2022

Strategic Report

Polar Capital Global Financials Trust plc

Annual Report and Financial Statements for the year ended 30 November 2022

Annual Report and Financial Statements for the year ended 30 November 2022

Contents

Your Company at a Glance

1

Summary of Share Capital Movements

2

Financial Highlights

3

Performance

4

Performance Highlights

5

Chairman's Statement

6

Chair Elect Q & A

11

Board of Directors

12

Investment Managers

14

Manager's Report

Investment Manager's Report

16

Attribution Analysis

23

Top Ten Investments

24

Full Investment Portfolio

25

Portfolio Review

28

Environmental, Social and Governance

Corporate Responsibility

30

Investment Perspective incorporating ESG

32

ESG Dashboard

34

Governance

Strategic Report

36

Section 172 Statement

44

Report of the Directors

48

Report on Corporate Governance

51

Audit Committee Report

60

Directors' Remuneration Report

67

Statement of Directors' Responsibilities

73

Independent Auditors' Report

74

Financial Statements and Notes

Statement of Comprehensive Income

83

Statement of Changes in Equity

84

Balance Sheet

85

Cash Flow Statement

86

Notes to the Financial Statements

87

Shareholder Information

Alternative Performance Measures (APMs)

115

Glossary of Terms

118

Corporate Information - AGM

120

Corporate Information - Other

122

Contact Information

IBC

Polar Capital Global Financials Trust plc (the Company or Trust) is a UK investment trust launched in July 2013. The Company initially had a fixed seven-year life but in April 2020, with Shareholder approval, moved to five-yearly tender offers with no fixed end of life.

The Company has appointed Polar Capital as its Investment Manager. Since its foundation in 2001, Polar Capital has grown steadily and currently has 14 autonomous investment teams managing specialist, active and capacity constrained portfolios, with a collegiate and meritocratic culture where capacity of investment strategies is managed to enhance and protect performance.

See more at:

polarcapitalglobalfinancialstrust.com

Your Company at a Glance

Investment Objective

The Company's investment objective is to generate for investors a growing dividend income together with capital appreciation.

Investment Policy

The Company seeks to achieve its objective by investing primarily in a global portfolio consisting of listed or quoted securities issued by companies in the financials sector operating in the banking, insurance, property and other subsectors. The portfolio is diversified by factors including geography, industry sub-sector and stock market capitalisation. Full details of the investment policy are set out on page 36 of the Strategic Report.

Management

The Company operates as an investment trust with an independent Board and third-party Investment Manager.

The Company has appointed Polar Capital LLP (the "Manager") as its AIFM and Investment Manager under the terms of an Investment Management Agreement ("IMA"). The IMA provides for a broad range of services including portfolio management. The portfolio has been jointly managed by Mr Nick Brind and Mr John Yakas since launch on 1 July 2013. With effect from 1 December 2020, Mr George Barrow was also appointed as Co-Fund Manager with Mr Brind and Mr Yakas. Details of the fees payable

to the Manager can be found on pages 8, 38 and 93. The Management Fee is charged 80% to capital and 20% to revenue; the Performance Fee, when payable, is charged 100% to capital.

Benchmark

In April 2020, following the reconstruction of the Company, the benchmark was changed to the MSCI ACWI Financials Net Total Return Index in recognition of the Company's level of portfolio exposure to emerging market financials equities and its limited portfolio exposure to real estate equities. Prior to this, the Company was benchmarked against the MSCI World Financials + Real Estate Net Total Return Index. See page 37 for more information.

Life of the Company - Tender Offer/ Reconstruction

The Company was launched in July 2013 with a fixed seven-year life. Shareholders approved changes to the Company's Articles of Association to make a tender offer to all Shareholders and to extend the Company's life indefinitely at the Company's General Meeting held on 7 April 2020 ("the Reconstruction"). The new Articles of Association removed the fixed life and now require the Company to make tender offers at five-yearly intervals, with the first to commence on or before 30 June 2025.

Gearing and use of Derivatives

Under the Articles of Association the Company may utilise an overall maximum leverage (gearing) limit of 20 per cent. of NAV at the time at which the relevant borrowing is taken out or increased.

In July 2022, the Company entered into a new agreement with Royal Bank of Scotland ("RBS"), for a three-year revolving credit facility ("RCF") in the amount of £50m, and two three-year term loans for £15m and USD $18.4m respectively. At the period end, the term loans had been fully drawn down; £25m in sterling and $6m in US dollars had also been drawn down under the RCF. As at 16 February 2023, the Company had drawn down a total of £70.3m across the term loan and RCF, equating to 7.9% net gearing.

Details of how the borrowings may be utilised are given in the Strategic Report on page 36.

Capital Structure

As at 30 November 2022, the Company had 325,394,000 ordinary shares of 5 pence each in issue of which 6,356,000 shares were held in treasury. Since the year end and up to

16 February 2023 (the latest practicable date), the Company has bought back a further 790,000 ordinary shares into treasury.

Annual Report and Financial Statements 2022 • Polar Capital Global Financials Trust plc

1

Summary of Share Capital Movements

Ordinary shares

Treasury shares*

As at 1 December 2021

272,980,000

6,350,000

Share capital change during the financial year

Shares issued since 1 December 2021 and up to the

General Meeting held on 1 February 2022:

Reissue out of treasury (1)

6,350,000

(6,350,000)

Issues of new shares out of

15,150,000

-

2021 AGM authority (2)

As at 1 February 2022

294,480,000

-

Shares issued since 1 February 2022 and up to Annual General

Meeting held 7 April 2022:

Issue of new shares

pursuant to Subsequent

16,869,893

-

Placing 1 in Jan 2022 (3)

Issue of new shares

pursuant to Subsequent

9,905,427

-

Placing 2 in Feb 2022 (3)

Issues of new shares out of

9,744,680

-

2022 GM authority (4)

As at 7 April 2022

331,000,000

-

Shares issued since 7 April 2022 and up to the year ended

30 November 2022:

Issues of new shares out of

750,000

2022 AGM authority (5)

Ordinary shares repurchased and held in treasury

Repurchased and held in

(6,356,000)

6,356,000

treasury

As at 30 November 2022

325,394,000

6,356,000

Share capital change subsequent to the financial year end

Ordinary shares repurchased since 1 December 2022 and up to

the date of this Annual Report 16 February 2023:

Repurchased and held in

(790,000))

790,000

treasury

As at 16 February 2023

324,604,000

7,146,000

The shares above have been issued under the following authorities:

Note 1: General Meeting ("GM") authority granted by Shareholders on 1 February 2021.

Note 2: AGM authority granted by Shareholders on 30 March 2021. This replaced the authority granted on 28 May 2020.

Note 3: Prospectus following the GM authority granted by Shareholders on 16 June 2021. This was in addition to the authority granted under (2).

Note 4: GM authority granted by Shareholders on 1 February 2022. This replaced the authority granted under (1).

Note 5: AGM authority granted by Shareholders on 7 April 2022. This replaced the authority granted under (2).

  • Treasury shares are held in the name of the Company and do not attract the right to receive dividends or have any other voting rights. Shares held in treasury may be reissued into the market at a premium to NAV.

2 Polar Capital Global Financials Trust plc • Annual Report and Financial Statements 2022

Financial Highlights

Financial Highlights as at and for the year ended 30 November

Net asset value (NAV) per ordinary share (total return)*

Ordinary share price (total return)*

2022

79,724,9001.9%

2022

-7.6%

29.7%

2021

2021

27.9%

29.7%

Total net assets^ (+18.4%)

NAV per ordinary share (-0.7%)

2022

£541,272,000

2022

166.3p

2021

2021

£457,247,000

167.5p

Ordinary share price (-10.1%)

(Discount)/premium per ordinary share*

2022

2022

154.6p

-7.0%

2021

2021

172.0p

2.7%

Net gearing*

Total dividend per ordinary share paid or declared

for the year

2022

6.0%

2022

4.45p

2021

5.2%

2021

4.40p

Dividends~

The Company has paid or declared the following dividends relating to the financial year ended 30 November 2022:

Amount per

Ordinary Shares

Pay date

Ordinary share

in Issue

Record Date

Ex-Date

Declared Date

First interim: 31 August 2022

2.40p

330,440,000

5 August 2022

4 August 2022

1 July 2022

Second interim: 28 February 2023

2.05p

324,779,000

3 February 2023

2 February 2023

18 January 2023

Total (2021: 4.40p)

4.45p

  • The change in net assets reflects shares reissued from treasury in the year, new shares issued, placing, buybacks, dividend paid and market movements. * Alternative Performance Measure, see pages 115 to 117 for further explanations.
    ~ Refer to Note 12 on pages 96 to 97 for more details.
    Data sourced by HSBC Securities Services Limited, Polar Capital LLP, MSCI and Lipper.

Annual Report and Financial Statements 2022 • Polar Capital Global Financials Trust plc

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Polar Capital Global Financials Trust plc published this content on 21 February 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 February 2023 07:39:01 UTC.