the number of shares held per equity investment from
investments owned by the Company. the custodian regarding all investments held at the balance sheet date; and
• Recalculated the valuation by multiplying the number of shares held per the
Therefore, we considered the valuation and ownership of quoted investments
statement obtained from the custodian by the bid price per share.
to be the most significant audit area as the quoted investments also
represent the most significant balance in the financial statements and Key observations:
underpin the principal activity of the entity. Based on our procedures performed we did not identify any matters to suggest that
the valuation and ownership of quoted investments was not appropriate.
For these reasons and the materiality of the balance in relation to the
financial statements as a whole, we considered this to be a key audit matter.
Revenue Recognition: (Note 3 on Page 80) We assessed the treatment of dividend income from corporate actions and special
Revenue is a key indicator of performance of the Company, as such dividends and challenged if these had been appropriately accounted for as income or
capital by reviewing the underlying reason for issue of the dividend and whether it could
there may be an incentive to recognise income as revenue where it is
be driven by a capital event.
more appropriately of a capital nature. Judgement may be required by
management in determining the allocation of dividend income to revenue or We analysed the whole population of dividend receipts to identify items for further
discussion that could indicate a capital distribution, for example where a dividend
capital for certain corporate actions or special dividends.
represents a particularly high yield. In these instances, we performed a combination of
For this reason, we considered revenue recognition to be a key audit matter.
inquiry with management and our own independent research, including inspection of
financial statements of investee companies, to ascertain whether the underlying event
was indeed of a capital nature.
In addition, we formed our own expectation of dividend income for the whole portfolio
using the entity’s investment holdings and dividend announcements from independent
sources. We vouched a sample of dividend receipts to bank. Other Information
Key observations:
Based on our procedures performed we found the judgements made by management
in determining the allocation of income to revenue or capital to be appropriate.
Report and Financial Statements 2024 | 67
and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

### Our application of materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements.

In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows:

|  Company financial statements | 2024 (£m) | 2023 (£m)  |
| --- | --- | --- |
|  Materiality | 8.7 | 8.5  |
|  Basis for determining materiality | 1% of Net assets | 1% of Net assets  |
|  Rationale for the benchmark applied | As an investment trust, the net asset value is the key measure of performance for users of the financial statements. | As an investment trust, the net asset value is the key measure of performance for users of the financial statements.  |
|  Performance materiality | 6.5 | 6.4  |
|  Basis for determining performance materiality | 75% of materiality | 75% of materiality  |
|  Rationale for the percentage applied for performance materiality | The level of performance materiality applied was set after having considered several factors including the expected total value of known and likely misstatements and the level of transactions in the year. | The level of performance materiality applied was set after having considered several factors including the expected total value of known and likely misstatements and the level of transactions in the year.  |

### Specific materiality

We also determined that for Revenue return before tax, a misstatement of less than materiality for the financial statements as a whole, specific materiality, could influence the economic decisions of users as it is a measure of the Company's performance of income generated from its investments after expenses. As a result, we determined materiality for these items to be £794,000 (2023: £690,000), based on 5% of Revenue return before tax (2023: 5% of Revenue return before tax). We further applied a performance materiality level of 75% (2023: 75%) of specific materiality to ensure that the risk of errors exceeding specific materiality was appropriately mitigated.

### Reporting threshold

We agreed with the Audit and Management Engagement Committee that we would report to them all individual audit differences in excess of £174,000 (2023: £170,000) for the financial statements as a whole and £40,000 (2023: £34,000) for differences in transactions and balances that impact revenue return. We also agreed to report differences below these thresholds that, in our view, warranted reporting on qualitative grounds.

### Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report & financial statements other than the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our 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 this other information, we are required to report that fact.

We have nothing to report in this regard.

68 | The Global Smaller Companies Trust PLC
Independent Auditor’s Report
Corporate governance statement Chairman’s StatementOverview Auditor’s Report
The Listing Rules require us to review 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.
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.
Strategic Report Governance Report Financial Report Notice of Meeting
Going concern and longer-term • The Directors' statement with regards to the appropriateness of adopting the going concern basis of accounting and any material
viability uncertainties identified set out on page 76; and
• The Directors’ explanation as to their assessment of the Company’s prospects, the period this assessment covers and why the
period is appropriate set out on page 39.
Other Code provisions • Directors' statement on fair, balanced and understandable set out on page 65;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 38;
• The section of the annual report that describes the review of effectiveness of risk management and internal control systems set out
on page 57; and
• The section describing the work of the audit committee set out on page 56.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report and Directors’ In our opinion, based on the work undertaken in the course of the audit:
report
• 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 the Directors’ report have been prepared in accordance with applicable legal requirements.
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 the Directors’ report.
Directors’ remuneration In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the
Companies Act 2006.
Matters on which we are We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to
required to report by exception 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.
Responsibilities of Directors In preparing the financial statements, the Directors are
As explained more fully in the Directors’ responsibilities responsible for assessing the Company’s ability to continue as a
statement, the Directors are responsible for the preparation of going concern, disclosing, as applicable, matters related to going
the financial statements and for being satisfied that they give a concern and using the going concern basis of accounting unless
true and fair view, and for such internal control as the Directors the Directors either intend to liquidate the Company or to cease
determine is necessary to enable the preparation of financial operations, or have no realistic alternative but to do so.
Other Information
statements that are free from material misstatement, whether
due to fraud or error.
Report and Financial Statements 2024 | 69
Auditor’s responsibilities for the audit of the financial • Reviewing minutes of meetings of those charged with
statements governance throughout the period for instances of non-
Our objectives are to obtain reasonable assurance about whether compliance with laws and regulations; and
the financial statements as a whole are free from material • Reviewing the calculation in relation to Investment Trust
misstatement, whether due to fraud or error, and to issue an compliance to check that the Company was meeting its
auditor’s report that includes our opinion. Reasonable assurance requirements to retain their Investment Trust Status. This
is a high level of assurance, but is not a guarantee that an audit included a review of other qualitative factors and ensuring
conducted in accordance with ISAs (UK) will always detect a compliance with these.
material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or Fraud
in the aggregate, they could reasonably be expected to influence We assessed the susceptibility of the financial statement to
the economic decisions of users taken on the basis of these material misstatement including fraud.
financial statements.
Our risk assessment procedures included:
Extent to which the audit was capable of detecting • Enquiry with the administrator and those charged with
irregularities, including fraud governance regarding any known or suspected instances of
Irregularities, including fraud, are instances of non-compliance fraud.
with laws and regulations. We design procedures in line • Review of minutes of meeting of those charged with
with our responsibilities, outlined above, to detect material governance for any known or suspected instances of fraud;
misstatements in respect of irregularities, including fraud. and
The extent to which our procedures are capable of detecting • Discussion amongst the engagement team as to how and
irregularities, including fraud is detailed below: where fraud might occur in the financial statements.
Non-compliance with laws and regulations Based on our risk assessment, we considered the area most
Based on: susceptible to fraud to be management override of controls and
• Our understanding of the Company and the industry in which the classification of dividends between revenue and capital.
it operates.
• Discussion with the investment manager and those charged Our procedures in respect of the above included:
with governance and the Audit and Management Engagement • In addressing the risk of management override of control, we:
Committee; and • Performed a review of estimates and judgements applied
• Obtaining an understanding of the Company’s policies and by management in the financial statements to assess their
procedures regarding compliance with laws and regulations. appropriateness and the existence of any systematic bias;
• Considered the opportunity and incentive to manipulate
We considered the significant laws and regulations to be accounting entries and tested relevant adjustments made
Companies Act 2006, the FCA listing and DTR rules, the in the period end financial reporting process;
principles of the AIC Code of Corporate Governance, industry • Performed the procedures covered in the ‘key audit matter’
practice represented by the AIC SORP, the applicable accounting section related to the revenue recognition classification;
framework, and the Company’s qualification as an Investment • Reviewed for significant transactions outside the normal
Trust under UK tax legislation, as any non-compliance of this course of business; and
would lead to the Company losing various deductions and • Performed a review of unadjusted audit differences, if any,
exemptions from corporation tax. for indicators of bias or deliberate misstatement.
Our procedures in respect of the above included: We also communicated relevant identified laws and regulations
• Agreement of the financial statement disclosures to underlying and potential fraud risks to all engagement team members who
supporting documentation. were all deemed to have appropriate competence and capabilities
• Enquiries of the investment manager and those charged with and remained alert to any indications of fraud or non-compliance
governance relating to the existence of any non-compliance with laws and regulations throughout the audit.
with laws and regulations.
Our audit procedures were designed to respond to risks of
material misstatement in the financial statements, recognising
70 | The Global Smaller Companies Trust PLC
Independent Auditor’s Report
that the risk of not detecting a material misstatement due to fraud Chairman’s StatementOverview Auditor’s Report
is higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery,
misrepresentations or through collusion. There are inherent
limitations in the audit procedures performed and the further
removed non-compliance with laws and regulations is from the
events and transactions reflected in the financial statements, the
less likely we are to become aware of it.
Strategic Report Governance Report Financial Report Notice of Meeting
A further description of our responsibilities is available on the
Financial Reporting Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our
auditor’s report.
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.
Peter Smith (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
25 June 2024
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
Other Information
Report and Financial Statements 2024 | 71
## Income Statement
For the year ended 30 April 2024 For the year ended 30 April 2023
Revenue Capital Total Revenue Capital Total
Notes

|  |  | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |
| --- | --- | --- | --- | --- | --- | --- | --- |
| 10 | Gains/(losses) on investments – 57,049 57,049 – (50,067) (50,067) |  |  |  |  |  |  |
| 21 | Foreign exchange (losses)/gains (10) 335 325 (6) 115 109 |  |  |  |  |  |  |
| 3 | Income 18,597 – 18,597 16,214 1,656 17,870 |  |  |  |  |  |  |
| 4 | Management fee (1,050) (3,148) (4,198) (1,082) (3,247) (4,329) |  |  |  |  |  |  |
| 5 | Other expenses (1,267) (34) (1,301) (1,070) (29) (1,099) |  |  |  |  |  |  |

Net return before finance costs and taxation 16,270 54,202 70,472 14,056 (51,572) (37,516)
6 Finance costs (391) (1,172) (1,563) (269) (808) (1,077)
Net return on ordinary activities before taxation 15,879 53,030 68,909 13,787 (52,380) (38,593)
7 Taxation on ordinary activities (1,319) – (1,319) (1,167) – (1,167)
Net return attributable to equity shareholders 14,560 53,030 67,590 12,620 (52,380) (39,760)
8 Return per share (basic and diluted) – pence 2.84 10.33 13.17 2.34 (9.73) (7.39)
The total column of this statement is the profit and loss account of the Company.
All revenue and capital items in the above statement derive from continuing operations.
A statement of total comprehensive income is not required as all income and expenses of the Company have been reflected in the above statement.
The notes on pages 76 to 91 form an integral part of the financial statements.
72 | The Global Smaller Companies Trust PLC
Financial Report
Chairman’s StatementOverview Auditor’s Report
## Statement of Changes in Equity
Strategic Report Governance Report Financial Report Notice of Meeting
for the year ended 30 April 2024

|  |  |  | Share |  | Capital |  |  |  | Total |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Share | premium |  | redemption |  | Capital | Revenue | shareholders’ |  |
|  | capital | account |  |  | reserve | reserves | reserve |  | funds |
| Notes | £’000s |  | £’000s |  | £’000s | £’000s | £’000s |  | £’000s |

Balance at 30 April 2023 15,513 212,639 16,158 597,354 17,771 859,435
Movements during the year ended 30 April 2024
9 Dividends paid – – – – (12,186) (12,186)
15 Shares repurchased by the Company and held in
– – – (44,777) – (44,777)
treasury
Net return attributable to equity shareholders
– – – 53,030 14,560 67,590
Balance at 30 April 2024 15,513 212,639 16,158 605,607 20,145 870,062
for the year ended 30 April 2023

|  |  |  | Share |  | Capital |  |  |  | Total |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Share | premium |  | redemption |  | Capital | Revenue | shareholders’ |  |
|  | capital | account |  |  | reserve | reserves | reserve |  | funds |
| Notes | £’000s |  | £’000s |  | £’000s | £’000s | £’000s |  | £’000s |

Balance at 30 April 2022 15,513 212,639 16,158 685,538 15,456 945,304
Movements during the year ended 30 April 2023
9 Dividends paid – – – – (10,305) (10,305)
Shares repurchased by the Company and held in
– – – (35,804) – (35,804)
treasury
Net return attributable to equity shareholders – – – (52,380) 12,620 (39,760)
Balance at 30 April 2023 15,513 212,639 16,158 597,354 17,771 859,435
The notes on pages 76 to 91 form an integral part of the financial statements.
Other Information
Report and Financial Statements 2024 | 73
## Balance Sheet

|  | At 30 April |  | At 30 April |  |
| --- | --- | --- | --- | --- |
|  |  | 2024 |  | 2023 |
| Notes |  | £’000s |  | £’000s |

Fixed assets
10 Investments 910,498 902,350
Current assets
11 Debtors 6,446 10,720
21 Cash at bank and in hand 11,021 2,292
Total current assets 17,467 13,012
Creditors: amounts falling due within one year
12, 21 Bank loans (16,463) (17,027)
13 Creditors (6,440) (3,900)
Total current liabilities (22,903) (20,927)
Net current liabilities (5,436) (7,915)
Total assets less current liabilities 905,062 894,435
Creditors: amounts falling due after more than one year
14, 21 Loan notes (35,000) (35,000)
Net assets 870,062 859,435
Capital and reserves

| 15 | Share capital 15,513 15,513 |
| --- | --- |
| 16 | Share premium account 212,639 212,639 |
| 17 | Capital redemption reserve 16,158 16,158 |
| 18 | Capital reserves 605,607 597,354 |
| 18 | Revenue reserve 20,145 17,771 |

Total shareholders’ funds 870,062 859,435
19 Net asset value per share (debt at par value) – pence 175.88 163.73
The notes on pages 76 to 91 form an integral part of the financial statements.
The financial statements were approved by the Board of Directors on 25 June 2024 and signed on its behalf by
Anja Balfour, Chairman
74 | The Global Smaller Companies Trust PLC
Financial Report
Chairman’s StatementOverview Auditor’s Report
## Statement of Cashflows
Strategic Report Governance Report Financial Report Notice of Meeting

|  |  | For the year |  | For the year |  |
| --- | --- | --- | --- | --- | --- |
|  | ended 30 April |  |  | ended 30 April |  |
|  |  |  | 2024 |  | 2023 |
| Notes |  |  | £’000s |  | £’000s |
| 20 Cashflows used in operating activities before dividends received and interest paid (6,022) (4,787) |  |  |  |  |  |

Dividends received 17,270 15,308
Interest paid (1,593) (1,038)
Cash inflows from operating activities 9,655 9,483
Investing activities
Purchases of investments (147,474) (191,230)
Sales of investments 202,370 219,670
Cash inflows from investing activities 54,896 28,440
64,551 37,923
Financing activities
Ordinary dividends paid (12,186) (10,305)
Cashflows from share buybacks for treasury shares (43,397) (36,034)
Repayment of bank loans – (10,287)
Drawdown of bank loans – 7,870
Cash outflows from financing activities (55,583) (48,756)
21 Net movement in cash at bank and in hand 8,968 (10,833)
Cash at bank and in hand at the beginning of the year 2,292 13,354
21 Effect of movement in foreign exchange (239) (229)
Cash at bank and in hand at the end of the year 11,021 2,292
Represented by:
Cash at bank 613 979
Short-term deposits less than 3 months 10,408 1,313
Cash at bank and in hand at the end of the year 11,021 2,292
The notes on pages 76 to 91 form an integral part of the financial statements.
Other Information
Report and Financial Statements 2024 | 75
## Notes to the Financial Statements
1. General information
The Global Smaller Companies Trust PLC is a public company limited by shares incorporated in England and Wales with a premium listing
on the London Stock Exchange. 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. The Company registration number is 28264 and the registered office is Cannon Place,
78 Cannon Street, London, EC4N 6AG, England.
The Company has conducted its affairs so as to qualify as an investment trust under the provisions of Section 1158 of the Corporation
Tax Act 2010. Approval of the Company under Section 1158 has been received. The Company intends to conduct its affairs so as to
enable it to continue to comply with the requirements. Such approval exempts the Company from UK Corporation Tax on gains realised in
the relevant year on its portfolio of fixed asset investments.
There have been no significant changes to the Company’s accounting policies during the year ended 30 April 2024, as set out in note 2
below.
2. Significant accounting policies
(a) Going concern
The Company’s investment objective, strategy and policy are subject to a process of regular Board monitoring and are designed to
ensure that the Company is invested mainly in readily realisable, listed securities and that the level of borrowings is restricted. The
Company retains title to all assets held by the Custodian and agreements cover its borrowing facilities. Cash is held with banks
approved and regularly reviewed by the Manager.
The Company has net current liabilities shown on the Balance Sheet but this has no effect on its ability to continue on a going
concern basis as the value of its investments, which are readily realisable, exceeds the Company's liabilities by a significant
margin.
The Directors believe that: the Company’s objective and policy continue to be relevant to investors; the Company operates within a
robust regulatory environment; and the Company has sufficient resources to continue operating within its stated policy for the 12
month period commencing from the date of this report. Accordingly, the financial statements have been drawn up on the basis that
the Company is a going concern for the reasons set out above as well as on pages 38 and 39.
(b) Basis of accounting
The financial statements of the Company have been prepared on a going concern basis under the historical cost convention,
modified to include fixed asset investments at fair value, and in accordance with the Companies Act 2006, Financial Reporting
Standard (FRS) 102 applicable in the United Kingdom and with the Statement of Recommended Practice ‘Financial Statements of
Investment Trust Companies and Venture Capital Trusts’ (‘SORP’) issued in July 2022.
The functional and presentation currency of the Company is pounds sterling because that is the currency of the primary economic
environment in which the Company operates.
In accordance with the SORP, the Income Statement has been analysed between a revenue account (dealing with items of a
revenue nature) and a capital account (relating to items of a capital nature). Revenue returns include, but are not limited to,
dividend income and operating expenses and tax (insofar as the expenses and tax are not allocated to capital, as described in
76 | The Global Smaller Companies Trust PLC
Financial Report
note 2(c) below). Net revenue returns are allocated via the revenue account to the revenue reserve, out of which interim and final Chairman’s StatementOverview Auditor’s Report
dividend payments are made. Capital returns include, but are not limited to, realised and unrealised profits and losses on fixed
asset investments and currency profits and losses on cash and borrowings. Following approval at the 2020 AGM, the Company's
Articles of Association no longer prohibit the distribution of realised capital profits by way of dividend. Such returns are allocated
via the capital account to the capital reserves. Dividends paid to equity shareholders are shown in the Statement of Changes in
Equity.
(c) Principal accounting policies
Strategic Report Governance Report Financial Report Notice of Meeting
The policies set out below have been applied consistently throughout the year.
(i) Financial instruments
Financial instruments include fixed asset investments, long-term and short-term debt instruments, cash and short-term deposits,
debtors and creditors. Accounting standards recognise a hierarchy of fair value measurements for financial instruments measured at
fair value on the Balance Sheet which gives the highest priority to unadjusted quoted prices in active markets for identical assets or
liabilities (level 1) and the lowest priority to unobservable inputs (level 3). The classification of financial instruments depends on the
lowest significant applicable input, as follows:
Level 1 – The unadjusted quoted price in an active market for identical assets or liabilities that the Company can access at the
measurement date.
Level 2 – Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data) for the asset
or liability, either directly or indirectly.
Level 3 – Inputs are unobservable (i.e. for which market data is unavailable) for the asset or liability.
(ii) Fixed asset investments
As an investment trust, the Company measures its fixed asset investments at ‘fair value through profit or loss’ and treats all
transactions on the realisation and revaluation of investments as transactions on the capital account. All purchases and sales are
accounted for on a trade date basis.
Quoted investments are valued at bid value at the close of business on the relevant date on the exchange on which the investment
is quoted. Investments which are not quoted or which are not frequently traded are stated at Directors’ best estimate of fair value.
In arriving at their estimate, the Directors make use of recognised valuation techniques and may take account of recent arm’s length
transactions in the same or similar investment instruments.
(iii) Debt instruments
Interest-bearing loans and overdrafts are recorded initially at the proceeds received, net of issue costs, irrespective of the duration of
the instrument. No debt instruments held during the year required hierarchical classification.
The fair value of the borrowings are set out in notes 12 and 14.
Finance charges, including interest, are accrued using the effective interest rate method and are added to the carrying amount of
the instrument to the extent that they are not settled in the period. See (vi) on next page for allocation of finance charges within the
Income Statement.
(iv) Foreign currency
Monetary assets, monetary liabilities and equity investments denominated in a foreign currency are expressed in sterling at rates
of exchange ruling at the balance sheet date. Purchases and sales of investment securities, dividend income, interest income and
expenses are translated at the rates of exchange prevailing at the respective dates of such transactions.
Other Information
Foreign exchange profits and losses on fixed asset investments are included within the changes in fair value in the capital account.
Foreign exchange profits and losses on other currency balances are separately credited or charged to the capital account except
where they relate to revenue items when they are credited or charged to the revenue account.
Report and Financial Statements 2024 | 77
(v) Income
Income from equity shares is brought into the revenue account (except where, in the opinion of the Directors, its nature indicates
it should be recognised within the capital account) on the ex-dividend date or, where no ex-dividend date is quoted, when the
Company’s right to receive payment is established. Fixed returns on non-equity shares and debt securities are recognised on a time
apportionment basis so as to reflect the effective yield on the investment.
Dividends are accounted for in accordance with FRS 102 on the basis of income actually receivable, without adjustment for the tax
credit attaching to the dividends. Dividends from overseas companies are shown gross of withholding tax.
Where the Company has elected to receive its dividends in the form of additional shares rather than in cash (scrip dividends), the
amount of the cash dividend foregone is recognised as income. Any excess in the value of the shares received over the amount of
the cash dividend foregone is recognised in the capital account.
Underwriting commission is recognised when the Company’s right to receive payment is established. Deposit interest is accounted
for on an accruals basis.
(vi) Expenses, including finance charges
Expenses are charged to the revenue account of the Income Statement, except as noted below:
– expenses which are incidental to the acquisition or disposal of fixed asset investments are recognised immediately in the
capital return of the income statement and are thus charged to capital reserve – arising on investments sold or held via the
capital account;
– 75% of management fees and 75% of finance costs are allocated to capital reserve – arising on investments sold via the
capital account, in accordance with the Board’s long-term expected split of returns from the investment portfolio of the
Company.
– all expenses are accounted for on an accruals basis.
(vii) Taxation
Taxation currently payable is calculated using tax rules and rates in force at the year end, based on taxable profit for the year, which
differs from the net return before tax. Note 7(b) sets out those items which are not subject to UK Corporation Tax.
Deferred tax is provided on an undiscounted basis on all timing differences that have originated but not reversed by the balance
sheet date, based on the tax rates that have been enacted at the balance sheet date and that are expected to apply in the
period when the liability is settled or the asset is realised. Deferred tax assets are only recognised if it is considered more likely
than not that there will be suitable profits from which the future reversal of timing differences can be deducted. In line with the
recommendations of the SORP, the allocation method used to calculate the tax relief on expenses charged to capital is the ‘marginal’
basis. Under this basis, if taxable income is capable of being offset entirely by expenses charged through the revenue account, then
no tax relief is transferred to the capital account.
(viii) Share premium
The surplus of net proceeds received from the issue of new ordinary shares over the nominal value of such shares, less any directly
attributable costs in relation to that share issue, is credited to this account which is non-distributable. The nominal value of the
shares issued is recognised in share capital.
(ix) Capital redemption reserve
The nominal value of ordinary share capital purchased and cancelled is transferred out of called-up share capital and into the capital
redemption reserve, which is a non-distributable reserve, on the trade date.
78 | The Global Smaller Companies Trust PLC
Financial Report
(x) Capital reserves Chairman’s StatementOverview Auditor’s Report
These are distributable reserves which may be utilised for the repurchase of share capital. Following approval at the 2020 AGM, the
Company's Articles of Association no longer prohibit the distribution of realised capital profits by way of dividend.
Capital reserve – arising on investments sold
The following are accounted for in this reserve:
– 75% of management fees and finance costs as set out in note 2(c)(vi);
– gains and losses on the realisation of fixed asset investments and derivative financial instruments;
Strategic Report Governance Report Financial Report Notice of Meeting
– foreign exchange differences of a capital nature;
– costs of professional advice, including related irrecoverable VAT, relating to the capital structure of the Company;
– other capital charges and credits charged or credited to this account in accordance with the above policies; and
– costs of purchasing ordinary share capital.
Capital reserve – arising on investments held
The following are accounted for in this reserve:
– increases and decreases in the valuation of fixed asset investments held at the year end.
(xi) Use of judgements, estimates and assumptions
The presentation of the financial statements in accordance with accounting standards requires the Board to make judgements,
estimates and assumptions that affect the accounting policies and reported amounts of assets, liabilities, income and expenses.
Estimates and judgements are continually evaluated and are based on perceived risks, historical experience, expectations of
plausible future events and other factors. Actual results may differ from these estimates.
The areas requiring the most significant judgement in the preparation of the financial statements are recognising and classifying
unusual or special dividends received as either revenue or capital in nature.
There are no significant estimates used in preparation of these financial statements.
Dividends received which appear to be unusual in size or circumstance are assessed on a case-by-case basis, based on
interpretation of the investee companies’ relevant statements, in order to make a judgement to determine their allocation in
accordance with the SORP to either the Revenue Account or Capital Reserves. Dividends which have clearly arisen out of the investee
company’s reconstruction or reorganisation are usually considered to be capital in nature and allocated to Capital Reserves. Investee
company dividends which appear to be paid in excess of current year profits will still be considered as revenue in nature unless
evidence suggests otherwise. The value of dividends received in the year treated as capital in nature, as disclosed in notes 3 and 18
to the financial statements, was not material in relation to capital reserves or the revenue account. The value of special dividends
receivable in any period cannot be foreseen as such dividends are declared and paid by investee companies and funds without prior
reference to the Company.
Other Information
Report and Financial Statements 2024 | 79
3. Income
2024 2023
£’000s £’000s
Income from investments
Dividends from quoted investments 16,597 15,072
(1)
Special dividends 1,137 601
17,734 15,673
Other Income
Management fee rebates from collective investment schemes 335 271
Interest on cash and short-term deposits 528 270
863 541
Total income recognised as revenue 18,597 16,214
(2)
Special dividends recognised as capital – 1,656
Total income 18,597 17,870
(1) Special dividends classified as revenue in nature in accordance with note 2(c)(xi).
(2) Special dividends classified as capital in nature in accordance with note 2(c)(xi).
4. Management fees

|  |  | 2024 |  |  | 2023 |
| --- | --- | --- | --- | --- | --- |
| Revenue | Capital | Total | Revenue | Capital | Total |
| £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |

Management fee 1,050 3,148 4,198 1,082 3,247 4,329
The Manager, Columbia Threadneedle Investment Business Limited, provides investment management, marketing and general
administrative services to the Company. With effect from 1 May 2023, net assets, after deduction of third party collective investment
schemes, in excess of £750m are charged a management fee at a rate of 0.5% per annum and net assets less than £750m are
charged at an amount equal to 0.55% per annum. Investments made by the Company in third party collective investment schemes
are subject to a management fee, payable monthly in arrears to the Manager, of 0.275% per annum of the month end market value
of those investments.
Up to 30 April 2023, the management fee was an amount equal to 0.55% per annum, payable monthly in arrears, of net assets
managed by the Manager at the calculation date. Investments made by the Company in third party collective investment schemes
were subject to a management fee, payable monthly in arrears to the Manager, of 0.275% per annum of the month end market value
of those investments.
The management agreement may be terminated upon six months’ notice given by either party.
The fees have been allocated 75% to capital reserve in accordance with accounting policies.
80 | The Global Smaller Companies Trust PLC
Financial Report

| 5. Other expenses |  |  | Chairman’s StatementOverview Auditor’s Report |
| --- | --- | --- | --- |
|  | 2024 | 2023 |  |
|  | £’000s | £’000s |  |

Other revenue expenses
Auditors’ remuneration:
(1)
Audit services 51 46
(2)
Directors’ fees for services to the Company 196 178
Marketing 266 271
Strategic Report Governance Report Financial Report Notice of Meeting
Printing and postage 110 86
Custody fees 46 45
Depositary fees 91 97
Professional fees 95 17
(3)
Loan commitment and arrangement fees 100 95
Sundry expenses 312 235
Total other revenue expenses 1,267 1,070
Capital expenses 34 29
Total other expenses 1,301 1,099
All expenses are stated gross of irrecoverable VAT, where applicable.
(1) Auditors’ remuneration payable to BDO for the audit of the Company's financial statements, exclusive of VAT, amounts to £47,000 (2023: £42,000). No non-audit
services were provided during the year (2023: none).
(2) See the Directors’ Remuneration Report on page 64.
(3) Under loan facility agreements (see note 12) the Company pays commitment fees on any undrawn portions of the facilities.
6. Finance costs

|  |  | 2024 |  |  | 2023 |
| --- | --- | --- | --- | --- | --- |
| Revenue | Capital | Total | Revenue | Capital | Total |
| £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |

Loan interest 391 1,172 1,563 269 808 1,077
Total finance costs 391 1,172 1,563 269 808 1,077
Finance costs have been allocated 75% to capital reserve in accordance with accounting policies.
7. Taxation on ordinary activities
(a) Analysis of tax charge for the year

|  |  | 2024 |  |  | 2023 |
| --- | --- | --- | --- | --- | --- |
| Revenue | Capital | Total | Revenue | Capital | Total |
| £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |

Corporation tax payable at 25% (2023: 19%) – – – – – –
Overseas taxation 1,319 – 1,319 1,167 – 1,167
Total tax charge for the year (note 7(b)) on ordinary activities 1,319 – 1,319 1,167 – 1,167
The tax assessed is lower than the standard rate of Corporate Tax in the UK (2023: lower).
Other Information
Report and Financial Statements 2024 | 81
(b) Factors affecting the current tax charge for the year

|  |  | 2024 |  |  | 2023 |
| --- | --- | --- | --- | --- | --- |
| Revenue | Capital | Total | Revenue | Capital | Total |
| £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |

Net return on ordinary activities before taxation 15,879 53,030 68,909 13,787 (52,380) (38,593)
Return on ordinary activities multiplied by the standard rate of corporation tax of 25% 3,970 13,257 17,227 2,619 (9,952) (7,333)
(2023: 19%)
Effects of:
Dividends* (4,131) – (4,131) (2,877) – (2,877)
Expenses not deductible for tax purposes 33 – 33 26 – 26
Overseas tax in excess of double taxation relief 1,319 – 1,319 1,167 – 1,167
Expenses not utilised in the year 128 1,089 1,217 232 776 1,008
Capital returns* – (14,346) (14,346) – 9,176 9,176
Total tax charge for the year (note 7(a)) 1,319 – 1,319 1,167 – 1,167
* The Company is not subject to corporation tax on capital gains or on dividend income. It therefore has unutilised expenses of £76.6m (2023: £71.7m). This results in a
deferred tax asset of £19.1m (2023: £17.9m). This asset has not been recognised as the Directors believe it is unlikely that the Company will have sufficient taxable profits
in future to utilise it. Of this amount £19.0m (2023: £18.5m) relates to revenue expenses and £57.6m (2023: £53.2m) to capital expenses.
8. Return per ordinary share
Earnings for the purpose of basic earnings per share is the profit/loss for the year attributable to ordinary shareholders and based
on the following data.
2024 2023
Revenue Capital Total Revenue Capital Total
Net return attributable to equity shareholders – £’000s 14,560 53,030 67,590 12,620 (52,380) (39,760)
Return per share – pence 2.84 10.33 13.17 2.34 (9.73) (7.39)
Both the revenue and capital returns per share are based on a weighted average of 513,545,620 ordinary shares in issue during the year (2023: 538,327,319).
9. Dividends
2024 2023
Dividends on ordinary shares Register date Payment date £’000s £’000s
Final for the year ended 30 April 2022 of 1.27 pence 1 July 2022 4 August 2022 – 6,936
Interim for the year ended 30 April 2023 of 0.63 pence 30 December 2022 26 January 2023 – 3,369
Final for the year ended 30 April 2023 of 1.67 pence 7 July 2023 4 August 2023 8,714 –
Interim for the year ended 30 April 2024 of 0.68 pence 29 December 2023 25 January 2024 3,472 –
12,186 10,305
The Directors have proposed a final dividend in respect of the year ended 30 April 2024 of 2.13 pence per share, payable on
20 August 2024 to all shareholders on the register at close of business on 12 July 2024. The recommended final dividend is
subject to approval by shareholders at the Annual General Meeting.
The attributable revenue and the dividends paid and proposed in respect of the financial year ended 30 April 2024 for the
purposes of the income retention test for Section 1159 of the Income and Corporation Tax Act 2010, are set out below:
2024
£’000s
Revenue attributable to equity shareholders 14,560
Interim for the year ended 30 April 2024 of 0.68 pence (3,472)
(1)
Proposed final for the year ended 30 April 2024 of 2.13 pence (10,380)
(2)
Amount transferred to revenue reserve for Section 1159 purposes 708
(1) Based on 487,338,276 shares in issue at 20 June 2024.
(2) Represents 3.8% of total income of £18,597,000 (see note 3)(2023: 2.9%).
82 | The Global Smaller Companies Trust PLC
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| 10. Investments |  |  |  |  |  |  | Chairman’s StatementOverview Auditor’s Report |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  | 2024 |  |  | 2023 |  |
|  | Level 1* | Level 3* | Total | Level 1* | Level 3* | Total |  |
|  | £’000s | £’000s | £’000s | £’000s | £’000s | £’000s |  |

Cost brought forward 757,263 304 757,567 770,920 304 771,224
Gains/(losses) brought forward 144,994 (211) 144,783 216,002 (143) 215,859
Valuation brought forward 902,257 93 902,350 986,922 161 987,083
Movements in the year: Strategic Report Governance Report Financial Report Notice of Meeting
Purchases at cost 148,564 – 148,564 191,408 – 191,408
Sales proceeds (197,691) (54) (197,745) (226,576) – (226,576)
Gains/(losses) on investments sold in year 9,132 (250) 8,882 21,511 – 21,511
Gains/(losses) on investments held at year end 48,236 211 48,447 (71,008) (68) (71,076)
Fair value of investments at 30 April 910,498 – 910,498 902,257 93 902,350
Analysed at 30 April
Cost at 30 April 717,268 – 717,268 757,263 304 757,567
Gains/(losses) at 30 April 193,230 – 193,230 144,994 (211) 144,783
Fair value of investments at 30 April 910,498 – 910,498 902,257 93 902,350
Investments sold during the year have been revalued over time since their original purchase, and until they were sold any unrealised gains/losses were included in the fair
value of the investments.
* The hierarchy of investments is described in note 2(c)(i) and below. No investments held in 2024 or 2023 were valued in accordance with Level 2.
Level 1 includes investments listed on any recognised stock exchange or quoted on AIM in the UK.
Level 2 includes investments for which the quoted price has been suspended.
Level 3 includes unquoted investments, which are held at Directors’ valuation.
The level 3 investment consisted of the holding in The Australian New Horizons Fund. This was fully liquidated in the year to 30
April 2024.
A full list of investments is set out on pages 29 to 31.
Gains/(losses) on investments
2024 2023
£’000s £’000s
Gains on investments sold during the year 8,882 21,511
Gains/(losses) on investments held at year end 48,447 (71,076)
Transaction costs (280) (502)
Total gains/(losses) on investments 57,049 (50,067)
11. Debtors
2024 2023
£’000s £’000s
Investment debtors 3,369 7,994
Overseas taxation recoverable 549 596
Prepayments and accrued income 2,528 2,130
6,446 10,720
Other Information
Report and Financial Statements 2024 | 83
12. Creditors: amounts falling due within one year
Bank loans 2024 2023
Non-instalment debt payable on demand or within one year £’000s £’000s
EUR 6.8 million repayable May 2024 5,807 –
JPY 557.5 million repayable May 2024 2,829 –
USD 9.8 million repayable May 2024 7,827 –
EUR 6.8 million repayable May 2023 – 5,973
JPY 557.5 million repayable May 2023 – 3,257
USD 9.8 million repayable May 2023 – 7,797
16,463 17,027
In September 2023 the Company renewed its £35m revolving credit facility with The Royal Bank of Scotland International Limited which
expires in September 2024. As at 30 April 2024 EUR6.8m, JPY557.5m and USD9.8m were drawn down for the period to 22 May
2024. The interest rate on the amounts drawn down are based on the commercial terms agreed with the bank. Commitment fees are
payable on undrawn amounts at commercial rates. The Directors consider that the carrying value of the loan is equivalent to its fair
value. No overdraft was outstanding at the year end.
13. Creditors: amounts falling due within one year
2024 2023
£’000s £’000s
Investment creditors 3,982 2,892
Interest accrued on bank loans 195 225
Share buybacks outstanding 1,639 259
Management fee accrued 355 346
Accruals and deferred income 269 178
6,440 3,900
14. Creditors: amounts falling due after more than one year
2024 2023
Loan notes £’000s £’000s
Loan notes £35 million repayable August 2039 35,000 35,000
In August 2019 the Company issued fixed rate 2.26% senior unsecured notes of £35 million sterling denominated loan notes expiring
in August 2039. The fair value of the long-term loan at 30 April 2024 was £24,145,000 (2023: £24,586,000) based on the equivalent
reference benchmark gilt.
15. Share capital
Issued and

|  | Shares held in |  | Shares entitled |  |  | Total shares in |  | fully paid |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | treasury |  | to dividend |  |  | issue | nominal |
| Equity share capital |  | Number |  |  | Number |  | Number | £’000s |

Ordinary shares of 2.5p each
Balance at 30 April 2023 95,625,622 524,908,148 620,533,770 15,513
Shares repurchased by the Company and held in treasury 30,210,332 (30,210,332) – –
Balance at 30 April 2024 125,835,954 494,697,816 620,533,770 15,513
During the year, 30,210,332 ordinary shares of 2.5p each were repurchased and held in treasury, incurring a cost of £44,777,000. Since the year end, and up to
20 June 2024, a further 7,359,540 ordinary shares have been repurchased and held in treasury.
84 | The Global Smaller Companies Trust PLC
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| 16. Share premium account |  |  | Chairman’s StatementOverview Auditor’s Report |
| --- | --- | --- | --- |
|  | 2024 | 2023 |  |
|  | £’000s | £’000s |  |

Balance brought forward and carried forward 212,639 212,639
17. Capital redemption reserve

|  | 2024 | 2023 |  |
| --- | --- | --- | --- |
|  | £’000s | £’000s |  |
| Balance brought forward and carried forward 16,158 16,158 |  |  | Strategic Report Governance Report Financial Report Notice of Meeting |

18. Other reserves

| Capital reserve arising |  |  | Capital reserve arising |  | Capital reserves |  | Revenue |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  | on investments sold |  | on investments held |  |  | – total | reserve |
|  |  | £’000s |  | £’000s |  | £’000s | £’000s |

Movements in the year
Gains on investments sold in year (see note 10) 8,882 – 8,882 –
Gains on investments held at year end (see note 10) – 48,447 48,447 –
Transaction costs (280) – (280) –
Foreign exchange gains 335 – 335 –
Repurchase of shares (44,777) – (44,777) –
Management fee charged to capital (see note 4) (3,148) – (3,148) –
Other expenses charged to capital (see note 5) (34) – (34) –
Finance costs charged to capital (see note 6) (1,172) – (1,172) –
Net revenue after tax for the year – – – 14,560
Net return attributable to ordinary shareholders (40,194) 48,447 8,253 14,560
Dividends paid in the year (see note 9) – – – (12,186)
(40,194) 48,447 8,253 2,374
Balance brought forward 452,571 144,783 597,354 17,771
Balance carried forward 412,377 193,230 605,607 20,145
Included within the capital reserve movement for the year are £188,000 (2023: £417,000) of transaction costs on purchases of investments, £92,000 (2023: £85,000) of
transaction costs on sales of investments and £nil (2023: £1,656,000) of distributions received recognised as capital.
19. Net asset value per ordinary share
2024 2023
Basic with debt at par value
Net assets attributable at the year end – £’000s 870,062 859,435
Number of ordinary shares in issue at the year end, excluding shares held in treasury 494,697,816 524,908,148
Net asset value per share – pence 175.88 163.73
2024 2023
Basic with debt at fair value
Net assets attributable at the year end – £’000s 870,062 859,435
Add back: Debt at par – £'000s 51,463 52,027
Deduct: Debt at fair value (see note 15) – £'000s (40,608) (41,613)
Net assets with debt at fair value – £'000s 880,917 869,849
Number of ordinary shares in issue at the year end, excluding shares held in treasury 494,697,816 524,908,148
Other Information
Net asset value per share – pence 178.07 165.71
Report and Financial Statements 2024 | 85
## 20. Reconciliation of total return before finance costs and taxation to net cashflows from operating activities

|   | 2024 £'000s | 2023 £'000s  |
| --- | --- | --- |
|  Net return on ordinary activities before taxation | 68,909 | (38,593)  |
|  Adjustments for returns from non-operating activities |  |   |
|  (Gains)/losses on investments | (57,049) | 50,067  |
|  Foreign exchange gains | (325) | (109)  |
|  Non-operating expenses of a capital nature | 34 | 29  |
|  Return from operating activities | 11,569 | 11,394  |
|  Adjustments for non-cashflow items, dividend income and interest expense |  |   |
|  (Increase)/decrease in prepayments and accrued income | (14) | 11  |
|  Increase/(decrease) in creditors | 101 | (41)  |
|  Dividends receivable | (17,734) | (15,673)  |
|  Interest payable | 1,563 | 1,077  |
|  Overseas taxation | (1,193) | (1,024)  |
|  Transaction costs | (280) | (502)  |
|  Other capital charges | (34) | (29)  |
|  Cash used in operating activities before dividends received and interest paid | (6,022) | (4,787)  |

## 21. Analysis of changes in net debt

|   | Cash £'000s | Bank loans £'000s | Loan notes £'000s | Total £'000s  |
| --- | --- | --- | --- | --- |
|  Opening net debt at 30 April 2023 | 2,292 | (17,027) | (35,000) | (49,735)  |
|  Cash-flows: |  |  |  |   |
|  Net movement in cash and cash equivalents | 8,968 | - | - | 8,968  |
|  Non-cash: |  |  |  |   |
|  Effect of foreign exchange movements | (239) | 564 | - | 325  |
|  Closing net debt at 30 April 2024 | 11,021 | (16,463) | (35,000) | (40,442)  |

## 22. Transactions with related parties and the Manager

The Board of Directors is defined as a related party. Under the FCA Listing Rules, the Manager is also defined as a related party. However, under the Investment Trust SORP issued by the AIC, in accordance with these financial statements are prepared, the Manager is not considered to be a related party for accounting purposes.

There are no transactions with the Board, who are the key management personnel of the Company, other than: aggregated remuneration for services as Directors as disclosed in the Remuneration Report on page 64, and as set out in note 5; and the beneficial interests of the Directors in the ordinary shares of the Company as disclosed on page 63. There are no outstanding balances with the Board at the year end. There were no transactions with the Ameriprise Group other than those detailed in note 4 on management fees, note 10, where investments managed by Columbia Threadneedle Investments are disclosed and note 13, where accrued management fees are disclosed.

## 23. Financial Risk Management

The Company is an investment company, listed on the London Stock Exchange, and conducts its affairs so as to qualify in the United Kingdom (UK) as an investment trust under the provisions of Section 1158. In so qualifying, the Company is exempted in the UK from corporation tax on capital gains on its portfolio of fixed asset investments.

The Company invests in smaller companies worldwide in order to secure a high total return. In pursuing the objective, the Company is exposed to financial risks which could result in a reduction of either or both of the value of the net assets and the profits available for distribution by way of dividend. These financial risks are principally related to the market (currency movements,

86 | The Global Smaller Companies Trust PLC
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interest rate changes and security price movements), liquidity and credit. The Board, together with the Manager, is responsible for the Company's risk management. The Directors' policies and processes for managing the financial risks are set out in (a), (b) and (c) below.

The accounting policies which govern the reported Balance Sheet carrying values of the underlying financial assets and liabilities, as well as the related income and expenditure, are set out in note 2 to the financial statements. The policies are in compliance with UK accounting standards and include the valuation of financial assets and liabilities at fair value, except as noted in (d) below. The Company does not make use of hedge accounting rules.

#### (a) Market risks

The fair value of equity and other financial securities held in the Company's portfolio fluctuates with changes in market prices. Prices are themselves affected by movements in currencies and interest rates and by other financial issues, including the market perception of future risks. The Board sets policies for managing these risks within the Company's objective and meets regularly to review full, timely and relevant information on investment performance and financial results. The Manager assesses exposure to market risks when making each investment decision and monitors ongoing market risk within the portfolio.

The Company's other assets and liabilities may be denominated in currencies other than sterling and may also be exposed to interest rate risks. The Manager and the Board regularly monitor these risks. The Company aims to be fully invested, only holding cash to cater for short-term trading and business requirements. Borrowings are limited to amounts and currencies commensurate with the portfolio's exposure to those currencies, thereby limiting the Company's exposure to future changes in exchange rates. Gearing may be short or long-term, in sterling and foreign currencies, and enables the Company to take a long-term view of the countries and markets in which it is invested without having to be concerned about short-term volatility.

The Board regularly monitors the effects on net revenue of interest earned on deposits and paid on gearing.

#### Currency Exposure

The principal currencies to which the Company was exposed, and the relevant exchange rates against sterling, are analysed below:

|   | 2024 |   | 2023  |   |
| --- | --- | --- | --- | --- |
|   | At 30 April 2024 | Average for the year | At 30 April 2023 | Average for the year  |
|  US dollar | 1.2522 | 1.2577 | 1.2569 | 1.2083  |
|  Euro | 1.1711 | 1.1614 | 1.1385 | 1.1553  |

Based on the financial assets and liabilities held and the exchange rates applying at the balance sheet date, a weakening or strengthening of sterling against each of the principal currencies by 10% would have the following approximate effect on returns attributable to equity shareholders and on the net asset value ('NAV') per share:

#### Weakening of sterling by 10%

|   | 2024 |   | 2023  |   |
| --- | --- | --- | --- | --- |
|   | US$ £'000s | € £'000s | US$ £'000s | € £'000s  |
|  Net revenue return attributable to equity shareholders | 519 | 149 | 541 | 129  |
|  Net capital return attributable to equity shareholders | 47,479 | 5,755 | 46,039 | 5,887  |
|  Net total return attributable to equity shareholders | 47,998 | 5,904 | 46,580 | 6,016  |
|  Net asset value per share (basic) – pence | 9.70 | 1.19 | 8.87 | 1.15  |

Financial Report

Report and Financial Statements 2024 | 87
Strengthening of sterling by 10%
2024 2023
US$ € US$ €
£’000s £’000s £’000s £’000s
Net revenue return attributable to equity shareholders (424) (122) (443) (105)
Net capital return attributable to equity shareholders (38,847) (4,709) (37,669) (4,816)
Net total return attributable to equity shareholders (39,271) (4,831) (38,112) (4,921)
Net asset value per share (basic) – pence (7.94) (0.98) (7.26) (0.94)
These analyses are presented in sterling and are representative of the Company’s activities although the level of the Company’s
exposure to currencies fluctuates in accordance with the investment and risk management processes. This level of change is
considered to be a reasonable illustration based on observation of current market conditions.
The fair values of the Company’s assets and liabilities at 30 April by currency are shown below:

|  |  |  | Cash at bank |  |  |  |  |  |  |  | Net monetary |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Short-term |  | and short-term |  | Short-term |  |  |  | Unsecured |  | (liabilities)/ |  |  |  |  |  |
|  |  | debtors |  | deposits | creditors |  | Loan notes |  |  | Loans |  | assets | Investments |  | Net exposure |  |
| 2024 |  | £’000s |  | £’000s |  | £’000s |  | £’000s |  | £’000s |  | £’000s |  | £’000s |  | £’000s |

Sterling 2,527 1,423 (3,170) (35,000) – (34,220) 325,243 291,023
US dollar – 9,149 (3,270) – (7,827) (1,948) 429,260 427,312
Euro 1,714 176 – – (5,807) (3,917) 55,712 51,795
Other 2,205 273 – – (2,829) (351) 100,283 99,932
Total 6,446 11,021 (6,440) (35,000) (16,463) (40,436) 910,498 870,062

|  |  |  | Cash at bank |  |  |  |  |  |  |  | Net monetary |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Short-term |  | and short-term |  | Short-term |  |  |  | Unsecured |  | (liabilities)/ |  |  |  |  |  |
|  |  | debtors |  | deposits | creditors |  | Loan notes |  |  | Loans |  | assets | Investments |  | Net exposure |  |
| 2023 |  | £’000s |  | £’000s |  | £’000s |  | £’000s |  | £’000s |  | £’000s |  | £’000s |  | £’000s |

Sterling 2,129 920 (1,397) (35,000) – (33,348) 326,757 293,409
US dollar 6,981 733 – – (7,797) (83) 414,437 414,354
Euro 1,053 639 (2,503) – (5,973) (6,784) 59,764 52,980
Other 557 – – – (3,257) (2,700) 101,392 98,692
Total 10,720 2,292 (3,900) (35,000) (17,027) (42,915) 902,350 859,435
Interest rate exposure
The exposure of the financial assets and liabilities to interest rate movements at 30 April were:

|  |  |  | 2024 |  |  |  | 2023 |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Within | More than |  | Net | Within | More than |  | Net |
| one year |  | one year | Total | one year |  | one year | Total |
| £’000s |  | £’000s | £’000s | £’000s |  | £’000s | £’000s |

Exposure to floating rates – cash 11,021 – 11,021 2,292 – 2,292
Exposure to fixed rates – loans (16,463) (35,000) (51,463) (17,027) (35,000) (52,027)
Net exposure (5,442) (35,000) (40,442) (14,735) (35,000) (49,735)
Exposures vary throughout the year as a consequence of changes in the make-up of the net assets of the Company arising out of
the investment and risk management processes.
Interest received on cash balances, or paid on bank overdrafts and borrowings, is at ruling market rates. The interest rate applied
on the loans is set out in notes 12 and 14. There were no holdings in fixed interest investment securities during the year or at the
year end.
The Company’s total returns and net assets are sensitive to changes in interest rates on cash and borrowings.
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Based on the financial assets and liabilities held, and the interest rates ruling, at each balance sheet date, a decrease or increase Chairman’s StatementOverview Auditor’s Report
in interest rates of 2% would have the following approximate effects on the income statement revenue and capital returns after tax
and on the NAV:

|  |  | 2024 |  |  | 2023 |
| --- | --- | --- | --- | --- | --- |
| Increase | Decrease |  | Increase | Decrease |  |
| in rate |  | in rate | in rate |  | in rate |
| £’000s |  | £’000s | £’000s |  | £’000s |

Revenue return 220 (220) 46 (46)
Capital return – – – –
Strategic Report Governance Report Financial Report Notice of Meeting
Total return 220 (220) 46 (46)
NAV per share – pence 0.04 (0.04) 0.01 (0.01)
The calculations in the table above which are based on the financial assets and liabilities held at each balance sheet date, are not
representative of the year as a whole, nor are they reflective of future market conditions.
Other market risk exposures
The Company did not enter into derivative transactions in managing its exposure to other market risks (2023: same). The portfolio
of investments, valued at £910,498,000 at 30 April 2024 (2023: £902,350,000) is therefore exposed to market price changes.
The Manager assesses these exposures at the time of making each investment decision. The Board reviews overall exposures
at each meeting against indices and other relevant information. An analysis of the portfolio by geographical region and major
industrial sector is set out on pages 5 and 8.
Based on the portfolio of investments held at each balance sheet date, and assuming other factors remain constant, a decrease
or increase in the fair values of the portfolio by 20% would have had the following approximate effects on the net capital return
attributable to equity shareholders and on the NAV:

|  |  | 2024 |  |  | 2023 |
| --- | --- | --- | --- | --- | --- |
| Increase | Decrease |  | Increase | Decrease |  |
| in value | in value |  | in value | in value |  |
| £’000s |  | £’000s | £’000s |  | £’000s |

Capital return 182,100 (182,100) 180,470 (180,470)
NAV per share – pence 36.81 (36.81) 34.38 (34.38)
This level of change is considered to be a reasonable illustration based on observation of current market conditions.
(b) Liquidity risk exposure
The Company is required to raise funds to meet commitments associated with financial instruments and share buy-backs. These
funds may be raised either through the realisation of assets or through increased borrowing. The risk of the Company not having
sufficient liquidity at any time is not considered by the Board to be significant, given: the large number of quoted investments
held in the Company’s portfolio, 213 at 30 April 2024 (2023: 193); the liquid nature of the portfolio of investments; and the
industrial and geographical diversity of the portfolio. Cash balances are held with reputable banks, usually on overnight deposit.
The Company does not normally invest in derivative products. The Manager reviews liquidity at the time of making each investment
decision. The Board reviews liquidity exposure at each meeting.
The Company has a £35 million unsecured revolving floating rate credit facility available until September 2024. In August 2019 the
Company issued senior unsecured notes of £35 million which expire in August 2039.
The remaining contractual maturities of the financial liabilities at each balance sheet date, based on the earliest date on which
payment can be required, were as follows:
Other Information
Report and Financial Statements 2024 | 89
More than three

|  | Three months |  | months but less |  | More than |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  |  | or less | than one year |  |  | one year | Total |
| 2024 |  | £’000s |  | £’000s |  | £’000s | £’000s |

Current liabilities:
Creditors 6,245 – – 6,245
Loans 16,463 – – 16,463
Interest payable on Loans 66 – – 66
Loan notes – – 35,000 35,000
Interest payable on Loan notes – 791 11,470 12,261
22,774 791 46,470 70,035
2023
Current liabilities:
Creditors 3,675 – – 3,675
Loans 17,027 – – 17,027
Interest payable on Loans 66 – – 66
Loan notes – – 35,000 35,000
Interest payable on Loan notes – 791 12,261 13,052
20,768 791 47,261 68,820
(c) Credit risk and counterparty exposure
The Company is exposed to potential failure by counterparties to deliver securities for which the Company has paid, or to pay for
securities which the Company has delivered. Such transactions must be settled on the basis of delivery against payment (except
where local market conditions do not permit).
Responsibility for the approval, limit setting and monitoring of counterparties is delegated to the Manager. Counterparties
are selected based on a combination of criteria, including credit rating, balance sheet strength and membership of a relevant
regulatory body. The rate of default in the past has been negligible. Cash and deposits are held with reputable banks.
The Company has an ongoing contract with its Custodian for the provision of custody services. Details of securities held in custody
on behalf of the Company are received and reconciled monthly. The Custodian has a lien over the securities in the account,
enabling it to sell or otherwise realise the securities in satisfaction of charges due under the agreement. The Depositary has
regulatory responsibilities relating to segregation and safekeeping of the Company’s financial assets, amongst other duties, as set
out in the Directors’ Report. The Board has direct access to the Depositary and receives regular reports from it via the Manager.
To the extent that the Manager carries out management and administrative duties (or causes similar duties to be carried out by
third parties) on the Company’s behalf, the Company is exposed to counterparty risk. The Board assesses this risk continuously
through regular meetings with the Manager (including the Lead Manager) and with its Risk Management function. In reaching its
conclusions, the Board also reviews the Manager's AAF Report.
The Company had no credit-rated bonds or similar securities or derivatives in its portfolio at the year end (2023: none) and does
not normally invest in them. None of the Company’s financial liabilities are past their due date or impaired.
(d) Fair values of financial assets and liabilities
The assets and liabilities of the Company are, in the opinion of the Directors, reflected in the Balance Sheet at fair value, or at a
reasonable approximation thereof, except for the loan notes which are carried at amortised cost.
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The fair value of the loan notes is set out in note 14.

The fair value of investments quoted on active markets is determined directly by reference to published price quotations in those markets. Unquoted investments are valued based on professional assumptions and advice that is not wholly supported by prices from current market transactions or by observable market data. The Directors make use of recognised valuation techniques and may take account of recent arm's length transactions in the same or similar investments.

#### (e) Capital risk management

The structure of the Company's capital is described in note 15 on page 84 and details of the Company's reserves are shown in the Statement of Changes in Equity on page 73.

The objective of the Company is stated as investing in smaller companies worldwide in order to secure a high total return. In pursuing this long-term objective, the Board has a responsibility for ensuring the Company's ability to continue as a going concern. It must therefore maintain an optimal capital structure through varying market conditions. This involves the ability to: issue and buy-back share capital within limits set by the shareholders in general meeting; borrow monies in the short and long term; and pay dividends to shareholders out of current year revenue earnings as well as out of brought forward revenue reserves and capital reserves.

The Company's objectives, policies and procedures for managing capital are unchanged from last year.

There were no breaches by the Company during the year of the financial covenants put in place in respect of the revolving credit facility provided to the Company, or in respect of the loan notes issued by the Company in August 2019.

These requirements are unchanged since last year and the Company has complied with them at all times.

#### 24. AIFMD

In accordance with the AIFMD, information in relation to the Company's leverage and the remuneration of the Company's AIFM is required to be made available to investors. Detailed regulatory disclosures including those on the AIFM's remuneration policy and costs are available on the Company's website or from Columbia Threadneedle Investments on request.

The Company's maximum and actual leverage levels at 30 April 2024 and 30 April 2023 are shown below:

|  Leverage exposure | 30 April 2024 |   | 30 April 2023  |   |
| --- | --- | --- | --- | --- |
|   |  Gross method | Commitment method | Gross method | Commitment method  |
|  Maximum permitted limit | 200% | 200% | 200% | 200%  |
|  Actual | 106% | 106% | 105% | 105%  |

The Leverage limits are set by the AIFM and approved by the Board and are in line with the maximum leverage levels permitted in the Company's articles of association. The AIFM is also required to comply with the gearing parameters set by the Board in relation to borrowings. Further information on the AIFMD can be found on page 98.

#### 25. Securities financing transactions ('SFT')

The Company has not, in the year to 30 April 2024 (2023: same), participated in any: repurchase transactions; securities lending or borrowing; buy-sell back transactions; margin lending transactions; or total return swap transactions (collectively called SFT). As such, it has no disclosure to make in satisfaction of the UK regulations on transparency of SFT, issued in November 2015.

#### 26. Events after the End of the Reporting Period

There were no events after the end of the reporting period.

Financial Report

Report and Financial Statements 2024 | 91
# Notice of Annual General Meeting

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the action you should take, you are recommended to seek your own independent financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000 if you are in the United Kingdom or, if not, from another appropriately authorised financial adviser. If you have sold or otherwise transferred all your ordinary shares in the Company please forward this document, together with the accompanying documents, immediately to the purchaser or transferee or to the stockbroker, bank or agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. If you have sold or otherwise transferred only part of your holding of shares, you should retain these documents.

Notice is hereby given that the one hundred and thirty fifth Annual General Meeting of the Company will be held at The Chartered Accountants Hall, 1 Moorgate Place, London EC2R 6EA on Tuesday, 13 August 2024 at 12.00 noon for the following purposes:

## Ordinary Resolutions:

To consider and, if thought fit, pass the following resolutions 1 to 12 as ordinary resolutions:

1. To receive and adopt the audited financial statements of the Company for the financial year ended 30 April 2024 and the reports of the directors and the auditor on those financial statements.
2. To approve the Directors' Remuneration Policy, the full text of which appears in the Directors' Remuneration Report for the financial year ended 30 April 2024 on page 62 of the Annual Report and Financial Statements for the financial year ended 30 April 2024.
3. To receive, adopt and approve the Directors' Remuneration Report for the financial year ended 30 April 2024 which appears on pages 62 to 64 of the Annual Report and Financial Statements for the financial year ended 30 April 2024 (other than the Directors' Remuneration Policy which appears on page 62 of the Annual Report and Financial Statements).
4. To declare a final dividend of 2.13 pence per ordinary share in respect of the financial year ended 30 April 2024 payable on 20 August 2024 to holders of ordinary shares on the register of members as at the close of business on 12 July 2024.
5. To re-elect Anja Balfour as a Director.
6. To re-elect Nick Bannerman as a Director.
7. To elect Bulbul Barrett as a Director.
8. To elect Randeep Grewal as a Director.
9. To re-elect Graham Oldroyd as a Director.

10. To re-appoint BDO LLP as auditor of the Company to hold office from the conclusion of the annual general meeting until the conclusion of the next annual general meeting of the Company.
11. To authorise the Audit and Management Engagement Committee to determine the remuneration of the Company's auditor.

## 12. Authority to allot shares

THAT, in substitution for any existing authority, but without prejudice to the exercise of any such authority prior to the passing of this resolution, the directors of the Company (the 'Directors') be and they are hereby generally and unconditionally authorised, in accordance with section 551 of the Companies Act 2006 (the 'Act'), to exercise all the powers of the Company to allot ordinary shares of 2.5 pence each in the capital of the Company ('Shares') and to grant rights to subscribe for, or convert any security into, Shares ('Rights'), up to an aggregate nominal amount of £1,218,345.68 (representing approximately 10% of the issued share capital of the Company (excluding treasury shares) as at the date of this notice), generally from time to time on such terms as the Directors may determine, such authority to expire at the conclusion of the annual general meeting of the Company in 2025 or on the date which is 15 months after the date on which this resolution is passed (whichever is earlier), unless previously revoked, varied or extended by the Company in a general meeting (the 'relevant period'); save that the Company may at any time prior to the expiry of this authority make offers or enter into agreements which would or might require Shares to be allotted or Rights to be granted after the expiry of the relevant period and notwithstanding such expiry the Directors may allot Shares or grant Rights in pursuance of such offers or agreements.

92 | The Global Smaller Companies Trust PLC
Notice of Meeting

# Special Resolutions:

To consider and, if thought fit, pass the following resolutions as special resolutions:

# 13. Disapplication of pre-emption rights

THAT, subject to the passing of resolution 12 set out in the notice of the 2024 annual general meeting ('Resolution 12') and in substitution for any existing authority, but without prejudice to the exercise of any such authority prior to the passing of this resolution, the directors of the Company (the 'Directors') be and they are hereby generally and unconditionally empowered, pursuant to sections 570 and 573 of the Companies Act 2006 (the 'Act'), to allot, or make offers or agreements to allot, equity securities (within the meaning of section 560 of the Act) for cash pursuant to the authority conferred by Resolution 12, and/or by way of a sale of treasury shares for cash, as if section 561(1) of the Act did not apply to any such allotment or sale, provided this power:

(a) shall be limited to the allotment of equity securities and the sale of treasury shares up to an aggregate nominal amount of £1,218,345.68 (representing approximately 10 per cent. of the issued share capital of the Company (excluding treasury shares) as at 20 June 2024); and
(b) shall expire at the conclusion of the next annual general meeting of the Company held after the passing of this resolution or, if earlier, on the date which is 15 months after the date on which this resolution is passed (unless previously renewed, varied or revoked by the Company in general meeting), save that the Company may before such expiry make offers and enter into agreements which would or might require equity securities to be allotted or treasury shares to be sold after such expiry and the Directors may allot equity securities or sell treasury shares in pursuance of such an offer or agreement as if the power conferred by this resolution had not expired.

# 14. Share buyback authority

THAT, in substitution for any existing authority, but without prejudice to the exercise of any such authority prior to the passing of this resolution, 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 its ordinary shares of 2.5 pence each on such terms and in such manner as the directors of the Company may from time to time determine (either for cancellation or for retention as treasury shares for future re-issue, resale, transfer or cancellation) provided that:

a) the maximum aggregate number of ordinary shares hereby authorised to be purchased is 73,052,007 or, if less, the number being 14.99% of the issued ordinary share capital

of the Company (excluding ordinary shares held in treasury) immediately prior to the passing of this resolution;

b) the minimum price (exclusive of expenses) which may be paid for an ordinary share purchased pursuant to this authority shall be 2.5p;
c) the maximum price (exclusive of expenses) which may be paid for an ordinary share purchased pursuant to this authority is the higher of (i) an amount equal to \(105\%\) of the average of the middle market quotations for an ordinary share (as derived from the London Stock Exchange Daily Official List) for the five business days immediately preceding the date on which the ordinary share is contracted to be purchased, 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 such a share on the London Stock Exchange at the time the purchase is carried out;
d) the authority hereby conferred shall expire at the conclusion of the next annual general meeting of the Company held after the passing of this resolution or on the date which is 15 months after the date on which this resolution is passed (whichever is earlier), unless such authority is varied, revoked or renewed prior to such time by the Company in general meeting; and
e) the Company may at any time prior to the expiry of such authority enter into a contract or contracts to purchase ordinary shares under such authority which will or may be completed or executed wholly or partly after the expiration of such authority and the Company may purchase ordinary shares pursuant to any such contract or contracts as if the authority conferred hereby had not expired.

# 15. General Meeting Notice

THAT the Company be and is hereby generally and unconditionally authorised to hold general meetings (other than annual general meetings) on 14 clear days' notice, such authority to expire at the conclusion of the next annual general meeting of the Company.

By Order of the Board

Columbia Threadneedle

Investment Business Limited

Company Secretary

25 June 2024

Registered office:

Cannon Place

78 Cannon Street

London EC4N 6AG

Registered number: 28264

Notice of Meeting

Report and Financial Statements 2024

93
must be received by Computershare Investor Services PLC not
Notes:
less than 48 hours before the time for holding the meeting or
Shareholders intending to attend the AGM are asked to register
adjourned meeting or (in the case of a poll taken otherwise
their intention as soon as practicable by email to the following
than at or on the same day as the meeting or adjourned
dedicated address: gscagm@columbiathreadneedle.com.
meeting) for the taking of the poll at which it is to be used. If
you want to appoint more than one proxy electronically please
Shareholders who are not able or do not wish to attend the contact Computershare Investor Services PLC on 0370 889
meeting in person will be able to watch a live webcast of the 4088.
5. Investors holding shares in the Company through the Columbia
meeting and access details are set out on the Form of Proxy, Form
Threadneedle ISA, Junior ISA, Child Trust Fund, General
of Direction and related Email Communications. This will include
Investment Account and/or Junior Investment Account should
the formal business of the meeting, the Manager’s presentation
ensure that forms of direction are returned to Computershare
and questions and answers. The webcast will not enable Investor Services PLC not later than 12.00 noon on 6 August
shareholders to participate in the meeting or to vote. However, 2024. Alternatively, voting directions can be submitted
shareholders can submit questions in advance of the meeting electronically at www.eproxyappointment.com by entering the
Control Number, Shareholder Reference Number and PIN as
by email to gscagm@columbiathreadneedle.com. Questions of
printed on the form of direction. Voting directions must be
a similar nature may be grouped together to ensure the orderly
submitted electronically no later than 12.00 noon on 6 August
running of the AGM.
2024.
6. Any person receiving a copy of this notice as a person
1. A member is entitled to appoint one or more proxies to
nominated by a member to enjoy information rights under
exercise all or any of the member’s rights to attend, speak
section 146 of the Act (a ‘Nominated Person’) should note
and vote at the meeting. A proxy need not be a member of the
that the provisions in notes 1, 3 and 4 above concerning the
Company but must attend the meeting for the member’s vote
appointment of a proxy or proxies to attend the meeting in
to be counted. If a member appoints more than one proxy to
place of a member do not apply to a Nominated Person as
attend the meeting, each proxy must be appointed to exercise
only shareholders have the right to appoint a proxy. However,
the rights attached to a different share or shares held by that
a Nominated Person may have a right under an agreement
member.
between the Nominated Person and the member by whom he
2. Any person holding 3% or more of the voting rights in the
or she was nominated to be appointed, or to have someone
Company who appoints a person other than the Chairman as
else appointed, as a proxy for the meeting. If a Nominated
his proxy will need to ensure that both he and such person
Person has no such proxy appointment right or does not
complies with their respective disclosure obligations under the
wish to exercise it, he/she may have a right under such an
Disclosure Guidance and Transparency Rules.
agreement to give instructions to the member as to the
3. A Form of Proxy is provided with this notice for members. If
exercise of voting rights at the meeting.
a member wishes to appoint more than one proxy and so
7. Nominated Persons should also remember that their main
requires additional proxy forms, the member should contact
point of contact in terms of their investment in the Company
Computershare Investor Services PLC on 0370 889 4088. To
remains the member who nominated the Nominated Person to
be valid, the Form of Proxy and any power of attorney or other
enjoy information rights (or, perhaps, the custodian or broker
authority under which it is signed (or a notarially certified copy
who administers the investment on their behalf). Nominated
of such authority) must be received by post or (during normal
Persons should continue to contact that member, custodian or
business hours only) by hand at the Company’s registrars,
broker (and not the Company) regarding any changes or queries
Computershare Investor Services PLC, The Pavilions, Bridgwater
relating to the Nominated Person’s personal details and
Road, Bristol BS99 6ZY, not less than 48 hours before the
interest in the Company (including any administrative matter).
time of the holding of the meeting or any adjournment thereof.
The only exception to this is where the Company expressly
Completion and return of a Form of Proxy will not preclude
requests a response from a Nominated Person.
members from attending and voting at the meeting should they
8. Pursuant to Regulation 41(1) of the Uncertificated Securities
wish to do so. Amended instructions must also be received by
Regulations 2001 (as amended) and for the purposes of
the Company’s registrars by the deadline for receipt of Forms
section 360B of the Act, the Company has specified that only
of Proxy.
those members registered on the register of members of
4. Alternatively, members may register the appointment of a
the Company at 11 p.m. on 9 August 2024 (the ‘Specified
proxy for the meeting electronically, by accessing the website
Time’) (or, if the meeting is adjourned to a time more than 48
www.eproxyappointment.com where full instructions for
hours after the Specified Time, by 11 p.m. on the day which
the procedure are given. The Control Number, Shareholder
is two days prior to the time of the adjourned meeting) shall
Reference and PIN as printed on the Form of Proxy will be
be entitled to attend and vote at the meeting in respect of the
required in order to use the electronic proxy appointment
number of shares registered in their name at that time. If the
system. This website is operated by Computershare Investor
meeting is adjourned to a time not more than 48 hours after
Services PLC. The proxy appointment and any power of attorney
the Specified Time, that time will also apply for the purpose of
or other authority under which the proxy appointment is made
determining the entitlement of members to attend and vote
94 | The Global Smaller Companies Trust PLC
Notice of Meeting

(and for the purposes of determining the number of votes they may cast) at the adjourned meeting. Changes to the register of members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the meeting.

9. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the meeting and any adjournment(s) thereof by using the procedures described in the CREST Manual. 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.
10. 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 & International Limited's specifications and must contain the information required for such instruction, as described in the CREST Manual (available via euroclear.com/CREST). 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 issuer's agent (ID number 3RA50) by the latest time(s) for receipt of proxy appointments specified in notes 3 and 4 above. For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the message by the CREST Application Host) from which the issuer's agent 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.
11. CREST members and, where applicable, their CREST sponsors or voting service provider(s) should note that Euroclear UK & International Limited does not make available special procedures in CREST for any particular messages. 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 CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service provider(s) are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings (euroclear.com/CREST).
12. 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 (as amended).
13. Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member provided that, if it is appointing more than one corporate representative, it does not do so in relation

to the same shares. It is therefore no longer necessary to nominate a designated corporate representative.

14. Under section 527 of the Act, members meeting the threshold requirements set out in that section have the right to require the Company to publish on a website a statement setting out any matter relating to:
a) the audit of the Company's accounts (including the auditors' report and the conduct of the audit) that are to be laid before the meeting; or
b) any circumstances connected with an auditor of the Company ceasing to hold office since the previous meeting at which annual accounts and reports were laid in accordance with section 437 of the Act.
15. The Company may not require the members requesting any such website publication to pay its expenses in complying with sections 527 or 528 of the Act. Where the Company is required to place a statement on a website under section 527 of the Act, it must forward the statement to the Company's auditor not later than the time when it makes the statement available on the website. The business which may be dealt with at the meeting includes any statement that the Company has been required under section 527 of the Act to publish on a website.
16. Any member attending the meeting has the right to ask questions. However, members should note that no answer need be given in the following circumstances:
a) if to do so would interfere unduly with the preparation of the meeting or would involve a disclosure of confidential information;
b) if the answer has already been given on a website in the form of an answer to a question; or
c) if it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.
17. As at 20 June 2024, being the last practicable date prior to the printing of this notice, the Company's issued capital (excluding 133,195,494 ordinary shares held in treasury) consisted of 487,338,276 ordinary shares of 2.5 pence each carrying one vote each. Therefore, the total voting rights in the Company as at 20 June 2024 are 487,338,276.
18. This notice, together with information about the total number of shares in the Company in respect of which members are entitled to exercise voting rights at the meeting as at 20 June 2024, being the latest practicable date prior to the printing of this notice and, if applicable, any members' statements, members' resolutions or members' matters of business received by the Company after the date of this notice, will be available at globalsmallercompanies.co.uk.
19. Any electronic address provided either in this notice or in any related documents (including the Form of Proxy) may not be used to communicate with the Company for any purposes other than those expressly stated.
20. Copies of the letters of appointment between the Company and its Directors; the register of Directors' holdings; and a deed poll relating to Directors' indemnities will be available for inspection at the registered office of the Company during usual business hours on any weekday (Saturdays, Sundays and Bank Holidays excluded) until the date of the meeting and also on the date

Notice of Meeting

Report and Financial Statements 2024 | 95
and at the place of the meeting from 15 minutes prior to the
commencement of the meeting to the conclusion thereof.
21. No Director has a service agreement with the Company.
22. Under sections 338 and 338A of the Act, members meeting
the threshold requirements in those sections have the right to
require the Company:
a) to give, to members of the Company entitled to receive
notice of the meeting, notice of a resolution which may
properly be moved and is intended to be moved at the
meeting, and/or
b) to include in the business to be dealt with at the meeting
any matter (other than a proposed resolution) which may
be properly included in the business.
A resolution may properly be moved or a matter may properly
be included in the business unless:
a) (in the case of a resolution only) it would, if passed, be
ineffective (whether by reason of inconsistency with any
enactment or the company’s constitution or otherwise),
b) it is defamatory of any person or
c) it is frivolous or vexatious.
Such a request may be in hard copy form or in electronic
form and must identify the resolution of which notice is to
be given or the matter to be included in the business, must
be authorised by the person or persons making it, must be
received by the Company not later than 2 July 2024, being
the date six clear weeks before the meeting, and (in the case
of a matter to be included in the business only) must be
accompanied by a statement setting out the grounds for the
request.
96 | The Global Smaller Companies Trust PLC
Other Information
Chairman’s StatementOverview Auditor’s Report
## Management and Advisers
Strategic Report Governance Report Financial Report Notice of Meeting

| The Management Company | Company Secretary and Registered | Share Registrars |
| --- | --- | --- |
| The Global Smaller Companies Trust PLC | Office | Computershare Investor Services PLC |
| is managed by Columbia Threadneedle | Columbia Threadneedle Investment | (the ‘Registrar’) |
| Investment Business Limited ('CTIBL'), | Business Limited | The Pavilions |
| a wholly-owned subsidiary of Columbia | Cannon Place | Bridgwater Road |
| Threadneedle Asset Management | 78 Cannon Street | Bristol BS99 6ZZ |
| (Holdings) PLC which is ultimately | London EC4N 6AG |  |
| owned by Ameriprise Financial, Inc. |  | Telephone: 0370 889 4088 |
| CTIBL is appointed under an investment | Telephone: 0207 464 5000 | Authorised and regulated in the UK by |
| management agreement with the | Website: globalsmallercompanies.co.uk | the Financial Conduct Authority. |
| Company, setting out its responsibilities | Email: globalsmallerscosec@ |  |
| for investment management, | columbiathreadneedle.com | Solicitors |
| administration and marketing. It is |  | Dickson Minto LLP |
| authorised and regulated by the Financial | Independent Auditor | Dashwood House |
| Conduct Authority. | BDO LLP | 69 Old Broad Street |
|  | (‘BDO’ or the ‘auditor’) | London EC2M 1QS |
| The Manager also acts as the Alternative | 55 Baker Street |  |
| Investment Fund Manager. | London W1U 7EU | Stockbroker |

Stifel Nicolaus Europe Limited

| Nish Patel, Lead Manager. Responsible | Custodian | 150 Cheapside |
| --- | --- | --- |
| for the allocation of the assets on a | JPMorgan Chase Bank (the ‘Custodian’) | London EC2V 6ET |
| regional basis and for the construction | 25 Bank Street |  |
| of the investment portfolio. He joined | Canary Wharf |  |
| the management company in November | London E14 5JP |  |

2007.
Depositary

| Ian Ridge Represents the Manager as | JPMorgan Europe Limited (the |
| --- | --- |
| Company Secretary and is responsible for | ‘Depositary’) |
| the Company’s statutory and regulatory | 25 Bank Street |
| compliance. He joined the management | Canary Wharf |
| company in May 2005. | London E14 5JP |

Marrack Tonkin Head of Investment
Trusts with responsibility for the
management company's relationship with
the Company. He joined the management
company in 1989.
Other Information
Report and Financial Statements 2024 | 97
## Additional Information for Shareholders
Alternative Investment Fund Managers Directive Key Information Document
The Company is an ‘alternative investment fund’ (‘AIF’) for the The Key Information Document relating to the Company’s shares
purposes of the AIFMD and has appointed its Manager, Columbia can be found on its website as shown on page 1. This document
Threadneedle Investment Business Limited, to act as its Alternative has been produced in accordance with the EU’s Packaged Retail
Investment Fund Manager (‘AIFM’). The Manager is authorised and and Insurance-based Investment Products Regulations.
regulated by the United Kingdom Financial Conduct Authority as a
‘full scope UK AIFM’. Net asset value and share price
The Company’s net asset value is released daily, on the
The Company is required to make certain disclosures available to working day following the calculation date, to the London
investors in accordance with the AIFMD. Those disclosures that are Stock Exchange. The current share price of The Global Smaller
required to be made pre-investment are included within the Investor Companies Trust PLC is shown in the investment trust section of
Disclosure Document (‘IDD’) which can be found on the Company’s the stock market page in most leading newspapers.
website, globalsmallercompanies.co.uk. There have not been any
material changes to the disclosures contained within the IDD since Unclaimed dividends
it was last updated in June 2024. The Company has engaged the services of Georgeson (a
subsidiary of Computershare) to locate shareholders, or
The Company and AIFM also wish to make the following disclosures their beneficiaries, who have lost track of or are unaware of
to investors: their investments. The service is provided at no cost to the
• the investment strategy, geographic and sector investment Company; Georgeson retain 10% of unclaimed dividends from
focus and principal stock exposures are included in the the shareholder on completion of each successful claim.
strategic report. A list of the thirty largest listed holdings is Alternatively, shareholders are given the option of contacting the
included on pages 27 and 28; Registrar themselves, thereby incurring no charges.
• none of the Company’s assets is subject to special
arrangements arising from their illiquid nature;
• the strategic report and note 23 to the Financial Statements
set out the risk profile and risk management systems in place.
There have been no changes to the risk management systems
in place in the year under review and no breaches of any of the
risk limits set, with no breach expected;
• there are no new arrangements for managing the liquidity of the
Company or any material changes to the liquidity management
systems and procedures that it employs;
• all authorised Alternative Investment Fund Managers are
required to comply with the AIFMD Remuneration Code in
respect of the AIFM’s remuneration. The relevant disclosures
required are within the IDD; and
• information in relation to the Company’s leverage is contained
within the IDD.
Following completion of an assessment of the application of the
proportionality principle to the FCA’s AIFM Remuneration Code, the
AIFM has disapplied the pay-out process rules with respect to it
and any of its delegates. This is because the AIFM considers that it
carries out non-complex activities and is operating on a small scale.
98 | The Global Smaller Companies Trust PLC
Other Information

# How to Invest

Financial Promotion

One of the most convenient ways to invest in The Global Smaller Companies Trust PLC is through one of the Savings Plans run by Columbia Threadneedle Investments.

CT Individual Savings Account (ISA)

You can use your ISA allowance to make an annual tax efficient investment of up to £20,000 for the current tax year with a lump sum from £100 or regular savings from £25 a month. You can also transfer any existing ISAs to us whilst maintaining the tax benefits.

CT Junior Individual Savings Account (JISA)*

A tax efficient way to invest up to £9,000 per tax year for a child. Contributions start from £100 lump sum or £25 a month. JISAs or CTFs with other providers can be transferred to Columbia Threadneedle Investments.

CT Lifetime Individual Savings Account (LISA)

For those aged 18-39, a LISA could help towards purchasing your first home or retirement in later life. Invest up to £4,000 for the current tax year and receive a 25% Government bonus up to £1,000 per year. Invest with a lump sum from £100 or regular savings from £25 a month.

CT General Investment Account (GIA)

This is a flexible way to invest in our range of Investment Trusts. There are no maximum contributions, and investments can be made from £100 lump sum or £25 a month.

CT Junior Investment Account (JIA)

This is a flexible way to save for a child in our range of Investment Trusts. There are no maximum contributions, and the plan can easily be set up under bare trust (where the child is noted as the beneficial owner) or kept in your name if you wish to retain control over the investment. Investments can be made from a £100 lump sum or £25 a month per account. You can also make additional lump sum top-ups at any time from £100 per account.

CT Child Trust Fund (CTF)*

If your child already has a CTF, you can invest up to £9,000 per birthday year, from £100 lump sum or £25 a month. CTFs with other providers can be transferred to Columbia Threadneedle Investments.

*The CTF and JISA accounts are opened by parents in the child's name and they have access to the money at age 18. **Calls may be recorded or monitored for training and quality purposes.

Charges

Annual management charges and other charges apply according to the type of Savings Plan, these can be found on the relevant product Presales Cost & Charges disclosure on our website www.ctinvest.co.uk.

Annual account charge

ISA/LISA: £60+VAT

GIA: £40+VAT

JISA/JIA/CTF: £25+VAT

You can pay the annual charge from your account, or by direct debit (in addition to any annual subscription limits).

Dealing charges

£12 per fund (reduced to £0 for deals placed through the online Columbia Threadneedle Investor Portal) for ISA/GIA/LISA/JIA and JISA. There are no dealing charges on a CTF.

Dealing charges apply when shares are bought or sold but not on the reinvestment of dividends or the investment of monthly direct debits. Government stamp duty of 0.5% also applies on the purchase of shares (where applicable).

The value of investments can go down as well as up and you may not get back your original investment. Tax benefits depend on your individual circumstances and tax allowances and rules may change. Please ensure you have read the full Terms and Conditions, Privacy Policy and relevant Key Features documents before investing. For regulatory purposes, please ensure you have read the Presales Cost & Charges disclosure related to the product you are applying for, and the relevant Key Information Documents (KIDs) for the investment trusts you want to invest in, these can be found at www.ctinvest.co.uk/documents.

How to Invest

To open a new Columbia Threadneedle Savings Plan, apply online at www.ctinvest.co.uk. Online applications are not available if you are transferring an existing Savings Plan with another provider to Columbia Threadneedle Investments, or if you are applying for a new Savings Plan in more than one name but paper applications are available at www.ctinvest.co.uk/documents or by contacting Columbia Threadneedle Investments.

New Customers:

Call: 0345 600 3030** (9.00am – 5.00pm, weekdays)

Email: invest@columbiathreadneedle.com

Existing Savings Plan Holders:

Call: 0345 600 3030** (9.00am – 5.00pm, weekdays)

Email: investor.enquiries@columbiathreadneedle.com

By post: Columbia Threadneedle Management Limited, PO Box 11114 Chelmsford CM99 2DG

You can also invest in the trust through online dealing platforms for private investors that offer share dealing and ISAs. Companies include: Barclays Stockbrokers, EQI, Halifax, Hargreaves Lansdown, HSBC, Interactive Investor, Lloyds Bank, The Share Centre

To find out more, visit ctinvest.co.uk

0345 600 3030, 9.00am – 5.00pm, weekdays, calls may be recorded or monitored for training and quality purposes.

Capital at risk. The material relates to an investment trust and its Ordinary Shares are traded on the main market of the London Stock Exchange. The Investor Disclosure Document, Key Information Document (KID), latest annual or interim reports and the applicable terms & conditions are available from Columbia Threadneedle Investments Cannon Place, 78 Cannon Street, London EC4N 6AG, your financial advisor and/or on our website www.columbiathreadneedle.com. Please read the Investor Disclosure Document before taking any investment decision. This material should not be considered as an offer, solicitation, advice or an investment recommendation. This communication is valid at the date of publication and may be subject to change without notice. Information from external sources is considered reliable but there is no guarantee as to its accuracy or completeness. In the UK Issued by Columbia Threadneedle Management Limited, No. 517895, registered in England and Wales and authorised and regulated in the UK by the Financial Conduct Authority. © 2024 Columbia Threadneedle Investments. WFD60259 (01/24) UK. Expiration Date: 31/01/2025

Part of

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

Report and Financial Statements 2024 | 99

Other Information
## 25 Year Historical Information
All data is based on figures as reported in accordance with the Company’s accounting policies and is unaudited but derived from
the audited financial statements.

|  |  |  | Net asset value |  |  |  | Closing |  | Premium/ |  | Revenue return |  |  | Dividend per |  |  | Dividend |  | Inflation |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Net assets |  |  | per share |  | share price |  |  | (discount) |  |  | per share |  |  | share |  | growth |  |  | (RPI) |  |
|  |  |  |  |  | (i) |  |  | (i) |  |  |  |  | (i) |  |  | (i) |  |  |  |  |  |
| at 30 April |  | £’000s |  | pence |  |  | pence |  |  | % |  | pence |  |  | pence |  |  | % |  |  | % |

1999 265,440 25.5 20.4 (20.3) 0.53 0.336 12.0 1.6
2000 313,128 32.5 25.5 (21.5) 0.42 0.375 11.6 3.0
2001 274,930 29.2 24.3 (16.9) 0.42 0.395 5.3 1.8
2002 246,300 26.6 21.9 (17.5) 0.39 0.402 1.8 1.5
2003 167,945 18.3 14.7 (19.7) 0.36 0.415 3.2 3.1
2004 235,390 27.7 22.4 (19.1) 0.40 0.424 2.2 2.5
2005 264,398 31.1 26.9 (13.7) 0.46 0.440 3.8 3.2
2006 227,652 47.1 43.5 (7.6) 0.45 0.453 3.0 2.6
2007 239,574 51.2 47.3 (7.6) 0.48 0.469* 3.5 4.5
2008 188,100 42.8 38.5 (8.6) 0.55 0.483 3.0 4.2
2009 150,994 36.0 32.5 (7.4) 0.57 0.489 1.2 (1.2)
2010 208,384 51.8 46.1 (9.6) 0.49 0.500 2.2 5.3
2011 241,604 60.3 58.4 (2.1) 0.51 0.510 2.0 5.2
2012 246,776 59.6 58.8 (0.4) 0.69 0.563 10.4 3.5
2013 340,090 75.6 76.5 1.6 0.71 0.650 15.5 2.9
2014 431,086 84.2 84.0 (0.1) 0.93 0.800 23.1 2.5
2015 516,963 97.0 98.0 1.0 1.09 0.965 20.6 0.9
2016 553,192 99.5 100.1 0.7 1.18 1.070 10.9 1.3
2017 733,282 126.4 127.3 0.8 1.38 1.225 14.5 3.5
2018 826,831 136.9 137.5 0.5 1.59 1.440 17.6 3.4
2019 854,619 140.6 134.6 (4.3) 1.76 1.650 14.6 3.0
2020 726,515 119.7 111.0 (7.3) 1.73 1.700 3.0 1.5
2021 1,007,508 174.9 168.6 (3.6) 1.26 1.750 3.0 2.9
2022 945,304 172.8 156.2 (9.6) 1.82 1.840 5.1 11.1
2023 859,435 165.7 144.6 (12.7) 2.34 2.300 25.0 11.4
(2)

|  | 2024 870,062 178.1 160.2 (10.0) 2.84 2.81 |  | 22.2 3.3 |
| --- | --- | --- | --- |
| * Excludes special dividend of 0.1p also paid |  | (i) |  |
| (i) Comparative figures for the years prior to 2020 have been restated due to the sub-division of each existing ordinary share of 25p into ten new ordinary shares of 2.5p each on |  |  |  |

31 October 2019.
(2) Subject to approval of the final dividend of 2.13p at the 2024 AGM.
100 | The Global Smaller Companies Trust PLC
Other Information

# Net asset value and share price performance vs Benchmark over 25 years

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

# Revenue return and dividend per share vs inflation over 25 years

![img-8.jpeg](img-8.jpeg)

Report and Financial Statements 2024 | 101

Other Information
# Alternative Performance Measures

The Company uses the following Alternative Performance Measures ('**APMs**') throughout the annual report, financial statements and notes to the financial statements. The APMs are reconciled to the financial statements through the narrative detailed below. The Board believes that each of the APMs, which are typically used within the investment trust sector, provide additional useful information to the shareholders in order to assess the Company's performance between reporting periods and against its peer group.

**Discount or Premium** – the share price of an Investment Trust is derived from buyers and sellers trading their shares on the stock market. This price is not identical to NAV per share of the underlying assets less liabilities of the Company. If the share price is lower than the NAV per share, the shares are trading at a discount. Shares trading at a price above NAV per share are said to be at a premium. The Board of the Company tries to ensure that the shares trade, in normal market conditions, at around the value of the net assets. This is done by means of buying shares from sellers at the below-NAV price (and placing them in treasury or cancelling them) or selling new shares to shareholders at a premium to NAV. The Board's policy is set out on page 42.

|   |  | 30 April 2024 pence | 30 April 2023 pence  |
| --- | --- | --- | --- |
|  Net Asset Value per share | (a) | 178.07 | 165.71  |
|  Share price per share | (b) | 160.20 | 144.60  |
|  (Discount)/Premium (c= (b-a)/a) | (c) | (10.0)% | (12.7)%  |

**Gearing** – this is the ratio of the borrowings of the Company to its net assets. Borrowings have a 'prior charge' over the assets of a company, ranking before ordinary shareholders in their entitlement to capital and/or income. They may include: preference shares; debentures; overdrafts and short and long-term loans from banks; and derivative contracts. If the Company has cash assets, these may be assumed either to net off against borrowings, giving a 'net' or 'effective' gearing percentage, or to be used to buy investments, giving a 'gross' or 'fully invested' gearing figure. Where cash assets exceed borrowings, the Company is described as having 'net cash'. The Company's maximum permitted level of gearing is set by the Board and is described within the Strategic Report and Directors' Report.

|   |  | 30 April 2024 £'000 | 30 April 2023 £'000  |
| --- | --- | --- | --- |
|  Loan notes |  | 35,000 | 35,000  |
|  Loans |  | 16,463 | 17,027  |
|   | (a) | 51,463 | 52,027  |
|  Less Cash and cash equivalents |  | (11,021) | (2,292)  |
|  Less Investment debtors |  | (3,369) | (7,994)  |
|  Add Investment creditors |  | 3,982 | 2,892  |
|  Total | (b) | 41,055 | 44,633  |
|  Net Asset Value | (c) | 870,062 | 859,435  |
|  Effective gearing (d= b/c) | (d) | 4.7% | 5.2%  |
|  Fully invested gearing (e= a/c) | (e) | 5.9% | 6.1%  |

102 | The Global Smaller Companies Trust PLC
Other Information

**Net Asset Value (NAV)** – the assets less liabilities of the Company, as set out in the Balance Sheet, all valued in accordance with the Company's Accounting Policies (see note 2 to the financial statements) and UK Accounting Standards. The net assets correspond to Total Shareholders' Funds, which comprise the share capital account, share premium account, capital redemption reserve and capital and revenue reserves. (See calculation in note 19 to the financial statements.)

**Net Asset Value (NAV) with Debt at Fair Value** – the Company's debt is valued in the Balance Sheet (on page 74) at cost, which is equivalent to the repayment value of the debt on the assumption that it is held to maturity. This is often referred to as 'Debt at Par'. The current replacement or fair value of the debt, which assumes it is repaid and renegotiated under current market conditions, is often referred to as the 'Debt at Market Value' or 'Debt at Fair Value'. See calculation in note 19 to the financial statements.

**Ongoing Charges** – all operating costs expected to be regularly incurred and that are payable by the Company or suffered within underlying investee funds, expressed as a proportion of the average net assets of the Company over the reporting year (see Ten Year Record). The costs of buying and selling investments and derivatives are excluded, as are interest costs, taxation, non-recurring costs and the costs of buying back or issuing ordinary shares.

|  Ongoing Charges calculation | 30 April 2024 £'000 | 30 April 2023 £'000  |
| --- | --- | --- |
|  Management fees | 4,198 | 4,329  |
|  Other expenses | 1,301 | 1,099  |
|  Less loan commitment/arrangement fees and one off costs | (218) | (110)  |
|  Underlying costs of collective investments excluding performance fee | 1,424 | 1,680  |
|  Underlying costs of collective investments - performance fee | (a) 208 | –  |
|  Total including performance fee | (b) 6,913 | 6,998  |
|  Total excluding performance fee (b-a) | (c) 6,705 | 6,998  |
|  Average daily net assets | (d) 858,025 | 888,724  |
|  Ongoing Charges including performance fee (e= b/d) | (e) 0.80% | 0.79%  |
|  Ongoing Charges excluding performance fee (f= c/d) | (f) 0.78% | 0.79%  |

**Total Expense Ratio ('TER')** – an alternative measure of expenses to Ongoing Charges. It comprises all operating costs incurred in the reporting period by the Company (see notes 4 and 5 (pages 80 and 81) to the financial statements), calculated as a percentage of the average net assets in that year (see Ten Year Record). Operating costs exclude costs suffered within underlying investee funds, costs of buying and selling investments and derivatives, interest costs, taxation and the costs of buying back or issuing ordinary shares.

|  TER calculation | 30 April 2024 £'000 | 30 April 2023 £'000  |
| --- | --- | --- |
|  Management fees | 4,198 | 4,329  |
|  Other expenses | 1,301 | 1,099  |
|  Less loan commitment/arrangement fees and one off costs | (218) | (110)  |
|  Total | (a) 5,281 | 5,318  |
|  Average daily net assets | (b) 858,025 | 888,724  |
|  TER (c= a/b) | (c) 0.61% | 0.60%  |

Report and Financial Statements 2024 | 103

Other Information
**Total Return** – the theoretical return to shareholders calculated on a per share basis by adding dividends paid in the period to the increase or decrease in the Share Price or NAV in the period. The dividends are assumed to have been re-invested in the form of shares or net assets, respectively, on the date on which the shares were quoted ex-dividend.

|   | NAV | Share price  |
| --- | --- | --- |
|  NAV/Share Price per share at 30 April 2023 (pence) | 165.71 | 144.60  |
|  NAV/Share Price per share at 30 April 2024 (pence) | 178.07 | 160.20  |
|  Change in the year | 7.5% | 10.8%  |
|  Impact of dividend reinvestments | 1.5% | 1.9%  |
|  Total return for the year | 9.0% | 12.7%  |

|   | NAV | Share price  |
| --- | --- | --- |
|  NAV/Share Price per share at 30 April 2022 (pence) | 172.83 | 156.20  |
|  NAV/Share Price per share at 30 April 2023 (pence) | 165.71 | 144.60  |
|  Change in the year | (4.1)% | (7.4)%  |
|  Impact of dividend reinvestments | 1.2% | 1.2%  |
|  Total return for the year | (2.9)% | (6.2)%  |

104 | The Global Smaller Companies Trust PLC
Other Information
Chairman’s StatementOverview Auditor’s Report
## Glossary of Terms
Strategic Report Governance Report Financial Report Notice of Meeting
AAF Report – Report prepared in accordance with Audit and Assurance Faculty guidance issued by the Institute of Chartered
Accountants in England and Wales.
Administrator – The administrator is State Street Bank and Trust Company to which Columbia Threadneedle has outsourced certain
functions.
AIFMD – the UK version of the Alternative Investment Fund Managers Directive that requires investment vehicles in the European
Union to appoint a Depositary and an Alternative Investment Fund Manager.
AIFM – the Alternative Investment Manager appointed by the Board of Directors in accordance with the AIFMD is the Company’s
Manager, as defined below.
Ameriprise – Ameriprise Financial Inc. which is the parent company of Columbia Threadneedle Asset Management (Holdings) PLC
which in turn owns Columbia Threadneedle Investment Business Limited.
APMs – Alternative Performance Measures are financial measures of historical or future financial performance, financial position, or
cashflows, other than financial measures defined or specified in the applicable accounting framework. Guidelines published by the
European Securities and Markets Authority aim to improve comparability, reliability and comprehensibility by way of APMs.
Benchmark – from 1 May 2023, a blend of two Indices, namely the MSCI All Country World ex UK Small Cap Index (80% (net)) and the
Deutsche Numis UK Smaller Companies (excluding investment companies) Index (20%). This Benchmark, against which the increase
or decrease in the Company’s net asset value is compared, measures the performance of a defined selection of smaller companies
listed in stock markets around the world and gives an indication of how those companies have performed in any period. Divergence
between the performance of the Company and the Benchmark is to be expected as: the investments within this Index are not
identical to those of the Company; the Index does not take account of operating costs; and the Company’s strategy does not entail
replicating (tracking) this Benchmark. Prior to 1 May 2023 the weighting of the indices in the Benchmark was 70% MSCI All Country
World ex UK Small Cap Index and 30% Deutsche Numis UK Smaller Companies (excluding investment companies). The MSCI index
was also measured on a gross basis rather than a net basis going forward.
Carbon intensity – this is measured in tons of CO2 equivalent (i.e. including the basket of six Kyoto Protocol gases) of Scope 1 and
2 emissions, divided by $1million of sales at a company level. This is aggregated to portfolio level using a weighted average (by
holding).
Closed-ended company – a company, including an Investment Company, with a fixed issued ordinary share capital the shares of which
are traded on an exchange at a price not necessarily related to the net asset value of the company and which can only be issued or
bought back by the company in certain circumstances.
Columbia Threadneedle Investments Savings Plans – these comprise the General Investment Account, Junior Investment Account,
ISA, Junior ISA and Child Trust Fund operated by Columbia Threadneedle Investments.
Other Information
Cum-dividend – shares are classified as cum-dividend when the buyer of a security is entitled to receive a dividend that has been
declared, but not paid. Shares which are not cum-dividend are described as ex-dividend.
Report and Financial Statements 2024 | 105
Custodian – The Custodian is JPMorgan Chase Bank. The Custodian is a financial institution responsible for safeguarding, worldwide,
the listed securities and certain cash assets of the Company, as well as the income arising therefrom, through provision of custodial,
settlement and associated services.
Depositary – The Depositary is JPMorgan Europe Limited. Under AIFMD rules, the Company must appoint a Depositary, whose
duties in respect of investments, cash and similar assets include: safekeeping; verification of ownership and valuation; and cash
monitoring. Under the AIFMD rules, the Depositary has strict liability for the loss of the Company’s financial assets in respect of which
it has safe–keeping duties. The Depositary’s oversight duties will include but are not limited to oversight of share buybacks, dividend
payments and adherence to investment limits.
Distributable Reserves – Reserves distributable by way of dividend or for the purpose of buying back ordinary share capital (see notes
2, 16, 17 and 18 to the financial statements). Company Law requires that Share Capital and the Capital Redemption Reserve may
not be distributed. The Company’s articles of association allow distributions by way of dividend out of Capital Reserves. Dividend
payments are currently made out of Revenue Reserve. The cost of all share buybacks is deducted from Capital Reserves.
Dividend Dates – Reference is made in announcements of dividends to three dates. The ‘record’ date is the date after which buyers
of the shares will not be recorded on the register of shareholders as qualifying for the pending dividend payment. The ‘payment’ date
is the date that dividends are credited to shareholders’ bank accounts. The ‘ex-dividend’ date is normally the business day prior to
the record date (most ex-dividend dates are on a Thursday).
GAAP – Generally Accepted Accounting Practice. This includes UK Financial Reporting Standards (‘FRS’) and International GAAP (IFRS
or International Financial Reporting Standards applicable in the European Union).
Investment Company (Section 833) – UK Company Law allows an Investment Company to make dividend distributions out of realised
distributable reserves, even in circumstances where it has made Capital losses in any year, provided the Company’s assets remaining
after payment of the dividend exceed 150% of the liabilities. An Investment Company is defined as investing its funds in shares, land
or other assets with the aim of spreading investment risk.
Investment Trust taxation status (Section 1158) – UK Corporation Tax law allows an Investment Company (referred to in Tax law as
an Investment Trust) to be exempted from tax on its profits realised on investment transactions, provided it complies with certain
rules. These are similar to Section 833 Company law rules but further require that the Company must be listed on a regulated stock
exchange and that it cannot retain more than 15% of income received. The Directors Report contains confirmation of the Company’s
compliance with this law and its consequent exemption from taxation on capital gains.
ISAE Report – Report prepared in accordance with the International Standard on Assurance Engagements.
Leverage – as defined under AIFMD rules, leverage is any method by which the exposure of an AIF (being an investment vehicle under
the AIFMD) is increased through borrowing of cash or securities or leverage embedded in derivative positions. Leverage is broadly
equivalent to gearing but is expressed as a ratio between the assets (excluding borrowings) and the net assets (after taking account
of borrowings). Under the gross method, exposure represents the sum of the Company’s positions after deduction of cash balances,
without taking account of any hedging or netting arrangements. Under the commitment method, exposure is calculated without the
deduction of cash balances and after certain hedging and netting positions are offset against each other.
Manager (AIFM) – Columbia Threadneedle Investment Business Limited, a subsidiary of Columbia Threadneedle Asset Management
(Holdings) PLC, which in turn is wholly owned by Ameriprise Financial Inc.. Its responsibilities and fees are set out in the Business
Model, Directors’ Report and note 4 to the financial statements.
Non-executive Director – a Director who has a contract for services, rather than a contract of employment, with the Company. The
Company does not have any executive Directors.
106 | The Global Smaller Companies Trust PLC
Other Information

**Open-ended Fund** – a collective investment scheme which issues shares or units directly to investors, and redeems directly from investors, at a price that is linked to the net asset value of the fund.

**Scope 1, 2 and 3 emissions** – Scope 1 emissions are those direct emissions that are owned or controlled by a company, whereas Scope 2 and 3 indirect emissions are a consequence of the activities of the company but occur from sources not owned or controlled by it.

**Section 172(1)** – Section 172(1) of the Companies Act 2006 requires a director of a company to act in the way he/she considers, in good faith, to 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 to matters specified in that section. The directors are required to report on this in the Strategic Report section of the Report and Financial Statements each year.

**SORP** – Statement of Recommended Practice. The accounts of the Company are drawn up in accordance with the Investment Trust SORP issued by the AIC, as described in note 2 to the Financial Statements.

**Special Dividends** – dividends received from investee companies which have been paid out of capital reconstructions or reorganisations of the investees are sometimes referred to as Special Dividends and may be allocated to Capital Reserves in accordance with the Company's accounting policies and the SORP Dividends which are unusually large in terms of the investee companies' annual earnings or normal payment pattern are also sometimes referred to as special but are treated as revenue in nature unless evidenced otherwise.

**Treasury shares** – ordinary shares previously issued by the Company that have been bought back from shareholders on the open market and kept in the Company's own treasury. Such shares may, at a later date, be re-issued for sale on the open market or cancelled if demand is insufficient. Treasury shares carry no rights to dividends and have no voting rights and hence are not included within calculations of earnings per share or net asset value per share.

**UK Code of Corporate Governance (UK Code 2018)** – the standards of good practice in relation to board leadership and effectiveness, remuneration, accountability and relations with shareholders that all companies with a Premium Listing on the London Stock Exchange are required to report on in their annual report and financial statements.

**The United Nations Sustainable Development Goals (SDGs)** – These goals are the blueprint to achieve a better and more sustainable future for all. They address global challenges including those related to poverty, inequality, climate change, environmental degradation, peace and justice. The 17 Goals are all interconnected and the aim is to achieve them all by 2030.

**The United Nations-supported Principles for Responsible Investment (UNPRI)** – The six principles for Responsible Investment are a voluntary and aspirational set of investment principles that offer a menu of possible actions for incorporating ESG issues into investment practice. In implementing them, signatories contribute to developing a more sustainable global financial system.

## Analysis of Ordinary Shareholders (unaudited)

|  Category | Holding % at 30 April 2024 | Holding % at 30 April 2023  |
| --- | --- | --- |
|  Columbia Threadneedle Investments Savings Plans | 54.4 | 55.1  |
|  Institutions | 10.3 | 11.2  |
|  Direct Individuals and Nominees | 35.3 | 33.7  |
|   | 100.0 | 100.0  |

Source: Columbia Threadneedle Investments.

Report and Financial Statements 2024 | 107

Other Information
Warning to Shareholders – Beware of Share Fraud.
Fraudsters use persuasive and high-pressure tactics to lure investors into scams. They may offer to sell to you shares that turn out to be worthless or
non-existent, or to buy your shares at an inflated price in return for an upfront payment following which the proceeds are never received.
If you receive unsolicited investment advice or requests:
• Check the Financial Services Register from fca.org.uk to see if the person or firm contacting you is authorised by the FCA
• Call the Financial Conduct Authority (‘FCA’) on 0800 111 6768 if the firm does not have contact details on the Register or you are told they are
out of date
• Search the list of unauthorised firms to avoid at fca.org.uk/scams
• Consider that if you buy or sell shares from an unauthorised firm you will not have access to the Financial Ombudsman Service or Financial
Services Compensation Scheme
• Think about getting independent financial and professional advice
If you are approached by fraudsters please tell the FCA by using the share fraud reporting form at fca.org.uk/scams where you can find out more
about investment scams. You can also call the FCA Consumer Helpline on 0800 111 6768. If you have already paid money to share fraudsters you
should contact Action Fraud on 0300 123 2040.
108 | The Global Smaller Companies Trust PLC
## The Global Smaller
## Companies Trust PLC
## Annual Report and
## Financial Statements
## for the year ended
## 30 April 2024
## Contact us
Registered office:
Cannon Place, 78 Cannon Street, London EC4N 6AG
020 7464 5000
globalsmallercompanies.co.uk
invest@columbiathreadneedle.com
Registrars:
Computershare Investor Services PLC
The Pavilions, Bridgwater Road
Bristol BS99 6ZZ
0370 889 4088
computershare.com
web.queries@computershare.co.uk
## To find out more visit columbiathreadneedle.com
© 2024 Columbia Threadneedle Investments. Columbia Threadneedle Investments is the global brand name of the Columbia and Threadneedle group of companies.