(formerly Securities Trust of Scotland plc)

Annual

Report

Year to 31 March 2023

www.stsplc.co.uk

What we do

STS Global Income & Growth Trust plc (the

‘Company’) is a UK-based investment trust,

managed by Troy Asset Management Limited

(the ‘Manager’ or ‘Troy’), which invests in a

portfolio of global equities. It aims to meet the

needs of investors looking for a growing level of

income and steady capital growth over the long

term, whilst also wanting to preserve the value

of their money.

A quality investment approach

The Company seeks to invest in a small number

of companies (typically 30 – 50 companies)

which the Manager deems to be high-quality

and hold them for very long periods to capture

the compounding power of those companies.

Dependable income

The Company aims to provide a steady,

regular income with the intention of growing

this consistently from year to year. Dividends

are paid quarterly in April, July, October

and January.

Experienced team

The Company is managed by James Harries

at Troy, alongside Tomasz Boniek. James has

more than 20 years experience of managing

global equity income strategies, with an average

annual total return of 9%.

Discount management

The Company introduced a discount control

mechanism in November 2020 which aims to

ensure, in normal market conditions, that the

shares trade consistently close to their net asset

value, providing liquidity for all shareholders.

Under the discount control mechanism, the

Company has committed to buying back shares

when there is excess supply and issuing shares

when there is excess demand.

Independent oversight

The Company is overseen by an independent

Board. By engaging with and listening to

shareholders, the Board ensures that the

Company continues to offer a distinctive

investment proposition that is relevant to

investors’ needs.

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

About STS Global Income & Growth Trust

www.stsplc.co.uk

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 1

Governance Financial review Investor informationOverview

Overview

Financial highlights 2

Chairman’s statement 4

Manager’s review 7

Portfolio summary 10

Portfolio holdings 11

Strategic report 12

Board of directors 19

Governance

Report of the directors 21

Corporate governance statement 28

Directors’ remuneration statement 35

Audit and risk committee report 38

Financial review

Independent auditor’s report 41

Statement of comprehensive income 48

Statement of financial position 49

Statement of changes in equity 50

Statement of cash flow 51

Notes to the financial statements 52

AIFMD disclosures (unaudited) 65

Investor information

Alternative performance measures 66

Glossary of terms 68

Ways to invest in the company 69

Notice of annual general meeting 70

Corporate information 75

Contents

Information disclaimer

This report is produced for members of the Company with the purpose of providing them with information relating to the

Company and its financial results for the period under review. This report contains subjective opinion, analysis and forward looking

statements which, by their very nature, involve uncertainty. Events beyond the control of the Board and the Company may affect

actual future results which may therefore differ to those indicated within this historical report. Market and currency fluctuations may

occur which may in turn have an impact on the value of the Company’s underlying investments in the future. Past performance is no

guarantee of future performance. Investments are not guaranteed and you may not get back the amount you originally invested.

Neither the Board nor the Company take responsibility for matters outside of their control.

2 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

The objective is to deliver rising income and long-term capital growth through investment

in a balanced portfolio constructed from global equities.

Dividend

Dividend per share (pence)

(pence)

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

2023

4.75

4.80

4.90

5.80

5.95

6.10

6.25

6.41

5.70

5.875

6.20

Long-term capital growth

(%)

Net asset value total return

Share price total return

Mar 23Mar 22Mar 21Mar 20Mar 19Mar 18Mar 17Mar 16Mar 15Mar 14Mar 13

240

220

200

180

160

140

120

100

Source: Refinitiv Datastream.

**See Alternative Performance Measures on page 66 for definitions.

Financial highlights

A total annual dividend

of 6.20p, an increase

of 5.5% from 2022

and 8.8% from 2021,

when the dividend was

rebased following the

change of manager.

Over the last ten years,

shareholders have enjoyed

a 105.1% increase in share

price (total return).

The share price return has

been positive in eight out

of the last ten years even

through some of the most

turbulent market conditions.

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 3

Overview Governance Financial review Investor information

Total returnsˆ (including reinvested dividends)

Year ended

31 March 2023

Year ended

31 March 2022

Net asset value per share (1.8) 16.8

Lipper Global – Equity Global Income Index 0.5 10.8

Share price (4.8) 17.4

Key data

As at

31 March 2023

As at

31 March 2022

Net asset value per share (cum income)ˆ 220.37p 230.75p

Net asset value per share (ex income)ˆ 218.37p 229.01p

Share price 214.00p 231.00p

(Discount)/premiumˆ (2.89)% 0.11%

Net assets £219,235,000 £229,657,000

Income

Year ended

31 March 2023

Year ended

31 March 2022

Revenue return per share 6.34p 5.82p

Dividend per share 6.20p 5.875p

Ongoing chargesˆ

Year ended

31 March 2023

Year ended

31 March 2022

Ongoing charges 0.94% 0.93%

ˆ Alternative performance measures see pages 66 and 67 for further information.

Five-year record

Annual total returns (including dividends reinvested) over 12 month periods to 31 March

2023 2022 2021 2020 2019

Net asset value per share (1.8)% 16.8% 28.5% (8.3)% 11.4%

Share price (4.8)% 17.4% 23.7% 2.7% 9.6%

Source: Refinitiv Datastream.

4 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

A total dividend of 6.20 pence per

ordinary share has been declared,

representing a 5.5% increase over the

previous financial year.

The year to 31 March 2023 proved to be

eventful in terms of both geopolitical and

economic developments. It was dominated

by the immediate and longer term effects of

the dreadful war in Ukraine precipitated by

the invasion by Russian forces in February

2022. An immediate economic effect of the

conflict was the increase in prices of oil &

gas on wholesale markets and this increase

added to the inflationary pressures already

pushing through as economies recovered

post pandemic.

The boost to inflation arrived at a time when Central Banks,

virtually worldwide, were raising short term interest rates

and reversing the very lax monetary policies that had been

in place since the financial crisis in 2007/2008. As might

be expected bond markets found this background to be

challenging and were significantly lower over the year (the

Investment Association Sterling Corporate Bond Sector

Index, for example, returned -9.4%). Not surprisingly, equity

markets struggled to generate positive returns against such

a difficult background.

Over the 12 month period the net asset value total return

for your Company was -1.8%, marginally behind the +0.5%

total return for the comparator benchmark, Lipper Global –

Equity Global Income Index.

The relative return for the year was consistent in the sense

that when markets, and generally in the first half of the

period, were in a “risk off” mode relative returns were

good. However, later in the period as confidence rose and

markets returned to sectors and stock that had driven the

post pandemic bounce relative returns were poorer.

Your Manager’s philosophy and portfolio positioning

has remained consistent and returns have been likewise

consistent against a frequently changing narrative in

respect of markets. It is a feature of stock markets that

rallies begin with a reversion to what had driven previous

returns but often this effect fades and new drivers emerge

as investors adapt to changing circumstances. This may

well be what is happening currently as the rally in the

second half of the financial year was led by sectors with

higher valuations despite what is a fundamental change

in the monetary background. The era of virtually free and

abundant debt has ended to be replaced by a period in

which capital has an economic cost and has to be allocated

on a much more rational basis. Your Board and Manager

believe that in such an environment the focus on investing

in strong companies in terms of market positioning and

financial robustness will produce good relative returns.

Revenue and dividends

Total revenue earned for the year was £8.2 million, an increase

of 11.7% on the previous year. This is a meaningful rise in

income and has two principal sources. First, the underlying

dividend performance of the Company’s investments has

been robust and is a testament to the stock selection of the

Manager. Second, with 47% of income arising from US dollar

denominated dividends the weakness of sterling vs the US

dollar over the year has been a boost to sterling revenues

as dollar payments are translated at more favourable rates.

(For your information the average £/$ rate for the year was

1.21 compared with 1.37 in the previous year).

In arriving at a dividend level for the year your Board has

been realistic and cognisant of the fact that shareholders

are expecting consistent dividend growth over the longer

term. While most encouraged by the underlying dividend

performance of our investment portfolio, the benefit of

currency changes has been welcome but is likely to be

volatile and may even be reversed.

Chairman’s statement

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 5

Overview Governance Financial review Investor information

The Board will therefore transfer to reserves some of the

currency benefit in order that in the event of a period of

less favourable currency movements there is flexibility

to use reserves to smooth the long term progression in

dividends paid to shareholders.

Consequently a total dividend of 6.20 pence per ordinary

share has been declared representing a 5.5% increase over

the 5.875 pence per share paid in respect of the previous

financial year.

Change of name

The current and previous Boards have discussed the

suitability of the name of your Company on several

occasions. The Board now believes that it is appropriate

to implement a new name for the Company which

better explains the Company’s aims and objectives. The

investment mandate and strategy remain the same;

providing defensive capital returns with growing income by

investing in a concentrated portfolio of global companies.

The Board is also conscious of changes in its investor

base, as well as changes in the ways in which investors

hold their shares. The Company’s shares are now held

through a broad range of wealth managers and retail

platforms and we believe the name change will make it

easier for individual retail investors to find the Company on

platforms when searching for global income and growth

investment opportunities.

Consequently, it was decided to change the name of your

Company to “STS Global Income & Growth Trust plc”. In

accordance with the Company’s articles of association, this

change of name has been actioned by a resolution of the

directors and the name change took effect on 5 June 2023.

It is important to emphasise that nothing else will change,

the ticker symbol (STS) will remain the same as will the

SEDOL and ISIN. You will not need or receive new share

certificates. The Board believes that this name change

will enhance the marketability of the shares and bring the

Company more easily to the attention of not only the retail

investor but all potential buyers of the shares.

Board changes

The Board is aware of the need to have a succession

process in place and this is particularly important as

compliance with the best practice of corporate governance

in respect of terms of appointment and diversity is a key

objective of the Board.

Therefore and in line with its long term planning I am

pleased to announce that Gillian Elcock will be appointed

as a non-executive director on 21 September 2023. Gillian

is a non-executive director of International Biotechnology

Trust plc and a member of the Board of the CFA UK.

I am delighted that Gillian is joining our Board. She has a

wealth of investment experience and will bring a valuable

perspective to Board discussions. My colleagues and I very

much look forward to working with her.

Discount management

Your Company adopted and implements a formal discount

control mechanism. It is the intention that the application

of this policy will, in normal market conditions, see the

shares consistently valued close to their net asset value,

providing liquidity for all shareholders. Shares are bought

by the Company should they trade at a discount to net

asset value and if there are sellers in the market. Likewise

shares will be issued at a premium to net asset value to

meet demand should there be buyers.

In the year to 31 March 2023, 1,616,500 shares were

purchased by the Company at an average discount of 1.9%

and 1,575,000 shares were issued at an average premium

of 1.2%.

Borrowing facilities

Your Company currently has debt facilities totalling £15.8

million. The use of these facilities is discussed regularly and

also at every Board meeting. The £15 million multicurrency

facility that the Company has had available since 2016

is due to expire in September of this year. Negotiations

are underway to replace this facility with an appropriately

flexible facility that will allow the Manager to utilise the

debt in a cost effective manner with the objective of

enhancing returns to shareholders over time.

ESG

The Board continues to recognise the importance of

considering environmental, social, and governance

(‘ESG’) factors when making investment decisions and

in the ongoing stewardship of investee companies and

is supportive of the Manager’s approach to responsible

investing, which fully integrates ESG analysis into the

fundamental research and investment process. More

information can be found on pages 12 and 13 and on the

responsible investing section of the Company’s website,

www.stsplc.co.uk/responsible-investment.

6 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Chairman’s statement continued

AGM

The Annual General Meeting of your Company will be held

on 20 September 2023 at the offices of Juniper Partners,

28 Walker Street, Edinburgh at 2.00 pm. The Board looks

forward to meeting shareholders in person at that meeting.

Keeping in touch

I would encourage shareholders to visit the Company’s

website at www.stsplc.co.uk as it offers a wealth of

information about the Company. It is regularly updated

and has recently been redesigned. Through the website

you can also subscribe to monthly email updates including

the factsheet which provides portfolio and performance

information. You can also contact the Manager or our

Company Secretary, Juniper Partners, through the website

or by using the email address on page 74 of this report.

Outlook

Much of the focus of financial markets is on the timing

and scale of changes in short term interest rates. We may

be near the peak of the current cycle – there are a myriad

of views. However, whilst the cost of debt may change it

is unlikely that Central Banks will relent on their liquidity

policies as these have to address 14 years of largesse.

Many of the well-publicised issues in the US and other

banking systems recently owe more to the effects of the

quantitative tightening than the higher cost of money.

The rate of inflation may be declining, or be forecast to

do so, but prices are still rising at unfamiliar levels. Your

Manager backs sound well established companies with

managements and processes that have been tested in

many economic circumstances and have stood the test

of time. Whilst we would not make firm predictions as to

what lies ahead we can be confident that we are invested

in companies that have proved their ability to deliver

throughout the cycle and have belief in their ability to

continue to do so.

John Evans

7 June 2023

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 7

Overview Governance Financial review Investor information

We remain confident that the Company

will continue to deliver growing free

cash flow to fund an attractive and

growing income stream as well as long

term capital growth.

As detailed in the Chairman’s statement,

in a tumultuous year for global equity

markets the Company’s NAV declined by

1.8% compared to a return of 0.5% for the

Lipper Global –Equity Global Income Index

comparator. Since the inception of Troy’s

management of the Company the NAV has

risen by 15.3%.

After delivering strong returns in 2022, this year has been a

year of consolidation for the Company and for equity markets.

Rising interest rates to combat inflation as well as the ongoing

war in Ukraine made for a challenging backdrop. The income

account remains robust, however, with the dividend for the

year increasing by 5.5%.

Performance

The last 12 months have demonstrated once again the

power of branded consumer goods. At a time of rapidly

rising interest rates driven by the re-emergence of inflation,

our consumer staples portfolio companies have been able

to raise prices to offset these headwinds. The combination

of well-loved brands, the habit of repeat purchases and

powerful distribution networks enables these companies

to generate attractive and sustainable returns on capital

employed. It is these same competitive advantages that

gives these businesses pricing power. They also benefit from

having limited capital requirements. This strength has been

rewarded by investors over this period as four out of the top

five contributors were consumer staples companies. These

were Unilever, PepsiCo, Philip Morris and Hershey.

The fifth most significant contributor was Swiss healthcare

company, Novartis. This is a high-quality franchise that

remains excellent value. Recent results have been

received well by investors as they re-appraise the steady

if unspectacular growth of this company. The shares have

begun to appreciate after a long spell of dull returns.

The key source of underperformance was our real estate

investments. Of the three which we hold, two – Vonovia

and Boston Properties – were the greatest detractors to

performance over the year. The scale of the rise in interest

rates and the pace that they have risen has been remarkable.

The effect of this change is likely to be felt in the economy

and markets with a lag. The impact on property has been far

more immediate. For each of these businesses we believed

there was a specific reason to invest.

Vonovia is the largest listed owner of German residential

real estate (as well as having some exposure to Sweden and

Austria). With property in Germany valued at a discount to

replacement cost and bolstered by structural factors such

as urbanisation and a trend towards smaller households we

viewed this an attractive asset. This was further supported

by an interest rate that was arguably too low for the German

economy since it is set at the EU level. Unfortunately, these

trends were overwhelmed by the shift in the structure of

interest rates. As detailed on the next page, Vonovia was

subsequently sold and was no longer part of the portfolio at

the year end.

Similarly, we believed Boston Properties to be attractive

owing to its ownership of A grade office property in the

coastal cities of the US. It is our contention that the current

post-COVID norm of hybrid working practices is unlikely to

outlast a more difficult economic environment. However, this

trend reversal is taking time and when combined with a rising

cost of capital caused the shares to decline in value.

Manager’s review

8 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

The next two holdings which detracted from performance

were both in the healthcare sector, broadly defined. Roche,

like Novartis (see previous page) is a high quality Swiss

pharmaceutical company. It also has an excellent diagnostics

business. The underperformance of the shares derives from

a spike in the share price which coincided with the end of

March 2022. It is the retreat from this precipitous high that is

captured in the poor showing over the last 12 months rather

than more worrying operational concerns. The shares remain

excellent value.

Medtronic is a high-quality medical technology franchise

covering a range of therapeutic and diagnostic medical

products. The company suffered during COVID as many

elective procedures were postponed. However, it has been

rather slower to recover from this disruption than we would

like. There have however been some encouraging signs

recently including the approval of a new insulin management

device for diabetics. The shares remain in the portfolio.

Finally, Domino’s Pizza was weak during the year. We continue

to believe this is an excellent business trading at a very

attractive valuation. The last few years have been marred by

friction between the company and the underlying franchisees

as well as several management changes including the loss

of the CEO, for whom they have yet to find a permanent

replacement. Further, investors have worried about the

health of the UK consumer. These concerns have weighed

on the shares. We believe that these problems will ultimately

be solved, and the strategic direction of the business is

becoming clearer. We are patiently waiting for the improving

operational momentum to be reflected in the share price and

it remains a long term investment for the Company.

Portfolio activity

Consistent with Troy’s long term investment approach, activity

within the portfolio has been limited. We established two new

investments, Admiral Group and Texas Instruments funded

from the sale of GSK, Western Union and Vonovia. We also

added to our investments in Nintendo, Reckitt Benckiser and

Link REIT.

Admiral Group (‘Admiral’) is an excellent business.

Dominated by its UK car insurance business, Admiral’s market

leadership is based on expertise in specialist insurance.

This specialisation leads to an extensive data set affording

accurate pricing of risk. As such, and unusually for an

insurance business, the company makes an underwriting

profit over the cycle. This persistent and consistent

profitability allows Admiral to offload the insurance risk

to Munich Re but to retain much of the profitability. Costs

are contained giving the company a very attractive return

profile. The company has limited capital requirements and is

therefore able to pay a healthy dividend.

For a variety of reasons, the performance of GSK towards the

beginning of this period had been strong. These included

the spinning-off of the consumer business (named Haleon)

following a failed bid by Unilever, a change in dividend

policy and US dollar strength (GSK has substantial US dollar

earnings). This provided an attractive time to sell.

Conversely Admiral had been a poor performer. During

COVID, Admiral’s customers had been paying premiums

without being able to use their cars, giving a short-term lift to

profits. This was reflected in a strong share price. As this effect

faded, so too did the company’s valuation. A reallocation of

capital from GSK to Admiral was therefore timely.

Texas Instruments (‘TI’) is a leader in analog semiconductors.

We have spent the last few years patiently building our

semiconductor industry knowledge. TI designs and

manufactures relatively low specification chips which don’t

require the latest manufacturing technology and have

incredibly long shelf lives. While other semiconductor

companies constantly design and manufacture new CPUs

to satisfy the insatiable need for greater computing power,

TI chips work for decades. We believe that roughly half of

TI’s sales derive from chips designed more than ten years

ago. The result is a business with little technological risk and

relatively low capital intensity.

The semiconductor industry has a degree of cyclicality,

however in the case of TI, we consider this risk to be

mitigated by having a conservative balance sheet

and capital allocation policy that rewards long-term

shareholders. Indeed, we believe TI has one of the clearest

frameworks for value creation, as described in the Investor

Overview document on TI’s website. The business is

fantastically profitable, ranking in the 89th percentile of

S&P500 companies in terms of free cash flow margins.

We considered the valuation to be attractive at purchase

including offering us a c.3% prospective dividend yield.

The investment was funded by the sale of Western Union and

the reduction in our investment in ADP.

Finally, we sold Vonovia and re-invested the proceeds in Link

REIT. Link REIT is the largest and, we believe, best managed

real estate investment trust in Asia. The company used its

scale and reputation to be first to raise equity via a rights issue

to offset the problems being felt across the industry from

rising interest rates. We participated in the issue and then

subsequently added to the investment, funded from the sale

of Vonovia. Link REIT now has a low debt profile and is well

placed to acquire distressed assets.

Manager’s review continued

Central Processing Units

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 9

Overview Governance Financial review Investor information

The overall shape of the portfolio is largely unchanged.

Branded consumer goods, healthcare and enterprise

software represent a material proportion of the Company.

Conversely, we have very limited exposure to sectors that we

consider to be more cyclical and require significant capital

investment to operate.

On an underlying revenue basis

the Company has 48.5%

invested in the US, 27.9% in Asia and Emerging Markets (EM),

15.7% in Europe and 7.0% in the UK.

We continue to view the US to be the best economy with the

best companies which is reflected in the significant exposure

we have to that country.

The proportion of revenue coming from Asia and EM may

increase over time. These economies have attractive growth

prospects, in part owing to having much younger populations

(with the important exception of China). Consumer

expenditure is likely to structurally increase over the long

term. Our portfolio company management teams are likely to

allocate further capital to these areas in the coming years to

take advantage of this opportunity.

Our favoured way of gaining exposure to these dynamic

economies is via developed market listed businesses. We

find them to have superior corporate governance and to

demonstrate better capital allocation.

Investment strategy

Equity markets have staged a remarkable recovery from the

lows seen in October 2022. We would caution investors that

this advance may not be markets sounding the economic

“all-clear”. We continue to think that the effect of rapidly

rising rates and the absence of quantitative easing is working

their way through the global economy, albeit with a lag. The

notable inversion of the US yield curve (a situation where

short-term interest rates are higher than longer term interest

rates which usually presages a recession) combined with still

elevated equity market valuations is a time for caution.

To us this optimism is being driven by the reasonable

expectation that inflation and therefore interest rates are

peaking. We fear however that this will simply be the opening

scene of a drama that develops ultimately into recession. It

may be therefore that while this year capital markets had to

contend with rising rates, next year they may have to deal with

declining earnings.

At the same time many of our portfolio companies, notably

in the consumer staples sector, are beginning to benefit from

softening input costs. We are beginning to see the first signs

of expanding gross and operating margins as a result. When

combined with still healthy demand for these repeat-purchase

products we are confident our companies will weather a more

difficult economic environment relatively well.

Further we continue to wait patiently to redeploy capital into

favoured sectors, but which remain, for now, stubbornly too

expensive. If events play out as we have suggested above,

this may be about to change.

We remain confident that the Company will continue to

deliver growing free cash flow to fund an attractive and

growing income stream as well as long term capital growth.

Further we are excited by the opportunities that may become

available in the coming year.

James Harries

7 June 2023

As at 31 March 2023

10 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

By region (excluding cash)

31 March 2023

31 March 2022

North America 52.9 54.2

Europe 41.0 42.1

Asia 6.1 3.7

100.0 100.0

By sector (excluding cash)

31 March 2023

31 March 2022

Consumer staples 39.9 38.7

Information technology 20.2 20.2

Healthcare 12.9 16.9

Consumer discretionary 7.1 6.0

Financials 6.7 4.7

Industrials 6.2 5.7

Real estate 3.9 5.8

Communication services 3.1 2.0

100.0 100.0

By asset class (including cash and borrowings)

31 March 2023

31 March 2022

Equities 106.5 106.1

Cash 0.7 0.4

Borrowings (7.2) (6.5)

100.0 100.0

Largest 10 holdings

31 March 2023

Market value

£000

31 March 2023

% of total

portfolio

31 March 2022

Market value

£000

31 March 2022

% of total

portfolio

British American Tobacco 13,070 5.6 15,683 6.4

Paychex 12,274 5.3 13,724 5.6

Unilever 12,081 5.2 10,158 4.2

PepsiCo 11,984 5.1 10,740 4.4

Reckitt Benckiser 11,824 5.1 10,541 4.3

Philip Morris 10,402 4.4 12,079 4.9

CME Group 9,934 4.2 11,590 4.7

Diageo 9,417 4.0 10,799 4.4

Automatic Data Processing 9,294 4.0 11,348 4.7

Novartis 9,235 3.9 8,341 3.4

Portfolio summary

Portfolio distribution as at 31 March 2023

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 11

Overview Governance Financial review Investor information

Sector Country

Market value

£000

% of total

portfolio

North America 124,002 52.9

Paychex Information technology United States 12,274 5.3

PepsiCo Consumer staples United States 11,984 5.1

Philip Morris Consumer staples United States 10,402 4.4

CME Group Financials United States 9,934 4.2

ADP Information technology United States 9,294 4.0

Microsoft Information technology United States 9,104 3.9

Johnson & Johnson Healthcare United States 7,697 3.3

Cisco Systems Information technology United States 7,201 3.1

Procter & Gamble Consumer staples United States 6,652 2.8

Medtronic Healthcare United States 6,432 2.7

McDonald’s Consumer discretionary United States 5,983 2.6

Fastenal Industrials United States 5,509 2.4

Texas Instruments Information technology United States 5,427 2.3

Hershey Consumer staples United States 4,294 1.8

Accenture Information technology United States 3,857 1.6

Coca-Cola Consumer staples United States 3,269 1.4

Clorox Consumer staples United States 2,694 1.1

Boston Properties Real estate United States 1,995 0.9

Europe 96,267 41.0

British American Tobacco Consumer staples United Kingdom 13,070 5.6

Unilever Consumer staples United Kingdom 12,081 5.2

Reckitt Benckiser Consumer staples United Kingdom 11,824 5.1

Diageo Consumer staples United Kingdom 9,417 4.0

Novartis Healthcare Switzerland 9,235 3.9

Relx Industrials United Kingdom 9,002 3.8

Roche Healthcare Switzerland 7,134 3.0

Admiral Group Financials United Kingdom 5,950 2.5

Domino's Pizza Consumer discretionary United Kingdom 5,407 2.3

Intercontinental Hotels Consumer discretionary United Kingdom 5,253 2.2

Nestle Consumer staples Switzerland 5,191 2.2

Imperial Brands Consumer staples United Kingdom 2,703 1.2

Asia 14,093 6.1

Nintendo Communication services Japan 7,075 3.1

Link REIT Real estate Hong Kong 7,018 3.0

Total portfolio 234,362 100.0

Portfolio holdings

As at 31 March 2023

12 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Business model

The Company, as an investment trust, is a UK closed-end

public limited company which invests in a diversified

portfolio of assets meeting certain tax conditions.

The Company has no employees, and the Board

outsources its entire operational infrastructure to third party

organisations. In particular, the Board appoints and oversees

Troy Asset Management Limited (‘Troy’ or the ‘Manager’) as

independent manager to manage the investment portfolio

and Juniper Partners Limited (‘Juniper Partners’ or the

‘Company Secretary’) to provide AIFM, company secretarial

and administrative services and to operate the discount

control mechanism. The Board sets the Company’s strategy,

decides the appropriate financial policies to manage the

assets and liabilities of the Company, ensures compliance

with tax, legal and regulatory requirements and reports

regularly to shareholders on the Company’s performance.

The directors do not envisage any change to this model in

the foreseeable future.

For more information on investment trusts please visit

www.theaic.co.uk.

Purpose and values

Purpose

The Company’s objective is to achieve rising income and

long-term capital growth which it seeks to deliver for

shareholders through investment in a balanced portfolio

constructed from global equities.

Values

Independence: to act independently in the interests

of shareholders.

Sustainability: to ensure that the companies in which the

Company invests are supportive of good environmental,

social and governance practices and that the Manager

encourages continuous improvement in these areas.

Transparency: to report transparently and accurately to

shareholders on the condition, performance and prospects

of the Company.

Culture

The Board considers that its culture of open debate

combined with strong governance and the benefits of a

diverse Board is central to delivering its purpose, values

and strategy. The Board monitors and reviews its culture

as part of its annual evaluation process and monitors the

culture within the Manager to ensure that it is closely

aligned with that of the Company.

Environmental, social and governance (ESG)

The materiality of environmental and social factors has

increased over recent years as individuals and regulators

have sought to differentiate between companies acting in

a responsible and sustainable way and those which are not.

Companies with strong corporate governance and capable

management teams will be better placed to navigate these

changes and create long-term value for shareholders.

The availability of relevant non-financial information and

data has improved, resulting in a commensurate increase

in the Board and Manager’s focus on ESG factors. As such,

the Company’s duty to investors necessitates that analysis

of material ESG risks and opportunities is integrated into

the investment process which includes engagement with

companies and voting at their AGMs. This is particularly

relevant in relation to climate risk which the Manager

believes to be both material and systemic.

Both the Board and Manager support the principles of

the 2020 UK Stewardship Code, issued by the Financial

Reporting Council (‘FRC’). These principles typify a high

standard of responsible investment and stewardship

practices. Troy is a signatory to the UK Stewardship Code;

a copy of Troy’s Stewardship Report can be viewed at

www.taml.co.uk. Troy has also been a member of the

United Nations’ Principles for Responsible Investment since

September 2016, further demonstrating its commitment to

upholding responsible investment practices.

Research process

Troy’s investment approach is conservative, with attention

always paid to the downside risk of any investment. Troy’s

responsible investment approach aims to ensure alignment

with its investment objectives. Central to this is an

assessment of ESG-related risks and opportunities during

the research process.

Troy may also seek to either mitigate the adverse

impact or improve the positive impact of investments

on the environment or society if doing so is aligned with

improving those investments’ risk and return profile. The

Manager would only do so if this does not run contrary to

the investment objectives of the Company.

Since materiality is dynamic, the Manager does not seek

to limit the categories that ESG encompasses. Rather,

the Manager’s aim is to analyse the ESG factors that

are material to each company. Troy does not employ a

prescriptive checklist nor does it seek to score holdings

on ESG grounds. Instead, the ESG risks and opportunities

relevant to each company are qualitatively assessed. Some

of the ESG factors considered are outlined below, though

this is not an exhaustive list.

Strategic report

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 13

Overview Governance Financial review Investor information

Climate change Natural capital

Product safety

& responsibility Human capital

Corporate

governance

Carbon pricing,

energy mix,

technological

disruption,

net zero alignment

and physical risk.

Natural resource

management,

biodiversity,

pollution, waste and

circularity.

Product use and

harm, chemical use,

data privacy and

cyber security.

Human rights,

workplace culture and

employee treatment

and empowerment.

Board effectiveness,

management

capability, corporate

behaviour and

business ethics.

Climate change

The extreme weather-related events of 2022 reinforced the

gravity with which climate-related calamities can impact

entire economies, communities and the health and stability

of financial markets.

Troy’s long holding periods and the potential for a changing

climate to impact physical assets, supply chains and cause

wide-spread systemic disruptions, heightens the need for

effective climate change mitigation today to minimise the

physical risks at a future date. While the portfolio’s exposure to

high-impact sectors remains limited given the Manager’s bias

towards capital-light and non-cyclical businesses, the Manager

assesses the transition strategies of all investee companies in

order to limit exposure to unmanaged climate-related risks

as we transition towards a lower carbon economy. For those

interested in learning more, Troy recently published its first

Climate Report aligned with the recommendations of the Task

Force for Climate-Related Financial Disclosures (‘TCFD’).

Active ownership (engagement and voting)

Whilst the Manager seeks to invest in companies whose

business strength and corporate governance mean

they generally do not require significant shareholder

intervention, the Manager recognises that engagement is

an important aspect of its fiduciary duty. Engagement is

generally conducted proactively but will occasionally be

more reactive if a company takes a course of action that

the Manager feels is counter to the creation of long-term

shareholder value. The impetus to engage may stem from

a breach by the company of generally accepted business

practice norms, Troy’s proxy voting process or integrated

ESG analysis.

Any engagement would be expected to be constructive,

have a clear objective and be material in nature.

As an example of such engagement, Troy’s Investment

Team carried out climate scoping analysis in early 2021.

This analysis revealed that Fastenal, a global leader in

the distribution of industrial and construction products,

did not have a Paris-aligned carbon reduction target and

lacked a comprehensive climate strategy. While Fastenal

is not a very carbon intensive company itself, its industrial

customers are under increased stakeholder pressure to

reduce their carbon emissions which entails seeking ways

to reduce their footprint along their entire value chain. This

means they increasingly apply pressure on their suppliers,

like Fastenal, to develop a decarbonisation strategy that is

Paris-aligned. Troy engaged with the company, including

meeting senior executives, to encourage Fastenal to

provide better reporting and stronger governance on

climate as well as to set decarbonisation goals that were

supportive of a longer-term transition towards net zero.

This engagement has since been closed as successful

following Fastenal’s publication of a net zero target and

decarbonisation strategy in January 2023.

The Manager considers (proxy) voting an important part

of its stewardship activities and investment process and

aims to use its voting rights to both safeguard the interests

of investors and encourage environmental and social

sustainability (where these objectives are aligned). The

Manager will seek to instruct votes, on behalf of investors,

on all resolutions for which it has voting authority.

Strategy

Investment policy

The Company’s policy is to invest primarily in global

equities. The majority of the Company’s portfolio is

invested in large capitalisation companies (market

capitalisations over £1 billion). The resulting diversified

portfolio of international quoted companies is focused,

typically containing between 30 and 50 high conviction

stocks selected on the basis of detailed research analysis.

The equity portfolio consists of listed shares and is

diversified across a range of holdings.

The Manager has unconstrained discretion to select stocks

except that:

• no more than 10% of the Company’s gross assets may

be invested in listed investment companies (including

UK listed investment trusts);

• the Board must approve in advance all investments

in investment schemes which are sponsored by

the Manager;

• the sum of all holdings over 5% of the total portfolio

must not exceed 40% of the portfolio;

14 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Strategic report continued

• no more than 15% of the total portfolio can be

invested in collective investment schemes, of which no

holding can exceed 10% of the value of the collective

investment scheme; and

• warrants cannot exceed 5% of the total portfolio.

The Company’s exposure to listed equities is set within

a range of 90% to 120% of shareholders’ funds in normal

circumstances.

The Company’s active portfolio management strategy

will inevitably involve separate periods where, at

different times, the Company’s portfolio outperforms and

underperforms the market as a whole.

With effect from November 2020 the performance of the

Company has been measured against the Lipper Global –

Equity Global Income Index which delivered a total return

for the year end 31 March 2023 of 0.5%.

As an investment trust, the Company is able to finance

part of its operations through bank borrowings (gearing).

The Board monitors such borrowings (gearing) closely and

takes a prudent approach. Gearing levels are discussed

by the Board and Manager regularly and reviewed

at every Board meeting. Gearing is limited to 20% of

shareholders’ funds.

Risk management

Risk management is largely focused on managing

investment risk in accordance with the investment policy

guidelines set by the Board. The Board has established risk

parameters for the Manager within which the portfolio will

be managed. The Board reviews, at each board meeting,

the relevant risk metrics and monitors investment risk on an

ongoing basis.

The wider corporate risks relate mainly to the challenges

of managing the Company in an increasingly regulated

and competitive market place. These risks are each actively

managed through mitigation measures which the Board

has put in place and which are discussed on pages 16 and

17 of this report.

Marketing

The marketing strategy seeks to:

• increase demand for the Company’s shares;

• obtain ratings and buy recommendations; and

• grow the profile of the Company across the investment

space.

This is achieved through active promotion by the Manager

and the public relations firm employed by the Company.

The Manager maintains the Company’s website to

provide relevant information relating to performance,

outlook and significant developments as they occur. The

Company regularly produces other engaging materials

for shareholders and potential investors. The Manager

also meets regularly with existing and potential

institutional shareholders.

Financial

The main financial focus is on the management of

shareholder capital; the use of gearing; and the

management of the risks to assets and liabilities of the

Company.

The Board’s principal goal for the management of shareholder

capital is to achieve rising income and long-term capital growth.

Dividend policy

The Company’s dividend policy is to provide shareholders

with a regular income paid quarterly in April, July, October

and January.

Gearing and bank facilities

From time to time the Company finances its operations

through bank borrowings. The Board monitors such

borrowings (gearing) closely and takes a prudent approach.

The Company currently has a multi-currency fixed

credit facility with the Royal Bank of Scotland

International, which expires on 19 September 2023, for

£15,795,000 million drawn in three tranches (£1,500,000,

€4,500,000 and US$12,750,000). The facilities are fully

drawn down in sterling, euros and US dollars with the

intention of increasing income and of improving future

investment returns.

The facility also offers a £10 million revolving credit loan

which expires on 30 September 2023. This was unutilised

at 31 March 2023. Further information on the Company’s

covenants can be found in note 12 on page 58.

As noted in the Chairman’s statement on page 5, the Board is

currently discussing renewal terms to replace this facility with

an appropriately flexible facility which it expects to be in place

when the current facility expires in September 2023.

Duty to promote the success of the Company

The Company is required to provide a statement which

describes how the directors have had regard to the matters

set out in section 172 of the Companies Act 2006 when

performing their duty to promote the success of the

Company, including:

• the likely consequence of any decision in the long-term;

• 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;

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 15

Overview Governance Financial review Investor information

• 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 Board is focused on promoting the long-term success of

the Company and regularly reviews the Company’s long-term

strategic objectives, including consideration of the impact

of the Manager’s actions on the marketability and reputation

of the Company and the likely impact on the Company’s

stakeholders of the Company’s principal strategies.

The main stakeholders in the Company are its shareholders,

the Manager, service providers and debt provider, along with

the wider community in which the Company operates. The

Manager also engages with the investee companies where

appropriate, particularly on performance and ESG issues.

The Board regularly considers its stakeholders at Board

meetings and receives feedback on the Manager’s

interactions with them.

• Shareholders – The Board receives regular reports

from the Manager on shareholder engagement, with

the Manager tasked with maintaining regular and open

dialogue with major shareholders. Directors, primarily

through the Chairman, also meet regularly with major

shareholders to understand their views and to help

inform the Board’s decision-making process. The

Company maintains a website which hosts copies of the

annual and interim reports along with factsheets and

other relevant materials. Shareholders are also invited

to attend the AGM and the annual investment trust

seminar run by the Manager at which they have the

opportunity to speak directly with directors.

• Manager – The Manager’s review on pages 7 to 9 details

the key investment decisions taken during the year. The

Board works closely with the Manager to develop and

monitor its investment strategy and activities, not just to

achieve its investment objective, but also to deliver the

Company’s values of independence, sustainability, and

transparency. The Board receives presentations from

the Manager at every Board meeting to help it exercise

effective oversight of the Manager and the Company’s

strategy. The Management Engagement Committee is

tasked with reviewing the performance of the Manager

at least annually.

• Service providers – The Board seeks to maintain

constructive relationships with the Company’s key

suppliers, either directly or through the Manager or

the Company Secretary, with regular communications

and meetings. A key relationship is with Juniper

Partners, who provide AIFM, company secretarial and

fund administration services, as well as operating the

discount control mechanism. The Company Secretary

is tasked with maintaining a constructive relationship

with other third-party suppliers, on behalf of the

Company. The Management Engagement Committee

conducts an annual review of the performance, terms

and conditions of the Company’s main service providers

to ensure they are performing in line with Board

expectations and providing value for money.

• Debt provider – On behalf of the Board, the

Manager and Juniper Partners maintain a positive

working relationship with The Royal Bank of Scotland

International, the provider of the Company’s loan

facilities, and provides regular updates on business

activities and compliance with its loan covenants.

• Communities and the environment – The Board

expects good governance standards to be maintained

at the companies in which the Company is invested and

reviews the engagement and voting activities which

are undertaken by the Manager. Further details of the

Company’s purpose, values and strategy are outlined

on page 12. The ESG strategy followed by the Manager

is also detailed on pages 12 and 13.

The Board is always mindful of its responsibilities to the

stakeholders of the Company and this forms part of

every Board decision. Specific examples of stakeholder

considerations during the year were:

• Dividends – In line with the Board’s ambition to provide

consistent and sustainably rising dividends over time,

the Company has continued to pay quarterly dividends,

which have increased by 5.5% from 2022 and by 8.8%

since the dividend was rebased in 2021.

• Discount control mechanism – The Board continued the

formal discount control mechanism (‘DCM’) to monitor

the discount/premium levels at which the Company’s

shares are traded. The DCM operates under a policy

whereby shares can only be issued at a premium and

bought at a discount to net asset value. The Board

believes the continued operation of the DCM is very

important for shareholders as it provides liquidity and

reduced discount volatility. Details of shares bought

back/issued can be found in note 13 on page 58.

• Succession planning – In line with the Company’s

tenure policy, Angus Gordon Lennox retired at the

AGM on 4 July 2022. The Board regularly reviews

its composition and succession planning ensuring

that there remains an appropriate level of skills and

experience on the Board to provide an effective

oversight structure for the Company’s operations. As

a result of these considerations, Alexandra Innes was

appointed as a director on 4 April 2022. In addition,

Sarah Harvey assumed the role of Senior Independent

Director and the Board commenced a search for an

additional director. Following a rigorous recruitment

process, Gillian Elcock will be appointed to the Board on

21 September 2023.

16 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Strategic report continued

• Communication – The Board are aware of the changing

nature of the way in which investors hold their shares

and that the majority of investors now hold through

online platforms. The Board are keen to ensure that the

Company remains as accessible as possible to existing

and future investors.

During the year the Company undertook a detailed

marketing review, with the assistance of external

consultants, to better understand investors views of the

Company and the information they wish to receive. As

a result of this review a number of marketing initiatives

have been implemented including a refreshed website

and a wider distribution plan to ensure all investors

have access to the relevant information on the

Company regardless of how they hold their shares.

• Name change – As part of the wider marketing project

and the aim to improve the marketability of the shares

the Board also undertook a detailed review of the

Company’s name. The conclusion of this review was

that the name be changed to STS Global Income &

Growth Trust. Further explanation of the rationale for

the name change can be found on page 5.

Principal developments and future prospects

The principal business developments over the course of

the year and an update on the future prospects for the

Company are set out in the Chairman’s statement on

pages 4 to 6 and the Manager’s review on pages 7 to 9.

The future performance of the Company depends upon the

success of the Company’s investment strategy in the light of

economic factors and equity markets developments.

Principal risks and uncertainties

Risk and mitigation

The Company’s business model is longstanding and

resilient to most of the short-term uncertainties that it

faces, which the Board believes are effectively mitigated by

its internal controls and the oversight of the Manager, as

described in the table below. The principal and emerging

risks and uncertainties are therefore largely longer term

and driven by the inherent uncertainties of investing in

global equity markets.

The Board believes that it is able to respond to these

longer-term risks and uncertainties with effective mitigation

so that both the potential impact and the likelihood

of these seriously affecting shareholders’ interests are

materially reduced.

Operational and management risks along with a review of

potential emerging risks, are regularly monitored at Board

meetings and the Board’s planned mitigation measures

for the principal and emerging risks are described in the

table below. As part of its annual strategy meeting, the

Board carries out a robust assessment of the principal and

emerging risks facing the Company, including those that

would threaten its business model, future performance,

solvency or liquidity.

The Board maintains a risk register and also carries out a

detailed risk analysis as part of its annual strategy meeting.

The Board has identified the following principal and

emerging risks to the Company:

Principal risks Mitigation and management

Investment strategy and objectives – Pursuing

an investment strategy to fulfil the Company’s

objective which the market perceives to be

unattractive or inappropriate may lead to

reduced returns for shareholders and, as a

result, the Company may become unattractive

to investors, leading to decreased demand for

its shares and a widening discount.

The Board formally reviews the Company’s objective and strategy on an

annual basis, or more regularly if appropriate. The Board also receives

updates at each Board meeting from the Manager with regards to the

portfolio and its performance; receives broker updates on the market; and

is updated on the make-up and movements in the shareholder register.

In addition, the Company operates a discount control mechanism; the

marketing and distribution activity is actively reviewed; and the Board and

Manager proactively engage with shareholders on an ongoing basis.

Investment management – If the longer-term

performance of the investment portfolio

does not deliver income and capital returns

in line with the investment objective and/

or consistently underperforms market

expectations, the Company may become

unattractive to investors.

The Board manages the risk of investment underperformance by relying

on the Manager’s stock selection skills within a framework of diversification

and other investment restrictions and guidelines.

The Board monitors the implementation and results of the investment

process with the Manager (who attends all Board meetings) and reviews

data that shows statistical measures of the Company’s risk profile. Should

investment underperformance be sustained despite the mitigation

measures taken by the Manager, the Board would assess the cause and be

able to take appropriate action to manage this risk.

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 17

Governance Financial review Investor informationOverview

Principal risks Mitigation and management

Macro-economic and market risk – The

Company’s portfolio is invested in listed

equities and is therefore exposed to events

or developments which can affect the

general level of share prices, including

inflation or deflation, economic recessions

and movement in interest rates and

currencies which could cause losses within

the portfolio and increasing finance and

operational costs of the Company.

The Board receives regular updates on the Company’s portfolio and

the investment environment in which the Manager is operating. An

explanation of the different components of market risk and how they are

individually managed is contained in note 18 to the financial statements on

pages 60 to 63.

Gearing and leverage risk – The Company

may borrow money for investment purposes.

While this has the potential to enhance

investment returns in rising markets, in falling

markets the impact could be detrimental

to performance. If borrowing facilities are

not renewed, the Company may have to sell

investments to repay borrowings.

The Company’s gearing is maintained at a conservative and manageable

level. All borrowing facilities require prior approval of the Board and

actual borrowing levels are discussed by the Board and Manager at

every meeting. Details of the Company’s current borrowings and unused

facilities can be found in note 12 to the financial statements on page 58.

The Company’s investments are in quoted securities that are readily

realisable and the Board regularly reviews the liquidity level of the

portfolio in order to assess how quickly, if necessary, the borrowings could

be repaid. The Board, through the Company Secretary, maintains an open

and constructive dialogue with the Company’s lenders to ensure that any

renewal of the facilities is co-ordinated well in advance of the expiration of

any existing facilities.

Discount risk – The discount/premium at

which the Company’s shares trade relative to

its net asset value can fluctuate. The risk of a

widening discount is that it may undermine

investor confidence in the Company.

The Company operates a discount control mechanism which aims to

ensure, in normal market conditions, the Company’s shares trade, on a

consistent basis, at or very close to net asset value. The Board reviews the

operation of the discount control mechanism at each Board meeting and

maintains a regular dialogue with Juniper Partners (which manages the

policy on behalf of the Board) in respect of any issues or buybacks under

the policy.

Operational risk – The Company is

dependent on third parties for the provision

of all services and systems. Any fraud, control

failures, cyber threats, business continuity

issues at, or poor service from, these third

parties could result in financial loss or

reputational damage to the Company.

The Board carries out an annual evaluation of its service providers and

gives regular feedback to the Manager and Company Secretary through

the Management Engagement Committee. The Board receives and

reviews control reports from all service providers where appropriate.

Periodically, the Board requests representatives from third party service

providers to attend Board meetings to give the Board the opportunity to

discuss the controls that are in place directly with the third-party providers.

Accounting, legal and regulatory – In order

to continue to qualify as an investment

trust, the Company must comply with

the requirements of section 1158 of the

Corporation Tax Act 2010. Breaches of the

UK Listing Rules, the Companies Act or

other regulations with which the Company is

required to comply, could lead to a number

of detrimental outcomes.

The Board considers that, given the regular oversight of this risk carried

out by the Company Secretary and reviewed by the Board, the likelihood

of this risk occurring is minimal. The Audit and Risk Committee regularly

reviews the eligibility conditions and the Company’s compliance against

each, including the minimum dividend requirements and shareholder

composition for close company status.

The Board receives reports from the Manager and Juniper Partners

in its capacity as AIFM and Company Secretary to enable it to ensure

compliance with all applicable rules.

Climate change risk – There is increasing

awareness of the challenges and emerging

risks posed by climate change.

The investment process is focused on ESG issues and, as set out on

pages 12 and 13, this includes an assessment of the potential impact of

climate change. Overall the specific potential effects of climate change are

difficult, if not impossible to predict and the Board and Manager continue

to monitor material physical and transition risks and opportunities as part

of the investment process.

18 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Strategic report continued

Principal risks Mitigation and management

Geopolitical risk (emerging risk) – The

impact of geopolitical events could result in

losses to the Company.

Geopolitical risks have always been an input into the investment process.

This risk area is now highlighted as a result of the Russian invasion of

Ukraine, with the resultant effects on global trade and volatility in asset

prices. Further information on this risk and its potential impact on the

Company is set out in the Chairman’s statement and the Manager’s review.

The Board seeks to mitigate this risk through maintaining a broadly

diversified global equity portfolio with appropriate asset and geographical

exposure. The Board and the Manager continue to monitor the ongoing

heightened geopolitical risk and are in regular communication on

emerging matters which may impact on the portfolio.

Following the ongoing assessment of the principal and emerging risks facing the Company, and its current position, the

Board is confident that the company will be able to continue in operation and that the processes of internal control that the

Company has adopted and oversight by the Manager and the Company Secretary continues to be effective.

Key performance indicators

The Board provides certain key performance indicators (‘KPIs’) to monitor and assess the performance of the Company. The

principal KPIs are:

1. Performance comparison

The NAV total return to 31 March 2023 was (1.8)% against

the Lipper Global-Equity Global Income Index total return

of 0.5%, resulting in an underperformance of 2.3% (2022:

overperformance of 6.0%).

2. Growth in net assets

The growth in net assets is measured by the growth in

the cum income NAV per share during the financial year.

The Company’s cum income NAV per share fell to 220.37p

at 31 March 2023, from 230.75p as at 31 March 2022, a

decrease of 4.5% (2022: increase of 13.8%).

The Chairman’s statement, on pages 4 to 6, and the

Manager’s review, on pages 7 to 9, provide more

information on performance.

3. Ongoing charges

The Board monitors the ongoing charges to ensure it stays

at or below 1.0%. The ongoing charges for the year ended

31 March 2023 were 0.94% (2022: 0.93%) and therefore the

KPI was achieved.

4. Discount

In November 2020, the Board introduced the discount

control mechanism with the aim to ensure, that in normal

market conditions, the Company’s shares trade, on a

consistent basis, at or very close to NAV. At 31 March 2023,

the share price was at a discount of 2.89% (31 March 2022 –

premium of 0.11%). The average premium for the year was

0.5% (2022: discount of 1.6%).

The successful implementation of this policy sees shares

being purchased and issued by the Company on a

consistent basis and the intention is to grow the Company

in real terms through share issuances over time.

5. Rising income

The Board aims to achieve rising income through

investment in a balanced portfolio constructed from

global equities.

The annual dividend for the year ended 31 March 2023 was

6.20p, an increase of 5.5% on the annual dividend for the

year ended 31 March 2022 of 5.875p.

Summary of KPIs Target Actual Achieved

1. Performance comparison Total return to exceed the Lipper Global –

Equity Global Income Index

(2.3)%

2. Growth in net assets Growth in cum income NAV (4.5)%

3. Ongoing charges Below 1.0% 0.94%

4. Average premium/(discount) At or very close to NAV 0.5%

5. Rising income Dividend per share growth 5.5%

Approved by the Board

John Evans

7 June 2023

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 19

Overview Governance Financial review Investor information

Board of directors

John Evans

Independent Non-Executive Director – Chairman

John has over 40 years of experience in the investment

trust sector as both a manager and subsequently as a non-

executive director. In 1990 John was one of the founders

of Aberforth Partners, a specialist investment management

firm that invests in UK smaller quoted companies, generally

on behalf of institutional investors. Following his retirement

from Aberforth, John has been a director and Chair of a

number of investment trusts. In addition to being Chair of

STS Global Income & Growth Trust he is currently Chair of

JP Morgan Mid Cap Investment Trust. He joined the Board

of STS Global Income & Growth Trust in February 2016 and

was appointed Chairman in November 2019.

Mark Little

Independent Non-Executive Director – Chairman of the

Audit and Risk Committee

Mark has an extensive knowledge of the investment

industry, as the former Managing Director of Barclays

Wealth Scotland and Northern Ireland. Mark held this

position for eight years until 2013 when he retired. Prior to

this, Mark held the position of Global Head of Automotive

Research at Deutsche Bank where he managed and

coordinated its global automotive research product. He is

currently a non-executive director of Majedie Investments

plc, BlackRock Smaller Companies Trust plc, abrdn Equity

Income Trust plc and acts as a consultant to Lindsays LLP.

He was appointed to the Board of STS Global Income &

Growth Trust in October 2014.

Sarah Harvey

Senior Independent Director – Chair of the Marketing

and Communications Committee

Sarah has extensive experience in corporate strategy,

product and technology, marketing and operations. Sarah

has worked in general management roles for a variety of

fast growing, international scale up businesses including

Prodigy Finance Ltd, Square Inc and Tough Mudder

Inc and now advises a number of mid-cap and scale up

firms. Her career began with Bain & Company before

working in strategy on a range of international projects

for businesses and not for-profit organisations. She was

appointed to the Board of STS Global Income & Growth

Trust in October 2018.

Angus Cockburn

Independent Non-Executive Director – Chairman of

the Management Engagement Committee

After six years as Group Chief Financial Officer of Serco

Group plc, Angus stepped down from the Serco Board

in April 2021. Angus is a chartered accountant with

considerable experience gained in a variety of sectors. He

has an MBA from the IMD Business School in Switzerland,

is an Honorary Professor at the University of Edinburgh

and a member of the Institute of Chartered Accountants

of Scotland. Prior to joining Serco Group plc in 2014

Angus held roles as Chief Financial Officer and Interim

Chief Executive of Aggreko plc, Managing Director of

Pringle of Scotland and held senior finance positions

at PepsiCo Inc including Regional Finance Director for

Central Europe. Angus is currently Senior Independent

Director and Chair of the Audit Committee of Ashtead

Group plc, a non-executive director of The Edrington

Group Limited and Chairman of James Fisher and Sons

Limited. He was appointed to the Board of STS Global

Income & Growth Trust in May 2021.

20 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Alexandra Innes

Independent Non-Executive Director – Chair of the

Nomination and Remuneration Committee

Alexandra is a non-executive Committee Member

at the Bank of England, a non-executive adviser and

member of the Group Executive Board at Knight Frank

LLP, and a non-executive director of Dowlais Group Plc,

Waverton Investment Management Group Ltd, Schroder

Real Estate Investment Trust Ltd, and the UCI Cycling

World Championships Ltd, as well as being the Senior

Independent Director at Facilities by ADF plc. Alexandra’s

international executive career spanned investment banking,

global capital markets, and investment management, most

latterly as Managing Director at Barclays plc, and prior

to that as Director of Global Markets at Bank of America

Merrill Lynch. She is a Fellow of Chapter Zero, holds an MA

Hons Economics from Cambridge University, is a Chartered

Member of the CISI (MCSI), a Green and Sustainable

Finance Professional, Chartered Banker Institute (CCBI

GSFP), and holds the CFA Certificate in ESG Investing.

She was appointed to the Board of STS Global Income &

Growth Trust in April 2022.

Gillian Elcock

Gillian will be appointed to the Board of STS Global

Income & Growth Trust on 21 September 2023

Gillian is the founder of Denny Ellison, an independent

investment research and training company, and was its

Managing Director for ten years. Prior to this, she worked

as an equity research analyst for several years at Putnam

Investments and Insight Investment. She was named a

finalist in the ‘Investment Analyst of the Year’ category

of the Women in Investment Awards 2018. She started

her career as a management consultant at The Boston

Consulting Group. Gillian is a Non-Executive Director of

International Biotechnology Trust plc. She is also a member

of the Board of the CFA UK and was previously Chair of

its Networks Steering Committee and a member of its

Nominating Committee. Gillian holds an MBA from the

Harvard Business School and MEng and BSc degrees from

the Massachusetts Institute of Technology.

Board of directors continued

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 21

Report of the directors

The directors present their report and the

audited financial statements of the Company

for the year ended 31 March 2023

Status

The Company carries on business as an investment trust

and its shares have a premium listing on the London Stock

Exchange. The Company has been approved by the HM

Revenue & Customs as an investment trust in accordance

with section 1158 of the Corporation Tax Act 2010 and the

Investment Trust (Approved Company) (Tax) Regulations

2011. The Company will continue to conduct its affairs

in a manner which will enable it to retain this status. The

Company is domiciled in the UK and is an investment

company within the meaning of section 833 of the

Companies Act 2006. It is not a close company for taxation

purposes.

Revenue and dividends

The net revenue return for the year after expenses, interest

and taxation was £6,341,000 (2022: £5,854,000), equivalent

to a return of 6.34p per share (2022: 5.82p). Interim

dividends totalling 4.35p have been paid during the year.

The directors recommend a fourth interim dividend of

1.85p per share to be paid on 14 July 2023 to holders

on the register at the close of business on 16 June 2023,

making a total for the year of 6.20p (2022: 5.875p).

Share capital

As at 31 March 2023, the Company had 99,483,575 ordinary

shares of one pence each in issue (2022: 99,525,075)

and 22,815,573 ordinary shares held in treasury (2022:

22,774,073). The Company repurchased 1,616,500 shares

into treasury at a cost of £3,586,000 during the year. This

represented 1.6% of the issued share capital at the year

end and had a nominal value of £16,165. During the year

1,575,000 shares held in treasury were reissued for net

proceeds of £3,631,000.

A special resolution to renew the authorities to issue and

repurchase shares will be put to shareholders for approval

at the AGM.

Directors

The Board currently consists of five non-executive

directors. The names and biographies of the current

directors are set out on pages 19 and 20, indicating their

range of experience as well as length of service. All held

office throughout the year and up to the date of this report,

except for Alexandra Innes who was appointed on 4 April

2022. As noted in the Chairman’s statement on page 5,

Gillian Elcock will be appointed as a non-executive director

on 21 September 2023.

In line with best practice all directors stand annually for

either election or re-election at the AGM. New directors

automatically offer themselves for election at the AGM

immediately following their appointment.

The Board considers that it has a balance of skills and

experience relevant to the leadership and direction of the

Company and that all directors contribute effectively. The role

of the Board and its governance arrangements are set out in

the Company’s corporate governance statement on pages 28

to 34 which forms part of this report of the directors.

Management arrangements

The Manager

The Company appointed Troy Asset Management Limited

as investment manager on 12 November 2020. The Board

closely monitors investment performance and the Manager

attends each Board meeting to present a detailed update

to the Board. The Board uses this opportunity to challenge

the Manager on any aspect of the portfolio’s management.

AIFM

The Company appointed Juniper Partners Limited as

its alternative investment fund manager with effect from

12 November 2020. For its services as AIFM, Juniper

Partners receive a fee of 0.015% of the net assets per annum,

subject to a minimum fee of £64,000.

The AIFM has formally delegated the portfolio

management to Troy as detailed below.

Investment management delegation agreement

As Manager, Troy receives an annual management fee of

0.65% of the net assets of the Company up to £750 million,

0.55% of net assets between £750 million and £1 billion

and 0.50% above £1 billion. Troy also made an ongoing

annual contribution to the cost of the company secretarial

and administration services provided by Juniper Partners.

The full investment management fee payable under the

investment management delegation agreement has been

payable since 12 November 2021.

Following an initial term of three years, the investment

management delegation agreement shall be terminable by

either party serving six months’ notice. No compensation

is payable to the Manager in the event of termination of

the contract over and above payment in respect of the

required minimum notice.

Financial review Investor informationOverview Governance

22 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Report of the directors continued

Continued appointment of the Manager

The Board, through the work of the Management

Engagement Committee, conducts an annual performance

appraisal of the Manager against a number of criteria,

including operational performance, investment

performance, investment management fees and other

contractual considerations.

Following the review by the Management Engagement

Committee outlined on page 32, the Board considers the

continuing appointment of the Manager to be in the best

interests of the shareholders at this time.

As at 31 March 2023 James Harries had an interest in

100,000 shares of the Company. Tomasz Boniek, Assistant

Manager, had an interest in 15,974 shares of the Company.

Company secretarial, accounting and administration

Juniper Partners provides company secretarial,

accounting and administration services to the Company.

Juniper Partners also operates the Company’s discount

control mechanism.

Depositary and custodian

JP Morgan Europe Limited is the Company’s depositary

and the custodian is JP Morgan Chase Bank N.A. The

depositary’s responsibilities include cash monitoring,

safe keeping of the Company’s financial instruments and

monitoring the Company’s compliance with investment

limits and leverage requirements. The depositary has

delegated the safe keeping function to the custodian.

Shareholder analysis

% of issued

share capital at

31 March 2023

% of issued

share capital at

31 March 2022

Wealth managers 55.1 55.0

D2C Platform 26.9 26.8

Institution 5.0 5.1

IFA Platform 1.3 1.1

Other 11.7 12.0

100.0 100.0

Source: RDIR

Substantial interests

During the year to 31 March 2023 the Company received

notification in accordance with the FCA’s Disclosure

Guidance and Transparency Rule 5.1.2R of the following

interests in the voting rights attaching to the Company’s

issued share capital:

As at 31 March 2023 No. of shares

% issued

share capital

Rathbone Investment

Management 12,964,585 13.0

Since the year end and up to the date of this report, the

Company has been notified of the following:

No. of shares

% issued

share capital

Rathbone Investment

Management 12,884,803 13.0

As at 6 June 2023, the last practicable date prior to the

printing of this report, the Company has 98,508,575

ordinary shares in issue (excluding treasury shares).

Shareholder and voting rights

Each ordinary shareholder is entitled to one vote on a

show of hands and, on a poll, to one vote for every share

held. The ordinary shares carry a right to receive dividends

which are declared from time to time by the Company. On

a winding-up, after meeting the liabilities of the Company,

any surplus assets would be paid to ordinary shareholders

in proportion to their shareholdings.

There are no restrictions on the transfer of ordinary shares

in the Company other than certain restrictions which may

from time to time be imposed by law (for example, insider

trading law) and there are no special rights attached to

any of the ordinary shares. The Company is not aware of

any agreements between shareholders which may result in

restrictions on the transfer of ordinary shares or the voting

rights attached to them.

Corporate governance statement

The Company’s corporate governance statement is set

out on pages 28 to 34 and forms part of this report of

the directors.

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 23

Financial review Investor informationOverview Governance

Voting policy

The Company has given discretionary voting powers to Troy.

With respect to voting on behalf of clients, Troy’s policy is to:

• vote at all general meetings of companies in which its

clients are invested;

• ensure in all situations that the economic interests of its

clients are paramount; and

• vote consistently on behalf of all clients who are

invested in the particular company.

The directors are aware that Troy gives consideration to

operational performance, corporate social responsibility

and corporate governance issues, among many other

factors, when investment decisions are taken.

The Board has noted Troy’s adoption of the 2020 FRC

Stewardship Code, and a copy of the Manager’s policies

and voting records can be found at www.taml.co.uk.

Disclosure of information to the auditor

As required by section 418 of the Companies Act 2006

each of the directors of the Company at the time when this

report was approved, confirms:

• so far as each of the directors is aware, there is no

relevant audit information (as defined in the Companies

Act) of which the Company’s auditor is unaware; and

• each of the directors has taken all the steps that they

ought to have taken as a director in order to make

themselves aware of any relevant audit information (as

defined) and to establish that the Company’s auditor is

aware of that information.

Listing Rule 9.8.4R

Listing Rule 9.8.4R requires the Company to include certain

information in a single identifiable section of the Annual

Report or a cross reference table indicating where the

information is set out. The directors confirm that there are

no disclosures to be made in this regard.

Greenhouse gas emissions

As an externally managed investment company with no

employees, the Company’s greenhouse gas emissions

are negligible. Streamlined Energy and Carbon Reporting

applies to all large companies. However, as the Company

has not consumed more than 40,000 kWh of energy

during the past year, it qualifies as a low energy user and

is exempt from reporting under these regulations.

Going concern status

The Company’s business activities, together with the

factors likely to affect its future development, performance

and position are set out in the Chairman’s statement,

Manager’s review, Strategic report and the Report of the

directors.

The financial position of the Company as at 31 March

2023 is shown on the statement of financial position on

page 49. The statement of cash flow of the Company is

set out on page 51. Note 18 on pages 60 to 63 sets out

the Company’s risk management policies, including those

covering market price risk, liquidity risk and credit risk.

The Company has a one year revolving credit facility for

£10,000,000 which expires in September 2023, which was

undrawn at 31 March 2023. In addition, the Company has

a multi-currency fixed facility, which expires in September

2023, in three tranches of £1,500,000, €4,500,000 and

US$12,750,000, all of which were fully drawn down at the

year-end date. Discussions are ongoing in relation to

the renewal of the borrowing facilities. Should they not

be renewed then the Company has adequate financial

resources in the form of readily realisable listed securities

and as a result the directors assess that the Company

is able to continue in operational existence without

the facilities.

In accordance with the 2019 AIC Code of Corporate

Governance, the directors have undertaken a rigorous

review of the Company’s ability to continue as a

going concern. The Company’s assets consist of a

diverse portfolio of listed equity shares which, in most

circumstances, are realisable within a very short timescale.

The directors are mindful of the principal and emerging

risks and uncertainties disclosed on pages 16 and 17.

They have reviewed revenue forecasts (adjusted for

various sensitivities) and they believe that the Company

has adequate financial resources and a suitably liquid

investment portfolio to continue its operational existence

for the foreseeable future, and at least for the period to

31 March 2025, which is at least 12 months from the date

the financial statements are authorised for issue.

24 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Report of the directors continued

Viability statement

The Company’s business model is designed to achieve

rising income and long-term capital growth through

investment in a balanced portfolio constructed from

global equities unconstrained by geography, sector, stock

or market capitalisation. The business model is based

on having no fixed or limited life provided global equity

markets continue to operate normally. The Board has

assessed its viability over a five year period as it believes

this is an appropriate period over which it does not expect

there to be any significant change to the principal risks

and adequacy of the mitigating controls in place. The

Board considers that this reflects the minimum period

which should be considered in the context of its long-term

objective but one which is limited by the inherent and

increasing uncertainties involved in assessment over a

longer period.

In making this assessment the directors took comfort

from the results of a series of stress tests that considered

the impact of severe market downturn scenarios on the

Company’s financial position. The directors also considered

the following risks to its ongoing viability:

• the principal and emerging risks and uncertainties and

the mitigating actions set out on pages 16 and 17;

• the mitigation measures which key service providers

including the Manager have in place to maintain

operational resilience;

• the challenges posed by climate change;

• the ongoing relevance of the Company’s investment

objective in the current environment;

• the level of income forecast to be generated by the

Company and the liquidity of the Company’s portfolio;

• the level of fixed costs and debt relative to its liquid

assets; and

• the expectation is that the current portfolio could

be liquidated to the extent of 97.6% within three

trading days.

Based on this assessment, the Board has a reasonable

expectation that the Company will be able to continue in

operation and meet its liabilities as they fall due over the

next five years.

Post balance sheet events

Since 31 March 2023, there are no commitments/

contingent liabilities and post balance sheet events which

would require the adjustment of or disclosure in the

financial statements.

Performance, outlook and trends likely to

affect future performance

Please refer to the Chairman’s statement on pages 4 to 6

and the Manager’s review on pages 7 to 9 for an update

on the performance of the Company over the year and

outlook for 2023, together with information on the trends

likely to affect the future performance of the Company.

AGM

The AGM of the Company will be held at 2.00pm on

20 September 2023, at 28 Walker Street, Edinburgh EH3 7HR.

Shareholders are encouraged to vote by proxy. If shares

are not held directly, for example either through a platform

or a wealth manager, investors are encouraged to arrange

for their nominee to vote on their behalf. Questions to the

AGM may be written on the form of proxy in the space

provided, and a written response will be posted on the

Company’s website following the meeting. The Notice of

AGM is included on pages 70 to 73. Resolutions relating to

the following items of business will be proposed:

Remuneration report – ordinary resolution

In accordance with the provisions of the Companies Act

2006 the directors’ remuneration report will be put to

an annual shareholder vote by ordinary resolution. The

vote is advisory in nature and is in respect of the overall

remuneration package which is in place for directors

of the Company, and not specific to individual levels

of remuneration.

Remuneration policy – ordinary resolution

The Company seeks approval of the directors’

remuneration policy every three years. The policy was

last approved at the annual general meeting held in 2020

and is therefore due for approval again at the upcoming

AGM. Resolution 3, which is an ordinary resolution, seeks

approval of the policy which is set out in detail on page 35.

Dividend policy – ordinary resolution

As a result of the timing of the payment of the Company’s

quarterly dividends in January, April, July and October,

the Company’s shareholders are unable to approve a final

dividend each year. As an alternative the Board intend to

put the Company’s dividend policy to shareholders for

approval on an annual basis.

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 25

Financial review Investor informationOverview Governance

Resolution 4, which is an ordinary resolution, relates to

the approval of the Company’s dividend policy which is

as follows:

Dividends on the ordinary shares are payable quarterly in

January, April, July and October. The payment of dividends

in accordance with this dividend policy is subject always

to market conditions and the Company’s financial position

and outlook.

Election and re-election of directors – ordinary

resolutions

Biographical detail of the directors can be found on

pages 19 and 20. In accordance with the principles of good

governance set out in the UK Corporate Governance Code

all directors who will continue following the AGM will seek

re-election. In proposing the election and re-election of the

directors, the Chairman has confirmed that, following the

most recent evaluation, each director continues to make

an effective and valuable contribution to the Board and

demonstrates commitment to their role.

Aggregate directors’ remuneration – ordinary

resolution

The articles of association provide that directors’ fees shall

not, in aggregate, exceed £200,000 per annum. Although

there are currently no plans to make any further changes to

the levels of fees paid to the non-executive directors, save

for those increases disclosed in the remuneration report, the

Board wish to propose an increase to the fee limit contained

in the articles of association to reflect the increased size

of the Board and to allow for the recruitment of additional

non-executive directors as part of the continued refreshment

of the Board. It is proposed that the fee limit be increased to

£250,000 per annum in aggregate. Directors’ remuneration

will continue to be paid in accordance with the approved

directors’ remuneration policy.

Allotment of shares – ordinary resolution

Section 551 of the Companies Act 2006 provides that the

directors may not allot new shares without shareholder

approval. Resolution 13 seeks to renew the directors’

authority to allot shares up to a maximum aggregate

nominal amount of £328,362 (being an amount equal

to one third of the issued share capital of the Company

(excluding treasury shares) as at 6 June 2023, being the

last practicable date before the date of this document).

The Board intends to exercise this power only once the

number of shares held by the Company in treasury is not

sufficient to support share issuance by the Company.

As at 6 June 2023, being the last practicable date prior

to the publication of this document, the Company held

23,790,573 ordinary shares in treasury, representing

approximately 24.2% of the Company’s issued share capital

(excluding treasury shares).

The authority will expire on 30 September 2024 or, if

earlier, at the AGM of the Company to be held in 2024,

unless previously cancelled or varied by the Company in

general meeting.

Disapplication of statutory pre-emption rights –

special resolution

Resolution 14 proposes as a special resolution to continue

the directors’ authority under sections 570 and 573

of the Companies Act 2006 to allot shares for cash in

certain circumstances otherwise than pro rata to all the

shareholders up to an aggregate nominal amount of

£244,598 (representing 20% of the Company’s issued share

capital, including treasury shares as at 6 June 2023, the

latest practicable date before publication of the accounts).

Any issue of shares would be made in accordance with

the Company’s articles of association. The directors issue

new ordinary shares or re-issue shares from treasury only

when they believe it is advantageous to the Company’s

shareholders to do so and for the purposes of operating

the Company’s discount control mechanism. Any such

issue of shares would only be undertaken at a premium to

the NAV at the time of dealing. In no circumstances would

such issue of new ordinary shares or re-issue of shares from

treasury result in a dilution of the net asset value per share.

For the purposes of this resolution, allotment of shares

includes the sale of treasury shares. As at 6 June 2023,

being the last practicable date prior to the publication

of this document, the Company held 23,790,573 ordinary

shares in treasury, representing approximately 24.2% of the

Company’s issued share capital (excluding treasury shares).

Purchase of own shares – special resolution

Each year the directors seek authority from shareholders

to purchase the Company’s own shares. The directors

recommend that shareholders renew this authority by

passing resolution 15.

Any shares purchased pursuant to this authority may be

automatically cancelled or held in treasury pursuant to the

Companies (Acquisition of own shares) (Treasury shares)

Regulations 2003. Resolution 15 specifies the maximum

number of shares that may be acquired being 14.99% of

the issued share capital as at 6 June 2023, being the last

practicable date prior to the publication of this document,

and the maximum and minimum prices at which they may

be bought and, if passed, would lapse at the Company’s

AGM in 2024.

26 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Report of the directors continued

The main effect of any share buybacks (whether for

cancellation or to be held in treasury) will be to enhance

the net asset value of the remaining ordinary shares, as the

shares will only be acquired at a cost that is less than their

net asset value.

Purchases can provide liquidity for shareholders wishing

to sell their ordinary shares and may have a beneficial

effect on the discount to their net asset value at which the

ordinary shares currently trade. The purpose of holding

some shares in treasury is to allow the Company to re-issue

those shares quickly and cost-effectively, thus providing the

Company with greater flexibility in the management of its

capital base. Whilst in treasury no dividends are payable on

or voting rights attached to the shares.

Purchase by the Company of its own shares will be

funded either by using available cash resources, by selling

investments in the portfolio or through borrowings. During

the year ended 31 March 2023, the Company bought

back 1,616,500 ordinary shares to be held in treasury. As at

31 March 2023, the Company holds 22,815,573 shares in

treasury representing 22.9% of the issued share capital of

the Company. As at 6 June 2023 being the last practicable

date before publication of the accounts, the Company

holds 23,790,573 shares in the treasury representing 24.2%

of the issued share capital of the Company (excluding

treasury shares).

Notice period for general meetings – special

resolution

The Company’s articles of association enable the Company

to call general meetings (other than an AGM) on 14 clear

days’ notice. In order for this to be effective, shareholders

must also approve annually the calling of meetings other

than AGMs on 14 days’ notice. Resolution 16 will be

proposed at the AGM to seek such approval. The approval

will be effective until the Company’s next AGM, when it is

intended that a similar resolution will be proposed.

The Company meets the requirements for electronic

voting under the Companies Act 2006, offering facilities

for all shareholders to vote by electronic means. The Board

believes it is in the best interests of shareholders for the

shorter notice period to be available to the Company,

although it is intended that this flexibility will be used only

for early renewals of the Board’s authority to issue new

shares or re-issue shares from treasury and only where

merited in the interests of shareholders as a whole.

Recommendation

The directors believe all the resolutions proposed are in

the best interests of the Company and the shareholders as

a whole and recommend all shareholders to vote in favour

of all the resolutions.

The results of the votes on the resolutions at the AGM will

be published on the Company’s website www.stsplc.co.uk.

Statement of directors’ responsibilities

The directors are responsible for preparing the annual

report and the financial statements in accordance with

applicable law and regulations.

Company law requires the directors to prepare financial

statements for each financial year. Under that law the

directors have elected to prepare the financial statements

in accordance with United Kingdom Generally Accepted

Accounting Practice (United Kingdom Accounting

Standards and applicable law), including Financial

Reporting Standard 102 ‘The Financial Reporting Standard

applicable in the UK and Republic of Ireland’ (“FRS102”).

Under company law the directors must not approve the

accounts unless they are satisfied that they give a true and

fair view of the state of affairs of the Company and of the

profit or loss of the Company for that period. In preparing

these financial statements, the directors are required to:

• select suitable accounting policies in accordance with

section 10 of FRS102, and then apply them consistently;

• make judgments and accounting estimates that are

reasonable and prudent;

• present information, including accounting policies, in

a manner that provides relevant, reliable, comparable

and understandable information;

• provide additional disclosures when compliance

with specific requirements in FRS102 is insufficient to

enable users to understand the impact of particular

transactions, other events and conditions on the

Company financial position and financial performance;

• state whether applicable UK Accounting Standards,

including FRS102, have been followed, subject to any

material departures disclosed and explained in the

financial statements; and

• prepare the financial statements on the going concern

basis unless it is inappropriate to presume that the

Company will continue in business.

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 27

Financial review Investor informationOverview Governance

The directors are responsible for keeping adequate

accounting records that are sufficient to show and explain

the Company’s transactions and disclose with reasonable

accuracy at any time the financial position of the Company

and enable them to ensure that the financial statements

comply with the Companies Act 2006. They are also

responsible for safeguarding the assets of the Company

and hence for taking reasonable steps for the prevention

and detection of fraud and other irregularities.

Under applicable law and regulations, the directors are

also responsible for preparing a strategic report, directors’

report, directors’ remuneration report and corporate

governance statement that comply with that law and

those regulations.

The financial statements are published on the Company’s

website, www.stsplc.co.uk, which is maintained by the

Manager. The maintenance and integrity of the website

is, so far as it relates to the Company, the responsibility of

the Manager.

The directors are responsible for the maintenance and

integrity of the corporate and financial information

included on the Company’s website. Legislation in

the United Kingdom governing the preparation and

dissemination of financial statements may differ from

legislation in other jurisdictions.

Responsibility statement

We confirm that to the best of our knowledge:

• the financial statements, prepared in accordance with

United Kingdom Generally Accepted Accounting

Practice, including FRS 102 ‘The Financial Reporting

Standard applicable in the UK and Republic of Ireland’,

give a true and fair view of the assets, liabilities,

financial position and profit or loss of the Company;

• the annual report, including the strategic report,

includes a fair review of the development and

performance of the business and the position of the

Company, together with a description of the principal

and emerging risks and uncertainties that it faces; and

• the annual report and financial statements, taken as

a whole, are fair, balanced and understandable and

provide the information necessary for shareholders to

assess the Company’s performance, business model

and strategy.

This responsibility statement was approved by the Board of

directors on 7 June 2023 and is signed on its behalf by:

John Evans

7 June 2023

28 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Corporate governance

Corporate governance is the process by which the Board

seeks to look after shareholders’ interests and protect

and enhance shareholder value. Shareholders hold the

directors responsible for the stewardship of the Company,

delegating authority and responsibility to the directors to

manage the Company on their behalf and holding them

accountable for its performance.

The Board is ultimately responsible for framing and

executing the Company’s strategy and for closely

monitoring risks. It aims to run the Company in a manner

which is responsible and consistent with our belief in

honesty, transparency and accountability. In our view,

good governance means managing our business well and

engaging effectively with investors. The Board consider

the practice of good governance to be an integral part

of the way it manages the Company and is committed

to maintaining high standards of financial reporting,

transparency and business integrity.

This report, which is part of the Report of the directors,

explains how the Board addresses its responsibility,

authority and accountability.

Compliance with the AIC Code

The Board of the Company has considered the Principles

and Provisions of the 2019 AIC Code of Corporate

Governance (‘AIC Code’). The AIC Code addresses the

principles and provisions set out in the 2018 UK Corporate

Governance Code (the ‘UK Code’), as well as setting

out additional provisions on issues that are of specific

relevance to investment companies. 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 to

Shareholders than if it had adopted the UK Code. The AIC

Code is available on the AIC website (www.theaic.co.uk). It

includes an explanation of how the AIC Code adapts the

Principles and Provisions set out in the UK Code to make

them relevant for investment companies.

Role of the Board

Investment companies have a board of directors whose

duty it is to govern the Company to secure the best

possible return for shareholders within the framework

set out in the Company’s articles of association – in

other words, to look after the interests of shareholders.

The Board met five times during the year on a formal

basis and on an ad-hoc basis when required, to consider

the Company’s strategy and monitor the Company’s

performance (see table on the next page). The directors

are directly answerable to shareholders.

An investment trust Board provides a very specific and

proactive form of direct oversight of the investment of the

shareholders’ funds.

The Board takes this responsibility extremely seriously

and serves shareholders by ensuring that the interests of

the Manager are aligned as closely as possible with those

of shareholders.

The Board consists of a Chairman and four non-executive

directors, all of whom are considered under the AIC

Code to be independent of the Manager and free of

any relationship which could materially interfere with the

exercise of their independent judgement on issues of

strategy, performance, resources and standards of conduct.

Biographies for all of the directors are on pages 19 and 20,

which demonstrate a breadth of investment knowledge,

business and financial skills which enable them to provide

effective strategic leadership and proper governance of

the Company.

The number of routine Board and committee meetings

attended by each director during the year compared

to the total number of meetings that each director was

eligible to attend is detailed in the table on page 29. The

Board meets formally at least five times a year, and more

frequently where business needs require. In addition, the

Board maintains regular contact with the Manager and

Company Secretary.

The primary focus at regular Board meetings is a review of

investment performance and associated matters including

asset allocation, promotion and investor relations, peer

group information and industry issues. To enable the Board

to function effectively and allow directors to discharge

their responsibilities, full and timely access is given to

all relevant information. In the case of Board meetings,

this consists of a comprehensive set of papers, including

the portfolio manager’s review, performance reports and

discussion documents regarding specific matters. Directors

have made further enquiries where necessary.

The Board sets the Company’s values and objectives and

ensures that its obligations to its shareholders are met.

It has formally adopted a schedule of matters which are

required to be brought to it for decision, thus ensuring

that it maintains full and effective control over appropriate

strategic, financial, operational and compliance issues.

The Board undertakes an annual review of culture, policies

and practices to ensure that they are aligned with the

Company’s values and objectives.

Corporate governance statement

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 29

Financial review Investor informationOverview Governance

The role of the Chairman and Senior Independent

Director

The Chairman is responsible for providing effective

leadership to the Board, by setting the tone of the

Company, demonstrating objective judgement and

promoting a culture of openness and debate. The

Chairman facilitates effective contribution, and encourages

active engagement, by each director. The Chairman

also ensures that directors receive accurate, timely and

clear information to assist them with effective decision-

making. The Chairman leads the evaluation of the Board

and individual directors, and acts upon the results of

the evaluation process by recognising strengths and

addressing any weaknesses. The Chairman also engages

with major shareholders and ensures that all directors

understand shareholder views.

The Senior Independent Director acts as a sounding

Board for the Chairman and acts as an intermediary for

other directors, when necessary. Working closely with the

Nomination and Remuneration Committee, the Senior

Independent Director takes responsibility for the annual

appraisal of the Chairman’s performance and is available

to shareholders to discuss any concerns they may have. As

noted in the Chairman’s statement, Sarah Harvey assumed

the role of Senior Independent Director following Angus

Gordon Lennox’s retirement at the 2022 AGM.

Committee structure

There are four Board committees: Audit and Risk,

Marketing and Communications, Management

Engagement and Nomination and Remuneration. Terms

of reference for each of the committees are available via

the Company Secretary. Directors who are not members of

committees may attend at the invitation of the committee

chairman. Further details of the work of each committee

and their members is set out on page 33.

Directors’ meetings

The following table shows the number of formal Board and

Board Committee meetings held during the year and the

number attended by each director.

Board

(5 meetings)

Management

Engagement

Committee

(1 meeting)

Audit and Risk

Committee

(3 meetings)

Nomination and

Remuneration

Committee

(1 meeting)

Marketing and

Communications

Committee

(2 meetings)

John Evans 5/5 1/1 N/A 1/1 2/2

Angus Cockburn 5/5 1/1 3/3 1/1 2/2

Angus Gordon Lennox 2/2 0/0 1/1 0/0 0/0

Sarah Harvey 5/5 1/1 3/3 1/1 2/2

Alexandra Innes 5/5 1/1 3/3 1/1 2/2

Mark Little 5/5 1/1 3/3 1/1 2/2

Notes:

1. John Evans, as Chairman, does not sit on the Audit and Risk Committee but attended each of the meetings.

2. Angus Gordon Lennox retired on 4 July 2022.

30 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Corporate governance statement continued

Directors’ independence and succession

planning

The Board consists of five non-executive directors, each

of whom is considered independent. Directors are initially

appointed until the following annual general meeting

when, under the Company’s articles of association, it

is required that they be elected by shareholders. The

Board has decided that all directors will stand for annual

re-election in line with best practice under the AIC Code.

The Board does not believe that length of service in itself

necessarily disqualifies a director from seeking re-election

but, when making a recommendation, the Board will

take into account the ongoing requirements of the AIC

Code, including the need to refresh the Board and

its committees.

In accordance with the AIC Code, all directors are

considered to be independent of the Manager. They are

free of any relationship which could materially interfere with

the exercise of their independent judgement on issues of

strategy, performance, resources and standards of conduct

and demonstrate a breadth of investment knowledge,

business and financial skills which enable them to provide

effective strategic leadership and proper governance of

the Company.

The Board plans for its own succession with the assistance

of the Nomination and Remuneration Committee. This

process involves the identification of the need for a new

appointment, and the preparation of a brief including

a description of the role and specification of the

capabilities required.

The Nomination and Remuneration Committee may seek

assistance in identifying suitable candidates by appointing

an external recruitment firm. During the year the Company

engaged Stonehaven Search Limited as its external

recruitment firm as part of the recruitment of Gillian Elcock,

who will be appointed to the Board on 21 September 2023.

Stonehaven does not have any other connections with the

Company. It would typically consider candidates from a

wide range of backgrounds, having consideration for the

diversity of the Board as a whole, including but not limited

to gender and ethnicity.

Tenure

The Board has adopted a tenure policy for all directors,

including the Chairman, which states that the Board

believes that it is an advantage to have the continuous

contribution of directors over a period of time during

which they are able to develop awareness and insight of

the Company and thereby be able to make a valuable

contribution to the Board as a whole. The Board believes

that it is appropriate for a director to serve for up to nine

years following their initial election at their first AGM, and

it is expected that directors will stand down from the Board

after that time. However, a flexible approach to tenure

has been adopted and that period may be extended for

a limited time to facilitate effective succession planning

whilst still ensuring regular refreshment and diversity on

the Board.

Board diversity

The Nomination and Remuneration Committee considers

diversity, including balance of skills, knowledge, gender,

social and ethnic backgrounds, cognitive and personal

strengths and experience , amongst other factors when

reviewing the composition of the Board.

The Nomination and Remuneration Committee does not

consider it appropriate to establish diversity targets or

quotas at this time. However, it is conscious of the diversity

targets set out in the FCA Listing Rules and the AIC Code

of Corporate Governance in appointing appropriately

diverse, independent non-executive directors who set the

operational and moral standards of the Company and aims

to have an appropriate level of diversity on the Board.

In accordance with Listing Rule 9.8.6R (9), (10) and (11) the

Board has provided the following information in relation to

its diversity as at 31 March 2023, being the financial year-

end of the Company. The information included in the tables

below has been obtained following confirmation from the

individual directors. As shown in the tables, the Company

did not meet the FCA ethnic diversity target as at 31 March

2023, however, with effect from 21 September 2023 and the

appointment of Gillian Elcock, the Company will meet the

new target. The Board will continue to take all matters of

diversity into account as part of its succession planning and

aims to have an appropriate level of diversity on the Board.

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 31

Financial review Investor informationOverview Governance

Board gender as at 31 March 2023

Number of

Board

members

Percentage

of the Board

Number of

senior positions

on the Board

Number in

executive

management

Percentage of

executive

management

Men 3 60% 1 n/a n/a

Woman 2 40%

n/a n/a

Not specified/prefer not to say – – – n/a n/a

Board ethnic background as at 31 March 2023

Number of

Board

members

Percentage

of the Board

Number of

senior positions

on the Board

Number in

executive

management

Percentage of

executive

management

White British or other white

(including minority-white groups) 5 100%

2 n/a n/a

Mixed/multiple ethnic groups – – – n/a n/a

Asian/Asian British – – – n/a n/a

Black/African/Caribbean/

Black British – – – n/a n/a

Other ethnic group,

including Arab – – – n/a n/a

Not specified/prefer not to say – – – n/a n/a

1. The number of Directors in executive management is not applicable for an investment trust.

2. This meets the Listing Rules target of 40%.

3. This meets the Listing Rules target of at least one senior position on the Board to be held by a woman.

4. For the purposes of the Listing Rule disclosures only the positions of Chairman and Senior Independent Director are relevant for an investment trust.

5. With effect from 21 September 2023, following the appointment of Gillian Elcock, the Company will meet the Listing Rules target on ethnic diversity of one

ethnic individual.

Induction and training

The Company Secretary provides all directors with

induction training on appointment, tailored to the needs

of individual appointees. The induction programme

includes one-to-one meetings with representatives of the

Manager and the Company Secretary. Regular briefings are

provided on changes in regulatory requirements that affect

the Company and directors. Directors are encouraged

to attend industry and other seminars covering issues

and developments relevant to investment trusts. Board

meetings regularly include agenda items on recent

developments in governance and investment trust issues.

Directors’ indemnity

The Company provides a deed of indemnity to each

director to the extent permitted by United Kingdom

law whereby the Company is able to indemnify such a

director against any defence costs incurred in proceedings

brought by the Company against a director in which the

director successfully defends. The Company also has in

place a director and officer liability insurance policy that is

renewed annually.

Performance evaluation

A formal, annual, appraisal system has been agreed

for the evaluation of the Board, its committees and the

individual directors, including the Chairman. The Board

and Committee evaluation questionnaires are drawn

up by the Company Secretary and completed by each

Director. The responses are collated and discussed. The

Chairman leads the evaluation of the Board, committee

and individual directors, including consideration of the

time commitment, skills and experience of the directors,

while the Senior Independent Director leads the evaluation

of the Chairman’s performance. The Board has given

consideration to appointing an external Board evaluator,

however, it does not believe it is necessary at this time. The

results of the evaluation process were presented to and

considered by the Board. There were no significant actions

arising from the evaluation process and it was agreed that

the current composition of the Board and its committees

reflected a suitable mix of skills and experience. It

concluded that the Board as a whole, the individual

directors and its committees were functioning effectively.

32 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Corporate governance statement continued

As a result of the Board’s evaluation process the Chairman

confirms that all directors continue to be effective and their

election/re-election is recommended.

The Board also regularly reviews the performance of the

Manager. The Management Engagement Committee meets

to review the continuing appointment of the Manager

and reviews the terms of the investment management

agreement, to ensure that it remains competitive and in

the best interest of shareholders along with the continuing

appointment of other key service providers.

Company secretary

The Board has direct access to company secretarial

advice and services of Juniper Partners which, through its

nominated representatives, is responsible for ensuring that

Board and committee procedures are followed, and that

applicable regulations are complied with.

Conflicts of interest

Directors are required to disclose all actual and potential

conflicts of interest to the Board as they arise for

consideration and approval. The Board may impose

restrictions or refuse to authorise such conflicts if deemed

appropriate. The Board regularly monitors the interests

of each director and a register of directors’ interests,

including potential conflicts of interest, is maintained by

the Company. Directors who have potential conflicts of

interest will not take part in any discussions which relate

to that particular conflict. The Board considers that the

framework has worked effectively throughout the year

under review.

Anti-bribery

The Board has a zero tolerance policy towards bribery and

ensures that its service providers and associated persons

have adequate anti-bribery policies and procedures in

place which are high level, proportionate and risk based.

In relation to the corporate offence of failing to prevent tax

evasion, it is the Company’s policy to conduct all business

in an honest and ethical manner. The Company takes

a zero-tolerance approach to facilitation of tax evasion

whether under UK law or under the law of any foreign

country and is committed to acting professionally, fairly and

with integrity in all its business dealings and relationships.

Modern slavery statement

The Modern Slavery Act 2015 requires certain companies

to prepare a slavery and human trafficking statement. As

the Company has no employees and does not supply

goods and services, it does not fall within the scope of the

Modern Slavery Act and therefore no slavery or human

trafficking statement is included in the annual report.

Whilst the Company is not within the scope of the Modern

Slavery Act 2015, it has considered its supply chains to be

of low risk. The Company’s supply chain is limited, and

its suppliers include Troy as Manager, Juniper Partners

as AIFM, Company Secretary and administrator and a

number of other professional firms and advisers. The

Company takes a zero-tolerance approach to slavery and

human trafficking and expects all those it deals with to

demonstrate the same attitude.

Relations with shareholders

The Company places great importance on communication

with shareholders. It aims to provide shareholders with

a full understanding of the Company’s activities and

performance and reports formally to shareholders twice a

year by way of the annual report and the half-yearly report.

The net asset value of the Company’s shares is available

daily through the London Stock Exchange and the

Company’s monthly updates are available on the website.

In addition, the Chairman meets major shareholders

annually or as necessary without the Manager present.

The Board monitors the shareholder base of the

Company at every Board meeting. All shareholders have

the opportunity to attend the Company’s AGM and the

Manager’s annual investment trust seminar at which the

directors and representatives of the Manager are available

to meet shareholders and answer questions. The Manager

also presents a review of the Company’s performance and

invites questions from shareholders at both events.

The Manager’s business development team also maintains

regular contact with the Company’s shareholders and

reports regularly to the Board. Shareholders can also

contact the directors throughout the year, through the

Company Secretary.

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 33

Financial review Investor informationOverview Governance

Board committees

Management Engagement Committee

The Committee, chaired by Angus Cockburn and

comprising of all directors, met once during the year and

its responsibilities include:

• reviewing the continuing appointment of the Manager;

• reviewing the performance of the Manager in terms of

investment performance, marketing and administration

services provided;

• reviewing the terms of the investment management

agreement, to ensure that it remains competitive and in

the best interests of Shareholders; and

• reviewing the performance of other service providers

to the Company including the Company Secretary,

depositary, registrar and broker.

Nomination and Remuneration Committee

The Committee, chaired by Alexandra Innes and

comprising of all directors, met once during the year and

its responsibilities include:

• assessing the skills, knowledge, experience and

diversity required on the Board and the extent to which

each are represented;

• establishing processes for the review of the

performance of the the Board and its committees as a

whole;

• establishing processes for the identification of suitable

candidates for appointment to the Board;

• overseeing succession planning for the Board;

• reviewing the performance of each director during the

period in which they have been a member of the Board

and considering the recommendation to shareholders

to approve their re-appointment; and

• to consider the directors’ remuneration policy and

approve any changes to directors’ remuneration arising

as a result of such policy.

Marketing and Communications Committee

The Committee, chaired by Sarah Harvey and comprising

of all directors, met twice during the year and its

responsibilities include:

• considering the marketing strategy for the Company

and associated key performance indicators;

• reviewing the Company’s communications with its

shareholders; and

• understanding the shareholder register and agreeing

the distribution strategy with the Manager.

The Committee has also reviewed the preparations that

both Juniper Partners as AIFM and Troy as Manager have

undertaken in preparation for the new FCA Consumer

Duty (the ‘Duty’). The Duty introduces a new standard

of care that firms are expected to provide to consumers

and creates a variety of obligations that are designed to

deliver better outcomes for retail customers. The Duty

does not apply directly to the Company as it is not a

regulated entity, however it does apply to the key external

service providers who manage the portfolio and distribute

the Company’s shares, including Juniper Partners and

the Manager. The Committee has therefore undertaken

a detailed review of the plans in place in relation to the

implementation of the Duty and the additional systems and

controls and proposed reporting obligations to ensure they

are comfortable with the proposed arrangements. Sarah

Harvey, as Chair of the Committee, will be responsible

for the continued oversight of the service provider’s

compliance with the Duty and any exception reporting

to the Board from Juniper Partners and the Manager

going forward.

Audit and Risk Committee

The Committee, chaired by Mark Little, comprises all the

directors save for John Evans, the Company’s Chairman,

who in line with best practice does not formally sit

on the Committee but attends each of the meetings.

The Committee met three times during the year.

Further information may be found in the Audit and Risk

Committee’s report on pages 38 to 40.

Internal control

The AIC Code and the FCA’s Disclosure Guidance and

Transparency Rules require directors, at least annually,

to review the effectiveness of the Company’s system of

internal control and include a description of the main

features relating to the financial reporting process.

Investment management and all administrative services are

provided to the Company by Troy and Juniper Partners,

respectively, the company’s system of internal control mainly

comprises monitoring the services provided by them,

including the operating controls established by them, to

ensure that they meet the Company’s business objectives.

The Company does not have an internal audit function of

its own, but relies on the risk and compliance department

of both firms. This arrangement is kept under review.

Juniper Partners also carries out a review of the custodial

activities carried out by J.P. Morgan Chase Bank N.A.

34 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Corporate governance statement continued

The Board, either directly or through its Committees,

reviews the effectiveness of the Company’s system of

internal control by monitoring the operation of the key

controls of main service providers and:

• reviews an internal control report as provided to the

Board annually by the Manager. This report details

significant risks, regulatory issues, error management

and complaint handling;

• reviews the terms of the management agreement;

• reviews reports on the internal controls and the

operations of the Manager and of the custodian; and

• reviews the risk profile of the Company and considers

investment risk at every Board meeting.

There is an ongoing process for identifying, evaluating

and managing the significant risks faced by the Company

including the principal and emerging risks as outlined

on pages 16 and 17. This process accords with the FRC’s

‘Guidance on Risk Management, Internal Control and

Related Financial and Business Reporting’.

During the course of its review of internal controls, the

Board has not identified or been advised of any failings or

weaknesses which it has determined to be significant, and

is satisfied with the arrangements.

Internal control and risk management systems in

relation to the financial reporting process

The directors are responsible for the Company’s system

of internal control, designed to safeguard the Company’s

assets, maintain proper accounting records and ensure

that financial information used within the business, or

published, is reliable.

Juniper Partners, in its capacity as administrator, has in

place stringent controls that monitor the following activities

within the financial reporting process:

• investment and related cash transactions are

completely and accurately recorded and settled in a

timely manner;

• corporate actions are identified and generated

respectively, and then processed and recorded

accurately and in a timely manner;

• investment income is accurately recorded in the proper

period;

• investments are valued using current prices obtained

from independent external pricing sources;

• cash and securities positions are completely and

accurately recorded and reconciled to third party data;

and

• investment management fees are accurately calculated

and recorded.

The system of internal control can only be designed to

manage rather than eliminate the risk of failure to achieve

business objectives and therefore can provide only

reasonable, but not absolute, assurance against fraud,

material mis-statement or loss.

By the means of the procedures set out above, the

Board confirms that it has reviewed the effectiveness of

the Company’s systems of internal control for the year

ended 31 March 2023, and to the date of approval of this

annual report.

John Evans

Chairman

7 June 2023

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 35

Financial review Investor informationOverview Governance

Nomination and Remuneration Committee

The Committee has responsibility for setting the

remuneration policy for all directors, taking into account

factors such as time commitment and responsibilities of

the role, with the objective to attract and retain directors

of the quality required to run the Company successfully,

without paying more than is necessary. The Committee

is also responsible for reviewing and setting directors’

remuneration levels.

Remuneration statement

The Board has prepared this report in accordance with the

requirements of the Large and Medium-sized Companies

and Groups (Accounts and Reports) (Amendment)

Regulations 2013. An ordinary resolution to approve this

report will be put to the members at the AGM.

Company law requires the Company’s auditor to audit

certain disclosures provided in this report. Where

disclosures have been audited, they are indicated as

such. The auditor’s opinion is included in their report on

pages 41 to 47.

Directors’ remuneration policy

The Board’s policy is that the remuneration of non-

executive directors should reflect the experience of the

Board as a whole, be fair and comparable to that of other

investment trusts that are similar in size, have a similar

capital structure (ordinary shares and borrowings) and have

similar investment objectives (principally global growth and

income). It is intended that this policy will continue for the

year ending 31 March 2024 and subsequent periods. The

fees for the non-executive directors are determined within

the limits set out in the Company’s articles of association.

Directors are entitled to be reimbursed for any reasonable

expenses properly incurred by them in connection with

the performance of their duties. The Company pays any

UK tax and National Insurance due on the reimbursed

expenses. Directors are not eligible for bonuses, pension

benefits, share options, long-term incentive schemes or

other benefits.

Directors do not have a service contract but are provided

with letters of appointment. All directors are appointed

for an initial term covering the period from the date of

appointment until the first AGM at which they are required

to stand for election in accordance with the Company’s

articles of association. Thereafter the directors have chosen

to be re-elected annually. There is no notice period and

no provision for compensation upon early termination of

appointment. The directors’ remuneration policy will be

put to shareholders at least once every three years and was

last approved by shareholders at the AGM in 2020. It will

therefore be put again to shareholders at the upcoming

AGM this year.

Annual report on remuneration

The Nomination and Remuneration Committee considered

the directors’ fees in the context of the benchmark data

from its peer group. To reflect the increasing regulatory

and compliance requirements on the Board and

recognising the importance of an appropriate level of fees

for the recruitment process, with effect from 1 April 2023, it

was agreed that directors’ fees would increase to £30,000

per annum (2022/2023: £26,500), the Chairman of the Audit

and Risk Committee’s fee would increase to £35,000 per

annum (2022/2023: £31,500) and the Chairman’s fee would

increase to £45,000 (2022/2023: £40,500). In recognition of

the additional work and responsibility of the role, it was

also agreed that an additional fee of £3,000 per annum

would be paid to the Senior Independent Director.

Directors’ shareholdings (audited)

The directors in office at 31 March 2023 and the number

of shares in the Company over which they held an interest

(including those of connected persons) are listed below.

As at 31 March 2023 2022

John Evans 50,000 50,000

Angus Cockburn 100,000 100,000

Sarah Harvey 503 503

Alexandra Innes – –

Mark Little 16,213 16,213

As at 7 June 2023 there have been no changes to the

above table.

Approval

An ordinary resolution for the approval of the directors’

annual report on remuneration will be put to shareholders

at the upcoming AGM. At the previous AGM held on 4 July

2022, the Shareholders voted in favour of the directors’

remuneration report for the year ended 31 March 2022.

Of the proxy votes received, 99.83% of votes were cast in

favour of the directors’ remuneration report (56,824 proxy

votes were cast against the report and 3,647,820 proxy

votes were withheld).

Directors’ remuneration statement

36 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Directors’ remuneration statement continued

Company performance

A graph showing the Company’s share price total return compared to the Lipper Global-Equity Global Income Index,

over the last 10 years is shown below. This index is deemed to be the most appropriate one against which to measure the

Company’s long-term performance.

Total return (% change over 10 years)

250

Share price

Lipper*

2021 2022 20232013 2014201520162017201820192020

Source: Troy Asset Management Limited.

* The Lipper Global – Equity Global Income Index is used as a proxy for the market.

Directors’ emoluments for the year (audited)

2022/2023

2021/2022

2020/2021

John Evans (Chairman of the Board) 40,500 39,000 38,500

Mark Little (Chairman of the Audit and Risk Committee) 31,500 30,500 30,000

Angus Cockburn (appointed on 1 May 2021) 26,500 23,458 –

Angus Gordon Lennox (retired on 4 July 2022) 6,829 25,500 25,000

Sarah Harvey (Senior Independent Director) 26,500 25,500 25,000

Alexandra Innes (appointed 4 April 2022) 26,330 – –

158,159 143,958 118,500

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 37

Financial review Investor informationOverview Governance

Annual percentage change in remuneration of directors

The table below is a disclosure requirement under The Companies (Directors’ Remuneration Policy and Directors’

Remuneration Report) Regulations 2019 and sets out the annual percentage change in each director’s remuneration

received in the financial year ended 31 March 2023 compared to the financial years ended 31 March 2022 and 31 March

2021. The percentage change reflects changes in role and less than full year appointment.

Director

2023

Total fees

% change

2022

Total fees

% change

2021

Total fees

% change

John Evans

3.8% 1.3% 21.1%

Mark Little 3.3% 1.7% 1.7%

Angus Cockburn

13.0% n/a n/a

Angus Gordon Lennox

(73.2%) 2.0% 2.0%

Sarah Harvey 3.9% 2.0% 2.0%

Alexandra Innes

– – –

1 John Evans assumed the role of chairman on 17 September 2019.

2 Angus Cockburn appointed on 1 May 2021.

3 Angus Gordon Lennox retired on 4 July 2022.

4 Alexandra Innes appointed on 4 April 2022.

Relative importance of spend on directors’ remuneration

To enable shareholders to assess the relative importance of spend on remuneration, the directors’ total remuneration has

been shown in a table below compared with the company’s dividend distributions.

2022/2023

£000’s

2021/2022

£000’s

Change

£000’s

Directors’ total remuneration 158 144 14

Dividends paid and payable 6,170 5,872 298

On behalf of the board

Alexandra Innes

Chairman of the Nomination and Remuneration Committee

7 June 2023

38 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

I am pleased to present the Committee’s report to

shareholders for the year ended 31 March 2023. This report

describes the range of work undertaken by the Committee.

The Audit and Risk Committee is chaired by Mark Little

and comprises all of the directors with the exception of

John Evans, Chairman of the Company. The Company

Chairman attended each of the meetings by invitation from

the Committee. The Board reviews the relevant skills and

experience of the Audit and Risk Committee as part of the

annual Board review and believes that the members of the

Committee have the appropriate skills and experience.

Biographies of the members of the Committee are on

pages 19 and 20.

Role and responsibilities

The Committee has continued to support the Board

in fulfilling its oversight responsibilities, reviewing the

financial reporting process, the systems of internal control

and management of risk, the audit process and the

Company’s process for monitoring compliance with laws

and regulations.

The Audit and Risk Committee’s responsibilities include:

• monitoring and reviewing the integrity of financial

statements and ensuring in particular that, taken as a

whole, they are fair, balanced and understandable;

• review of the internal financial controls;

• making recommendations to the Board in relation

to the appointment, evaluation and dismissal of the

external auditors, their remuneration, terms of their

engagement and reviewing their independence and

objectivity, effectiveness, and overall effectiveness of

the audit process;

• reviewing the external auditor’s audit plan and year

end report;

• developing and implementing policy on the

engagement of the external auditors to supply non-

audit services;

• reporting to the Board, identifying any matter in respect

of which it considers that action or improvement is

needed and making recommendations as to the steps

to be taken; and

• assessing the need for an internal audit function.

Activities during the year

The Committee met three times during the year where

it reviewed the Company’s risk register, internal controls

and risk and compliance reports from third party service

providers and considered the half yearly and annual

financial reports to shareholders. The Committee also

considered and approved the external auditors’ plan and

scope for the audit of the financial statements for the year

ended 31 March 2023.

The Audit and Risk Committee takes account of the

most significant issues and risks, both operational and

financial, that are likely to impact the Company’s financial

statements.

The following significant areas were considered by the Audit and Risk Committee in relation to the financial statements:

Matter Action

Accuracy of portfolio valuation

and ownership of investments

Controls are in place to ensure that valuations are appropriate and existence is verified

through custodian reconciliations.

All listed investments are valued at bid prices provided by third party service providers

in accordance with the price source agreement in place. The AIFM carries out testing

of the prices and reports regularly to the Board.

The appointed custodian is responsible for the custody and controlling of all assets

of the Company entrusted for safekeeping. The Audit and Risk Committee reviews a

summary of the SOC 1 report from JP Morgan Chase Bank N.A. on key controls over

the assets of the Company and any significant issues are reported to the Committee.

The AIFM regularly reconciles the portfolio holdings to confirmations from the

Company’s custodian.

The Manager has procedures in place to ensure that investments can only be made

to the extent that the appropriate contractual and legal arrangements are in place to

protect the Company’s assets.

Audit and Risk Committee report

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 39

Financial review Investor informationOverview Governance

Matter Action

Strength of processes and

internal controls at outsourced

providers

The Committee together with the Board have established clear lines of responsibility

between the Manager, Custodian, Company Secretary and receive appropriate reports

from each of them regarding the operation of their internal controls and reviews.

The Directors, having carried out due diligence at the time of appointment and

subsequently, are satisfied with the third party service providers, their business

resilience and continuity arrangements.

Mis-statement of revenue returns The Board reviews income forecasts (including special dividends) and receives

explanations from the Manager for any variations or significant movements from

previous forecasts. The Board, together with the Manager, has reviewed the impact

that significant external events that could give rise to market volatility, including the

Russian invasion of Ukraine, may have on the portfolio and income forecasts.

The allocation of expenses is reviewed by the Audit and Risk Committee annually

taking into account the long-term split of returns from the portfolio, both historic and

projected and the objectives of the Company.

The management fee is calculated in accordance with the contractual terms in the

investment management agreement and is reviewed in detail by the Company

Secretary and is also subject to analytical review by the Board.

Auditors’ report

At the conclusion of the audit, Ernst & Young LLP (‘EY’) did

not highlight any issues to the Audit and Risk Committee

which would cause it to qualify its audit report, nor did it

highlight any fundamental internal control weaknesses.

Their audit report is included on pages 41 to 47.

Conclusions in respect of the annual report

The production and audit of the Company’s annual

report is a comprehensive process which requires input

from a number of different contributors. One of the key

governance requirements of the Company’s annual report

is that it is fair, balanced and understandable. The Board

requested that the Audit and Risk Committee confirm

whether it considered that the annual report, when taken

as a whole, fulfils this requirement.

As part of its review of the annual report, the Committee

noted that:

• comprehensive reviews had been undertaken at

different levels in the production process of the annual

report by the Company Secretary, Manager, auditor

and the Committee to ensure consistency and overall

balance; and

• the controls that are in place at the Company Secretary

and other third-party service providers ensure the

completeness and accuracy of the Company’s financial

records and the security of the Company’s assets.

Effectiveness of the external audit process

The Committee also evaluated the effectiveness of

the external audit process. This evaluation involved

an assessment of the effectiveness of the auditor’s

performance against criteria including qualification,

expertise and resources, independence and effectiveness

of the audit process. Having reviewed the performance of

the external auditor as described above, the Committee is

satisfied with the external audit process undertaken by EY

in relation to this annual report and its financial statements.

Auditor’s independence

The Company has in place a policy governing the

provision of non-audit services by the external auditor,

so as to safeguard its independence and objectivity.

This is achieved by prohibiting non-audit work where

independence may be compromised or conflicts arise.

Any non-audit work requires specific approval of the

audit and risk committee in each case. The audit fee was

£47,500 plus VAT for the year ended 31 March 2023 (2022:

£40,000 plus VAT). There were no non audit fees for the

year ended 31 March 2023 (2022: nil). Following its review,

the Committee is satisfied that the Company’s auditor, EY,

remains independent.

40 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Auditor rotation

A competitive tender for the audit of the Company was

held in January 2018, following which EY was appointed

as the Company’s auditor with effect from the conclusion

of the 2018 AGM. In accordance with the FRC ethical

standard, the Company’s audit engagement partner will

rotate every five years. Sue Dawe originally served as

audit engagement partner since the appointment of EY.

The audit partner, with effect from November 2022, is

Denise Davidson. There is currently no intention to put the

audit out to tender. A resolution to re-appoint EY as the

Company’s auditor will be proposed at the AGM.

Having completed its review of the annual report and

financial statements, the Committee recommended to the

Board that the annual report and financial statements when

taken as a whole, are fair, balanced and understandable.

Mark Little

Chairman of the Audit and Risk Committee

7 June 2023

Audit and Risk Committee report continued

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 41

Independent auditor’s report to the

members of STS Global Income & Growth

Trust plc

Opinion

We have audited the financial statements of STS Global

Income & Growth Trust plc (“the Company”) for the year

ended 31 March 2023 which comprise the Statement

of Comprehensive Income, the Statement of Financial

Position, the Statement of Changes in Equity, the

Statement of Cash Flow and the related notes 1 to 21,

including a summary of significant accounting policies.

The financial reporting framework that has been applied

in their preparation is applicable law and United Kingdom

Accounting Standards including FRS 102 “The Financial

Reporting Standard applicable in the UK and Republic of

Ireland” (United Kingdom Generally Accepted Accounting

Practice).

In our opinion, the financial statements:

• give a true and fair view of the Company’s affairs as at

31 March 2023 and of its loss for the year then ended;

• have been properly prepared in accordance with United

Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the

requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International

Standards on Auditing (UK) (ISAs (UK)) and applicable law.

Our responsibilities under those standards are further

described in the Auditor’s responsibilities for the audit of

the financial statements section of our report. We believe

that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our opinion.

Independence

We are independent of the Company in accordance with

the ethical requirements that are relevant to our audit of

the financial statements in the UK, including the FRC’s

Ethical Standard as applied to public interest entities,

and we have fulfilled our other ethical responsibilities in

accordance with these requirements.

The non-audit services prohibited by the FRC’s Ethical

Standard were not provided to the Company and we

remain independent of Company in conducting the audit.

Conclusions relating to going concern

In auditing the financial statements, we have concluded

that the directors’ use of the going concern basis of

accounting in the preparation of the financial statements

is appropriate. Our evaluation of the directors’ assessment

of the Company’s ability to continue to adopt the going

concern basis of accounting included:

• Confirmation of our understanding of the Company’s

going concern assessment process and engaged with

the Directors and the Company Secretary to determine

if all key factors that we have become aware of during

our audit were considered in their assessment.

• Inspection of the Directors’ assessment of going

concern, including the revenue forecast, for the period

to 31 March 2025 which is at least twelve months from

the date the financial statements were authorised for

issue. In preparing the revenue forecast, the Company

has concluded that it is able to continue to meet its

ongoing costs as they fall due.

• Review of the factors and assumptions, including

the impact of the current economic environment,

as applied to the revenue forecast and the liquidity

assessment of the investments. We considered the

appropriateness of the methods used to calculate the

revenue forecast and the liquidity assessment and

determined, through testing of the methodology and

calculations, that the methods, inputs and assumptions

utilised were appropriate to be able to make an

assessment for the Company.

• Assessment of the risk of breaching the debt covenants

as a result of a reduction in the value of the Company’s

portfolio. We calculated the Company’s compliance

with debt covenants, and we performed reverse stress

testing in order to identify what factors would lead to

the Company breaching the financial covenants.

• Consideration of the mitigating factors included in the

revenue forecasts and covenant calculations that are

within the control of the Company. We reviewed the

Company’s assessment of the liquidity of investments

held and evaluated the Company’s ability to sell

those investments in order to cover working capital

requirements should revenue decline significantly.

Independent auditor’s report

Financial review Investor informationOverview Governance

42 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Independent auditor’s report continued

• Review of the Company’s going concern disclosures

included in the annual report in order to assess that the

disclosures were appropriate and in conformity with the

reporting standards.

Based on the work we have performed, we have not

identified any material uncertainties relating to events

or conditions that, individually or collectively, may cast

significant doubt on the Company’s ability to continue as a

going concern for the period to 31 March 2025

In relation to the Company’s reporting on how they have

applied the UK Corporate Governance Code, we have

nothing material to add or draw attention to in relation to

the directors’ statement in the financial statements about

whether the directors considered it appropriate to adopt

the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors

with respect to going concern are described in the relevant

sections of this report. However, because not all future

events or conditions can be predicted, this statement is not

a guarantee as to the Company’s ability to continue as a

going concern.

Overview of our audit approach

Key audit matters • Risk of incomplete or inaccurate revenue recognition, including the classification of

special dividends as revenue or capital items in the Statement of Comprehensive

Income

• Risk of incorrect valuation or ownership of the investment portfolio

Materiality • Overall materiality of £2.19m (2022: £2.30m) which represents 1% (2022: 1%) of total

shareholders’ funds.

An overview of the scope of our audit

Tailoring the scope

Our assessment of audit risk, our evaluation of materiality

and our allocation of performance materiality determine

our audit scope for the Company. This enables us to

form an opinion on the financial statements. We take into

account size, risk profile, the organisation of the Company

and effectiveness of controls, the potential impact of

climate change and changes in the business environment

when assessing the level of work to be performed.

Climate change

Stakeholders are increasingly interested in how climate

change will impact the Company. The Company has

determined that the most significant future impacts from

climate change on its operations will be from how climate

change could affect the Company’s investments and overall

investment process. This is explained on page 17 in the

principal risks and uncertainties. This disclosure forms

part of the “Other information,” rather than the audited

financial statements. Our procedures on these unaudited

disclosures therefore consisted solely of considering

whether they are materially inconsistent with the financial

statements or our knowledge obtained in the course of the

audit or otherwise appear to be materially misstated, in line

with our responsibilities on “Other information”.

Our audit effort in considering climate change was focused

on the adequacy of the Company’s disclosures in the

financial statements as set out in Note 1a and conclusion

that there was no further impact of climate change to be

taken into account as the investments are valued based on

market pricing as required by FRS102. We also challenged

the Directors’ considerations of climate change in their

assessment of viability and associated disclosures.

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 43

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial

statements of the current period and include the most significant assessed risks of material misstatement (whether or not

due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy,

the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed

in the context of our audit of the financial statements as a whole, and in our opinion thereon, and we do not provide a

separate opinion on these matters.

Risk Our response to the risk

Key observations communicated

to the Audit Committee

Incomplete or inaccurate revenue

recognition, including the

classification of special dividends as

revenue or capital in the Statement

of Comprehensive Income (as

described on page 39 in the Audit

and Risk Committee’s Report and

as per the accounting policy set out

on page 52).

The total revenue for the year to

31 March 2023 was £8.24m (2022:

£7.38m), consisting primarily

of dividend income from listed

equity investments.

The investment income receivable

by the Company during the year

directly affects the Company’s

revenue return. There is therefore

a risk of incomplete or inaccurate

recognition of revenue through

the failure to recognise proper

income entitlements or to apply an

appropriate accounting treatment.

In addition to the above, the

Directors may be required to

exercise judgment in determining

whether income receivable in

the form of special dividends

should be classified as ‘revenue’

or ‘capital’ in the Statement of

Comprehensive Income.

In the year to 31 March 2023, the

Company received three special

dividends of which £0.37m (2022:

£0.18m) was classified as revenue

and £0.27m (2022: £nil) was classified

as capital.

We have performed the following procedures:

We obtained an understanding of the processes

and controls surrounding revenue recognition,

including the classification of special dividends, by

performing walkthrough procedures.

For all dividends received, we recalculated the

dividend income by multiplying the investment

holdings at the ex-dividend date, traced from the

accounting records, by the dividend per share,

which was agreed to an independent data vendor.

For a sample of dividends received, we agreed

amounts to bank statements and agreed the

exchange rates used to an external source.

For all accrued dividends, we reviewed the

investee company announcements to assess

whether the dividend entitlements arose prior

to 31 March 2023. We agreed the dividend rate

to corresponding announcements made by the

investee company, recalculated the dividend

amount receivable by multiplying the investment

holdings at the ex-dividend date, traced from

the accounting records, and confirmed this was

consistent with cash received as shown on post

year end bank statements, where paid.

To test completeness of recorded income, we verified

that expected dividends for each investee company

held during the year had been recorded as income

with reference to investee company announcements

obtained from an independent data vendor.

For all investments held during the year, we

reviewed the type of dividends paid with reference

to an external data vendor to identify those which

were special. Based on the work performed, we

identified three special dividends were received by

the Company; all of which were above our testing

threshold. We assessed the appropriateness of

management’s classification as revenue, or a

revenue and capital split, for the special dividends

above our testing threshold by reviewing the

underlying rationale of the distribution.

The results of our procedures

identified no material

misstatement in relation to

incomplete or inaccurate

revenue recognition, including

incorrect classification of

special dividends as revenue or

capital items in the Statement

of Comprehensive Income.

Financial review Investor informationOverview Governance

44 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Independent auditor’s report continued

Risk Our response to the risk

Key observations communicated

to the Audit Committee

Incorrect valuation or ownership

of the investment portfolio (as

described on page 38 in the Report

of the Audit and Risk Committee

and as per the accounting policy set

out on page 52).

The valuation of the investment

portfolio at 31 March 2023 was

£234.36m (2022: £244.56m)

consisting primarily of listed

investments.

The valuation of the assets held

in the investment portfolio is the

primary driver of the Company’s

net asset value and total return.

Incorrect investment pricing, or a

failure to maintain proper legal title

of the assets held by the Company

could have a significant impact on

the portfolio valuation and the return

generated for shareholders.

The fair value of listed investments

is determined by reference to stock

exchange quoted market bid prices

at the close of business on the

reporting date.

We performed the following procedures:

We obtained an understanding of the processes

and controls surrounding investment pricing and

legal title of listed investments by performing

walkthrough procedures.

For all investments in the portfolio, we compared

the market prices and exchange rates applied to

an independent pricing vendor and recalculated

the investment valuations as at the year-end.

We confirmed with the Administrator that there

were no investments with stale prices as at the

year-end and therefore no stale pricing report

produced. For all investments in the portfolio, we

obtained the market prices, from an independent

pricing vendor, for 5 business days pre and post

the year end date and calculated the day-on-day

movement and confirmed there are no stale prices.

We compared the Company’s investment holdings

at 31 March 2023 to independent confirmations

received directly from the Company’s Custodian

and Depositary.

The results of our procedures

identified no material

misstatement in relation

to the risk of incorrect

valuation or ownership of the

investment portfolio

There have been no changes to the areas of audit focus

raised in the above risk table from the prior year.

Our application of materiality

We apply the concept of materiality in planning

and performing the audit, in evaluating the effect of

identified misstatements on the audit and in forming our

audit opinion.

Materiality

The magnitude of an omission or misstatement that,

individually or in the aggregate, could reasonably be

expected to influence the economic decisions of the users

of the financial statements. Materiality provides a basis for

determining the nature and extent of our audit procedures.

We determined materiality for the Company to be

£2.19 million (2022: £2.30 million), which is 1% (2022: 1%) of

shareholders’ funds. We believe that shareholder’s funds

provide us with a materiality aligned to the key measure of the

Company’s performance.

Performance materiality

The application of materiality at the individual account

or balance level. It is set at an amount to reduce to

an appropriately low level the probability that the

aggregate of uncorrected and undetected misstatements

exceeds materiality.

On the basis of our risk assessments, together with our

assessment of the Company’s overall control environment,

our judgement was that performance materiality was 75%

(2022: 75%) of our planning materiality, namely £1.64m

(2022: £1.72m). We have set performance materiality

at this percentage due to the fact there has been no

misstatements in prior periods.

Given the importance of the distinction between revenue

and capital for investment trusts, we have also applied a

separate testing threshold for the revenue column of the

Statement of Comprehensive Income of £0.35m (2022:

£0.32m), being 5% (2022: 5%) of revenue return on ordinary

activities before taxation.

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 45

Reporting threshold

An amount below which identified misstatements are

considered as being clearly trivial.

We agreed with the Audit Committee that we would report

to them all uncorrected audit differences in excess of £0.11m

(2022: £.0.11m), which is set at 5% of planning materiality,

as well as differences below that threshold that, in our view,

warranted reporting on qualitative grounds.

We evaluate any uncorrected misstatements against both the

quantitative measures of materiality discussed above and in

light of other relevant qualitative considerations in forming

our opinion.

Other information

The other information comprises the information included

in the annual report other than the financial statements and

our auditor’s report thereon. The Directors are responsible

for the other information contained within the annual

report.

Our opinion on the financial statements does not cover

the other information and, except to the extent otherwise

explicitly stated in this report, we do not express any form

of assurance conclusion thereon.

Our responsibility is to read the other information and,

in doing so, consider whether the other information

is materially inconsistent with the financial statements

or our knowledge obtained in the course of the audit

or otherwise appears to be materially misstated. If

we identify such material inconsistencies or apparent

material misstatements, we are required to determine

whether this gives rise to a material misstatement in the

financial statements themselves. If, based on the work

we have performed, we conclude that there is a material

misstatement of the other information, we are required to

report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by

the Companies Act 2006

In our opinion the part of the directors’ remuneration

report to be audited has been properly prepared in

accordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the course

of the audit:

• the information given in the strategic report and the

Directors’ report for the financial year for which the

financial statements are prepared is consistent with the

financial statements; and

• the strategic report and Directors’ reports have

been prepared in accordance with applicable legal

requirements.

Matters on which we are required to report

by exception

In the light of the knowledge and understanding of the

Company and its environment obtained in the course of

the audit, we have not identified material misstatements in

the strategic report or Directors’ report.

We have nothing to report in respect of the following

matters in relation to which the Companies Act 2006

requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or

returns adequate for our audit have not been received

from branches not visited by us; or

• the financial statements and the part of the Directors’

Remuneration Report to be audited are not in

agreement with the accounting records and returns; or

• certain disclosures of Directors’ remuneration specified

by law are not made; or

• we have not received all the information and

explanations we require for our audit

Financial review Investor informationOverview Governance

46 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Independent auditor’s report continued

Corporate Governance Statement

We have reviewed the Directors’ statement in relation

to going concern, longer-term viability and that part of

the Corporate Governance Statement relating to the

Company’s compliance with the provisions of the UK

Corporate Governance Code specified for our review by

the Listing Rules.

Based on the work undertaken as part of our audit, we

have concluded that each of the following elements of the

Corporate Governance Statement is materially consistent

with the financial statements or our knowledge obtained

during the audit:

• Directors’ statement with regards to the appropriateness

of adopting the going concern basis of accounting and

any material uncertainties identified set out on page 23;

• Directors’ explanation as to its assessment of the

Company’s prospects, the period this assessment covers

and why the period is appropriate set out on page 24;

• Director’s statement on whether it has a reasonable

expectation that the group will be able to continue in

operation and meets its liabilities set out on page 24;

• Directors’ statement on fair, balanced and

understandable set out on page 27;

• Board’s confirmation that it has carried out a robust

assessment of the emerging and principal risks set out

on pages 16 and 17;

• The section of the annual report that describes the

review of effectiveness of risk management and internal

control systems set out on page 33; and

• The section describing the work of the audit committee

set out on page 38.

Responsibilities of directors

As explained more fully in the Directors’ responsibilities

statement set out on page 27, the Directors are

responsible for the preparation of the financial statements

and for being satisfied that they give a true and fair view,

and for such internal control as the Directors determine is

necessary to enable the preparation of financial statements

that are free from material misstatement, whether due to

fraud or error.

In preparing the financial statements, the Directors are

responsible for assessing the Company’s ability to continue

as a going concern, disclosing, as applicable, matters

related to going concern and using the going concern

basis of accounting unless the Directors either intend to

liquidate the Company or to cease operations, or have no

realistic alternative but to do so.

Auditor’s responsibilities for the audit of

the financial statements

Our objectives are to obtain reasonable assurance about

whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error,

and to issue an auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance, but is

not a guarantee that an audit conducted in accordance

with ISAs (UK) will always detect a material misstatement

when it exists. Misstatements can arise from fraud or

error and are considered material if, individually or in the

aggregate, they could reasonably be expected to influence

the economic decisions of users taken on the basis of these

financial statements.

Explanation as to what extent the audit

was considered capable of detecting

irregularities, including fraud

Irregularities, including fraud, are instances of non-

compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined above,

to detect irregularities, including fraud. The risk of not

detecting a material misstatement due to fraud is higher

than the risk of not detecting one resulting from error, as

fraud may involve deliberate concealment by, for example,

forgery or intentional misrepresentations, or through

collusion. The extent to which our procedures are capable of

detecting irregularities, including fraud is detailed below.

However, the primary responsibility for the prevention

and detection of fraud rests with both those charged with

governance of the Company and management.

• We obtained an understanding of the legal and

regulatory frameworks that are applicable to the

Company and determined that the most significant

are FRS 102, the Companies Act 2006, the Listing

Rules, UK Corporate Governance Code, the

Association of Investment Companies’ Code and

Statement of Recommended Practice, Section 1158

of the Corporation Tax Act 2010 and The Companies

(Miscellaneous Reporting) Regulations 2018.

• We understood how the Company is complying with

those frameworks through discussions with the Audit

Committee and Company Secretary and review of

Board minutes and the Company’s documented

policies and procedures.

• We assessed the susceptibility of the Company’s

financial statements to material misstatement, including

how fraud might occur by considering the key risks

impacting the financial statements. We identified a

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 47

fraud risk with respect to the incomplete or inaccurate

revenue recognition through incorrect the classification

of special dividends as revenue or capital items. Further

discussion of our approach is set out in the section on

key audit matters above.

• Based on this understanding we designed our audit

procedures to identify non-compliance with such laws

and regulations. Our procedures involved review of the

Company Secretary’s reporting to the Directors with

respect to the application of the documented policies

and procedures and review of the financial statements

to ensure compliance with the reporting requirements

of the Company.

A further description of our responsibilities for the audit

of the financial statements is located on the Financial

Reporting Council’s website at https://www.frc.org.uk/

auditorsresponsibilities. This description forms part of our

auditor’s report.

Other matters we are required to address

• Following the recommendation from the audit and risk

committee, we were appointed by the Company at

the annual general meeting on 19 September 2018 to

audit the financial statements of the Company for the

year ending 31 March 2019 and subsequent financial

periods.

• The period of total uninterrupted engagement

including previous renewals and reappointments is

5 years, covering the years ending 31 March 2019 to

31 March 2023.

• The audit opinion is consistent with the additional

report to the audit and risk committee.

Use of our report

This report is made solely to the Company’s members,

as a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken

so that we might state to the Company’s members

those matters we are required to state to them in an

auditor’s report and for no other purpose. To the fullest

extent permitted by law, we do not accept or assume

responsibility to anyone other than the Company and the

Company’s members as a body, for our audit work, for this

report, or for the opinions we have formed.

Denise Davidson

(Senior statutory auditor)

for and on behalf of Ernst & Young LLP

Statutory Auditor

London

7 June 2023

Financial review Investor informationOverview Governance

48 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Year to 31 March 2023 Year to 31 March 2022

Note

Revenue

£000

Capital

£000

Total

£000

Revenue

£000

Capital

£000

Total

£000

Net (losses)/gains on investments 9 – (8,800) (8,800) – 29,232 29,232

Net currency (losses)/gains (4) (869) (873) 3 (445) (442)

Income 2 8,238 266 8,504 7,378 – 7,378

Investment management fee 3 (531) (985) (1,516) (222) (413) (635)

Other expenses 4 (625) – (625) (516) – (516)

Net return before finance costs and

taxation 7,078 (10,388) (3,310) 6,643 28,374 35,017

Finance costs 5 (171) (318) (489) (157) (291) (448)

Net return on ordinary activities

before taxation 6,907 (10,706) (3,799) 6,486 28,083 34,569

Taxation on ordinary activities 7 (566) – (566) (632) – (632)

Net return attributable to ordinary

shareholders 6,341 (10,706) (4,365) 5,854 28,083 33,937

Net return per ordinary share 8 6.34p (10.70)p (4.36)p 5.82p 27.92p 33.74p

The total columns of this statement are the profit and loss accounts of the Company.

The revenue and capital items are presented in accordance with the Association of Investment Companies (AIC) Statement

of Recommended Practice (SORP 2022).

All revenue and capital items in the above statement derive from continuing operations.

No operations were acquired or discontinued in the year.

The notes on pages 52 to 64 form part of these financial statements.

Statement of comprehensive income

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 49

As at 31 March 2023 As at 31 March 2022

Note £000 £000 £000 £000

Fixed assets

Investments held at fair value through profit or loss 9 234,362 244,561

Current assets

Trade and other receivables 10 1,113 1,089

Cash and cash equivalents 1,570 865

2,683 1,954

Current liabilities

Bank loans 12 (15,795) –

Trade payables 11 (572) (489)

Dividend payable 6 (1,443) (1,368)

Total current liabilities (17,810) (1,857)

Net current (liabilities)/assets (15,127) 97

Total assets less current liabilities 219,235 244,658

Non-current liabilities

Bank Loans 12 – (15,001)

Total net assets 219,235 229,657

Capital and reserves

Called up share capital 13 1,223 1,223

Capital redemption reserve 78 78

Share premium account 31,808 30,762

Special distributable reserve 70,924 71,925

Capital reserve 14 111,905 122,611

Revenue reserve 3,297 3,058

Total shareholders’ funds 219,235 229,657

Net asset value per ordinary share 15 220.37p 230.75p

The Company is registered in Scotland no.SC283272.

The notes on pages 52 to 64 form part of these financial statements.

The financial statements were approved by the Board and signed on its behalf by

John Evans

Chairman

7 June 2023

Statement of financial position

Financial review Investor informationOverview Governance

50 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

For the year ended

31 March 2023 Note

Called up

capital

£000

Capital

redemption

reserve

£000

premium

account

£000

Special

distributable

reserve*

£000

Capital

reserve*

£000

Revenue

reserve*

£000

Total

£000

As at 1 April 2022 1,223 78 30,762 71,925 122,611 3,058 229,657

Net return attributable to

shareholders** 8 – – – – (10,706) 6,341 (4,365)

Shares issued from treasury 13 – – 1,046 2,585 – – 3,631

Shares bought back into treasury 13 – – – (3,586) – – (3,586)

Dividends paid 6 – – – – – (6,102) (6,102)

As at 31 March 2023 1,223 78 31,808 70,924 111,905 3,297 219,235

For the year ended

31 March 2022 Note

Called up

capital

£000

Capital

redemption

reserve

£000

premium

account

£000

Special

distributable

reserve*

£000

Capital

reserve*

£000

Revenue

reserve*

£000

Total

£000

As at 1 April 2021 1,223 78 30,725 78,194 94,528 2,930 207,678

Net return attributable to

shareholders** 8 – – – – 28,083 5,854 33,937

Shares issued from treasury 13 – – 37 162 – – 199

Shares bought back into treasury 13 – – – (6,431) – – (6,431)

Dividends paid 6 – – – – – (5,726) (5,726)

As at 31 March 2022 1,223 78 30,762 71,925 122,611 3,058 229,657

* These reserves are distributable with the exception of the unrealised portion of the capital reserve (see note 14), which is non-distributable.

** The Company does not have any other income or expenses that are not included in the ‘Net return attributable to ordinary redeemable shareholders’ as

disclosed in the Statement of comprehensive income on page 48, and therefore this is also the ‘Total comprehensive income’ for the year.

The notes on pages 52 to 64 form part of these financial statements.

Statement of changes in equity

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 51

Year ended 31 March 2023 Year ended 31 March 2022

Note £000 £000 £000 £000

Cash flows from operating activities

Net return on ordinary activities before taxation (3,799) 34,569

Adjustments for:

Losses/(gains) on investments 9 8,800 (29,232)

Finance costs 5 489 448

Exchange movement on bank borrowings 16 794 416

Purchases of investments* 9 (22,917) (17,528)

Sales of investments* 9 24,316 23,970

Dividend income 2 (8,496) (7,378)

Other income 2 (8) –

Dividend income received 8,523 7,252

Other income received 8 –

(Increase)/decrease in receivables (5) 17

Increase in payables 70 358

Overseas withholding tax deducted (612) (406)

10,962 (22,083)

Net cash flows from operating activities 7,163 12,486

Cash flows from financing activities

Repurchase of ordinary share capital (3,586) (6,431)

Issue of ordinary share capital from treasury 3,631 199

Equity dividends paid from revenue (6,027) (5,768)

Interest paid on borrowings (476) (446)

Net cash flows from financing activities (6,458) (12,446)

Net increase in cash and cash equivalents 705 40

Cash and cash equivalents at the start of the year 865 825

Cash and cash equivalents at the end of the year 1,570 865

* Receipts from the sale of, and payments to acquire, investment securities have been classified as components of cash flows from operating activities

because they form part of the Company’s dealing operations.

The notes on pages 52 to 64 form part of these financial statements.

Statement of cash flow

Financial review Investor informationOverview Governance

52 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Note 1: Accounting policies

(a) STS Global Income & Growth Trust plc (the

‘Company’) is a public company limited by shares, is

incorporated and domiciled in Scotland, and carries

on business as an investment trust.

The accounts are prepared in accordance with the

Companies Act 2006, United Kingdom Generally

Accepted Accounting Practice (Accounting Standards

‘UK GAAP’) including Financial Reporting Standard

(FRS) 102 ‘The Financial Reporting Standard

applicable in the UK and Republic of Ireland’ and

the Statement of Recommended Practice ‘Financial

Statements of Investment Trust Companies and

Venture Capital Trusts’ (the ‘SORP’) issued by

the Association of Investment Companies in July

2022. All of the Company’s operations are of a

continuing nature.

The accounts have been prepared on a going

concern basis under the historical cost convention,

as modified by the revaluation of investments held

at fair value through profit or loss. In preparing these

financial statements the directors have considered the

impact of climate change on the value of the listed

investments that the Company holds. As the portfolio

consists of listed equities, which are valued using

quoted bid prices for investments in an active market,

the fair value reflects the market participants’ view of

climate change risk.

The Company’s assets consist of a diverse portfolio of

listed equity shares which, in most circumstances, are

realisable within a very short timescale. The directors

have reviewed revenue forecasts and they believe

that the Company has adequate financial resources to

continue its operational existence for the foreseeable

future, and for the period to 31 March 2025, which

is at least 12 months from the date the financial

statements are authorised for issue.

The principal accounting policies are set out below.

These policies have been applied consistently

throughout the current and prior year.

Estimates and judgements are continually evaluated

and are based on historical experience and other

factors, including expectations of future events

that are believed to be reasonable under the

circumstances. There are no critical accounting

estimates or judgements.

Functional currency – the Company is required to

determine a functional currency, being the currency

in which the Company predominately operates. The

Board has determined that sterling is the Company’s

functional currency, which is also the currency in which

these financial statements are prepared. This is also

the currency in which all expenses and dividends are

paid in.

(b) Income from equity investments is recognised on

the date on which the investments are quoted ex-

dividend, or where no ex-dividend date is quoted,

when the Company’s right to receive payment is

established. UK dividends received are accounted

for at the amount receivable and are not grossed up

for any tax credit. Any special dividends are looked

at individually to ascertain the reason behind the

payment. This will determine whether they are treated

as revenue or capital. Other income includes any

taxes deducted at source. Gains and losses arising

from the translation of income denominated in foreign

currencies are recognised in the revenue reserve.

Scrip dividends are treated as unfranked investment

income; any excess in value of shares received over

the amount of the cash dividend is recognised in

capital reserve.

expenses are accounted for on an accruals basis.

(d) The management fee and finance costs are allocated

65% to capital and 35% to revenue in accordance with

the Board’s expected long-term split of returns in the

form of capital gains and income, respectively. All

other expenses are wholly allocated to revenue.

(e) Gains and losses on the realisation of investments

and changes in the fair value of investments which

are readily convertible to cash, without accepting

adverse terms, together with exchange adjustments

to overseas currencies are taken to capital reserve.

Notes to the financial statements

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 53

(f) Acquisitions in foreign currencies are recorded in the

functional currency of the Company at the prevailing

exchange rate on the date of the transaction and

retranslated at the rates of exchange ruling on

the date of the statement of financial position.

Investments are recognised initially as at the trade

date of a transaction. Subsequent to this, the disposal

of an investment is accounted on the trade date

of a transaction.

(g) Revenue received and interest paid in foreign

currencies are translated at the rates of exchange

on the transaction date. Any exchange differences

between the recognition and settlement both for

revenue transactions are recognised as revenue in the

statement of comprehensive income.

(h) The Company’s investments are classified as ‘financial

assets at fair value through profit or loss’ and are

valued at fair value. For listed investments this is

deemed to be bid market prices. Gains and losses

arising from changes in fair value are included in the

capital return for the year.

(i) All other financial assets and liabilities are recognised

in the financial statements at amortised cost.

(j) The cost of share buybacks include the amount of

consideration paid, including directly attributable

costs and are deducted from the special distributable

reserve until the shares are cancelled. Proceeds

received from the reissue of shares held in treasury

are treated in accordance with section 731 of the

Companies Act 2006. Proceeds equivalent to the

original cost, calculated by applying a weighted

average price, are credited to the special distributable

reserve to replenish the profits available for

distribution; proceeds in excess of the original cost

are credited to the share premium account.

(k) Nature of distributable reserve accounts

Capital reserve

Gains and losses on realisations of fixed asset

investments, and transactions costs, together with

appropriate exchange differences, are dealt with in

this reserve.

Increases and decreases in the valuation of fixed

asset investments (which are non-distributable) are

also dealt with in this reserve along with receipts of

special dividends considered capital in nature and

any payment of capital dividends. Also taken to this

reserve are 65% of the management fees as detailed

in note (d).

Revenue reserve

Net revenue profits and losses of the company

are recorded within this reserve, together with the

dividend payment made by the Company. The

remaining 35% of the management fees are taken to

this reserve.

Special distributable reserve

Records transactions of which are capital in nature

– shares bought back into treasury and the related

stamp duty incurred. Also taken to this reserve are

proceeds received, based on weighted average

purchase price, on shares issued from treasury.

(l) Dividends payable – under FRS 102 dividends should

not be accrued in the financial statements unless

they have been approved by shareholders before

the statement of financial position date. Dividends to

equity shareholders are recognised in the statement

of changes in equity when the shareholder’s right to

receive the payment is established. In the case of the

fourth interim dividend this would be the ex-dividend

date of 15 June 2023.

Financial review Investor informationOverview Governance

54 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Notes to the financial statements continued

Note 2: Revenue

Year to

31 March

2023

£000

Year to

31 March

2022

£000

Revenue:

From listed investments

UK – equities 2,973 2,889

Overseas – equities 5,257 4,489

8,230 7,378

Other revenue

Deposit interest 8 –

Total allocated to revenue 8,238 7,378

Capital:

From listed investments

UK – equities 266 –

Total allocated to capital 266 –

Total 8,504 7,378

During the year ended 31 March 2023, the Company received £266,000 special dividends treated as capital (2022: £nil).

Note 3: Investment management fee

The increase in fee is a consequence of Troy agreeing to waive its fee from the date of their appointment to 12 November

2021. Had thay not waived their fee, the amount payable in the year to 31 March 2022 would have been £873,000 higher.

Note 4: Other expenses

Year to

31 March

2023

£000

Year to

31 March

2022

£000

Custody/depository fees 43 40

Directors’ fees 158 144

Secretarial fee 45 15

Other administration expenses 322 269

Total 568 468

Auditors’ remuneration*:

– audit services 57 48

625 516

* The audit fees are payable to Ernst & Young LLP. There were no non-audit services for the year ended 31 March 2023 (2022: nil).

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 55

Note 5: Finance costs

Year to 31 March 2023 Year to 31 March 2022

Revenue

£000

Capital

£000

Total

£000

Revenue

£000

Capital

£000

Total

£000

Interest on bank loans 171 318 489 157 291 448

Note 6: Dividends

Year to

31 March

2023

£000

Year to

31 March

2022

£000

Year ended 31 March 2021 – fourth interim dividend of 1.575p – 1,608

Year ended 31 March 2022 – first interim dividend of 1.375p – 1,376

Year ended 31 March 2022 – second interim dividend of 1.375p – 1,374

Year ended 31 March 2022 – third interim dividend of 1.375p – 1,368

Year ended 31 March 2022 – fourth interim dividend of 1.75p 1,754 –

Year ended 31 March 2023 – first interim dividend of 1.45p 1,454 –

Year ended 31 March 2023 – second interim dividend of 1.45p 1,451 –

Year ended 31 March 2023 – third interim dividend of 1.45p 1,443 –

6,102 5,726

Set out below are the total dividends in respect of the period, which forms the basis on which the requirements of sections

1158-1159 of the Corporation Tax Act 2010 are considered.

Year to

31 March

2023

£000

Year to

31 March

2022

£000

First interim dividend of 1.45p for the year ended 31 March 2023 (2022: 1.375p) 1,454 1,376

Second interim dividend of 1.45p for the year ended 31 March 2023 (2022: 1.375p) 1,451 1,374

Third interim dividend of 1.45p for the year ended 31 March 2023 (2022: 1.375p) 1,443 1,368

Proposed fourth interim dividend of 1.85p for the year ended 31 March 2023 (2022: 1.75p) 1,822 1,754

6,170 5,872

The revenue reserves as at 31 March 2023 are £3,297,000, of this £1,822,000 will be used to fund the fourth interim dividend.

The amount reflected above for the cost of the proposed fourth interim dividend for 2023 is based on 98,508,575 ordinary

shares, being the number of ordinary shares in issue excluding those held in treasury at the date of this report. The articles

of association of the Company permit dividends to be paid out of capital.

Financial review Investor informationOverview Governance

56 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Notes to the financial statements continued

Note 7: Taxation on ordinary activities

Year to

31 March

2023

£000

Year to

31 March

2022

£000

Irrecoverable overseas withholding tax 566 632

The corporation tax rate was 19.00% (2022: 19.00%). The tax charge for the year differs from the charge resulting

from applying the standard rate of corporation tax in the UK for an investment trust company. The differences are

explained below:

Year to

31 March

2023

£000

Year to

31 March

2022

£000

Net return before taxation (3,799) 34,569

Corporation tax at rate of 19% (2022: 19%) (722) 6,568

Effects of:

Losses/(gains) on investments (not taxable) 1,672 (5,554)

Non taxable dividend income (1,548) (1,347)

Irrecoverable overseas withholding tax 566 632

Currency losses (not taxable) 166 84

Increase in excess management and loan expenses 432 249

Total tax charge 566 632

As at 31 March 2023, the Company had unutilised management expenses of £21,851,000 (2022: £19,579,000) carried

forward. Due to the Company’s status as an investment trust and the intention to continue to meet the conditions required

to obtain approval in the foreseeable future, the Company has not provided deferred tax on capital gains and losses arising

on the revaluation or disposal of investments.

Note 8: Return per share

Year to

31 March

2023

Year to

31 March

2022

Revenue return (£000) 6,341 5,854

Capital return (£000) (10,706) 28,083

Total (£000) (4,365) 33,937

Weighted average number of ordinary shares in issue 100,005,571 100,591,911

Revenue return per ordinary share 6.34p 5.82p

Capital return per ordinary share (10.70)p 27.92p

Total return per ordinary share (4.36)p 33.74p

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 57

Note 9: Investments at fair value through profit or loss

As at

31 March

2023

£000

As at

31 March

2022

£000

Opening book cost 209,480 215,911

Opening investment holding gains 35,081 5,860

Opening market value 244,561 221,771

Acquisitions at cost 22,917 17,528

Disposals proceeds received (24,316) (23,970)

(Losses)/gains on investments (8,800) 29,232

Market value of investments held 234,362 244,561

Closing book cost 206,662 209,480

Closing investment holding gains 27,700 35,081

Closing market value 234,362 244,561

The Company received £24,316,000 (2022: £23,970,000) from investments sold in the year. The average book cost of these

investments when they were purchased was £25,735,000 (2022: £23,959,000). These investments have been revalued over

time and until they were sold any unrealised gains/losses were included in the fair value of investments.

The transaction costs in acquiring investments during the year were £68,000 (2022: £47,000). For disposals, transaction costs

were £11,000 (2022: £9,000).

Note 10: Trade and other receivables

As at

31 March

2023

£000

As at

31 March

2022

£000

Dividends receivable 827 854

Tax recoverable 253 207

Prepayments and other debtors 33 28

1,113 1,089

None of the Company’s trade receivables are past due or impaired.

Note 11: Trade payables – amounts falling due within one year

As at

31 March

2023

£000

As at

31 March

2022

£000

Interest accrued 28 15

Other trade payables 544 474

572 489

Financial review Investor informationOverview Governance

58 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Notes to the financial statements continued

Note 12: Bank loans

As at

31 March

2023

£000

As at

31 March

2022

£000

Bank term loans due within one year 15,795 –

Bank term loans due after more than one year – 15,001

15,795 15,001

The Company has a multi-currency revolving credit facility with The Royal Bank of Scotland International Limited (the

‘lender’). The facilities comprise £1,500,000 (Facility A), €4,500,000 (Facility B), and $12,750,000 (Facility C) term loans and

£10,000,000 (Facility D) multi-currency revolving credit facility.

The term loans carry an annual fixed rate interest of 2.1408%, 1.4175% and 3.1925% for Facility A, Facility B and Facility C

respectively. The termination date of the term loans is 19 September 2023.

Facility D was not drawn down at 31 March 2023 or 31 March 2022. The rate of interest for Facility D is set at each roll-over

date and is made up of a fixed margin of 1.0% plus SONIA rate. In addition, a commitment fee of 0.45% per annum is

payable in respect of Facility D. The repayment date of Facility D is the last day of its interest period and the termination

date is the 30 September 2023.

The main covenant under the agreement requires the Company to ensure that, at the end of each month, the aggregate of

the loans outstanding does not exceed an amount equal to 25% of its net tangible assets and, unless otherwise agreed with

the lender, net tangible assets are not less than £100,000,000.

As at 31 March 2023 the Company had drawn down the full amount of the loan facilities A to C and the balances as at that

date were for Facility A £1,500,000, Facility B £3,957,000 (€4,500,000) and Facility C £10,338,000 (US$12,750,000) (31 March

2022: Facility A £1,500,000, Facility B £3,792,000 (€4,500,000), Facility C £9,709,000 (US$12,750,000).

Note 13: Called up share capital

Number

of shares

As at

31 March

2023

£000

Number

of shares

As at

31 March

2022

£000

Ordinary shares of 1p

Ordinary shares in issue at the beginning of the year 99,525,075 995 102,468,075 1,025

Ordinary shares issued from treasury during the year 1,575,000 16 100,000 1

Ordinary shares bought back to treasury during the year (1,616,500) (16) (3,043,000) (31)

Ordinary shares in issue at the end of the year 99,483,575 995 99,525,075 995

Treasury shares (ordinary shares 1p)

Treasury shares in issue at the beginning of the year 22,774,073 228 19,831,073 198

Ordinary shares issued from treasury during the year (1,575,000) (16) (100,000) (1)

Ordinary shares bought back to treasury during the year 1,616,500 16 3,043,000 31

Treasury shares in issue at the end of the year 22,815,573 228 22,774,073 228

Total ordinary shares in issue and in treasury at the end of the year 122,299,148 1,223 122,299,148 1,223

There were 1,616,500 shares bought back during the year to 31 March 2023 at a cost of £3,586,000 (2022: 3,043,000 shares

at a cost of £6,431,000). During the year, the Company issued 1,575,000 shares for net proceeds of £3,631,000 (2022: 100,000

shares for net proceeds of £199,000). The share premium represents the surplus amount over the nominal value of the

issued share capital excluding costs, with any related issuance cost allocated to the special distributable capital reserve.

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 59

Note 14: Capital reserve

The analysis of the capital reserve is as follows:

Realised

capital

reserve

£000

Investment

holding

gains

£000

Total

capital

reserve

£000

As at 31 March 2022 87,530 35,081 122,611

Losses on realisation of investments at fair value (1,419) – (1,419)

Realised currency losses during the year (869) – (869)

Movement in unrealised gains – (7,381) (7,381)

Dividend income recognised as capital 266 – 266

Capital expenses (1,303) – (1,303)

As at 31 March 2023 84,205 27,700 111,905

The above split in capital reserve is shown in accordance with provisions of the Statement of Recommended Practice

‘Financial Statements of Investment Trust Companies and Venture Capital Trusts’, 2022. Only the realised capital reserve is

regarded as being available for distribution.

Note 15: Net asset value per share

As at

31 March

2023

As at

31 March

2022

Net assets attributable to shareholders (£’000) 219,235 229,657

Shares in issue at the year end 99,483,575 99,525,075

Net asset value per share 220.37p 230.75p

Note 16: Analysis of debt

As at

31 March

2022

£000

Cash

flows

£000

Exchange

movements

£000

As at

31 March

2023

£000

Cash at bank 865 705 – 1,570

Bank borrowings (15,001) – (794) (15,795)

Net debt (14,136) 705 (794) (14,225)

Note 17: Related party transactions

With the exception of the management and secretarial fees, directors’ fees and directors’ shareholdings (disclosed on

page 35), there have been no related party transactions during the year, or in the prior year.

The management fee payable in respect of the year ended 31 March 2023 was £1,516,000 (2022: £635,000), of which

£386,000 (2022: £373,000) was outstanding at the year-end. The secretarial and directors’ fees payable in respect of the year

ended 31 March 2023 are detailed in note 4. The amount outstanding at the year end for secretarial fees and directors’ fees

was £18,000 (2022: £3,000) and £nil (2022: £nil) respectively.

Financial review Investor informationOverview Governance

60 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Notes to the financial statements continued

Note 18: Financial instruments

The Company’s financial instruments comprise securities and other investments, cash balances, loans and debtors and

creditors that arise directly from its operations; for example, in respect of sales and purchases awaiting settlement, and

debtors for accrued income. The Company also has the ability to enter into derivative transactions in the form of forward

foreign currency contracts, futures and options, for the purpose of managing currency and market risks arising from the

Company’s activities, although no such transactions have been undertaken in the current or prior year.

The main risks the Company faces from its financial instruments are (a) market price risk (comprising of (i) interest rate risk,

(ii) currency risk and (iii) other price risk), (b) liquidity risk and (c) credit risk.

The Board regularly reviews and agrees policies for managing each of these risks. The Manager’s policies for managing

these risks are summarised below and have been applied throughout the year. The numerical disclosures exclude short-

term receivables and creditors, other than for currency disclosures.

(a) Market price risk

The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of changes in

market prices. This market risk comprises three elements – interest rate risk, foreign currency risk and other price risk.

(i) Market risk arising from interest rate risk

Interest rate movements may affect:

• the fair value of the investments in fixed interest rate securities;

• the level of income receivable on cash deposits; and

• the level of interest payable on borrowings.

The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into

account when making investment and borrowing decisions.

The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions and reviews these on

a regular basis. The Company has a revolving multi-currency loan facility with The Royal Bank of Scotland International

Limited which provides flexibility to finance opportunities in the short term. Current guidelines state that the total

borrowings will not exceed 20% of the net tangible assets of the Company. Details of borrowings at 31 March 2023 are

shown in note 12 on page 58.

Interest risk profile

The interest rate risk profile of the portfolio of financial assets and liabilities at the date of the statement of financial position

was as follows:

As at 31 March 2023

Interest

rate

Local

currency

000

Foreign

exchange

rate

GBP sterling

equivalent

£000

Assets:

Pound Sterling 0.60 1,504 n/a 1,504

US dollar 1.37 82 1.233 66

Total 1,570

Liabilities:

Bank loan – Pound sterling 2.14 1,500 n/a 1,500

Bank loan – Euro 1.42 4,500 1.137 3,956

Bank loan – US dollar 3.19 12,750 1.233 10,339

Total 15,795

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 61

Note 18: Financial instruments continued

As at 31 March 2022

Interest

rate

Local

currency

000

Foreign

exchange

rate

GBP sterling

equivalent

£000

Assets:

Pound sterling 0.00 865 n/a 865

Total 865

Liabilities:

Bank loan – Pound sterling 2.14 1,500 n/a 1,500

Bank loan – Euro 1.42 4,500 1.187 3,792

Bank loan – US dollar 3.19 12,750 1.313 9,709

Total 15,001

The interest on the bank loans are fixed until maturity (note 12).

Interest rate sensitivity

The sensitivity analysis below has been determined based on the exposure to interest rates at the statement of financial

position date and the stipulated change taking place at the beginning of the financial year and held constant throughout

the reporting period in the case of instruments that have floating rates.

The following table illustrates the sensitivity of the return after taxation to an increase or decrease of 2.00% (2022: 0.75%)

in interest rates. The sensitivity analysis is based on the Company’s cash and cash equivalents at the Statement of financial

position date, with all other variables held constant.

Year to 31 March 2023 Year to 31 March 2022

2.00%

Increase

in rate

£000

2.00%

Decrease

in rate

£000

0.75%

Increase

in rate

£000

0.75%

Decrease

in rate

£000

Effect on revenue return 31 (31) 6 (6)

Effect on capital return – – – –

Effect on total return and on net assets 31 (31) 6 (6)

In the opinion of the directors, the above sensitivity analysis may not be representative of the year as a whole, since

exposure may change as investments are made, borrowings are drawn down and may be repaid throughout the year.

(ii) Market risk arising from foreign currency risk

A significant proportion of the Company’s investment portfolio is invested in overseas securities and the statement of

financial position can be significantly affected by movements in foreign exchange rates. It is not the Company’s policy to

hedge this risk on a continuing basis but the Company may, from time to time, match specific overseas investment with

foreign currency borrowings.

Financial review Investor informationOverview Governance

62 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Notes to the financial statements continued

Note 18: Financial instruments continued

Foreign currency risk profile

Foreign currency risk exposure by currency of denomination:

As at 31 March 2023 As at 31 March 2022

Investment

exposure

£000

Net monetary

exposure

£000

Total currency

exposure

£000

Investment

exposure

£000

Net monetary

exposure

£000

Total currency

exposure

£000

US dollar 124,002 (9,875) 114,127 132,588 (9,363) 123,225

Euro – (3,883) (3,883) 5,713 (3,794) 1,919

Swiss franc 21,560 149 21,709 22,884 – 22,884

Hong Kong dollar 7,018 – 7,018 4,158 – 4,158

Japanese yen 7,075 119 7,194 4,784 75 4,859

Total foreign currency exposure 159,655 (13,490) 146,165 170,127 (13,082) 157,045

Pound Sterling 74,707 (1,637) 73,070 74,434 (1,822) 72,612

Total net assets 234,362 (15,127) 219,235 244,561 (14,904) 229,657

The asset allocation between specific markets can vary from time to time based on the Manager’s opinion of the

attractiveness of the individual markets.

Foreign currency sensitivity

At 31 March 2023, if sterling had strengthened by 10% in relation to all currencies (2022: 10%), with all other variables held

constant, total net assets and total return on ordinary activities would have decreased by the amounts shown below. A 10%

weakening of sterling against all currencies, with all other variables held constant, would have had an equal but opposite

effect on the financial statement amounts.

As at

31 March

2023

£000

As at

31 March

2022

£000

US dollar 11,413 12,322

Euro (388) 192

Swiss franc 2,171 2,288

Hong Kong dollar 702 416

Japanese yen 719 486

14,617 15,704

(iii) Market risk arising from other price risk

Other price risks (i.e. changes in market prices other than those arising from interest rate or currency risk) may affect the

value of the quoted investments.

It is the Board’s policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from

factors specific to a particular sector. The allocation of assets and the stock selection process, as detailed on pages 13 and

14, both act to reduce market risk. The Manager actively monitors market prices throughout the year and reports to the

Board, which meets regularly in order to review investment strategy. All investments held by the Company are listed on

stock exchanges worldwide.

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 63

Note 18: Financial instruments continued

Other price risk sensitivity

The following table illustrates the sensitivity of the return after taxation and the net asset value to an increase or decrease

of 15% in the fair value of the Company’s equities (2022: 15%). The calculations are based on the portfolio valuations as at

the respective statement of financial position date, and the consequent impact on the investment management fees for the

year, and are not representative of the year as a whole.

Year to 31 March 2023 Year to 31 March 2022

15% increase

in fair value

£000

15% decrease

in fair value

£000

15% increase in

fair value

£000

15% decrease

in fair value

£000

Effect on revenue return (80) 80 (83) 83

Effect on capital return 35,005 (35,005) 36,529 (36,529)

Effect on total return and on net assets 34,925 (34,925) 36,446 (36,446)

(b) Liquidity risk

This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.

Liquidity risk is not considered to be significant as the Company’s assets comprise mainly readily realisable securities,

which can be sold to meet funding commitments if necessary. Short-term flexibility is achieved through the use of loan and

overdraft facilities (see note 12 for more details).

The contractual maturities of the financial liabilities at the year end, based on the earliest date on which payment can be

required are as follows:

As at 31 March 2023 As at 31 March 2022

Three months

or less

£000

More than

three months

£000

Total

£000

Three months

or less

£000

More than

three months

£000

Total

£000

Trade payables:

Bank loans 28 15,992 16,020 15 15,583 15,598

Other trade payables 544 – 544 474 – 474

572 15,992 16,564 489 15,583 16,072

This is the risk of failure of the counterparty to a transaction to discharge its obligations under that transaction that could

result in the Company suffering a loss.

The risk is not considered to be significant by the Board, and is managed as follows:

• investment transactions are carried out with a large number of brokers, whose credit-standing is reviewed periodically

by the Investment Manager, and limits are set on the amounts that may be due from any one broker; and

• cash is held only with reputable banks with high quality external credit ratings.

The maximum credit risk exposure as at 31 March 2023 was £2,397,000 (2022: £1,719,000). This was due to dividend

receivables and cash as per notes 10 and 16.

Fair value of financial assets and financial liabilities

All financial assets and liabilities of the Company are included in the statement of financial position at fair value or the

statement of financial position amount is a reasonable approximation of fair value.

Financial review Investor informationOverview Governance

64 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Note 19: Capital management policies and procedures

The Company’s capital management objectives are:

• to ensure that the Company will be able to continue as a going concern; and

• to maximise the income and capital return to its equity shareholders through an appropriate balance of equity capital

and debt.

The capital of the Company consists of equity, comprising issued capital, reserves and retained earnings.

The Board monitors and reviews the broad structure of the Company’s capital on an ongoing basis. This review includes

the nature and planned level of gearing, which takes account of the Manager’s views on the market and the extent to which

revenue in excess of that which is required to be distributed should be retained.

Note 20: Fair value hierarchy

Under FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’, an entity is required to

classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the

measurements. The fair value hierarchy shall have the following levels:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2: other significant observable inputs (including quoted prices for similar investments, interest rates, prepayments,

credit risk, etc); or

• Level 3: significant unobservable input (including the Company’s own assumptions in determining the fair value of

investments).

The financial assets measured at fair value through profit and loss are grouped into the fair value hierarchy as follows:

At 31 March 2023

Level 1

£000

Level 2

£000

Level 3

£000

Total

£000

Financial assets at fair value through profit or loss

Quoted equities 234,362 – – 234,362

Net fair value 234,362 – – 234,362

At 31 March 2022

Level 1

£000

Level 2

£000

Level 3

£000

Total

£000

Financial assets at fair value through profit or loss

Quoted equities 244,561 – – 244,561

Net fair value 244,561 – – 244,561

Note 21: Company information

STS Global Income & Growth Trust plc is a closed-ended investment company, registered in Scotland No SC283272,

with its ordinary shares listed on the London Stock Exchange. The address of the registered office is 28 Walker Street,

Edinburgh EH3 7HR.

Notes to the financial statements continued

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 65

AIFMD Disclosures (Unaudited)

In accordance with the AIFM Directive, information in relation to the Company’s leverage and the remuneration of the

Company’s AIFM, Juniper Partners, is required to be made available to investors. In accordance with the Directive, the

AIFM’s remuneration policy and the numerical remuneration disclosures in relation to the AIFM’s year ended 30 April 2022

and 30 April 2021 are available from the Company Secretary on request.

The Company’s maximum and actual leverage levels are shown below:

Gross method Commitment method

Leverage Exposure

31 March

2023

31 March

2022

31 March

2023

31 March

2022

Maximum permitted limit 300% 300% 200% 200%

Actual 107% 106% 108% 106%

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 Manager is also required to comply with the gearing parameters set

by the Board in relation to borrowings.

Financial review Investor informationOverview Governance

66 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

The alternative performance measures (‘APMs’) detailed below are used by the Board to assess the Company’s performance

against a range of criteria and are viewed as particularly relevant to an investment trust. Other terms detailed below are

for reference.

NAV total return Net asset value (‘NAV’) total return measures the increase or decrease in NAV per

share plus the dividends paid in the period, which are assumed to be reinvested at

NAV at the time that the share price is quoted ex-dividend.

2023 2022

Opening NAV per share A 230.75p 202.68p

Closing NAV per share B 220.37p 230.75p

% change in NAV C=(B-A)/A (4.5)% 13.8%

Impact of dividends reinvested D 2.7% 3.0%

NAV total return E=C+D (1.8)% 16.8%

Share price total return Share price total return measures the increase or decrease in share price plus the

dividends paid in the period, which are assumed to be reinvested at the share price at

the time that the share price is quoted ex-dividend.

2023 2022

Opening share price A 231.00p 202.00p

Closing share price B 214.00p 231.00p

% change in share price C=(B-A)/A (7.4)% 14.4%

Impact of dividend reinvested D 2.6% 3.0%

Share price total return E=C+D (4.8)% 17.4%

Premium/discount to NAV The amount by which the share price is higher/lower than the NAV per share,

expressed as a percentage of the NAV per share.

2023 2022

NAV per share A 220.37p 230.75p

Share price B 214.00p 231.00p

(Discount)/premium C=(B-A)/A (2.89)% 0.11%

Alternative performance measures

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 67

NAV per share This is the main measure of the underlying value of a share in an investment company.

The NAV (cum income) per share includes undistributed current year income and

the calculation is included in note 15. NAV (ex income) per share is calculated by

deducting undistributed current year income from the NAV. To determine the NAV (ex

income) per share the following calculation is applied:

2023 2022

Net assets per statement of financial

position A 219,235,000 229,657,000

Current year revenue return B 6,341,000 5,854,000

Dividends paid for the current year

(note 6) C 4,348,000 4,118,000

NAV (ex income) D=A-(B-C) 217,242,000 227,921,000

Shares in issue at the year-end E 99,483,575 99,525,075

Net asset value per share (ex income) F=D/E 218.37p 229.01p

Ongoing charges Ongoing charges are the total of the Company’s management fees and other

operating expenses expressed as a percentage of average net assets in the year.

Operating costs exclude costs of buying and selling investments, finance costs,

taxation, and the direct costs of buying back or issuing ordinary shares. The ongoing

charges figure has been calculated in line with the AIC’s recommended methodology.

2023

£000

2022

£000

Investment management fee 1,516 635

Other expenses 625 516

Discount control costs (fixed element) 32 30

Total expenses 2,173 1,181

Effect of 12 month management fee

holiday* – 873

One-off costs (50) –

Ongoing charges A 2,123 2,054

Average net assets B 226,835 220,068

Ongoing charges ratio C=A/B 0.94% 0.93%

* Troy agreed to waive its management fee for a period of 12 months from the date of their appointment

(12 November 2020). If Troy had not waived its fee until 12 November 2021 the investment management fee

payable in the year ended 31 March 2022 would have been £873,000 higher.

Financial review Investor informationOverview Governance

68 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

AIFM

An alternative investment fund manager (‘AIFM’) is an entity

that provides certain investment services, including portfolio

and risk management services. The Company has appointed

Juniper Partners as its AIFM. AIFMs are responsible for

managing investment products that fall within the category of

alternative investment funds and investment trusts, including

the Company, are included in this.

Comparison index

The Company’s investment performance (on a total return

basis) is measured against the Lipper Global – Equity

Global Income Index for comparison purposes.

Discount control mechanism

The policy through which the Company issues shares where

there is demand in the market or buys back shares when

there are excess shares available in the market with the aim

of ensuring, in normal market conditions, that the shares

trade consistently close to their net asset value.

Dividend

Income from an investment in shares. Not all investment

companies pay dividends. Dividend income is not

guaranteed and may fall as well as rise. The Company pays

dividends quarterly in April, July, October and January.

Dividend yield

The annual dividends expressed as a percentage of the

current share price.

Ex and cum income

Also shown as ‘ex div’ or ‘xd’, this means that, if you buy

the shares today, you will not receive the most recently

declared dividend.

Shares are being traded all the time on stock markets, so

for administrative reasons there needs to be a point when

buyers and sellers agree whether they will receive the most

recently declared dividend. The point when the shares

purchased will no longer receive the dividend is known

as the ‘ex dividend date’ and the shares are said to have

‘gone ex dividend’. The share price will normally fall by the

amount of the dividend to reflect this.

If you buy the shares when you are still entitled to the most

recently declared dividend, this is known as the shares

being cum dividend.

Gearing

At its simplest, gearing means borrowing money to buy

more assets in the hope the Company makes enough profit

to pay back the debt and interest and leave something

extra for shareholders. However, if the investment portfolio

doesn’t perform well, gearing can increase losses. The

more an investment company gears, the higher the risk.

The gearing currently employed is discussed in the

strategic report on page 14.

Leverage

Leverage, for the purposes of the AIFMD, is any method

which increases the Company’s exposure to stockmarkets

whether through borrowings, derivatives, or any other

means. It is expressed as a ratio of the Company’s

exposure to its NAV. In summary, the gross method

measures the Company’s exposure before applying

hedging or netting arrangements. The commitment

method allows certain hedging or netting arrangements

to be offset. As at 31 March 2023, the Company had no

hedging or netting arrangements.

Net assets

A measure of the size of an investment company. The total

value of all assets held, less liabilities and prior charges,

including income for the current year.

Share buy backs

Describes an investment company buying its own shares

and reducing the number of shares in issue.

Share buy backs can be used to return money to

shareholders, but are also often used to tackle the

Company’s discount. Discounts may reflect an imbalance

between the demand for shares and the number of shares

in existence. The hope is that, by reducing the number of

shares in existence, the buy back will help to prevent the

discount widening or even reduce it.

Share price

The price of a share as determined by the stock market.

If you see a single share price shown, it’s likely that this is

the mid-market price. This is different to the price at which

you buy and sell the shares, which are known as the bid

price (sell) and offer price (buy).

Treasury shares

Shares in the Company’s own share capital which the

Company itself owns and which can be sold to investors to

raise new funds.

Treasury shares only come into existence when the Company

buys back its own shares. Instead of cancelling the shares

(i.e. they cease to exist) they are held ‘in treasury’ by the

Company and can be sold at a later date to raise new funds.

Glossary of terms

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 69

Financial review Investor informationOverview Governance

The Company’s shares quality for tax efficient wrapper

products like individual savings accounts (‘ISAs’) and self-

invested personal pensions (‘SIPPs’) as well as may other

investment wrappers that can be used, including those

designated for children.

Platforms, fund supermarkets and online

stockbrokers

You can invest using a number of fund platforms and fund

supermarkets. Many offer wrapper products like ISAs and

SIPPs and children’s savings products. A number of real-

time execution only stockbroking services also allow you

to trade online, manage your portfolio and buy UK listed

shares. These services do not offer financial advice and if

you are unsure about investing, we recommend that you

speak to a qualified financial adviser.

Retail distribution/NMPI status

The Company’s shares are ‘excluded securities’ for

the purposes of the rules relating to non-mainstream

pooled investment (‘NMPI’) products. This means

they can be recommended by independent financial

advisers to their ordinary retail clients, subject to normal

suitability requirements.

Independent financial advisers

An increasing number of independent financial

advisers are including investment trusts within their

investment recommendations for clients. To find

an adviser who recommends on investment trusts,

visit www.unbiased.co.uk.

Private client stockbrokers

If you have a large sum to invest, you may want to contact

a private client stockbroker. They can manage your entire

portfolio of shares and will advise you on your investments.

To find a private client stockbroker visit the Wealth

Management Association: www.thewma.co.uk.

Trading Codes

(You may be asked for these when investing)

TIDM code: STS

Sedol: B09G3N2

ISIN: GB00B09G3N23

Ways to invest in the Company

70 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Notice of Annual General Meeting

Notice is hereby given that the annual general meeting

of STS Global Income & Growth Trust plc (the ‘Company’)

will be held at 28 Walker Street, Edinburgh, EH3 7HR, on

20 September 2023 at 2.00pm for the following purposes:

Ordinary business

To consider and, if thought fit, pass the following

resolutions as ordinary resolutions:

1. To receive the audited financial statements for the

year ended 31 March 2023 together with the reports

of the directors and the auditor thereon.

2. To approve the directors’ remuneration report for the

year ended 31 March 2023.

3. To approve the directors’ remuneration policy

4. To approve the dividend policy.

5. To re-elect John Evans as a director of the Company.

6. To re-elect Angus Cockburn as a director of the

Company.

7. To re-elect Sarah Harvey as a director of the Company.

8. To re-elect Alexandra Innes as a director of the

Company.

9. To re-elect Mark Little as a director of the Company.

10. That Ernst & Young LLP be re-appointed as auditor

of the Company, to hold office from the conclusion

of this meeting until the conclusion of the next

general meeting at which accounts are laid before

the company.

11. To authorise the directors to fix the remuneration of

the auditor for the year ending 31 March 2024.

12. To increase the aggregate limit on directors’

remuneration from £200,000 to £250,000 per annum.

13. In substitution of any existing authority of the

directors, the directors of the Company be and are

hereby generally and unconditionally authorised

pursuant to s551 of the Companies Act 2006 (the ‘Act’)

to allot equity securities (as defined in s560 of the Act)

and to grant rights to subscribe for or to convert any

security into shares in the company up to a maximum

aggregate nominal amount of £328,362 (being one

third of the issued share capital of the company as at

6 June 2023; being the latest practicable date before

the date of this notice) provided that the authority

hereby given shall expire (unless previously varied as

to duration, revoked or renewed by the company in

general meeting) on 30 September 2024 or, if earlier,

at the conclusion of the annual general meeting of

the company in 2024 save that the Company may, at

any time before the expiry of such authority, make an

offer or enter into an agreement which would or might

require equity securities to be allotted after the expiry

of such authority and the directors may allot equity

securities in pursuance of such an offer or agreement

as if such authority had not expired.

Special business

To consider and, if thought fit, pass the following

resolutions as special resolutions:

14. That the directors be empowered pursuant to s570

and s573 of the Act to allot equity securities (as

defined in s560 of the Act) for cash pursuant to the

general authority conferred on them by resolution 13

above and/ or to sell equity securities held as treasury

shares for cash pursuant to s727 of the Act, in each

case as if s561 of that Act did not apply to any such

allotment or sale, provided that this power shall be

limited to:

(a) any such allotment and/or sale of equity

securities in connection with an offer or issue

by way of rights or other pre-emptive offer or

issue, open for acceptance for a period fixed

by the directors, to holders of ordinary shares

(other than the Company) on the register

on any record date fixed by the directors in

proportion (as nearly as may be) to the respective

number of ordinary shares deemed to be held

by them, subject to such exclusions or other

arrangements as the directors may deem

necessary or expedient in relation to fractional

entitlements, legal or practical problems arising

in any overseas territory, the requirements of any

regulatory body or stock exchange or any other

matter whatsoever; and

(b) any such allotment and/or sale of equity

securities, otherwise than pursuant to sub-

paragraph (a) above, having, in the case of

ordinary shares, an aggregate nominal value or,

in the case of other equity securities, giving the

right to subscribe for or convert into ordinary

shares having an aggregate nominal value, not

exceeding the sum of £244,598 (representing

20% of the issued ordinary share capital as at

6 June 2023; being the latest practical date

before the date of this notice).

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 71

Financial review Investor informationOverview Governance

This authority shall expire, unless previously

revoked or renewed by the company in a general

meeting, on 30 September 2024 or, if earlier, at

the conclusion of the annual general meeting

of the Company to be held in 2024, except that

the Company may at any time before such expiry

make any offer or agreement which would or

might require equity securities to be allotted or

equity securities held as treasury shares to be

sold after such expiry and the directors may allot

equity securities and/or sell equity securities held

as treasury shares in pursuance of such an offer

or agreement as if the power conferred by this

resolution had not expired.

15. That, in accordance with s701 of the Act, and in

substitution for any existing authority, the Company

be and is hereby generally and unconditionally

authorised to make market purchases (within the

meaning of s693 of the Act) of ordinary shares of 1p

each in the capital of the Company provided that:

(i) the maximum aggregate number of ordinary

shares authorised to be purchased is 14,766,435

(being 14.99% of the issued share capital as at

6 June 2023, being the last practicable date

before this notice);

(ii) the minimum price which may be paid for an

ordinary share is 1p per share which amount shall

be exclusive of expenses;

(iii) the maximum price (exclusive of expenses) which

may be paid for an ordinary share shall be not

more than the higher of (i) 105% of the average

of the mid-market quotations for an ordinary

share of the company as derived from the Daily

Official List of the London Stock Exchange for

the five business days immediately preceding

the date of purchase or (ii) the higher of the price

quoted for (a) the last independent trade of and

(b) the highest current independent bid for, any

number of ordinary shares on the trading venue

where the purchase is carried out;

(iv) the authority hereby conferred shall expire

15 months after the date of passing of this

resolution or at the conclusion of the next annual

general meeting of the company following the

passing of this resolution, whichever first occurs,

unless such authority is renewed or revoked prior

to such time; and

(v) the Company may enter into a contract to

purchase ordinary shares under this authority

prior to the expiry of such authority which will or

may be executed wholly or partly after the expiry

of such authority and may make a purchase

of ordinary shares in pursuance of any such

contract as if the authority hereby conferred

had not expired.

16. That a general meeting of the Company other than

an annual general meeting may be called on not less

than 14 clear days’ notice provided that this authority

shall expire at the conclusion of the next annual

general meeting of the Company.

By order of the Board

Juniper Partners Limited

Secretary

7 June 2023

Registered office: 28 Walker Street, Edinburgh EH3 7HR

72 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

Notes to the Notice of AGM

1. This document is important and requires your

immediate attention.

If you are in any doubt as to what action you should

take, you are recommended to seek your own

financial advice from your stockbroker or other

independent adviser authorised under the Financial

Services and Markets Act 2000.

2. If you have sold or transferred all of your shares in the

Company, please forward this document, together

with the accompanying documents, as soon as

possible either to the purchaser or transferee or to the

person who arranged the sale or transfer so they can

pass these documents to the person who now holds

the shares.

3. The Company has specified that to be entitled to

attend and vote at the meeting (and for the purpose

of determining the number of votes they may cast),

members must be entered on the register of members

48 hours before the time fixed for the meeting, or, if

the meeting is adjourned, on the register of members

48 hours before the time for holding any adjourned

meeting. Changes to entries on the share register

after the relevant deadline will be disregarded in

determining the rights of any person to attend or vote

at the meetings.

4. A member entitled to attend, speak and vote may

appoint a proxy or proxies to attend, speak and, on

a poll, vote instead of him/her. A proxy need not

be a member of the Company. A shareholder may

appoint more than one proxy provided that each

proxy is appointed to exercise the rights attached to

a different share or shares held by that Shareholder.

To be valid, proxies must be lodged at the office of

the registrars of the Company not less than 48 hours

before the time of the meeting. A form of proxy is

enclosed. The notes to the form of proxy explain how

to direct your proxy, how to vote on each resolution,

or with-hold your vote. Appointment of a proxy will

not preclude a member from attending the meeting

and voting in person.

5. You may submit your proxy electronically using The

Share Portal service at signalshares.com. Shareholders

can use this service to vote or appoint a proxy online.

The same voting deadline of 48 hours (excluding non-

working days) before the time of the meeting applies

as if you were using the paper proxy form to vote or

appoint a proxy by post to vote for you. Shareholders

will need to use the unique personal investor code.

This number can be found on your share certificate.

Shareholders should not show this information to

anyone unless they wish to give proxy instructions on

their behalf.

6. A corporation which is a member can appoint one or

more corporate representative(s) who may exercise,

on its behalf, all its powers as a member provided that

no more than one corporate representative exercises

powers over the same share.

7. As at 6 June 2023 (being the last practicable day prior

to the publication of this Notice) the company’s issued

voting share capital consists of 122,299,148 ordinary

shares, of which 23,790,573 shares are held in treasury.

Each share carries one vote, therefore, the total voting

rights in the Company are 98,508,575 votes.

8. 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.

The message must be transmitted so as to be

received by the Company’s agent, (CREST Participant

ID: RA10), no later than 48 hours (excluding non-

working days) before the time appointed for

the meeting.

9. In the case of joint holders, where more than one of

the joint holders completes a proxy appointment, only

the appointment submitted by the most senior holder

will be accepted. Seniority is determined by the order

in which the names of the joint holders appear in the

company’s register of members in respect of the joint

holding (the first-named being the most senior).

10. Pursuant to s319A of the Companies Act 2006, the

Company must provide an answer to any question

which is put by a member attending the meeting

relating to the business being considered, except

if a response would not be in the interest of the

company or for the good order of the meeting

or if to do so would involve the disclosure of

confidential information.

11. Pursuant to s338 of the Companies Act 2006,

members fulfilling the qualification criteria set

out at Note 12 below, may, require the Company

to give notice of a resolution which may properly

be moved and is intended to be moved at the

meeting if a) the resolution would not, if passed, be

ineffective (whether by reason of inconsistency with

any enactment or the Company’s constitution or

otherwise) and b) it is not defamatory of any person,

frivolous or vexatious.

Notice of Annual General Meeting continued

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 73

Financial review Investor informationOverview Governance

12. Members fulfilling the qualification criteria set out

below may require the Company, without payment,

to place on its website a statement, made available

also to the Company’s auditor, setting out any matter

relating to the audit of the company’s accounts,

including the Auditor’s Report and the conduct of

the audit; or any circumstance connected with an

auditor of the company ceasing to hold office since

the previous meeting at which the annual report

and accounts were laid in accordance with s437 of

the Companies Act 2006. The business of the AGM

should include any statement that the Company has

been required to publish, under s527 of the Act, on

its website.

The Company becomes required to place such a

statement on the website, should a) members with at

least 5% of the total voting rights of the company or b)

at least 100 members who are entitled to vote and on

whose shares an average sum per member of at least

£100 has been paid, have submitted such a request

to the company, not later than six weeks before the

meeting. Members seeking to do this should write to

the Company Secretary.

13. Information regarding the meeting, including the

information required by s311A of the Companies Act

2006, is available from www.stsplc.co.uk.

14. The right to appoint a proxy does not apply to

persons whose shares are held on their behalf by

another person and who have been nominated

to receive communications from the Company in

accordance with section 146 of the Companies Act

2006 (“nominated persons”). Nominated persons may

have a right under an agreement with the registered

Shareholder who holds the shares on their behalf to

be appointed (or to have someone else appointed)

as a proxy. Alternatively, if nominated persons do not

have such a right, or do not wish to exercise it, they

may have a right under such an agreement to give

instructions to the person holding the shares as to the

exercise of voting rights. If you have been nominated

to receive general shareholder communications

directly from the Company, it is important to

remember that your main contact in terms of your

investment remains as it was (so the registered

shareholder, or perhaps custodian or broker, who

administers the investment on your behalf). Therefore

any changes or queries relating to your personal

details and holding (including any administration

thereof) must continue to be directed to your existing

contact at your investment manager or custodian. The

Company cannot guarantee dealing with matters that

are directed to us in error. The only exception to this

is where the Company, in exercising one of its powers

under the Companies Act 2006, writes to you directly

for a response.

15. Copies of the letters of appointment of the directors

of the Company and the articles of association are

available for inspection at the Company’s registered

office at 28 Walker Street, Edinburgh, EH3 7HR

until the close of the meeting and at the meeting

(for 15 minutes prior to the meeting and during

the meeting).

16. Any electronic address provided either in this notice

of AGM or any related documents (including the

form of proxy) to communicate with the company

may not be used for any purposes other than those

expressly stated.

74 STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023

The Company’s website can be found at www.stsplc.co.uk. This offers a wealth of information about the Company.

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Enquiries

If you have an enquiry about STS Global Income & Growth Trust, please get in touch.

0131 378 0500 l companysecretary@stsplc.co.uk

The Chairman

c/o Company Secretary

STS Global Income & Growth Trust plc

28 Walker Street

Edinburgh

EH3 7HR

chairman@stsplc.co.uk

Easy access to information

STS Global Income & Growth Trust plc Annual Report for the year to 31 March 2023 75

Directors

John Evans (Chairman)

Angus Cockburn

Sarah Harvey (Senior Independent Director)

Alexandra Innes

Mark Little

AIFM and Company Secretary

Juniper Partners Limited

28 Walker Street

Edinburgh EH3 7HR

Juniper Partners Limited is authorised and regulated by the

Financial Conduct Authority.

Manager

Troy Asset Management Limited

33 Davies Street

London W1K 4BP

Troy Asset Management Limited is authorised and regulated by

the Financial Conduct Authority.

Registered office

STS Global Income & Growth Trust plc

28 Walker Street

Edinburgh EH3 7HR

Registered in Scotland, registered number SC283272

Independent auditor

Ernst & Young LLP

25 Churchill Place

Canary Wharf

London E14 5EY

Custodians

J.P. Morgan Chase Bank N.A.

25 Bank Street

Canary Wharf

London E14 5JP

Bankers

The Royal Bank of Scotland International Limited

71 Bath Street

St Helier

Jersey JE4 8PJ

Depositary

J.P. Morgan Europe Limited

25 Bank Street

Canary Wharf

London E14 5JP

Brokers

JPMorgan Cazenove Limited

25 Bank Street

Canary Wharf

London E14 5JP

Association of Investment Companies

9th Floor

24 Chiswell Street

London EC1Y 4YY

www.theaic.co.uk

STS Global Income & Growth Trust is a member of the AIC (the

trade body of the investment company industry).

Shareholder information

Website: www.stsplc.co.uk

Corporate information

Financial calendar – key dates 2023

First interim

dividend paid

Third interim

dividend paid

Half-yearly results, announced

half-yearly financial report

issued

Second interim

dividend payment

Fourth interim

dividend paid

Year end figures

announced and

annual report issued

January OctoberApril July

SeptemberJune

Annual General

Meeting

Financial review Investor informationOverview Governance

(formerly Securities Trust of Scotland plc)

stsplc.co.uk

28 Walker Street

Edinburgh

EH3 7HR