Annual Report & Financial Statements

For the year ended 30 April 2022

Polar Capital Technology Trust Annual Report and Financial Statements for the year ended 30 April 2022

See more at:

polarcapitaltechnologytrust.co.uk

Inflation, Technology and

the Repricing of Risk

www.polarcapitaltechnologytrust.co.uk

Contents

TBC

Purpose

The purpose of the Company is to provide a vehicle in

which investment is spread across a diversified portfolio

of technology companies which aim to deliver long term

capital growth to shareholders. The purpose is achieved

though the Investment Objective and policy incorporating

parameters to ensure excessive risk is not undertaken.

Investment Objective

The Investment Objective is to maximise long-term capital

growth through investing in a diversified portfolio of

technology companies around the world. The investment

policy and investment guidelines are set out in full in the

Strategic Report on pages 56 to 58.

Management structure

The Company is an investment trust led by an experienced

Board of Independent Non-executive Directors with

extensive knowledge of investment matters and the

regulatory and legal framework within which your

Company operates. The role of the Board is to provide

oversight of the Company’s activities and to seek to ensure

that the appropriate financial resources and controls are

in place to deliver the Investment Objective and manage

the risks associated with such activities. The Directors have

appointed various third-party suppliers to provide a range

of services including investment management, depositary

and administrative services to the Company.

Polar Capital LLP has been the appointed Investment

Manager and AIFM throughout the year. Ben Rogoff, the

appointed portfolio manager, has been responsible for the

Company’s portfolio since 1 May 2006 and is supported by a

team of technology specialists. Polar Capital LLP is authorised

and regulated by the Financial Conduct Authority.

Our Business at a Glance

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143

REGISTERED OFFICE AND ADDRESS FOR CONTACTING

THE DIRECTORS

16 Palace Street,

London,

SW1E 5JD

020 7227 2700

Company Registered Number

Polar Capital Technology Trust Plc

(The ‘Company’)

is incorporated in England and Wales with company

number 3224867 and registered as an investment company

under section 833 of the Companies Act 2006.

Investment Manager and AIFM

Polar Capital LLP

Authorised and regulated by the Financial Conduct

Authority

Represented by Portfolio Manager Ben Rogoff

Company Secretary

Polar Capital Secretarial Services Limited

Represented by Tracey Lago, FCG

Email: cosec@polarcapital.co.uk

Independent Auditors

KPMG LLP

Chartered Accountants and Statutory Auditors

15 Canada Square,

London, E14 5GL

Corporate Broker

Stifel Nicolaus Europe Limited

150 Cheapside,

London, EC2V 6ET

Depositary, Bankers and Custodian

HSBC Bank PLC

8 Canada Square,

London, E14 5HQ

Registrar

Equiniti Limited

Aspect House, Spencer Road, Lancing, West Sussex,

BN99 6DA

Shareholder helpline: 0800 313 4922

(or +44 (0) 121 415 0804 from overseas)

www.shareview.co.uk

Shareholders who have their shares registered in their own

name, not through a share savings scheme or ISA, can

contact the registrars with any queries on their holding.

In correspondence you should refer to the Company,

stating your registered name and address and, if available,

your full account number.

Financial Calendar

The key dates in the Company’s financial year are as

follows:

30 April

Financial year-end

July Announcement of year-end results

September Annual General Meeting

31 October Half-year end

December Announcement of half-year results

Identification Code

SEDOL 422002

ISIN GB0004220025

TICKER PCT

BLOOMBERG PCT.LN

DATASTREAM PCT

REUTERS PCT.L

LIPPER 71000395

GIIN J29SBF.99999.SL.826

LEI 549300TN1O5392UC4K19

AIC

The Company is a member of the Association of Investment

Companies (‘AIC’). The AIC website www.theaic.co.uk

contains detailed information about investment trusts,

including guide and statistics.

Contact Information

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Overview

Our Business at a Glance IFC

Financial Highlights 1

Performance 3

Chair’s Statement 4

Chair Elect Q&A 7

Financial Performance Review 8

Board of Directors 10

Technology Investment Team 12

Manager’s Report

Investment Manager’s Report 16

Investment Manager’s Core Themes 28

Portfolio Review 32

Environment, Social and

Governance Report (“ESG”)

Corporate Perspective 42

Investment Perspective 44

Governance

Strategic Report 56

Section 172 Statement 70

Report of the Directors 76

Report on Corporate Governance 78

Audit Committee Report 87

Directors’ Remuneration Report 92

Statement of Directors’ Responsibilities 98

Independent Auditors’ Report 99

Financial Statements

Statement of Comprehensive Income 106

Statement of Changes in Equity 107

Balance Sheet 108

Cash Flow Statement 109

Notes to the Financial Statements 110

Shareholder Information

Alternative Performance Measures (APMs) 134

Glossary of Terms 136

Corporate Information – including AGM

138

Contact Information 143

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

www.polarcapitaltechnologytrust.co.uk

Financial Highlights

2021: +45.5%

Net Assets Per Ordinary Share

Total Return* Benchmark Total Return~ Share Price Total Return*

2021: +46.4% 2021: +33.3%

Year ended 30 April 2022

-7.7% -0.9% -13.7%

Key Contents

Chair’s Statement 4

Chair Elect Q & A 7

Investment Manager’s Report 16

Investment Manager’s Core Themes 28

Environmental, Social and Governance 42

Audit Committee Report 87

Financial Statements 106

Information for Shareholders 138

NOTICE OF ANNUAL GENERAL MEETING

Thursday 8 September 2022

2.30PM

See the separate Notice of

AGM also available on our

website.

AGM: Thursday

8 September 2022

at 2:30pm

* Alternative Performance Measure, see page 134.

~ Dow Jones World Technology Index (total return, Sterling adjusted, with the removal of relevant withholding taxes).

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Exchange Rates

As at 30 April 2022 2021

US$ to £ 1.2555 1.3846

Japanese Yen to £ 162.66 151.34

Euro to £ 1.1901 1.1502

Expenses

For the year to 30 April 2022 2021

Ongoing charges ratio #- 0.84% 0.82%

Ongoing charges ratio including performance fee #- 0.84% 0.82%

Data supplied by Polar Capital LLP and HSBC Securities Services.

# Ongoing charges ratio represents the total expenses of the Company, excluding transaction costs, interest payments, tax and non-recurring expenses

expressed, as a percentage of the average daily net asset value, in accordance with guidance issued by the Association of Investment Companies

(“AIC”).

- Alternative Performance Measure see pages 134 to 135.

Financial Summary

As at

30 April 2022

As at

30 April 2021

Year Ended

2022

Year Ended

2021

Total net assets £3,050,985,000 £3,408,763,000 (10.5%)

47.7%

Net Asset Value (NAV) per ordinary share 2305.13p 2496.44p (7.7%)

45.5%

Benchmark 3504.44 3535.05 (0.9%)

46.4%

Price per ordinary share 2040.00p 2364.00p (13.7%)

33.3%

Discount of ordinary share price

to the NAV per ordinary share-

(11.5%) (5.3%)

Ordinary shares in issue* 132,356,426 136,544,764 (3.1%)

1.5%

Ordinary shares held in treasury 4,958,574 770,236 543.8% -

* The issued share capital on 15 July 2022 (latest practicable date) was 137,315,000 ordinary shares of which 6,433,670 were held in treasury.

For the year to 30 April 2022

Local Currency

Sterling Adjusted

Benchmark

Dow Jones World Technology Index (10.1) (0.9)

Other Indices over the year (total return)

FTSE World (3.8) 5.8

FTSE All-Share 8.7

S&P 500 Composite 0.2 10.2

Nikkei 225 (5.0) (12.0)

Eurostoxx 600 6.1 2.3

Key Data

www.polarcapitaltechnologytrust.co.uk

Financial Highlights continued

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

As at 30 April 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Net Assets (£m) 503.3 528.8 606.6 793.0 801.3 1,252.5 1,551.6 1,935.6 2,308.6 3,408.8 3,051.0

Share price (pence) 387.0 398.5 442.0 592.0 566.0 947.0 1,148.0 1,354.0 1,774.0 2,364.0 2,040.0

NAV per share (pence) 392.6 412.4 458.4 599.2 605.5 945.4 1,159.7 1,446.4 1,715.6 2,496.4 2,305.1

Indices of Growth

Share price 100.0 103.0 114.2 153.0 146.3 244.7 296.6 349.9 458.4 610.9 527.1

NAV per share

100.0 105.0 116.8 152.6 154.2 240.8 295.4 368.4 437.0 635.9 586.9

Dow Jones World Technology Index

100.0 106.0 119.8 155.1 155.0 237.7 278.2 337.8 399.0 584.0 578.9

The Company commenced trading on 16 December 1996 and the share price on the first day was 96.0p per share and the NAV per share was 97.5p.

Notes:

1 Rebased to 100 at 30 April 2012.

2 The NAV per share growth is based on NAV per share as adjusted for subscription shares.

3 Dow Jones World Technology Index (total return, Sterling adjusted) and from April 2013 with the removal of relevant withholding taxes.

All data sourced from Polar Capital LLP.

10 Year Performance Graph

Historic Performance

200

400

600

800

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Benchmark Company ordinary share price Company NAV per share (Note 2)

Total Return (rebased to 100)

As at 30 April

www.polarcapitaltechnologytrust.co.uk

Performance

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

As I come to step down from the Board at

the AGM may I thank our shareholders, my

fellow directors and all the team at Polar

Capital for all the support they have given

me during my tenure as Chair

www.polarcapitaltechnologytrust.co.uk

Chair’s Statement

Introduction

Shareholders may remember that in the year to April 2021,

on which I reported in July 2021, your Company’s NAV

had risen by 45.5%. That followed a ten year period over

which the net assets of your Company had grown from

£468.7m, to £3.4bn, as technology stocks outperformed

markets generally, on the back of extraordinary corporate

growth and rising valuations. Last year, I noted that we

seemed cautiously to be emerging from the pandemic, but

were in something of uncharted territory, and were seeing

rising bond yields and inflationary concerns, significant

concentration of performance in the largest capitalisation

stocks and a rotation from “growth” to “value”.

Nevertheless, I suggested that the long term supportive

trends in the sector remained in place, and shareholders

would continue to benefit from disruption.

For the first three quarters of the last financial year, these

conditions generally persisted. Inflationary pressures

continued to mount, bond yields rose, investors continued

to invest in recovery stocks rather than growth stocks and

the concentration of performance continued. The share

prices of technology stocks suffered in this environment,

although corporate performance remained strong. At

the end of the financial year (the beginning of 2022) the

exuberance in technology stocks continued to unwind. Our

manager describes the details of this in pages 16 to 27.

The invasion by Russia of Ukraine on 24 February 2022

sent shock waves across the world. In stock market terms,

volatility increased substantially and inflationary pressures

were exacerbated by oil price rises and food supply chain

disruption. We do not know how or where this will end,

although the long term tech trends do remain powerful and

valuations are coming back into more attractive territory.

Over the year, the Company’s NAV fell by 7.7% and your

share price fell by 13.7% as the discount widened. The

NAV performance was behind the index which fell by just

under 1%. UK investors were sheltered from the decline in

the technology market by the appreciation of the US dollar

against Sterling. Although the manager did hold some

cash, the index performance was driven significantly by the

very strong relative performance of Apple and Microsoft.

The detail of this is set out in the manager’s report. We

do run into a concentration problem here, in that both

companies amount to around 15% of the index each

and whilst they are our two largest holdings at between

10% to 11% of our portfolio individually, these positions

are still lower than index weightings and not having had

an index weight in each has had a significant impact on

relative performance. The most significant causes of our

underperformance were not having full 15% weightings in

those two stocks. The manager wrote about concentration

risk at the interim stage and we would not find it easy

to justify holding such significant positions in these two

companies. We would expect that the concentration of

stock performance in the largest companies will diminish

as it tends to lead to overvaluation. Investors with long

memories will remember the performance of Vodafone

after it became 15% of the UK index in 2000.

Discount Management

The Board actively monitors the discount at which

the Company’s ordinary shares trade in relation to the

Company’s underlying NAV. The discount has widened over

the last year reflecting the considerable change in sentiment

towards technology stocks and market volatility generally.

Whilst the Board does not have a formal discount policy

or a fixed target level for all times and circumstances, it

will continue to exercise its discretion to buy back shares

at a discount and to issue shares at a premium in order to

seek to reduce the volatility of the share price, to add a

small amount to NAV per share and to address significant

imbalances in the supply and demand for shares. We

have continued to buy back stock regularly and reliably,

repurchasing a total of 4,188,338 shares in the year under

review (amounting to 3% of the issued share capital) at an

average price of 2,355.35 pence per share and an average

Sarah Bates

Chair

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

www.polarcapitaltechnologytrust.co.uk

discount of 9.6%. This produced an uplift in NAV per share

of just under 7p per share. After the year end and up to

15 July 2022, the Company has bought back a further

1,475,096 shares. We should note that this activity does not

preclude the manager determining that a more significant

amount than usual on any one day should be purchased if

there is, in their view, a particular investment opportunity

best accessed through buying shares in the Company rather

than buying individual securities.

Fees

We have continued to make progress on our fee structure.

In April 2019 we announced a change in the calculation of

the performance fee and a reduction in the participation

rate for that fee, which took effect from 1st May in that

year. In 2021, which was our regular three yearly review of

the base management fee, we agreed with Polar Capital a

reduction as follows:

Current Base Management Fee Arrangement:

effective 1 May 20222022

0.80% £0 - £2bn

0.70% £2bn - £3.5bn

0.60% over £3.5bn

Base Management Fee Arrangement to 30 April 2022

1% Up to £800m

0.85% £800m - £1.6bn

0.80% £1.6bn - £2.00bn

0.70% over £2.0bn

Board Composition

In my statement last year, I reported that the Nominations

Committee and the Board would continue with its

succession plan during the year. Phase one was completed

in September 2021 with the appointment of Catherine

Cripps and Jane Pearce as independent non-executive

Directors to the Board. It is intended that Jane Pearce

will succeed Charlotta Ginman (our current Audit Chair)

who will come to the end of her nine years’ service in

2024. Both Catherine and Jane will stand for election by

Shareholders at the AGM to be held on 8 September 2022,

along with those directors standing for re-election.

Phase two of the succession plan was to appoint my

successor as Chair of the Board ahead of my retirement

at the Company’s Annual General Meeting in 2022, as it

is the AGM after I reach 11 years’ service. In accordance

with the Board’s tenure policy I am able to remain on

the Board for up to 12 years. I am delighted to confirm

that Catherine Cripps has been invited by the Board,

and has accepted the role of Chair (subject to election

by Shareholders at the AGM) when I retire at the

forthcoming AGM. I should note that this part of the plan

was developed and implemented by the Nominations

Committee excluding me, and led by our Senior

Independent Director (“SID”), Tim Cruttenden. We also are

grateful to our external board evaluator, Tim Stephenson,

who reviewed and commented on our plans. The Board

believes that Catherine will bring a fresh perspective to

its proceedings and look forward to seeing the Company

make further progress under her guidance.

Directors’ Fees

As part of the Board’s annual fee review to ensure that

remuneration paid to Directors remains competitive and

in line with those of its peers, it was noted by the external

board evaluator and the Remuneration Committee that the

current level of fees paid to the Company’s Directors was

significantly below the market rate for a large investment

trust. Whilst the Board usually favours modest increases

year on year (where applicable), it was felt that fees should

be competitive and reflective of the current market in order

to attract and retain the best candidates. It was also agreed

that fees should reflect the increasing workload, time

and commitment required from Directors of a FTSE 250

Company. As is detailed further within the Remuneration

Committee Report, with effect from 1 May 2022, the base

Directors’ fee increased by 4.8% to £33,000 and the fee

of the Chair by 10% to £55,000. The supplements for

the Audit Committee Chair and the Senior Independent

Director remain unchanged at £7,000 and £4,200

respectively.

Annual General Meeting

Assuming we continue to emerge from the pandemic, the

AGM will be held on 8 September 2022 at Haberdashers’

Hall, 18 West Smithfield, London EC1A 9HQ, a venue

you might remember from the 2019 AGM. We will again

be holding the AGM as a hybrid meeting supported

by Lumi Global. A notice of AGM will be provided to

all Shareholders and made available on the Company’s

website, this includes the formal business to be conducted

at the AGM and further details of how Shareholders can

join the AGM virtually.

Environmental, Social and Governance (ESG)

As detailed in my report last year, we continue to develop

our approach to ESG and during the year under review,

we continued to engage with our manager to better

understand how ESG has been further integrated into the

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Chair’s statement continued

investment and decision-making process. The Board also

receives information on how ESG affects Polar Capital as a

business and the technology team in particular.

In addition to this, we as a Board have nominated

Catherine Cripps to assume the role of ESG lead. Catherine

has been responsible for ensuring that the Board is kept

abreast of the latest developments in this area to develop

how the Company can report to stakeholders in line

with such. Catherine has worked with the manager to

develop a dashboard which allows us to see how the

manager is considering ESG matters, and whether that

meets our requirements. We do think the ESG issues

raised are important, interesting and complicated. We

have also held a number of conversations with our

shareholders about their views on ESG matters and how

they would like us to report, given their requirements. We

have endeavoured to provide information as requested.

The ESG report on pages 42 to 53 describes, both the

Corporate and Investment approach to ESG matters.

Outlook

After more than a decade of easier money and the

extraordinary effects of COVID-19, we are seeing

considerable turmoil in our financial environment. At this

point, long term interest rates in the US and elsewhere

have risen sharply. The valuations of companies which were

elevated by very low long term interest rates, have, not to

put it too finely, cratered. Many investors have not seen

inflation rates such as those we currently observe.

At this point, many tech companies are not reporting

significant impacts on their trading, but we are aware that

company reports can be indicators of the current state,

rather than of future problems. We are in uncertain times,

and although between us, we’ve lived through previous

savage market downturns and inflationary pressures, it’s

not clear how our current circumstances play out. We

suspect markets could be fearful for some time. However,

we do think the basic disruptive opportunities for the

companies in our portfolio persist, and we support our

Manager’s view that we should stick to the fundamental

principle that investing in the potential growth in our

sector will remain profitable over time.

Finally, as I come to step down from the Board at the AGM

may I thank our shareholders, my fellow directors and all

the team at Polar Capital for all the support they have

given me during my tenure as Chair.

Sarah Bates

Chair

19 July 2022

we look forward

to welcoming

Shareholders to the

AGM

8 September

2022

www.polarcapitaltechnologytrust.co.uk

After a long and successful executive career, what do you

enjoy most about being a Non-Executive Director?

I enjoy the variety of matters that come up across my portfolio;

companies big and small have some very similar issues to deal

with as well as some very different ones. I believe that the read

across between companies is mutually beneficial to all. Above all,

for me, the people are important and make a role enjoyable or

not. At Polar we have some excellent people who are very well

qualified and a pleasure to work with.

What do you hope to bring to your role as Chair

of the Board?

Sarah is a fantastic chair so these are big shoes to fill but I

would like to build on her work so far and bring some of my

perspectives to bear. I have had experience of both investment

and control environments and in the new hybrid and digital age

the control environment can get stressed. Besides, investors pay

us for investment management and not for operational risk.

What are you looking forward to as Chair of Board?

I am looking forward to working with my colleagues and I see

us very much as a team with every one bringing their own

experience and viewpoints to the table. I believe these should be

as diverse as possible so I am expecting some healthy debates! I

am also looking forward to building on the relationships with our

key service providers and Polar Capital in particular, with whom

we have a long history.

What do you think the key areas of focus will be

for the year ahead?

Sarah is leaving the Company at a very interesting time, certainly

in terms of performance. The eternal optimism of investors in

technology companies and growth ones in particular is being

challenged. Keeping investors informed and meeting their

expectations is always a priority but is going to be harder in these

markets. Maintaining a dialogue with Ben and his team as well

as with our other service providers is going to be a focus. I fully

expect these dialogues to be constructive but it is important we

oversee them and hold them to account as appropriate. Finally,

there is also our developing stance on ESG which we need to

keep progressing.

What interests you about the technology sector

and the trust?

When I choose the roles I would like to undertake I look for a

balance of my being able to use my experience together with

the presence of the lure of something for me to learn. The

Company is in the sector of fund management in which I have

much experience but its focus on technology stocks feels to me

like an insight into the future. I love science fiction and what

might be possible and I was certainly the one around the table

who had read Neal Stephenson’s novel Snow Crash where the

term ‘metaverse’ was first used. Watching science fiction become

reality is thrilling.

I look forward

to meeting

Shareholders at

this year’s AGM

Chair Elect Q&A

Catherine Cripps

Catherine, you joined the Board around 9 months ago and have been

appointed as Chair Elect, what can you tell us from your experience so far?

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

www.polarcapitaltechnologytrust.co.uk

Financial Performance Review

For the year ended 30 April 2022

The NAV per share fell to 2305.13p as at 30 April 2022 from

2496.44p at the start of the year. The Company’s NAV per

share total return for the period was a loss of 7.7% and

the Company finished the year with a total net assets of

£3,051.0m. The Investment Manager’s Report on pages 16

to 27 sets out in detail the performance of the Company for

the financial year. The chart on the following page shows in

greater detail the movement in total net assets for the year.

Total Return

The Company generates returns from both capital growth

(capital return) and dividend income received (revenue

return). For the year ended 30 April 2022, the total net

loss was £258.6m (2021: £1,063.7m gains), of which

there was a £241.9m losses (2021: £1,074.2m gain) from

capital and a £16.7m losses (2021: £10.5m loss) on our

income account which offsets all expenses against dividend

income. Full details of the total return can be found in the

Statement of Comprehensive Income on page 106. We

choose as a matter of policy not to allocate our expenses

between capital and income, (any performance fee is the

only expense allocated to capital). The Company’s allocation

of expenses is described in Note 2(d) on page 111 and the

allocation methodology is considered on an annual basis.

The total net losses per share were 191.61p, compared to

the previous year’s earnings per share of 776.75p. The total

net losses per share was made up of 179.25p from capital

return and a loss of 12.36p from revenue return.

Capital Return

The investment portfolio was valued at £2,811.1m

(2021: £3,243.0m) at the year end 30 April 2022. The

investment portfolio delivered a realised loss on disposals of

£121.2m (2021: £480.4m gains) and valuation losses on

investment of £132.5m (2021: £647.3m gains) for the year

ended 30 April 2022. The Company’s valuation approach is

described in Note 2 (f) on page 112. The derivative losses of

£5.8m (2021: £49.1m losses) represent the call and put options

which are used to facilitate efficient portfolio management. Full

details of the derivatives are set out in the Investment Managers

Report on pages 16 to 27 and Note 6 on page 115.

Revenue Return

The investment income of £15.87m (2021: £18.2m)

represents dividend income derived from listed

investments. The investment income, excluding any one

off special dividends, increased by 5.2% for the year and

this was driven by changes in holdings, dividend rates, and

FX rate changes as the Company’s revenue is generally

denominated in currencies other than Sterling.

The other operating income of £0.031m (2021: £0.008m)

was derived mainly from the Money Market Fund (MMF)

interest. The increase in interest rates in recent months has

enabled banks and MMF to resume payment of interest

income. It should be noted, however, that the MMF is held

primarily as a cash diversification factor rather than an

income generating investment. As stated above, as a matter

of policy, all expenses (excluding the performance fee) are

charged to revenue and as a result, expenses normally

exceed the income received in any given year. As has been

the case for many years, the revenue reserve remains

therefore negative. The Company historically has not paid

dividends given the nature of its focus on longer- term

capital growth. The Board reviews this stance on a periodic

basis.

Expenses

The total expenses for the year under review amounted

to £30.6m (2021: £26.2m) and include investment

management fees of £28.3m (2021: £24.1m),

administrative expenses of £1.3m (2021: £1.1m) and

finance costs of £1.0m (2021: £1.0m). Although the net

asset value reduced in absolute terms towards the end of

the financial year, on average it had increased during the

year under review when compared to the prior year, hence

increases in management, depositary and custody fees

were incurred during the year. Other expenses remained at

a similar level to the last year. There was no performance

fee accrued at the year ended 30 April 2022 (2021: £nil).

In January 2022 agreement was made with Polar Capital to

amend the base management fee tier levels and calculation

structure with effect from the new financial year

commencing 1 May 2022. Further details can be found on

pages 60 and 61.

Ongoing Charges

The ongoing charges ratio, as calculated in line with

the AIC recommended methodology, represents the

total expenses of the Company, excluding finance costs,

expressed as a percentage of the average daily NAV. This

ratio demonstrates to Shareholders the annual percentage

reduction in NAV as a result of recurring operational

expenses, that is, the expected cost of managing the

portfolio. Whilst based on historical information, the

ratio provides an indication of the likely level of costs that

will be incurred in managing the Company in the future.

The ongoing charges ratio for the year to 30 April 2022

was 0.84% (2021: 0.82%). The ongoing charges ratio

including the performance fee for the year to 30 April

2022 was also 0.84% (2021: 0.82%) as no performance

fee was accrued at the year end. As noted above under

expenses, the slight increase in the OCR is mainly due to

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

the increase in management fee during the year which

moved in line with the change in net asset value during

the year under review. See Alternative Performance

Measures on pages 134 to 135.

Cash and Cash Equivalents

As noted in prior years, the Company maintains a

relatively high level of cash, closing the year with

£311.4m (2021: £212.7m). As noted above, as part of

the Company’s cash diversification strategy, the Company

has taken a cautious approach and has chosen to invest

50% of its USD cash balance into a USD Treasury Money

Market Fund. As at 30 April 2022, the Company held the

BlackRock Institutional Cash Series – US Treasury Fund with

a market value of £92.0m.

Portfolio Turnover

Portfolio turnover (purchases and sales divided by two)

totalled £2,728.1m equating to 84% for the year to 30 April

2022 (2021: 113%) of average net assets over the year.

Details of the investment strategy and portfolio are given in

the Investment Manager’s Review on pages 16 to 27.

Gearing

The Company can use gearing for investment purposes and

as stated on page 58. As at the year end, the Company had

fully drawn the two, two-year fixed rate term loans (JPY

3.8bn and USD 36m) with ING Bank N.V. Both loans fall

due for repayment on 30 September 2022. The repayment

of both loans, totalling approximately £52.0m (2021:

£51.1m), would equate to 17% of the cash and cash

equivalents readily available to the Company as at 30 April

2022. Consideration to the level of borrowings required

by the Portfolio Manager is under review and replacement

facilities will be negotiated accordingly with ING Bank N. V.

or another provider in due course.

Foreign Exchange

The majority of the Company’s assets and revenue are

denominated in currencies other than Sterling. As at the

year ended the other currency gains of £17.5m represents

the exchange gains on currency balances of £18.4m

and losses on translation of loan balances of £0.9m.

The Company’s total return and net assets can be affected

by the currency translation and movements in foreign

exchange. Note 27 (a) (ii) on pages 125-128, analyses the

currency risk and the management of such risks.

Sarah Bates

Chair

19 July 2022

£ million

Total net

assets at

30 April 2021

Valuation

losses on

investments

Losses on

disposal of

investments

Losses on

derivatives

Other

currency

exchange

gains

Total income Total

expenses

Tax Ordinary

repurchased

into treasury

Total net

assets at

30 April 2022

500

1000

1500

2000

2500

3000

3500

4000

3,408.8

-132.5

-121.2

-5.8

17.5

15.9

-30.6

-2.0

-99.1

3,051.0

Movement in total assets for the year to 30 April 2022

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Sarah Bates

Independent

Non-executive Chair

Appointed to the Board in

June 2011 and as Chair in

September 2017.

Skills and Experience

Sarah is a past Chair of the

Association of Investment

Companies and has been involved

in the UK savings and investment

industry in different roles for

over 30 years. She has chaired

companies and Trustee bodies

ranging from a small youth charity

to a FTSE 100 company. She is a

co-Founder of the Diversity Project.

Other Appointments

Sarah is a non-executive director

and Senior Independent Director

of Worldwide Healthcare Trust

and Alliance Trust. She is Chair of

the John Lewis Partnership Trust

for Pensions and a director of

the Universities Superannuation

Scheme Investment Management

Limited. Previously, Sarah was Chair

of St James’ Place plc, JP Morgan

American Investment Trust plc, Witan

Pacific Investment Trust plc and the

Diversity Project Charity. She was

also chair of the audit committees of

New India Investment Trust plc and of

U and I Group plc. Sarah is a Fellow

of CFA UK.

PCT Share Interests

10,500

Annual Remuneration

Financial - year ended 2022

£50,000

Rationale for re-election

Sarah will not be standing for

re-election as she will be retiring from

the Board in accordance with the

Board’s succession plans. Sarah will

be succeeded by Catherine Cripps

who will assume the role of Chair

following the AGM in September

2022.

Tim Cruttenden

Independent

Non-executive Director

Appointed to the Board in

March 2017 and as both the

Senior Independent Director

(‘SID’) and Chair of the

Remuneration Committee in

July 2020.

Skills and Experience

Tim is currently Chief Executive

Officer of VenCap International

plc having been with the company

in various positions since 1994.

VenCap invests in venture capital

funds in the US, Asia and Europe,

with a primary focus on early stage

technology companies.

Other Appointments

Tim is a non-executive director of

Chrysalis Investments Limited.

PCT Share Interests

1,000

Annual Remuneration

Financial - year ended 2022

£35,700

Rationale for re-election

Tim has extensive technology

private equity investment

experience and brings an

alternative investment perspective

to discussions on portfolio. The

Board and Manager value the

investment debates at meetings

particularly where Tim focusses

on new themes, and welcome

the continued contribution from

him. He has also thoughtfully and

capably taken the lead on the Chair

succession discussions as SID.

Charlotta Ginman

Independent

Non-executive Director

Appointed to the Board

and as Chair of the Audit

Committee in February 2015.

Skills and Experience

Charlotta qualified as a Chartered

Accountant at Ernst & Young

before spending a career in

investment banking and commercial

organisations, principally in technology

related businesses. She held senior

roles with JP Morgan, Deutsche Bank,

UBS and the Nokia Corporation.

Other Appointments

Charlotta is a non-executive director

and chairs the audit committees

of Pacific Assets Trust plc,

Keywords Studios plc and Gamma

Communications plc. Charlotta is

also a non-executive director of

Unicorn AIM VCT plc and Boku Inc.

PCT Share Interests

4,941

Annual Remuneration

Financial - year ended 2022

£38,500

Rationale for re-election

Charlotta has recent and relevant

financial and investment expertise

with a strong accounting background

which enables her to perform

in-depth analyses of the Company’s

Financial Statements in conjunction

with the external service providers.

Charlotta actively works with Polar

Capital and the Auditors to ensure a

smooth year-end process and audit.

She has brought her considerable

experience of audit, governance and

related regulatory matters as they

apply to the Company.

Where there might be concern

of over-boarding, as three of

Charlotta’s roles are with investment

companies that typically have only

5 Board meetings a year and the

other companies are all AIM listed,

with less regulatory burden than

a premium listing, Charlotta has

sufficient time to devote to each of

her roles.

Catherine Cripps

Independent Non-executive

Director and Chair Elect

Appointed to the Board in

September 2021.

Skills and Experience

Catherine is a qualified Chartered

Accountant who has in excess of

30 years’ senior investment industry

experience in a number of trading,

risk management and investing

roles including Investment Director

and Head of Research at GAM.

Other Appointments

Catherine is a non-executive director

of Goldman Sachs International

and Goldman Sachs International

Bank. She also acts as Chair of the

Goldman Sachs International and

Goldman Sachs International Bank

Board Risk Committees and is a

member of the Audit Committees.

She is also a non-executive director

for Maniyar Capital Advisors and

Pool Re. Previously, Catherine

was non-executive director of

CQS Management Limited where

she chaired the Remuneration

and Performance Management

Committees and was a member of

the Audit Committee, she was also

non-executive director and chair of

the group audit and risk committee

of Merian Global Investors, as well

as being chair of the investment

committee and trustee for the

Nuclear Liabilities Fund.

PCT Share Interests

Annual Remuneration

Financial - year ended 2022

£20,677

Rationale for election

Catherine was appointed to the

Board in September 2021 and

brings to the Board a wealth of

investment industry experience

following a number of roles

including Investment Director

and Head of Research at GAM

International. With the support of

the Board, Catherine has assumed

the role of ESG lead and has been

responsible for ensuring that the

Board is kept abreast of the latest

developments in this area and

how the Company can report to

stakeholders in line with such.

www.polarcapitaltechnologytrust.co.uk

Board of Directors

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Charles Park

Independent

Non-executive Director

Appointed to the Board in

January 2018.

Skills and Experience

Charles has over 25 years of

specialist investment experience

and was a co-founder of Findlay

Park Partners, an investment firm

specialising in quoted American

equity investments. Prior to this,

he was a US fund manager at Hill

Samuel Asset Management.

Other Appointments

Mr Park is a non-executive director

of both North American Income

Trust plc and Evenlode Investments.

PCT Share Interests

1,840

Annual Remuneration

Financial - year ended 2022

£31,500

Rationale for re-election

Charles has extensive equity

investment experience and brings

to the Board current and active

knowledge of the industry from a

different, value based investment

approach which contributes to

board and manager discussions.

He also brings his understanding

of investment management firms,

fees and the private client wealth

management sector to Board

discussions. He has helped the

Board by bringing perspectives from

elsewhere to give us context and

insight into investment markets. He

has also brought his interest in ESG

issues to our discussions.

Stephen White

Independent

Non-executive Director

Appointed to the Board in

January 2018.

Skills and Experience

Stephen qualified as a Chartered

Accountant at PwC before starting a

career in investment management.

He has more than 35 years’

investment experience, most notably

as Head of European Equities at

F&C Asset Management, where he

was manager of F&C Eurotrust plc

and deputy manager of The F&C

Investment Trust plc, and as Head of

European and US equities at British

Steel Pension Fund.

Other Appointments

Stephen is non-executive director

and Chairman of Brown Advisory

US Smaller Companies Trust plc. He

is also non-executive director and

chairman of the audit committees

of BlackRock Frontiers Investment

Trust plc and Aberdeen New India

Investment Trust plc.

PCT Share Interests

10,000

Annual Remuneration

Financial - year ended 2022

£31,500

Rationale for re-election

Stephen has many years of

investment and financial experience

including as an investment company

manager, which he brings to the

Board. He has been particularly

interested in our Manager’s individual

stock holdings and has encouraged

helpful debate. He also has wide

experience of the institutional and

investment company sector, of its

fees, clients and approaches. He also

holds other audit committee chair

positions which bring extra support

to our Audit committee.

Jane Pearce

Independent Non-executive

Director

Appointed to the Board in

September 2021.

Skills and Experience

Jane is an experienced

non-executive director and

Chartered Accountant with

over 20 years’ financial markets

experience. She has a number of

years’ experience as a Technology

Equity Analyst and as an Equity

Strategist at leading investment

banks including Lehman Brothers

and Nomura International.

Other Appointments

Jane is a non-executive director and

member of the audit committee of

Shires Income plc and a Co-opted

External Member of the Audit and

Risk Committee of the University of

St. Andrews.

PCT Share Interests

Annual Remuneration

Financial - year ended 2022

£20,677

Rationale for election

Jane was appointed to the Board

on 6 September 2021 and is an

experienced non-executive director

and Chartered Accountant with

over 20 years’ financial markets

experience. Since joining the Board

Jane has been a keen participant

in meetings often bringing a new

perspective to discussions.

Jane will assume the role of Chair

of the Audit Committee following

the retirement of Charlotta Ginman

from the Board expected to be in

2024.

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Ben Rogoff

Partner, Technology

Ben has been a technology specialist for

26 years. He has been lead manager of Polar

Capital Technology Trust plc since 2006, and

is a Fund Manager of the Polar Capital Global

Technology Fund and Polar Capital Automation

and Artificial Intelligence Fund. Prior to joining

Polar Capital, he began his career in fund

management at CMI, as a global technology

analyst. He moved to Aberdeen Fund

Managers in 1998 where he spent four years

as a senior technology manager. Ben has a BA

(Hons) in Modern History from St Catherine’s

College, Oxford.

Nick Evans

Partner, Technology

Nick joined Polar Capital in 2007 and has

24 years’ experience as a technology specialist.

He has been lead manager of the Polar Capital

Global Technology Fund since January 2008

and is also a fund manager on the Polar

Capital Technology Trust and Polar Capital

Automation and Artificial Intelligence Fund.

Nick has a degree in Economics and Business

Economics from Hull University, has completed

all levels of the ASIP, and is a member of the

CFA Institute.

Xuesong Zhao

Partner

Focus areas: Semiconductors, Robotics,

Industrial Automation and Artificial

Intelligence

Xuesong joined Polar Capital in 2012 and has

15 years’ investment experience. He is a lead

manager of the Polar Capital Automation

and Artificial Intelligence Fund and is a fund

manager on the Polar Capital Technology

Trust and Polar Capital Global Technology

Fund. Xuesong holds an MSc in Finance from

Imperial College of Science & Technology, a BA

in Economics from Peking University and is also

a CFA Charterholder.

Alastair Unwin

Fund Manager

Focus areas: Software, Fintech / Payments

Alastair joined Polar Capital in June 2019 and

has 11 years’ investment experience. Prior to

joining Polar Capital, Alastair co-managed the

Arbrook American Equities Fund. Between

2014 and 2018 he launched and then

managed the Neptune Global Technology Fund

and managed the Neptune US Opportunities

Fund. Alastair has a BA (1st Class Hons) in

History from Trinity College, Cambridge and is

a CFA Charterholder.

Paul Johnson

Investment Analyst

Focus areas: Automotive (EV/AV), video

gaming, 3D printing

Paul joined Polar Capital in 2012 and has

10 years’ investment experience. Prior to

joining Polar Capital Paul helped manage a

private investment fund between 2010 and

2012. Paul holds a BA in History and Politics

and a Masters in History from Keele University.

Paul is also a CFA Charterholder.

Fatima Iu

Fund Manager

Focus areas: Cybersecurity, 5G, Clean

Energy and Medtech

Fatima joined Polar Capital in 2006 and has

16 years’ investment experience. She is a

fund manager on the Polar Capital Global

Technology Fund, Polar Capital Technology

Trust and Polar Capital Automation and

Artificial Intelligence Fund. Fatima holds an

MSc in Chemistry with Medicinal Chemistry

from Imperial College of Science & Technology

in London. She is also a CFA Charterholder.

www.polarcapitaltechnologytrust.co.uk

Technology Investment Team

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Bradley Reynolds

Investment Analyst

Focus area: Internet

Brad joined Polar Capital in 2011 as an Analyst

and Trader working within the European

Market Neutral team with a focus on media

and internet, he has 14 years’ investment

experience. In 2014, he joined the Technology

team as an Investment Analyst. Brad graduated

from the University of Hertfordshire with a

degree in Business Studies.

Nick Williams

Investment Analyst

Focus areas: Artificial Intelligence,

Healthcare and Clean Energy

Nick joined Polar Capital in June 2019 as

an analyst on the Polar Capital Technology

team and has 7 years’ investment experience.

Prior to joining Polar Capital, Nick worked

at Neptune Investment Management

as the Assistant Fund Manager on the

US Opportunities Fund. Prior to that he worked

in academia at the University of Oxford. Nick

holds an MChem in Chemistry from Wadham

College, University of Oxford.

Patrick Stuff

Investment Analyst

Focus area: Artificial Intelligence, Industrial

After graduating from the University of

Warwick with a BSc in Economics, Patrick

joined Polar Capital as an Operations Executive,

where he provided operational support to all

fund management teams at Polar, including

the Technology team. During this time Patrick

successfully passed all three levels of the

CFA program first time, and subsequently,

after a successful 8 months seconded to the

technology team, Patrick joined on a full-time

basis in May 2021 as an investment analyst

with a focus on AI and Industrial companies.

Patrick has 6 year’s investment experience.

www.polarcapitaltechnologytrust.co.uk

Ben Rogoff

Fund Managers (x4)

Investment Analysts (x4)

Experience breakdown (years)

The team collectively manage

£9.4bn in assets

Polar Capital Technology Trust

Polar Capital Global Technology Fund

Automation and Artiﬁcial Intelligence Fund

£3.1bn

£5.8bn

£548m

As at 30 April 2022

Manager’s Report

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Market Review

An unexpected monetary volte-face by policymakers amid

persistently high inflation weighed on equity markets

and valuations during the year. However, losses were

more than offset by pronounced US dollar strength which

gained more than 12% on a trade-weighted basis and

more than 9% against the British Pound (GBP). As a result,

the MSCI All Country World Index over the year to 30 April

2022 gained 4.3% in sterling terms, aided by a strong

first half characterised by economic reopening, upward

earnings revisions, and rampant M&A.

The strength of the US dollar mirrored sharply higher

US interest rate expectations following the revelation in

November that the Fed no longer believed inflationary

pressures were ‘transitory’. Energy prices likely played a

part in driving this Fed Pivot as oil and commodity prices

rose 79% and 54% respectively during the year. Higher

risk-free rates (10-year US Treasury yields increased from

1.6% to 2.9%) resulted in a much more challenging

fiscal second half with negative headline returns failing

to capture the magnitude of the correction experienced

by the average stock. While the US, as measured by the

S&P 500 Index, gained 10.2% (and 0.2% in local terms),

drawdowns were significantly greater elsewhere, including

Europe (Eurostoxx 600 +2.3%), Japan (Nikkei 225 -12.0%)

and Asia ex-Japan (MSCI Asia ex- Japan -12.9%) (all

returns in sterling terms, unless otherwise stated). Weakest

performance was reserved for Chinese stocks (MSCI

China -29.8%) where a deluge of regulatory changes and

market unfriendly developments took their toll on investor

sentiment and lockdowns in Shanghai towards period end

reflected the challenge posed by the omicron variant to

China’s zero-COVID policy.

Ben Rogoff

Partner, Technology

An unexpected monetary volte-face

by policymakers amid persistently high

inflation weighed on equity markets and

valuations during the year.

Small-cap indices meaningfully underperformed during the

year, with the Russell 2000 (small cap) declining 9.6% while

the Russell 1000 (large-cap) advanced by +6.2% (both in

sterling terms). Breadth also continued to deteriorate with

just c.25% of NYSE stocks trading above their 200-day

average at year-end, compared to 58% a year earlier.

The first half of the year saw markets grind higher amid

economic reopening, positive earnings revisions, and

record equity inflows. This was possible due to worldwide

vaccination programmes that succeeded in breaking the

link between COVID-19 infections and deaths. Economic

recovery was most evident in consumption trends and in

labour market strength, the US unemployment rate falling

below 5% by September before returning to pre-COVID

levels by year end. The recovery trajectory was complicated

by waning fiscal stimulus and labour shortages,

exacerbated by the combination of limited improvement

in the labour participation rate and early retirement (aka

the ‘Great Resignation’). However, the most significant

headwind was commodity shortages and soaring energy

prices with oil surpassing $80/barrel in November for the

first time since 2014, while US producer prices rose 8.3%

y/y in August, the largest year-on-year increase on record.

The combination of shortages and a surfeit of freshly

printed liquidity saw CPI increase 5% y/y in May – the

fastest growth in consumer prices since August 2008. This

led to the June FOMC ‘dot plot’ implying two rate hikes

in 2023, up from zero in March, and, in October, the Fed

signalled that it could begin scaling back asset purchases

in November. However, equity markets were able to shrug

off these negative developments largely due to the Fed

maintaining its earlier ‘transitory’ stance and persistently

negative real rates supporting equity multiples.

Investment Manager’s Report

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

The emergence of the highly mutated Omicron variant

in November was an inauspicious start to what proved a

very challenging fiscal second half. In the same month,

recently re-nominated Fed Chair Jerome Powell performed

a remarkable pivot regarding inflation, declaring “it’s

probably a good time to retire that word transitory”.

While the milder variant of COVID likely contributed to a

“more hawkish variant of the Fed”, it was November’s CPI

print (+6.5% y/y) – the highest reading since 1982 – that

likely forced Powell’s hand. Hawkish monetary developments

dominated the balance of the year, with the Fed first moving

to double the pace of tapering in December. An inflation

shock morphed into a rates shock as the release of FOMC

minutes in January raised the spectre of rate hikes and

quantitative tightening (QT) “sooner or at a faster pace than

participants had earlier anticipated”.

The first US rate hike since 2018 was also delivered in

March, three months after the UK became the first G7

economy to raise interest rates since the pandemic began.

By the end of April, markets had priced in Fed Funds at

250bps having anticipated zero rate hikes little more than a

year earlier, and 10-year US Treasury yields had backed up

to 2.9%, almost doubling during the first four months of

2022. The persistence of inflationary pressures saw other

central banks adopt more hawkish positions too, forcing

rates higher.

Long-duration stocks felt the full force of this monetary

about-turn with the earlier tremor in weaker, more

speculative names turning into a full risk-off episode across

high growth and long duration names. This was particularly

true within small caps where growth stocks trailed value by

more than 20% during the year.

In addition to the human tragedy associated with the

invasion of Ukraine, the conflict added untimely upside

pressure to inflation and downside risk to global growth

forecasts. Reflecting the elevated risk of so-called ‘policy

error’ (the Fed tightening against this most uncertain of

backdrops) the two-year versus 10-year Treasury yield

spread briefly inverted during March, something often seen

as a precursor to a recession.

Technology Review

Calendar year 2021 proved a strong recovery year with

worldwide IT spending +9% y/y as compared to earlier

estimates of +6%. Upside to 2021 forecasts saw the

technology sector deliver revenue and earnings growth

of 15.7% and 28.9% y/y respectively, well ahead of

estimates this time last year of 10.1% and 17.5%. As a

result, technology revenue growth ended up only narrowly

behind the market (16.5%) although earnings trailed

significantly as the market delivered 47.5% growth. This

was unsurprising given more difficult comparisons and

less incremental leverage in the technology sector. Despite

better-than-expected IT spending, technology stocks

trailed the broader market during the fiscal year,

the Dow Jones World Technology Index declining 1%

in sterling terms (total return) due to fading pandemic

tailwinds, tough comparisons and extreme factor rotation

following the shift in Fed policy. However, and even

more extreme than in the broader market, returns were

dominated by US stocks which increased 6.6% while

non- US technology stocks (as measured by the W2TEC

index) fell 22% during the year. Small caps also significantly

underperformed, the Russell 2000 (small) technology

index declining 10.1% while large-caps (as measured

by the Russell 1000 technology index) advanced 6.9%,

both in sterling terms. Moreover, US relative strength was

driven by an even narrower group of megacap stocks that

continued to deliver strong growth against a less uniformly

positive backdrop while also enjoying strong ESG-related

equity inflows. At year end, just 19% of NASDAQ stocks

were trading above their 200-day moving average.

Higher multiple, long duration stocks saw very significant

multiple compression down from their November highs,

as the most expensive quintile of the US technology sector

fell -47% while the least expensive (value) quintile only

declined -8% through our fiscal year end.

At the sector level, strongest performance was enjoyed by

the semiconductor sector as demand remained strong amid

chip shortages despite concerns about double-ordering and

the durability of the cycle. Strong capex growth (+20% y/y)

at the hyperscale public cloud companies led to continued

strength in cloud data centre capex benefitting both AMD

(+15%) and Nvidia (+36%). While most of the automotive

industry struggled with the global chip shortages, Tesla

(+35%) enjoyed a stellar period delivering a record number

of vehicles and record margins in Q3 and Q4 against a

supportive backdrop for electric vehicles.

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Value-oriented sectors such as networking (aided by

datacentre strength) and hardware also performed well,

the latter benefitting from outstanding performance from

Apple (+32%), which proved able to deal with ongoing

supply constraints to fulfil steady consumer demand

for its products. Software stocks trailed (IGV-9%), with

average returns significantly worse than headlines due to

Microsoft (+21%) as the sector suffered material multiple

compression amid higher rate expectations. This trend

accelerated into calendar year 2022, which saw software

EV/NTM (Enterprise Value / Next Twelve Months) sales

multiples compress by 42% by the end of April to an

average of 8x. Private Equity buyers stepped in to take

advantage of the weakness with Thoma Bravo bidding for

Sailpoint (13.4x forward sales) and Anaplan (13.9x forward

sales).

Weakest performance was reserved for Internet stocks (and

other ‘work from home’ beneficiaries) which struggled

with reopening, difficult comparisons, changes to user

tracking, supply chain travails and (towards period end)

consumer spending concerns. While the sector struggled

(particularly in China, where a series of regulatory

crackdowns weighed heavily) the average stock suffered

far more than headlines suggest with NASDAQ CTQ

Internet Index returning -37%, while Alphabet delivered

positive returns (+5%). Softer ecommerce trends and the

impact of waning fiscal stimulus checks put pressure on the

ecommerce and payments space, including PayPal (-63%)

and Shopify (-60%). Amazon (-21%) was not immune as

strong AWS results were not enough to offset concerns

around ecommerce pull forward and the profitability of its

retail business.

Public cloud results remained very solid as the three major

public cloud operators (Amazon AWS, Microsoft Azure,

Google GCP) reached a collective annual revenue run rate

of c.$140bn, up +41% y/y. Many of the bellwether WFH

and lockdown beneficiaries more than reversed out earlier

gains as companies such as Netflix, DocuSign, Peloton

and Spotify broke below pre-COVID levels despite strong

growth in their revenues and user bases in the intervening

period. The most speculative areas of the market saw the

largest drawdowns. The GS Non-Profitable Tech Index

returned -47% and the ARK Innovation ETF delivered -57%

during the year as investor enthusiasm for ‘TAM’ (Total

Addressable Market) stories abated in the context of more

persistent inflation and a higher rate outlook.

Portfolio Performance

The Trust underperformed its benchmark with the net asset

value per share falling -7.7% during the fiscal year versus

a decline of -0.9% for the Dow Jones World Technology

index. The Trust’s share price fell by 13.7% reflecting the

additional impact of the discount widening from 5.3%

to 11.5% during the period. We continue to monitor the

discount and the Trust bought back 4.19m shares during

the period.

The year was dominated by the reversal of fortunes in high

growth / long-duration stocks that were challenged by the

combination of reopening headwinds and supply chain

travails as well as sustained valuation compression amid

soaring energy prices, rampant inflation, higher risk-free

rates, and increased risk of recession. As such, adverse

stock selection (largely associated with our growth-centric

investment approach) was responsible for most of the

Trust’s underperformance as investors rotated away from

smaller, longer-duration assets in favour of more solid,

lower-multiple assets. In addition, a handful of mega-cap

stocks that explain a large part of our benchmark including

Alphabet (+5%), Apple (+33%) and Microsoft (+22%)

delivered strong positive returns while smaller-cap peers

fell significantly. Given that we are underweight in these

names compared to the benchmark, their relative strength

dragged on our relative performance. More broadly, the

underperformance of smaller companies, which we were

overweight relative to the benchmark, during the period

acted as a meaningful performance headwind. On the

positive side, our average cash position of 5.3% added

95bps of performance (aided by USD strength) although

our NDX puts dragged by -17bps for the full year, despite

strong recent positive contribution. Asset allocation also

benefited from an underweight exposure to China which

underperformed following increasingly hostile government

scrutiny of technology platforms and (towards period end)

economic weakness due to lockdowns.

At the stock level, weakest relative performance was

delivered by earlier COVID beneficiaries that suffered a

stark reversal in fortune during the year. These included

ecommerce companies such as Amazon (-21%) and

HelloFresh (-31%) as well as digital payment platforms

such as PayPal (-53%) and Square (-55%), which similarly

struggled with the slowdown in online sales and the

withdrawal of government stimulus.

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Two of our largest stock detractors were Internet stocks:

Netflix (-59%) which struggled to maintain its earlier

subscriber momentum growth amid reopening; and Snap

(-49%) which was hurt by user-tracking changes made by

Apple. Software companies that had previously enjoyed

tailwinds associated with remote and hybrid work also

experienced significant drawdowns typified by DocuSign

(-60%) and Twilio (-66%). Other software stocks also

struggled with valuation compression that more than

offset fundamental progress, while a few were punished

following more mixed execution including Okta (-51%)

and Elastic (-30%). Long-duration stocks were particularly

weak as sentiment reversed as risk free rates rose, which

negatively impacted companies such as 10x Genomics

(-73%) and Guardant Health (-57%). As ever, there were

also a few genuine disappointments such as Chegg (-70%)

Everbridge (-64%) and 2U (-72%), although these were

mostly contained to the portfolio tail. However, the most

significant stock level detractors were our underweight

positions in Apple (+32%) and Microsoft (+21%) which

combined cost nearly -240bps relative, despite strongly

contributing to absolute returns.

In terms of positives, the Trust benefitted from the

outperformance of cybersecurity stocks which enjoyed

strong fundamentals and positive sentiment (buttressed

by events in Ukraine) in contrast with software peers.

Noteworthy performances were delivered by Tenable

(+61%), Cloudflare (+12%) and CrowdStrike (+5%).

Companies exposed to strong cloud capex /datacentre

spending also performed well including Arista Networks

(+61%), AMD (+15%) and Marvell Technology (+41%).

Electric vehicle (EV) plays such as Tesla (+35%) and BYD

(+60%) continued to benefit from strong adoption

trends while managing to avoid too much supply chain

disruption. The Trust also benefited from its underweight

exposure to Chinese stocks with Alibaba (-54%) the

largest individual positive contributor (c.88bps) to relative

performance. Strong performance from E-Ink (+172%)

is deserving of mention as the Taiwanese manufacturer

delivered strong growth aided by Walmart’s adoption of

its electronic shelf labels.

Portfolio Changes

While our core themes (and our growth-centric approach)

had previously mapped well to the pandemic, we

continued to realign the portfolio to better position it for

reopening. This resulted in us significantly reducing our

exposure to earlier work-from-home (WFH) beneficiaries,

many of which suffered spectacular reversals.

This resulted in us exiting positions in Adyen, Avalara,

Delivery Hero, Fiverr, Kahoot!, ON24, Peloton, Shimano,

Wise and Zalando during the year. We also significantly

reduced exposure to longer-duration stocks post the

Fed pivot in November, exiting Affirm, Pinduoduo and

Sea. On the positive side, we continued to add to our

semiconductor exposure reflecting myriad thematic drivers

(including AI and EV) as well as the ongoing demand-

supply imbalance. Changes to the portfolio made during

the year meaningfully ameliorated underperformance with

the Trust’s actual return more than 4.5% ahead of what a

static (i.e. unchanged) portfolio would have delivered.

Market Outlook

With the worst of the pandemic apparently behind us,

investors could be forgiven for thinking that recovery

might have been more straightforward. Instead, we are

faced with a more uncertain macroeconomic backdrop

than at any stage since the pandemic and – given the

loss of policymaker support – arguably since the Great

Financial Crisis (GFC). As recently as January, the IMF

was forecasting global growth of 4.4% and 3.8% in

2022 and 2023 respectively – a deceleration from an

estimated 6.1% in 2021 – reflecting higher interest rates,

slower US growth and troubles in China. However, the

invasion of Ukraine in late February has seen growth

forecasts contract further while resultant soaring food

and energy prices have led to inflation expectations of

5.7% in advanced economies and 8.7% in emerging

markets this year, significantly ahead of earlier forecasts.

Beyond the tragic humanitarian consequences of the

war, the conflict has also highlighted Europe’s reliance

on Russian energy with the EU receiving nearly 40% of

its gas and more than a quarter of its oil from Russia.

With the war ongoing (and with systemic risk thus far

avoided), higher commodity and energy prices will be

the primary mechanism for how the conflict affects the

global economy. While Russia only explains c.1.6% of

global GDP, it is the world’s largest exporter of natural

gas (c.20% global share) and the second largest exporter

of crude oil. Russia is also the largest exporter of wheat

(c.20% share) and supplies c.10% of the world’s copper

and aluminium and 40% of palladium. Consumer

spending is being challenged by higher energy costs

with UK families said to face the biggest real income

squeeze in nearly 50 years. In the US, a gallon of gas

recently exceeded $5 – the first time ever – with negative

implications for disposable incomes and consumer

confidence which recently fell to a decade low.

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Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

IMF World Economic Outlook, April 2022

PROJECTIONS

(real GDP, annual percent change) 2021

2022 2023

World Output

6.1 3.6 3.6

Advanced Economies 5.2 3.3 2.4

United States

5.7 3.7 2.3

Euro Area 5.3 2.8 2.3

Germany 2.8 2.1 2.7

France 7.0 2.9 1.4

Italy 6.6 2.3 1.7

Spain 5.1 4.8 3.3

Japan 1.6 2.4 2.3

United Kingdom 7.4 3.7 1.2

Canada 4.6 3.9 2.8

Other Advanced Economies

5.0 3.1 3.0

Emerging Market and Developing Economies 6.8 3.8 4.4

Emerging and Developing Asia

7.3 5.4 5.6

China 8.1 4.4 5.1

India 8.9 8.2 6.9

ASEAN-5 3.4 5.3 5.9

Emerging and Developing Europe 6.7 -2.9 1.3

Russia 4.7 -8.5 -2.3

Latin America and the Caribbean 6.8 2.5 2.5

Brazil 4.6 0.8 1.4

Mexico 4.8 2.0 2.5

Middle East and Central Asia 5.7 4.6 3.7

Saudi Arabia 3.2 7.6 3.6

Sub-Saharan Africa 4.5 3.8 4.0

Nigeria 3.6 3.4 3.1

South Africa 4.9 1.9 1.4

Memorandum

Emerging Market and Middle-Income Economies 7.0 3.8 4.3

Low-Income Developing Countries 4.0 4.6 5.6

Source: IMF, World Economic Outlook, April 2022

Note: For India, data and forecasts are presented on fiscal year basis,

with FY 2021/2022 starting in April 2021. For the April 2022 WEO, India’s

growth projections are 8.9 percent in 2022 and 5.2 percent in2023 based

on calendar year.

Sharply higher energy prices also pose a new and

substantial risk to an inflationary backdrop that had

already become problematic. As previously discussed,

inflation has soared almost everywhere with annual

CPI growth rates in the US and Europe at multi-decade

highs. Originally understood as a supply shock due to

COVID-related disruption, the past year has seen higher

prices become more pervasive and less transitory. As

previously mentioned, US CPI reached +6.5% in November,

while in the same month, Eurozone inflation came in

at +4.9% y/y, way ahead of the ECB’s earlier forecast

of +1.5% for 4Q21. Tight labour markets have also led

to wage inflation, with unit labour costs +6.3% y/y in

3Q21, the biggest increase since 1982. As a result, the

narrative has shifted to inflation as a demand problem

caused by stimulus, excess savings, and pent-up demand

which, when paired with more inelastic supply, has created

a “perfect storm of higher prices”.

Consumer Price Indices (1960 – May 2022)

11.5

11.0

10.5

10.0

9.5

9.0

8.5

8.0

7.5

7.0

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

-0.5

-1.0

-1.5

-2.0

-2.5

Personal Consumption Expenditures Price Index (31/5/2022 = 6.3%)

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

Core Personal Consumption Expenditures Price Index (31/5/2022 = 4.7%)

Source: Department of Commerce

Monthly data 31/1/1960 - 31/5/2022

Consumer Price Indices (1960 – May 2022)

Since the start of the pandemic, highly accommodative

fiscal and monetary policy designed to prevent financial

collapse has ‘flooded the economy and financial markets’

with unprecedented liquidity. Between February 2020 and

November 2021, M2 rose $6trn to $21.4trn – equivalent

to almost a year’s worth of nominal GDP, a record. Excess

liquidity was recently estimated at c.$3trn while fiscal

support packages have seen government deficits balloon. In

the US, the federal budget deficit reached c.$2.8trn, almost

three times the 2019 level. The Fed’s balance sheet has

expanded by almost $5trn too, reaching a record $8.7trn

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by the end of the calendar year. While the Fed may have

“greatly miscalculated” the inflationary impact of earlier

stimulus, they could not have known the pandemic would

result in a labour supply issue. Just two years ago the

pandemic was said to have “triggered one of the worst jobs

crises since the Great Depression”. Instead, and despite the

US economy being 1.4% larger than it was pre-pandemic,

there are still 3.6 million fewer people in jobs and nearly

1.9 job openings per job seeker. This is largely the result

of the 3m additional ‘early retirees’ equivalent to c.2% of

the US workforce (aka the ‘Great Retirement’), another

pandemic-related twist which has accelerated the labour

market recovery timeline. As a result, wages are rising, with

the National Federation for Independent Businesses (NFIB)

recently reporting a record net 48% of small businesses

increasing worker compensation. Despite this, labour force

participation remains subdued at 62.3% (as compared to

c.63% pre-pandemic) leading to massive employee churn

(aka the ‘Great Resignation’). Labour shortages may persist

which will put further upward pressure on wages and

could presage a self-reinforcing wage-price spiral unless

productivity growth improves significantly.

As such, a US tightening cycle was necessary to prevent

inflation becoming more embedded in the labour market.

While the Fed may appear behind the curve, inflation

expectations appear to remain relatively well-

anchored. The Fed will want to keep it that way; to fail to

have pivoted after the November data “would have risked

Powell’s rhetoric degenerating into self-parody”. Since

then, rate hikes have begun with further increases

anticipated this year and next. The decision by the ECB in

early March to accelerate tapering despite events in Ukraine

highlighted the fact that central banks will (and should)

always prioritise credibility over policy error risk. As

such, we expect Powell to “do whatever it takes” to becalm

inflation but do not anticipate a Volcker re-run given the

very different backdrop with one notable exception – soaring

energy prices. Regardless, it is difficult to see how central

banks can come to the rescue of markets with interest rates

near zero. Moreover, reducing inflation has become an

increasingly important political focus, and a more important

consideration than bailing out equity investors. At some

point concerns about reflexivity will resurface but there is

no obligation for the Fed to act and, in any case, we know

it failed twice to stop selloffs of as much as 50% in the bear

markets that ended in 2002 and 2009.

This malalignment of

demand and supply

is reminiscent of the

post-war period

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Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Until recently, our base case was slowing growth rather

than stagflation or recession. However, we have to

acknowledge the increasing risks posed to this relatively

sanguine view by tighter monetary conditions, war, and

soaring energy costs. For now, we are encouraged by

earnings expectations that have remained relatively robust

with growth in earnings and revenues this year forecast

at 7.7% and 11.5% respectively. While these forecasts

may prove stale and subject to downward revision, it is

worth recalling that while GDP is measured in real terms,

earnings estimates are nominal. As such, inflation currently

represents a greater risk to multiples than to corporate

earnings. Of course, much depends on the durability of

cycle-high corporate profit margins given an increasing

number of cost pressures. We continue to keep a close eye

on the direction of operating earnings given its strongly

positive (0.94) correlation with the S&P 500.

Following the recent market correction, valuations

look less problematic today with the S&P 500 trading at

c.15.8x forward earnings as compared to last year when

we noted they were “somewhat extended” at c.23x. As

a result, US stocks now trade below both five-year (18.6x)

and 10-year (16.9x) averages. However, this year we are

forced to consider valuations against a very different

inflation backdrop. That said, we are somewhat willing to

look through current elevated inflation because longer-

term expectations remain well anchored and because the

Fed is alive to inflationary risk. Equity valuations should

also be somewhat supported by a paucity of alternatives.

Compared to bonds, the Fed Model suggests stocks

are c.50% undervalued compared to Treasuries, and

c.20% undervalued versus investment-grade credit. Cash

continues to look unattractive with negative real returns

guaranteed in most major markets, although elevated

levels of equity market volatility have added to its relative

lustre.

Upside risk could manifest via the cessation of

hostilities in Ukraine - unlikely in the very near term but

possible in time. While a return to the prior equilibrium

enjoyed between Russia and the West appears impossible,

an end to hostilities could significantly ameliorate

current market uncertainty, becalm energy prices, and

meaningfully reduce the risk of escalation. Structural

inflation fears may also be overdone with many of the

imbalances that existed prior to the invasion of Ukraine

appearing pandemic-related: pent-up demand boosted

by household savings bloated during COVID, supply-chain

challenges frustrated by uneven vaccine availability and

draconian approaches to COVID containment, particularly

in China. Heightened labour market churn also appears

to be somewhat pandemic related with the pursuit of

more flexible work and/or relocation important reasons for

changing jobs. Reopened borders and easier international

travel may also ameliorate labour shortages in lower-

paid work where wage growth has been strongest. This

malalignment of demand and supply is reminiscent of the

post-war period when the end of price controls saw CPI

leap from 1.7% in February 1946 to a peak at 19.7% in

March 1947, before plunging to zero in 1949. The cause

of this volatility was a combination of pent-up demand,

as soldiers were demobilised, and plunging industrial

production, as factories retooled from armaments to

consumer goods. Two years later, production rebounded

dramatically, helping to bring inflation down. A similar

experience also occurred during the Korean War. Both of

these episodes revealed that inflation can rise and

fall very quickly without inflation expectations being

permanently altered. Fed Chair Powell may have been

alluding to this possibility when he stated that “appropriate

monetary policy in this environment requires a recognition

that the economy evolves in unexpected ways”.

Other positive impulses include the so-called ‘CFO put’

with S&P companies sitting on $2.4trn in cash and other

liquid assets. Leverage at public companies (as measured

by net debt/EBITDA) is back at 2014 lows which should

support capital spending, higher dividends and stock

repurchases. It should also fuel greater M&A activity with

private equity additionally said to have c.$2.3trn of ‘dry

powder’ cash reserves. During 2022, we have seen private

equity spend more than $34bn acquiring three software

vendors - Citrix, SailPoint and Anaplan. A return of

strategic M&A may also prove supportive too, with $95bn

of gross transaction value announced in the videogaming

industry alone this year following Microsoft’s $69bn bid

for Activision Blizzard and Take-Two’s $13bn bid for Zynga.

In early March, Google also announced the $5.4bn cash

acquisition of cybersecurity company Mandiant. We also

see many of the conditions necessary for a rally

falling into place: the IPO market is essentially shut,

and investor sentiment is at post-1992 lows (a recent

AAII survey of US retail investors revealed that just 15%

of investors are bullish). Small caps have underperformed

considerably from highs and new issues have been

smashed as the GS Recent Liquid IPO Index has halved

from November highs, both of which have typically been

preconditions of previous rallies.

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Market Risks

While COVID remains a wildcard, war, inflation, and

recession represent the most significant interconnected

risks this year. In terms of COVID, we continue to believe

the worst of the pandemic is behind us thanks to vaccine

rollouts that have broken the link between cases and

mortality, as well as the link between cases and behavioural

adjustments. Put differently, most people appear to have

concluded that the health risks associated with COVID

are no longer significant enough for them to change their

behaviour. As long as Omicron remains the dominant

strain, our base case is a continuation of the transition

from pandemic to endemic disease. The main risk to this

is a significantly different new variant that changes the

trajectory of the virus. In addition, current lockdowns

in China – where omicron is challenging the efficacy of

local vaccines and the zero-COVID policy - are a pertinent

reminder that COVID is likely to continue disrupting life

and supply chains for the foreseeable future. We also

cannot know how the Ukraine conflict will evolve.

At the same time, China will be watching closely given its

One-China Principle is similar to Putin’s desire to rebuild

a Greater Russia. There is also a real (if small) risk of

escalation (evidenced by potential NATO enlargement) –

a chilling prospect given Russia controls the world’s biggest

nuclear arsenal and has been unafraid to sanction the use

of chemical weapons in Syria.

The conflict also poses additional risks to the prevailing

investment backdrop. History says we should expect

higher inflation: as the saying goes, “war is inflationary;

peace is deflationary”. Put differently, the pursuit of both

“guns and butter” comes at an inflationary cost. In the

US, inflation spiked during the War of 1812, the American

Civil War, WWI, and WWII through the end of the Cold

War. We might also do well to consider the implications of

permanently higher defence spending and the potential

for a new arms race. If so, this may coalesce around

hypersonic weapons which reduce the effectiveness of

existing ballistic missile defence systems. With the potential

to derail the theory of deterrence based on mutually

assured destruction (MAD), higher defence budgets look

inevitable. Germany has already announced an immediate

€100bn budget to modernise its army and an ambition to

exceed a target of 2% of GDP in defence spending (from

c.1.5% today). This pivot is significant, as was the recent

decision by some ESG funds to allow defence stocks within

their investment remits. During the Cold War, the US spent

around 7% of GDP on defence which détente saw fall to

c2.8% today. The war in Ukraine has drawn a line under

that peace dividend with US defence spending already

forecast to rise towards 3.5-4% over the coming years.

War in Ukraine has also highlighted Europe’s dependence

on Russian oil and gas, particularly in Germany where

65% of gas comes from Russia. Naturally, this has brought

energy security to the fore and Europe’s urgent need

to reduce this vulnerability. While this should accelerate

the clean energy transition, the reality is that it takes a

lot of alternative energy to replace gas. The invasion has

so shaken Germany that its economic minister from the

Green Party is reviewing the possibility of keeping both

coal and nuclear plants online to reduce dependence on

Russian energy. We are excited about the opportunity to

participate in another wave of environmental technology

spending, but the climate transition also represents

another “slow- moving negative supply shock” because it

embeds the cost of carbon emissions in production prices.

It is also another reminder we may already be past peak

globalisation. This process arguably began with Brexit

and Trump’s tariff wars but stepped up a gear with COVID

when the world’s interdependence was tested. Vaccine

nationalism was a particularly difficult moment, while

post-pandemic challenges have further highlighted the

risk associated with global supply chains built on hyper-

specialisation and finely-tuned just-in-time (JIT) inventory

management. The risks to US equities from a decline

in globalisation are not insignificant: Bank of America

estimates that globalisation has driven more than half of

all margin expansion due to lower COGS on exports, taxes,

and labour.

More significantly, the risk is that peak globalisation is

part of broader inflation regime shift. In recent years

we have seen a wave of populism presage significant

minimum wage increases and social unrest, while a

number of COVID policy responses in the developed world

(such as massive transfer payments indirectly financed

by central banks) represent a “generational shift in fiscal

policy”. The demand for more flexible work post-pandemic

is also perhaps symptomatic of a recalibrated relationship

between labour and capital that could persist. Taken

together, these factors represent a significant challenge

to the disinflationary era that has been in place since the

early 1980s. Finally, we might highlight the long-term

risk posed to the dollar-based system following the

freezing of Russian US dollar reserves, described as “the

weaponization of money”. While a paucity of alternatives

suggests limited immediate risk to the dollar’s reserve

currency status, so- called ‘de-dollarisation’ could become

a key theme in an “increasingly multi-polar and potentially

more contentious world”.

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Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Technology Outlook

Earnings outlook

After increasing 9% in 2021, worldwide IT spending is

expected to reach $4.4trn this calendar year representing

an increase of 4.0%, in current dollar terms. However,

this forecast has already been revised lower from +5%

forecast in January reflecting deepening geopolitical and

macroeconomic risks. For 2022, the technology sector

is expected to deliver revenue and earnings growth of

11.2%/12% while the S&P 500 is forecast to grow at

9.8%/10.3% respectively. These forecasts do not look

unreasonable, particularly after a solid Q1 results seasons

that at the time of writing has seen the sector deliver

11.7% y/y revenue growth. However, guidance has been

more mixed than usual, likely reflecting inflation, supply

chain challenges, USD strength and the impact of the

conflict in Ukraine. These headwinds come at a tricky time

for the technology sector’s net profit margins which are

elevated at c.25% as compared to the five-year average

of 21.8%. Sustained US Dollar strength could challenge

revenue estimates given the sector’s international exposure

of 59% (the highest of any sector) vs. 41% for the market.

Valuation

Having made a new cycle high of 28x ahead of the Fed

Pivot in November 2021, technology valuations have been

in retreat. Today, the forward P/E of the technology sector

is c.19 – considerably less than this time last year (26x),

below the five-year average (21.7x) but still ahead of the

10-year (18.2x) average. In addition, technology remains

the best-capitalised US sector and the only one with net

cash. The sector’s relative rating has also contracted from

post-2004 highs of 1.4x registered in late 2021. Today,

technology stocks trade at 1.1x the market PE multiple,

towards the middle of its post-dotcom bubble range of

0.9-1.4x and a far cry from levels seen during the dotcom

bubble, when the sector traded at more than twice the

market multiple. However, as we have long argued,

aggregate valuations continue to be diluted by ‘cheap’

incumbents such as HP and Intel (and now arguably Meta /

Facebook) that trade on P/Es of between 7-13x.

S&P Information Technology Forward PE, as

at 1/7/22

S&P 500 Information Technology Sector Forward P/E (1/7/2022 = 19.33)

+4 SD

+3 SD

+2 SD

+1 SD

Mean

-1 SD

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Source: S&P Capital IQ and MSCI, Inc. (GICS)

# standard deviations from the mean on 1/7/2022 = -0.11

S&P Information Technology Forward PE, as at 1/7/22

S&P Information Technology Relative

Forward PE as at 1/7/22

2.6

2.4

2.2

2.0

1.8

1.6

1.4

1.2

1.0

0.8

0.6

Ratio of S&P 500 Information Technology Sector Forward P/E to S&P 500 Forward P/E (1/7/2022 = 1.14)

+5 SD

+4 SD

+3 SD

+2 SD

+1 SD

Mean

-1 SD

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Source: S&P Capital IQ and MSCI, Inc. (GICS)

# standard deviations from the mean on 1/7/2022 = -0.18

S&P Information Technology Relative Forward PE as at 1/7/22

Last year, we highlighted how the technology story had

hardly gone unnoticed, evidenced by next-generation

valuations that had expanded to cycle highs, revisiting

levels not seen since the late 1990s. While this group of

stocks boasted unusual growth profiles, we cautioned

that elevated valuations also reflected several late-cycle

features – elevated retail participation, SPAC issuance,

concentrated portfolios and ‘classic late-cycle exuberance’

that had coalesced around long-term ‘total addressable

market’ (TAM) investing. Since then, those pockets of

exuberance have been truly burst including ARK (a proxy

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for TAM investing) which peaked in February 2021 – a full

nine months before our own benchmark made its highs–

and has subsequently suffered peak-to-trough decline of

c.77%. SPACs have fallen by c.50%. At time of writing,

valuations across the SaaS space have more than halved

across all growth groups. While we have been nervous

about high-growth valuations, our own base case did not

envisage a derating that would be as deep or dramatic as

it is currently proving; what began as an overdue valuation

reset has gathered momentum of its own as investors have

begun to question the durability of growth and even the

validity of some companies’ non-GAAP profitability given

high (and persistent) levels of share-based compensation.

While macroeconomics and the Fed pivot have played a

significant part in this, it has been the reversing fortunes

of the working from home (WFH) and other pandemic

beneficiaries that began this process.

Spending Priorities / Favoured Themes

Although next-generation valuations are currently under

pressure, IT spending priorities are unlikely to change

nearly as dramatically. Indeed, a recent JP Morgan survey

of 142 Chief Information Officers (CIO) responsible for

$114bn spend expect IT budget growth of +5.3% and

+5.7% in 2022 and 2023 respectively, versus c.4.8%

expected during the pandemic. The survey (and others

like it) support the view that IT budgets continue to

be reallocated in favour of new technologies. Cloud

computing remains the number one IT priority, while other

high priority areas include security, digital transformation,

analytics, collaboration, and AI. Demand for IT services

also remains strong due to accelerated digital demand and

the constrained talent environment. In contrast (and at

the margin) there does appear to be some levelling off in

spend intentions for communications software likely due to

reopening/WFH digestion. Hardware also remains one of

the slowest growth areas, with PCs seeing a deterioration

in CIO prioritisation post-WFH, while the cloud shift

continues to represent significant longer-term risk.

Expected IT budget gainers / losers among

select vendors

Microsoft

Amazon

Google

SAP

Salesforce.com

VMware

Dell (incl. EMC)

Hewlett-Packard Enterprise

Oracle

IBM (incl Red Hat)

% of Responses Expecting Vendor with Largest Gain or Loss of Incremental Share of IT Budget

as a Result of shift to Cloud in Next Three Years

Top 5 Increase

Spending

Gain

Lose

Source: AlphaWise, Morgan Stanley Research

Bottom 5 Decrease

Spending

10%0% 20% 30% 40% 50% 60%

42%

13%

-8%

-9%

-10%

-12%

40%

21%

-6%

-13%

-14%

-15%

-16%

Net%

4Q21

Net%

3Q21

Expected IT budget gainers / losers among select vendors

More broadly, and consistent with previous years, legacy

technologies, and vendors such as IBM, Oracle and Dell

are expected to remain market-share donors despite their

best efforts (and M&A) to reinvent themselves. At a time

when growth stocks are under sustained pressure, this is a

good reminder of why value investing within technology is

something of a Faustian pact (and why we avoid it). Instead,

we construct our portfolio around seven core themes:

internet advertising / ecommerce, software-as-a-service,

cloud infrastructure, cybersecurity, data economy / AI, digital

entertainment and connectivity/5G. In addition, we have

exposure to a number of secondary themes including fintech/

payments, automotive, clean energy, and medical technology.

We are also excited about the long-term disruptive potential

of emerging themes such as blockchain and the metaverse.

Technology Risks

As ever, there are multiple risks to our constructive medium-

term view. Many of these relate to macroeconomics

(recession; inflation; war, and others) that are covered

broadly elsewhere. In addition, we should highlight the risk

to technology spending should CEO confidence meaningfully

deteriorate. Despite survey results suggesting otherwise,

there could be some risk to cloud spending should earlier-

stage companies/unicorns spend less aggressively. Other ‘big

picture’ risks include widespread component shortages

and labour market tightness. Valuation is another risk

because even after this atypical correction, technology stocks

have retraced back to average, rather than cheap territory

versus history. While earnings progress is expected to

moderate this year, numbers look at risk of downward

revision given the weaker global growth outlook and US

Dollar strength while record technology margins could

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Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

be challenged by soaring input prices, tight labour markets

and/or reopening (as companies give up or reinvest some

of their pandemic savings).

As we warned last year, a steeper yield curve (noticeably

absent at present) is unlikely to prove good news for

technology stocks. Regulation remains a key risk with

events in China after the aborted IPO of Ant a salient

reminder of regulatory risk. That said, we are comforted

by the existence of due legal process in liberal democracies

painfully absent elsewhere. However, we would not be

surprised to see a resurgence in regulatory scrutiny in the

US post-COVID. While legislation will not be easy to pass,

restrictive legislation has already been proposed by members

of both parties that focus on app stores, first party/third

party seller conflicts and responsibility for content on

internet platforms (revising Section 230). We expect ‘Big

Tech’ and their natural monopolies to continue to invite

scrutiny and the drumbeats in Washington to grow louder

over the coming year ahead of key lawsuits slated for 2023.

Concentration Risk

In addition to market and sector specific risks, it would

be remiss of us not to remind our shareholders about the

concentration risk both within the Trust and the market-

cap weighted index around which we construct the

portfolio. At the end of June, our three largest holdings –

Microsoft, Apple and Alphabet – represented c.28.5% of

our NAV and c.41.3% of our benchmark respectively. Five

years ago, our top three positions (Alphabet, Apple and

Microsoft) accounted for c.22% of NAV and c.30% of our

benchmark. The higher concentration of both our portfolio

and benchmark reflects the spectacular performance of a

handful of stocks that captured the zeitgeist of this cycle.

These are unique, nonfungible assets and their long-term

success represents their dominance of their respective

industries in an interconnected world where network effects

are paramount, and the marginal cost of distribution is low.

Their influence is not only felt within technology indices;

at the end of June, the largest ten stocks (including these

three) in the S&P 500 accounted for 28.0% of its market

cap. While off recent highs, this level of concentration

is commensurate with levels not seen since the early

1980s. Although this makes the portfolio (and indices)

more sensitive to the performance of a few stocks, we

are encouraged by the fact that the largest ten stocks also

explained 29% of index earnings as at year end. Trading at/

around a market multiple, these stocks dominate market-

cap indices because of their earnings progress, rather than

because they sport outlandish valuations as was the case in

the late 1990s. We are very comfortable moving materially

underweight them should we become concerned about

their growth or return prospects, or should we find more

attractive risk-reward profiles elsewhere in the market.

Conclusions

As one of the largest beneficiaries of the pandemic,

reopening was always going to generate crosscurrents

for the technology sector. E-commerce normalisation

has led to significant retracements within the internet

and payment subsectors which are likely to take time

to recapture. However, we are confident that secular

tailwinds will reassert themselves, supported by favourable

demographics. Software spending growth remains robust

as companies digitally transform, automate workflows,

gain insight from AI, secure themselves from cyberattacks

and apply technology to drive productivity gains. Gartner

believe software spending will increase 9.6% this year;

IDC size digital transformation as a $10trn opportunity

through 2025. And then there’s a myriad of other secular

themes within technology to get excited about – AI,

cybersecurity, electric vehicles (EVs), healthcare and clean

energy to name a few, as well as optionality associated

with autonomous vehicles, the metaverse and blockchain/

distributed computing. With macroeconomics currently

dominating equity markets and near-term volatility high, it

is easy to forget how good the long-term technology

story is.

Long-term returns ultimately reflect economic value

added, even if market disruptions and cyclical impulses

can overwhelm the powerful underlying drivers of

longer- term technological progress in the short term.

If the past year has shown anything, it is the enormous

risk associated with hubristic and Panglossian investment

approaches: TAM, growth at any price, disregard for

liquidity, and high conviction trumping risk management as

the basis for portfolio construction. None of these things,

however, alter the underlying criticality of technology

(via its contribution to total factor productivity) to future

economic growth, especially as the other two inputs to

growth (capital and labour) may contribute less as they

become relatively scarcer. As the OECD puts it (quoting

Krugman): “Productivity isn’t everything, but in the long

run it is almost everything.”. Technology is the handmaiden

to productivity improvement, and so long as the sector can

continue to help the economy become more productive

and create economic value, we expect value to continue to

accrue to equity holders in the most impactful companies

enabling this change.

Investment Manager’s Report continued

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While valuations have now corrected back to medium-

term averages, they are still susceptible to further

downside given increased volatility, the growing influence

of energy prices and real rates on equity markets as well

as heightened recession risk. The current drawdown

(c.21%) is already consistent with the average non-

recessionary bear market (-18% over eight months).

However, the average recessionary bear market has

seen the market fall by c.33% over 17 months, suggesting

the current correction may only be c. two-thirds complete

in the event of a recession. That said, technology

valuations have meaningfully corrected such that next-

generation software stocks now trade broadly in line with

incumbents on a forward EV/sales basis. The last time

this happened was 2015/2016 when the market was also

significantly concerned about a hard landing, suggesting

that technology stocks have begun to meaningfully price

in recession risk. As such, we have begun to rebuild our

exposure to higher-growth stocks while maintaining a

modest amount of Nasdaq put protection and cash to help

ameliorate the impact of further market weakness while

ensuring the portfolio remains highly liquid.

Cloud vs. Legacy Software Valuations,

Forward EV/Sales (2010 – June 2022)

25x

20x

15x

10x

Legacy

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Cloud

Source: KeyBanc, 8/7/22

EV/trailing 12 month sales

Cloud vs. Legacy Software Valuations, Forward EV/Sales

(2010 – June 2022)

Ben Rogoff

19 July 2022

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Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Investment Manager’s Core Themes

Cloud Infrastructure

Of the technologies that enjoyed a pandemic boost, few

are likely to prove as durable as those that accrued to cloud

computing. The past two years have seen an accelerated

shift to the cloud to support digital transformation,

remote work, and a plethora of new services “at a scale

unprecedented in human history”.

We’re excited about…

Cloud computing continues to deliver strong growth at

extraordinary scale, with the three dominant vendors

(Amazon, Microsoft and Google) now running at a

collective annual revenue run rate of $140bn, up +41%

y/y. Strong cloud growth necessitates cloud capex growth

which should underpin demand for semiconductors,

memory and networking equipment in cloud data

centres; Morgan Stanley have increased their expectations

for hyperscaler capex growth in 2022 to +27% y/y. AI

continues to be a major driver of cloud adoption as

companies move from proof of concept to production

use cases; Gartner expects AI software revenue to reach

$62.5bn this year, up +21% y/y. Environmental tailwinds

are also likely to support future adoption.

Current holdings

Amazon, Microsoft, Alphabet, Arista Networks, AMD,

NVIDIA.

Representing 28.5% of net assets at 30 April 2022.

Cybersecurity

Cybersecurity plays a vital role in protecting the digital

economy and has been elevated from an IT problem to a

business imperative which has seen its share of IT budgets

grow from c.4.8% in 2011 to 8.4% in 2021. We believe

growth should be supported by cybercrime incidents that

continue to grow in both volume and sophistication. The

cost of cybercrime is estimated at $1trn, equivalent to c.1%

of global GDP.

We’re excited about…

Cybercrime incidents continue to grow alongside

technological advances such as social media, cloud

computing and digital transformation that expand the

so-called ‘attack surface’. This should support cybersecurity

spending which also benefits from the shift in primary

aim from data theft to business disruption as well as

a growing regulatory imperative. In 2021, there was a

ransomware attack every 11 seconds. We are particularly

excited about cloud security spending with CrowdStrike

estimating that today cloud security spend amounts to only

1% of the underlying infrastructure spend today. While

we do not believe that cybersecurity has benefitted from

significant pull-forward during the pandemic, strong recent

results have not been rewarded due to macroeconomic

uncertainty. Downside risk could also be ameliorated by

M&A activity following a strong 2021 which saw McAfee,

Mimecast and Proofpoint all acquired by private equity.

Current holdings

CrowdStrike Holdings, CyberArk Software, Tenable

Holdings, CloudFlare, eMemory Technology, Okta.

Representing 3.7% of net assets at 30 April 2022.

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Cloud Software

Like infrastructure, the software industry has been

migrating to a subscription model powered by the cloud.

The trend to software-as-a-service (SaaS) models has

greatly increased the software market by collapsing upfront

costs. This has made it possible for smaller companies to

access software previously reserved for enterprises as well

as facilitating myriad new vertical applications. By 2025,

almost two-thirds of spending on application software will

be directed towards the cloud.

We’re excited about…

Despite a more challenging macroeconomic backdrop,

software results have remained solid with companies

continuing to invest in digital transformation. Microsoft

CEO Satya Nadella recently noted strength in demand

for automation technology “because in an inflationary

environment, the only deflationary force is software.”.

ServiceNow’s CEO further highlighted how macro

“challenges have underscored the urgency of investment

in digital business”. Unfortunately, these imperatives

and generally sound results have been in contrast with a

massive derating in sector valuations. While this correction

was overdue (and influenced by waning growth in earlier

work-from-home beneficiaries) we have begun to rebuild

our portfolio exposure as the de-rating appears well

beyond any fundamental change in sector outlook. On

a medium-term view, we remain excited about ongoing

SaaS penetration with the cloud explaining just 15% of the

$2trn enterprise IT stack today.

Current holdings

Microsoft, ServiceNow, Salesforce.com, Adobe Systems,

MongoDB, HubSpot.

Representing 16.0% of net assets at 30 April 2022.

Artificial Intelligence

AI can analyse and extract insight from huge quantities of

data which could augment and potentially replace human

decision making and allow a much tighter interaction

between the physical and digital worlds. We are early and

the opportunity is growing: more data is created per hour

today than was captured in an entire year just 20 years ago

and only 0.5% of all data captured is being analysed. AI

could be a $734bn market by 2027.

We’re excited about…

Before the advent of AI, companies could only analyse

structured data which is very expensive to gather, store

and process, resulting in just 3% of total data captured

being tagged. The leading AI-specific applications today are

image recognition and Natural Language Processing (NLP).

NLP remains a key battleground for tech giants fighting for

supremacy in AI given the easy adaption for a wide range

of downstream tasks through transfer learning, whereas

startups look more at machine vision because entry barriers

are lower. We are seeing AI technology move from being

proof of concept - beating humans at video games - to

deployments by companies outside the technology space.

We have seen this in credit underwriting, autonomous

mining vehicles, machine-vision recycling sorting and

myriad other applications including AI-based ‘digital twins’;

digital representations of a physical objects which mirror the

physical object. We continue to regard the semiconductor

and SPE industries as a levered way to play AI proliferation

in addition to industry leaders Google and Microsoft.

Current holdings

NVIDIA, Synopsys, Applied Materials, Tokyo Electron, AMD,

Alphabet, Microsoft.

Representing 27.5% of net assets at 30 April 2022.

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Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Internet

The internet sector has been challenged by the reversal of

trends which supported strong US ecommerce growth and

multiple expansion during COVID, including stay-at-home

orders, the impact of stimulus and consumer spending

shift to goods versus services. Although growth has slowed

against tough comparators, ecommerce spending in 2021

remains at levels c.70% higher than 2019 and subsectors

more exposed to reopening trends continue to deliver

strong growth. Social media continues to play a central

role in our everyday lives, with the world set to spend more

than four trillion hours using social media in 2022.

We’re excited about…

Ecommerce penetration of total retail sales remains low,

having steadily increased 0.4%-0.9% per year for the

decade through 2019 to reach 10.5%, then spiking

dramatically during COVID to reach 14.6%, before

declining modestly this year. COVID forced a large group

of consumers and some large sectors in the economy

(e.g. grocery) online and, despite near-term headwinds,

it still seems reasonable to assume ecommerce’s share

of incremental retail sales will be higher in the five years

following the pandemic (c. 2/3) than in the five years

before it (c.1/3). Online advertising suffered in sympathy

with ecommerce and faced incremental headwinds from

changes to Apple’s user-tracking policies and the influence

of TikTok increasingly felt across the landscape. There

has been a blurring of the boundaries between social

media and e-commerce with short-form video and social

commerce continuing to take share.

Current holdings

Amazon, Alphabet, Snap, Shopify, Airbnb.

Representing 12.4% of net assets at 30 April 2022.

Digital Entertainment

The combination of smartphones, broadband and app

stores have resulted in an explosion of internet applications

and a reallocation of time spent on entertainment. We

remain excited about the potential of over-the-top (OTT)

video, streaming music, and video gaming to continue to

grow entertainment wallet share. However, weaker recent

trends amid reopening and waning consumer confidence

have dampened our near-term enthusiasm for the theme.

We’re excited about…

After a stellar 2020, reopening has played havoc with

digital entertainment and videogaming stocks due to

pandemic-related strength demand pull-forward and

heightened competition, as well as slowing growth on

tough comparisons causing valuation compression. For

2021, the video games software industry only grew

1% y/y having grown 23% in 2020. This slowdown

(and associated multiple compression) more than offset

sustained M&A activity that has continued into 2022

with the proposed acquisitions of Activision and Zynga

representing the two largest gaming deals ever. While

growth is expected to reaccelerate this year, there remains

considerable uncertainty around consumer spending

given elevated energy prices and weakening confidence.

Recent disappointments for high-profile consumer facing

stocks such as Amazon and Netflix have also been painful

reminders that reopening headwinds and the shift from

goods to services spending, may not yet be fully priced

in. As such we have meaningfully reduced our exposure

to this consumer-facing theme, maintaining a position in

Nintendo and a collection of tail-names including ROBLOX

(user created gaming platform) and Take-Two Interactive

Software.

Current holdings

Nintendo, ROBLOX, Take-Two Interactive Software, Spotify.

Representing 1.2% of net assets at 30 April 2022.

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Connectivity / 5G

The 5G network rollout continues apace despite an air

pocket in China and 5G handset penetration also tracked

above earlier forecasts, reaching 39% in 2021. Apple had

another strong year and proved more adept than most at

handling supply chain challenges. In Electric Vehicles, EV

sales penetration has grown from 1% in 2017 to 8% in

2021, with unit sales up +101% last year as automakers

prioritised EV production to meet consumer demand

and avoid emissions penalties in the face of widespread

shortages.

We’re excited about…

A hybrid workforce, more cloud-delivered applications

and more data from digital customer interactions means

the need for network speed and capacity upgrades.

Architectural upgrades designed to enhance security

posture as well as deliver efficiency. Apple has so far been

less subject to WFH headwinds as the Services business

continues to grow well and consumers have enthusiastically

adopted Macs with the new M1 chip, which speaks to

Apple’s dominant position in smartphones and ability to

monetize their billion-strong loyal user base ever more

effectively. EV adoption remains early, as consensus expects

EV sales to reach one third of new car sales by 2030, but

some analysts have suggested the majority could be EVs

by this point based on OEM targets, S-curve adoption

models and government emissions mandates. We continue

to believe the megatrends of electrification, autonomy

and connectivity represent the biggest revolution in the

automotive industry since Henry Ford unveiled the Model T

in 1908.

Current holdings

Apple, Qualcomm, MediaTek, Taiwan Semiconductor, Tesla,

BYD, ON Semiconductor.

Representing 16.3% of net assets at 30 April 2022.

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Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

% % Pence per share

NAV per share at 30 April 2021 2496.44

Market Impact

Benchmark performance (Sterling adjusted) -0.87

Active Management

Stock Allocation Effect~ -6.82

Stock Trading and Timing Effect~ -0.10

Total active management -6.92

Other factors

Liquidity/gearing effect 0.97

Ongoing charges including performance fee -0.84

Total other factors 0.13

Performance of NAV -7.66 -191.31

NAV per share at 30 April 2022 2305.13

~ Stock allocation effect refers to the portion of the total relative performance which is attributable to being overweight or underweight in a security. Stock

Trading and Timing effect refers to the portion of the total relative performance which is attributable to the different returns from a security in the fund and

in the benchmark over the same period of time. Refer to Investment Manager’s Report on pages 16 to 27 for further information.

Performance Attribution

Movement in net asset value (total return) per share

Over the year to 30 April 2022 the Net Asset Value per share fell by 7.66% compared to the decline in total return

provided by the Benchmark of 0.87%. The below table breaks down the Company’s absolute one year return into market

impact, active management and other factors.

Performance attribution by investment

The top ten relative contributors and the bottom ten relative detractors from performance over the year to 30 April 2022.

-1.5 -1.0 -0.5 0.0 0.5 1.0

Alibaba**

EInk

Arista Networks

Tesla Motors

Cloudﬂare

Tenable

Marvell Technology

Advanced Micro Devices

CrowdStrike

BYD

Paypal*

Amazon.com

Chegg*

Broadcom*

Twilio

Everbridge*

Snap

Netﬂix*

Microsoft**

Apple**

0.88

0.41

0.30

0.29

0.26

0.25

0.24

0.22

-0.38

-0.39

-0.42

-0.46

-0.50

-0.53

-0.64

-1.66

0.38

-0.39

-0.42

-0.46

-0.50

-0.53

-0.64

-1.66

All of the above companies were held during the year to 30 April 2022. All data sourced from Polar Capital LLP.

*not held at the year ended 30 April 2022/**underweight position relative to the Benchmark.

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Breakdown of investments by region

as at 30 April 2022

Performance attribution by region*

year to 30 April 2022

Market capitalisation of underlying investments

as at 30 April 2022

Performance attribution by market capitalisation*

over the year to 30 April 2022

0 10 20 30 40 50 60 70 80

US & Canada

Japan

Asia Paciﬁc

(ex-Japan)

Other Net

Assets

Europe

(inc - UK)

Middle East

& Africa

2022

2021

74.2

70.1

10.2

12.6

7.9

4.9

3.4

4.7

2.9

7.1

1.4

0.6

0 10 20 30 40 50 60 70 80 90 100

Market Capitalisation

<$1bn

Market Capitalisation

$1bn-$10bn

Market Capitalisation

>$10bn

2022

2021

11.7

7.8

88.0

91.8

0.3

0.4

-10 -8 -6 -4 -2 0 2 4

2.14

0.97

-0.00

-0.03

-0.40

-0.67

-7.95

Asia Paciﬁc (ex-Japan)

Liquidity/gearing effect

Middle East & Africa

Latin America

Japan

Europe (inc-UK)

US & Canada

-7 -6 -5 -4 -3 -2 -1 0 1 2

0.97

-6.41

-3.01

Large Cap (>$10bn)

Mid Cap (>$1bn - $10bn)

Small Cap (<$1bn)

Liquidity/gearing effect

-0.35

-0.16

* This represents the gross return of the fund minus the benchmark return. This reflects the attribution effect where the fund’s return is compared to the benchmark

return (excluding ongoing charges including performance fees of 0.84%).

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Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Classification of Investments*

as at 30 April 2022

North

America

Europe

Asia Pacific

(inc. Middle

East)

Total

30 April

2022

Total

30 April

2021

Benchmark

Weightings as

at 30 April

2022

Software 26.5 0.1 1.0 27.6 25.2 25.9

Semiconductors & Semiconductor Equipment 15.4 2.1 4.9 22.4 18.3 22.6

Technology Hardware, Storage & Peripherals 11.7 0.2 2.7 14.6 12.5 14.4

Interactive Media & Services 12.4 - 1.6 14.0 19.6 13.3

Internet & Direct Marketing Retail 2.2 0.1 0.6 2.9 5.0 2.9

IT Services 2.2 - 0.1 2.3 3.5 4.1

Automobiles 0.9 - 0.7 1.6 0.6 1.6

Electronic Equipment, Instruments & Components - - 1.6 1.6 2.8 1.6

Communications Equipment 1.5 - - 1.5 - 1.5

Entertainment 0.4 - 0.8 1.2 2.5 1.2

Aerospace & Defence 0.7 - - 0.7 0.4 0.7

Machinery - - 0.7 0.7 1.3 0.8

Healthcare Equipment & Supplies 0.3 - 0.3 0.6 0.3 0.6

Electrical Equipment - 0.4 - 0.4 0.2 0.4

Diversified Consumer Services - - - - 0.9 -

Leisure Products - - - - 0.8 -

Healthcare Providers & Services - - - - 0.7 -

Auto Components - - - - 0.4 -

Media - - - - 0.1 -

Total investments (£2,811,080,000) 74.2 2.9 15.0 92.1 95.1

Other net assets (excluding loans) 6.0 2.3 1.3 9.6 6.4

Loans (0.9) - (0.8) (1.7) (1.5)

Grand total (net assets of £3,050,985,000) 79.3 5.2 15.5 100.0 -

At 30 April 2021 (net assets of £3,408,763,000) 72.4 8.5 19.1 - 100.0

* The classifications are derived from the Benchmark as far as possible. The categorisation of each investment is shown in the portfolio available on the

Company’s website. Where a dash is shown for the Benchmark it means that the sector is not represented in the Benchmark. Not all sectors of the

Benchmark are shown, only those in which the Company has an investment at the financial year end.

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Top 10 Investments as at 30 April 2022

Ranking

Value of holding

£'000

% of total net

assets

2022 2021 2022 2021 2022 2021

1 (1) 336,977 296,561 11.0 8.7

Held since: 2007

Founded in 1975, the company is the largest software company in the world and has built a dominant franchise in desktop

software through its ubiquitous Windows operating system, Office productivity software and Azure Cloud computing service.

2 (3) 305,244 281,211 10.1 8.2

Held since: 2003

Apple is a leading supplier of personal computers, smartphones, tablets and accessories such as AirPods that feature or integrate

with the company’s proprietary OS X operating system. Other services include AppleTV, Apple Music and its subscription-based

iCloud storage.

3 (2) 249,058 292,143 8.2 8.6

Held since: 2005

As the parent company of Google, the company is the dominant provider of Internet search, online advertising, web applications

and tools and its Android (mobile OS) combined with Chrome (browser) and Google Maps have enabled it to maintain its market

leadership during the mobile internet transition.

4 (9) 95,065 74,141 3.1 2.2

Held since: 2016

NVIDIA is a US fabless semiconductor company with leading market share in graphics processors (GPUs) used in gaming,

professional visualisation, data centre and automotive. Supported by its CUDA programming model, the company’s GPUs are

critical components in Artificial Intelligence (AI) platforms helping to train neural networks.

5 (13) 86,045 52,175 2.8 1.5

Advanced Micro Devices is an American semiconductor company that develops computer processors and related technologies for

business and consumer markets.

Held since: 2016

6 (5) 82,312 115,503 2.7 3.4

Held since: 2007

A manufacturer of a very wide array of products ranging from components to finished products for both consumer electronics

and industrial end markets. The company is particularly renowned for its high global market share in the fields of memory

semiconductors (NAND/DRAM), LCD displays, and mobile smartphones/tablets.

7 (6) 82,012 110,029 2.7 3.2

Taiwan Semiconductor engages in the manufacture and sale of integrated circuits and wafer semiconductor devices. Its chips

are used in personal computers and peripheral products; information applications; wired and wireless communications systems

products; automotive and industrial equipment including consumer electronics such as digital video compact disc player, digital

television, game consoles, and digital cameras.

Held since: 2001

8 (10) 59,248 61,023 1.9 1.8

Held since: 2001

ASML manufacture complex lithography machines which chipmakers use to produce integrated circuits, or computer chips and

provide chipmakers with hardware, software and services to mass produce patterns on silicon through lithography.

9 (15) 57,558 47,029 1.9 1.4

Held since: 2009

Amazon is a multinational technology company that focuses on e-commerce, Cloud computing, digital streaming and artificial

intelligence.

10 (22) 56,280 30,463 1.8 0.9

Held since: 2015

ServiceNow is an American software company that develops a cloud computing platform to help companies manage digital

workflows for enterprise operations.

Total

1,409,799 46.2%

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Full Portfolio

Stock Sector Region

30 April

2022

£’000

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30 April

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30 April

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%2022 2021

1 (1) Microsoft Software North America 336,977 296,561 11.0 8.7

2 (3) Apple Technology Hardware, Storage & Peripherals North America 305,244 281,211 10.1 8.2

3 (2) Alphabet Interactive Media & Services North America 249,058 292,143 8.2 8.6

4 (9) Nvidia Semiconductors & Semiconductor Equipment North America 95,065 74,141 3.1 2.2

5 (13) Advanced Micro Devices Semiconductors & Semiconductor Equipment North America 86,045 52,175 2.8 1.5

6 (5) Samsung Electronics Technology Hardware, Storage & Peripherals Asia Pacific 82,312 115,503 2.7 3.4

7 (6) Taiwan Semiconductor Semiconductors & Semiconductor Equipment Asia Pacific 82,012 110,029 2.7 3.2

8 (10) ASML Semiconductors & Semiconductor Equipment Europe 59,248 61,023 1.9 1.8

9 (15) Amazon.com Internet & Direct Marketing Retail North America 57,558 47,029 1.9 1.4

10 (22) ServiceNow Software North America 56,280 30,463 1.8 0.9

Top 10 investments 1,409,799 46.2

11 (4)

Meta Platforms

(previously Facebook)

Interactive Media & Services North America 54,509 143,131 1.8 4.2

12 (20) Micron Technology Semiconductors & Semiconductor Equipment North America 48,220 38,249 1.6 1.2

13 (-) Arista Networks Communications Equipment North America 44,318 - 1.5 -

14 (8) Tencent Interactive Media & Services Asia Pacific 43,880 78,674 1.4 2.3

15 (-) KLA-Tencor Semiconductors & Semiconductor Equipment North America 39,816 - 1.3 -

16 (28) CrowdStrike Software North America 39,441 25,213 1.3 0.7

17 (17) HubSpot Software North America 38,675 44,270 1.3 1.3

18 (44) Marvell Technology Semiconductors & Semiconductor Equipment North America 38,601 16,803 1.2 0.5

19 (11) Applied Materials Semiconductors & Semiconductor Equipment North America 36,986 59,068 1.2 1.7

20 (18) Snap Interactive Media & Services North America 36,334 41,944 1.2 1.2

Top 20 investments 1,830,579 60.0

21 (37) Qualcomm Semiconductors & Semiconductor Equipment North America 32,622 19,753 1.0 0.6

22 (26) Seagate Technology Technology Hardware, Storage & Peripherals North America 27,421 28,123 0.9 0.8

23 (-) Tesla Motors Automobiles North America 26,891 - 0.9 -

24 (25) Mastercard IT Services North America 26,330 28,215 0.9 0.8

25 (12) Adobe Software North America 25,980 53,963 0.8 1.6

26 (57) Lattice Semiconductor Semiconductors & Semiconductor Equipment North America 24,788 14,916 0.8 0.4

27 (23) Zendesk Software North America 24,415 30,294 0.8 0.9

28 (21) Tokyo Electron Semiconductors & Semiconductor Equipment Asia Pacific 23,889 38,083 0.8 1.1

29 (-) Five9 Software North America 23,654 - 0.8 -

30 (-) Elastic Software North America 23,453 - 0.8 -

Top 30 investments 2,090,022 68.5

Ranking

Value of holding % of net assets

Ranking

Value of holding % of net assets

Portfolio Review continued

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Stock Sector Region

30 April

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31 (88) Nintendo Entertainment Asia Pacific 23,413 8,557 0.8 0.2

32 (96) BYD Automobiles Asia Pacific 23,080 7,073 0.7 0.2

33 (71) Axon Enterprise Aerospace & Defense North America 21,985 12,144 0.7 0.4

34 (51) CyberArk Software Software Asia Pacific 21,721 15,768 0.7 0.5

35 (63)

Monolithic Power

Systems

Semiconductors & Semiconductor Equipment North America 20,305 14,258 0.7 0.4

36 (-) Pure Storage Technology Hardware, Storage & Peripherals North America 19,712 - 0.7 -

37 (42) Airbnb Interactive Media & Services North America 19,708 17,276 0.7 0.5

38 (24) Visa IT Services North America 19,629 29,196 0.6 0.9

39 (-) E Ink Electronic Equipment, Instruments & Components Asia Pacific 19,235 - 0.6 -

40 (7) Alibaba Internet & Direct Marketing Retail Asia Pacific 18,888 79,532 0.6 2.3

Top 40 investments 2,297,698 75.3

41 (-) Palo Alto Networks Software North America 18,479 - 0.6 -

42 (27) Salesforce.com Software North America 18,315 25,730 0.6 0.8

43 (81) Unity Software Software North America 17,761 9,456 0.5 0.3

44 (84) Smartsheet Software North America 16,414 8,900 0.5 0.3

45 (65) Cloudflare Software North America 15,864 13,727 0.5 0.4

46 (76) Power Integrations Semiconductors & Semiconductor Equipment North America 14,930 10,635 0.5 0.3

47 (-) ON Semiconductor Semiconductors & Semiconductor Equipment North America 14,451 - 0.5 -

48 (48) TripAdvisor Interactive Media & Services North America 14,362 16,227 0.5 0.5

49 (64) Snowflake Software North America 13,973 13,956 0.5 0.4

50 (80) MongoDB Software North America 13,343 9,522 0.5 0.3

Top 50 investments 2,455,590 80.5

51 (89) Shopify IT Services North America 13,251 8,338 0.4 0.2

52 (30) Twilio Software North America 13,034 24,094 0.4 0.7

53 (35) Tenable Software North America 12,985 19,893 0.4 0.6

54 (38)

Zoom Video

Communications

Software North America 12,578 19,029 0.4 0.6

55 (101) SolarEdge Technologies Semiconductors & Semiconductor Equipment Asia Pacific 12,519 5,295 0.4 0.2

56 (-) eMemory Technology Semiconductors & Semiconductor Equipment Asia Pacific 12,388 - 0.4 -

57 (36) Okta Software North America 12,146 19,789 0.4 0.6

58 (-) SiTime Semiconductors & Semiconductor Equipment North America 11,860 - 0.4 -

59 (87) Ceres Power Electrical Equipment Europe 11,569 8,743 0.4 0.2

60 (47) Workday Software North America 11,557 16,379 0.4 0.5

Top 60 investments 2,579,477 84.5

Ranking

Value of holding % of net assets

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Stock Sector Region

30 April

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61 (-) Synopsys Software North America 11,533 - 0.4 -

62 (53) MediaTek Semiconductors & Semiconductor Equipment Asia Pacific 11,125 15,489 0.4 0.5

63 (49) TDK Electronic Equipment, Instruments & Components Asia Pacific 10,791 15,954 0.4 0.5

64 (-) Paycom Software Software North America 10,780 - 0.3 -

65 (-) Square IT Services North America 9,990 - 0.3 -

66 (72) Atlassian Software Asia Pacific 9,414 12,115 0.3 0.3

67 (-) Kornit Digital Machinery Asia Pacific 9,356 - 0.3 -

68 (106) Kinaxis Software North America 9,169 3,593 0.3 0.1

69 (79) Qualtrics International Software North America 8,840 9,627 0.3 0.3

70 (86) Dexcom Healthcare Equipment & Supplies North America 8,749 8,756 0.3 0.3

Top 70 investments 2,679,224 87.8

71 (-) Hoya Healthcare Equipment & Supplies Asia Pacific 8,746 - 0.3 -

72 (59) Roblox Entertainment North America 8,655 14,585 0.3 0.4

73 (55) Keyence Electronic Equipment, Instruments & Components Asia Pacific 8,251 15,371 0.3 0.4

74 (-) Coupa Software Software North America 7,487 - 0.3 -

75 (58)

Fuji Machine

Manufacturing

Machinery Asia Pacific 7,403 14,793 0.2 0.4

76 (-) Ambarella Semiconductors & Semiconductor Equipment North America 7,377 - 0.2 -

77 (16) Infineon Technologies Semiconductors & Semiconductor Equipment Europe 6,891 44,581 0.2 1.3

78 (60) Harmonic Drive Systems Machinery Asia Pacific 6,430 14,480 0.2 0.4

79 (100) Hamamatsu Photonics Electronic Equipment, Instruments & Components Asia Pacific 6,376 5,299 0.2 0.2

80 (-) Disco Corporation Semiconductors & Semiconductor Equipment Asia Pacific 6,256 - 0.2 -

Top 80 investments 2,753,096 90.2

81 (-) Naver Interactive Media & Services Asia Pacific 6,137 - 0.2 -

82 (-) UiPath Software North America 5,720 - 0.2 -

83 (-) Intuit Software North America 5,521 - 0.2 -

84 (-) Etsy Internet & Direct Marketing Retail North America 5,067 - 0.2 -

85 (-) CS Disco Software North America 4,266 - 0.2 -

86 (-) DoorDash Internet & Direct Marketing Retail North America 4,212 - 0.1 -

87 (94)

Take-Two Interactive

Software

Entertainment North America 3,926 7,108 0.1 0.2

88 (99) Qt Software Europe 3,542 5,731 0.1 0.2

89 (50) HelloFresh Internet & Direct Marketing Retail Europe 3,456 15,942 0.1 0.5

90 (-) Impinj Semiconductors & Semiconductor Equipment North America 3,417 - 0.1 -

Top 90 investments 2,798,360 91.7

Ranking

Value of holding % of net assets

Portfolio Review continued

Full Portfolio continued

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Stock Sector Region

30 April

2022

£’000

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30 April

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%2022 2021

91 (-) Logitech Technology Hardware, Storage & Peripherals Europe 3,309 - 0.1 -

92 (107) Zuken IT Services Asia Pacific 3,081 3,582 0.1 0.1

93 (103) Seeing Machines Electronic Equipment, Instruments & Components Asia Pacific 2,894 4,074 0.1 0.1

94 (102) Tobii Technology Hardware, Storage & Peripherals Europe 2,181 4,140 0.1 0.1

95 (109) ilika Electronic Equipment, Instruments & Components Europe 1,254 2,747 - 0.1

96 (110)

Cermetek

Microelectronics

Electronic Equipment, Instruments & Components North America 1 2 - -

Total equities 2,811,080 92.1

Other net assets 239,905 7.9

Total net assets 3,050,985 100.0

Note: Asia Pacific includes Middle East.

Ranking

Value of holding % of net assets

Environmental, Social and Governance

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Environmental, Social and Governance

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

ESG – Corporate Perspective

Few folk, if any, in the investment world are not discussing

ESG and what it means for them. There are many

varied and different taxonomies, metrics, opinions and

approaches being taken. The investment trust companies,

like Polar Capital Technology Trust plc, currently have few

regulatory required actions and reporting but we strive to

be cognisant of best practice as we pursue a long-term

and sustainable future for the Company. The Board has

continued to develop its understanding of sustainability

and ESG more generally, sharing their stance with the

Investment Manager, Polar Capital.

Over the past year, we have worked with the Portfolio

Manager and his team to assure ourselves that the relevant

ESG factors are considered as a matter of course in the

investment process. This has involved much discussion with

the team as to how the investment process has naturally

evolved over recent years to include ESG considerations.

As a result, a thorough scrutiny of the investment process

through the ESG lens this year has led to an identification

of where ESG factors are already integrated into the

process and areas where there is value to add in enhancing

the process; many improvements have been made and

monitoring by the Investment Manager is in place.

Governance has variously been an issue with technology

companies. The sector considers itself a driver of the ‘E’

in ESG but there is a need to verify this is the case for our

investee companies. We acknowledge that engagement is

not always possible with the technology giants but we and

the Investment Manager are taking the time to make sure

we are doing what we can.

On pages 44 to 52 the Investment Manager explains ESG

from an investment perspective, bringing it to life by using

several examples.

At the request of the Board, the Investment Manager has

crafted a dashboard, a version of which is provided on

page 53, of all relevant and available metrics but we do

not believe now is the time to be setting targets for these,

given their unrefined state. We will, however, monitor them

over time and evolve them as and when appropriate. We

also engaged with our Investment Manager about their

overall ESG philosophy and found they are engaged on

many different levels.

We all recognise this is a journey into the unknown and

somewhat unquantifiable, but the high-level objectives are

clear and we are steering the Company with those very

much in mind.

ESG and third party service providers

The Investment Manager (on behalf of all clients) receives

assurance on an annual basis that, where required, third-

party service providers comply with the requirements of

the Modern Slavery Act and adhere to a zero-tolerance

policy to bribery and corruption. In light of the growing

requirements surrounding ESG, including TCFD, third party

service providers have been engaged in providing copies of

their ESG, diversity and inclusion, stewardship and other

related policies to the Company. The Board will continue

to monitor the practices of service providers and seek to

assure shareholders where appropriate that suitable policies

and procedures are in place to effect positive change.

Corporate responsibility

The Company’s core investment and administrative

activities are undertaken by its Investment Manager which

aims to limit the use of non-renewable resources and

reduce waste where possible. The Investment Manager has

a corporate ESG policy, which is available in the document

library of the Company’s website, and wherever possible

and appropriate the parameters of such are considered

and adopted by the investment team in relation to the

Company’s management and portfolio construction. As

aforementioned, the Portfolio Managers are required to

consider ESG factors when reviewing new, continuing or

exiting investments but they are not required to take an

investment decision solely on the basis of ESG factors.

The Board monitors the Investment Manager’s approach

to ESG including policies for improving their impact on

the environment, and they themselves take into account

ESG factors in the management of the Company. The

Companies Act 2006 (Strategic Report and Directors’

Reports) Regulations 2013 require companies listed on

the Main Market of the London Stock Exchange to report

on the greenhouse gas (GHG) emissions for which they

are responsible. The Company is an investment trust,

with neither employees nor premises, nor has it any

financial or operational control of the assets which it

owns. Consequently, it has no GHG emissions to report

from its operations nor does it have responsibility for any

other emissions. Information on the GHG emissions of the

Investment Manager can be found within the ESG and

Sustainability area of their website.

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Taskforce for Climate-Related Financial

Disclosures (TCFD)

The Company notes the TCFD recommendations on

climate-related financial disclosures. As stated above,

the Company is an investment trust with no employees,

internal operations or property. However, it is an asset

owner and therefore we will work to develop appropriate

disclosures about our portfolio. Information sources are

developing and consultations on reporting requirements

are underway. The Board will continue to work alongside

its Investment Manager to provide more information

as it becomes available. Polar Capital supports TCFD’s

recommendations and is in the process of applying the

guidance to ensure compliance going forward.

Diversity and Gender reporting

The Company has no employees and the Board is

comprised of four female and three male Independent

Non-executive Directors. The Board is cognisant of the

requirements of the FCA Diversity and Inclusion Policy

published in April 2022 and, while the Board does meet

the gender requirements, being a minimum of 40% female

Board members and having at least one senior female

appointment, the current composition does not satisfy

the ethnicity requirements (at least one non-white ethnic

minority Board member). The Board has put in place a

succession plan based on the recommended nine-year

tenure of Directors with allowance for an extended period

of up to 12 years for the role of the Chair (in line with the

Chair Tenure Policy). The Board will continue to consider

the benefits of diversity throughout any recruitment

process, especially when compiling a shortlist of candidates

and selecting individuals for interview in order to ensure a

wide group of candidates. The Board has taken care to take

account of this when developing job specifications and

in the use of head-hunters who demonstrate an ability to

widen the pool of candidates. We are acutely aware that

not doing so could mean we do not attract candidates who

support the Board as a whole to function as best it can. The

Board’s Diversity Policy is discussed further in the Report on

Corporate Governance on page 83.

The Company has not adopted a policy on human rights as

it has no employees or operational control of its assets.

Modern Slavery Act

As an investment company, the Company does not provide

goods or services in the normal course of business and

does not have any customers. Accordingly, the Company

does not consider that it falls within the scope of the

Modern Slavery Act 2015 and therefore does not meet the

criteria requiring it to produce a statement under the Act.

The Company considers its supply chains to be of low risk

as its suppliers are typically professional advisers.

A statement by the Manager under the Act has been published

on their website.

Anti-bribery, corruption and tax evasion

The Board has adopted a zero-tolerance policy (which is

available on the Company’s website) to bribery, corruption

and the facilitation of tax evasion in its business activities.

The Board uses the principles of the policies formulated and

implemented by the Investment Manager and expects the

same standard of zero-tolerance to be adopted by third-

party service providers. The Company has implemented

a Conflicts of Interest policy to which the Directors must

adhere, in the event of divergence between the Investment

Manager’s policy and the Company’s policy the Company’s

policy shall prevail. The Company is committed to acting

with integrity and in the interests of shareholders at all times.

Risk and Responsibility

The Board has a schedule of principle risks and uncertainties

and addresses how these are mitigated on pages 65 to 69;

additionally how the directors have undertaken their duties

in compliance with s172 of the Companies Act 2006 is

provided on pages 70 to 75.

Catherine Cripps

Non-executive Director & ESG Lead

19 July 2022

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

The following report describes the approach Polar Capital

LLP, as Investment Manager to the Company, takes to

ESG and how the policies and practices are applied to

the investments made, or considered, in connection with

managing the portfolio of the Company.

The terms ‘our’, ‘we’, ‘us’ relate to Polar Capital and

specifically the Polar Capital Technology team, on behalf of

Polar Capital Technology Trust (the Company).

Polar Capital’s approach to ESG

ESG continues to be top of mind for many investors and

Polar Capital has invested a large amount of time and

effort formalising its approach. Very little of what we are

doing is wholly new to our investment process, as most

enhancements represent an extension or more rigorous

documentation of existing activities, along with increased

oversight and monitoring.

The primary aim is to take into account the wide range

of ESG risks prevalent in the sector while still reflecting

the enormous opportunities for technology companies to

help solve existential environment and social challenges

such as climate change and financial inclusion. The

Technology and Climate Change report, which is available

on the Company’s website, covers one aspect of the

sector’s crucial role. We are techno-optimists (if not

techno- utopians) and genuinely believe the technology

sector has been and will continue to be a net force for

good in the world, and the handmaiden to a greener and

more equitable future.

Our ESG approach focuses on the ESG issues and factors

we believe are most material to the portfolio and the

planet, and seeks to combine our sector domain expertise

with rigorous external research and oversight. We engage

with companies on ESG matters where it can add value

to our investment process and/or where we can use our

influence to effect change.

Oversight

Central Polar Risk & Sustainability Teams

Oversight from ESG consultant

Exclusions

Alignment

Reporting

Assess company vs Trust’s promoted characteristics

Based on % of revenue or R&D

Sector-based

Norms-based

Portfolio-level

ESG metrics

Company engagement

ESG Analysis

MSCI Report Evaluation & Controversies

Polar ESG Risks & Controversies

Stewardship

Engagement where it adds value or can effect change

Oversight from ESG consultant

Core ESG work undertaken by Technology Analysts

Integrating ESG into our investment process

Our ESG process covers six main aspects:

ESG – Investment Perspective

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Exclusions

Polar Capital funds adhere to formal exclusions on all

companies that are linked to the production and/or

marketing of controversial weapons (cluster munitions;

anti-personnel mines; depleted uranium).

We may also choose to exclude companies in certain

subsectors that, in our or the Board’s belief, may have a

negative impact on the world by virtue of their business

activities and those companies in breach of sustainability

principles or widely-accepted behavioural norms including,

but not limited to, the United Nations (UN) Global Compact,

the UN Guiding Principles on Business and Human Rights,

the International Labour Organisation’s conventions and the

Organisation for Economic Co-Operation and Development’s

Guidelines for Multinational Enterprises. Any such exclusions

are discussed with the Board and are reassessed annually.

Where a company does not demonstrate adequate and

timely progress towards re-aligning with these standards, we

may choose to divest from the company, taking into account

the liquidity of the holding.

Alignment

To assess the Company portfolio’s potential to have a positive

impact on the world, we want to reflect the role technology

companies can play in bringing about positive environmental

and social outcomes. To this end, we now assess a portfolio

company’s alignment to three environmental and social

characteristics, in addition to a broader assessment of the

ESG risks and opportunities relevant to each company.

The environmental and social characteristics with which

the Company aligns reflect the wide scope of technology

adoption in the world today and portfolio companies’ roles

in supporting (1) access to technology and communications

infrastructure, (2) increasing business productivity and

efficiency, and (3) empowering individuals. We believe

these characteristics are well-aligned with a number of the

UN Sustainable Development Goals (SDGs). These include

SDGs 3, 4, 7, 8, 9 and 12.

At a high level, the distinction between the characteristics

is as follows:

• Access to technology and communications

infrastructure. This includes companies whose

products and services provide technology,

communications, clean technology and data security

infrastructure to promote inclusive and sustainable

industrialisation and foster innovation. This may

include cloud computing (cloud providers, networking

equipment providers, semiconductor companies,

semiconductor capital equipment companies,

infrastructure software); clean technology (power

semiconductors, renewable technology); data security

(cybersecurity, encryption, anti-fraud technology).

• Increasing business productivity and efficiency.

This includes companies that contribute to responsible

economic growth through products and services

that enable increases in workforce productivity,

new business formation and more efficient use of

resources. This may include application software, online

advertising, e-commerce, data management, artificial

intelligence and automation.

• Empowering individuals. This includes companies

whose products and services enhance the wellbeing

and lives of individuals through innovative platforms

and services that support social empowerment,

improved communication, broader access to commerce,

lifelong learning, training and inclusion. This may

include social networking, smart phones and their

supply chain, online services, health technology,

educational technology, financial technology and

consumer internet.

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Spotlight on Applied Materials

‘Make Possible a Better Future’

The portfolio investment in Applied Materials demonstrates

how we integrate ESG into our investment process.

Alignment: Applied Materials’ revenue is aligned with

promoting access to technology and communications

infrastructure given that the company’s semiconductor

production equipment and services help customers produce

the semiconductors that are the foundation of technological

infrastructure. The company’s mission to ‘Make Possible

a Better Future’ aligns the company around a 10-year

sustainability roadmap: 1x (how the company runs its own

business), 100x (the industry and its supply chain impact),

10,000x (how Applied Materials’ technology can be used

to advance sustainability on a global scale) and provides

goals for investors to monitor progress against these. Silicon

content per device continues to increase as we transition

to an increasingly ‘smart’ world, and this will be crucial in

helping to transition the world to become more energy

efficient in line with a net zero scenario.

Applied Materials has instigated a 10-year sustainability

roadmap encompassing operations, and “how the company’s

technology can be used to advance sustainability on a global

scale”. They have been an industry leader in promoting lower

emissions in the semiconductor production equipment supply

chain. To this end, they are on track to reduce their own

Scope 1+2 carbon emissions by 50% by 2030 (versus a 2019

baseline) and move to 100% renewable power in 2022 (US)

and 2030 (globally). The company is committed to Science

Based Targets (SBTi) and reporting in line with TCFD.

Climate concerns have been embedded into Applied Materials’

core operations: the company has also instituted explicit design

targets for all new products covering energy and water usage,

chemical consumption and other environmental metrics. ESG

metrics are included in Applied Materials’ Corporate Scorecard

which is tied to executive compensation.

Goal Progress U.N. SDG

3x30 Goals

Reduce equivalent

energy consumption for

semiconductor products

by 30% by 2030

Set energy consumption

baseline for semiconductor

products (2019 basis) and

completed key energy use

models

RESPONSIBLE

CONSUMPTION AND

PRODUCTION

Reduce chemical

consumption for

semiconductor products

by 30% by 2030

Established chemical impact

metric and completed key

chemical impact models

RESPONSIBLE

CONSUMPTION AND

PRODUCTION

Reduce tool footprint

per production-unit

ratio (sqm/wph) for

semiconductor products

by 30% by 2030

Completed key models for

tool footprint to production

rate ratios

INDUSTRY,

INNOVATION AND

INFRASTRUCTURE

SuCCESS2030 Goals

Reduce supply chain

carbon emissions by

moving from airfreight

to intermodal shipping,

with interim emissions

reduction target of

15% by 2024

Conducted pilot tests to

demonstrate the feasibility

of intermodal shipping; our

progress was slowed by the

unprecedented demand

for semiconuctor products

in 2020

CLIMATE

ACTION

Transition the supply

chain to recyclable

content packaging,

*with a target of 80%

by the end of 2023

Achieved nearly 60%

recyclable packaging in

2020

RESPONSIBLE

CONSUMPTION AND

PRODUCTION

Eliminate 100% of

phosphate-based

pre-treatment of metal

surfaces by 2024

Conducting pilot trials and

evaluating results

RESPONSIBLE

CONSUMPTION AND

PRODUCTION

Increase the percentage

of spend with, and

representation of,

women-and minority-

owned businesses by

2024

On track to increase global

diverse supplier spend by

2% year-over-year

GENDER

EQUALITY

Comply with RBA Code

of Conduct and Applied

Materials’ Standards of

Business Conduct

Developed supply chain

ESG risk assessment model;

conducted supplier training

and outreach and initiated

supplier audits

REDUCED

INEQUALITY

* In our 2019 Sustainability Report, we erroneously committed to a goal of

transitioning to recycled content packaging, rather than recyclable content

packaging. While we use recycled content packaging when it meets

performance specifications (e.g., stacking strength, plastic purity), it is

infeasible for all applications.

Environmental, Social and Governance (ESG) continued

www.polarcapitaltechnologytrust.co.uk

10,000X100X

FOR THE

INDUSTRY

FOR OUR

BUSINESS

FOR THE

WORLD

Lead with

Purpose

Innovate for

Progress

Protect our

Planet

Invest in

People

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Spotlight on Hubspot

Culture as a differentiator

HubSpot’s mission is to be the leading customer

relationship management (CRM) platform for scaling

enterprises. It is an SMB-focused product which allows

new businesses access to best-in-class B2B marketing

automation and CRM tools and supports new business

formation. The platform includes marketing, sales, service,

operations and website management products that start

free and scale to meet customers’ needs at any stage of

growth. This is an important aspect of increasing small

business productivity and efficiency, which otherwise may

struggle to compete with large incumbers with greater

sales and distribution resources. The fact that HubSpot’s

platform is cloud-native means it has scaled to more than

120,000 customers at an average cost per subscription

customer (ARPSC) of just $11,000, all of whom are able

to leverage HubSpot’s ongoing research and development

efforts to help scale their businesses with fewer upfront

resources and by automating routine and monotonous

administrative work. HubSpot has further enabled training

and certification of >350,000 professionals through

their global HubSpot Academy and supported >1,100

institutions to teach HubSpot marketing methodologies in

the classroom. We believe this makes HubSpot well aligned

with UN SDG 8 and a direct contributor to supporting

specific SDG targets 8.1-8.3.

We have met with Hubspot’s management team on

multiple occasions and discussed how they are assessing

and addressing their key ESG challenges. In 2021 the

company conducted a sustainability materiality assessment

and identified key areas of focus: diversity and inclusion;

privacy and data protection; and energy and emissions. The

company is ranked no 4 in Glassdoor’s 2021 Best Places to

Work and won the Comparably award for Best Leadership

Team. Hubspot have offset more than 80,000 metric tonnes

of emissions via the purchase of renewable energy certificates

(RECs) and verified carbon offsets and operate the first and

only building in Ireland with a platinum certification on version

four of Leadership in Energy and Environmental Design (LEED).

The company has been particularly strong as a thought leader

in diversity and inclusion, hybrid working and building the

kind of working environment and culture that positions the

company well in the ever-competitive war for talent in the

technology sector. This includes giving employees the ability

to choose how they work (in office, at home or hybrid),

unlimited vacation, creating an initiative to address employee

burnout, hosting programmes for employees to identify ways

to prioritise their mental health at work. This differentiated

culture and the commitment to transparency around it

(HubSpot publishes their Culture Code and Diversity, Inclusion

and Belonging Reports and has made every employee a

designated ‘insider’ so market-sensitive information can be

shared at all levels) has allowed HubSpot to attract diverse

talent to scale their own business even as competitors have

struggled to do the same.

www.polarcapitaltechnologytrust.co.uk

2022 SUSTAINABILITY REPORT

454,000+$8M+100%

More than 50% 2,580

increased to 37%

Led by a CEO

who is

a woman of

color

Named #2 on Glassdoor’s

Best Places to Work in 2022

by Glassdoor’s Employees’

Choice Awards

Professionals trained and certified through HubSpot Academy,

our free online training for inbound marketing, sales, and customer

service professionals

Contributed to

communities

across the globe

Renewable energy

across all our

building sites

Of people leaders are women New employees onboarded virtually in 2021

in the past year

BIPOC employee representation

Highlights

2020 2021

Women

Non-binary

*Non-binary/gender variant data reflects the self-reporting survey population only.

Men

52.9%54.2%

46.9%45.7%

0.2%0.1%

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

www.polarcapitaltechnologytrust.co.uk

Spotlight on AMD

When processing power meets brain power

Advanced Micro Devices (AMD) is the global leader in

high-performance computing, which provides the brains

behind the crucial technological and communications

infrastructure that has transformed modern life and

has the potential to be part of the solution to global

challenges such as climate change. AMD is helping to

develop a new generation of supercomputers which

can cross the ‘exascale’ performance barrier for the

first time and perform more than one quintillion (10

)

calculations per second, which will allow researchers

to develop models which can create breakthroughs

in climate science, materials discovery and biomedical

engineering. COVID-19 vaccine development was

accelerated using AMD’s technology and the company’s

provision of free computing resources for universities and

research institutions from April 2020 as part of their High

Performance Compute (HPC) Fund. Nikhef, the Dutch

National Institute used AMD computing to help discover

gravitational waves and the Higgs Boson.

AMD’s activities are also aligned with increasing business

productivity and efficiency as a result of their high-

performance semiconductors power servers which

power data analysis and the application of AI to business

operations. AMD has a goal that by 2025 100 million

people will benefit from AMD and AMD Foundation

partnerships which enable STEM education and scientific

research.

AMD conducted a 2020 materiality assessment to

appraise the company’s most pressing ESG issues, which

gave rise to four strategic areas of focus: digital impact;

environmental stewardship; supply chain responsibility;

diversity, belonging and inclusion. AMD has embedded

goals related to these priorities including a 50% reduction

in AMD’s Scope 1+2 greenhouse gas (GHC) emissions

by 2030; a commitment that 100% of manufacturing

suppliers have GHG emission reduction goals by 2025

and 80% source renewable energy; and a 30x increase in

energy efficiency for AMD processors powering servers for

AI training and HPC between 2020 and 2025. We meet

regularly with AMD management to keep track of their

progress on meeting their ESG and financial goals, and

have always been struck by the company’s commitment to

its mission.

Environmental, Social and Governance (ESG) continued

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

www.polarcapitaltechnologytrust.co.uk

ESG analysis

As a team, we use a combination of third-party research

and our own proprietary work to carry out ESG analysis

at the company level. We have also found a third-party

assessment and scoring approach useful as an independent

check on a company’s ESG profile.

MSCI aims to measure a company’s resilience to long-

term, financially relevant ESG risks by scoring a company’s

exposure to, and management of, the material ESG risks

and opportunities in its industry (‘Key Issues’), relative to

the company’s peers.

MSCI ESG Key Issue Hierarchy

3 Pillars 10 Themes 36 ESG Key Issues

Environment Climate Change Carbon Emissions

Product Carbon Footprint

Financing Environmental Impact

Climate Change Vulnerability

Natural Capital Water Stress

Biodiversity & Land Use

Raw Material Sourcing

Pollution & Waste Toxic Emissions & Waste

Packaging Material & Waste

Electronic Waste

Environmental Opportunities Opportunities in Clean Tech

Opportunities in Green Building

Opportunities in Renewable Energy

Social Human Capital Labour Management

Health & Safety

Human Capital Development

Supply Chain Labor Standards

Product Liability Product Safety & Quality

Chemical Safety

Consumer Financial Protection

Privacy & Data Security

Responsible Investment

Health & Demographic Risk

Stakeholder Opposition Controversial Sourcing

Community Relations

Social Opportunities Access to Communications

Access to Finance

Access to Health Care

Opportunities in Nutrition & Health

Governance Corporate Governance Ownership & Control

Board

Pay

Accounting

Corporate Behaviour Business Ethics

Tax Transparency

Opportunities in Renewable Energy

The limitations of MSCI’s approach can include issues around

data accuracy and timeliness, inappropriate peer groups and

a failure to consider fully the context around ESG issues.

More significantly, MSCI does not always reflect the most

material ESG risks and opportunities a company may face

when considered through the lens of our domain knowledge

and industry experience. We therefore believe it is important

to continue to undertake our own proprietary ESG work

when assessing companies, and this work must be led by

the investment team with oversight and support from Polar

Capital’s Risk and Sustainability teams.

Part 1: Investigate and assess third-party research

We use third-party ESG analysis reports as a useful

‘first pass’ for company-level analysis as part of a wider

assessment. We investigate areas where an individual

company scores poorly, check the information used to

make sure the score is accurate and timely, and take a view

on the materiality of the issue or controversy.

We also use this initial assessment as one basis for

engagement if we believe doing so can help us better

understand the issue, or we can influence the company to

mitigate it. Many clients and other stakeholders also view

the Company’s ESG profile through the lens of an external

provider, often MSCI, so it is important we can understand

and explain what drives this.

Part 2: Proprietary research

We conduct our own proprietary research to assess any

material sustainability issues not captured by third-party

assessments, often for reasons of methodology or scope,

making use of company filings, sustainability reports, sell-

side research, news reports and so on. This helps us assess

any material limitations in the data or information relied

upon for third-party assessments and allows us to assess

companies not covered by third-party providers (such as

companies new to the public market).

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

It is core to our process that our ESG research is carried out

by the same analysts responsible for the fundamental and

financial assessment of portfolio companies, rather than

outsourced to another team, whether internal or external.

We believe ESG risks and opportunities are intrinsic to the

investment opportunity in every company, and it is in the

interests of ours and our shareholders’ long-term returns

that they should be considered alongside one another.

We believe a company’s ESG profile can be as relevant

to its investment profile as its competitive position, the

differentiation of its underlying technology or any other

characteristic.

We also evaluate the company’s environmental, social

and governance practices versus peers. This involves an

assessment of the company’s policies, disclosure and

behaviour versus the peers they compete with in the market

for customers, talent and capital, which we believe to be

the most relevant and meaningful marker of sustainability

risks and opportunities. This work can also serve as a

basis for further engagement with a company and any

engagement on these issues will be recorded.

Technology companies and governance

Governance issues are a fundamental consideration when

investing in the technology sector. Many technology

companies operate with different governance structures

and practices, including limited minority shareholder

voting rights, above-average share dilution and option

issuance, non-independent boards and, at times, excessive

management remuneration. We believe it is important

to scrutinise each company on its individual merits and

recognise the trade-offs between shareholder rights and

the importance of backing management’s long-term

vision and allowing the company to compete effectively

in the marketplace. For example, it may be necessary for

a company to issue an elevated level of shares to attract

and retain scarce talent in a fast-growing area to support

its growth, but such issuance would be excessive should

the company’s growth not materialise. We always consider

the impact of share-based compensation on free cash flow,

and the makeup and integrity of the Board of Directors

as a check on management decisions, especially around

dilutive M&A and strategic investments. The Trust has

invested in many founder-led companies since its inception

and we will continue to use our domain expertise to judge

the appropriateness and materiality of each company’s

governance arrangements and activities.

Stewardship

Engagement: At a high level we engage where it is useful

and can add value to our investment process and/or where

we can use our influence to effect change. We decide

where to engage based on our ESG analysis and we record

the results of these engagements. We meet with a large

number of companies regularly given the size of our team

and typically have many opportunities to raise issues with

them. These more informal engagements are recorded in

our research database, Tamale, alongside company meeting

and valuation work.

We also undertake a small number of more ESG-led

engagements with companies where ESG issues have

become more material, or we believe our engagement may

effect positive change.

Environmental, Social and Governance (ESG) continued

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Spotlight on engagement

ESG Risks

Activision: Identification of a major ESG risk, September 2021

We identified a major ESG risk at Activision in September

2021. We engaged with investor relations at Activision

Blizzard shortly after the DFEH lawsuit was announced, to

discuss claims of gender discrimination and sexual harassment

at the Blizzard studio, the “tone deaf” initial response

from management, and the actions subsequently taken by

management to address the situation. Our aim was to better

understand the potential risks for the company and the

appropriateness of the action the company was taking.

Although our discussions did not provide much detail on the

case itself given it was ongoing, we were able to gather more

insight into the company’s reaction. The initial response to the

DFEH lawsuit, which was to deny the claims, was a statement

of the company’s legal position in the case, but caused outrage

from many former and existing employees. The subsequent

letter from the CEO Bobby Kottick helped calm the situation

somewhat, apologising for the company’s initial response which

was “tone deaf” and “did not provide the right empathy and

understanding.”

The company explained they were in the process of investigating

the claims and taking several steps to prevent these issues from

happening again. The company hired law firm WilmerHale to

conduct a review of its policies and promised “swift action” to

ensure a “safe environment” and to stamp out harassment. The

company is investigating every claim (hiring additional compliance

staff), making personnel changes (any manager found to have

impeded the integrity of their processes for evaluating claims

and imposing appropriate consequences will be terminated),

encouraging diversity in hiring and removing inappropriate in-

game content.

The company further explained they will provide greater

disclosure on pay and other ESG issues like their carbon

footprint. They have since included several high-profile

management changes including the exit of J. Allen Brack

(Blizzard President), Jesse Meschuk (Blizzard SVP of HR), Luis

Barriga (Director of Diablo IV) and several other game directors,

as well as hiring Jen Oneal and Mike Ybarra (as co-leaders of the

studio) and Julie Hodges (Chief People Officer).

The company has clearly taken meaningful steps to address the

issues, but we concluded the cultural problems at Blizzard (low

morale), combined with disruption caused by the investigation

(in particular the departure of the high-level employees

mentioned above) materially increased the company’s risk

profile. While we felt that the company had taken some

meaningful steps to improve the culture at Blizzard, we felt it

was going to be a challenge for the studio to work through

the disruption and deliver these games successfully. As such,

with ESG risks elevated, we decided to exit the position we

held in the Company’s portfolio.

Governance issues

Zendesk: Acquisition not in shareholders’ best interests.

(October 2021 - January 2022).

Zendesk (ZEN US) announced the acquisition of Momentive

(MNTV US) for c$4bn of Zendesk equity on 28 October 2021.

We saw limited strategic merit in the combination of Zendesk

and Momentive. We listened carefully to Zendesk’s arguments

around potential product and go-to-market synergies,

but ultimately found these unconvincing – something our

discussions with industry analysts and feedback from customers

has supported.

We met with Zendesk’s investor relations team twice following

the announcement of the deal (in November and December

2021) and remained unconvinced as to the deal rationale.

We wrote to Zendesk’s Board of Directors (in January 2022) to

express our strong opposition to Zendesk’s proposed acquisition

of Momentive Global and to advise them we would be voting

against the proposed transaction. We called on Zendesk’s

Board to take the requisite steps to terminate the transaction

and refocus the company on executing against what remains a

meaningful organic growth opportunity and – in our view – the

potential for the generation of material shareholder value. We

offered to discuss the issue further should they wish.

The company and Zendesk’s Board acknowledged our letter

and thanked us for our feedback but declined to discuss

the proposed deal. Following opposition from other major

shareholders and later the proxy advisers, Zendesk lost the

shareholder approval vote on 25 February 2022 and terminated

the transaction.

Voting: Analysts are responsible for voting all proxies. We

subscribe to ISS’s Proxy services, and record when and why we

vote against either ISS or management, which requires lead fund

manager approval.

Escalation: Initial engagement is typically undertaken with

IR/ESG contacts or in the course of company meetings can

be raised to C-suite and ultimately to the company’s board,

although divestment is more likely. We have written to portfolio

company boards regarding shareholder dilution, option issuance

and to express our opposition to proposed transactions.

Collaboration: The UN PRI’s Active Ownership 2.0 report, the

PRI’s Principle 5 (“We will work together…”) cements collective

action as a core element of responsible investment. We are

open to working with other shareholders where appropriate

and supporting industry initiatives. In March 2021, Polar Capital

joined the investor-led collaborative engagement initiative

Climate Action 100+ and has been participating in active

engagement on the climate and carbon reduction strategy of a

conglomerate in emerging markets.

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Environmental, Social and Governance (ESG) continued

Monitoring and oversight

The Company’s ESG characteristics are reviewed in detail

every four months in the investment oversight meetings

with Polar Capital’s Chief Investment Officer, Chief Risk

Officer and Head of Sustainability. Oversight covers the

Company’s ESG profile and scoring using third-party data

methodology, climate risk assessment and norms and

controversies screening.

Oversight of the Company’s ESG profile and scoring uses

a third-party data methodology, which gives an overall

asset-weighted score for each portfolio and its benchmark,

the analysis of which is the starting point for discussion in

oversight meetings.

Climate risk assessment data includes an assessment of the

Company relative to the benchmark on metrics including

carbon footprint, carbon intensity of the portfolio stocks

and weighted average carbon intensity. It also highlights key

high-emissions sectors of allocation within the portfolio.

Key high-emitting stocks, stocks with exposure to potential

stranded assets and climate risk management of the

companies are highlighted.

The Company’s portfolio is monitored for controversies

using third-party norms and controversies research, which

evaluates ESG controversies’ severity and impact. It is

also assessed, in line with the aforementioned exclusions

process, against alignment with the UN’s Global Compact

(UNGC), the UN’s Guiding Principles on Business and

Human Rights, the International Labour Organisation’s

conventions and the Organisation for Economic Co-

operation and Development’s Guidelines for Multinational

Enterprises. We at Polar Capital use MSCI ESG Norms and

Controversies to provide deeper insight into companies

however, given differing methodologies, tolerances and

assessments of company behaviour, we retain discretion

over the assessment of third-party conclusions on a case-

by-case basis.

Polar Capital also incorporates an additional layer of

oversight using a consultant with expertise in ESG. The

purpose of the additional layer of oversight is to ensure the

team have a detailed understanding of the mechanics of

changes in third-party ESG scores at both the company and

portfolio level, and to ensure the ESG integration process is

being adhered to. This occurs monthly.

Reporting

Reporting forms an important part of our ESG approach

given its role in allowing investors and other stakeholders to

evaluate our activities and progress.

The Board receives an ESG dashboard as part of the regular

board packs which includes metrics regarding the Company’s

MSCI ESG fund score, the worst-scoring underlying holdings

across E, S and G metrics, the portfolio’s carbon footprint

and the portfolio’s exposure to clean technology solutions.

The dashboard also has an analysis of the Company’s proxy

voting activities over the most recent period. A similar

dashboard is provided on the next page. Polar Capital has

also produced a specific ESG presentation which is available

to investors on request.

Alastair Unwin

Fund Manager, Technology

Polar Capital

19 July 2022

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Top 5 Rated Holdings

Security

Rating Change

ADOBE INC. AAA

ASML Holding N.V. AAA

NAVER Corporation AAA

Taiwan Semiconductor Manufacturing Co., Ltd. AAA

Microsoft Corporation AAA

Source: MSCI

Bottom 5 Rated Holdings

Security

Rating Change

Zuken CCC

Impinj CCC

Monolithic Power Systems Com B

Harmonic Drive Systems Inc. B

eMemory Technology Inc B

Source: MSCI

Vote cast statistics

Votes for

83.47%

Votes against

8.73%

Votes withheld

7.06%

Votes ABSTAIN 0.09%

Votes management

say on pay

6.31%

Source: MSCI, ISS

Abstain

Votes withheld

Votes management say on pay

Votes against

Votes for

Voting Record

Category Number Percentage

Number of votable meetings

114

Number of meetings voted

111 97.37

Number of meetings with at least 1 vote

Against, Withhold or Abstain

61 53.51

Source: MSCI, ISS

MSCI

ESG RATINGS

CCC B BB BBB A AA AAA

AAA

Weighted average carbon intensity

(tCO2e / $m sales)

The fund’s holdings have low carbon intensity, based on the

weighted average carbon emissions per USD million sales.

34.4

tons

VERY HIGH HIGH MODERATE LOW VERY LOW

MSCI ESG metrics and carbon data based off fund holdings as at 30 April 2022, using MSCI’s

latest available data. Carbon metrics calculated using issuer EVIC, using Scope 1&2 emissions

data (Source: MSCI Climate Change Metrics – reported and estimated data).

ESG Rating distribution of fund holdings

30% of the fund’s holdings receive an MSCI ESG Rating of AAA

or AA (ESG Leaders) and 4% receive an MSCI ESG Rating of B or

CCC (ESG Laggards).

AAAAAABBBBBBCCC

22%

30%

10%

20%

LAGGARD AVERAGE LEADER

Corporate governance

The fund’s weighted average percentage of independent board

of directors is 77.7%, and its weighted average percentage of

women on boards is 29.9%.

Board DiversityBoard Independence

77.7%

29.9%

l Portfolio

Weighted Avg ESG Score 6.74

Adjustment

+ ESG Trend Positive 34.58%

- ESG Trend Negative 1.63%

- ESG Laggards 4.91%

Adjustment Total 28.03%

Score Adjustment 1.89

ESG Quality Score 8.63

ESG Rating AAA

Governance

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Strategic Report

The Strategic Report section of this Annual Report

comprises the Chair’s Statement, the Investment Manager’s

Report, including information on the portfolio, and this

Strategic Report. This report has been prepared to provide

information to Shareholders on the Company’s strategy and

the potential for such to succeed, including a fair review

of the Company’s performance during the year ended 30

April 2022, the position of the Company at the year end

and a description of the principal risks and uncertainties.

Throughout the Strategic Report there are certain forward-

looking statements made by the Directors in good faith

based on the information available to them at the time

of their approval of this Report. Such statements should

be treated with caution due to inherent uncertainties,

including both economic and business risk factors

underlying any such forward-looking information.

Business Model and Regulatory

Requirements

The Company’s business model follows that of an externally

managed investment trust providing Shareholders with

access to an actively managed portfolio of technology

shares selected on a worldwide basis.

The Company is designated as an Alternative Investment

Fund (‘AIF’) under the Alternative Investment Fund

Management Directive (‘AIFMD’) and, as required by the

Directive, has contracted with Polar Capital LLP to act as

the Alternative Investment Fund Manager (‘AIFM’) and

Investment Manager (or ‘Manager’) and HSBC Bank Plc to

act as the Depositary.

Both the AIFM and the Depositary have responsibilities

under AIFMD for ensuring that the assets of the Company

are managed in accordance with the Investment Policy and

are held in safe custody. The Board remains responsible for

setting the investment strategy and operational guidelines

as well as meeting the requirements of the FCA’s Listing

Rules and the Companies Act 2006.

The AIFMD requires certain information to be made

available to investors in AIFs before they invest and requires

that material changes to this information be disclosed

in the Annual Report of each AIF. Investor Disclosure

Documents, which set out information on the Company’s

investment strategy and policies, leverage, risk, liquidity,

administration, management, fees, conflicts of interest

and other Shareholder information are available on the

Company’s website.

There have been no material changes to the information

requiring disclosure. Any information requiring immediate

disclosure pursuant to the AIFMD will be disclosed to the

London Stock Exchange. Statements from the Depositary

and the AIFM can be found on the Company’s website.

Investment Objective and Policy

While observing the Dow Jones World Technology Index

(total return, Sterling adjusted, with the removal of relevant

withholding taxes) as the Benchmark against which NAV

performance is measured, Shareholders should be aware

that the portfolio is actively managed and is not designed

to track any particular benchmark index or market. The

performance of the portfolio can vary from the Benchmark

performance, at times considerably.

Over the last four decades the technology industry has

been one of the most vibrant, dynamic and rapidly growing

segments of the global economy. Technology companies

offer the potential for substantially faster earnings growth

than the broader market.

Investments are selected for their potential Shareholder

returns, not on the basis of technology for its own sake.

The Investment Manager believes in rigorous fundamental

analysis and focuses on:

• management quality;

• the identification of new growth markets;

• the globalisation of major technology trends; and

• exploiting international valuation anomalies and sector

volatility.

Changes to Investment Policy

Any material change to the Investment Policy will require

the approval of the Shareholders by way of an ordinary

resolution at a general meeting. The Company will

promptly issue an announcement to inform Shareholders

and the public of any change to its Investment Policy.

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Investment Strategy Guidelines and Board

Limits

The Board has established guidelines for the Investment

Manager in pursuing the Investment Policy. The Board

uses these guidelines to monitor the portfolio’s exposure

to different geographical markets, sub-sectors within

technology and the spread of investments across different

market capitalisations.

These guidelines are kept under review as cyclical changes

in markets and new technologies will bring certain

sub-sectors or companies of a particular size or market

capitalisation into or out of favour.

Asset Allocation

Technology may be defined as the application of scientific

knowledge for practical purposes and technology

companies are defined accordingly. While this offers a very

broad and dynamic investing universe and covers many

different companies, the portfolio of the Company (the

‘Portfolio’) is focused on companies which use technology

or which develop and supply technological solutions

as a core part of their business models. This includes

areas as diverse as information, media, communications,

environmental, healthcare, finance, e-commerce and

renewable energy, as well as the more obvious applications

such as computing and associated industries.

The Board has agreed a set of parameters which seek to

ensure that investment risk is spread and diversified. The

Board believes that this provides the necessary flexibility

for the Investment Manager to pursue the Investment

Objective, given the dynamic and rapid changes in the field

of technology, while maintaining a spread of investments.

Market Parameters

With current and foreseeable investment conditions, the

Portfolio will be invested in accordance with the Investment

Objective and Policy across worldwide markets, generally

within the following ranges:

• North America up to 85%.

• Europe up to 40%.

• Japan and Asia up to 55%.

• Rest of the world up to 10%.

The Board has set specific upper exposure limits for certain

countries where they believe there may be an elevated risk.

The Company does not presently and has not immediate

intention to hold stocks in Russia.

The Company will at all times invest and manage its assets

in a manner that is consistent with spreading investment

risk and invests in a Portfolio comprised primarily of

international quoted equities which is diversified across

both regions and sectors.

Investment Limits

In applying the Policy, the Company will satisfy the

following investment restrictions:

• The Company’s interest in any one company will not

exceed 10% of the gross assets of the Company,

save where the Benchmark weighting of any investee

company in the Company’s portfolio exceeds this

level, in which case the Company will be permitted to

increase its exposure to such investee company up to

the Benchmark ‘neutral’ weighting of that company or,

if lower, 15% of the Company’s gross assets.

• The Company will have a maximum exposure to

companies listed in emerging markets (as defined by

the MSCI Emerging Markets Index) of 25% of its gross

assets.

• The Company may invest in unquoted companies

from time to time, subject to prior Board approval.

Investments in unquoted companies in aggregate will

not exceed 10% of the gross assets of the Company.

Such limits are measured at the time of acquisition of the

relevant investment and whenever the Company increases

the relevant holding.

In addition to the restrictions set out above, the Company

is subject to Chapter 15 of the FCA’s Listing Rules which

apply to closed ended investment companies with a

premium listing on the Official List of the London Stock

Exchange.

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Strategic Report continued

In order to comply with the current Listing Rules, the

Company will not invest more than 10% of its total

assets at the time of acquisition in other listed closed

ended investment funds, whether managed by the

Investment Manager or not. This restriction does not apply

to investments in closed ended investment funds which

themselves have published investment policies to invest no

more than 15% of their total assets in other listed closed

ended investment funds. However, the Company will not in

any case invest more than 15% of its total assets in other

closed ended investment funds.

Cash, Borrowings (Gearing) and Derivatives

The Company may borrow money to invest in the Portfolio

over both the long and short-term. Any commitment to

borrow funds is agreed by the Board and the AIFM.

The Company’s Articles of Association permit borrowings

up to the amount of its paid up share capital plus capital

and revenue reserves, but any net borrowings in excess of

20% of the Company’s net assets at the time of drawdown

will only be made with the approval of the Board.

The Investment Manager may also use from time to time

derivative instruments, as approved by the Board, such

as financial futures, options, contracts-for-difference

and currency hedges. These are used for the purpose of

efficient portfolio management. Any such use of derivatives

will be made in accordance with the Company’s policies

on spreading investment risk as set out in this investment

policy and any leverage resulting from the use of such

derivatives will be subject to the restrictions on borrowings.

Cash

The Company may hold cash or cash equivalents if the

Investment Manager feels that these will at a particular

time or over a period enhance the performance of the

Portfolio. The Board has agreed that management of cash

may be achieved through the purchase of appropriate

government bonds, money market funds or bank deposits

depending on the Investment Manager’s view of the

investment opportunities and the benefits of diversification.

Gearing and Derivatives

The Company may use gearing in the form of bank loans

which are used on a tactical basis by the Investment

Manager, when considered appropriate. The Board

monitors the level of gearing available to the Portfolio

Manager and agrees, in conjunction with the AIFM, all

bank facilities in accordance with the Investment Policy. The

Board approves and controls all bank facilities and any net

borrowings over 20% of the Company’s net assets at the

time of draw down will only be made after approval by the

Board.

During the year the Company had two, two-year loan

facilities with ING Bank NV: One for 36m US Dollars at a

fixed rate of 1.335% pa and one for 3.8bn Japanese Yen at

a fixed rate of 0.9% pa, both of which were drawn down

on 30 September 2020. These loans fall due for repayment

on 30 September 2022. It is anticipated that the loan

facilities will be replaced on expiry.

Details of the loans are set out in Note 17 to the Financial

Statements.

The Investment Manager’s use of derivatives is monitored

by the Board in accordance with the Company’s investment

policy and any leverage from the use of such derivatives will

be subject to the restriction on gearing.

Future Developments

The Board remains positive on the longer-term outlook for

technology and the Company will continue to pursue its

Investment Objective. The outlook for future performance

is dependent to a significant degree on the world’s financial

markets and their reactions to economic events and other

geopolitical forces. In accordance with the Articles of

Association, the Board will propose the next five-yearly

continuation vote of the Company at the Annual General

Meeting to be held in September 2025. The Chair’s

Statement and the Investment Manager’s Report comment

on the outlook.

Dividends

The Company’s revenue varies from year to year and the

Board considers the dividend position each year in order

to maintain the Company’s status as an investment trust.

The revenue reserve remains in deficit and historically the

Company has not paid dividends given its focus on capital

growth.

The Directors do not recommend, for the year under

review, the payment of a dividend (2021: no dividend

recommendation).

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Service Providers

Polar Capital LLP has been appointed to act as the

Investment Manager and AIFM as well as to provide or

procure company secretarial services, marketing, including

print, production and website services which it arranges

through Perivan and Huguenot Limited respectively, and

administrative services, including accounting, portfolio

valuation and trade settlement which it has arranged to

deliver through HSBC Securities Services (‘HSS’).

The Company also contracts directly, on terms agreed

periodically, with a number of third parties for the provision

of specialist services:

• Stifel Nicolaus Europe Limited as Corporate Broker;

• Equiniti Limited as Share Registrars;

• HSBC Securities Services as Custodian and Depositary;

• RD:IR for Investor Relations and Shareholder Analysis;

and

• Camarco as PR advisors.

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Investment Management Company and

Management of the Portfolio

As the Company is an investment vehicle for Shareholders,

the Directors have sought to ensure that the business of

the Company is managed by a leading specialist investment

management team and that the investment strategy

remains attractive to Shareholders. The Directors believe

that a strong working relationship with the investment

management team will help to achieve the optimum return

for Shareholders. As such, the Board and the Investment

Manager operate in a supportive, co-operative and open

environment.

The Investment Manager is Polar Capital LLP (‘Polar

Capital’), which is authorised and regulated by the

Financial Conduct Authority, to act as Investment Manager

and AIFM of the Company with sole responsibility for

the discretionary management of the Company’s assets

(including uninvested cash) and sole responsibility to

take decisions as to the purchase and sale of individual

investments. The Investment Manager also has

responsibility for, asset allocation within the limits of the

investment policy and guidelines established and regularly

reviewed by the Board, all subject to the overall control

and supervision of the Board, and procuring accountancy

services, company secretarial, marketing and day to

day administrative services, including the monitoring of

third-party suppliers, which are directly appointed by the

Company.

While the Board reviews the performance of the Investment

Manager at each Board meeting, and the Company’s

performance against Benchmark and a peer group of funds

with similar objectives, the Management Engagement

Committee formally carries out an annual review of the

Investment Manager and other suppliers’ performance

during the year.

Polar Capital provides a team of technology specialists led

by Ben Rogoff. Each team member focuses on specific

areas while Ben has overall responsibility for the portfolio.

Polar Capital also has other specialist and geographically

focused investment teams which may contribute to idea

generation. The technology investment team’s biographies

can be found on pages 12 and 13.

The Investment Manager has other investment resources

which support the investment team and has experience in

administering and managing other investment companies.

Termination Arrangements

The Investment Management Agreement (“IMA”) may be

terminated by either party giving 12

months’ notice, but

under certain circumstances the Company may be required

to pay up to one year’s management charges if immediate

notice is given. Compensation will be on a sliding scale

if less than 12

months’ notice is given. The IMA may be

terminated earlier by the Company with immediate effect

on the occurrence of certain events, including: (i) if an

order has been made or an effective resolution passed

for the liquidation of the Investment Manager; (ii) if the

Investment Manager ceases or threatens to cease to carry

on its business; (iii) where the Company is required to do

so by a relevant regulatory authority; (iv) on the liquidation

of the Company; or (v) subject to certain conditions, where

the Investment Manager commits a material breach of the

IMA.

Fee Arrangements

As reported within the Chair’s Statement, following

negotiations with the Manager, on 12 January 2022 the

Company announced that it had concluded its three-yearly

review of the base management fee arrangements. The

revised terms came into force on 1 May 2022.

Performance periods coincide with the Company’s

accounting periods. In the event of a termination of

the investment management agreement, the date the

agreement is terminated will be deemed to be the end of

the relevant performance period and any performance fee

payable shall be calculated as at that date. Under the terms

of the IMA the Board will undertake the three-yearly review

of the fee arrangements with the anticipation that any

changes proposed and subsequently agreed will take effect

from the start of the following financial year.

Management fee

With effect from 1 May 2022, the base management fee,

which is paid by the Company monthly in arrears to the

Manager, is calculated on the daily Net Asset Value (‘NAV’)

as follows:

•

Tier 1: 0.80 per cent. for such of the NAV up to and

including £2bn;

•

Tier 2: 0.70 per cent. for such of the NAV between

£2bn and £3.5bn; and

•

Tier 3: 0.60 per cent. for such of the NAV above

£3.5bn

Strategic Report continued

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Prior to 1 May 2022, and the fee basis for the financial

year ended 30 April 2022, the management fee was

payable quarterly in arrears based on the NAV per share

(‘NAV’) on a per share basis as follows:

•

Tier 1: 1 per cent. for such of the NAV as exceeds

£0

but is less than or equal to £800 million;

•

Tier 2: 0.85 per cent. for such of the NAV as exceeds

£800 million but is less than or equal to £1.6 billion;

•

Tier 3: 0.80 per cent. for such of the NAV as exceeds

£1.6 billion but is less than or equal to £2 billion; and

•

Tier 4: 0.70 per cent. for such of the NAV as exceeds

£2 billion.

Any investment in funds managed by Polar Capital

are wholly excluded from the base management fee

calculation. In addition to the base management fee,

the Investment Manager may be entitled to receive a

performance fee as detailed below. Management fees of

£28,281,000 (2021: £24,134,000) have been paid for

the year to 30 April 2022 of which £6,374,000 (2021:

£6,844,000) was outstanding at the year end.

Performance fee

The performance fee participation rate is 10 per cent. of

outperformance above the Benchmark, subject to a cap

on the amount which may be paid out in any one year

of 1 per cent. of NAV. Any amount over the 1 per cent.

payment is written off.

There was no performance fee payable for the year to

April 2022 (2021: nil), and therefore no amount (2021:

nil) was outstanding at the year end.

Calculation

A notional performance fee entitlement (‘NPFE’) is

calculated and if positive, accrued daily, having made up all

past underperformance; however, it is only at the financial

year end that payment of the performance fee is tested.

The calculation period starts at the end of the financial year in

which the last performance fee was paid and is open until the

end of the financial year that the next performance fee is paid.

The 1 per cent. cap is applied as part of the NAV

calculation so the performance fee accrual will never

exceed 1 per cent. of the NAV.

Any under performance since the last performance fee was

paid must be made good before a fee may be paid.

Payment Conditions

On the final day of each financial year the NPFE will be

tested.

If the NPFE is positive, then a performance fee may be

paid to the Manager if the following conditions have been

achieved:

•

There has been outperformance of the Benchmark in

the financial year;

•

The NAV per share at the financial year end is equal

to or higher than the NAV per share when the last

performance fee was paid; and

•

The NAV per share at the financial year end is equal to

or higher than the NAV per share at the beginning of

the financial year.

•

If the NPFE is negative, then no performance fee is

paid, and the calculation period remains open.

Other

In addition to the above, the Investment Manager is

responsible for the first £200,000 of marketing costs

(previously £100k) and all research costs.

Continued Appointment of Investment

Manager

The Board, through the Management Engagement

Committee, has reviewed the performance of the

Investment Manager in managing the portfolio over the

longer-term. The review also considered the quality of

the other services provided, including the strength of the

investment team, the depth of the other services provided

and the resources available to provide such services.

The Board reflected on the positive impact from

the continued recruitment into various teams at the

Investment Manager to support the Company, which

includes the investment team, marketing, administration,

and the organisation on the Company’s behalf of third

party suppliers, and the quality of the Shareholder

communications.

The Board, on the recommendation of the Management

Engagement Committee, has concluded that on the basis

of longer-term performance, it is in the best interests of

Shareholders as a whole that the appointment of Polar

Capital LLP as Investment Manager is continued on the

terms agreed on 12 April 2019.

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Longer-Term Viability

In accordance with the AIC Code of Corporate Governance, the Company is required to make a forward-looking longer-

term viability statement. The Board has considered and addressed the ability of the Company to continue to operate

over a period significantly beyond the twelve-month period required for the going concern statement. The Board

has considered the industry and market in which the Company operates and the continued appetite for technology

investment. The Board continues to use five years as a reasonable term over which the viability of the Company should

be viewed; Shareholders have the opportunity to vote on the continuation of the Company every five years, therefore the

outlook for the next five-year period incorporates the continuation vote which will be put to Shareholders at the AGM in

2025. The process and matters considered in establishing the longer-term viability are detailed within the Audit Committee

Report on page 89.In establishing the positive outlook for the Company over the next five years to 30 April 2027, the

Board has taken into account:

The ability of the

Company to meet its

liabilities as they fall due

The financial position of the Company and its cash flows and liquidity position are described in the

Strategic Report and the Financial Statements. Note 27 to the Financial Statements on pages 124 to

131 includes the Company’s policies and process for managing its capital; its financial risk management

objectives; details of financial instruments and hedging activities. Exposure to credit risk and liquidity risk

are also disclosed.

The portfolio comprises investments traded on major international stock exchanges, there is a spread of

investments by size of company.

The assessment took account of the Company’s current financial position, its cash flows and its liquidity

position, the principal risks as set out on pages 65 to 69 and the Committee’s assessment of any material

uncertainties and events that might cast significant doubt upon the Company’s ability to continue as a

going concern. The assessment was then subject to a sensitivity analysis over a five-year period, which

stress tested a number of the key assumptions underlying the forecasts both individually and in aggregate

for normal, favourable and stressed conditions and considered whether financing facilities will be renewed.

COVID-19 was also factored into the key assumptions made by assessing its impact on the Company’s

key risks and whether the key risks had increased in their potential to affect the normal, favourable and

stressed market conditions.

99.8% of the current portfolio could be liquidated within seven trading days and there is no expectation

that the nature of the investments held within the portfolio will be materially different in future.

The expenses of the Company are predictable and modest in comparison with the assets and there are no

capital commitments foreseen which would alter that position. The ongoing charges of the Company for

the year ended 30 April 2022 (excluding performance fees) were 0.84% (2021: 0.82%).

Repayment of the bank facilities, drawn down at the year end, and due in September 2022, would equate

to approximately 16.7% of the cash or cash equivalents available to the Company at 30 April 2022,

without having to liquidate the portfolio of investments.

The Company has no employees and consequently does not have redundancy or other employment related

liabilities or responsibilities.

The Company will

propose a resolution on

the continuation of the

Company at the AGM in

September 2025

Under the AIC SORP, where Shareholders have the opportunity to vote in favour or against a company

continuing in existence, it will normally be the case that Shareholders will have to vote in favour of a

liquidation before it can occur. It is reasonable to believe that if good performance is achieved over the

period until the next continuation vote Shareholders will vote in favour of continuation.

Factors impacting the

forthcoming years

The Strategic Report and Governance sections, comprising the Chair’s Statement, the Investment

Manager’s Report and the Strategic Report provide a comprehensive review of factors which may impact

the Company in forthcoming years. In making its assessment, the Board considered these factors alongside

the Principal Risks and Uncertainties, and their corresponding mitigation and controls, as set out on pages

65 and 69.

Regulatory changes Despite the increased level of regulation and the unpredictability of future requirements it is considered

that regulation will not increase to a level that makes the running of the Company uneconomical in

comparison to other competitive products.

Closed-ended Investment

Funds

That the business model of being a closed ended investment fund will continue to be wanted by investors

and the Investment Objective will continue to be desired and achievable.

Strategic Report continued

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Further, the Board recognises that there has been

considerable growth in the technology sector and immense

change in what is deemed to be a technology company

which broadens the universe for potential investment.

Technology remains a specialist sector for which there

continues to be a need for independent specialist sector

investment expertise.

The Board therefore believe it appropriate to confirm their

assessment for the longer-term viability of the Company

for the next five years to 30 April 2027.

Going Concern

The Board has also considered the ability of the Company

to adopt the Going Concern basis for the preparation of

the Financial Statements.

Consideration included the Company’s current financial

position, its cash flows, its liquidity position and its assessment

of any material uncertainties and events that might cast

significant doubt upon the Company’s ability to continue

as a going concern. In conjunction with the financial

considerations taken into account when reviewing the

longer-term viability, the Board considered the performance

of the Company’s net asset value per share (-7.7%) and

the benchmark (-0.9%); the liquidity of the portfolio (an

estimated 99.8% can be liquidated over seven days) and

the opportunity for investment and reinvestment of funds.

In reaching these conclusions and those in the Longer-Term

Viability Statement, the stress testing conducted also featured

consideration of the effects of COVID-19. This is discussed

further in the Report of the Audit Committee on page 89.

The Board believe that the Company is able to continue in

operation and meet its liabilities as they fall due over the

next twelve-month period from the date of this Report and

it is appropriate to present the Company and the Financial

Statements as a Going Concern.

Key Performance Indicators

The Board appraises the performance of the Company and the Investment Manager as the key supplier of services to

the Company against Key Performance Indicators (‘KPIs’). The objectives of the KPIs comprise both specific financial and

Shareholder related measures and these KPIs have not differed from the prior year.

KPI Control process Outcome

The provision of investment

returns to Shareholders

measured by long-term

NAV growth and relative

performance against the

Benchmark.

The Board reviews the performance of the

portfolio in detail and hears the views of

the Investment Manager at each meeting.

At 30 April 2022 the total net assets of the

Company amounted to £3,050,985,000

(2021: £3,408,763,000). The Company’s

NAV has, over the year to 30 April 2022,

underperformed the Benchmark by 6.8%.

The NAV per share fell by 7.7% from

2496.44p to 2305.13p while the Benchmark

fell 0.9% in Sterling terms over the same

period. As at 30 April 2022 the portfolio

comprised 96 (2021: 110) investments.

Investment performance is explained in

the Chair’s Statement and the Investment

Manager’s Report. Over the longer-term, as

shown by the ten year historic performance

data shown on page 3, growth in the NAV

has exceeded the Benchmark.

Monitoring and reacting

to issues created by the

discount or premium of the

ordinary share price to the

NAV per ordinary share with

the aim of reduced discount

volatility for Shareholders.

The Board receives regular information on the

composition of the share register including

trading patterns and discount/premium levels

of the Company’s ordinary shares.

A daily NAV per share, diluted when

appropriate, calculated in accordance with

the AIC guidelines, is issued to the London

Stock Exchange.

The discount/premium of the ordinary share

price to NAV per ordinary share (diluted

when appropriate) has been as follows:

Financial year to 30 April 2022

• Minimum discount over year: 0.3%

• Maximum discount over year: 15.4%

• Average discount over year: 8.6%

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

KPI Control process Outcome

The Board is aware of the vulnerability

of a sector specialist investment trust to

a change in investor sentiment to that

sector. The Board discusses the market

factors giving rise to any discount or

premium, the long or short-term nature

of those factors and the overall benefit

to Shareholders of any actions. The

market liquidity is also considered when

authorising the issue or buy back of shares

when appropriate market conditions

prevail. The Company does not have an

absolute target discount level at which

it buys back shares but has historically

bought back significant amounts of the

outstanding share capital when deemed

appropriate and remains ready to do so

again. This approach does not preclude

a more active approach as discounts

widen and the Investment Manager

may consider that a single purchase or a

series of purchases of shares in current

or greater volumes, which would enhance

the Company’s NAV per share, would be

an attractive investment of the Company’s

cash resources, given the positive long-term

prospects for the Company’s portfolio. As

always, the Board keeps the level of discount

under careful review and has been buying

back shares actively in recent months at

levels set out in the adjacent column.

In the year ended 30 April 2022, the

Company bought back 4,188,338 ordinary

shares at an average discount of 9.6%,

Subsequent to the year end and to 15 July

2022, the Company bought back a further

1,475,096 shares.

Over the previous five financial years ended

30 April 2022

• Maximum premium over period: 6.1%

• Maximum discount over period: 15.9%

• Average discount over period: 4.3%

Over the previous five financial years ended

30 April 2022 the Company has issued

4,978,841 Ordinary shares as a result of

market demand.

To qualify and continue to

meet the requirements for

Sections 1158 and 1159

of the Corporation Tax Act

2010 (‘investment trust

status’).

The Board receives regular financial

information which discloses the current

and projected financial position of the

Company against each of the tests set out

in Sections 1158 and 1159.

This has been achieved for every year since

launch in 1996.

HMRC has approved the investment trust

status subject to the Company continuing to

meet the relevant eligibility conditions and

ongoing requirements.

The Directors believe that the tests have

been met in the financial year ended 30

April 2022 and will continue to be met.

Efficient operation of the

Company with appropriate

investment management

resources and services from

third party suppliers within

a stable and risk controlled

environment.

The Board considers annually the services

provided by the Investment Manager, both

investment and administrative, and reviews

on a cycle the provision of services from

third parties including the costs of their

services.

The annual operating expenses are

reviewed and any non-recurring project

related expenditure approved by the

Board.

The Board has received and considered

satisfactory the internal controls report

of the Investment Manager and other

key suppliers including contingency

arrangements to facilitate the ongoing

operations of the Company in the event of

withdrawal or failure of services.

The ongoing charges of the Company for

the year ended 30 April 2022 excluding the

performance fee were 0.84% of net assets

(2021: 0.82%). There was no performance

fee payable for the year ended 30 April

2022 (2021: nil) and therefore the ongoing

charges including the performance fee

were 0.84% (2021: 0.82%) of net assets.

Strategic Report continued

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Principal Risks and Uncertainties

The Board is responsible for the management of risks faced

by the Company and, through delegation to the Audit

Committee, has established procedures to manage risk,

oversee the internal control framework and determine the

nature and extent of the principal risks the Company is willing

to take in order to achieve its long-term strategic objectives.

The established risk management process the Company

follows, identifies and assesses various risks, their

likelihood, and possible severity of impact, considering

both internal and external controls and factors that could

provide mitigation. A post mitigation risk impact score is

then determined for each principal risk.

At each Audit Committee, identified principal risks are

reviewed and reassessed against the backdrop of the ever

changing world the Company is operating in. Furthermore,

the Audit Committee carries out, at least annually, a robust

assessment of overall risks and uncertainties faced by the

Company with the assistance of the Investment Manager.

As part of this process, the Committee also identifies any

emerging risks during its review process and continues to

closely monitor these risks along with any other emerging

risks as they develop and implements mitigating actions as

necessary. Current emerging risks include Climate change,

inflation, recession and rising interest rates.

The Committee is mindful of the uncertainty surrounding

inflation, recession and rising interest rates coupled with the

invasion of Ukraine by Russia and the longer term impact

this may have on the market and global economy. The

impact of this is discussed further in the Chair’s Statement

and Investment Manager’s Report. Further information on

how the Committee has assessed the Company’s ability to

operate as a going concern and the Company’s longer-term

viability can be found on pages 62 and 63 of this Strategic

Report and on pages 88 and 89 of the Report of the Audit

Committee.

The Principal risks are detailed on the following pages

along with a high-level summary of their management

through mitigation and status arrows to indicate any

change in assessment over the past financial year.

RISK CYCLE

Monitoring

and Review

Identify

Risk

Analyse

Risk

Manage

Risk

Build Risk

Strategy

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Principal Risks and Uncertainties continued

Management of risks through Mitigation & Controls

PORTFOLIO RISK

Failure to achieve investment objective due to poor performance

The Board seeks to manage the impact of such risks through regular reporting and monitoring of investment

performance. In addition, the Board regularly considers, the level of premium and discount of the share price to the

NAV and ways to enhance Shareholder value including share issuance and buy backs.

A detailed annual review of the investment strategy is undertaken by the Investment Manager with the Board

including analysis of investment markets and sector trends.

The Board is committed to a clear communication program to ensure Shareholders understand the investment

strategy. A resolution is put forward every five years to provide Shareholders with an opportunity to vote on the

continuation of the Company. The last continuation vote was held in September 2020 and had 100% of votes cast in

favour, the next continuation resolution will be proposed at the AGM to be held in September 2025.

Given the current market volatility as well as the Company’s underperformance for the last two years, the Board

agreed to elevate this risk following the Company’s year-end.

Gearing - Breach of covenants/limits or restrictions

Detailed reports containing financial information are provided to each Board meeting and are used to assess portfolio

construction and the degree of risk which the Investment Manager incurs to generate investment returns.

Lenders covenants and AIFMD limits are hard coded into the Investment Manager’s Bloomberg accounts and trading

system which are populated by the Investment Manager’s Risk Team. Monthly returns are made to the lender to

ensure regular reporting of lending level and covenant monitoring.

The Depositary also monitors compliance with lending restrictions. Any material breaches immediately notified to

Board.

Portfolio management errors e.g. breach of policy

Investment limits and restrictions are encoded into the dealing and operations systems of the Investment

Manager and various oversight functions are undertaken to ensure there is early warning of any potential issue

of compliance or regulatory matters.

The Investment Manager on behalf of the Company undertakes counterparty monitoring and only trades

with brokers which have satisfied the approval process. Trade settlement, currency exposure and all dealing

operations are monitored by various systems and groups including the Investment Manager’s Operations and

Risk Teams and independent monitoring by the depositary.

Strategic Report continued

Increase

Decrease Unchanged

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Management of risks through Mitigation & Controls

OPERATIONAL RISK

Failure in services provided by the Investment Manager

The Board carries out an annual review of internal control reports from suppliers which includes the Investment

Manager’s cyber protocols and disaster recovery procedures.

Accounting, Financial or Custody errors

Due diligence and service reviews are undertaken with third-party service providers including the Custodian and

Depository.

IT failure and Cyber Risk

The number, severity and success rate of cyberattacks have increased considerably over recent years. However,

controls are in place and the Board proactively seeks to keep abreast of developments through updates with

representatives of the Investment Manager who undertakes meetings with relevant service providers.

The Audit Committee once again sought assurance via the Investment Manager, from each of the Company’s

service providers on the resilience of their business continuity arrangements. These assurances and the

subsequent detailed updates that were given to the Committee provided a satisfactory level of assurance that

there had not been, and there was no anticipation of any disruption in the ability of each service provider to

fulfil their duties as would typically be expected.

Black Swan event – e.g. unforeseen natural disaster

The Company has a disaster recovery plan in place along with a Black Swan Committee comprised of any two

directors, who are able to provide a response to such events as necessary.

Failure of Depositary, Custodian, Sub-Custodian

A full review of the internal control framework is carried out at least annually. Regular reporting is received by

the Investment Manager on behalf of the Board from the Depositary on the safe custody of the Company’s

assets. The Board undertakes independent reviews of the Depositary and external Administrator services

and additional resources have been put in place by the Investment Manager. Management accounts are

produced and reviewed monthly, statutory reporting and daily NAV calculations are produced by the external

Administrator and verified by the Investment Manager.

Supplier risk – failure in provision of efficient services by service providers

The Board considers, approves and monitors supplier appointments. The Investment manager reports on

breaches of service level agreements and failure to meet standards as it becomes aware of the issue.

Annual controls reports from service providers are reviewed by Board, and exceptions highlighted to the Board.

Representatives from each service provider attend meetings to apprise the Board of exceptions found in their

control environments. Directors regularly attend due diligence visits to service providers.

Increase

Decrease Unchanged

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Principal Risks and Uncertainties continued

Management of risks through Mitigation & Controls

REGULATORY RISK

Breach of Statutes and Regulation

The Board monitors regulatory change with the assistance of the Investment Manager, Company Secretary and

external professional suppliers and implements necessary changes should they be required.

The Board receives regulatory reports for discussion and, if required, considers the need for any remedial action.

In addition, as an investment company, the Company is required to comply with a framework of tax laws,

regulation and company law.

The Board keeps abreast of third party service provider internal controls processes to ensure requirements are met

in accordance with regulatory requirements.

Failure to effectively communicate with investors

Polar Capital Sales Team and the Corporate Broker provide periodic reports to the Board on communications with

shareholders and feedback received.

The Audit Committee received the half-year and annual financial statements prior to sign-off and makes

recommendations to the Board.

Contact details and how to contact the Board are provided in regulatory announcements and in half year and

annual reports. The Board are present at the AGM to speak to shareholders.

ECONOMIC AND MARKET RISK

Global geo-political risk

The Board regularly discusses the global geopolitical issues and general economic conditions and developments.

Note 27 on pages 125 to 128 describes the impact of changes in foreign exchange rates. The Company’s largest

exposure is to the level of US $ holdings.

Subsequent to the Company’s year-end, this risk was elevated following the invasion of Ukraine by Russia

coupled with the uncertainty and volatility in financial markets. The medium and longer term impacts of this risk

will continue to be assessed by the Audit Committee in light of how they may affect the Company’s portfolio

and the economic and geopolitical environment in which the Company operates within overall.

Uncertainty in regulatory environment and impact of Brexit

Due to the high level of US investments (74.2% based on the NAV) and the low level of UK investments (0.42%

based on the NAV) the Board does not believe that there is likely to be any direct impact on the operation of the

Company or the structure of the portfolio following the completion of the Brexit transition period.

The Company has a varying level of cash which is primarily held in US Dollars and also has loan facilities in both

Japanese Yen and US Dollars. Fluctuations in exchange rates are monitored which may impact investor returns.

An analysis of currency is given in Note 27 to the Financial Statements.

Strategic Report continued

Increase

Decrease Unchanged

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Management of risks through Mitigation & Controls

KEY STAFF RISK

Loss of Portfolio Manager or other Key staff

The strength and depth of investment team provides comfort that there is not over-reliance on one person

with alternative senior technology portfolio managers available to act if needed. For each key business process

roles, responsibilities and reporting lines are clear and unambiguous. Key personnel are incentivised by equity

participation in the investment management company.

Insufficient resource or experience on the Board

Respected recruiters are used to source suitably experienced candidates for Non-executive directorships. A

Board, Committee and Individual evaluation process is carried out annually and justification for re-election of

Directors is provided in Annual Report to Shareholders.

Increase

Decrease Unchanged

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Section 172 Statement

The statutory duties of the Directors are listed in s171-177 of the Companies Act 2006. Under s172, Directors have a duty

to promote the success of the Company for the benefit of its members (our Shareholders) as a whole and in doing so

have regard to the consequences of any decision in the long term, as well as having regard to the Company’s stakeholders

amongst other considerations. The fulfilment of this duty not only helps the Company achieve its Investment Objective but

ensures decisions are made in a responsible and sustainable way for Shareholders.

To ensure that the Directors are aware of, and understand, their duties, they are provided with an induction, including

details of all relevant regulatory and legal duties as a Director when they first join the Board, and continue to receive

regular and ongoing updates on relevant legislative and regulatory developments. They also have continued access to

the advice and services of the Company Secretary and, when deemed necessary, the Directors can seek independent

professional advice. The Schedule of Matters Reserved for the Board, as well as the Terms of Reference of its committees

are reviewed annually and further describe Directors’ responsibilities and obligations and include any statutory and

regulatory duties.

The Board seeks to understand the needs and priorities of the Company’s stakeholders and these are taken into account

during all of its discussions and as part of its decision-making. As an externally managed investment company, the

Company does not have any employees or customers, however the key stakeholders and a summary of the Board’s

consideration and actions where possible in relation to each group of stakeholders are described in the table below.

Stakeholder Group How we engage with them

Shareholders The Directors have considered this duty when making the strategic decisions during the year that affect

Shareholders, the confirmation of the continued appointment of the Investment Manager and the

recommendation that Shareholders vote in favour of the resolutions to be proposed at the AGM. The

Directors have also engaged with and taken account of Shareholders’ interests during the year.

The Directors were unable to have the usual face to face interactions with shareholders for most of the

financial year due to the guidance from the UK government in respect of gatherings of people, however

some of these were replaced with remote meetings between the Chair and investors. Once restrictions

allowed, the Directors along with the Portfolio Manager reinstated face to face meetings and interacted

with a number of shareholders and institutions in addition to holding the annual Investor Relations

dinner in October 2021. Positive feedback was received from all attendees of the dinner who welcomed

the opportunity to interact with the Board and Manager again.

The Board will continue to respond to the helpful pointers given and welcome other interaction with

shareholders wherever possible; the Portfolio Manager will look to continue face to face shareholder

meetings once again in the second half of the year. In addition, the Chair will write to the Company’s

largest Shareholders following the publication of the Annual Report and Financial Statements offering

the opportunity to have a meeting.

The Company’s AGM will be held at 2:30pm on Thursday 8 September 2022. Following the events of

the COVID-19 years, we have decided to continue to offer the flexibility to Shareholders to attend the

meeting either in person or electronically. Feedback from the hybrid meeting held in 2021 was positive

and we found that while the meeting was not well-attended when compared to the pre-COVID years,

Shareholders were encouraged by the options presented to them which translated into near-equal

attendance in person and electronically. The Board recognises that the AGM is an important event for

Shareholders and the Company and is keen to ensure that Shareholders are able to exercise their right

to vote and participate either in person or electronically. Unless circumstances change, the meeting will

be held at Haberdashers’ Hall, 18 West Smithfield, London, EC1A 9HQ and online via the Lumi Global

Electronic Platform.

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

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Environmental, Social

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Financial

Statements

Shareholder

Information

Stakeholder Group How we engage with them

The Board believes that shareholder engagement remains important, especially in the current market

conditions and is keen that the AGM be a participative event for all Shareholders who attend.

Shareholders are encouraged to send any questions ahead of the AGM to the Board via the Company

Secretary at cosec@polarcapital.co.uk stating the subject matter as PCTT-AGM. The investment

manager gives a presentation and the Chair of the Board and of each Committee attends and are

available to respond to questions and concerns from Shareholders.

Should any significant votes be cast against a resolution, the Board will engage with Shareholders.

Should this situation occur, the Board will explain in its announcement of the results of the AGM

the actions it intends to take to consult Shareholders in order to understand the reasons behind the

votes against. Following the consultation, an update will be published no later than six months after

the AGM and the Annual Report will detail the impact the Shareholder feedback has had on any

decisions the Board has taken and any actions or resolutions proposed.

Relations with Shareholders

The Board and the Manager consider maintaining good communications and engaging with

Shareholders through meetings and presentations a key priority. The Board regularly considers the

share register of the Company and receives regular reports from the Manager and the Corporate

Broker on meetings attended with Shareholders and any concerns that are raised in those meetings.

The Board also reviews correspondence from Shareholders and may attend investor presentations.

The Chair has communicated directly with the shareholders representing in the region of 67% of the

share register, during the year and responded to comments raised both at the AGM and via email.

Shareholders are able to raise any concerns directly with the Board without using the Manager or

Company Secretary as a conduit. The Chair or other Directors are available to Shareholders who wish

to raise matters either in person or in writing. The Chair and Directors may be contacted through the

registered office of the Company.

Shareholders are kept informed by the publication of annual and half year reports, monthly fact

sheets, access to commentary from the Investment Manager via the Company’s website and

attendance at events in which the Investment Manager presents.

The Company, through the sales and marketing efforts of the Investment Manager, encourages

retail investment platforms to engage with underlying Shareholders in relation to Company

communications and enable those Shareholders to cast their votes on Shareholder resolutions;

the Company however has no responsibility over such platforms. The Board therefore encourage

Shareholders invested via the platforms to regularly visit the Company’s website or to make contact

with the Company directly to obtain copies of Shareholder communications.

The Company has also made arrangements with its registrar for Shareholders, who own their shares

directly rather than through a nominee or share scheme, to view their account online at

www.shareview.co.uk. Other services are also available via this service.

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Stakeholder Group How we engage with them

Outcomes and strategic decisions during the year

Buybacks

Further to shareholder authority being granted, the Company has the facility to conduct share buy

backs when, in normal market conditions, it is in the best interests of Shareholders to do so. The

Company bought back a total of 4,188,338 shares during the year under review. Subsequent to the

year end and to 15 July 2022, the Company bought back a further 1,475,096 shares.

Gearing

The Company is aware of the positive effect that leverage can have in increasing the return to

Shareholders when utilised. The Company has term loans with ING Bank NV, which expire in

September 2022, consideration will be given to the renewal of, or the replacement of, the term loans

if it is deemed to be in the best interests of shareholders in maximising returns.

Continuation Vote

The Company has within its corporate structure the requirement to hold a continuation vote every

five years; ahead of each vote the Board, Investment Manager and Corporate Broker seek the

feedback of Shareholders including any concerns, and an indication of whether they were likely to

vote in favour of the Company’s continuation. The last continuation vote was held in September

2020, for which 100% of the votes cast were in favour, and the next continuation vote will be held

at the AGM in September 2025.

Directors’ Remuneration

As detailed in the Chair’s statement and Remuneration Committee report, the remuneration of

Directors is reviewed regularly and was increased with effect from 1 May 2021 and again from 1 May

2022, to reflect the greater regulation, increasing workload and to attract and retain the necessary

calibre of Director for the Company.

Section 172 Statement continued

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Stakeholder Group How we engage with them

Investment

Manager

Engagement

Through the Board meeting cycle, which was enhanced in 2020 to include additional monthly

informal update meetings, regular updates and the work of the Management Engagement

Committee reviewing the services of the Investment Manager twice yearly, the Board is able to

safeguard Shareholder interests by:

• Ensuring adherence to the Investment Policy;

• Ensuring excessive risk is not undertaken in the pursuit of investment performance;

• Ensuring adherence to the Investment Management Policy and reviewing the agreed

management and performance fees;

• Reviewing the Investment Manager’s decision making and consistency in investment process; and

• Considering the succession plans for the Technology Team in ensuring the continued provision of

portfolio management services.

Maintaining a close and constructive working relationship with the Manager is crucial as the Board

and the Investment Manager both aim to continue to achieve consistent, long-term returns in

line with the Investment Objective. The culture which the Board maintains to ensure this involves

encouraging open discussion with the Investment Manager; recognising that the interests of

Shareholders and the Investment Manager are aligned, providing constructive challenge and making

Directors’ experience available to support the Investment Manager. This culture is aligned with the

collegiate and meritocratic culture which Polar Capital has developed and maintains.

Outcomes and strategic decisions during the year

ESG

During the year under review, the Board continued to develop its approach to ESG and engages

with the Investment manager to better understand how ESG has been further integrated into the

investment and decision-making process. The Board also receives information on how ESG affects

Polar Capital as a business and the technology team in particular.

In addition to this, the Board has chosen to appoint Catherine Cripps as ESG lead. Catherine has

been responsible for ensuring that the Board is kept abreast of the latest developments in this area to

develop how the Company can report to stakeholders in line with such. Catherine has worked with

the manager to develop a dashboard which allows us to see how the manager is considering ESG

matters, and whether that meets our requirements. Please see page 53 of the ESG Report for further

information.

The Management Engagement Committee has recommended the continued appointment of the

Investment Manager on the terms agreed within the Investment Management Agreement.

Fees

During the financial year under the review, a three-yearly review of the fee arrangements was

undertaken as per the IMA and following this review, it was agreed that the base management fees

be reduced to three tiers. Further information is contained in the Strategic report on pages 60 and 61.

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Stakeholder Group How we engage with them

Investee

Companies

Stewardship

The Board has instructed the Investment Manager to take into account the published corporate

governance policies of the companies in which it invests.

The Board has also considered the Investment Manager’s Stewardship Code and Proxy Voting Policy.

The Voting Policy is for the Investment Manager to vote at all general meetings of companies in

favour of resolutions proposed by the management where it believes that the proposals are in the

interests of Shareholders. However, in exceptional cases, where it believes that a resolution could

be detrimental to the interests of Shareholders or the financial performance of the Company,

appropriate notification will be given and abstentions or a vote against will be lodged.

The Investment Manager reports to the Board, when requested, on the application of the

Stewardship Code and Voting Policy. The Investment Manager’s Stewardship Code and Voting Policy

can be found on the Investment Manager’s website in the Corporate Governance section

(www.polarcapital.co.uk).

The Technology Investment Team also use the services of ISS to assist with their own evaluation of

companies’ proposals or reporting ahead of casting votes on behalf of the Company at their general

meetings. In the event that an investee company has share blocking in place, the default position is to

refrain from voting to ensure the ability to trade these stocks if required.

During the year ended 30 April 2022, votes were cast at 97.4% of investee company general

meetings held. At 53.5% of those meetings a vote was either cast against management

recommendation, withheld or abstained from. Further information on how the Investment Manager

considers ESG in its engagement with investee companies can be found in the ESG Report on pages

44 to 53.

Outcomes and strategic decisions during the year

During the year the Board discussed the impact of ESG and how the Investment Manager factors it

into its decision making. In addition, consideration was given to the Company’s ESG journey going

forward and the form this would take.

Service

Providers

Engagement

The Directors have frequent engagement with the Company’s other service providers through the

annual cycle of reporting and when possible site visits and due diligence meetings. As reflected below,

the schedule of deep-dive in-person meetings are due to re-commence in 2022. This engagement is

completed with the aim of having effective oversight of delegated services, seeking to improve the

processes for the benefit of the Company and to understand the needs and views of the Company’s

service providers, as stakeholders in the Company. Further information on the Board’s engagement

with service providers is included in the Corporate Governance Statement and the Report of the

Audit Committee. During the year under review, due diligence meetings have been undertaken

by the Investment Manager in a virtual fashion and where possible, service providers have joined

video conference meetings to present their reports directly to the Board or the Audit Committee as

appropriate. While we have been unable to hold in-person due diligence sessions with suppliers due to

COVID restrictions a programme of meetings has been put together for the year ahead.

Outcomes and strategic decisions during the year

The reviews of the Company’s service providers have been positive and the Directors believe their

continued appointment is in the best interests of the Company. The accounting and administration

services of HSBC Securities Services (HSS) are contracted through Polar Capital and provided to the

Company under the terms of the IMA. The Board, through due diligence undertaken by the Company

Secretary and the Polar Capital Compliance team, is satisfied that the service received continues to be

of a high standard.

Section 172 Statement continued

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Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Stakeholder Group How we engage with them

Proxy Advisors Engagement

The support of proxy adviser agencies is important to the Directors, as the Company seeks to retain a

reputation for high standards of corporate governance, which the Directors believe contributes to the

long-term sustainable success of the Company. The Directors consider the recommendations of these

various proxy voting agencies when contemplating decisions that will affect Shareholders and also

when reporting to Shareholders through the Half Year and Annual Reports.

Recognising the principles of stewardship, as promoted by the UK Stewardship Code, the Board

welcomes engagement with all of its investors. The Board recognises that the views, questions

from, and recommendations of many institutional investors and proxy adviser agencies provide a

valuable feedback mechanism and play a part in highlighting evolving Shareholders’ expectations and

concerns.

Prior to AGMs, the Company engages with these agencies to fact check their advisory reports and

clarify any areas or topics that the agency requests. This ensures that whilst the proxy advisory reports

provided to Shareholders are objective and independent, the Company’s actions and intentions are

represented as clearly as possible to assist with Shareholders’ decision making when considering the

resolutions proposed at the AGM.

Outcomes and strategic decisions during the year

The Nomination Committee considers the time commitment required of Directors and the Board

considers each Director’s independence on an ongoing basis. The Directors have also considered

the proxy adviser agencies policies on overboarding when Directors request approval for additional

appointments and when recruiting new Directors. The Board is aware that some investment

companies and other AIM listed companies have less regulatory burden than companies with a

premium listing and this is taken into consideration when approving such requests. The Board have

confirmed that all Directors remain independent and are able to commit sufficient time in fulfilling

their duties, including those listed on s172 of the Companies Act. Accordingly, all Directors are

standing for election/re-election at the Company’s AGM, with the exception of the Chair who shall

retire from the Board in line with the Company’s succession plans. Further information has been

provided where appropriate in each directors biography on pages 10 and 11.

THE AIC Engagement

The Company is a member of the AIC and has supported lobbying activities such as the consultation on

the 2019 AIC Code, the 2021 BEIS Restoring Trust in Audit and Corporate Governance and the FCA’s

2021 consultation on Diversity and Inclusion on Company Boards. The Directors also cast votes in the AIC

Board Elections each year and regularly attend AIC events.

Approved by the Board on 19 July 2022

By order of the Board

Tracey Lago, FCG

Polar Capital Secretarial Services Limited

Company Secretary

19 July 2022

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Report of the Directors

The Directors, who are listed on pages 10 and 11,

present their annual report, together with their Report

on Corporate Governance and the Audited Financial

Statements for the year ended 30 April 2022. In addition,

the attention of Shareholders is drawn to the Strategic

Report Section (Chairman’s Statement, the Investment

Manager’s Report, Strategic Report, and the ESG

and Section 172 Statements) which provides further

commentary on the activities and outlook for the Company.

Introduction and Status

The Company is incorporated in England and Wales as

a public limited company and domiciled in the United

Kingdom. It is an investment company as defined in

Section 833 of the Companies Act 2006, operating as an

investment trust in accordance with sections 1158 and

1159 of the Corporation Tax Act 2010 (as amended by

section 42(2) of the Finance Act 2011). Its ordinary shares

are listed and traded on the London Stock Exchange.

As an investment trust the Company’s ordinary shares

are excluded from the FCA’s restrictions which apply to

non‑mainstream investment products. The Company

conducts its affairs and intends to do so for the foreseeable

future so that the exclusion continues to apply.

Life of the Company

The Articles of Association of the Company provide that

a vote on whether the Company should continue in

operation be proposed as an ordinary resolution at every

fifth AGM of the Company. Such a resolution was proposed

at the AGM held on 2 September 2020 and was passed

with 100% of the votes cast in favour of continuing for

a further five years. The next continuation vote will be

proposed at the AGM to be held in September 2025.

Directors

The current Directors of the Company are listed on pages

10 and 11. All the Directors held office throughout the

year under review. All Directors, with the exception of

Sarah Bates, who is retiring from the Board, will seek

election/re‑election at the AGM in September 2022 in

accordance with the AIC Code, which recommends annual

re‑election for all directors. The fees paid to the Directors

are set out in the Directors’ Remuneration Report. The

Board have considered the support for the Directors’

election/re‑election and the rationale for such is set out on

pages 10 and 11. The report of the Nomination Committee

on pages 84 and 85 provides more information on the

composition of the Board.

Listing Rule 9.8.4

Listing Rule 9.8.4 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 there are no

disclosures to be made pursuant to this rule.

Corporate Governance Statement

The Report on Corporate Governance on pages 78 to 86

forms part of this Directors’ Report.

Capital Structure

Issued

The Company’s share capital is divided into ordinary shares

of 25p nominal value each. At 30 April 2022, there were

137,315,000 ordinary shares in issue of which 4,958,574

were held in treasury (2021: 770,236 ordinary shares held

in treasury). As at 15 July 2022, the latest practicable date

prior to signing of this report, there were 137,315,000

ordinary shares in issue of which 6,433,670 were held in

treasury.

Changes During the Year

In the year under review, the Company bought back

4,188,338 ordinary shares which were placed into treasury.

Since the year ended 30 April 2022 to 15 July 2022, a

further 1,475,096 shares have been bought back and

placed in treasury. Further details can be found in Note 18

on page 121 to the Financial Statements.

Further information on transferability and the voting rights

attached to these shares can be found in the Shareholder

information page 139.

Powers to issue and make market purchases

of ordinary shares

The Board was granted authority by Shareholders at the

AGM in 2021 to allot equity securities up to a nominal

value of £3,432,875, representing approximately 10

per cent. of the then issued share capital, and to issue

those shares for cash without offering those shares to

Shareholders in accordance with their statutory pre‑emption

rights. New ordinary shares will not be allotted and issued

at below the Net Asset Value.

The Board also obtained Shareholder authority at the AGM

in 2021 to make market purchases up to a nominal value

of £5,145,880 representing approximately 14.99 per cent.

of the then issued share capital, or 20,583,520 ordinary

shares, for cancellation or holding as treasury shares in

accordance with the terms and conditions set out in the

resolution.

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

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Environmental, Social

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Financial

Statements

Shareholder

Information

Shareholder Type of Holding Number of Shares % of voting rights*

Rathbone Brothers plc Indirect 15,017,658 11.47%

Brewin Dolphin Ltd Indirect 9,946,829 7.59%

Investec Wealth & Investment Ltd Direct 6,813,636 5.20%

Quilter plc Indirect 6,704,725 5.12%

Lazard Asset Management LLC Both 6,383,454 4.87%

The above percentages are calculated by applying the ordinary shareholdings as notified to the Total Voting Rights of the issued

ordinary share capital at 15 July 2022 of 130,881,330 and do not necessarily match the submitted TR1s.

The level of the ordinary share price discount or premium

to the Net Asset Value together with internal guidelines for

the repurchase or issuance of new ordinary shares are kept

under regular review by the Board. The Board considers

that discount volatility is unattractive to Shareholders but as

a specialist investment fund, market sentiment can create

sustained discount pressure. With this in mind the Board has

a pragmatic approach to share buy backs. While there is no

formal discount policy the Board discusses the market factors

giving rise to any discount or premium, the long or short‑term

nature of those factors and the overall benefit to Shareholders

of any actions. The Board regularly considers, in comparison

to the sector and peers, the level of premium and discount of

the share price to the NAV and ways to enhance Shareholder

value including share issuance and buy backs.

These powers to issue and make market purchases of

ordinary shares will expire at the AGM to be held in

September 2022 and renewal of the authorities will be

sought at that AGM.

Environmental, Social and Governance

(“ESG”)

The Board is responsible for the corporate elements of

ESG and for ensuring ESG is factored into the investment

process. Details of how ESG is considered and where

corporate requirements are met is provided on pages 42

and 43.

Disclosure of information to the Auditors

The Directors who held office at the date of approval of

this Directors’ Report confirm that, so far as they are each

aware, there is no relevant audit information of which

the Company’s Auditors are unaware; and each Director

has taken all the steps that they ought to have taken as a

Director to make themselves aware of any relevant audit

information and to establish that the Company’s Auditors

are aware of that information.

Annual General Meeting

The AGM of the Company will be held on Thursday, 8

September 2022. Please see pages 138 and 139 for further

information on the resolutions to be proposed.

Tracey Lago, FCG

Director

Polar Capital Secretarial Services Limited

Corporate Secretary

19 July 2022

Major interests in ordinary shares

As at the year end of 30 April 2022, the Company had received notifications from the following shareholders in respect of

their own and their clients’ interests in the voting rights of the Company:

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Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Report on Corporate Governance

The Financial Reporting Council (FRC) has endorsed the

Association of Investment Companies (‘AIC’) Code of

Corporate Governance (the ‘AIC Code’) issued in February

2019, for AIC Member Companies to report against in

relation to their corporate governance provisions. The

AIC Code addresses the relevant principles set out in

the FRC UK Code as well as additional principles and

recommendations on issues that are specific to investment

trust companies.

The FRC has confirmed that by following the AIC

Code, boards of investment companies (including those

structured as investment trusts) will meet their obligations

under FCA Listing Rule 9.8.6.

The Board has considered the Principles and Provisions

of the AIC Code of Corporate Governance (AIC Code)

and considers that reporting against the Principles and

Provisions of the AIC Code provides more relevant

information to Shareholders.

As an externally managed investment trust many provisions

of the FRC UK Code are not relevant, including those

relating to the roles of chief executive, executive directors’

remuneration, statement of gas emissions and the

requirement to have an internal audit function. In addition,

there are provisions within the FRC UK Code which the

Board has chosen to depart from in favour of following

the AIC Code, such as the Company’s formal Chair Tenure

Policy which allows the Chair to continue in role in excess

of 9 years. See page 83 for more information.

Corporate Governance Framework

The following diagram demonstrates the governance framework within which the Company is managed. The Directors

recognise the importance of strong corporate governance and acknowledge that they are ultimately accountable to the

Company and its Shareholders and are therefore responsible for the good governance of the Company. The Company

has no employees and the Directors rely on third parties to administer the Company and to provide investment

management services.

Audit Committee

Management Engagement

Committee

Nomination

Committee

Remuneration

Committee

Shareholders

Board of Directors

Investment Manager

and AIFM

Third Party Service

Providers

Chair:

Sarah Bates

Members:

all independent NEDs

Chair:

Charlotta Ginman

Members:

all independent NEDs

with the exception of

the Chair of the Board

Chair:

Sarah Bates

Members:

all independent NEDs

Chairman:

Tim Cruttenden

Members:

all independent NEDs

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Overview

Manager’s

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Environmental, Social

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Financial

Statements

Shareholder

Information

Statement of Compliance and Application of

The AIC Code’s Principles

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. The

Board believes that the Company’s current practices are

consistent in all material respects in applying the principles

and complying with the provisions of the AIC Code.

The Board will continue to observe the principles and

recommendations set out in the AIC Code.

The AIC Code’s principles and provisions are structured

into five sections: Board leadership and purpose; division

of responsibilities; composition, succession and evaluation;

audit, risk and internal control; and remuneration. The

Company’s application of the principles and compliance

with the provisions of each section is detailed on the

following pages.

Board Leadership and Purpose (Principles

A‑E, Provisions 1‑7) Purpose

Purpose

The purpose of the Company is to provide a vehicle in

which investment is spread across a diversified portfolio

of technology companies which aim to deliver long

term capital growth to shareholders. The Investment

objective and policy seeks to achieve this purpose by

providing investors with global exposure to technology

companies and sets parameters to ensure the portfolio

is diversified and excessive risk is not undertaken. As

an externally managed investment trust, the culture of

the Company is consequential of the Board’s diversity,

decisions and behaviours which are aligned with the values

and behaviours of the Investment Manager, interaction

between the two and engagement with the Company’s

stakeholders. The Board monitors this culture, including the

policies and practices it implements to maintain it.

Board Leadership

In promoting the long‑term sustainable success of the

Company, the performance of the Company’s portfolio

is constantly reviewed in view of value generation for

Shareholders by achievement of the investment objective.

Investment management fees are reviewed periodically,

with the latest review being undertaken during this

financial year. Further detail is provided below in the Report

of the Management Engagement Committee on page 80.

The Company’s performance over the previous ten years

can be found on page 3 and how the Board views its duties

is considered in the s172 statement on pages 70 to 75. The

Board’s engagement with Shareholders and stakeholders

and how it contributes to strategic decision making is also

discussed within the s172 statement. Participation from

both groups is encouraged and the Board can be easily

contacted through the Company Secretary. The Company’s

service providers are subject to periodic visits and attend

service review and other meetings throughout the year,

ensuring effective engagement. Fulfilling the Investment

Objective and the Company’s performance is the focus of

the Board’s primary discussions in meetings, these are also

reported on at least monthly.

The Board’s effectiveness, including how it promotes the

long‑term sustainable success of the Company, is reviewed

annually and facilitated by an external evaluator every

three years. The evaluation process is managed by the

Nomination Committee and the outcomes from this year’s

external evaluation are detailed on page 84.

Role, responsibilities and committees of the board

The Board has created four standing committees for

which terms of reference are available on the Company’s

website. In addition to formal meetings, the Board also

holds ad hoc meetings or creates ad hoc committees (such

as the Black Swan Committee) to enact or approve policies

or actions agreed in principle by the whole Board. The

Chair of each committee attends the AGM to deal with

questions relating to the Financial Statements and their

specific mandates. The Board has delegated to each of

the Audit, Management Engagement, Remuneration and

Nomination committees specific remits for consideration

and recommendation, but the final responsibility in these

areas remains with the Board.

The number of formal meetings of the Board and its

committees held during the year ended 30 April 2022

and the attendance of individual Directors are shown

on page 80. The Board also holds monthly investment

update meetings to keep up to date on the Company’s

performance, review market effects of global issues such

as the invasion of Ukraine by Russia and put in place any

responses or practices deemed appropriate according

to the live market and industry situation and discuss

operational aspects with representatives of the Investment

Manager.

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Board &

Strategy Audit

Management

Engagement Remuneration Nomination 2021 AGM

Number of Meetings

Sarah Bates* 6 3 2 1 1 1

Tim Cruttenden 6 3 2 1 1 1

Charlotta Ginman 6 3 2 1 1 1

Charles Park 6 3 2 1 1 1

Stephen White 6 3 2 1 1 1

Catherine Cripps** 3 1 1

‑ ‑ ‑

Jane Pearce** 3 1 1 ‑ ‑ ‑

Service Provider Performance Evaluation

Process

Investment Manager

The Board has contractually delegated the day to day

management of the portfolio to Polar Capital LLP (the

‘Manager’ or ‘Investment Manager’), directly represented by

Ben Rogoff as Portfolio Manager. It is the Portfolio Manager’s

sole responsibility to take decisions as to the purchase

and sale of individual investments other than unquoted

investments where the Board is consulted. The Portfolio

Manager has responsibility for tactical gearing, asset allocation

and sector selection within the guidelines established and

regularly reviewed by the Board.

The Manager is responsible for providing or procuring

accountancy services, company secretarial and administrative

services. The Manager also ensures that all Directors receive

in a timely manner all relevant management, regulatory

and financial information. Representatives of the Manager

attend all Board meetings in a variety of capacities including

investment management, compliance, risk and marketing,

enabling the Directors to probe further on matters of concern

or seek clarification on certain issues.

The whole Board reviews the performance of the Manager

in all service disciplines and, at each Board meeting, the

Company’s performance against the market and a peer group

of funds with similar investment objectives is reviewed. The

investment team provided by the Manager, led by Ben Rogoff,

has long experience of investment in technology. In addition,

the Manager has other investment resources which support

the investment team and has experience in managing and

administering other investment trust companies.

The Board and Investment Manager work in a collaborative

manner and the Chair encourages open discussion and

debate.

Report of the Management Engagement

Committee

The Management Engagement Committee is chaired

by Sarah Bates and comprises all of the independent

Non‑executive Directors. During the financial year ended

30 April 2022 the Committee met twice to consider

the relationship with, and the services provided by the

Manager prior to making its recommendation to the Board

that the retention of the Manager would be in the best

interests of Shareholders.

The Committee is also responsible for keeping under review

the terms of the Investment Management Agreement (‘IMA’)

and the Manager’s appointment as AIFM. In connection

with the IMA review, the Committee considers the level

and structure of management and performance fee paid or

payable to the Manager, making relevant recommendations

to the Board when appropriate. As referenced in the

Strategic Report and detailed in the Notes to the Financial

Statements, the Board keeps the fee arrangements

with Polar Capital LLP under review and considers any

recommendations of the Committee. In January 2022, we

concluded our three‑yearly review of the base management

fee and agreed a new tiered base structure which became

effective from 1 May 2022. Further details on the new

Management fee structure can be found on pages 60 and

61 of the Strategic Report. There were no changes to the

performance fee arrangements which were last reviewed for

the financial year beginning 1 May 2019.

* Sarah Bates attends the Audit Committee by invitation.

** Appointed 6 September 2021.

Report on Corporate Governance continued

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

The Company uses a variety of performance measures

when monitoring the performance of the portfolio

managed by the Portfolio Manager. These measures are

considered to be Alternative Performance Measures under

the ESMA* guidelines and are described further on pages

134 to 136.

Other Suppliers

The Board also monitors directly or through the Investment

Manager the performance of its other key service providers.

• The Board has directly appointed HSBC Bank Plc as

Depositary and Stifel Nicolaus as Corporate Broker.

The Depositary reports quarterly and makes an annual

presentation to the Board. The Corporate Broker

provides reports to each Board meeting and joins the

Board on request to discuss markets and other issues.

• The Registrar, Equiniti Limited, is directly appointed

by the Board and the performance of its duties is

monitored by the Company Secretary.

• Other suppliers such as printers, website designers and

PR agents are monitored by the Company Secretary

and each supplier reports to the Board as and when

deemed necessary.

Report Of The Nomination Committee

The Report of the Nomination Committee can be found

under Composition, Succession and Evaluation on pages

83 to 85

. Due to the fully independent non‑executive

Board comprising seven Directors, the Board has deemed

it appropriate for the full Board to also fulfil the role of the

Nomination Committee.

Report Of The Audit Committee

Charlotta Ginman chairs the Audit Committee and all

independent Non‑executive Directors are members with the

exception of the Chair of the Board, who may be invited to

attend meetings as a guest. The Audit Committee Report is

set out on pages 87 to 91.

Report Of The Remuneration Committee

Tim Cruttenden as Senior Independent Director, chairs

the Remuneration Committee and all independent

Non‑executive Directors are members. The Report of the

Remuneration Committee can be found on pages 92 to 97.

*See Glossary on page 136

Division Of Responsibilities

(Principles F‑I, Provisions 8‑21)

The Chair

The Chair is responsible for the leadership of the Board and

works with the Company Secretary for setting the Board

meeting agendas and for balancing the issues presented

to each meeting. Open and honest debate is encouraged

at each Board meeting and the Chair keeps in touch with

both the Company Secretary and other Directors between

Board meetings. Sarah Bates was appointed to the Board

in 2011 and appointed as Chair of the Board in 2017. The

Chair was independent on appointment and continues to

meet the criteria for independence with the exception of

tenure in excess of 9 years which the Board has countered

by implementing a formal Chair tenure policy. The Board

does not consider that the length of a Director’s tenure,

in isolation, reduces his or her ability to act independently.

The Board believes that continuity and experience add

significantly to the strength of the Board. Please refer to

page 83 for more detail on the Chair Tenure Policy. The

Board considers the competence and independence of the

Directors on an annual basis. As reported in the Chair’s

Statement, Sarah Bates will retire from the Board at the

conclusion of the Company’s forthcoming AGM following

c.11 years’ service on the Board and will be succeeded by

Catherine Cripps subject to her election by Shareholders at

the Company’s AGM.

The Senior Independent Director (‘SID’)

The SID leads on matters relating to Chair succession,

evaluation and remuneration of the Chair and can be

contacted via the Registered Office of the Company.

Board Responsibilities

The Board currently comprises seven Non‑executive

Directors who are all considered to be independent. The

Board considers that its overall composition is adequate

for the effective governance of the Company. A formal

schedule of matters specifically reserved for decision by

the full Board has been defined and a procedure has been

adopted for individual Directors, in the furtherance of their

duties, to take independent professional advice at the

expense of the Company. No such advice has been sought

during the year.

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

The Directors have access to the advice and services of the

Company Secretary which is provided in compliance with

the IMA through Polar Capital Secretarial Services Limited.

An appointed representative, Tracey Lago, is responsible to

the Board for ensuring that Board procedures are followed,

and that applicable rules and regulations are complied

with. The Board and Investment Manager operate in a

supportive, co‑operative and open environment. The Board

acknowledges the change in PIRC’s voting guidelines

which recommend voting against the laying of the Annual

Report at an AGM where the Investment Manager provides

company secretarial services to the Company. The Board

believe the benefits gained by utilising the services of a

Company Secretary provided by the Investment Manager

far outweigh any perceived risk or conflicts in the view of

PIRC. The Company Secretary is provided to the Company

as an independent service and the appointed representative

acts as an officer of the Company and not an employee of

the Investment Manager when working with the Board and

the Company.

The Board has a schedule of regular meetings through

the year and meets at additional times as required. During

the year, Board and Board Committee meetings were held

to deal with the ongoing stewardship of the Company

and other matters including the setting and monitoring of

investment strategy and performance, review of the Financial

Statements, ESG and considering any Shareholder feedback.

The level of share price discount or premium to the net asset

value are kept under review along with matters affecting the

industry and the evaluation of third‑party service providers.

The Board was responsible for considering, reviewing and

implementing appropriate policies in respect of regulatory

changes that impacted the Company.

The Board continues to consider the Company’s strategy and

its relevance to the market and shareholders as a whole at

each Board meeting and at least one Board meeting per year

includes an in‑depth focus on strategy. Through this process

the Board supervises the management of the investment

portfolio, the work of the Investment Manager, the risks to

which the Company is exposed and their mitigation, and the

quality of services received by the Company.

The Nomination Committee seeks to balance the time

required, skills, knowledge and experience of individual

Directors to form an effective and efficient Board. Directors

may adopt external appointments in compliance with the

Board’s conflicts of interests policy which also considers the

time commitment of external appointments.

Delegated Responsibilities

The Board has delegated to each of the Audit,

Management Engagement, Remuneration and Nomination

committees specific remits detailed within the terms of

reference which are available on the Company’s website,

but the final responsibility in these areas remains with the

Board. The Chair of each committee attends the AGM

to deal with questions relating to the Annual Report

and Financial Statements. Attendance at each of these

meetings is disclosed above on page 80. Given the size

of the Board and that all the Directors of the Company

are Non‑executive, all members of the Board serve on

each Committee, with the exception of Sarah Bates who

is an invited guest at meetings of the Audit Committee.

This encourages unity, clear communication and prevents

duplication of discussion between the Board and the

Committees.

Directors’ Professional Development

When new Directors are appointed, they are offered an

induction course provided by the Manager. Directors are

welcome to visit the Manager at any time to receive an

update on any aspect of interest or a refresher on the

Manager’s operations both generally and those which are

specific to the Company. Directors are also provided on

a regular basis with key information on the Company’s

policies, regulatory and statutory obligations and internal

controls. Changes affecting Directors’ responsibilities are

advised to the Board as they arise. Directors also regularly

participate in professional and industry seminars and may

use the Manager’s online training resources to ensure they

maintain their knowledge. The programme of ‘deep‑dive’

internal controls reviews with suppliers serve to both

maintain the level of internal review undertaken with

suppliers but also to enhance the Directors’ understanding

of the services and any enhancements or changes made to

such.

Conflicts Of Interest

Directors have a duty to avoid a situation in which they

have a conflict of interest or a possible or perceived conflict

with the interests of the Company. The Company’s Articles

of Association contain provisions to permit the Board to

authorise conflicts or potential conflicts.

The Board has in place a policy to govern situations where

a potential conflict of interest may arise, for example

where a director is also a director of a company in which

the Company invests or may invest. Where a conflict

situation arises, the conflicted Director is excluded from any

discussions or decisions relating to the matter of conflict.

Report on Corporate Governance continued

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

No Director has declared the receipt of any benefits other

than their emoluments and associated expenses in their

capacity as a Director of the Company.

There were no contracts subsisting during or at the end of

the year in which a Director is or was interested and which

is or was significant in relation to the Company’s business

or to the Director since its introduction. All the Directors

were considered independent of the Investment Manager

and had no relationship or conflicts which were likely

to affect their judgement. The Directors’ interests in the

ordinary shares of the Company are set out on page 96 of

the Directors’ Remuneration Report.

Composition, succession and evaluation

(principles j‑l, provisions 22‑28)

Board composition

When considering Board structure and composition, the

Nomination Committee seeks to ensure the candidates

considered will enhance the Board and replace or refresh

desired skill sets.

Board diversity

In accordance with the Disclosure and Transparency

Rules, the Company is required to have a Diversity Policy;

however, as an investment company with no employees

and only an independent Board, the Board does not feel a

formal Diversity policy is required but instead, commits to

consider diversity at all stages of recruitment to the Board

and has worked hard to ensure the broadest range of

candidates are found when recruiting new directors.

When recruiting directors, the Nomination Committee

seeks to follow the diversity recommendations of the

Hampton‑Alexander and Parker Reviews, amongst other

factors; consideration is given to all forms of diversity in

order to balance both the expertise on, and the structure

of, the Board as a whole. The Committee notes the

requirements of the FCA Diversity and Inclusion Policy

published in April 2022 and, whilst the Board does meet

the gender requirements, being a minimum of 40% female

Board members and having at least one senior female

appointment, the current composition does not satisfy

the ethnicity requirements (at least one non‑white ethnic

minority Board member). The Board will continue to keep

this under consideration as part of the Board’s future

succession plans and will provide full disclosures in next

year’s annual report as required under the FCA’s policy.

Succession

The Board believes that retaining Directors with sufficient

experience of the Company, investment industry and

financial markets is of benefit to shareholders while

recognising that regular refreshment of approach is equally

of benefit and importance.

As reported in last year’s Annual Report, the sub‑committee

of the Nomination Committee carried out a phased

recruitment process commencing with the recruitment of a

new non‑executive director to succeed Charlotta Ginman

as Audit Chair in 2024. In order to encourage all relevant

candidates, including those with little or no board level

experience, the sub‑committee initiated the process early in

order to provide a longer hand‑over process. The Company

engaged Nurole to assist with the recruitment search and to

identify suitably qualified external candidates and a formal

recruitment process was undertaken which culminated in

the appointment of Jane Pearce as Audit Chair Elect and

Catherine Cripps as Non‑executive Directors on 6 September

2021. During the recruitment process, a long list of suitably

qualified candidates was considered followed by interviews

of shortlisted candidates with the Board. Both Jane and

Catherine will seek election at the AGM on 8 September

2022 in accordance with the Articles of Association.

On 27 May 2022, the Board announced that, subject to

shareholder election, Catherine Cripps would succeed

Sarah Bates as Chair of the Board following Sarah’s

retirement from the Board at the conclusion of the AGM in

September 2022.

Chair Tenure Policy

It is the Board’s view that in the circumstances of an

investment company, where corporate knowledge and

continuity can add value, there may be merit in appointing

one of its members to the Chair. In addition, there may

be circumstances where succession plans are disrupted

such that an internal candidate with some years’ existing

experience is the most appropriate candidate for the Chair.

In other circumstances an external candidate may be more

appropriate. The Board’s policy is that the maximum tenure

for the Chair is up to 12 years (where up to nine years of

this could be served as a Non‑executive Director).

The Board believes that, unless assuming the role of Chair

or there being unforeseen circumstances, Directors will retire

from the Board at the AGM following nine years of service.

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Performance and re-election

The Board formally reviews the performance of the

Directors each year and considers any recommendations

of the Nomination Committee, the deliberations of which

take place in the absence of any Board nominee. Directors

are required to stand for election by Shareholders at the

first AGM following their appointment to the Board and

each Director will stand for re‑election annually.

The rationales for re‑election of each Director are included

in the Board of Directors biographies on pages 10 and 11

and the Chair’s letter which accompanies the Notice of

Annual General Meeting at which the re‑election resolution

is being put to Shareholders.

Report of the Nomination Committee

Sarah Bates, as Chair of the Board, chairs the Nomination

Committee and all Directors are members. The Committee

meets at least annually and is responsible to the Board

for the size and structure of the Board as well as for

succession planning and the tenure policies for the Chair

and Directors.

When considering Board structure and composition, the

Committee seeks to ensure the candidates considered will

enhance the Board and replace or refresh desired skill sets.

The Board has a policy to consider diversity and has worked

hard to ensure the broadest range of candidates are found

when recruiting new directors.

Meetings and Work Undertaken

During the financial year ended 30 April 2022 the

Nomination Committee met once and considered the

structure, size and composition of the Board. It was agreed

that all relevant targets were being met in relation to

experience and expertise on the Board. As noted above

the sub‑committee appointed in 2019 continued in effect

through the year under review.

Evaluation

The Nomination Committee is also responsible for

coordinating the evaluation of the Board and considering

the conclusions from that review. Evaluation of the Board,

individual Directors and the committees is undertaken

annually. As recommended by the AIC Code, being three

years since the last external evaluation took place in 2019,

the Evaluation for 2022 was conducted by Stephenson

Executive Search, an independent external Board Evaluator.

The evaluation process involved each Director, the Portfolio

Manager and the Company Secretary having individual

interviews with the Evaluator following which a report was

provided to the Chair and thereafter the whole Board.

The key points that the external evaluation highlighted were:

• The Board was noted as being particularly strong in

investment management and financial services with

emphasis on technology and corporate governance.

The Directors were noted as having substantial public

company board experience and, four of the Directors

had significant accountancy expertise.

• The Board size was noted as large with a

recommendation that this could be reduced; the Board

have addressed this with the succession of the Chair

being an internal appointment with no replacement to

immediately be recruited. The recommendations of the

external evaluator were considered when determining

the succession plan.

• It was highlighted that the Board committees work well

and are effective in their requirements. It was further

highlighted that the Board works in a harmonious and

collegiate manner under a well organised and well-

respected Chair. Relationships with the Manager were

positive with high regard being given to the Portfolio

Manager and noting the conscientious and effective

service provided by the Company Secretary.

• Finally, the Evaluator noted that remuneration levels

of investment trust directors had increased in line with

increased fiduciary duties and regulatory responsibility;

the Evaluator recommended the Board consider the

remuneration levels of the Directors and particularly the

Chair which was significantly below market rate.

The evaluation process was also used by the Committee to

carefully review and rigorously assess the contribution of

each Director and their independence. The performance

review of the Chair was also carried out by the Committee,

led by the SID. The Committee has determined that each

Director standing for re‑election continued to offer relevant

experience, effectively contributed to the operation of

the Board and had demonstrated independent views on

a range of subjects. The Committee is satisfied that the

structure, mix of skills and operation of the Board continue

to be effective and relevant for the Company.

Each year, the evaluation outcomes are reviewed by the

Board as a whole and, should it be deemed necessary,

additional reporting measures or operations are put in place.

The evaluation process considers the balance of skills,

experience, knowledge and independence on the Board.

Consideration is also given to its diversity and other

factors which contribute to the effectiveness of the Board,

including how the Directors interact as a unit.

Report on Corporate Governance continued

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

The Company has no employees and the Board is currently

comprised of four female and three male Non‑executive

Directors. When new appointments are made to the Board,

the Board will continue to have regard to the benefits of

diversity, including gender and ethnicity, when seeking to

make any such appointments.

External evaluations have been completed every three years

whilst the Company has been a constituent of the FTSE 350.

Audit, Risk And Internal Control (Principles

M‑O, Provisions 29‑36)

Internal Controls

The Board has overall responsibility for the Company’s

system of internal control, for reviewing its effectiveness

and ensuring that risk management and control process are

embedded in the day to day operations which are operated

or overseen by the Investment Manager. The Board,

through the Audit Committee, has established a process

for identifying, evaluating, monitoring and reviewing,

and managing the principal risks faced by the Company.

This is documented through the use of a Risk Map which

is subject to regular review by the Audit Committee and

accords with the Guidance on Risk Management, Internal

Control and Related Financial and Business Reporting

issued in September 2014 by the Financial Reporting

Council. As the Company has no employees and its

operational functions are carried out by third parties, the

Audit Committee does not consider it necessary for the

Company to establish its own internal audit function.

Contracts with suppliers are entered into after full and

proper consideration by the Board of the quality and

cost of the services offered, including the control systems

in operation in so far as they relate to the affairs of the

Company.

The Investment Manager has an internal control framework

to provide reasonable but not absolute assurance on the

effectiveness of the internal controls operated on behalf of

its clients. The Manager is authorised and regulated by the

Financial Conduct Authority and its compliance department

monitors the Company’s compliance with the various rules

and regulations applicable to it including the FCA’s rules,

AIFMD, MiFID II and GDPR, for example.

The Audit Committee reviews and reports to the Board

on the operation of the controls which are embedded

within the business of the Manager and other third‑party

suppliers. Controls and risk management covering the risks

identified, including financial, operational, compliance,

safeguarding of assets, maintenance of proper accounting

records and the publication of reliable financial information

are monitored by a series of regular reports from the

Investment Manager including risks not directly the

responsibility of the Investment Manager.

Operation of Internal Controls

The process was active throughout the year and up to the

date of approval of this Annual Report. However, such a

system is designed to manage rather than eliminate risks

of failure to achieve the Company’s business objectives and

can only provide reasonable and not absolute assurance

against material misstatement or loss.

The Board, in assessing the effectiveness of the Company’s

internal controls has, through the Audit Committee,

received formal reports on the policies and procedures in

operation, including the policies put in place in connection

with COVID‑19. The reports also include results of tests,

with details of any known internal control failures from

the Investment Manager for its financial year ended

December 2021. For the year under review, no material

errors or control failures had been identified. The Manager

has subsequently provided confirmation that there has

been no material change to the control environment up to

the date of signing these Financial Statements.

The Board also considers reports provided by other third‑

party suppliers and ad hoc reports from the Investment

Manager are supplied to the Board as required.

The Manager has delegated the provision of accounting,

portfolio valuation and trade processing to HSBC Securities

Services but remains responsible to the Company for these

functions and provides the Board with information on

these services.

Based on the work of the Audit Committee and the

reviews of the reports received by the Audit Committee on

behalf of the Board, the Board has concluded that there

were no material control failures during the year and up to

the date of this report.

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Report on Corporate Governance continued

Remuneration (Principles P‑R, Provisions 37‑42)

The Remuneration Committee is Chaired by Tim Cruttenden

and all independent Non‑executive Directors are members

of the Committee. The Company’s remuneration policy,

approved by Shareholders at the AGM in September 2020, is

detailed within the Report of the Remuneration Committee

on page 92 and explains how the policy is designed to

support strategy and promote long‑term sustainable success.

The Committee meets at least annually and is responsible

to the Board for consideration and recommendations in

relation to directors’ remuneration. Consideration is given

to peer investment trust companies remuneration levels,

industry guidance, the work undertaken by the Board in the

prior year and plans for the year ahead. Remuneration levels

are set to attract and retain the correct calibre of individual

to the Board. Further details are provided in the Directors’

Remuneration Report on pages 92 and 97. The Directors

are excluded from discussions in relation to their own

remuneration.

By order of the Board

Tracey Lago, FCG

Polar Capital Secretarial Services Limited

Company Secretary

19 July 2022

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Audit Committee Report

Introduction from The Chair

I am pleased to present, as Chair of the Audit Committee,

my seventh annual report to Shareholders. As reported in

the Chair’s statement, as part of phase one of the Board’s

succession plans, we went through a recruitment process

during the year under review to recruit an Audit Chair Elect

to succeed me when I reach nine years’ service in 2024.

Following this process, Jane Pearce joined the Board on 6

September 2021 as Audit Chair Elect. Jane and I will work

together to ensure a smooth and orderly handover process

ahead of my retirement from the Board in 2024.

Committee Composition

The Committee comprises all of the independent Non‑

executive Directors; with the exception of the Chair of the

Board who attends Committee meetings by invitation.

The Audit Committee, as a whole, has competence

relevant to the sector in which the Company operates.

Committee members have a range of financial, investment

and other relevant sector experience, including fund

management in both listed and private equity funds. The

requirement for at least one member of the Committee to

have recent and relevant financial experience is satisfied

by various members of the Committee who are Chartered

Accountants and some of whom also chair Audit

Committees for other public companies. More information

about the Committee members can be found in the

Directors’ biographies on pages 10 and 11.

During the year the Audit Committee met three times,

with all members of the Committee attending each

meeting with the exception of Jane Pearce and Catherine

Cripps who officially joined the Committee on 6

September 2021 having observed as guests the Committee

meeting held on 1 September 2021. The Committee has

primarily functioned remotely for the financial year due

to the restrictions in place in relation to the COVID‑19

pandemic. Zoom videoconferencing and online Diligent

Charlotta Ginman

Chair of the Audit Committee

Boardbooks were utilised to assist with the smooth running

of meetings. I am pleased to confirm that this has worked

well, all Committee members have been able to operate

as effectively as before and that there has been no break

in service from external providers. Since the year end,

the Committee is pleased to have returned to in person

meetings.

Committee Role and Responsibilities

The Committee has written terms of reference which

clearly define its responsibilities and duties. The terms of

reference which are reviewed annually by the Committee

and approved by the Board, are available to view on the

Company’s website, www.polarcapitaltechnologytrust.co.uk.

Significant issues considered by the Audit

Committee during The Year

Geopolitical events

This time last year we were reporting on the effect of the

COVID‑19 pandemic on the portfolio and market disruption

in general. Thankfully we now appear to be seeing the last

signs of COVID‑19 as a pandemic and the first signs of it

becoming something that we should all continue to be

aware of and live with as carefully as we can.

Focus has shifted as we now watch the impact of the

Russian war on Ukraine as well as the effects of inflation.

The consequences of these events can be seen globally and

the associated market volatility has had an impact on the

Company’s portfolio performance. Further details can be

found in the Investment Manger’s Report on pages 16 to

27. The Committee will continue to monitor the impact of

these events which appear in our assessment of risk and

the ability to achieve the Company’s investment objective.

The Committee regularly reviews the operational resilience

of its various service providers in connection with the

mitigation of the business risks posed by geopolitical

events. Many of the external service providers have

continued to utilise the hybrid working model after such

a successful business transition to fully remote working

during the pandemic. The Committee is pleased to confirm

that all service providers have continued to demonstrate

their ability to provide services to the expected level, with

no breaks in the services provided or significant operational

failures. We have continued to stress test our assumptions

when considering the Company’s ability to continue as a

going concern and making a statement in regard to the

Company’s ongoing viability.

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Audit Regulation

Since my last report to you, the Committee has not this

year had to consider any new material regulations.

As reported last year, the Committee is aware of the

extensive proposals outlined by the Department of

Business, Enterprise, Industry and Skills consultation

(“BEIS”) which seek to strengthen the UK’s audit and

corporate governance framework. The outcomes of the

consultation process were published on 31 May 2022.

The Committee will therefore review the detail of and

implement any primary legislation arising from the reforms

and consider any suggested guidance from BEIS for good

practice. The Committee will report on any changes made

in the next Annual Report.

Significant Reporting Matters

Annual Report and Financial Statements

(the ‘Annual Report’)

The Board has asked the Committee to once again confirm

that in its opinion the Annual Report as a whole can be

taken as fair, balanced and understandable and provides

the information necessary for Shareholders to assess the

Company’s financial position, performance, business

model and strategy. In doing so the Committee has given

consideration to:

• the ongoing comprehensive control framework around

the production of the Annual Report, including the

verification processes in place to deal with the factual

content;

• the extensive levels of review that are undertaken in the

production process, by the Investment Manager and

the Committee;

• the internal control environment as operated by the

Investment Manager and other suppliers including any

checks and balances within those systems; and

• the unqualified audit report from the auditors

confirming their work based on substantive testing of

the financial statements.

As a result of the work performed, the Committee has

concluded that the Annual Report for the year ended

30 April 2022, taken as a whole, is fair, balanced and

understandable and provides the information necessary

for Shareholders to assess the Company’s performance,

business model and strategy, and this has been

recommended to the Board.

Valuation of Investments

During the year the Committee once again reviewed the

robustness of the Investment Manager’s processes in place

for recording investment transactions as well as ensuring

the valuation of assets is carried out in accordance with the

adopted accounting policies and as laid out in Note 2 (f). No

unquoted valuations were held at the Company’s year end.

Existence and Ownership of Investments

During the year the Committee received reassuring quarterly

reports from the Depositary on its work and safe keeping of

the Company’s investments, in accordance with the AIFM

Regulations. No errors have been reported during the year.

Other Reporting Matters

Accounting Policies

During the year the Committee ensured that the

accounting policies as set out on pages 110 to 114 were

applied consistently throughout the year. In light of there

being no unusual transactions during the year or other

possible reasons, there were no changes to currently

adopted policies. There were no new IFRSs or amendments

to IFRSs applicable to the current year which had any

significant impact on the Company’s Financial Statements.

European Single Electronic Format (ESEF)

With effect from this financial year (30 April 2022), the

Company is required under ESEF regulations to prepare and

file accounts in xHTML format. As the Company prepares

single accounts, it is exempt from filing consolidated

accounts with full ESEF tagging.

Going Concern

The Audit Committee, at the request of the Board,

considered the ability of the Company to adopt the

Going Concern basis for the preparation of the Financial

Statements. Having reviewed the Company’s financial

position, the Committee is satisfied that it is appropriate

for the Board to prepare the Financial Statements for the

year ended 30 April 2022 on a going concern basis.

The Committee’s review of the Company’s financial

position included consideration of the current cash

and debt ratios of the Company; the ability to repay

outstanding bank facilities with 17% cash equivalents

readily available to the Company as at 30 April 2022; the

diversification of the portfolio; and the analysis of portfolio

liquidity, which estimated liquidation of 99.8% of the

portfolio within seven trading days.

Audit Committee Report continued

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

The Committee is mindful of the uncertainty surrounding

inflation, recession and rising interest rates coupled with

the invasion of Ukraine by Russia and the longer term

impact this may have on the market and global economy.

As noted above, these have been included on the

Company’s risk register and will continue to be monitored.

The Committee also considered the Company’s financial

performance during the year under review and concluded

that: given the lack of impact on dividend income received

and there being no exposure to unquoted assets at the

year‑end, this had not affected the Company’s ability to

continue as a going concern and is not expected to have

a significant financial impact on the Company during the

next 12 months.

Viability Statement

The Committee considered the Company’s longer‑term

viability, with reference to the FRC’s Guidance on Risk

Management, Internal Control and Related Financial and

Business Reporting, and concluded that the Board may

state its reasonable expectation that the Company will be

able to continue in operation and meet its liabilities as they

fall due over the period of their assessment.

The assessment took account of the Company’s current

financial position, its cash flows and its liquidity position,

the principal risks as set out on pages 64 and 69 and the

Committee’s assessment of any material uncertainties

and events that might cast significant doubt upon the

Company’s ability to continue as a going concern.

The assessment was then subject to a sensitivity analysis

projected over a five‑year period, which tested a number

of the key assumptions including income and expenditure

underlying the forecasts both individually and in aggregate

for normal, favourable and stressed conditions. In

conducting the stress tests, the Company’s principal risks

such as failure to achieve the investment objective, global

geopolitical risk, black swan events and IT Failure and cyber

risk were grouped into three buckets according to their

post mitigation scores and, where possible, material values

were attached to the key risks materialising and evaluated

to assess the effect of this on the Company’s ability to

continue as a going concern and its viability over a five‑

year period. The Committee recommended to the Board

that the Company’s longer term prospects to continue its

operations and meet its expenses and liabilities as they

fall due over the next five years to 30 April 2027 were

reasonable. See pages 62 and 63 for further details.

Taxation and Expenses

The Committee sought to ensure that the Company

was compliant with section 1158 of the Corporation Tax

Act 2010 throughout the year, by seeking and receiving

confirmation that the Company continues to meet the

eligibility conditions. In the year under review, Grant

Thornton LLP provided services to the Company as tax

agents in Taiwan and Arrk Solutions for the iXBRL tagging

of the Company’s accounts for submission to HM Revenue

and Customs.

At the Audit Committee meeting in May 2022, the

Committee also considered the allocation of expenses

between capital and income and agreed to continue with

the Company’s stated accounting policy of allocating the

indirect costs to revenue and performance fees to capital,

in line with market practice and permitted by the AIC SORP

(Statement of Recommended Practice).

Interim Report and Financial Statements

The Committee considered and reviewed the Interim

Report and Financial Statements, which are not audited

or reviewed by the external Auditors, to ensure that they

remained consistent with the accounting policies used in

the annual Financial Statements.

Internal Controls and Risk Management

The Board has ultimate responsibility for the management

of risk throughout the Company and has asked the Audit

Committee to assist in maintaining an effective internal

control environment. The Company maintains a Risk Map

which seeks to identify, monitor and control principal risks

as well as identifying emerging risks. The Committee has

continued to review the Risk Map to identify the principal

and emerging risks facing the business including those that

might threaten its business model, future performance,

liquidity and reputation. Alongside this, the Committee

considered the likelihood, impact, mitigating factors and

controls to reduce the impact of such risks as described on

pages 64 and 69. This process was carried out throughout

the year and is the means by which the Risk Map is

monitored and kept relevant by reflecting any changes to

the source and level of risks facing the Company.

The Audit Committee has met to discuss and assess

emerging risks and where appropriate recommends

changes to the Risk Map, as well as thinking of different

ways of illustrating the level of risk faced by the business

through the use of heat maps, for example. The

Committee will actively continue to monitor the system

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

of internal controls through the regular review of the Risk

Map and the internal control environment in order to

provide assurance that they operate as intended and that

the Risk Map reflects developing and new risks.

As part of the year end process the Audit Committee

undertook a review of the effectiveness of the system

of internal controls taking into account any issues that

had arisen during the course of the year. The Committee

acknowledges that the Company is reliant on the systems

utilised by external suppliers. Representatives of the

Investment Manager reported to the Committee on the

system of internal controls in place for the performance

of the Investment Manager’s duties under the Investment

Management Agreement. Presentations and internal

control reports were also received from other key

suppliers on the quality and effectiveness of the services

provided to the Company. In addition, employees of the

Manager conducted a virtual due diligence site visit with

HSBC where they received thorough presentations from

representatives covering the work of the Operations, Risk

Administration and Accounting Teams, in addition to the

Custodian and Depositary. No matters of concern with

any areas of service were raised at any of the meetings

or on reviewing the internal controls reports. Deep dive

review meetings, which the Committee completed in

financial years prior to the COVID‑19 pandemic have been

reintroduced and the schedule of meetings will commence

in mid‑2022.

The Audit Committee has reviewed the Investment

Manager’s policies on whistleblowing, anti‑bribery and the

Modern Slavery Act and is satisfied that the Investment

Manager has controls and monitoring processes to

implement their policies across the main contractors which

supply goods and services to the Investment Manager

and the Company. The Company has adopted an Anti‑

Corruption policy which incorporates Anti‑Bribery, Anti‑

Slavery and the Corporate Criminal Offence of Tax Evasion.

In addition to this the Company has issued a data privacy

notice in relation to the General Data Protection Regulation.

All such policies can be found on the Company’s website

www.polarcapitaltechnologytrust.co.uk.

The Audit Committee has also considered the Investment

Manager’s policy and controls surrounding the use of

brokerage commissions generated from transactions

in the Company’s portfolio. There were no issues of

concern arising from the reviews of the internal controls

environment the Company relied upon during the course

of the year ended 30 April 2022.

External Auditor

The Committee, on behalf of the Board, is responsible

for overseeing the relationship with the external auditor,

including ensuring the quality and robustness of the audit.

Appointment and Tenure

Following a formal and competitive tender process, KPMG

LLP (‘KPMG’) was appointed as the Company’s external

auditor with their first year as the Company’s auditor

being the year ended 30 April 2018. Mr John Waterson

was the Audit Partner allocated to the Company by KPMG

on engagement and has served as Audit Partner until

completion of the current financial year’s audit being the

year ending in April 2022, being five full audit years; he will

be succeeded by Mr Philip Merchant who will complete his

first audit with the Company for the year ended 30 April

2023. In accordance with current legislation, the Company

is required to tender the external audit no later than for

the year ending 30 April 2028, after ten full audit years.

However, the Committee keeps the external audit function

under review and may choose to undertake an audit tender

process earlier than prescribed should it be deemed in the

best interests of shareholders so to do. The re‑appointment

of KPMG as Auditor to the Company will be submitted for

Shareholder approval at the AGM to be held in September

2022, together with a separate Resolution to authorise the

Directors to set the remuneration of the Auditor.

The Company has complied throughout the year ended

30 April 2022 with the provisions of the Statutory Audit

Services Order 2014, issued by the Competition and

Markets Authority (‘CMA Order’). There are no contractual

obligations restricting the choice of external auditor. The

external auditor is invited to all Committee meetings and

receives copies of all relevant papers and meeting minutes.

The Audit

The scope of the annual external audit was agreed in

advance with the Committee with a focus on areas of audit

risk and the appropriate level of audit materiality. For the

financial year 2021, COVID‑19 led to an increased level of

scrutiny of the Company’s going concern and longer‑term

viability testing by the Auditors. As detailed above the

Company has continued to utilise enhanced stress testing

as a matter of best practice. The Auditors reported to the

Audit Committee on the results of the audit work and

highlighted any issues which were significant or material

in the context of the Financial Statements. There were

no adverse matters brought to the Audit Committee’s

attention in respect of the financial year 2022 audit which

were material or significant or which should be brought to

Shareholders’ attention.

Audit Committee Report continued

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Effectiveness

The Audit Committee monitored and evaluated the

effectiveness of the Auditors under the terms of their

appointment based on an assessment of their performance,

qualification, knowledge, expertise and resources. The

Auditors’ effectiveness was also considered along with

other factors such as audit planning and interpretations of

accounting standards. This evaluation has been carried out

throughout the year by meetings held with the Auditors,

by review of the audit process and by comments from the

Investment Manager and others involved in the audit process.

The Auditors were provided with an opportunity to address

the Committee and independently, the Audit Chair, without

the Investment Manager present to raise any concerns

or discuss any matters relating to the audit work and the

cooperation of the Investment Manager and others in

providing any information and the quality of that information

including the timeliness in responding to audit requests. No

concerns were raised by the Auditors or the Audit Committee

in relation to the service provided by the Investment Manager

or any other third‑party service provider.

Independence

In order to fulfil the Committee’s responsibility regarding

the independence of the Auditor, the Committee reviewed

the senior staffing for the audit, the Auditors arrangements

concerning any conflicts of interest, the extent of any non‑

audit services, the Auditors independence statement and

any other issues that may affect the Auditors independence.

Subsequent to the review the Audit Committee concluded

that the Auditor remained independent and continued to act

in an independent manner.

Fees

As part of the year end audit, the Committee considered

and re‑confirmed the level of fees pre‑agreed and payable

to the Auditor bearing in mind the nature of the audit

and the quality of services received. The annual audit fee

for the year was £45,000 (2021: £40,000 plus an overrun

fee of £3,500 for the financial year 2020 audit which was

recognised in the financial year 2021). The fee represents

a further increase on the prior year to reflect the level of

audit work required to perform a robust quality audit.

Increased resource is being committed by audit firms,

particularly in terms of partner level involvement. The

year‑on‑year increase, whilst unwelcome, is in line with

increases experienced across the investment trust sector

in the current and recent years. Audit firms generally have

increased the fees that they charge to investment trusts in

order to reflect the increased level of work that they have

been required to perform, and the increased risk that they

perceive, in the context of more rigorous levels of audit

scrutiny and regulation.

In addition to the regular audit fee for the 2021 financial

year, overrun fees were incurred in the completion of the

2021 audit and during the financial year ended 2022, of

£12,000 and £10,000 respectively. The company recharged

these to the investment manager given the nature of the

additional audit work undertaken.

The Audit Committee is conscious of the increased external

audit fees which continue to be proposed across the

industry in connection with increased levels of liability and

regulatory risk. The Audit Committee therefore continues

to keep fee levels under close review and considers that

any fee increases must be justified, particularly given the

impact of technology reducing audit man hours, the very

high proportion of the Company’s balances which can be

verified easily by reference to independent sources and

the low incidence of management estimates within the

accounts.

Non-Audit Services

The Audit Committee’s policy on the provision of non‑audit

services by the Auditors is available on the Company’s

website. The policy is produced in line with the FRC Ethical

Standards (updated in March 2020) and any non‑audit

services are required to be pre‑approved by the Audit

Committee. KPMG LLP were appointed to undertake their

first annual audit for the year ended 30 April 2018 and

have not provided any non‑audit services to the Company

in the year under review, or in the previous year.

Effectiveness of The Committee

As a member of the FTSE350, the Company is required

to engage in an external Board evaluation at least every

three years. Such an external evaluation was last carried

out during the financial year under review by Stephenson

Executive Search

, an independent third‑party specialising

in board evaluation. I am delighted to confirm that the

findings of the evaluation processes were positive in all

aspects and the Audit Committee was highly rated. The

Committee continually seeks to improve its effectiveness

where possible and follow best practice guidance from the

FRC and other relevant legislative and industry bodies.

Charlotta Ginman, FCA

Chair of the Audit Committee

19 July 2022

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Directors’ Remuneration Report

Introduction

This report is submitted in accordance with the Large and

Medium‑Sized Companies and Groups (Accounts and

Reports) (Amendment) Regulation 2013 (the ‘Regulations’),

The Companies (Directors’ Remuneration Policy and Directors’

Remuneration Report) Regulations 2019 and the Listing Rules

of the Financial Conduct Authority in respect of the year

ended 30 April 2022. It has been audited where indicated.

Chairman’s Report

The Remuneration Committee (“the Committee”) comprises

all the independent Non‑executive Directors and has

written terms of reference, which are available to view on

the Company’s website, www.polarcapitaltechnologytrust.

co.uk. The terms of reference clearly define the Committee’s

responsibilities and duties.

The Committee meets at least annually and is responsible

for recommending the framework for the remuneration

of Directors, including the ongoing appropriateness of

the Remuneration Policy and the individual remuneration

of Directors based on their contributions. The Committee

aims to pay fees relative to other companies in the

sector commensurate with the responsibilities and time

commitments of the Board. On at least an annual basis

and within the current year, we considered the time and

commitment required of the Directors and of the Chair of

the Board. We considered comparative fees, inflation and

the need to attract and retain capable people to the role,

as well as the requirements to avoid conflicts and time

constraints.

Remuneration Policy

Shareholders approved the current Directors’ Remuneration

Policy by way of an ordinary resolution passed at the AGM

in September 2020. Such Policy came into effect on 1 May

2021 and shall remain in force until 30 April 2024.

Tim Cruttenden

Independent Non‑executive

Director

Company’s Policy on Directors’ Remuneration effective until 30 April 2024

How policy supports strategy and

promotes long term sustainable success

Operation Opportunity

The Board consists entirely of

independent Non‑executive

Directors, who meet regularly to deal

with the Company’s affairs.

The intention is that fees payable

reflect the time spent by them

individually and collectively, be

of a level appropriate to their

responsibilities and be in line with

market practice, sufficient to enable

candidates of high calibre to be

recruited and retained.

Non‑executive Directors have formal

letters of appointment and their

remuneration is determined by the

Board within the limits set by the

Articles of Association.

Fees are reviewed annually but the

review will not necessarily result in any

change to rates. No Director is involved

in deciding their own remuneration

level.

Non‑executive Directors are appointed

initially for a three‑year term, subject to

annual re‑election by Shareholders in

accordance with the AIC Code.

All fees are paid by credit transfer

monthly in arrears, to the Director

concerned.

The Company’s policy in relation to fees is to offer only

a fixed basic fee in line with equivalent roles within the

sector with additional fees for the roles of Chair of the

Company, Chair of the Audit Committee and SID.

In accordance with the Company’s Articles of

Association, any Director who performs, or undertakes

to perform, services which the Directors consider go

far beyond the ordinary duties of a Director, may be

paid such additional remuneration (whether by way of

fixed sum, bonus, commission, participation in profits or

otherwise) as the Directors may determine.

In such instances, when the Remuneration Committee

believes that there have been exceptional circumstances

and a Director’s services have been substantially

beyond what is typically expected, the Remuneration

Committee will authorise a payment to a Director and

provide details of the events, duties and responsibilities

that gave rise to such within the Remuneration

Implementation Report.

As the Company is an investment

trust and all Directors are Non‑

executive, it is considered

inappropriate to have any long‑term

incentive schemes or benefits.

Non‑executive Directors do not

receive any bonus, nor do they

participate in any long‑term incentive

schemes or pension schemes.

There are no performance conditions relating to Non‑

executive Directors fees.

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

As per previous AGM resolutions shareholders will be asked to consider a non‑binding vote for the approval of the

Directors’ Remuneration Implementation Report which reports on how the current policy has operated during the year to

30 April 2022. The results of the Shareholder vote on the Directors’ Implementation Report and on Directors’ Policy Report

submitted to the 2021 Annual General Meeting were as follows:

Implementation Report

for the Year ended

30 April 2021

Remuneration

Policy for the three

years ending on

30 April 2024

Votes for 99.91% of votes cast 99.94% of votes cast

Votes against 0.09% of votes cast 0.06% of votes cast

Votes withheld 51,038 1,379,929

2021/22 Fees Paid

In the year under review the Directors’ fees were paid

at the following annual rates, the Chair £50,000; other

Directors £31,500 with the Chair of the Audit Committee

receiving an extra £7,000 and the Senior Independent

Director receiving an extra £4,200 for performing such

additional roles.

Fee Review

The Committee carries out an annual review of fees paid

to the Directors. While such a review will not necessarily

result in any change to the rates, the Committee believes

that it is important that these reviews happen annually. The

Committee, when considering fees, favours modest annual

increases rather than larger increases awarded at longer

intervals.

In May 2022, the Committee carried out a review of

Directors’ remuneration which included a selection of peer

comparisons and external reports including the Nurole

Compensation Report and the Trust Associates 2021 Fee

Review. Consideration was also given to the external Board

Evaluation results and the increased level of input and

responsibility the members of the Board have in relation to

enhanced regulations and requirements. As a result, the

Committee decided to implement the following increases

with effect from 1 May 2022:

Chair

The annual fee for the Chair has been increased from to

£50,000 to £55,000 pa. This is an increase of 10%. Taking

into account the Chair fees paid by Investment Trusts

of a similar size, the Committee reflected that the rate

could be increased further but would consider such in the

2023

review.

Directors

The annual fee for a Non‑executive Director has been

increased from £31,500 to £33,000 pa, representing a

4.7% increase. Directors’ fees for the year ending 30 April

2023, in respect of the current board members, after

taking account of the retirement of the current Chair, are

expected to total £243,000. The maximum aggregate

amount provided for in the Company’s Articles of

Association (the Articles), Article 99 is £300,000.

The Board remains committed to ongoing Shareholder

dialogue and any views expressed by Shareholders on

the fees being paid to Directors would be taken into

consideration by the Remuneration Committee in the

annual review of Directors’ fees. No such views have been

received from Shareholders.

The Directors did not participate in discussions on the fees

applicable to their own roles.

Senior Independent Director and Chair of

Audit Committee

The supplements for the Senior Independent Director and

Chair of the Audit Committee remained unchanged at

£4,200 and £7,000 respectively.

Other Fees and Incentives

As the Company is an investment trust it has no executive

Directors or employees and as all the Directors are Non‑

executive, it is considered inappropriate to have any long

term incentive schemes. The fees are not specifically

related to the Directors’ performance, either individually or

collectively.

The Directors are entitled to be reimbursed for reasonable

expenses incurred by them in connection with the

performance of their duties and attendance at Board and

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

General Meetings. In certain circumstances, under HMRC

rules, travel and other out of pocket expenses reimbursed

to the Directors may be considered as taxable benefits.

The taxable expenses comprise of expenses incurred by

the Directors attending Board and other meetings held in

London. Such expenses are paid to the Directors grossed

up for taxation.

Letters of Appointment

In accordance with recommended practice, the Directors do

not have service agreements but instead each Director has

received a letter setting out the terms of their appointment

under which they provide their services to the Company. A

Director may resign by giving one month’s notice in writing

to the Board at any time. The Directors are not entitled to

payment for loss of office.

A sample equivalent to the Directors’ Letter of

Appointment is available on the Company’s website.

In accordance with the Articles, any new Director is

required to stand for election at the first AGM following

their appointment, and in accordance with good corporate

governance practice all Directors stand for re‑election by

shareholders every year thereafter.

Directors’ And Officers’ Liability Insurance /

Indemnity

Directors’ and officers’ liability insurance is held by the

Company in respect of the Directors. The Company has, to

the extent permitted by law and the Company’s Articles,

provided each Director with a Deed of Indemnity which,

subject to the provisions of the Articles and s234 of the

Companies Act 2006 ‘qualifying third party indemnity

provisions’, indemnifies the Directors in respect of costs

which they may incur relating to the defence of any

proceedings brought against them arising out of their

position as Directors (excluding criminal and regulatory

penalties). Directors’ legal costs may be funded up‑front

provided they reimburse the Company if the individual

is convicted or, in an action brought by the Company,

judgement is given against them. These provisions were in

force during the year and remain in force.

Directors’ Remuneration Report continued

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Remuneration Implementation Report

Remuneration Paid In The Year Ended 30 April 2022 (Audited)

The fees payable in respect of each of the Directors were as follows:

Year ended 30 April 2022 Year ended 30 April 2021

Fixed fee

Taxable

expenses

Total

Remuneration Fixed fee

Taxable

expenses

Total

Remuneration

Sarah Bates (Chair) £50,000 – £50,000 £46,500 – £46,500

Charlotta Ginman (Chair of the Audit

Committee)

£38,500 – £38,500 £36,000 – £36,000

Tim Cruttenden (Senior Independent Director) £35,700 – £35,700 £33,431 – £33,431

Charles Park £31,500 – £31,500 £30,000 – £30,000

Stephen White £31,500 – £31,500 £30,000 – £30,000

Jane Pearce (appointed to the Board with

effective from 6 Sep 2021)

£20,677 £777 £21,454 – – –

Catherine Cripps (appointed to the Board

with effective from 6 Sep 2021)

£20,677 – £20,677 – – –

Peter Hames (retired as Senior Independent

Director and from the Board on 8 July 2020)

– – – £6,451 – £6,451

TOTAL £228,554 £777 £229,331 £182,382 – £182,382

Note 1: Taxable travel and subsistence expenses incurred in attending Board and Committee meetings. The amount disclosed above is the gross amount.

No pension contributions or other remuneration or compensation was paid or payable by the Company during the year

to any of the Directors. Consequently, the figures shown above comprise the single total remuneration figure for each

Director.

The table below contains the annual percentage change in remuneration in the five financial years prior to the current year

in respect of each Director:

Fee Rates

Year to 30 April

2018

Year to 30 April

2019

Year to 30 April

2020

Year to 30 April

2021

Year to 30 April

2022

Chair

£41,500 £43,000 £44,300 £46,500 £50,000

+3.8% +3.6% +3.0% +5.0% +7.5%

Directors’ fees

£26,800 £27,600 £28,400 £30,000 £31,500

+4.1% +3.0% +2.9% +5.6% +5.0%

Additional fees:

Chair of the Audit Committee

£3,500 £3,600 £5,000 £6,000 £7,000

+16.7% +2.9% +38.9% +20% +16.6%

Senior Independent Director

£3,500 £3,600 £3,700 £4,000 £4,200

+16.7% +2.9% +2.8% +8.1% +5.0%

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Directors’ Share Interests (Audited)

Neither the Company’s Articles nor the Directors’ letters of appointment require Directors to hold shares in the Company.

The interests in the ordinary shares of the Company of the Directors in office at 30 April 2021 and 30 April 2022 are as

follows:

Ordinary Shares 30 April 2022 30 April 2021

Sarah Bates (Chair) 10,500 10,500

Tim Cruttenden 1,000 1,000

Charlotta Ginman 4,941 4,941

Charles Park 1,840 1,840

Stephen White 10,000 10,000

Catherine Cripps

‑ ‑

Jane Pearce ‑ ‑

Performance

The Large and Medium‑sized Companies and Groups (Accounts and Reports) (amendment) Regulations 2013, (Schedule 8,

Part 3 (18, 4(c))) require a line graph to be included in the Directors’ Remuneration Report showing the total Shareholder

return for each of the financial years in the relevant period, being the five financial years with the last being the period

under review. Each subsequent annual graph is required to increase by one year until the maximum relevant period of

ten years is reached; thereafter the relevant period will continue to be ten years. The Dow Jones World Technology Index

is shown because, as a market capitalisation weighted index based on the entire global technology sector, it is the most

relevant benchmark.

April

2012

April

2013

April

2014

April

2015

April

2016

April

2017

April

2018

April

2019

April

2020

April

2021

April

2022

100

200

300

400

500

600

700

800

PCTT Ordinary Share Price Dow Jones World Technology Index

Directors’ Remuneration Report continued

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Relative Importance Of Spend On Pay

Under the Regulations (Schedule 8, Part 3 (20)), the Directors’ Remuneration Report must show a comparison of all

remuneration paid to employees to all distributions (including dividends and share buy backs) paid to shareholders for the

current year, preceding year and the difference between those years. This is to assist the Directors in understanding the

relative importance of spend on pay.

The Company has no employees and while the Directors do not consider that the comparison of Directors’ remuneration

with distributions to shareholders is a meaningful measure of the Company’s overall performance, for comparison

purposes the table below compares Directors’ fees with the level of dividends paid, profit after tax and the cost of share

buy backs undertaken by the Company.

Change

2022

£’000

2021

£’000 £’000 %

Directors’ total remuneration* 229 182 47 26

Dividends paid or declared in respect of the financial

year

‑ ‑ ‑ ‑

Net (loss)/profit for the year and total comprehensive

(expense)/income

(258,646) 1,063,687 (1,322,333) (124)

Issue of ordinary shares

‑ 53,530 (53,530) (100)

Ordinary shares repurchased into treasury 99,132 17,051 82,081 481

* Increase relates to the appointment of Catherine Cripps and Jane Pearce in September 2021 and fee increases from 1 May 2021.

Tim Cruttenden

Senior Independent Director and Chairman of the Remuneration Committee

19 July 2022

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

Statement of Directors’ Responsibilities in respect of

the financial statements

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 they

have elected to prepare the financial statements in

accordance with

UK‑adopted international accounting

standards and applicable law. Under company law the

directors must not approve the financial statements unless

they are satisfied that they give a true and fair view of the

state of affairs of the Company and of its profit or loss for

that period. In preparing these financial statements, the

Directors are required to:

• select suitable accounting policies and then apply them

consistently;

• make judgements and estimates that are reasonable,

relevant and reliable;

• state whether they have been prepared in accordance

with

UK‑adopted international accounting standards;

• assess the Company’s ability to continue as a going

concern, disclosing, as applicable, matters related to

going concern; and

• use the going concern basis of accounting unless they

either intend to liquidate the Company or to cease

operations, or have no realistic alternative but to do so.

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 its financial statements

comply with the Companies Act 2006. They are responsible

for such internal control as they determine is necessary

to enable the preparation of financial statements that are

free from material misstatement, whether due to fraud or

error, and have general responsibility for taking such steps

as are reasonably open to them to safeguard the assets of

the Company and to prevent and detect 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 complies with that law and

those regulations.

The Directors are responsible for the maintenance and

integrity of the corporate and financial information

included on the company’s website. Legislation in the UK

governing the preparation and dissemination of financial

statements may differ from legislation in other jurisdictions.

Responsibility Statement of the Directors in

respect of the Annual Report and Financial

Statements

We confirm that to the best of our knowledge:

• the financial statements, prepared in accordance with

the applicable set of accounting standards, give a true

and fair view of the assets, liabilities, financial position

and profit or loss of the company; and

• the Strategic Report includes a fair review of the

development and performance of the business and the

position of the issuer, together with a description of the

principal risks and uncertainties that they face.

We consider the annual report and accounts, taken as a

whole, is fair, balanced and understandable and provides

the information necessary for shareholders to assess the

Company’s position and performance, business model and

strategy.

Sarah Bates

Chair

19 July 2022

www.polarcapitaltechnologytrust.co.uk

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Independent Auditor’s Report

to the members of Polar Capital Technology Trust plc

1. Our opinion is unmodified

We have audited the financial statements of Polar Capital

Technology Trust plc (“the Company”) for the year

ended 30 April 2022 which comprise the Statement of

Comprehensive Income, Balance Sheet, Statement of

Changes in Equity, Cash Flow Statement, and the related

notes, including the accounting policies in note 2.

In our opinion the financial statements:

– give a true and fair view of the state of the Company’s

affairs as at 30 April 2022 and of its return for the year

then ended;

– have been properly prepared in accordance with

UK‑adopted international accounting standards; 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 are described below. We believe

that the audit evidence we have obtained is a sufficient

and appropriate basis for our opinion. Our audit opinion is

consistent with our report to the audit committee.

We were first appointed as auditor by the shareholders

on 7 September 2017. The period of total uninterrupted

engagement is for the five financial years ended 30 April

2022. We have fulfilled our ethical responsibilities under, and

we remain independent of the Company in accordance with,

UK ethical requirements including the FRC Ethical Standard

as applied to listed public interest entities. No non‑audit

services prohibited by that standard were provided.

Overview

Materiality: Financial

statements as a whole

£31.6m (2021:£34.9m)

1% (2021: 1%) of Total Assets

Key audit matters vs 2021

Recurring risks

Carrying amount of



quoted investments

2. Key audit matters: including our assessment

of risks of material misstatement

Key audit matters are those matters that, in our

professional judgement, were of most significance in the

audit of the financial statements and include the most

significant assessed risks of material misstatement (whether

or not due to fraud) identified by us, including 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. We summarise below

the key audit matter (unchanged from 2021) in arriving

at our audit opinion above, together with our key audit

procedures to address that matter and our findings from

those procedures in order that the Company’s members,

as a body, may better understand the process by which we

arrived at our audit opinion. This matter was addressed,

and our findings are based on procedures undertaken, in

the context of, and solely for the purpose of, our audit of

the financial statements as a whole, and in forming our

opinion thereon, and consequently are incidental to that

opinion, and we do not provide a separate opinion on this

matter.

The risk Our response

Carrying amount of quoted

investments

(£2,811m; 2021: £3,243m)

Refer to page 88 (Audit

Committee Report), page 112

(accounting policy) and note 13

on page 118 (financial

disclosures).

Low risk, high value:

The Company’s portfolio of quoted investments

makes up 89% (2021: 93%) of the Company’s

total assets (by value) and is one of the key

drivers of results. We do not consider these

investments to be at a high risk of significant

misstatement, or to be subject to a significant

level of judgement because they comprise

liquid, quoted investments.

However, due to their materiality in the context

of the financial statements as a whole, they are

considered to be one of the areas which had

the greatest effect on our overall audit strategy

and allocation of resources in planning and

completing our audit.

We performed the detailed tests below rather

than seeking to rely on any of the Company’s

controls, because the nature of the balance

is such that we would expect to obtain audit

evidence primarily through the detailed

procedures described below.

Our procedures included:

– Test of detail: Agreeing the valuation of

100% of quoted investments in the portfolio

to externally quoted prices; and

– Enquiry of custodians: Agreeing 100%

of investment holdings in the portfolio

to independently received third party

confirmations from investment custodians.

Our findings

– We found no differences (2021: no

differences) from the holdings confirmations

nor from the externally quoted prices of a size

to require reporting to the audit committee.

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

100

3. Our application of materiality and an

overview of the scope of our audit

Materiality for the financial statements as a whole was set

at £31.6m (2021: £34.9m), determined with reference to

a benchmark of total assets, of which it represents 1%

(2021: 1%).

In line with our audit methodology, our procedures

on individual account balances and disclosures were

performed to a lower threshold, performance materiality,

so as to reduce to an acceptable level the risk that

individually immaterial misstatements in individual account

balances add up to a material amount across the financial

statements as a whole. Performance materiality was

set at 75% (2021: 75%) of materiality for the financial

statements as a whole, which equates to £23.7m (2021:

£26m). We applied this percentage in our determination

of performance materiality because we did not identify any

factors indicating an elevated level of risk.

We agreed to report to the Audit Committee any corrected

or uncorrected identified misstatements exceeding £1.6m

(2021: £1.8m) in addition to other identified misstatements

that warranted reporting on qualitative grounds.

Our audit of the Company was undertaken to the

materiality level specified above and was performed by a

single audit team.

The scope of the audit work performed was fully

substantive as we did not rely upon the Company’s internal

control over financial reporting.

Total Assets

£3,160m (2021: £3,500m)

Materiality

£31.6m (2021: £34.9m)

Total Assets

£31.6m

Whole ﬁnancial

statements materiality

(2021: £34.9m)

£23.7m

Performance materiality

(2021: £26m)

£1.6m

Misstatements reported to

the audit committee (2021:

£1.8m)

4. Going concern

The Directors have prepared the financial statements on

the going concern basis as they do not intend to liquidate

the Company or to cease its operations, and as they have

concluded that the Company’s financial position means

that this is realistic. They have also concluded that there are

no material uncertainties that could have cast significant

doubt over its ability to continue as a going concern for

at least a year from the date of approval of the financial

statements (“the going concern period”).

We used our knowledge of the Company, its industry, and

the general economic environment to identify the inherent

risks to its business model and analysed how those risks

might affect the Company’s financial resources or ability

to continue operations over the going concern period.

The risks that we considered most likely to adversely affect

the Company’s available financial resources and/or metrics

relevant to debt covenants:

– the impact of a significant reduction in the valuation

of investments and the implications for the Company’s

debt covenants;

– the liquidity of the investment portfolio and its ability to

meet the liabilities of the Company as and when they

fall due; and

– the operational resilience of key service organisations.

We considered whether these risks could plausibly affect

the liquidity/or covenant compliance in the going concern

period by assessing the degree of downside assumption

that, individually and collectively, could result in a liquidity

issue, taking into account the Company’s current and

projected cash and liquid investment position (a reverse

stress test).

We considered whether the going concern disclosure

in note 2(a) to the financial statements gives a full and

accurate description of the Directors’ assessment of

going concern, including the identified risks and related

sensitivities.

Our conclusions based on this work:

– We consider that the Directors’ use of the going

concern basis of accounting in the preparation of the

financial statements is appropriate;

– We have not identified, and concur with the Directors’

assessment that there is not, a material uncertainty

related 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 going concern period;

Independent Auditor’s Report continued

www.polarcapitaltechnologytrust.co.uk

101

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

– We have nothing material to add or draw attention

to in relation to the Directors’ statement in note 2(a)

to the financial statements on the use of the going

concern basis of accounting with no material

uncertainties that may cast significant doubt over the

Company’s use of that basis for the going concern

period, and we found the going concern disclosure in

note 2(a) to be acceptable; and

– The related statement under the Listing Rules set out

on page 63 is materially consistent with the financial

statements and our audit knowledge.

However, as we cannot predict all future events or

conditions and as subsequent events may result in

outcomes that are inconsistent with judgements that

were reasonable at the time they were made, the above

conclusions are not a guarantee that the Company will

continue in operation.

5. Fraud and breaches of laws and regulations –

ability to detect

Identifying and responding to risks of material

misstatement due to fraud

To identify risks of material misstatement due to fraud

(“fraud risks”) we assessed events or conditions that could

indicate an incentive or pressure to commit fraud or provide

an opportunity to commit fraud. Our risk assessment

procedures included:

– enquiring of Directors as to the Company’s high‑level

policies and procedures to prevent and detect fraud,

as well as whether they have knowledge of any actual,

suspected or alleged fraud;

– assessing the segregation of duties in place between

the Directors, the Administrator and the Company’s

Investment Manager; and

– reading Board and Audit Committee minutes.

As required by auditing standards, we perform procedures

to address the risk of management override of controls, in

particular the risk that management may be in a position

to make inappropriate accounting entries. We evaluated

the design and implementation of the controls over

journal entries and other adjustments and made inquiries

of the Administrator about inappropriate or unusual

activity relating to the processing of journal entries and

other adjustments. We substantively tested all material

post‑closing entries and, based on the results of our risk

assessment procedures and understanding of the process,

including the segregation of duties between the Directors

and the Administrator, no further high‑risk journal entries

or other adjustments were identified.

On this audit we do not believe there is a fraud risk

related to revenue recognition because the revenue

is non‑judgemental and straightforward, with limited

opportunity for manipulation.

We did not identify any significant unusual transactions or

additional fraud risks.

Identifying and responding to risks of material

misstatement related to compliance with laws and

regulations

We identified areas of laws and regulations that could

reasonably be expected to have a material effect on

the financial statements from our general commercial

and sector experience and through discussion with the

Directors, the Investment Manager and the Administrator

(as required by auditing standards), and discussed with the

Directors the policies and procedures regarding compliance

with laws and regulations. As the Company is regulated,

our assessment of risks involved gaining an understanding

of the control environment including the entity’s procedures

for complying with regulatory requirements.

The potential effect of these laws and regulations on the

financial statements varies considerably.

Firstly, the Company is subject to laws and regulations

that directly affect the financial statements including

financial reporting legislation (including related companies

legislation), distributable profits legislation, and its

qualification as an Investment Trust under UK taxation

legislation, any breach of which could lead to the Company

losing various deductions and exemptions from UK

corporation tax, and we assessed the extent of compliance

with these laws and regulations as part of our procedures

on the related financial statement items.

Secondly, the Company is subject to many other laws

and regulations where the consequences of non‑

compliance could have a material effect on amounts

or disclosures in the financial statements, for instance

through the imposition of fines or litigation. We identified

the following areas as those most likely to have such an

effect: money laundering, data protection, bribery and

corruption legislation and certain aspects of company

legislation recognising the financial and regulated nature

of the Company’s activities and its legal form. Auditing

standards limit the required audit procedures to identify

non‑compliance with these laws and regulations to enquiry

of the Directors and the Administrator and inspection of

regulatory and legal correspondence, if any. Therefore if a

breach of operational regulations is not disclosed to us or

evident from relevant correspondence, an audit will not

detect that breach.

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

102

Context of the ability of the audit to detect fraud or

breaches of law or regulation

Owing to the inherent limitations of an audit, there is an

unavoidable risk that we may not have detected some

material misstatements in the financial statements, even

though we have properly planned and performed our audit

in accordance with auditing standards. For example, the

further removed non-compliance with laws and regulations

is from the events and transactions reflected in the financial

statements, the less likely the inherently limited procedures

required by auditing standards would identify it.

In addition, as with any audit, there remained a higher risk

of non-detection of fraud, as these may involve collusion,

forgery, intentional omissions, misrepresentations, or the

override of internal controls. Our audit procedures are

designed to detect material misstatement. We are not

responsible for preventing non-compliance or fraud and

cannot be expected to detect non-compliance with all laws

and regulations.

6. We have nothing to report on the other

information in the Annual Report

The Directors are responsible for the other information

presented in the Annual Report together with the financial

statements. Our opinion on the financial statements does

not cover the other information and, accordingly, we do

not express an audit opinion or, except as explicitly stated

below, any form of assurance conclusion thereon.

Our responsibility is to read the other information and,

in doing so, consider whether, based on our financial

statements audit work, the information therein is materially

misstated or inconsistent with the financial statements

or our audit knowledge. Based solely on that work we

have not identified material misstatements in the other

information.

Strategic report and Directors’ report

Based solely on our work on the other information:

– we have not identified material misstatements in the

strategic report and the Directors’ report;

– in our opinion the information given in those reports

for the financial year is consistent with the financial

statements; and

– in our opinion those reports have been prepared in

accordance with the Companies Act 2006.

Directors’ remuneration report

In our opinion the part of the Directors’ Remuneration

Report to be audited has been properly prepared in

accordance with the Companies Act 2006.

Disclosures of emerging and principal risks and

longer-term viability

We are required to perform procedures to identify whether

there is a material inconsistency between the Directors’

disclosures in respect of emerging and principal risks and

the viability statement, and the financial statements and

our audit knowledge.

Based on those procedures, we have nothing material to

add or draw attention to in relation to:

– the Directors’ confirmation within the Principal Risks

and Uncertainties disclosure on page 65 that they have

carried out a robust assessment of the emerging and

principal risks facing the Company, including those that

would threaten its business model, future performance,

solvency and liquidity;

– the Principal and Emerging Risks disclosures describing

these risks and how emerging risks are identified, and

explaining how they are being managed and mitigated;

and

– the Directors’ explanation in the Viability Statement of

how they have assessed the prospects of the Company,

over what period they have done so and why they

considered that period to be appropriate, and their

statement as to whether they have a reasonable

expectation that the Company will be able to continue

in operation and meet its liabilities as they fall due

over the period of their assessment, including any

related disclosures drawing attention to any necessary

qualifications or assumptions.

We are also required to review the Viability Statement, set

out on pages 62 to 63 under the Listing Rules. Based on

the above procedures, we have concluded that the above

disclosures are materially consistent with the financial

statements and our audit knowledge.

Our work is limited to assessing these matters in the

context of only the knowledge acquired during our

financial statements audit. As we cannot predict all future

events or conditions and as subsequent events may result in

outcomes that are inconsistent with judgements that were

reasonable at the time they were made, the absence of

anything to report on these statements is not a guarantee

as to the Company’s longer-term viability.

Independent Auditor’s Report continued

www.polarcapitaltechnologytrust.co.uk

103

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Corporate governance disclosures

We are required to perform procedures to identify whether

there is a material inconsistency between the Directors’

corporate governance disclosures and the financial

statements and our audit knowledge.

Based on those procedures, we have concluded that each

of the following is materially consistent with the financial

statements and our audit knowledge:

– the Directors’ statement that they consider that the

annual report and financial statements taken as a whole

is fair, balanced and understandable, and provides the

information necessary for shareholders to assess the

Company’s position and performance, business model

and strategy;

– the section of the annual report describing the work of

the Audit Committee, including the significant issues that

the audit committee considered in relation to the financial

statements, and how these issues were addressed; and

– the section of the annual report that describes the

review of the effectiveness of the Company’s risk

management and internal control systems.

We are required to review the part of Corporate

Governance Statement relating to the Company’s

compliance with the provisions of the UK Corporate

Governance Code specified by the Listing Rules for our

review. We have nothing to report in this respect.

7. We have nothing to report on the other

matters on which we are required to report

by exception

Under the Companies Act 2006, we are required 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.

We have nothing to report in these respects.

8. Respective responsibilities

Directors’ responsibilities

As explained more fully in their statement set out on

page 98, the Directors are responsible for: the preparation

of the financial statements including being satisfied that

they give a true and fair view; such internal control as

they determine is necessary to enable the preparation

of financial statements that are free from material

misstatement, whether due to fraud or error; 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

they either intend to liquidate the Company or to cease

operations, or have no realistic alternative but to do so.

Auditor’s responsibilities

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 our opinion in an auditor’s report. Reasonable assurance

is a high level of assurance, but does not 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 aggregate, they could reasonably be

expected to influence the economic decisions of users taken

on the basis of the financial statements.

A fuller description of our responsibilities is provided on the

FRC’s website at: www.frc.org.uk/auditorsresponsibilities.

9. The purpose of our audit work and to whom

we owe our responsibilities

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 and the terms of our engagement by

the Company. 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 the further matters we are required to state to them

in accordance with the terms agreed with the Company,

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.

John Waterson (Senior Statutory Auditor)

for and on behalf of KPMG LLP, Statutory Auditor

Chartered Accountants

Saltire Court

20 Castle Terrace

Edinburgh

EH1 2EG

19 July 2022

Financial Statements

www.polarcapitaltechnologytrust.co.uk

104

www.polarcapitaltechnologytrust.co.uk

105

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

106

Statement of Comprehensive Income

For the year ended 30 April 2022

Year ended 30 April 2022 Year ended 30 April 2021

Notes

Revenue

return

£’000

Capital

return

£’000

Total

return

£’000

Revenue

return

£’000

Capital

return

£’000

Total

return

£’000

Investment income 3 15,870 - 15,870 18,156 - 18,156

Other operating income 4 31 - 31 8 - 8

(Losses)/gains on investments held at fair value 5 - (253,694) (253,694) - 1,127,646 1,127,646

Losses on derivatives 6 - (5,799) (5,799) - (49,111) (49,111)

Other currency gains/(losses) 7 - 17,535 17,535 - (4,379) (4,379)

Total income 15,901 (241,958) (226,057) 18,164 1,074,156 1,092,320

Expenses

Investment management fee 8 (28,281) - (28,281) (24,134) - (24,134)

Performance fee 8 - - - - - -

Other administrative expenses 9 (1,335) - (1,335) (1,071) - (1,071)

Total expenses (29,616) - (29,616) (25,205) - (25,205)

(Loss)/profit before finance costs and tax (13,715) (241,958) (255,673) (7,041) 1,074,156 1,067,115

Finance costs 10 (973) - (973) (996) - (996)

(Loss)/profit before tax (14,688) (241,958) (256,646) (8,037) 1,074,156 1,066,119

Tax 11 (2,000) - (2,000) (2,432) - (2,432)

Net (loss)/profit for the year and total

comprehensive (expense)/income

(16,688) (241,958)

(258,646) (10,469) 1,074,156 1,063,687

(Losses)/earnings per share (basic and

diluted) (pence)

12 (12.36) (179.25) (191.61) (7.65) 784.40 776.75

The total column of this statement represents the Company’s Statement of Comprehensive Income, prepared in accordance with UK-

adopted International Accounting Standards.

The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the AIC.

All items in the above statement derive from continuing operations.

The Company does not have any other comprehensive income.

The notes on pages 110 to 131 form part of these Financial Statements.

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Notes

capital

£’000

Capital

redemption

reserve

£’000

premium

£’000

Special

non-

distrib-

utable

reserve

£’000

Capital

reserves

£’000

Revenue

reserve

£’000

Total

£’000

Total equity at 30 April 2020 33,641 12,802 170,532 7,536 2,183,728 (99,642) 2,308,597

Total comprehensive income/(expense):

Profit/(loss) for the year to 30 April 2021 - - - - 1,074,156 (10,469) 1,063,687

Transactions with owners, recorded

directly to equity:

Issue of ordinary shares 18, 20 688 - 52,842 - - - 53,530

Ordinary shares repurchased into treasury 22 - - - - (17,051) - (17,051)

Total equity at 30 April 2021 34,329 12,802 223,374 7,536 3,240,833 (110,111) 3,408,763

Total comprehensive expense:

Loss for the year to 30 April 2022 - - - - (241,958) (16,688) (258,646)

Transactions with owners, recorded

directly to equity:

Ordinary shares repurchased into treasury 22 - - - - (99,132) - (99,132)

Total equity at 30 April 2022 34,329 12,802 223,374 7,536 2,899,743 (126,799) 3,050,985

The notes on pages 110 to 131 form part of these Financial Statements.

Statement of Changes in Equity

For the year ended 30 April 2022

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Balance Sheet

As at 30 April 2022

Notes

30 April 2022

£’000

30 April 2021

£’000

Non-current assets

Investments held at fair value through profit or loss 13 2,811,080 3,243,034

Current assets

Receivables 14 31,096 36,096

Overseas tax recoverable 286 162

Cash and cash equivalents 15 311,363 216,205

Derivative financial instruments 13 6,479 4,090

349,224 256,553

Total assets 3,160,304 3,499,587

Current liabilities

Payables 16 (57,284) (36,241)

Bank loans 17 (52,035) -

Bank overdraft 15 - (3,473)

(109,319) (39,714)

Non-current liabilities

Bank loans 17 - (51,110)

Net assets 3,050,985 3,408,763

Equity attributable to equity shareholders

Share capital 18 34,329 34,329

Capital redemption reserve 19 12,802 12,802

Share premium 20 223,374 223,374

Special non-distributable reserve 21 7,536 7,536

Capital reserves 22 2,899,743 3,240,833

Revenue reserve 23 (126,799) (110,111)

Total equity 3,050,985 3,408,763

Net asset value per ordinary share (pence) 25 2305.13 2496.44

The Financial Statements, on pages 106 to 131, were approved and authorised for issue by the Board of Directors on 19 July 2022 and

signed on its behalf by:

Sarah Bates

Chair

The notes on pages 110 to 131 form part of these Financial Statements

Registered number 3224867

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Notes

2022

£’000

2021

£’000

Cash flows from operating activities

(Loss)/profit before tax (256,646) 1,066,119

Adjustments

Losses/(gains) on investments held at fair value through profit or loss 5 253,694 (1,127,646)

Losses on derivative financial instruments 6 5,799 49,111

Proceeds of disposal on investments 2,822,328 3,089,314

Purchases of investments (2,618,737) (2,998,482)

Proceeds on disposal of derivative financial instruments 13 39,006 8,735

Purchases of derivative financial instruments 13 (47,194) (58,545)

(Increase)/decrease in receivables (64) 116

(Decrease)/increase in payables (355) 5,720

Overseas tax (2,124) (2,500)

Foreign exchange (gains)/losses 7 (17,535) 4,379

Net cash generated from operating activities 178,172 36,321

Cash flows from financing activities

Loans repaid 17 - (10,300)

Loans drawn 17 - 9,870

Ordinary shares repurchased into treasury (98,001) (17,051)

Issue of ordinary shares - 57,078

Net cash (used in)/generated from financing activities (98,001) 39,597

Net increase in cash and cash equivalents 80,171 75,918

Cash and cash equivalents at the beginning of the year 212,732 146,677

Effect of movement in foreign exchange rates on cash held 7 18,460 (9,863)

Cash and cash equivalents at the end of the year 15 311,363 212,732

Reconciliation of cash and cash equivalents to the Balance Sheet is as follows:

Notes

2022

£’000

2021

£’000

Cash held at bank and derivative clearing houses 15 219,403 162,479

BlackRock’s Institutional Cash Series plc

(US Treasury Fund), money market fund

15 91,960 50,253

Cash and cash equivalents at the end of the year 15 311,363 212,732

The notes on pages 110 to 131 form part of these Financial Statements

Cash Flow Statement

For the year ended 30 April 2022

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1 General Information

Polar Capital Technology Trust plc is a public limited company registered in England and Wales whose shares are traded on

the London Stock Exchange.

The principal activity of the Company is that of an investment trust company within the meaning of Section 1158/1159 of

the Corporation Tax Act 2010 and its investment approach is detailed in the Strategic Report.

The Company financial statements have been prepared and approved by the Directors in accordance with international

accounting standards in accordance with UK-adopted international accounting standards (“UK-adopted IAS”).

The Company’s presentational currency is Pounds Sterling. All figures are rounded to the nearest thousand pounds (£’000)

except as otherwise stated.

2 Accounting Policies

The principal accounting policies, which have been applied consistently for all years presented are set out below:

(A) Basis of Preparation

The Financial Statements have been prepared on a going concern basis under the historical cost convention, as modified

by the inclusion of investments and derivative financial instruments at fair value through profit or loss.

Where presentational guidance set out in the Statement of Recommended Practice (SORP) for investment trusts issued by

the Association of Investment Companies (AIC) in April 2021 is consistent with the requirements of UK-adopted IAS, the

Directors have sought to prepare the Financial Statements on a basis compliant with the recommendations of the SORP.

The financial position of the Company as at 30 April 2022 is shown in the balance sheet on page 108

. As at 30 April 2022

the Company’s total assets exceeded its total liabilities by a multiple of over 28. The assets of the Company consist

mainly of securities that are held in accordance with the Company’s Investment Policy, as set out on page 56 and these

securities are readily realisable. The Company has two, two-year fixed rate term loans with ING Bank N.V both of which

fall due for repayment on 30 September 2022. The Directors have considered a detailed assessment of the Company’s

ability to meet its liabilities as they fall due. The assessment took account of the Company’s current financial position,

its cash flows and its liquidity position. In addition to the assessment the Company carried out stress testing which used

a variety of falling parameters to demonstrate the effects in the Company’s share price and net asset value. In light of the

results of these tests, the Company’s cash balances, and the liquidity position, the Directors consider that the Company

has adequate financial resources to enable it to continue in operational existence for at least 12 months. Accordingly, the

Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the Company’s Financial

Statements.

(B) Presentation of Statement of Comprehensive Income

In order to reflect better the activities of an investment trust company and in accordance with the guidance set out by

the AIC, supplementary information which analyses the Statement of Comprehensive Income between items of a revenue

and capital nature has been presented alongside the Statement of Comprehensive Income. The results presented in the

revenue return column is the measure the Directors believe appropriate in assessing the Company’s compliance with

certain requirements set out in section 1158 of the Corporation Taxes Act 2010.

Dividends receivable from equity shares are taken to the revenue return column of the Statement of Comprehensive

Income on an ex-dividend basis.

Special dividends are recognised on an ex-dividend basis and may be considered to be either revenue or capital items.

The facts and circumstances are considered on a case by case basis before a conclusion on appropriate allocation is

reached.

Notes to the Financial Statements

For the year ended 30 April 2022

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Where the Company has received dividends in the form of additional shares rather than in cash, the amount of the cash

dividend foregone is recognised in the revenue return column of the Statement of Comprehensive Income. Any excess in

value of shares received over the amount of the cash dividend foregone is recognised in the capital return column of the

Statement of Comprehensive Income.

Unfranked income includes the taxes deducted at source.

Bank interest, money market fund interest and other income receivable are accounted for on an accruals basis and is

recognised in the period in which it was earned.

Interest outstanding at the year end is calculated on a time apportioned basis using the market rates of interest.

(D) Expenses and Finance Costs

All expenses, including finance costs, are accounted for on an accruals basis.

All indirect expenses have been presented as revenue items per the non-allocation method except as follows:

– any performance fees payable are allocated wholly to capital, reflecting the fact that, although they are calculated on a

total return basis, they are expected to be attributable largely, if not wholly, to capital performance.

– transaction costs incurred on the acquisition or disposal of investments are expensed either as part of the unrealised

gain/loss on investments (for acquisition costs) or as a deduction from the proceeds of sale (for disposal costs).

Finance costs are calculated using the effective interest rate method and are accounted for on an accruals basis.

(E) Taxation

The tax expense represents the sum of the overseas withholding tax deducted from investment income, tax currently

payable and deferred tax.

The tax currently payable is based on the taxable profit for the year. Taxable profit differs from net profit as reported in

the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible

in other years and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is

calculated using tax rates that have been enacted or substantively enacted at the balance sheet date.

In line with the recommendations of the SORP, the allocation method used to calculate tax relief on expenses presented

against capital returns in the supplementary information in the Statement of Comprehensive Income is the ‘marginal

basis’. Under this basis, if taxable income is capable of being offset entirely by expenses presented in the revenue return

column of the Statement of Comprehensive Income, then no tax relief is transferred to the capital return column.

Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts

of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable

profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable

temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be

available against which deductible temporary differences can be utilised.

Investment trusts which have approval as such under section 1158 of the Corporation Tax Act 2010 are not liable for

taxation on capital gains.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no

longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is

realised based on tax rates that have been enacted or substantively enacted at the balance sheet date.

Deferred tax is charged or credited in the Statement of Comprehensive Income, except when it relates to items charged or

credited directly to equity, in which case the deferred tax is also dealt with in equity.

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Notes to the Financial Statements continued

(F) Investments Held at Fair Value Through Profit or loss

When a purchase or sale is made under contract, the terms of which require delivery within the timeframe of the relevant

market, the investments concerned are recognised or derecognised on the trade date and are initially measured at fair value.

On initial recognition the Company has designated all of its investments as held at fair value through profit or loss as defined

by UK-adopted IAS.

All investments are measured at subsequent reporting dates at fair value, which is either the bid price or the last traded price,

depending on the convention of the exchange on which the investment is quoted. Investments in unit trusts or OEICs are

valued at the closing price, the bid price or the single price as appropriate, as released by the relevant investment manager.

Fair values for unquoted investments, or for investments for which there is only an inactive market, are established by using

various valuation techniques. These may include recent arms length market transactions, the current fair value of another

instrument that is substantially the same, discounted cash flow analysis and option pricing models. Where there is a valuation

technique commonly used by market participants to price the instrument and that technique has been demonstrated to

provide reliable estimates of prices obtained in actual market transactions, that technique is utilised. Where no reliable fair

value can be estimated for such instruments, they are carried at cost, subject to any provision for impairment.

Changes in fair value of all investments held at fair value and realised gains and losses on disposal are recognised in the

capital return column of the Statement of Comprehensive Income.

(G) Receivables

Receivables are initially recognised at fair value and subsequently measured at amortised cost. Receivables do not carry

any interest and are short-term in nature and are accordingly stated at their nominal value (amortised cost) as reduced by

appropriate allowances for estimated irrecoverable amounts.

(H) Cash and Cash Equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term maturity of three months or less,

highly liquid investments that are readily convertible to known amounts of cash.

The Company’s investment in BlackRock’s Institutional Cash Series plc – US Treasury Fund of £91,960,000 (2021:

£50,253,000) is managed as part of the Company’s cash and cash equivalents as defined under IAS 7.

In the Balance Sheet bank overdrafts are shown within current liabilities.

(I) Payables

Payables are initially recognised at fair value and subsequently measured at amortised cost. Payables are not interest-

bearing and are stated at their nominal value (amortised cost).

(J) Bank Loans

Interest bearing bank loans are initially recognised at cost, being the proceeds received net of direct issue costs, and

subsequently at amortised cost. The amounts falling due for repayment within one year are included under current

liabilities in the Balance Sheet.

(K) Derivative Financial Instruments

The Company’s activities expose it primarily to the financial risks of changes in market prices, foreign currency exchange

rates and interest rates. Derivative transactions which the Company may enter into comprise forward exchange contracts,

the purpose of which is to manage the currency risks arising from the Company’s investing activities, quoted options on

shares held within the portfolio, or on indices appropriate to sections of the portfolio, the purpose of which is to provide

additional capital return.

The use of financial derivatives is governed by the Company’s policies as approved by the Board, which has set written

principles for the use of financial derivatives.

A derivative instrument is considered to be used for hedging purposes when it alters the market risk profile of an existing

underlying exposure of the Company. The use of financial derivatives by the Company does not qualify for hedge

accounting under UK-adopted IAS. As a result, changes in the fair value of derivative instruments are recognised in the

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Statement of Comprehensive Income as they arise. If capital in nature, associated change in value is presented in the

capital return column of the Statement of Comprehensive Income.

(L) Rates of Exchange

Transactions in foreign currencies are translated into Sterling at the rate of exchange ruling on the date of each

transaction. Monetary assets, monetary liabilities and equity investments in foreign currencies at the balance sheet date

are translated into Sterling at the rates of exchange ruling on that date. Realised profits or losses on exchange, together

with differences arising on the translation of foreign currency assets or liabilities, are taken to the capital return column of

the Statement of Comprehensive Income.

Foreign exchange gains and losses arising on investments held at fair value are included within changes in fair value.

(M) Share Capital

Represents the nominal value of authorised and allocated, called-up and fully paid shares issued.

(N) Capital Reserves

Capital reserves - gains/losses on disposal includes:

– gains/losses on disposal of investments

– exchange differences on currency balances and on settlement of loan balances

– cost of own shares bought back

– other capital charges and credits charged to this account in accordance with the accounting policies above

Capital reserve – revaluation on investments held includes:

– increases and decreases in the valuation of investments and loans held at the year end.

All of the above are accounted for in the Statement of Comprehensive Income except the cost of own shares bought back

or issued which are accounted for in the Statement of Changes in Equity.

(O) Repurchase of Ordinary Shares (including those held in treasury)

Where applicable, the costs of repurchasing ordinary shares including related stamp duty and transaction costs are taken

directly to equity and reported through the Statement of Changes in Equity as a charge on the capital reserve. Share

repurchase transactions are accounted for on a trade date basis.

The nominal value of ordinary share capital repurchased and cancelled is transferred out of called up share capital and into

the capital redemption reserve.

Where shares are repurchased and held in treasury, the transfer to capital redemption reserve is made if and when such

shares are subsequently cancelled.

(P) Share issue costs

Costs incurred directly in relation to the issue of new shares together with additional share listing costs have been

deducted from the share premium reserve.

(Q) Segmental Reporting

Under IFRS 8, ‘Operating Segments’, operating segments are considered to be the components of an entity about which

separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding

how to allocate resources and in assessing performance. The chief operating decision maker has been identified as the

Manager (with oversight from the Board).

The Board is of the opinion that the Company is engaged in a single segment of business, namely by investing in a

diversified portfolio of technology companies from around the world in accordance with the Company’s Investment

Objective, and consequently no segmental analysis is provided.

In line with IFRS 8, additional disclosure by geographical segment has been provided in Note 26.

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Notes to the Financial Statements continued

Further analyses of expenses, investment gains or losses, profit and other assets and liabilities by country have not been

given as either it is not possible to prepare such information in a meaningful way or the results are not considered to be

significant.

(R) Key Estimates and Assumptions

Estimates and assumptions used in preparing the Financial Statements are reviewed on an ongoing basis and are based on

historical experience and various other factors that are believed to be reasonable under the circumstances. The results of

these estimates and assumptions form the basis of making judgements about carrying values of assets and liabilities that

are not readily apparent from other sources.

The majority of the Company’s investments are in US Dollars, the level of which varies from time to time. The Board

considers the functional currency to be Sterling. In arriving at this conclusion the Board considered that Sterling is most

relevant to the majority of the Company’s Shareholders and creditors and the currency in which the majority of the

Company’s operating expenses are paid.

The only estimates and assumptions that may cause material adjustment to the carrying value of assets and liabilities

relate to the valuation of unquoted investments and investments for which there is an inactive market. These are valued in

accordance with the techniques set out in Note 2(f). At the year end, there were no unquoted investments (2021: same).

(S) New and revised accounting Standards

There were no new IFRSs or amendments to IFRSs applicable to the current year which had any significant impact on the

Company’s Financial Statements.

i) The following new or amended standards became effective for the current annual reporting period and the adoption

of the standards and interpretations have not had a material impact on the Financial Statements of the Company.

Standards & Interpretations

Effective for periods commencing on

or after

IFRS 9, IAS 39, IFRS 7, IFRS

16 and IFRS 4: Interest Rate

Benchmark Reform – phase 2

(amended)

IBOR Reform - Phase 2 addresses issues that might affect

financial reporting during the reform of an interest rate

benchmark, including the effects of changes to contractual

cash flows or hedging relationships arising from the

replacement of an interest rate benchmark with an

alternative benchmark rate.

The Phase 2 amendments apply only to changes required

by the interest rate benchmark reform to financial

instruments and hedging relationships.

1 January 2021

ii) At the date of authorisation of the Company’s financial statements, there were no relevant standards that potentially

impact the Company are in issue but are not yet effective and have not been applied in the financial statements.

The Directors expect that the adoption of the standards listed above will have either no impact or that any impact will not be

material on the Financial Statements of the Company in future periods.

3 Investment income

Year ended

30 April 2022

£’000

Year ended

30 April 2021

£’000

Revenue:

Overseas Dividend income 15,870 18,156

15,870 18,156

All investment income is derived from listed investments.

Included within income from investments is £172,000 (2021: £3,229,000) of special dividends classified as revenue in

nature in accordance with note 2 (c). No special dividends have been recognised in capital (2021: nil).

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4 Other operating income

Year ended

30 April 2022

£’000

Year ended

30 April 2021

£’000

Bank interest 4 1

Money market fund interest 27 7

31 8

5 (Losses)/gains on investments held at fair value

Year ended

30 April 2022

£’000

Year ended

30 April 2021

£’000

Net gains on disposal of investments at historic cost 232,360 736,118

Transfer on disposal of investments (353,508) (255,764)

(Losses)/gains on disposal of investments based on carrying value at previous balance sheet date (121,148) 480,354

Valuation (losses)/gains on investments held during the year (132,546) 647,292

(253,694) 1,127,646

6 Losses on Derivatives

Year ended

30 April 2022

£’000

Year ended

30 April 2021

£’000

Losses on disposal of derivatives held (10,212) (60,474)

Gains on revaluation of derivatives held 4,413 11,363

(5,799) (49,111)

The derivative financial instruments represent the call and put options, which are used for the purpose of efficient

portfolio management. As at 30 April 2022, the Company held NASDAQ 100 Stock Index put option and the market

value of these open put option position was £6,431,000 (2021: NASDAQ 100 Stock Index put options with a market

value of £2,793,000). The Company also held Apple Inc. call options and the market value of these open call option

position was £48,000 (2021: Apple Inc. call options with a market value of £1,297,000).

7 Other currency gains/(losses)

Year ended

30 April 2022

£’000

Year ended

30 April 2021

£’000

Exchange gains/(losses) on currency balances 18,460 (9,863)

Exchange losses on settlement of loan balances - (3,517)

Exchange (losses)/gains on translation of loan balances (925) 9,001

17,535 (4,379)

8 Investment management and performance fee

Year ended

30 April 2022

£’000

Year ended

30 April 2021

£’000

Investment management fee paid to Polar Capital (charged wholly to revenue) 28,281 24,134

Performance fee paid to Polar Capital (charged wholly to capital) - -

There was no performance fee payable in respect of the year nor outstanding at the year end (2021: same).

The basis for calculating the investment management and performance fees are set out in the Strategic Report on pages

60 and 61 and details of all amounts payable to the Manager are given in Note 24 on page 123.

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Notes to the Financial Statements continued

Although the net asset value reduced in absolute terms towards the end of the financial year, on average it had increased

during the year under review when compared to the prior year, hence an increase in management fee was incurred during

the year.

A new investment management fee arrangement was agreed with the Manager and announced on 12 January 2022. The

revised arrangement reduced rates of the base management fee and simplified the structure of the base fee to three tiers.

Details of the investment management agreement are disclosed in the Strategic Report on pages 60 and 61.

9 Other administrative expenses

Year ended

30 April 2022

£’000

Year ended

30 April 2021

£’000

Directors’ fees

and expenses 229 182

National Insurance Contributions 24 18

Depositary fee

233 220

Registrar fee

51 43

Custody and other bank charges

358 327

UKLA and LSE listing fees

190 124

Legal & professional fees and other financial services 4 11

AIC fees 21 21

Auditors’ remuneration - for audit of the financial statements

45 44

Directors’ and officers’ liability insurance 23 12

AGM expenses

31 10

Corporate brokers’ fee

- 37

Marketing expenses

25 -

Shareholder communications 57 57

Other expenses

44 (35)

1,335 1,071

1 Full disclosure is given in the Directors’ Remuneration Report on page 92.

2 Depositary fee is based on the value of the net assets. The daily average net asset value increased by 14.6% during the current financial year compared to

the previous year.

3 2022 includes additional cost in relation to processing of Treasury shares.

4 Custody fees are based on the value of the assets and geographical activity and determined on the pre-approved rate card with HSBC.

5 Fees are based on the market capitalisation of the Company which increased over the last invoice period.

6 The base audit fee for the statutory audit was £45,000 (2021: £40,000k plus an overrun fee of £3,500 for the 2020 financial year which was recognised

in 2021). Overrun fees incurred in the completion of the 2021 audit and during the financial year 2022, £12,000 and £10,000 respectively. The company

recharged these to the Investment Manager given the nature of the additional audit work undertaken.

7 Includes additional costs in relation to hybrid AGM and 2021 Haberdasher’ Hall AGM cancellation due to COVID restrictions in place.

8 2021/2022 annual fee was offset by the commission credit on shares repurchases.

9 Bespoke promotional marketing cost of £25,000 in Q1 2022. The first £100,000 was absorbed by the Investment Manager.

10 Includes Non-executive Directors search fee and external third party Board evaluation cost.

10 Finance costs

Year ended

30 April 2022

£’000

Year ended

30 April 2021

£’000

Interest on loans and overdrafts 973 910

Loan arrangement and facility fees - 86

973 996

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11 Taxation

(a) Analysis of tax charge for the year:

Year ended

30 April 2022

£’000

Year ended

30 April 2021

£’000

Overseas tax

2,000 2,432

Total tax for the year (see Note 11b) 2,000 2,432

(b) Factors affecting tax charge for the year:

The charge for the year can be reconciled to the (loss)/profit per the Statement of Comprehensive Income as follows:

(Loss)/profit before tax (256,646) 1,066,119

Tax at the UK corporation tax rate of 19% (48,763) 202,563

Tax effect of non-taxable dividends (3,015) (3,450)

Tax effect of losses/(gains) on investments that are not taxable 45,972 (204,090)

Unrelieved current year expenses and deficits 5,806 4,977

Overseas tax suffered 2,000 2,432

Total tax for the year (see Note 11a) 2,000

2,432

There is an unrecognised deferred tax asset comprising:

Unrelieved management expenses 61,780 41,326

Non-trading loan relationship deficits 1,807 1,194

63,587 42,520

The deferred tax asset is based on a prospective corporation tax rate of 25% (2021: 19%).

It was substantively enacted on 24 May 2021 that the rate of UK corporation tax will increase from 19% to 25% from

1 April 2023. Therefore, the unrecognised deferred tax asset of £63,587,000 on 30 April 2022 has been calculated using

a corporation tax rate of 25%.

It is unlikely that the Company will generate sufficient taxable profits in the future to utilise these expenses and deficits

and therefore no deferred tax asset has been recognised.

Due to the Company’s tax status as an investment trust and the intention to continue meeting the conditions required to

maintain approval of such status in the foreseeable future, the Company has not provided tax on any capital gains arising

on the revaluation or disposal of investments held by the Company.

12 (Losses)/earnings per ordinary share

Year ended 30 April 2022 Year ended 30 April 2021

Revenue

return

Capital

return

Total

return

Revenue

return

Capital

return

Total

return

The calculation of basic earnings per share is

based on the following data:

Net (loss)/profit for the year (£’000) (16,688) (241,958) (258,646) (10,469) 1,074,156 1,063,687

Weighted average ordinary shares in issue

during the year

134,984,460 134,984,460 134,984,460 136,938,993 136,938,993 136,938,993

From continuing operations

Basic and diluted - ordinary shares (pence) (12.36) (179.25) (191.61) (7.65) 784.40 776.75

As at 30 April 2022 there are no potentially dilutive shares in issue and the earnings per share therefore equate to those

shown above (2021: there was no dilution).

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Notes to the Financial Statements continued

13 Investments held at fair value through profit or loss

(i) Investments held at fair value through profit or loss

Year ended

30 April 2022

£’000

Year ended

30 April 2021

£’000

Opening book cost 2,199,334 1,566,135

Opening investment holding gains 1,043,700 652,172

Opening fair value 3,243,034 2,218,307

Analysis of transactions made during the year

Purchases at cost 2,639,004 2,978,969

Sales proceeds received (2,817,264) (3,081,888)

(Losses)/gains on investments held at fair value (253,694) 1,127,646

Closing fair value 2,811,080 3,243,034

Closing book cost 2,253,434 2,199,334

Closing investment holding gains 557,646 1,043,700

Closing fair value 2,811,080 3,243,034

Of which:

Listed on a recognised Stock Exchange 2,811,080 3,243,034

The Company received £2,817,264,000 (2021: £3,081,888,000) from disposal of investments in the year. The book

cost of these investments when they were purchased were £2,584,904,000 (2021: £2,345,770,000). These investments

have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the

investments.

Included in additions at cost are purchase costs of £1,005,000 (2021: £1,345,000). Included in proceeds of disposals are

sales costs of £1,182,000 (2021: £1,522,000). These costs primarily comprise commission.

(ii) Changes in derivative financial instruments

Year ended

30 April 2022

£’000

Year ended

30 April 2021

£’000

Valuation at 1 May 4,090 3,391

Additions at cost 47,194 58,545

Proceeds of disposal (39,006) (8,735)

Losses on disposal (10,212) (60,474)

Valuation gains 4,413 11,363

Valuation at 30 April 6,479 4,090

(iii) Classification under Fair Value Hierarchy:

The table below sets out the fair value measurements using the IFRS 7 fair value hierarchy. Categorisation within the

hierarchy has been determined on the basis of the lowest level of input that is significant to the fair value measurement of

the relevant asset as follows:

Level 1 - valued using quoted prices in active markets for identical assets.

Level 2 - valued by reference to valuation techniques using observable inputs other than quoted prices included within

Level 1.

Level 3 - valued by reference to valuation techniques using inputs that are not based on observable market data.

The valuation techniques used by the company are explained in the accounting policies note on page 112.

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There have been no transfers during the year between Levels 1 and 2. A reconciliation of fair value measurements in

Level 3 is set out below.

Year ended

30 April 2022

£’000

Year ended

30 April 2021

£’000

Equity Investments and derivative financial instruments

Level 1 2,817,559 3,247,124

Level 2 - -

Level 3 - -

2,817,559 3,247,124

Year ended

30 April 2022

£’000

Year ended

30 April 2021

£’000

Level 3 investments at fair value through profit or loss

Opening balance - 52

Distribution proceeds - (104)

Total gains included in the Statement of Comprehensive Income – on assets held

at the year end

- 52

Closing balance - -

(iv) Unquoted investments

As at 30 April 2022, the portfolio comprised no unquoted investment (30 April 2021: same).

Herald Ventures Limited Partnership made its final distribution of £104,000 in the previous year.

Level 3 investments are recognised at fair value through profit & loss on a recurring basis.

14 Receivables

30 April 2022

£’000

30 April 2021

£’000

Sales for future settlement 29,315 34,379

Prepayments and accrued income 1,741 1,682

VAT recoverable 40 35

31,096 36,096

The carrying values of other receivables approximate their fair value.

15 Cash and cash equivalents

30 April 2022

£’000

30 April 2021

£’000

Cash at bank 211,940 165,952

Cash held at derivative clearing houses 7,463 -

Money market funds 91,960 50,253

Cash and cash equivalents 311,363 216,205

Bank overdraft - (3,473)

311,363 212,732

As at 30 April 2022, the Company held BlackRock’s Institutional Cash Series plc – US Treasury Fund with a market value

of £91,960,000 (30 April 2021: £50,253,000), which is managed as part of the Company’s cash and cash equivalents as

defined under IAS 7.

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Notes to the Financial Statements continued

16 Payables

30 April 2022

£’000

30 April 2021

£’000

Purchases for future settlement 49,419 29,152

Repurchase of ordinary shares awaiting settlement 1,131 -

Accruals 6,734 7,089

57,284 36,241

The carrying values of other payables approximate their fair value.

17 Bank loans

(i) Bank loans

30 April 2022

£’000

30 April 2021

£’000

The Company has the following unsecured Japanese Yen and US Dollar loans:

JPN¥3,800m at a rate of 0.9% repayable 30 September 2022 23,361 25,109

US$36m at a rate of 1.335% repayable 30 September 2022 28,674 26,001

52,035 51,110

The bank loans held at the year end are a Japanese Yen 3.8 billion and a US Dollar 36 million two-year fixed rate term

loan with ING Bank N.V. The loans are unsecured but are subject to certain undertakings and restrictions, all of which

have been complied with during the year. The carrying value of the loans approximates at their fair value. These loans are

repayable on 30 September 2022.

The main covenants relating to the above loans are:

(i) Total borrowings shall not exceed 30% of the Company’s net asset value

(ii) The Company’s minimum net asset value shall be £400 million

(iii) The Company shall not change the Investment Manager without prior written consent of the lenders.

(ii) Reconciliation of bank loans

30 April 2022

£’000

30 April 2021

£’000

Bank loans held as at 30 April 2021 51,110 57,024

Term loan repaid under October 2018 facility - (10,300)

Term loan of JPN¥5,200m and US$23.3m under October 2018 facility expired in October 2020 - (46,064)

Term loan drawn under September 2020 facility - 9,870

Term loan of JPN¥3,800m and US$36m under September 2020 facility due to expire in

September 2022

- 46,064

Exchange losses on settlement of loan balances - 3,517

Effect of changes in foreign exchange rates on bank loans held 925 (9,001)

Bank loans held as at 30 April 2022 52,035 51,110

The movement in the liability arising from the bank loans due to changes in foreign exchange rates is a non-cash

movement and is included in the Statement of Comprehensive Income within ‘Other currency gains/(losses)’.

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18 Share capital

30 April 2022

£’000

30 April 2021

£’000

Allotted, Called up and Fully paid:

Ordinary shares of 25p each

Opening balance of 136,544,764 (30 April 2021: 134,566,000) 34,136 33,641

Issue of nil (30 April 2021: 2,749,000) ordinary shares - 688

Repurchase of 4,188,338 (30 April 2021: 770,236) ordinary shares into treasury (1,047) (193)

Allotted, called up and fully paid: 132,356,426 (30 April 2021: 136,544,764)

ordinary shares of 25p

33,089 34,136

4,958,574 (2021: 770,236) ordinary shares held in treasury 1,240 193

At 30 April 2022 34,329 34,329

During the year, there were no ordinary shares issued (2021: 2,749,000 ordinary shares were issued, with nominal value

of £688,000 for a net consideration received of £53,715,000). A total of 4,188,338 (2021:770,236) ordinary shares were

repurchased into treasury at a cost of £98,639,000 (2021: £16,966,000).

Subsequent to the year end, and to 15 July 2022 (latest practicable date), 1,475,096 ordinary shares were repurchased

into treasury at an average price of 1,899.35p per share.

19 Capital redemption reserve

30 April 2022

£’000

30 April 2021

£’000

As at 1 May 2021 12,802 12,802

As at 30 April 2022 12,802 12,802

The Capital Redemption Reserve represents the nominal value of shares repurchased and cancelled.

This reserve is not distributable.

20 Share premium

30 April 2022

£’000

30 April 2021

£’000

As at 1 May 2021 223,374 170,532

Issue of nil (30 April 2021: 2,749,000) ordinary shares - 52,842

As at 30 April 2022 223,374 223,374

The share premium arises from excess of consideration received on the issue of the shares over the nominal value.

This reserve is not distributable.

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Notes to the Financial Statements continued

21 Special non-distributable reserve

30 April 2022

£’000

30 April 2021

£’000

As at 1 May 2021 7,536 7,536

As at 30 April 2022 7,536 7,536

The special non-distributable reserve arose from the exercise of warrants which were issued by the Company at launch in

1996. The final warrant conversion was exercised in 2005.

This reserve is not distributable.

22 Capital reserves

Capital*

reserve -

gains/losses

on disposal

30 April 2022

£’000

Capital**

reserve -

revaluation

30 April 2022

£’000

Total

capital

reserves

30 April 2022

£’000

Capital

reserve -

gains/losses

on disposal

30 April 2021

£’000

Capital

reserve -

revaluation

30 April 2021

£’000

Total

capital

reserves

30 April 2021

£’000

As at 1 May 2021 2,198,239 1,042,594 3,240,833 1,553,026 630,702 2,183,728

Net (losses)/gains on disposal of investments (121,148) - (121,148) 480,354 - 480,354

Transfer on disposal of investments 353,508 (353,508) - 255,764 (255,764) -

Valuation (losses)/gains on investments held

during the year

- (132,546) (132,546) - 647,292 647,292

Net (losses)/gains on derivative contracts (10,212) 4,413 (5,799) (60,474) 11,363 (49,111)

Exchange gains/(losses) on currency balances 18,460 - 18,460 (9,863) - (9,863)

Exchange losses on settlement of loan

balances

- - - (3,517) - (3,517)

Exchange (losses)/gains on translation of loan

balances

- (925) (925) - 9,001 9,001

Ordinary shares repurchased into treasury (98,639) - (98,639) (16,966) - (16,966)

Stamp duty on ordinary shares repurchased

into treasury

(493) - (493) (85) - (85)

As at 30 April 2022 2,339,715 560,028 2,899,743 2,198,239 1,042,594 3,240,833

* These are realised distributable capital reserves which may be used to repurchase the Company’s shares or be distributed as dividends.

** This reserve comprises holdings gains on investments (which maybe deemed to be realised) and other amounts, which are unrealised. An analysis has not

been made between the amounts that are realised (and maybe distributed or used to repurchase the Company’s shares) and those that are unrealised.

23 Revenue reserve

30 April 2022

£’000

30 April 2021

£’000

As at 1 May 2021 (110,111) (99,642)

Loss for the year to 30 April (16,688) (10,469)

As at 30 April 2022 (126,799) (110,111)

The revenue reserve may be distributed or used to repurchase the Company’s shares (subject to being a positive balance).

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24 Transactions with the Manager and related party transactions

(a) Transactions with the Manager

Under the terms of an agreement dated 9 February 2001 the Company has appointed Polar Capital LLP (“Polar Capital”)

to provide investment management, accounting, secretarial and administrative services. Details of the fee arrangement

for these services are given in the Strategic Report. The total management fees, paid under this agreement to Polar

Capital in respect of the year ended 30 April 2022 were £28,281,000 (2021: £24,134,000) of which £6,374,000 (2021:

£6,844,000) was outstanding at the year end.

There was no performance fee payable in respect of the year nor outstanding at the year end (2021: same).

In addition, with effect from 1 May 2019, the research costs and the first £100,000 of marketing costs are borne by the

Manager.

The overrun audit fees of £12,000 and £10,000 were incurred by the Company in the completion of the 2021 audit and

during the financial year ended 2022 and were recharged to the Investment Manager given the nature of the additional

audit work undertaken. See note 9 and the Audit Committee Report on page 91 for more details.

A new investment management agreement was put in place with the Manager and announced on 12 January 2022 which

took effect on 1 May 2022. The revised fee arrangement agreed lower rates of the management base fee and simplified

the structure of the base fee to three tiers and is calculated on the daily net asset value; The Manager also agreed to

increase the contribution to the marketing costs payable by the Company to the first £200,000 per annum. Details of the

revised terms of the investment management agreement are provided in the Strategic Report on pages 60 and 61.

(b) Related party transactions

The compensation payable to key management personnel in respect of short term employee benefits is £229,000

(2021: £182,000) which comprises £229,000 (2021: £182,000) paid by the Company to the Directors.

Refer to pages 92 to 97 for the Directors’ Remuneration Report including Directors’ shareholdings and movements within

the year.

25 Net asset value per ordinary share

Net asset value per share

30 April 2022 30 April 2021

Undiluted:

Net assets attributable to ordinary Shareholders (£’000) 3,050,985 3,408,763

Ordinary shares in issue at end of year 132,356,426 136,544,764

Net asset value per ordinary share (pence) 2305.13 2496.44

As at 30 April 2022, there were no potentially dilutive shares in issue (2021: there was no dilution)

26 Segmental reporting

Geographical segments

Since the Company does not have external customers an analysis of the Company’s investments held at 30 April 2022 by

geographical segment and the related investment income earned during the year to 30 April 2022 is noted below:

30 April 2022

Value of

investments

£’000

Year ended

30 April 2022

Gross

income

£’000

30 April 2021

Value of

investments

£’000

Year ended

30 April 2021

Gross

income

£’000

North America 2,260,033 6,945 2,388,352 8,103

Europe 91,450 2,171 242,301 896

Asia Pacific (inc. Middle East) 459,597 6,754 612,381 9,157

Total 2,811,080 15,870 3,243,034 18,156

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Notes to the Financial Statements continued

27 Derivatives and other financial instruments

Risk management policies and procedures

The Company invests in equities and other financial instruments for the long term to further the Investment Objective set

out on page 56. This exposes the Company to a range of financial risks that could impact on the assets or performance of

the Company.

The main risks arising from the Company’s pursuit of its Investment Objective are market risk, liquidity risk, credit risk and

gearing risk and the Directors’ approach to the management of them is set out below. The risks have remained unchanged

since the beginning of the year to which the financial statements relate.

The Company’s exposure to financial instruments comprise:

- Equity and non-equity shares which are held in the investment portfolio in accordance with the Company’s Investment

Objective.

- Term loans and bank overdrafts, the main purpose of which is to raise finance for the Company’s operations.

- Cash, money market funds, liquid resources and short-term receivables and payables that arise directly from the

Company’s operations.

- Derivative transactions which the Company enters into may include equity or index options, index future contracts,

forward foreign exchange contracts and interest rate swaps.

The purpose of these is to manage the market price risks, foreign exchange risks and interest rate risks arising from the

Company’s investment activities.

The overall management of the risks is determined by the Board and its approach to each risk identified is set out below.

The Board and the Investment Manager co-ordinate the risk management and the Investment Manager assesses the

exposure to market risk when making each investment decision.

(a) Market Risk

Market risk comprises three types of risk: market price risk (see Note 27(a)(i)), currency risk (see Note 27(a)(ii)), and interest

rate risk (see Note 27(a)(iii)).

(i) Market Price Risk

The Company is an investment company and as such its performance is dependent on the valuation of its investments.

Consequently, market price risk is the most significant risk that the Company faces.

Market price risk arises mainly from uncertainty about future prices of financial instruments used in the Company’s

operations. It represents the potential loss the Company might suffer through holding market positions in the face of price

movements.

A detailed breakdown of the investment portfolio is given on pages 32 to 39. Investments are valued in accordance with

the Company’s accounting policies as stated in Note 2(f).

At the year end, the Company’s portfolio included derivative instruments of £6,479,000 (2021: £4,090,000).

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Management of the risk

In order to manage this risk, it is the Board’s policy to hold an appropriate spread of investments in the portfolio in order

to reduce both the statistical risk and the risk arising from factors specific to a particular technology sector. The allocation

of assets to international markets, together with stock selection covering small, medium and large companies, and the use

of index options, are other factors which act to reduce price risk. The Investment Manager actively monitors market prices

throughout the year and reports to the Board which meets regularly in order to consider investment strategy.

Market price risk exposure

The Company’s exposure to changes in market prices at 30 April on its quoted investments was as follows:

30 April 2022

£’000

30 April 2021

£’000

Non-current asset investments at fair value through profit or loss 2,811,080 3,243,034

Derivative financial instruments at fair value through profit or loss 6,479 4,090

2,817,559 3,247,124

An analysis of the Company’s portfolio is shown on pages 32 to 35.

Market price risk sensitivity

The following table illustrates the sensitivity of the return after taxation for the year and the value of Shareholders’ funds

to an increase or decrease of 20% (2021: 15%) in the fair values of the Company’s investments. This level of change is

considered to be reasonably possible based on observation of current market conditions and historic trends. The sensitivity

analysis is based on the Company’s investments at each balance sheet date, with all other variables held constant.

30 April 2022 30 April 2021

Increase in

fair value

£’000

Decrease in

fair value

£’000

Increase in

fair value

£’000

Decrease in

fair value

£’000

Revenue return (3,945) 3,945 (3,409) 3,409

Capital return 563,512 (563,512) 487,069 (487,069)

Change to the profit after tax for the year 559,567 (559,567) 483,660 (483,660)

Change to Shareholders’ funds 559,567 (559,567) 483,660 (483,660)

Change to NAV per share (pence) 422.77 (422.77) 354.21 (354.21)

(ii) Currency Risk

The Company’s total return and net assets can be significantly affected by currency translation movements as the majority

of the Company’s assets and revenue are denominated in currencies other than Sterling.

Management of the risk

The Investment Manager mitigates the individual currency risks through the international spread of investments and may

make use of forward foreign exchange contracts. Borrowings in foreign currencies are entered into to manage the asset

exposure to those currencies, which vary according to the asset allocation.

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Notes to the Financial Statements continued

Foreign currency exposure

The table below shows, by currency, the split of the Company’s non-Sterling monetary assets, liabilities and investments

that are priced in currencies other than Sterling.

30 April 2022

£’000

30 April 2021

£’000

Monetary Assets:

Cash and short term receivables

US Dollars 218,119 130,603

Euros 57,761 16,296

Japanese Yen 32,928 35,360

Swiss Franc 12,879 6,816

Hong Kong Dollars 8,035 26,416

Swedish Krona 1,703 -

Taiwan Dollars 923 317

Korean Won 375 435

Norwegian Krone 222 -

Polish Zloty 5 -

Monetary Liabilities:

Payables

US Dollars (43,678) (29,178)

Euros (3,105) (5)

Taiwan Dollars (2,709) -

Japanese Yen (16) (18)

Swiss Franc (7) -

Bank Loans:

US Dollars (28,674) (26,001)

Japanese Yen (23,361) (25,109)

Foreign currency exposure on net monetary items 231,400 135,932

Non-Monetary Items:

Investments at fair value through profit or loss that are equities

US Dollars 2,322,762 2,546,974

Taiwan Dollars 124,760 125,518

Japanese Yen 104,636 159,764

Korean Won 88,449 124,568

Euros 73,137 177,166

Hong Kong Dollars 66,960 85,747

Canadian Dollars 9,169 3,593

Swiss Franc 3,309 -

Swedish Kroner 2,181 4,140

Investments at fair value through profit or loss that are derivatives

US Dollars 6,479 4,090

Total net foreign currency exposure 3,033,242 3,367,492

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Foreign currency exchange rate movement

During the financial year Sterling depreciated by 9.3% (2021: appreciated by 9.8%) against the US Dollar, appreciated by

7.5% (2021: appreciated by 12.2%) against the Japanese Yen, appreciated by 3.5% (2021: depreciated by 0.1%) against

the Euro, depreciated by 8.4% (2021: appreciated by 10.0%) against the Hong Kong Dollar, appreciated by 2.4% (2021:

appreciated by 0.2%) against the Korean Won and depreciated by 4.3% (2021: appreciated by 3.1%) against the Taiwan

Dollar.

Foreign currency sensitivity

The following table illustrates the sensitivity of the loss after tax for the year and the value of Shareholders’ funds in regard

to the financial assets and financial liabilities and the exchange rates for the six major currencies noted under foreign

currency exposure, £/US Dollar, £/Euro, £/Japanese Yen, £/Hong Kong Dollar, £/Korean Won and £/Taiwan Dollar.

Based on the year end position, if Sterling had depreciated, by a further 10% (2021: 10%), against the currencies shown,

this would have the following effect:

30 April 2022

£’000

US Dollar Euro

Japanese

Yen

Hong Kong

Dollar

Korean

Won

Taiwan

Dollar

Statement of Comprehensive Income -

profit/loss after tax

Revenue return 746 87 355 21 209 285

Capital return 274,996 14,179 12,552 8,333 9,828 13,664

Change to the profit/loss after tax for the year 275,742 14,266 12,907 8,354 10,037 13,949

Change to Shareholders’ funds 275,742 14,266 12,907 8,354 10,037 13,949

30 April 2021

£’000

US Dollar Euro

Japanese

Yen

Hong Kong

Dollar

Korean

Won

Taiwan

Dollar

Statement of Comprehensive Income –

profit/loss after tax

Revenue return 671 104 277 22 245 189

Capital return 291,821 21,480 18,772 12,463 13,841 13,982

Change to the profit/loss after tax for the year 292,492 21,584 19,049 12,485 14,086 14,171

Change to Shareholders’ funds 292,492 21,584 19,049 12,485 14,086 14,171

Based on the year end position, if Sterling had appreciated, by a further 10% (2021: 10%), against the currencies shown,

this would have the following effect:

30 April 2022

£’000

US Dollar Euro

Japanese

Yen

Hong Kong

Dollar

Korean

Won

Taiwan

Dollar

Statement of Comprehensive Income -

profit/loss after tax

Revenue return (610) (71) (290) (17) (171) (233)

Capital return (224,997) (11,601) (10,270) (6,818) (8,041) (11,179)

Change to the profit/loss after tax for the year (225,607) (11,672) (10,560) (6,835) (8,212) (11,412)

Change to Shareholders’ funds (225,607) (11,672) (10,560) (6,835) (8,212) (11,412)

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Notes to the Financial Statements continued

30 April 2021

£’000

US Dollar Euro

Japanese

Yen

Hong Kong

Dollar

Korean

Won

Taiwan

Dollar

Statement of Comprehensive Income -

profit/loss after tax

Revenue return (549) (85) (227) (18) (200) (155)

Capital return (238,763) (17,575) (15,359) (10,197) (11,324) (11,440)

Change to the profit/loss after tax for the year (239,312) (17,660) (15,586) (10,215) (11,524) (11,595)

Change to Shareholders’ funds (239,312) (17,660) (15,586) (10,215) (11,524) (11,595)

In the opinion of the Directors, neither of the above sensitivity analyses are representative of the year as a whole since

the level of exposure changes frequently as part of the currency risk management process used to meet the Company’s

objectives.

(iii) Interest Rate Risk

Interest rate changes may affect the income received from cash at bank and interest payable on borrowings.

All cash balances earn interest at a variable rate.

The Company has additional exposure to interest rate risk in relation to its holdings in the money market funds and receive

interests income at a variable rate.

The Company finances its operations through its term loans as well as bank overdrafts and any retained gains arising from

operations.

The Company uses borrowings in the desired currencies at both fixed and floating rates of interest to both generate the

desired interest rate profile and manage the exposure to interest rate fluctuations.

The Company’s Japanese Yen and US Dollar two-year term loans carry a fixed rate of interest and therefore do not give

rise to any interest rate risk.

Management of the risk

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

regular basis. The Company may also enter into interest rate swap agreements.

Interest rate exposure

The exposure, at 30 April, of financial assets and liabilities to interest rate risk is shown by reference to:

– floating interest rates (i.e. giving cash flow interest rate risk) - when the rate is due to be re-set;

– fixed interest rates (i.e. giving fair value interest rate risk) - when the financial instrument is due for repayment.

30 April 2022 (£’000) 30 April 2021 (£’000)

Within

one year

More than

one year Total

Within

one year

More than

one year Total

Exposure to floating interest rates:

Cash and cash equivalents 219,403 - 219,403 162,479 - 162,479

Money market funds 91,960 - 91,960 50,253 - 50,253

Exposure to fixed interest rates:

Bank loan (52,035) - (52,035) - (51,110) (51,110)

Total exposure to interest rates 259,328 - 259,328 212,732 (51,110) 161,622

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As at year ended 30 April 2022, the Company held two, two-year fixed rate term loan with ING Bank N.V. The Japanese

Yen 3.8 billion (2021: Japanese Yen 3.8 billion) carries an interest rate of 0.90% (2021: 0.90%) per annum and US Dollar

36 million (2021: US Dollar 36 million) carries an interest rate of 1.335%% (2021: 1.335%) per annum. Both of the loans

fall due for repayment on 30 September 2022.

Interest rate sensitivity

The sensitivity analysis is based on the Company’s monetary financial instruments held at each balance sheet date, with all

other variables held constant.

The table below illustrates the Company’s sensitivity to interest rate movements, with a change of 1%

(2021: 0.25%) per annum in the rates of interest available to the Company’s financial assets and a change of

1% (2021: 0.25%) per annum in the rates of interest available to the Company’s financial liabilities. The effect on the

revenue and capital return after tax and the value of Shareholders’ funds are as follows if rates increased:

30 April 2022

£’000

30 April 2021

£’000

Statement of Comprehensive Income - profit/loss after tax

Revenue return 2,593 404

Capital return - -

Change to the profit/loss after tax for the year 2,593 404

Change to Shareholders’ funds 2,593 404

A corresponding decrease in the rate would have equal and opposite effect to that shown in the table above.

This level of change is considered to be reasonably possible based on observation of current market conditions. This is

not representative of the year as a whole, since the exposure changes as level of cash/(loans) held during the year will be

affected by the strategy being followed in response to the Investment Manager’s perception of market prospects and the

investment opportunities available at any particular time.

(b) Liquidity Risk

Liquidity risk is the possibility of failure of the Company to realise sufficient assets to meet its financial liabilities.

Management of the risk

The Company’s assets mainly comprise readily realisable securities which may be sold to meet funding requirements as

necessary.

Liquidity risk exposure

The maturity of the Company’s existing borrowings are set out in Note 17 to the Financial Statements. Short-term

flexibility is achieved through the use of overdraft facilities.

At 30 April the financial liabilities comprised of:

30 April 2022

£’000

30 April 2021

£’000

Due within 1 month:

Balances due to brokers 49,419 29,152

Repurchase of ordinary shares awaiting settlement 1,131 -

Accruals 6,688 7,044

Bank overdraft - 3,473

Due after 3 months and within 1 year:

Bank loan and interest 52,336 626

Due after 1 year and within 2 years:

Bank loan and interest - 51,358

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Notes to the Financial Statements continued

Credit risk is the exposure to loss from failure of a counterparty to deliver securities or cash for acquisitions or disposals of

investments or to repay deposits.

Management of the risk

The Company manages credit risk by using brokers from a database of approved brokers and by dealing through

Polar Capital.

All cash balances are held with approved counterparties. HSBC Bank plc is the Custodian of the Company’s assets. The

Company’s assets are segregated from HSBC’s own trading assets and are therefore protected in the event that HSBC were

to cease trading.

These arrangements were in place throughout the current year and the prior year.

Credit risk exposure

The maximum exposure to credit risk at 30 April 2022 was £342,331,000 (30 Apr 2021: £252,191,000) comprising:

30 April 2022

£’000

30 April 2021

£’000

Balances due from brokers 29,315 34,379

Accrued income 1,653 1,607

Cash at bank 211,940 165,952

Cash held at derivative clearing houses 7,463 –

Money market funds 91,960 50,253

342,331 252,191

All of the above financial assets are current, their fair values are considered to be the same as the values shown and the

likelihood of a material credit default is considered low.

None of the Company’s financial assets are past due or impaired. All deposits were placed with banks that had a rating of

A or higher.

The money market fund, BlackRock’s Institutional Cash Series plc – US Treasury Fund, held by the Company as at year

ended 30 April 2022 has a rating of AAA or higher, the fund invests primarily in US Treasury bills, US Treasury Repurchase

Agreements and other similar instruments.

Investment transactions are carried out with a large number of brokers, the credit standing of each is reviewed periodically

by the Investment Manager are set on the amount that may be due from any one broker.

(d) Gearing risk

The Company’s policy is to increase its exposure to equity markets through the judicious use of borrowings. When

borrowings are invested in such markets, the effect is to magnify the impact on Shareholder’s funds of changes, both

positive and negative, in the value of the portfolio.

Management of the risk

The Company uses short-term loans to manage gearing risk, details of which can be found in Note 17.

Gearing risk exposure

The loans are valued at amortised cost, using the effective interest rate method in the financial statements. The Board

regulates the overall level of gearing by raising or lowering cash balances.

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(e) Capital Management Policies and Procedures

The Company’s capital, or equity, is represented by its net assets which are managed to achieve the Company’s Investment

Objective set out on page 56.

The Board monitors and reviews the broad structure of the Company’s capital on an ongoing basis. This review includes:

(i) the planned level of gearing through the Company’s fixed rate loan facility, credit facility and

(ii) the need to issue or buy back equity shares for cancellation, which takes account of the difference between the net

asset value per share and the share price (i.e. the level of share price discount or premium).

The Company’s objectives, policies and processes for managing capital are unchanged from the preceding accounting

period.

The Company is subject to externally imposed capital requirements through the Companies Act with respect to its status

as a public company.

In addition in order to pay dividends out of profits available for distribution by way of dividend, the Company has to be

able to meet one of the two capital restriction tests imposed on investment companies by Company Law. The Company is

also subject to externally imposed capital requirements through the loan covenants set out in the loan facility.

These requirements are unchanged since the previous year end and the Company has complied with them.

28 Post Balance Sheet Event

Subsequent to the year end, and to 15 July 2022, 1,475,096 ordinary shares were repurchased and placed in the treasury

at an average price of 1,899.35p per share.

There are no other significant events that have occurred after the end of the reporting period to the date of this report

which require disclosure.

Shareholder Information

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In assessing the performance of the Company, the Investment Manager and the Directors use the following APMs which

are not defined in accounting standards or law but are considered to be known industry metrics:

Net Asset Value (NAV)

The NAV is the value attributed to the underlying assets of the Company less the liabilities, presented either on a per share

or total basis.

The value of the Company’s assets, principally investments made in other companies and cash being held, minus any

liabilities. The NAV is also described as ‘Shareholders’ funds’ per share. The NAV is often expressed in pence per share after

being divided by the number of shares which have been issued. The NAV per share is unlikely to be the same as the share

price which is the price at which the Company’s shares can be bought or sold by an investor. The NAV per ordinary share is

published daily.

30 April 2022 30 April 2021

Company’s total equity a £3,050,985,000 £3,408,763,000

Total ordinary shares in issue (excluding those held in treasury) b 132,356,426 136,544,764

Company’s NAV per share as at the year end (a / b) 2305.13p 2496.44p

NAV Total Return (APM)

The NAV total return shows how the net asset value per share has performed over a period of time taking into account

both capital returns and dividends paid to Shareholders.

NAV total return reflects the change in value of NAV plus the dividend paid to the Shareholder. Since the Company has

not paid a dividend the NAV total return is the same as the NAV per share return as at the year ended 30 April 2022 and

30 April 2021.

Year ended

30 April 2022

Year ended

30 April 2021

Opening NAV per share a 2496.44p 1715.59p

Closing NAV per share b 2305.13p 2496.44p

NAV total return for the year (b / a)-1 (7.7%) 45.5%

Share Price Total Return (APM)

Share price total return shows how the share price has performed over a period of time. It assumes that dividends paid to

Shareholders are reinvested in the shares at the time the shares are quoted ex dividend.

Share price total return reflects the change in share price value plus the dividend paid to the Shareholder. Since the

Company has not paid dividends the share price total return is the same as the price per ordinary share return as at year

end 30 April 2022 and 30 April 2021.

Year ended

30 April 2022

Year ended

30 April 2021

Opening share price a 2364.00p 1774.00p

Closing share price b 2040.00p 2364.00p

Share price total return for the year (b / a)-1 (13.7%) 33.3%

Alternative Performance Measures (APMs)

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(Discount)/Premium (APM)

A description of the difference between the share price and the net asset value per share usually expressed as a

percentage (%) of the net asset value per share. If the share price is higher than the NAV per share the result is a premium.

If the share price is lower than the NAV per share, the shares are trading at a discount.

30 April 2022 30 April 2021

Closing share price a 2040.00p 2364.00p

Closing NAV per share b 2305.13p 2496.44p

Discount of ordinary share price to the NAV per ordinary share (a / b)-1 (11.5%) (5.3%)

Ongoing Charges (APM)

Ongoing charges are calculated in accordance with AIC guidance by taking the total expenses of the Company, excluding

performance fees and exceptional items, if any, and expressing them as a percentage of the average daily net asset value

of the Company over the year.

Ongoing charges include all regular operating expenses of the Company. Transaction costs, interest payments, tax and

non-recurring expenses are excluded from the calculation as are the costs incurred in relation to share issues and share

buybacks.

Where a performance fee is paid or is payable, a second ongoing charge is provided, calculated on the same basis as the

above but incorporating the amount of performance fee due or paid.

Year ended

30 April 2022

Year ended

30 April 2021

Investment Management Fee (Note 8 on page 115) £28,281,000 £24,134,000

Other Administrative Expenses (Note 9 on page 116) £1,335,000 £1,071,000

a £29,616,000 £25,205,000

Average daily net assets value b £3,525,121,000 £3,075,483,000

Ongoing Charges excluding performance fee a / b 0.84% 0.82%

Performance fee (Note 8 on page 115) c – –

d = a+c £29,616,000 £25,205,000

Ongoing charges including performance fee d / b 0.84% 0.82%

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Glossary of Terms

AAII Bear American Association of Individual Investors sentiment survey showing the mood of

individual investors – Bullish/Neutral/Bearish.

AAF Report

A report prepared in accordance with Audit and Assurance Faculty guidance issued by the

Institute of Chartered Accountants in England and Wales. Utilised within the review of

internal controls.

AGM

The Annual General Meeting will be held on Thursday, 8 September 2022. Details of the

arrangements will be provided in the separate Notice of AGM and on the Company’s

website.

AIC

Association of Investment Companies, the industry body for closed ended investment

companies.

AIFM Alternative Investment Fund Manager – Polar Capital LLP.

AIFMD

Alternative Investment Fund Managers Directive. Issued by the European Parliament in

2012 and 2013. The Directive requires that, while the Board of Directors of an Investment

Trust remains fully responsible for all aspects of the Company’s strategy, operations and

compliance with regulations, all alternative investment funds (‘AIFs’) in the UK and European

Union, must appoint a Depositary and an Alternative Investment Fund Manager (‘AIFM’).

The Company’s AIFM is Polar Capital LLP.

Benchmark

The Dow Jones World Technology Index (total return, Sterling adjusted, with the removal of

relevant withholding taxes).

BREXIT This refers to the withdrawal of the United Kingdom from the European Union on

31 January 2020.

Closed-ended

Investment Company

An Investment Company whose shares are traded on an exchange at a price not necessarily

related to the net asset value of the company and which can only be issued or bought back

by the company in certain circumstances.

COVID-19 Coronavirus, a highly contagious and infectious disease caused by the acute respiratory

syndrome SARS-CoV-2 virus; COVID-19 was first discovered in December 2019.

Custodian

The Custodian is HSBC Bank plc, a financial institution responsible for safeguarding,

worldwide, the listed securities and certain cash assets of the Company, as well as the

income arising therefrom, through provision of custodial, settlement and associated services.

Depositary

The Depositary is also HSBC Bank plc. Under AIFMD rules the Company must appoint

a Depositary whose duties in respect of investments, cash and similar assets include:

safekeeping; verification of ownership and valuation; and cash monitoring. Under the

AIFMD rules, the Depositary has strict liability for the loss of the Company’s financial assets

in respect of which it has safe-keeping duties. The Depositary’s oversight duties will include

but are not limited to share buybacks, dividend payments and adherence to investment

limits.

Derivative

A contract between two or more parties, the value of which fluctuates in accordance with

the value of an underlying security. Examples of derivatives are Put and Call Options, Swap

contracts, Futures and Contracts for Difference. A derivative can be an asset or a liability and

is a form of gearing because it can increase the economic exposure to Shareholders.

ESEF

European Single Electronic Format is the requirement whereby reports are prepared and

filed in XHTML format, such requirement applies with effect from 1 January 2021 to all

annual reports and accounts issuers on UK (or EU) regulated markets. In addition, for issuers

preparing consolidated annual accounts in accordance with IFRS, the XHTML file will require

tagging under the IFRS taxonomy.

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ESMA The European Securities and Markets Authority is an independent EU authority whose

purpose is to improve investor protection and promote stable, orderly financial markets.

Fund/Portfolio

Manager

Ben Rogoff of Polar Capital LLP has been delegated responsibility for the creation and

management of the portfolio of investments subject to the investment policy and various

parameters set by the Board of Directors.

IFRS

International accounting standards comprise standards and interpretations approved by

the International Accounting Standards Board (IASB) and International Financial Reporting

Committee, including interpretations issued by the IFRS Interpretations Committee.

Investment Company

In Section 833 of the Companies Act 2006, an Investment Company is defined as a

company which invests its funds in shares, land or other assets with the aim of spreading

investment risk.

Investment Trust

taxation status

UK Corporation Tax law (Section 1158 of the Corporation Tax Act 2010) allows an

Investment Company (referred to in Tax law as an Investment Trust) to be exempt from tax

on its profits realised on investment transactions, provided it complies with certain rules.

These are similar to Section 833 above but further require that the Company must be listed

on a regulated stock exchange and that it cannot retain more than 15% of income received.

The Directors’ Report contains confirmation of the Company’s compliance with this law and

its consequent exemption from taxation on capital gains.

KPMG The Company’s auditor is KPMG LLP, represented by John Waterson, Partner.

Leverage

As defined under AIFMD rules, leverage is any method by which the exposure of an AIF

is increased through borrowing of cash or securities or leverage embedded in derivative

positions. Leverage is broadly equivalent to gearing but is expressed as a ratio between the

assets (excluding borrowings) and the net assets (after taking account of borrowings).

Manager/Investment

Manager

Polar Capital LLP (Polar Capital), also appointed as AIFM. The responsibilities and fees

payable to Polar Capital are set out in the Directors’ Report.

MiFID II Markets in Financial Instruments Directive, applicable from 3 January 2018.

Non-executive Director

The Company is managed by a Board of Directors who are appointed by letter rather

than a contract of employment, with the Company. The Company does not have any

executive Directors. Remuneration of the Non-executive Directors is set out in the Directors’

Remuneration Report while the duties of the Board and the various Committees are set out

in the Corporate Governance Statement.

PCT or the Company Polar Capital Technology Trust Plc.

PRIIPS

The Packaged Retail and Insurance-based Investment Products regulations which came into

force on 1 January 2018 in the EU. The regulations require generic pre-sale disclosure of

investment ‘product’ costs, risks and certain other matters.

SORP

The Statement of Recommended Practice. The financial statements of the Company are

prepared in accordance with the Investment Trust SORP issued by the AIC.

UK-adopted IAS The international accounting standards adopted by the UK Endorsement Board after

delegation of adoption powers.

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Corporate Information

2022 Annual General Meeting (“AGM”)

The Company’s AGM will be held at 2:30pm on Thursday 8

September 2022 at Haberdashers’ Hall, 18 West Smithfield,

London, EC1A 9HQ and online via the Lumi Global

Electronic Platform.

Further information including the full text of the

resolutions, in addition to information on how to access

the online Lumi portal, to be proposed at the AGM and an

explanation of each resolution is contained in the Notice

of AGM which has been posted to Shareholders and is

available on the Company’s website.

Shareholders will have the option to ask questions at

the meeting either in person or within the online portal,

shareholders are also encouraged to send any questions

ahead of the AGM to the Board via the Company Secretary

at cosec@polarcapital.co.uk stating the subject matter

as PCTT-AGM. We will endeavour to answer relevant

questions at the meeting.

For ease of reference and understanding a brief explanation of

the resolutions and the structure of the AGM is given below.

Resolution 1 relates to the statutory requirement of every

company to lay before shareholders the Annual Report

and Financial Statements, i.e. this document in full. The

Annual Report has been prepared and approved by the

Board of Directors and audited by the externally appointed

auditors. The document will be filed at Companies House

once published to shareholders. The Annual Report sets out

the Company’s business strategy, governance structure and

procedures as well as the financial accounts for the financial

year under review and any forward-looking statements.

Resolution 2, in compliance with the Large and Medium-

Sized Companies and Groups (Accounts and Reports)

(Amendment) Regulation 2013 (the ‘Regulations’), The

Companies (Directors’ Remuneration Policy and Directors’

Remuneration Report) Regulations 2019 and the Listing

Rules of the Financial Conduct Authority, the Company is

required on a three-yearly basis to provide shareholders

with the opportunity to vote on the Company’s Directors’

Remuneration Policy. In addition to this, on an annual basis,

shareholders are presented, with the Directors’ Remuneration

Implementation Report which looks back at the year under

review and advises how the Remuneration Policy was

applied. Shareholders last voted on the Remuneration Policy

at the AGM in 2020 and the policy came into effect from 1

May 2021, the current policy will remain in effect until 30

April 2024 and a new policy will be presented to the AGM

in 2023 ahead of expiry of the current policy. Resolution 2

therefore, is the annual advisory vote of shareholders on

the Remuneration Implementation Report. The Directors’

Remuneration Report is presented on page 92.

Resolutions 3 to 8 relate to the annual election/re-election

of directors. In line with good corporate governance the

tenure policy of directors is 9-years, with the exception of

the Board’s Chair tenure policy which allows the Chair to

remain in role for up to 12-years in certain circumstances.

It is recommended that directors stand for re-election

on an annual basis in order to give shareholders the

opportunity to vote on each Director. Having undergone

a Board Evaluation process, as described on page 84, the

Directors have provided a rationale for their support for the

reappointment of each director on pages 10 and 11 and

within the Notice of AGM.

Resolutions 9 and 10 relate to the statutory appointment

or reappointment of the Company’s external auditors and

the Directors’ authority to determine their remuneration.

Further information is provided in the Audit Committee

Report on pages 90 to 91.

Resolution 11 to 13 relate to potential changes in the

share capital. Resolution 11 authorises the Directors to

allot (i.e. sell) ordinary shares, whether these be newly

created shares or shares held in the Company’s treasury

account which have been previously bought back in the

market. Once allotted the shares are listed on the London

Stock Exchange and have the same rights as any other

ordinary shares of the Company. Resolution 12 is proposed

in connection with 11 and allows the Directors to allot the

shares without pre-emption rights. Under the Companies

Act, all shareholders have the right of pre-emption which

means that the Company must offer the same to all; being

a listed company with many shareholders, the Directors ask

to disapply the pre-emption rights which means they are

able to offer and allot the shares to specific shareholders

or in specific ways to the market, noting that such

allotments would be at a premium to the net asset value

(NAV) per share and therefore accretive (i.e positive) to

overall shareholder value. While all shareholders can trade

the ordinary shares of the Company on the open market

there are times when a shareholder would like to acquire

greater amounts of shares than are available in the market

and might approach the Company through the corporate

broker to obtain shares. In a similar but opposite scenario,

resolution 13 provides the Directors’ the ability to buy

back (i.e. purchase) shares of the Company in the market.

Depending on the market environment, and various other

factors, the shares of the Company may trade at a discount

to NAV, when this is the case the Company may step in and

buy back shares in an effort to reduce the discount. Each

of these authorities require shareholder approval and are

regular resolutions proposed to each AGM; each authority

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remains in place for 12 months or until the limits have been

reached.

As noted within the Chair’s Statement and in the separate

Notice of AGM, the meeting is being held as a hybrid

meeting with full access for shareholders both in-person

but also online. This is the first year since the COVID-19

pandemic, we are returning to holding the meeting at an

external venue and we hope to welcome a greater number

of shareholders, we would be delighted to reach towards or

beyond the representation of 2019 and prior AGMs where

we would see some 60-80 people in the room; we have

however opted to also provide an online option as we did

in 2020 and 2021. We acknowledge that our shareholders

appreciate the ability to attend the AGM in whichever form

suits their needs and we hope that we will have a suitably

significant representation online. We note however that to

provide the online hybrid option does increase costs and

so this year is a test to establish the cost-benefit of the

hybrid meeting. In the event that we have very few online

representatives we may have to return to an in-person only

meeting next year.

We would very much welcome feedback from shareholders

on the format of the meeting, we will provide some

feedback cards at the AGM and shareholders are also

invited to email the Board at cosec@polarcapital.co.uk

with the subject heading AGM Feedback.

Share Capital, Voting Rights and

Transferability

The Company’s share capital is divided into ordinary shares

of 25p nominal value each. At 30 April 2022, there were

137,315,000 ordinary shares in issue of which 4,958,574

were held in treasury (2021: 770,236 ordinary shares held

in treasury).

Ordinary shares carry voting rights which are exercised on a

show of hands at a meeting, or on a poll, where each share

has one vote. Arrangements for the casting of proxy votes

are provided when a notice of meeting is issued.

Any shares in the Company may be held in uncertificated

form and, subject to the Articles, title to uncertificated

shares may be transferred by means of a relevant system.

Further information can be found in the Articles of

Association available on the Company’s website

www.polarcapitaltechnologytrust.co.uk

The Company is not aware of arrangements to restrict the

votes or transferability of its shares.

History and Structure

The Company was launched in 1996 with a five-yearly

continuation vote. Shareholders approved the resolution for

the Company to continue in operation in its current form

at the AGM in 2020. The next continuation vote of the

Company, in accordance with the Articles of Association,

will be proposed at the AGM to be held in 2025. The

Company continues to operate as an investment trust with

an independent Board and third-party investment manager.

Company Website

www.polarcapitaltechnologytrust.co.uk

The Investment Manager maintains a website on behalf of

the Company which provides a wide range of information

on the Company, monthly factsheets issued by the

Investment Manager and copies of announcements,

including the annual and half year reports when issued.

Information on the Company can also be obtained from

various other sources including:

• www.theaic.co.uk

• www.ft.com/markets

• www.londonstockexchange.co.uk

Benchmark

The Company uses the Dow Jones World Technology Index

(total return, Sterling adjusted, with the removal of relevant

withholding taxes) as the Benchmark against which Net

Asset Value (NAV) performance is measured for the purpose

of assessing performance fees.

Dividends

The Company has not historically paid a dividend as the

objective is capital growth.

Capital Gains Tax

Information on Capital Gains Tax (‘CGT’) is available on the

HM Revenue & Customs website www.hmrc.gov.uk/cgt/

index.

When shares are disposed of a capital gain may result if

the disposal proceeds exceed the sum of the base cost of

the shares sold and any other allowable deductions such as

share dealing costs. The exercise of subscription shares into

ordinary shares should not have given rise to a capital gain,

however a capital gain may arise on the eventual disposal

of those shares.

The calculations required to compute capital gains may

be complex and depend on personal circumstances.

Shareholders are advised to consult their personal financial

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Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

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advisor for further information regarding a possible tax

liability in respect of their shareholdings.

Within the Document Library of the Company’s website,

launch and calculation details for CGT purposes are

provided, Shareholders may find these useful when

considering their tax position.

Statement by the Depositary

The statement of the Depositary’s responsibilities in respect

of the Company and its report to Shareholders for the year

ended 30 April 2022 is available on the Company’s website.

The Depositary, having carried out such procedures as

it considered necessary, was satisfied that in all material

respects the Company was managed in accordance with

the applicable FCA rules and AIFMD.

Polar Capital Technology Trust plc is a public listed company

on the London Stock Exchange Premium Market section

and complies with the Financial Conduct Authority (‘FCA’)

Listing Rules. It is not directly authorised and regulated by

the FCA.

Statement By The AIFM

The statement by the AIFM in respect of matters to be

disclosed to investors for the year ended 30 April 2022 is

available on the Company’s website.

Share Price and Net Asset Value

The Company’s Net Asset Value (NAV) is normally released

daily, on the next working day, following the calculation

date, to the London Stock Exchange. The mid-market price

of the ordinary shares is published daily in the Financial

Times in the Companies and Markets section under the

heading ‘Investment Companies’. Share price information

is also available from The London Stock Exchange website:

www.londonstockexchange.co.uk

Securities Financing Transactions

The Securities Financing Transactions Regulation, as

published by the European Securities and Markets

Authority, aims to improve the transparency of the

securities financing markets. Disclosures regarding exposure

to Securities Financing Transactions (‘SFTs’) or total return

swaps will be required on all reports & accounts published

after 13 January 2018. During the period to 30 April 2022

and at the balance sheet date, the Company did not use

SFTs or total return swaps, as such no disclosure is required.

Electronic Communications

If you hold your shares in your own name you can choose

to receive communications from the Company in electronic

format. This method reduces cost, is environmentally

friendly and, for many, is convenient.

If you would like to take advantage of Electronic

Communications, please visit our registrar’s website at

www.shareview.co.uk. You will need your Shareholder

Reference Number. If you agree to the terms and

conditions, in future, on the day that documents are sent

to shareholders by post you will receive an e-mail providing

the website address where the documents can be viewed

and downloaded. Paper copies will still be available on

request.

Disability Act

Copies of this Annual Report and Financial Statements or

other documents issued by the Company are available from

the Company Secretary. If needed, copies can be made

available in a variety of formats, either Braille or on audio

tape or larger type as appropriate.

You can contact our Registrars, Equiniti Limited, who have

installed textphones to allow speech and hearing-impaired

people who have their own textphone to contact them

directly by ringing 0870 600 3950 without the need for

an intermediate operator. Specially trained operators are

available during normal business hours to answer queries

via this service. Alternatively, if you prefer to go through a

‘typetalk’ operator (provided by the Royal National Institute

for the Deaf), you should dial 18001 followed by the

number you wish to dial.

Investing

The ordinary shares of the Company are listed and traded

on the London Stock Exchange. Investors should be aware

that the value of the Company’s ordinary shares may reflect

the greater relative volatility of technology shares.

Polar Capital Technology Trust plc is an investment trust

and as such its ordinary shares are excluded from the FCA’s

restrictions which apply to non-mainstream investment

products. The Company conducts its affairs and intends to do

so for the foreseeable future so that the exclusion continues

to apply.

There are a variety of ways to invest in the Company.

However, this will largely depend upon whether you

would like financial advice or are happy to make your own

investment decisions.

Corporate Information continued

www.polarcapitaltechnologytrust.co.uk

141

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Investing Risks

Investors should be aware of the following risks when

considering investing in the shares of Polar Capital

Technology Trust plc:

Past performance is not a guide to future performance.

Please remember that any investment in the shares of

Polar Capital Technology Trust either directly or through a

savings scheme or ISA carries the risk that the value of the

investment and any income from such may go down as

well as up due to the fluctuations of the share price, the

market and interest rates. This risk may result in an investor

not getting back the original amount invested.

Investors should be aware that the value of the NAV of the

Company’s shares may reflect the greater relative volatility

of technology shares. Technology shares are subject to the

risks of developing technologies, competitive pressures

and other factors including the acceptance by business

and consumers of new technologies. Many companies

in the technology sector are smaller companies and are

therefore also subject to the risks attendant on investing in

smaller capitalisation businesses. As the Company invests in

overseas companies changes in exchange rates may cause

fluctuations in the value of the investments and of your

investment in the Company.

The Company takes on bank debt for investment purposes

(‘gearing’) which exposes the company to exchange risk

when the borrowings are in different currencies and the

value of the investments made with the borrowings may

fall and may not be sufficient to cover the borrowings and

interest costs. However, the Company may increase or

decrease its borrowing levels to suit market conditions.

If you are investing through a savings plan, ISA or other

investment arrangement it is important that you read the

key features documents and understand the risks associated

with investing in the shares of the Company. If you are in

any doubt as to the suitability of a plan or any investment

available within a plan, please take professional advice.

Tax rates and reliefs change from time to time and may

affect the value of your investment.

For those investors who would like advice:

Private Client Stockbrokers – generally for investors with

a large lump sum to invest, a private client stockbroker will

manage a portfolio of shares on behalf of a private investor

and will offer a personalised service to meet an individual’s

particular needs. A list of private client stockbrokers is

available from The Personal Investment Management &

Financial Advice Association (PIMFA) at www.pimfa.co.uk

Financial Advisers – carry out the share transactions for

their clients, they can do this directly but also via a growing

number of platforms that offer investment trusts including

AJ Bell, Interactive Investor, Ascentric, Embark, Nucleus,

Raymond James, Seven IM and Transact. For investors

looking to find a financial adviser, please visit www.

unbiased.co.uk

For those investors who are happy to make their

own investment decisions:

Online Stockbroking Services – There are a number of

real time execution only stockbroker services which allow

private investors to trade online for themselves, manage

a portfolio and buy UK listed shares. Online stockbroking

services include AJ Bell, Interactive Investor, Barclays

Stockbrokers, Halifax Share Dealing and Hargreaves

Lansdown.

Share Dealing Services

The Company has also made arrangements with its share

registrars, Equiniti Limited, for investors to buy and sell

shares through the Shareview.co.uk service.

For telephone sales call 0345 603 7037 (or +44 121 415

7560) between 8.30am and 4.30pm for dealing and up to

6.00pm for enquiries, Monday to Friday. For Internet sales

log on to www.shareview.co.uk/dealing

Forward-Looking Statements

Certain statements included in this Annual Report and

Financial Statements contain forward-looking information

concerning the Company’s strategy, operations, financial

performance or condition, outlook, growth opportunities or

circumstances in the countries, sectors or markets in which

the Company operates.

By their nature, forward-looking statements involve

uncertainty because they depend on future circumstances,

and relate to events, not all of which are within the

Company’s control or can be predicted by the Company.

Although the Company believes that the expectations

reflected in such forward-looking statements are

reasonable, no assurance can be given that such

expectations will prove to have been correct.

Actual results could differ materially from those set out

in the forward-looking statements. For a detailed analysis

of the factors that may affect our business, financial

performance or results of operations, we urge you to look

at the principal risks and uncertainties included in the

Strategic Report within this Annual Report.

www.polarcapitaltechnologytrust.co.uk

Polar Capital Technology Trust plc Annual Report and Financial Statements 30 April 2022

142

No part of this Annual Report constitutes, or shall be taken

to constitute, an invitation or inducement to invest in Polar

Capital Technology Trust plc or any other entity and must

not be relied upon in any way in connection with any

investment decision.

The Company undertakes no obligation to update any

forward-looking statements.

Boiler Room Scams

Shareholders of the Polar Capital Technology Trust plc

may receive unsolicited phone calls or correspondence

concerning investment matters. These are typically from

overseas based ‘brokers’ who target UK shareholders,

offering to sell them what often turn out to be worthless

or high risk shares in U.S. or UK investments or offering

to act on the shareholder’s behalf on the payment of a

retainer or similar in a spurious corporate event. These

operations are commonly known as ‘boiler rooms’. These

‘brokers’ can be very persistent and extremely persuasive.

It is not just the novice investor that has been duped in this

way; many of the victims had been successfully investing

for several years. Shareholders are advised to be very wary

of any unsolicited advice, offers to buy shares at a discount

or offers of free company reports.

If you have been contacted by an unauthorised firm

regarding your shares the FCA would like to hear from you.

You can report an unauthorised firm using the FCA helpline

on 0845 606 1234 or 0800 111 6768 or by visiting their

website, which also has other useful information, at www.

fca.org.uk

If you receive any unsolicited investment advice:

• Make sure you get the correct name of the person and

organisation

• If the calls persist, hang up

If you deal with an unauthorised firm, you will not be

eligible to receive payment under the Financial Services

Compensation Scheme. More detailed information on this

or similar activity can be found on the FCA website.

How to avoid investment and pension scams

If you’re suspicious, report it

You can report the �rm or scam to us by

contacting our Consumer Helpline on

0800 111 6768 or using our reporting form

using the link below.

If you’ve lost money in a scam, contact

Action Fraud on 0300 123 2040 or

www.actionfraud.police.uk

Reject unexpected o�ers

Scammers usually cold call, but contact

can also come by email, post, word of mouth

or at a seminar. If you’ve been o�ered an

investment out of the blue, chances are it’s

a high risk investment or a scam.

Check the FCA Warning List

Use the FCA Warning List to check the risks

of a potential investment – you can also search

to see if the �rm is known to be operating without

our authorisation.

Get impartial advice

Get impartial advice before investing – don’t use

an adviser from the �rm that contacted you.

Be ScamSmart and visit

www.fca.org.uk/scamsmart

Corporate Information continued

www.polarcapitaltechnologytrust.co.uk

Contents

TBC

Purpose

The purpose of the Company is to provide a vehicle in

which investment is spread across a diversified portfolio

of technology companies which aim to deliver long term

capital growth to shareholders. The purpose is achieved

though the Investment Objective and policy incorporating

parameters to ensure excessive risk is not undertaken.

Investment Objective

The Investment Objective is to maximise long-term capital

growth through investing in a diversified portfolio of

technology companies around the world. The investment

policy and investment guidelines are set out in full in the

Strategic Report on pages 56 to 58.

Management structure

The Company is an investment trust led by an experienced

Board of Independent Non-executive Directors with

extensive knowledge of investment matters and the

regulatory and legal framework within which your

Company operates. The role of the Board is to provide

oversight of the Company’s activities and to seek to ensure

that the appropriate financial resources and controls are

in place to deliver the Investment Objective and manage

the risks associated with such activities. The Directors have

appointed various third-party suppliers to provide a range

of services including investment management, depositary

and administrative services to the Company.

Polar Capital LLP has been the appointed Investment

Manager and AIFM throughout the year. Ben Rogoff, the

appointed portfolio manager, has been responsible for the

Company’s portfolio since 1 May 2006 and is supported by a

team of technology specialists. Polar Capital LLP is authorised

and regulated by the Financial Conduct Authority.

Our Business at a Glance

Designed and printed by Perivan 263497

This document is printed on Respecta

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CBP013582

143

REGISTERED OFFICE AND ADDRESS FOR CONTACTING

THE DIRECTORS

16 Palace Street,

London,

SW1E 5JD

020 7227 2700

Company Registered Number

Polar Capital Technology Trust Plc

(The ‘Company’)

is incorporated in England and Wales with company

number 3224867 and registered as an investment company

under section 833 of the Companies Act 2006.

Investment Manager and AIFM

Polar Capital LLP

Authorised and regulated by the Financial Conduct

Authority

Represented by Portfolio Manager Ben Rogoff

Company Secretary

Polar Capital Secretarial Services Limited

Represented by Tracey Lago, FCG

Email: cosec@polarcapital.co.uk

Independent Auditors

KPMG LLP

Chartered Accountants and Statutory Auditors

15 Canada Square,

London, E14 5GL

Corporate Broker

Stifel Nicolaus Europe Limited

150 Cheapside,

London, EC2V 6ET

Depositary, Bankers and Custodian

HSBC Bank PLC

8 Canada Square,

London, E14 5HQ

Registrar

Equiniti Limited

Aspect House, Spencer Road, Lancing, West Sussex,

BN99 6DA

Shareholder helpline: 0800 313 4922

(or +44 (0) 121 415 0804 from overseas)

www.shareview.co.uk

Shareholders who have their shares registered in their own

name, not through a share savings scheme or ISA, can

contact the registrars with any queries on their holding.

In correspondence you should refer to the Company,

stating your registered name and address and, if available,

your full account number.

Financial Calendar

The key dates in the Company’s financial year are as

follows:

30 April

Financial year-end

July Announcement of year-end results

September Annual General Meeting

31 October Half-year end

December Announcement of half-year results

Identification Code

SEDOL 422002

ISIN GB0004220025

TICKER PCT

BLOOMBERG PCT.LN

DATASTREAM PCT

REUTERS PCT.L

LIPPER 71000395

GIIN J29SBF.99999.SL.826

LEI 549300TN1O5392UC4K19

AIC

The Company is a member of the Association of Investment

Companies (‘AIC’). The AIC website www.theaic.co.uk

contains detailed information about investment trusts,

including guide and statistics.

Contact Information

Overview

Manager’s

Report

Environmental, Social

and Governance (ESG) Governance

Financial

Statements

Shareholder

Information

Overview

Our Business at a Glance IFC

Financial Highlights 1

Performance 3

Chair’s Statement 4

Chair Elect Q&A 7

Financial Performance Review 8

Board of Directors 10

Technology Investment Team 12

Manager’s Report

Investment Manager’s Report 16

Investment Manager’s Core Themes 28

Portfolio Review 32

Environment, Social and

Governance Report (“ESG”)

Corporate Perspective 42

Investment Perspective 44

Governance

Strategic Report 56

Section 172 Statement 70

Report of the Directors 76

Report on Corporate Governance 78

Audit Committee Report 87

Directors’ Remuneration Report 92

Statement of Directors’ Responsibilities 98

Independent Auditors’ Report 99

Financial Statements

Statement of Comprehensive Income 106

Statement of Changes in Equity 107

Balance Sheet 108

Cash Flow Statement 109

Notes to the Financial Statements 110

Shareholder Information

Alternative Performance Measures (APMs) 134

Glossary of Terms 136

Corporate Information – including AGM

138

Contact Information 143

Annual Report & Financial Statements

For the year ended 30 April 2022

Polar Capital Technology Trust Annual Report and Financial Statements for the year ended 30 April 2022

See more at:

polarcapitaltechnologytrust.co.uk

Inflation, Technology and

the Repricing of Risk