WORLDWIDE HEALTHCARE TRUST PLC
A
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023
C
25 SOUTHAMPTON BUILDINGS
LONDON
WC2A 1AL
WWW.WORLDWIDEWH.COM
Annual Report
for the year ended 31 March 2023
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A member of the Association of Investment Companies
CBP008251
This report is printed on Revive 100% White Silk a totally recycled paper
produced using 100% recycled waste at a mill that has been awarded the
ISO 14001 certificate for environmental management.
The pulp is bleached using a totally chlorine free (TCF) process.
This report has been produced using vegetable based inks.
Disability Act
Copies of this annual report and other documents issued by the Company are available from the
Company Secretary. If needed, copies can be made available in a variety of formats, including
Braille, audio tape or larger type as appropriate. You can contact the Registrar to the Company,
Link Group, which has installed telephones to allow speech and hearing impaired people who have
their own telephone to contact them directly, without the need for an intermediate operator, for this
service please call 0800 731 1888. 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 RNID) you should dial 18001 followed by the number you wish to dial.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORTSTRATEGIC REPORT
D
STRATEGIC REPORT
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023
STRATEGIC REPORT
Financial Summary
Key Information
Company Performance
Statement from the Chair
Investment Objective and Policy
Portfolio
OrbiMed Capital LLC (‘OrbiMed’)
Portfolio Manager’s Review
Contribution by Investment
ESG and Climate Change
Business Review
GOVERNANCE
Board of Directors
Report of the Directors
Statement of Directors’
Responsibilities
Corporate Governance
Audit & Risk Committee Report
Directors’ Remuneration Report
Independent Auditors’ Report
FINANCIAL STATEMENTS
Income Statement
Statement of Changes in Equity
Statement of Financial Position
Statement of Cash Flows
1
2
3
4-7
8-9
10-12
13
14-23
24
25-26
27-40
41-43
44-48
49
50-57
58-62
63-65
66-74
75
76
77
78
Notes to the Financial Statements 79-95
FURTHER INFORMATION
Shareholder Information
Glossary of Terms and Alternative
Performance Measures
How to Invest
96
97-99
100
Notice of Annual General Meeting 101-105
Explanatory Notes to the
106-107
Resolutions
Regulatory Disclosures
108-109
Company Information
110
The Strategic Report, Governance and Further
Information Sections are unaudited unless
specifically stated otherwise.
For more information about Worldwide
Healthcare Trust PLC visit the website at
www.worldwidewh.com
Follow us on Twitter @worldwidewh
WORLDWIDE HEALTHCARE TRUST PLC
Worldwide Healthcare Trust PLC (the
“Company”) is a specialist investment trust
which invests in the global healthcare sector
with the objective of achieving a high level of
capital growth.
In order to achieve its investment objective, the Company invests worldwide
in a diversified portfolio of shares in pharmaceutical and biotechnology
companies and related securities in the healthcare sector. It may use
gearing, and derivative transactions to enhance returns and mitigate risk.
Performance is measured against the MSCI World Health Care Index on a
net total return, sterling adjusted basis (“Benchmark”). Further details of the
Company’s investment policy, including how it can use gearing and employ
derivatives, are set out in the Strategic Report on pages 8 and 9.
ACCESSING THE GLOBAL MARKET
The healthcare sector is global and accessing this market as a UK investor
can be difficult. The Company offers an opportunity to gain exposure to
pharmaceutical, biotechnology and related companies in the healthcare sector
on a global scale. The Company invests in large companies with market
capitalisations of over U.S.$10bn, smaller companies below that size, as well
as in unquoted companies. The portfolio ranges from large multi-national
pharmaceutical companies with multiple products to unquoted emerging
biotechnology companies.
Worldwide Healthcare Trust PLC is able to participate in all aspects
of healthcare, anywhere in the world because of its broad investment,
mandate. These may include patented speciality medicines for small patient
populations and unpatented generic drugs, in both developed countries
and emerging markets. In addition, the Company invests in medical
device technologies, life science tools and healthcare services. The overall
geographic spread of Worldwide Healthcare Trust PLC is also extensive with
investments in the U.S., Europe, Japan, China and India (see page 12 for
further information).
HOW TO INVEST
The Company’s shares are traded openly on the London Stock Exchange and
can be purchased through a stockbroker or other financial intermediary. The
shares are also available through savings plans (including investment dealing
accounts, ISAs, Junior ISAs and SIPPs) which enable both regular monthly
investments and lump sum investments in the Company’s shares. There are
a number of investment platforms that offer these facilities. Further details
can be found on page 100.
For more information about Worldwide Healthcare Trust PLC visit the website
at www.worldwidewh.com. Follow us on Twitter @worldwidewh.
1
FINANCIAL SUMMARY
as at 31 March 2023
(0.1%)
Net asset value per share
(total return)*^
2022: (5.8%)
(9.3%)
Discount of share price
to net asset value per share*^
2022: (5.5%)
(4.1%)
Share price (total return)*^
2022: (10.8%)
31.0p
Dividends per share
2022: 26.5p
+2.5%
Benchmark*†^
2022: +20.4%
0.8%
Ongoing Charges^
2022: 0.9%
*Source: Morningstar
† MSCI World Health Care Index on a net total return, sterling adjusted basis. (See Glossary beginning on page 97).
^ Alternative Performance Measure (see Glossary beginning on page 97).
TOTAL RETURN PERFORMANCE
for the year to 31 March 2023
%
115
110
105
100
95
90
85
80
Mar 2022
Apr 2022
May 2022
Jun 2022
Jul 2022
Aug 2022
Sep 2022
Oct 2022
Nov 2022
Dec 2022
Jan 2023
Feb 2023
Mar 2023
Benchmark (total return) (+2.5%)
WWH NAV (total return) (-0.1%)
WWH Share Price (total return) (-4.1%)
Rebased to 100 as at 31 March 2022
Source: Morningstar
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT 2
2
STRATEGIC REPORT
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023
KEY INFORMATION
TOTAL RETURN PERFORMANCE
Since Launch to 31 March 2023
%
6000
5000
4000
3000
2000
1000
0
Apr
95
Mar
96
Mar
97
Mar
98
Mar
99
Mar
00
Mar
01
Mar
02
Mar
03
Mar
04
Mar
05
Mar
06
Mar
07
Mar
08
Mar
09
Mar
10
Mar
11
Mar
12
Mar
13
Mar
14
Mar
15
Mar
16
Mar
17
Mar
18
Mar
19
Mar
20
Mar
21
Mar
22
Mar
23
WWH NAV (total return) (+4,234.1%)
WWH Share Price (total return) (+3,705.4%)
Benchmark (total return) (+2,189.0%)*
Rebased to 100 as at 28 April 1995. Source: Morningstar, Thomson Reuters & Bloomberg
* With effect from 1 October 2010, the performance of the Company is measured against the MSCI World Health Care Index on a net total return, sterling
adjusted basis. Prior to this date, performance was measured against the Datastream World Pharmaceutical & Biotechnology Index (total return, sterling adjusted)
FIVE YEAR TOTAL RETURN PERFORMANCE
to 31 March 2023
%
200
180
160
140
120
100
80
Mar 18
Mar 19
Mar 20
Mar 21
Mar 22
Mar 23
Benchmark (total return) (+83.8%)
WWH NAV (total return) (+48.0%)
WWH Share Price (total return) (+34.6%)
Rebased to 100 as at 31 March 2018. Source: Morningstar.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT COMPANY PERFORMANCE
3
HISTORIC PERFORMANCE
for the years ended 31 March
Net asset value per share (total return)*^
Benchmark (total return)*^
Net asset value per share
Share price
(Discount)/Premium of share price to
net asset value per share^
Dividends per share
Leverage^
Ongoing charges^
Ongoing charges (including performance
fees paid or crystallised during the year)^
2018
2.8%
(2.5%)
2,411.1p
2,405.0p
(0.3%)
17.5p
16.4%
0.9%
2019
13.7%
21.1%
2,722.9p
2,730.0p
0.3%
26.5p
4.9%
0.9%
2020
6.5%
5.7%
2,868.9p
2,920.0p
1.8%
25.0p
12.0%
0.9%
2021
30.0%
16.0%
3,703.0p
3,695.0p
(0.2%)
22.0p
7.6%
0.9%
2022
(5.8%)
20.4%
3,465.2p
3,275.0p
(5.5%)
26.5p
10.9%
0.9%
2023
(0.1%)
2.5%
3,434.5p
3,115.0p
(9.3%)
31.0p
10.5%
0.8%
1.2%
1.1%
0.9%
0.9%
1.4%
0.8%
*Source: Morningstar
^ Alternative Performance Measure (see Glossary beginning on page 97).
DISCOUNT OF THE COMPANY’S SHARE PRICE TO THE NET ASSET VALUE PER SHARE
year to 31 March 2023
%
0.0
-2.0
(5.5%)
-4.0
-6.0
-8.0
-10.0
-12.0
(9.3%)
Mar 2022
Apr 2022
May 2022
Jun 2022
Jul 2022
Aug 2022
Sep 2022
Oct 2022
Nov 2022
Dec 2022
Jan 2023
Feb 2023
Mar 2023
*Source: Morningstar
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT 4
4
STATEMENT
FROM THE CHAIR
DOUG MCCUTCHEON
A principal contributor to performance in the year, both
in relative and absolute terms, came from emerging
biotechnology stocks (defined primarily as small-and mid-
capitalisation stocks). A key part of our Portfolio Manager’s
strategy is to be overweight the emerging biotechnology
sector, reflecting the high levels of innovation and growth
found in these companies. However, for some time, part
of this strategy has included our overweight position in
emerging market stocks, particularly in China, which was
not successful during the past year.
More broadly, the Company’s results over the past two
years have dragged down our medium-term performance.
While our net asset value per share compound annual
return over five years has been a respectable +8.2%, it was
lower than that of our Benchmark (+12.9%). Nonetheless,
the long-term performance of the Company continues to be
strong. From the Company’s inception in 1995 to 31 March
2023, the total return of our net asset value per share
has been +4,234.1%, equivalent to a compound annual
return of +14.5%. This compares to a cumulative blended
Benchmark return of +2,189.0% and a compound annual
return of +11.9% over the same period.
Further information on the healthcare sector, the
Company’s investments and performance during the year
can be found in the Portfolio Manager’s Review beginning
on page 14.
INVESTMENT PERFORMANCE
This is my first full year report, having succeeded Sir Martin
Smith as Chair of the Board in July 2022.
I mentioned at the half-year stage that macro events,
rather than industry fundamentals, had been dictating the
performance of global equity markets. In the second half of
the year, investors continued to be torn between the overall
economic and political background, on the one hand, and
company and industry developments on the other. As set
out in our Portfolio Manager’s Review, during the year your
Company performed well in periods when markets were
being driven by sector fundamentals and struggled when
macro factors were in control.
Overall, the financial year ended 31 March 2023 proved to
be a challenging one for the Company, with market volatility
much greater than year-end to year-end results suggest.
The Company’s net asset value per share total return was
-0.1% (2022: -5.8%) and the share price total return was
-4.1% (2022: -10.8%). Our results underperformed the
Company’s Benchmark, the MSCI World Health Care Index
measured on a net total return, sterling adjusted basis,
which returned +2.5% during the year (2022: +20.4%). The
disparity between the performance of the Company’s net
asset value per share and its share price was reflected in
the widening of our share price discount to our net asset
value per share from 5.5% as at 31 March 2022 to 9.3% at
31 March 2023.
The majority of the Company’s assets are denominated in
U.S. dollars, and it should be noted that our absolute net
asset value performance was helped by the weakness of
sterling over the year, particularly compared to the dollar,
against which it depreciated by 6.5%.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT
5
5
CAPITAL
REVENUE AND DIVIDEND
Challenging stock market conditions since the beginning
of 2022 have continued to have a negative impact on share
price discounts across the investment company sector,
with the average level of discount currently standing at
c.14.9%*.
*Source: Winterflood Investment Trusts
It is the Board’s policy to buy back our shares if the
Company’s share price discount to the net asset value
per share exceeds 6% on an ongoing basis. Shareholders
should note, however, that it remains possible for the
discount to be greater than 6% for extended periods of
time, particularly when sentiment towards the Company,
the sector and to investment trusts generally remains poor.
In such an environment, buybacks may prove unable to
prevent the discount from widening. However, they enhance
the net asset value per share for remaining shareholders
and go some way to dampening discount volatility, which
can adversely affect investors’ risk adjusted returns.
Over the year, the Company remained committed to its
share buyback and issuance policy, regularly repurchasing
shares. A total of 2,836,483 shares were repurchased for
treasury at a cost of £91.6m and at an average discount of
8.8%.
On 31 March 2023, there were 62,620,763 shares in issue
(excluding the 2,438,015 shares held in treasury). Since this
date to 5 June 2023, a further 1,299,037 shares have been
bought back for treasury, at a cost of £42.3m and at an
average discount of 10.0%. At the time of writing, the share
price discount stands at 9.4%. In line with the Company’s
stated policy, I confirm that all shares held in treasury at the
date of the Company’s Annual General Meeting to be held
on 18 July 2023, will be cancelled.
Shareholders will be aware that it remains the Company’s
investment policy to pursue capital growth for shareholders
and to pay dividends at least to the extent required to
maintain investment trust status. Therefore, the level
of dividends declared can go down as well as up. An
unchanged interim dividend of 7.0p per share for the year
ended 31 March 2023, was paid on 11 January 2023 to
shareholders on the register on 25 November 2022.
Due, in large part, to an increase in exposure to higher
yielding stocks in the portfolio and also to the continued
weakness of sterling, the Company’s revenue return
per share for the year as a whole increased to 30.6p
(2022: 26.8p). Accordingly, the Board is proposing an
increased final dividend of 24.0p per share (2022:19.5p
per share) which, together with the interim dividend
already paid, makes a total dividend for the year of 31.0p
(2022: 26.5p per share). Due to the impact of share
buybacks the total dividend for the year is higher than the
reported return per share. Based on the closing mid market
share price of 3,275.0p on 5 June 2023, the total dividend
payment for the year represents a current yield of 0.9%.
The final dividend will be payable, subject to shareholder
approval, on 26 July 2023, to shareholders on the register
of members on 9 June 2023. The associated ex-dividend
date will be 8 June 2023.
The Company’s dividend policy will be proposed for
approval at the forthcoming Annual General Meeting.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT 6
STATEMENT FROM THE CHAIR CONTINUED
BOARD OF DIRECTORS
The process of Board refreshment, which began a few
years ago, continued during the year. As previously
announced, Tim Livett and Jo Parfrey joined the Board
in September 2022. Between them, they have a wealth
of experience in the finance, investing, healthcare and
governance fields, from which the Board will benefit
for years to come. During the year, Tim took over from
Humphrey van der Klugt as Chair of the Audit & Risk
Committee, with Humphrey carrying on as a Director of
the Company. In addition, Jo took over from Bina Rawal as
Chair of the Management Engagement & Remuneration
Committee.
Sarah Bates, the Company’s Senior Independent Director
and the Chair of the Nominations Committee, having served
on the Board since 2013, will retire at the conclusion of
the Company’s Annual General Meeting on Tuesday, 18
July 2023. Sarah’s leadership, governance and investment
industry experience, including her deep knowledge of the
investment trust sector, have been invaluable to the Board.
Her friendship and wise counsel will be greatly missed.
Bina will take over from Sarah as the Senior Independent
Director and Chair of the Nominations Committee.
The biographical details and Board positions of all of the
Directors are set out on pages 41 to 43.
SHARE SPLIT PROPOSAL
As a consequence of the Company’s strong investment
returns over many years, its share price has risen steadily.
While this has been good news for our shareholders, the
Board believes that it may be unhelpful for those investors
seeking to purchase smaller quantities of shares, as well
as for regular savers. Accordingly, in order to address this
and to increase market liquidity and marketability, we are
proposing to split the shares on a 10-for-1 basis. Following
the share split, each shareholder will receive nine additional
Ordinary shares for each Ordinary share held immediately
prior to the transaction. The net effect is that, following
the split, you will have 10 times as many shares, but the
Company’s share price should, in theory, be one-tenth of
what it was previously. The share split will not affect the
value of your overall investment in the Company, nor will it
affect your shareholder rights. Shareholders will have the
opportunity to vote on this proposal at the forthcoming
Annual General Meeting and details can be found under
Notice of Meeting, on pages 101 to 105.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
(ESG) MATTERS
ESG matters continue to be an important priority for
the Board and our objective is to have full, transparent
disclosure on the topic. Bina Rawal has been working
closely with our Portfolio Manager on this matter.
Our Portfolio Manager remains committed to taking
a leading role in the development of meaningful ESG
engagement practices in the healthcare sector. As part of
this, they facilitate dialogue and an exchange of leading
practices among investors, companies and other relevant
experts on ESG in the large capitalisation pharmaceutical
sector. They also engage with a broad range of companies
on a regular basis where areas of improvement can be
identified. Further information on both ESG matters and
climate change can be found in the Portfolio Manager’s
ESG report beginning on page 25.
OUTLOOK
Global stock markets continue to experience higher
than usual levels of uncertainty, with persistent inflation,
central bank borrowing rates at much higher levels than
they were one year ago, a developing ongoing economic
downturn and several overhanging geopolitical issues. It
is unsurprising, therefore, that investors remain relatively
risk-averse for the moment, favouring more predictable
businesses over the faster growing companies that make
up much of our portfolio and sector.
Against this challenging short-term background, however,
our Portfolio Manager OrbiMed continues to remain
positive on the outlook for healthcare and our Company.
They expect the current accelerated levels of mergers and
acquisitions to continue, supported by attractive valuations,
healthy balance sheets and, within the pharmaceutical
sector, a need to address future patent expirations.
Regardless of the market backdrop, the pace of scientific
and technological development within the sector continues
unabated while clinical and regulatory catalysts will
continue to provide a regular flow of key share price moving
events. They further believe that the sector’s defensive
growth characteristics should continue to prove attractive
in times of global uncertainty.
Your Board shares OrbiMed’s perspective. We believe that
long-term investors in this sector will be rewarded and that
the Company will continue to perform strongly over time.
Thus far, in the current financial year, performance is off to
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT 7
STATEMENT FROM THE CHAIR CONTINUED
a positive start, both in absolute and relative terms. From
1 April 2023 to the date of this letter, our net asset value per
share has increased by +6.2%, compared to +0.9% for our
Benchmark.
ANNUAL GENERAL MEETING (“AGM”)
The Company’s AGM will be held at Saddlers’ Hall,
40 Gutter Lane, London EC2V 6BR on Tuesday, 18 July
2023 at 12.30pm. As well as the formal proceedings, there
will be an opportunity to meet the Board and the Portfolio
Manager and to receive an update on the Company’s
strategy.
For those investors who are not able to attend the meeting
in person, a video recording of the Portfolio Manager’s
presentation will be uploaded to the website after the
meeting. Shareholders can submit questions in advance by
sending them to wwh@frostrow.com.
I encourage all shareholders to exercise their right to vote at
the AGM and to register your votes online in advance of the
meeting. Registering your vote in advance will not restrict you
from attending and voting at the meeting in person should
you wish to do so, subject of course to the occurrence of any
extraordinary events that might make attendance difficult or
impossible. The votes on the resolutions to be proposed at
the AGM will be conducted on a poll. The results of the proxy
votes will be published immediately following the conclusion
of the AGM by way of a stock exchange announcement and
will also be able to be viewed on the Company’s website at
www.worldwidewh.com.
Doug McCutcheon
Chair
6 June 2023
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT 8
INVESTMENT OBJECTIVE AND POLICY
INVESTMENT OBJECTIVE
INVESTMENT POLICY
The Company invests in the global
healthcare sector with the objective of
achieving a high level of capital growth.
In order to achieve its investment objective, the Company
invests worldwide in a diversified portfolio of shares in
pharmaceutical and biotechnology companies and related
securities in the healthcare sector. It uses gearing, and
derivative transactions to enhance returns and mitigate
risk. Performance is measured against the MSCI World
Health Care Index on a net total return, sterling adjusted
basis (“Benchmark”).
INVESTMENT STRATEGY
The implementation of the Company’s Investment
Objective has been delegated to OrbiMed by Frostrow
(as AIFM) under the Board’s and Frostrow’s supervision
and guidance.
Details of OrbiMed’s investment strategy and approach
are set out in the Portfolio Manager’s Review on
pages 14 to 23.
While the Board’s strategy is to allow flexibility in
managing the investments, in order to manage investment
risk it has imposed various investment, gearing and
derivative guidelines and limits, within which Frostrow and
OrbiMed are required to manage the investments, as set
out below.
Any material changes to the Investment Objective, Policy
and Benchmark or the investment, gearing and derivative
guidelines and limits require approval from shareholders.
INVESTMENT LIMITS AND GUIDELINES
•
•
•
•
•
•
The Company will not invest more than 15% of the
portfolio in any one individual stock at the time of
acquisition;
At least 50% of the portfolio will normally be invested
in larger companies (i.e. with a market capitalisation of
at least U.S.$10bn);
At least 20% of the portfolio will normally be invested
in smaller companies (i.e. with a market capitalisation
of less than U.S.$10bn);
Investment in unquoted securities will not exceed 10%
of the portfolio at the time of acquisition;
A maximum of 5% of the portfolio, at the time
of acquisition, may be invested in each of debt
instruments, convertibles and royalty bonds issued by
pharmaceutical and biotechnology companies;
A maximum of 30% of the portfolio, at the time of
acquisition, may be invested in companies in each of
the following sectors:
– healthcare equipment and supplies;
– healthcare providers and services;
•
The Company will not invest more than 10% of its
gross assets in other closed ended investment
companies (including investment trusts) listed on the
London Stock Exchange, except where the investment
companies themselves have stated investment
policies to invest no more than 15% of their gross
assets in other closed ended investment companies
(including investment trusts) listed on the London
Stock Exchange, where such investments shall be
limited to 15% of the Company’s gross assets at the
time of acquisition.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT 9
INVESTMENT OBJECTIVE AND POLICY CONTINUED
DERIVATIVE STRATEGY AND LIMITS
In line with the Investment Objective, derivatives are
employed, when appropriate, in an effort to enhance
returns and to improve the risk-return profile of the
Company’s portfolio. Only Equity Swaps were employed
within the portfolio during the year.
The Board has set the following limits within which
derivative exposures are managed:
•
•
Derivative transactions (excluding equity swaps) can
be used to mitigate risk and/or enhance capital returns
and will be restricted to a net exposure of 5% of the
portfolio; and
Equity Swaps may be used in order to meet the
Company’s investment objective of achieving a high
level of capital growth, and counterparty exposure
through these is restricted to 12% of the gross assets
of the Company at the time of acquisition.
The Company does not currently hedge against foreign
currency exposure.
GEARING LIMIT
The Board has set a maximum gearing level, through
borrowing, of 20% of the net assets.
LEVERAGE LIMITS
Under the AIFMD the Company is required to set
maximum leverage limits. Leverage under the AIFMD is
defined as any method by which the total exposure of an
AIF is increased.
The Company has two current sources of leverage: the
overdraft facility, which is subject to the gearing limit; and,
derivatives, which are subject to the separate derivative
limits. The Board and Frostrow have set a maximum
leverage limit of 140% on both the commitment and
gross basis.
Further details on the gearing and leverage calculations,
and how total exposure through derivatives is calculated,
are included in the Glossary beginning on page 98. Further
details on how derivatives are employed can be found in
note 16 beginning on page 89.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT 10
PORTFOLIO
INVESTMENTS HELD AS AT 31 MARCH 2023
Investments
AstraZeneca
Boston Scientific
Bristol-Myers Squibb
Humana
Intuitive Surgical
Sanofi
UnitedHealth
Novo Nordisk
Roche
Stryker
Top 10 investments
Daiichi Sankyo
BioMarin Pharmaceutical
Eisai
Sarepta Therapeutics
Thermo Fisher Scientific
Biogen
Evolent Health
Tenet Healthcare
Eli Lilly & Co
Baxter International
Top 20 investments
Caris Life Sciences*
Ionis Pharmaceuticals
Edwards Lifesciences
Apellis Pharmaceuticals
Neurocrine Biosciences
Natera
SI-BONE
Wuxi Biologics Cayman
Vertex Pharmaceuticals
WuXi AppTec
Top 30 investments
uniQure NV
Progyny
Sector
Pharmaceuticals
Health Care Equipment & Supplies
Pharmaceuticals
Health Care Providers & Services
Health Care Equipment & Supplies
Pharmaceuticals
Health Care Providers & Services
Pharmaceuticals
Pharmaceuticals
Health Care Equipment & Supplies
Pharmaceuticals
Biotechnology
Pharmaceuticals
Biotechnology
Life Sciences Tools & Services
Biotechnology
Health Care Providers & Services
Health Care Providers & Services
Pharmaceuticals
Health Care Equipment & Supplies
Life Sciences Tools & Services
Biotechnology
Health Care Equipment & Supplies
Biotechnology
Biotechnology
Life Sciences Tools & Services
Health Care Equipment & Supplies
Life Sciences Tools & Services
Biotechnology
Life Sciences Tools & Services
Biotechnology
Health Care Providers & Services
Shanghai Kindly Medical Instruments
Health Care Equipment & Supplies
Mirati Therapeutics
Crossover Health*
R1 RCM
New Horizon Health
Beijing Yuanxin Technology*
Biotechnology
Health Care Providers & Services
Health Care Providers & Services
Life Sciences Tools & Services
Health Care Providers & Services
EDDA Healthcare & Technology*
Health Care Equipment & Supplies
VISEN Pharmaceuticals*
Top 40 investments
Iovance Biotherapeutics
Joinn Laboratories China
API Holdings*
RxSight
Ruipeng Pet Group*
Jiangxi RiMAG*
Vaxcyte
Xenon Pharmaceuticals
MabPlex*
Dingdang Health Technology
Top 50 investments
Biotechnology
Biotechnology
Biotechnology
Health Care Providers & Services
Health Care Equipment & Supplies
United States
Health Care Providers & Services
Health Care Providers & Services
Biotechnology
Biotechnology
Health Care Providers & Services
Health Care Providers & Services
China
China
United States
Canada
China
China
Country
UK
United States
United States
United States
United States
France
United States
Denmark
Switzerland
United States
Japan
United States
Japan
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
China
United States
China
Netherlands
United States
China
United States
United States
United States
China
China
China
China
United States
China
India
Market value
£’000
% of
investments
139,838
114,463
112,095
104,491
103,710
99,259
91,691
88,871
84,999
76,834
6.5
5.3
5.2
4.8
4.8
4.6
4.2
4.1
3.9
3.6
1,016,251
47.1
76,125
76,049
59,273
55,344
53,900
53,740
52,218
45,509
44,971
44,832
3.5
3.5
2.7
2.6
2.5
2.5
2.4
2.1
2.1
2.1
1,578,212
73.1
40,900
36,373
36,118
32,234
31,196
28,994
28,526
28,512
28,253
22,443
1.9
1.7
1.7
1.5
1.4
1.3
1.3
1.3
1.3
1.0
1,891,761
87.6
21,955
20,833
19,475
19,009
17,163
16,620
16,011
14,606
14,550
14,281
1.0
1.0
0.9
0.9
0.8
0.8
0.7
0.7
0.7
0.7
2,066,264
95.7
14,104
13,760
13,668
12,431
11,900
11,673
10,755
10,392
5,944
4,736
0.7
0.6
0.6
0.6
0.6
0.5
0.5
0.5
0.3
0.2
2,175,627
100.7
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT PORTFOLIO CONTINUED
11
Investments
Ikena Oncology
Sector
Pharmaceuticals
Shanghai Bio-heart Biological Technology
Health Care Equipment & Supplies
Passage Bio
Peloton Therapeutics* - DCC
Total investments
OTC Equity Swaps – Financed^
Healthcare M&A Target Basket
Apollo Hospitals Enterprise
Healthcare Catalyst Basket
Pharmaron Beijing
Biotechnology
Biotechnology
Swap Baskets
Health Care Providers & Services
Swap Baskets
Life Sciences Tools & Services
Jiangsu Yuyue Medical Equipment & Supply
Health Care Equipment & Supplies
Less: Gross exposure on financed swaps
Total OTC Swaps
Total investments including OTC Swaps
* Unquoted holding
DCC = deferred contingent consideration.
^ See Glossary beginning on page 97 and note 16 beginning on page 89 for further details in relation to the OTC Swaps.
Country
United States
China
United States
United States
Market value
£’000
% of
investments
4,445
4,233
1,627
485
0.2
0.2
0.1
0.0
2,186,417
101.2
United States
105,629
India
United States
China
China
32,672
24,216
16,989
11,197
(217,596)
(26,892)
2,159,525
4.9
1.5
1.1
0.8
0.5
(10.1)
(1.2)
100.0
SUMMARY
Investments
Quoted equities
Unquoted equities
Equity swaps
Total of all investments
Market value
£’000
2,041,247
145,170
(26,892)
2,159,525
% of
investments
94.5
6.7
(1.2)
100.0
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT (cid:39)(cid:78)(cid:84)(cid:89)(cid:74)(cid:72)(cid:77)(cid:83)(cid:84)(cid:81)(cid:84)(cid:76)(cid:94)
(cid:53)(cid:77)(cid:70)(cid:87)(cid:82)(cid:70)(cid:72)(cid:74)(cid:90)(cid:89)(cid:78)(cid:72)(cid:70)(cid:81)
(cid:49)(cid:78)(cid:75)(cid:74)(cid:5)(cid:56)(cid:72)(cid:78)(cid:74)(cid:83)(cid:72)(cid:74)(cid:88)(cid:5)(cid:57)(cid:84)(cid:84)(cid:81)(cid:88)(cid:5)(cid:11)(cid:5)(cid:56)(cid:74)(cid:87)(cid:91)(cid:78)(cid:72)(cid:74)(cid:88)
(cid:41)(cid:74)(cid:71)(cid:89)(cid:5)(cid:46)(cid:83)(cid:88)(cid:89)(cid:87)(cid:90)(cid:82)(cid:74)(cid:83)(cid:89)(cid:88)
12
PORTFOLIO CONTINUED
PORTFOLIO DISTRIBUTION
BY SECTOR*
(cid:39)(cid:78)(cid:84)(cid:89)(cid:74)(cid:72)(cid:77)(cid:83)(cid:84)(cid:81)(cid:84)(cid:76)(cid:94)
(cid:53)(cid:77)(cid:70)(cid:87)(cid:82)(cid:70)(cid:72)(cid:74)(cid:90)(cid:89)(cid:78)(cid:72)(cid:70)(cid:81)
(cid:45)(cid:74)(cid:70)(cid:81)(cid:89)(cid:77)(cid:72)(cid:70)(cid:87)(cid:74)(cid:5)(cid:53)(cid:87)(cid:84)(cid:91)(cid:78)(cid:73)(cid:74)(cid:87)(cid:88)(cid:5)(cid:11)(cid:5)(cid:56)(cid:74)(cid:87)(cid:91)(cid:78)(cid:72)(cid:74)(cid:88)
(cid:45)(cid:74)(cid:70)(cid:81)(cid:89)(cid:77)(cid:72)(cid:70)(cid:87)(cid:74)(cid:5)(cid:53)(cid:87)(cid:84)(cid:91)(cid:78)(cid:73)(cid:74)(cid:87)(cid:88)(cid:5)(cid:11)(cid:5)(cid:56)(cid:74)(cid:87)(cid:91)(cid:78)(cid:72)(cid:74)(cid:88)
(cid:45)(cid:74)(cid:70)(cid:81)(cid:89)(cid:77)(cid:72)(cid:70)(cid:87)(cid:74)(cid:5)(cid:42)(cid:86)(cid:90)(cid:78)(cid:85)(cid:82)(cid:74)(cid:83)(cid:89)(cid:20)(cid:56)(cid:90)(cid:85)(cid:85)(cid:81)(cid:78)(cid:74)(cid:88)(cid:20)(cid:57)(cid:74)(cid:72)(cid:77)(cid:83)(cid:84)(cid:81)(cid:84)(cid:76)(cid:94)
(cid:45)(cid:74)(cid:70)(cid:81)(cid:89)(cid:77)(cid:72)(cid:70)(cid:87)(cid:74)(cid:5)(cid:42)(cid:86)(cid:90)(cid:78)(cid:85)(cid:82)(cid:74)(cid:83)(cid:89)(cid:20)(cid:56)(cid:90)(cid:85)(cid:85)(cid:81)(cid:78)(cid:74)(cid:88)(cid:20)(cid:57)(cid:74)(cid:72)(cid:77)(cid:83)(cid:84)(cid:81)(cid:84)(cid:76)(cid:94)
(cid:49)(cid:78)(cid:75)(cid:74)(cid:5)(cid:56)(cid:72)(cid:78)(cid:74)(cid:83)(cid:72)(cid:74)(cid:88)(cid:5)(cid:57)(cid:84)(cid:84)(cid:81)(cid:88)(cid:5)(cid:11)(cid:5)(cid:56)(cid:74)(cid:87)(cid:91)(cid:78)(cid:72)(cid:74)(cid:88)
(cid:41)(cid:74)(cid:71)(cid:89)(cid:5)(cid:46)(cid:83)(cid:88)(cid:89)(cid:87)(cid:90)(cid:82)(cid:74)(cid:83)(cid:89)(cid:88)
(cid:23)(cid:21)(cid:23)(cid:24)
(cid:23)(cid:21)(cid:23)(cid:21)
(cid:23)(cid:21)(cid:23)(cid:22)
(cid:23)(cid:21)(cid:23)(cid:21)
(cid:23)(cid:21)(cid:23)(cid:23)
(cid:21)(cid:19)(cid:21)(cid:19)
(cid:23)(cid:21)(cid:23)(cid:22)
(cid:21)(cid:19)(cid:21)(cid:19)
Pharmaceutical
29.9%
Pharmaceutical
35.1%
Healthcare Equipment/Supplies/Technology
19.6%
Healthcare Equipment/Supplies/Technology
21.1%
Biotechnology
Healthcare Providers & Services
Life Sciences Tools & Services
Basket Swaps
17.6%
18.7%
8.7%
5.5%
Biotechnology
Healthcare Providers & Services
Life Sciences Tools & Services
Debt Instruments
20.7%
15.2%
7.7%
0.2%
(cid:51)(cid:84)(cid:87)(cid:89)(cid:77)(cid:5)(cid:38)(cid:82)(cid:74)(cid:87)(cid:78)(cid:72)(cid:70)
(cid:42)(cid:82)(cid:74)(cid:87)(cid:76)(cid:78)(cid:83)(cid:76)(cid:5)(cid:50)(cid:70)(cid:87)(cid:80)(cid:74)(cid:89)(cid:88)
(cid:42)(cid:90)(cid:87)(cid:84)(cid:85)(cid:74)
(cid:38)(cid:88)(cid:78)(cid:70)
(cid:46)(cid:83)(cid:73)(cid:78)(cid:70)
BY REGION*
(cid:51)(cid:84)(cid:87)(cid:89)(cid:77)(cid:5)(cid:38)(cid:82)(cid:74)(cid:87)(cid:78)(cid:72)(cid:70)
(cid:42)(cid:82)(cid:74)(cid:87)(cid:76)(cid:78)(cid:83)(cid:76)(cid:5)(cid:50)(cid:70)(cid:87)(cid:80)(cid:74)(cid:89)(cid:88)
(cid:42)(cid:90)(cid:87)(cid:84)(cid:85)(cid:74)
(cid:38)(cid:88)(cid:78)(cid:70)
(cid:46)(cid:83)(cid:73)(cid:78)(cid:70)
(cid:23)(cid:21)(cid:23)(cid:24)
(cid:23)(cid:21)(cid:23)(cid:22)
(cid:23)(cid:21)(cid:23)(cid:22)(cid:23)(cid:21)(cid:23)(cid:22)
(cid:23)(cid:21)(cid:23)(cid:23)
(cid:23)(cid:21)(cid:23)(cid:22)
(cid:23)(cid:21)(cid:23)(cid:22)(cid:23)(cid:21)(cid:23)(cid:22)
North America
Europe
China
Japan
India
65.3%
18.3%
8.8%
5.7%
1.9%
North America
Europe
China
Japan
India
70.8%
12.0%
12.5%
3.5%
1.1%
* Figures expressed as a % of the total economic exposure. This includes all derivatives as an economically equivalent position in the underlying holding.
(cid:51)(cid:84)(cid:87)(cid:89)(cid:77)(cid:5)(cid:38)(cid:82)(cid:74)(cid:87)(cid:78)(cid:72)(cid:70)
(cid:42)(cid:82)(cid:74)(cid:87)(cid:76)(cid:78)(cid:83)(cid:76)(cid:5)(cid:50)(cid:70)(cid:87)(cid:80)(cid:74)(cid:89)(cid:88)
(cid:42)(cid:90)(cid:87)(cid:84)(cid:85)(cid:74)
(cid:38)(cid:88)(cid:78)(cid:70)
(cid:46)(cid:83)(cid:73)(cid:78)(cid:70)
(cid:23)(cid:21)(cid:23)(cid:22)
(cid:23)(cid:21)(cid:23)(cid:24)
(cid:23)(cid:21)(cid:23)(cid:22)(cid:23)(cid:21)(cid:23)(cid:22)
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT ORBIMED CAPITAL LLC
OrbiMed was founded in 1989 and
has evolved over time to be one of
the largest dedicated healthcare
investment firms in the world.
OrbiMed has managed the Company’s
portfolio since its launch in 1995.
OrbiMed had approximately U.S.$17 billion in assets under
management as of 31 March 2023, across a range of
funds, including investment trusts, hedge funds, and private
equity funds.
INVESTMENT STRATEGY AND PROCESS
Within the guidelines set by the Board, the OrbiMed team
works to identify sources of outperformance, or alpha, with
a focus on fundamental research. In healthcare, there are
many primary sources of alpha generation, especially in
therapeutics. Clinical events such as the publication of new
clinical trial data is a prominent example and historically
has been the largest source of share price volatility.
Regulatory events, such as new drug approvals by U.S.,
European, or Japanese regulatory authorities are also
stock moving events. Subsequent new product launches
are carefully tracked and forecasted. Other sources include
legal events and, of course, merger and acquisition activity.
The team has a global focus with a universe of coverage
that covers the entire spectrum of companies, from early
stage companies with pre-clinical assets to fully integrated
biopharmaceutical companies. The universe of actively
covered companies is approaching 1,000.
OrbiMed emphasises investments in companies with
under-appreciated products in the pipeline, high quality
management teams, and adequate financial resources.
A disciplined portfolio construction process is utilised
to ensure the portfolio is focused on high conviction
positions. Finally, the portfolio is subject to a rigorous risk
management process.
13
THE TEAM
The wider OrbiMed Investment Team continues to expand
and now has over 100 professionals that cover all aspects
of research, trading, finance, and compliance. This includes
over 30 degree holders with MD and/or PhD credentials,
healthcare industry veterans, and finance professionals
with over 20 years of experience.
The firm has a global investment horizon and the OrbiMed
footprint now spans three continents with offices in New
York, San Francisco, Herzliya (Israel), Hong Kong, Shanghai,
Mumbai and London.
The lead managers with responsibility for the Company’s
portfolio are as follows:
Sven H. Borho, CFA, is a founder and Managing Partner of
OrbiMed. Sven heads the public equity team and he is the
portfolio manager for OrbiMed’s public equity and hedge
funds. He has been a portfolio manager for the firm’s funds
since 1993 and has played an integral role in the growth of
OrbiMed’s asset management activities.
He started his career in 1991 when he joined OrbiMed’s
predecessor firm as a Senior Analyst covering European
pharmaceutical firms and biotechnology companies
worldwide. Sven studied business administration at
Bayreuth University in Germany and received a M.Sc.
(Econs.), Accounting and Finance, from The London School
of Economics.
Trevor M. Polischuk, Ph.D., is a Partner at OrbiMed focused
on the global pharmaceutical industry. Trevor joined
OrbiMed in 2003 and became a Partner in 2011. Previously,
he worked at Lehman Brothers as a Senior Research
Analyst covering the U.S. pharmaceutical industry. Trevor
began his career at Warner Lambert as a member of the
Global Marketing Planning team within Parke-Davis. Trevor
holds a Doctorate in Neuropharmacology & Gross Human
Anatomy and an M.B.A. from Queen’s University, Canada.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT 14
PORTFOLIO MANAGER’S REVIEW
MARKETS
PERFORMANCE
Overall, for the year ended 31 March 2023, the Company
generated a net asset value total return of -0.1% whilst
the share price total return was -4.1%. This performance
lagged the Benchmark return of +2.5%. Performance
– both absolute and relative – came intermittently
throughout the year, largely reflecting the aforementioned
struggle between fundamental industry drivers and
macroeconomic factors that heavily influenced equity
markets.
Certainly, the start of calendar year 2022 was dominated
by the macro and global markets came under intense
pressure as investors focused on tightening monetary
policies, continued geopolitical tensions, and concerns
about COVID-induced lockdowns in China. Preference
for “value-over-growth” continued as a macro theme for
investors, as did healthcare being relatively defensive.
This set-up was not conducive to performance given
our preference for innovative growth companies and
as a result the Company’s returns materially lagged the
Benchmark to start the financial year in April and May.
The reported financial year was up and down for the
global equity markets. Whilst the pandemic eased as a
global healthcare crisis, its lingering economic impact
still reverberated across the world. Inflation, rising
interest rates and the war in Ukraine all played major
parts in shaping equity returns. Overall, global inflation
and the ensuing central bank responses led to an array
of conflicting crosscurrents between currency values,
gross margin pressures, and higher financing costs that
all shaped the market. The year was a product of many
things, with perhaps the only constant being the unyielding
battle between macro factors and industry fundamentals
– forcing investors to grapple with the “yin and yang” of
these two disparate market forces.
The net result, amazingly, was rather modest, with a global
market total return of -0.5% as measured by the MSCI
World Index (in sterling terms). This despite the significant
volatility in between the start and end of the year with
several material drawdowns. Even local geographies
were not in agreement with the various market forces,
with the FTSE All-Share Index finishing notably up 2.8%
whilst the S&P 500 finished down 1.8% (both figures in
sterling measured on a total return basis). Even healthcare
stocks did not fare as expected, partially eschewing their
defensive characteristics to post a +2.5% total return
(sterling) in the year, obviously lagging the UK market but
outpacing others.
FINANCIAL YEAR PERFORMANCE COMPARISON
(WORLDWIDE HEALTHCARE TRUST VS. MSCI WORLD HEALTHCARE INDEX)
%
10
5
0
-5
-10
Mar 2022
Apr 2022
May 2022
Jun 2022
Jul 2022
Aug 2022
Sep 2022
Oct 2022
Nov 2022
Dec 2022
Jan 2023
Feb 2023
Mar 2023
MSCI Health (total return) (+2.5%)
WWH NAV (total return) (-0.1%)
Source: Bloomberg, OrbiMed; Data updated through 31 March 2023. Note: WWH performance figures are net of fees
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT PORTFOLIO MANAGER’S REVIEW CONTINUED
15
PERFORMANCE SEGMENTS
MACRO-DRIVEN VS. FUNDAMENTAL-DRIVEN PERFORMANCE
April and May 2022
%
20
15
10
5
0
-5
%
20
15
10
5
0
-5
-0.2
-7.3
-10
Apr
22
May
22
-10
Jun
22
Jun
22
MSCI Health
WWH
June to September 2022
October to December 2022
%
20
15
+11.2
10
+2.3
5
0
-5
-10
+4.1
-1.5
Jul
22
Aug
22
Sep
22
Oct
22
Oct
22
Nov
22
Dec
22
Jan
23
January to March 2023
%
20
15
10
5
0
-5
-1.6
-3.6
-10
Jan
23
Feb
23
Mar
23
Apr
23
Source: Bloomberg, OrbiMed; Data updated through 31 March 2023. Note: WWH performance figures are net of fees
However, as we had been expecting, mergers and
acquisitions (M&A) in the therapeutics space finally
inflected in June and this phenomenon carried on well
into early October. This coincided with a host of important
– and positive – clinical catalysts which helped to move
biotechnology stocks higher during this period. Investor
interest picked up and fund flows followed. The Company
recorded a +11.0% return during this period, which was
nearly 9.0% better than the Benchmark.
As the calendar-year-end approached, investor focus
shifted yet again and stock markets rounded off a
tumultuous year with gains, including healthcare, only to
stumble in December as recessionary fears spiked. This
environment again favoured larger capitalisation stocks
and value names, impacting the Company’s relative
returns in this three-month period.
Finally, the fourth quarter of the financial year was similarly
volatile. Healthcare stocks were clear laggards in January
as investors pivoted from fears of a looming recession,
to the view that a softer landing may be possible given
decelerating inflation, a stronger European outlook, and the
swift re-opening in China. Defensive healthcare sectors
– like large capitalisation pharmaceutical stocks and
managed care – therefore saw investor outflows and this
continued into February as healthcare stocks continued to
underperform the broader markets. This set-up favoured
our portfolio positioning and despite some modest
declines in this segment, the Company returned over 2.0%
more than Benchmark.
We are pleased to report that this performance to start
the calendar year has continued in the first 6 weeks of the
new financial year. M&A activity has remained elevated
thus far, a number of key catalysts have been positive, and
this has buoyed the Company’s performance as strong
fundamentals are consistent with our bullish positioning.
Specifically, from the start of the financial year to the date
of this report, the NAV has advanced 6.2% compared to the
Benchmark return of +0.9%.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT 16
PORTFOLIO MANAGER’S REVIEW CONTINUED
PERFORMANCE SINCE INCEPTION
(WORLDWIDE HEALTHCARE TRUST NAV VS. BLENDED BENCHMARK*)
%
5000
4000
3000
2000
1000
0
Apr
95
Mar
96
Mar
97
Mar
98
Mar
99
Mar
00
Mar
01
Mar
02
Mar
03
Mar
04
Mar
05
Mar
06
Mar
07
Mar
08
Mar
09
Mar
10
Mar
11
Mar
12
Mar
13
Mar
14
Mar
15
Mar
16
Mar
17
Mar
18
Mar
19
Mar
20
Mar
21
Mar
22
Mar
23
WWH NAV (total return) (+4,234.1%)
WWH Share Price (total return) (+3,705.4%)
Benchmark (total return) (+2,189.0%)
FTSE (total return) (+578.8%)
* With effect from 1 October 2010, the performance of the Company is measured against the MSCI World Health Care Index on a net total return, sterling
adjusted basis. Prior to this date, performance was measured against the Datastream World Pharmaceutical & Biotechnology Index (total return, sterling
adjusted). Source: Frostrow, Bloomberg
Despite the volatility that marked the reported financial
year, we are pleased to report that the long-term
performance of the Company is strong. Overall, the
Company’s net asset value performance since inception
to 31 March 2023 (from 28 April 1995), is a return of
+4,234.1%, an average of +14.5% per annum. This
compares to a cumulative blended Benchmark return of
+2,189.0%, an average of +11.9% per annum, over the same
investment horizon. This compares to the FTSE All-Share
Index return of +579% and +7.1%. As we enter our 29th year
of managing the Company, the multiple since inception of
42x represents both the strength of the healthcare industry
and the unyielding global demand for healthcare related
goods and services. It also shows what an active manager
or specialist investor can do in healthcare, especially in the
face of a highly idiosyncratic, global sector that possesses
many barriers to understanding the scientific, clinical,
regulatory, technological, and political environment that
envelops all of healthcare.
KEY SOURCES OF CONTRIBUTION
The key contributor to performance in the year was from
emerging biotechnology stocks (defined primarily as small
- and mid -capitalisation stocks). Positive contribution
here was due to both allocation effect and individual stock
picking, contributing both absolute (over 4.5%) and relative
(over 4.0%) performance. Recall that our positioning in this
sub-sector has been a key strategic overweight for us and
will remain so given the impressive innovation cycle that
continues to date. This contribution was partially offset due
to allocation effect within large capitalisation biotechnology
stocks, where we were not materially invested, which
detracted approximately 1.0% relative to the Benchmark.
The second largest contributor on a sub-sector basis
was large capitalisation pharmaceuticals. The group
experienced similar volatility to the broad market
throughout the financial year, but finished higher on a
relative basis. Our exposure here contributed nearly 1.2%
to performance. This was offset by allocation, as we were
materially underweight this sub-sector, creating nearly
1.6% of relative underperformance. However, we do note
that we consider large capitalisation pharmaceuticals as a
funding source for biotechnology, so this positioning overall
was a net positive.
The final subsector with absolute contribution of over 1.0%
was from Japan pharmaceuticals. Here the contribution
was completely due to stock picking. Overall weighting was
mostly in-line with the Benchmark, creating over 0.7% of
relative performance.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT PORTFOLIO MANAGER’S REVIEW CONTINUED
SOURCES OF CONTRIBUTION (ABSOLUTE)
%
5
4
3
2
1
0
-1
-2
-3
-4
-5
Biotech
Japan
Services
Tools
Pharma
Medtech
India
China
Source: Frostrow
Lastly, another subsector of note was medical technology.
Whilst we were fully invested in this space, overall
performance for these stocks was negative in the financial
year, down on average 7.5% in the Benchmark. The
subsector was adversely impacted by a mix of macro
factors and fundamental headwinds, namely hospital
staffing shortages, semiconductor shortages, elevated
oil and resin prices, shipping bottlenecks and a dearth
of meaningful new product cycles. However, many of
these issues have abated and even reversed, leading to a
tailwind for the sector going forward. Due to stock picking
in the reported period, our average returns were superior,
down on average 0.3% in the portfolio. This added over
1.1% of relative performance.
SOURCES OF CONTRIBUTION (RELATIVE)
Biotech
Medtech
Tools
Services
Japan
India
Pharma
China
3
2
1
0
%
-1
-2
-3
-4
-5
Source: Frostrow
17
In terms of subsectors that materially detracted
from performance, we highlight two. First, specialty
pharmaceuticals detracted more than 1.0% in both
absolute and relative performance, due to a single stock
pick (Horizon Therapeutics – discussed below). Second,
emerging market stocks, particularly China healthcare
(a key strategic overweight) was particularly volatile in
the financial year. That said, China detracted over 1.6% in
both absolute and relative performance, due to a single
stock pick (Shanghai Bio-heart Biological Technology –
discussed further on page 19).
UNQUOTED
During the financial year ended on 31 March 2023,
the Company strategically refrained from making new
investments in unquoted companies, as we cautiously
navigated the challenging public offering market for small
and mid-capitalisation therapeutic firms. Encouragingly,
however, one of the existing unquoted investments,
DingDang Health Technology Group, completed its
initial public offering (IPO) in mid-September, despite a
subsequent share price decline (described below). With the
recent encouraging signs of improvement in the capital
market funding landscape, we are optimistic about the
potential for more unquoted investments to achieve listings
in the current financial year.
As of 31 March 2023, unquoted company investments
made up 6.7% of the Company’s net assets, only slightly
down from 7.1% on 31 March 2022. The existing unquoted
portfolio demonstrates a diverse and forward-looking
approach. Geographically, around 60% is exposed to
emerging markets and the remainder is invested in North
American companies. On a sector basis, half of the
unquoted investments are in healthcare services, with
additional allocations to life sciences tools, biotechnology,
and medtech.
For the year ended 31 March 2023, the Company’s
unquoted strategy encountered a few challenges, resulting
in a loss of £17.3 million and an implied return of -10.3%,
which somewhat offset the substantial gain of £42.5 million
in the financial year ended 31 March 2022. The decline was
primarily driven by a post-listing decrease in DingDang
Health Technology Group (£7.5 million) and net write-
downs in the remaining unquoted portfolio of £9.8 million.
Nevertheless, given the emerging positive trends in the
market and our strategic approach, we remain confident
in the future performance of our unquoted investments,
echoing the successes of prior years.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT 18
PORTFOLIO MANAGER’S REVIEW CONTINUED
MAJOR CONTRIBUTORS TO PERFORMANCE
The top six contributors to absolute performance were a
combination of therapeutic and non-therapeutic stocks,
but the impact of M&A in the biopharmaceutical sector
on performance was the distinguishing feature of positive
performance in the year.
M&A IMPACT ON PERFORMANCE
3 OF THE TOP 5 CONTRIBUTORS WERE
BIOTECHNOLOGY TAKE-OUTS.
>100%
premium
>100%
premium
>$40
billion
The largest contributor in the period was Global
Blood Therapeutics. The California based small-mid-
capitalisation biotechnology company focuses on clinical
medicines used to treat blood-based disorders, such as
sickle cell disease (SCD). The company was acquired
by Pfizer in an announced transaction in August 2022.
The agreed upon price was for a total enterprise value
of U.S.$5.4 billion, a 100% premium to the unaffected
share price. In addition to an already marketed product
for the treatment of SCD, Oxbryta (voxelotor), Pfizer also
gained important pipeline assets, including GBT601, an
oral, once-daily, next-generation sickle haemoglobin
(HbS) polymerization inhibitor in the Phase 2 portion of
a Phase 2/3 clinical study. GBT601 has the potential to
be a best-in-class agent targeting improvement in both
haemolysis and frequency of vaso-occlusive crisis (VOC).
Another promising pipeline asset is inclacumab, a fully
human monoclonal antibody targeting P-selectin which is
being evaluated in two Phase 3 clinical trials as a potential
quarterly treatment to reduce the frequency of VOCs and
to reduce hospital readmission rates due to VOCs. The
transaction officially closed in early October 2022.
In addition to the above, Pfizer also executed on the
largest M&A healthcare transaction of the year, acquiring
Seattle-based oncology player, Seagen. Pfizer announced
its intention in March 2023. In a U.S.$43 billion deal “to
battle cancer”, the two companies entered into a definitive
agreement that will see Pfizer acquire the company for
$229 per share, a premium of more than 100% to the
company’s 52-week low. Seagen is a pioneer in “antibody
drug conjugate” (ADC) technology, with four of the twelve
total U.S. Food & Drug Administration (FDA)-approved
and marketed ADCs using its technology industry-wide.
ADCs are a transformative modality that is emerging as a
powerful tool across a broad range of cancers designed to
preferentially kill cancer cells and limit off-target toxicities.
ENHERTU
3RD GENERATION ANTIBODY DRUG CONJUGATE
Discovered by:
Overexpression of HER2
leads to cancer
Enhertu
First FDA Approval: Dec '19
Co-marketed & Co-Developed by:
Metastatic Breast Cancer
Additional Indications
Mega-Blockbuster
with peak sales
potential in excess
of $15 billion
HIGH HER2+ EXPRESSION
EFFICACY SUPERIOR TO KADCYLA
Risk of Death by 72%
LOW HER2+ EXPRESSION
ESTABLISHED NEW STANDARD
OF CARE
Risk of Death by 50%
• Gastric
• Colon
• Lung
• Earlier lines of therapy
Unprecedented
Efficacy
The Japanese pharmaceutical interest, Daiichi-Sankyo,
has emerged as the other leader in ADC technology and
is a pioneer in creating “3rd generation” ADCs that are
more potent and safer than ever before. Their first offering,
Enhertu (trastuzumab deruxtecan), for the treatment of
specific forms of metastatic breast cancer, has already
become a blockbuster product. The share price re-rated
multiple times in the fiscal year as the company disclosed
new data sets (low HER2+ expression), new approvals
(high HER2+ expression), and sales above expectations
consistently through the year (sales >$1 billion in the first
nine months). One of the most interesting data disclosures
occurred in June 2022 at the American Society of Clinical
Oncology meeting in Chicago where Enhertu was shown to
double the length of survival in women with “low HER2+”
expression. The data was so impressive, the thousands of
oncologists in attendance collectively rose in a standing
ovation. The stock has also appreciated ahead of the
first pivotal data for the company’s next ADC offering,
datopotamab deruxtecan (Dato-DXd) for the treatment of
specific lung cancer, which “could be bigger than Enhertu”,
as per the company’s partner, AstraZeneca.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT
PORTFOLIO MANAGER’S REVIEW CONTINUED
19
BioMarin Pharmaceutical is another California based
small-mid-capitalisation biotechnology company that
was a material contributor to performance. The company
is well known for developing and commercialising
therapeutic enzyme products but has more recently
added efforts in gene therapy. Their lead asset, Roctavian
(valoctocogene roxaparvovec), is the first gene therapy
for the treatment of severe haemophilia A. An approval
for Roctavian in Europe (August 2022) and an imminent
approval by the FDA (expected in June 2023) helped push
the share price higher in the reported period, despite some
profit taking late in the year. Additionally, the company’s
new product launch for achondroplasia, Voxzogo
(vosoritide), has been very successful. Multiple upward
sales revisions for Voxzogo through 2022 were also an
important tailwind for the share price.
The Cambridge, Massachusetts biotechnology company,
Sarepta Therapeutics, has evolved into a rare disease
company with expertise in the treatment of Duchenne
Muscular Dystrophy (DMD), a severe type of muscle
wasting found in young males. More recently, the
company has acquired and developed a platform
technology in gene therapy which they have applied to
DMD patients. This development programme had moved
into pivotal stages and the data had looked promising as a
potential cure for these patients. The stock moved higher
as a result, and moved higher still after the company was
granted an accelerated approval path by the FDA for their
lead gene therapy asset (delandistrogene moxeparvovec).
Some share price volatility of note closed the end of the
financial year due to some internal disagreement within
the FDA about the approvability of delandistrogene, which
was ultimately resolved with a positive recommendation
for approval by an external advisory committee meeting in
May 2023.
Finally, yet another California based small-mid-
capitalisation biotechnology company was a significant
contributor to performance via its acquisition during the
fiscal year. Turning Point Therapeutics was acquired by
Bristol-Myers Squibb for a total equity value of U.S.$4.1
billion, representing a +125% premium to the previous
closing share price. The deal was announced in June
2022 and closed August 2022. Turning Point Therapeutics
is a clinical-stage precision oncology company with a
pipeline of investigational medicines designed to target the
most common mutations associated with oncogenesis.
Their lead asset, repotrectinib, is a next generation,
potential best-in-class tyrosine kinase inhibitor, targeting
the ROS1 and NTRK oncogenic drivers of non-small cell
lung cancer (NSCLC) and other advanced solid tumours.
Repotrectinib is expected to be approved in the U.S. in the
second half of 2023 and become a new standard of care
for patients with ROS1-positive NSCLC in the first-line
setting.
MAJOR DETRACTORS FROM PERFORMANCE
Investments that experienced negative returns were
very diverse in nature, whether it be geographically
(U.S., Europe, and China) or sector (biotechnology,
pharmaceuticals, and medical technology). The one
common thread each of the stocks faced was a
unique individual event, such as a clinical trial failure, a
commercial sales slowdown, or even de-risking ahead of a
catalyst, which subsequently triggered a fall in share price.
The main detractor in the year was Shanghai Bio-
heart Biological Technology the China-based medical
technology company is a leader in interventional
cardiovascular devices. The company has enjoyed
enormous success since its IPO in late 2021, with returns
in excess of 250% of its original listing price. However,
the stock inexplicably began to sell off, even falling in
November on no obvious news. We speculated that
some profit taking took place ahead of an important data
disclosure for the company’s novel renal denervation
device for uncontrolled hypertension, expected early in
2023. This was partially confirmed when the competitor
data (from Medtronic) failed to prove that its renal
denervation system reduced patients’ ambulatory systolic
blood pressure. Additionally, the share price was pressured
as some investors may have sold ahead of the lock-up
expiration for private investors in December 2022.
Mirati Therapeutics is a California-based biotechnology
company developing novel small molecule drugs to treat
cancer. In particular, their lead program is a targeted
oncology therapy intended to treat patients with lung
cancer that harbours a specific mutation in the KRAS
gene. Shares rose in late 2022 amid rumours that the
company might be acquired; however, they ultimately
fell in December 2022 following the presentation of
disappointing clinical trial data. The data suggested
that their lead programme might not be superior to
the standard of care therapy in first line lung cancers
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT 20
PORTFOLIO MANAGER’S REVIEW CONTINUED
harbouring a KRAS mutation. Instead, the drug may be
used in more advanced lung cancer patients where the
market opportunity is smaller.
Horizon Therapeutics is a U.S. based specialty
pharmaceutical company that presided over one of the
most successful drug launches ever in 2020. Tepezza
(teprotumumab) was developed by the company to
treat “TED” or thyroid eye disease, a painful, disfiguring,
and debilitating disorder of the musculature of the eye.
Launched in January 2020, the drug was well on its way
to blockbuster status despite the commercial headwinds
of the COVID-19 pandemic. Despite a temporary
government-mandated shutdown in the manufacturing
of Tepezza due to the prioritisation of COVID-19 vaccine
production in early 2021, the re-launch of the product in
April 2021 exceeded expectations. Whilst this success
continued into early 2022, the sales growth for Tepezza
then began to unexpectedly flatten, and the company
reported second quarter sales that were disappointing
and full year sales guidance was lowered. Additionally,
investors learned that a key study (Tepezza usage in
chronic patients) was delayed into 2023. As a result,
the stock fell. We exited the position as the company
pondered new marketing initiatives and increased spend
to reinvigorate Tepezza sales in 2023, whilst awaiting
trial results for the chronic indication. We were no longer
invested in the company when Amgen announced its
intention to acquire the company in December 2022.
Investing in healthcare necessarily brings with it clinical
risk. For Swiss pharmaceutical giant, Roche, the bad news
came in threes during 2022. First, the company started
the financial year off on the wrong foot when in April 2022
they confirmed that their investigative oral hormonal
therapy, giredestrant, a “SERD” (selective estrogen
receptor degrader), failed to show a benefit in advanced
breast cancer. Then in May 2022, Roche confirmed that
their “anti-TIGIT” antibody, tiragolumab, failed on an
interim look in the treatment of lung cancer. And finally
in November 2022, Roche confirmed that their high risk /
high reward antibody, gantenerumab, failed delaying the
progression in mild-to-moderate Alzheimer’s patients.
This string of unfortunate clinical trial failures coupled with
declines in profits due to the dwindling effects of COVID-
related sales (particularly in the company’s diagnostics
unit), led to share price declines in the period.
The medical technology company, Edwards Lifesciences,
is a developer of tissue replacement heart valves, and
more specifically transcatheter heart valves (THV). The
company’s current valve portfolio is largely comprised
of transcatheter aortic heart valves (TAVR), a market
which has been growing solidly in the double-digit range
but experienced some disruption in the second half of
2022 due to hospital staffing shortages across the U.S.
This has fuelled investor concerns that the market is
maturing and is one of the primary reasons for prolonged
weakness in the share price during the reported period.
Other headwinds facing the stock were mostly macro in
nature, including the negative sentiment for growth stocks
and rising interest rates. However, there is evidence that
staffing shortages and other hospital difficulties have
eased so far in 2023, which should benefit all medtech
companies and especially those most exposed to inpatient
procedure volumes, such as Edwards. Moreover, the
company is the process of launching a key new product
cycle in the transcatheter mitral heart valve (TMVR)
market, which has the potential to accelerate top line
growth in 2023 and more fully in 2024.
DERIVATIVE STRATEGY
The Company has the ability to utilise equity swaps and
options as part of its financial strategy. Throughout the
financial year, the Company leveraged single stock equity
swaps to access Chinese and Indian investments in
emerging markets, which would otherwise be inaccessible
through more traditional investment methods. Despite
detracting £22.8 million from performance in the financial
year ended 31 March 2023, we remain confident in the
long-term prospects of emerging market securities,
particularly those trading locally in mainland China.
Additionally, the Company strategically invested in two
customised tactical basket swaps, targeting growth
opportunities in undervalued small and mid-capitalisation
therapeutic companies. These baskets were constructed
to capitalise on two prevailing themes that we anticipate
will deliver strong returns in current financial year:
1) investment opportunities possessing considerable
potential as attractive acquisition targets for larger
corporations, and 2) those exhibiting a favourable risk/
reward profile in light of upcoming clinical catalysts.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT PORTFOLIO MANAGER’S REVIEW CONTINUED
21
LEVERAGE STRATEGY
Historically, the typical range of leverage level employed
by the Company has been between high single digits to
mid-teens. Considering the market conditions over the
past three financial years, we have, more recently, used
leverage in a more tactical fashion. Examples include the
volatility around the original emergence of the pandemic
in March 2020 and the U.S. Presidential election in
November 2020 and the subsequent U.S. Senate run-off in
January 2021.
More recently, we increased leverage back into the low-to-
double digits, a reflection of our overall bullishness on the
portfolio, a turn in biotechnology stocks, and the relative
outlook for healthcare ahead of a potential recession.
One caveat that keeps us from extending leverage even
further, is the volatile and uncertain macro backdrop,
either economic in nature or even further geopolitical
unsettlement in the east.
SECTOR DEVELOPMENTS AND OUTLOOK
Whilst healthcare stocks in general may have struggled
this year given the see-saw of macro headwinds, there
were a number of positive sector developments to
highlight. First, some investors expressed angst over a
slowdown of new drug approvals at the FDA. However,
entering 2023, disrupted work schedules because of
the coronavirus have dwindled and most recently, FDA
inspectors returned to China for the first time in years
which is encouraging (source: Washington Analysis).
A significant number of complete response letters and
extended user fee dates had been issued by the agency
due to the inability to complete the inspections, so this
is a welcome relief for the industry. More importantly,
despite some delays, the past six years have been the
most productive in industry history, with almost 300 new
product approvals during that span. The FDA has kept
pace so far in 2023, with 13 additional approvals in the
first three months of the calendar year (source: fda.gov).
Perhaps the largest sector development that has occurred
during this period is new legislation that was approved
by the U.S. Senate and signed into law in July 2022
– the Inflation Reduction Act of 2022 (“IRA”) – which
settled concerns about prescription drug price reform.
The threat of drug price reform in the U.S. has been a
persistent source of uncertainty and negative sentiment,
an overhang for the biopharmaceutical sector for decades,
but particularly over the past two years since President
Biden took office. The IRA was modest in scope and
included a mix of positive and negative factors for the
biopharmaceutical industry. Overall, we view the IRA as
very manageable for the biopharmaceutical sector, with
limited impact on profits into the end of the decade, and
perhaps the issue of drug price reform can now begin to
dissipate as an overhang on the sector.
U.S. DRUG PRICE REFORM IMPACT: MIXED BUT MANAGEABLE
Three Main Components to the IRA 2022 re: Drug Price Reform
Drug Price Inflation Cap
Medicare Part D Redesign
Medicare Price Negotiations
Requires drug companies
to pay rebates to Medicare
if they increase drug prices
faster than inflation
Removes the “donut hole”
and replaces it with an
“out-of-pocket cap” of
$2,000 per patient
Enables Health & Human
Services to set the prices of
certain costly drugs within
the Medicare program
INFLATION REDUCTION ACT - OF 2022
NEUTRAL
• Price is no longer a revenue driver for pharma
• LIST prices do rise today, but < levels of inflation
• NET prices are cut even further due to rebating
• Curbs bad actors = positive for industry image
POSITIVE
• Lowers out of pocket expenses
•
•
•
• Should result in increased volumes
Increases affordability of medicines
Increases adherence / treatment duration of times
Increases patient access
NEGATIVE but MANAGEABLE
• Not in effect until 2026
• Only 10 drugs per year are negotiated
• Targets medicines that are near the end of their life
cycles but do not yet have generic competition
(9 yrs - small molecules / 13 yrs - biologics)
• Only a potential $40 billion incremental hit to U.S.
Rx revenues to 2032 (out of $660 billion)
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT 22
PORTFOLIO MANAGER’S REVIEW CONTINUED
LARGE CAP PHARMACEUTICALS: LOOMING PATENT CLIFF
Sales at Risk ($bn)
Company
Drug Name
US Loss of
Exclusivity
(Projected)
2021
Global Sales
($bn)
$60
$50
$40
$30
$20
$10
$0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
SOURCE: Evaluate, “The Patent Winter is Coming”, May 25, 2022; S &P Global report, data as of February 17, 2022.
The Company has taken advantage of accelerating M&A
activity within the biotechnology space and we expect
that trend to continue. With the insatiable need for large
capitalisation companies to continue to fill their pipelines and
replace revenues lost to patent expirations, this is a logical
view. In fact, the pharmaceutical industry appears to be facing
another “patent cliff”, starting in 2023 and inflecting in 2025. A
number of major blockbusters will be losing their exclusivity
and sales will erode substantially, leaving major gaps in
revenues and earnings for a number of companies.
With the historic small-mid-capitalisation biotechnology
stock sell-off and large capitalisation executives talking
up the need to execute deals, a plethora of transactions
began in earnest, inflecting in June 2022. The result for
the financial year was a near doubling in the number of
biotechnology transactions to 30 and near quadrupling of
the value of deals, to U.S.$113 billion. This has been a real
rallying point for the industry, especially in biotechnology,
and as we have seen in the past, M&A can move the entire
sector higher and we have finally seen these stocks move
off the bottom after experiencing the largest and longest
drawdown in the history of the “XBI” (the biotech ETF).
BIOTECH M&A: YEAR-OVER-YEAR ACCELERATION
# of Deals
$ Value of Deals
FY 2021
FY 2022
17
30
$31 billion
$113 billion
YOY
+76%
+265%
Periods ending March 31. SOURCE: FactSet, Company Websites
We expect this accelerated M&A pace to continue.
Why? The pace of innovation within the biotechnology
industry remains impressive and is the number one
value driver in the industry. The patent cliff keeps the
appetite of large capitalisation companies for additional
new pipelines and products very high. Additionally,
historically low biotechnology valuations will continue to
fuel biotechnology acquisitions. Over 200 life sciences
companies continue to trade at negative enterprise values
(i.e., market capitalisations below net cash). As shown in
the following chart, revenue multiples for the sector are
also bouncing off bear market recessionary lows.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT 23
PORTFOLIO MANAGER’S REVIEW CONTINUED
BIOTECHNOLOGY TRADING AT HISTORICALLY
LOW REVENUE MULTIPLES
50x
40x
30x
20x
10x
0x
6x
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2013 2017 2019 2021 2023
Median Biotech EV/Sales
Historical recession min.
Another important phenomenon that typically follows an
acceleration of M&A is the rekindling of clinical and regulatory
catalysts as key stock moving events. After an inflection of
M&A, typically there is a renewed appreciation of the catalyst
strategy as investors are reminded of why companies are
being bought for 100 to 200% premiums – innovation.
And in 2023, we expect investor focus to return to such
catalysts, across such examples as gene therapy, a highly
scrutinised new therapeutic technology that was left for
dead in 2022 due to emerging safety concerns, but is now
on the precipice of three new product launches. And there
are many more, across oncology, nephrology, neurology,
and so on. The commercial opportunities that are eventually
created are significant. The top 15 new product opportunities
in biotechnology today could create over U.S.$60 billion in
cumulative sales by the next decade (source: Jefferies).
15 NOVEL BIOTECH-SOURCED LAUNCHES WITH >U.S.$60 BILLION IN CUMULATIVE REVENUES
$70
$60
$50
$40
$30
$20
$10
$0
FGEN $2.4B FibroGen
BMRN $2.6B BiOMARIN
PCVX $2.8B Vaxcyte
AXSM $2.8B Axsome
VTYX $2.8B Ventyx
ASND $3B
CYTK $3.6B Cytokinetics
Ascendis
ITCI
$3.6B Intra-Cellular
APLS $4.0B Apellis
RXDX $4.8B Prometheus
NTLA $5.1B Intellia
MDGL $5.5B Madrigal
KRTX $6B
Karuna
ARGX $6.8B Argenx
ALNY $7.3B Alnylam
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
)
B
$
(
e
u
n
e
v
e
R
s
u
s
n
e
s
n
o
C
d
e
t
s
u
d
a
n
U
k
s
R
j
i
Finally, a word on emerging markets. China’s re-emergence
from its zero-COVID policy provides an important new
growth driver for global healthcare companies. Major
Chinese cities have gone from lockdowns to traffic jams
in just a few months. The principle here is simple – as
China re-opens from its zero-COVID policy, the economy
and the local equity market should follow. The Hong Kong
healthcare index hit all-time lows in October 2022, after
ill-founded investor fears about government and political
interference - both from China and the U.S. - created a
market dislocation. A rebound into calendar year-end
ensued in anticipation of an economic re-opening. And
whilst geopolitical tensions created some volatility early in
2023, we are optimistic about China going forward as this
oversold situation should reverse.
Sven H. Borho and Trevor M. Polischuk
OrbiMed Capital LLC
Portfolio Manager
6 June 2023
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT
24
CONTRIBUTION BY INVESTMENT
ABSOLUTE CONTRIBUTION BY INVESTMENT FOR THE YEAR ENDED 31 MARCH 2023
Principal contributors to and detractors from net asset value performance
Top five contributors
Global Blood Therapeutics**
Seagen**
Daiichi Sankyo
BioMarin Pharmaceutical
Sarepta Therapeutics
Country
USA
USA
Japan
USA
USA
Sector
Biotechnology
Biotechnology
Pharmaceutical
Biotechnology
Biotechnology
Contribution
£’000
30,805
28,289
23,488
21,598
20,665
Contribution
per share*
£
0.5
0.4
0.4
0.3
0.3
Top five detractors
Edwards Lifesciences
Roche
Horizon Therapeutics**
Mirati Therapeutics
Shanghai Bio-heart Biological Technology
USA
Switzerland
USA
USA
China
Healthcare Equipment & Supplies
Pharmaceutical
Biotechnology
Biotechnology
Healthcare Equipment & Supplies
(18,551)
(24,481)
(29,324)
(33,332)
(42,324)
(0.3)
(0.4)
(0.5)
(0.5)
(0.7)
* Calculation based on 64,474,422 shares being the weighted average number of shares in issue during the year ended 31 March 2023
** Not held at 31 March 2023
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT ENVIRONMENTAL, SOCIAL AND GOVERNANCE
AND CLIMATE CHANGE
25
The Company’s Portfolio Manager, OrbiMed, is guided by
its Responsible Investing Policy in its approach to ESG
(Environmental, Social and Governance). They seek to
invest in innovative healthcare companies that are working
towards addressing significant unmet medical needs,
across biopharmaceuticals, medical devices, diagnostics,
and healthcare services sectors, globally.
OrbiMed believes that there is a high congruence between
companies that seek to act responsibly and those that
succeed in building long-term shareholder value. They seek
to integrate ESG into the overall investment process, with
the objective of maximising investment returns. OrbiMed
has recruited a senior executive who has the responsibility
of overseeing this project. Investment decisions are
based on a variety of financial and non-financial company
factors, including environmental, social, and governance
information.
As a responsible investor, OrbiMed negatively screens
potential investments and business sectors that may
objectively lead to negative impacts on public health or
well-being. They consider healthcare sector-specific
guidance from the Sustainability Accounting Standards
Board (SASB) to determine material ESG factors as part
of their investment research. Social factors such as
affordability, pricing, access, and safety dominate the
financially material ESG issues for the pharmaceutical,
biotechnology, and medical devices sub-sectors, followed
by governance factors. Environmental factors such as
greenhouse gas (GHG) emissions are not featured as
material. Energy and waste management appear as
material factors for healthcare delivery, and drug retailer
sub-sectors, where the physical footprint of the companies
is large. The healthcare and life sciences sector is highly
regulated, globally. Environmental regulation, along with
quality-related regulation is well-established across both
developed and emerging markets. To that end, OrbiMed
considers compliance with local laws and regulations as
one of the factors in its investment evaluation. Depending
on the investment, all or a subset of the ESG factors that
are financially material and relevant are considered in
OrbiMed’s research.
MONITORING AND ENGAGEMENT
OrbiMed utilises ESG scores for public equity holdings
from third-party service providers. To supplement the
information from these providers, OrbiMed also conducts
proprietary analysis of ESG performance. The scores
from the third-party service providers are integrated
with OrbiMed’s own analysis onto a proprietary business
intelligence platform for regular monitoring.
OrbiMed also generally engages on a regular basis with its
portfolio companies through meetings with management,
proxy voting, and in some cases, through board
representation.
OrbiMed’s analysts regularly track ESG information
on safety of clinical trials, drug/product safety, ethical
marketing, call-backs and other materially relevant factors.
In addition, OrbiMed is taking the initiative in leading
meaningful ESG engagement in the healthcare sector. As
part of these efforts, OrbiMed engages with companies
directly or through brokers, and facilitates dialogue and an
exchange of best practice among investors, companies,
and other relevant experts on ESG in the healthcare sector.
Some examples of engagement include:
•
•
•
Engagement with large capitalisation pharmaceutical
companies on reporting, environmental sustainability,
access, product pricing, supplier engagement and
targets on ESG through an investor conference and
broker-led ESG road shows;
Participation in an ESG conference where a mid-
capitalisation biotechnology company disclosed its ESG
governance, and discussed key programmes including
increasing diversity in clinical trials, employee diversity
and talent-building initiatives, and other community
initiatives; and
As part of the ‘Industry Investor Connect’, OrbiMed
participated in an ESG roundtable discussion with a
large capitalisation medical devices company and a
pharmaceutical company, alongside 10 other investors.
Topics discussed included drugs and product safety,
litigation, and access to medicines.
OrbiMed also participated in the Goldman Sachs
Sustainability Conference in September 2022 and the
Jefferies London Healthcare Conference in November 2022,
alongside several healthcare companies and investors, to
allow further dissemination and discussion of leading ESG
practices in the healthcare sector.
Between April 1, 2022, and March 31, 2023, a total of 776
proposals came to vote within the Company’s portfolio.
Of these, 759 were management proposals and 17 were
shareholder proposals.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT 26
ENVIRONMENTAL, SOCIAL AND GOVERNANCE AND CLIMATE CHANGE CONTINUED
Proposed by
Management
Shareholder
Total number
of proposals
Voted for
759
17
667
2
Voted
against
92
15
Votes
abstained
0
0
against
management’s
proposed
response
88
2
Number of votes
greenwashing rules will take effect immediately and will
be applicable to all regulated firms in the UK. Labelling and
classification rules come into effect a year later, and the
disclosure rules will follow after a further year.
In May 2022, the U.S. Securities and Exchange Commission
(SEC) proposed amendments to rules and reporting forms
to promote disclosures for investors concerning funds’
and advisers’ incorporation of ESG. Following this, in
2023, the Division of Examinations of the SEC announced
the publication of its 2023 examination priorities, which
include a focus on ESG-related advisory services and fund
offerings, to evaluate labelling and practices with respect to
stated policies and processes, in the United States.
International coherence on ESG between regimes is yet
to be achieved. The changing regulatory landscape is
continuously being monitored by OrbiMed.
Sven H. Borho and Trevor M. Polischuk
OrbiMed Capital LLC
Portfolio Manager
6 June 2023
There was one management proposal referring to an ESG
report and two shareholder proposals regarding product
pricing. ‘Affordability and pricing’ is one of the material ESG
topics listed in the Sustainability Accounting Standards
Board guidance for the Biotechnology and Pharmaceuticals
sub-sector.
OrbiMed provides a quarterly update on ESG to the Board
of the Company. This provides updates on the evolving
regulatory landscape as well as details of monitoring,
engagement and its proxy voting activity. ESG reporting
by companies within the portfolio is also examined in the
quarterly report.
CLIMATE CHANGE
As per the guidance from SASB, climate change in relation
to the Company’s own operations is not a material ESG
consideration for the biotechnology and pharmaceutical,
medical equipment and supplies, and managed care
sectors. However, Energy management is noted as a
material ESG concern for the healthcare delivery sector.
To that end, OrbiMed includes the scores on energy
management for the relevant sectors in its overall ESG
monitoring.
REGULATORY UPDATE ON ESG
In October 2022, the UK Financial Conduct Authority
(FCA) published the Consultation Paper on UK-specific
Sustainability Disclosure Requirements (SDR). The
proposed SDR is focused on asset managers and their UK-
based fund products and portfolio management services.
The Consultation Paper’s core elements are labelling and
classification; disclosure; and naming and marketing rules.
The FCA has concluded the Consultation on the draft Rules.
The final rules which were expected to be published in
June 2023, are now expected to be published in the third
quarter of 2023. Upon the release of the Final Rules, anti-
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT
27
BUSINESS REVIEW
The Strategic Report, on pages 1 to 40, contains a review
of the Company’s business model and strategy, an analysis
of its performance during the financial year and its future
developments and details of the principal risks and
challenges it faces. Its purpose is to inform shareholders
in the Company and help them to assess how the Directors
have performed their duty to promote the success of the
Company.
The Strategic Report contains certain forward-looking
statements. These statements are made by the Directors in
good faith based on the information available to them up to
the date of this report. Such statements should be treated
with caution due to the inherent uncertainties, including both
economic and business risk factors, underlying such forward-
looking information.
BUSINESS MODEL
Worldwide Healthcare Trust PLC is an externally managed
investment trust and its shares are listed on the premium
segment of the Official List and traded on the main market
of the London Stock Exchange. Its investment objective and
policy are set out on pages 8 and 9.
The purpose of the Company is to achieve a high level of
capital growth for its shareholders by providing a vehicle for
investors to gain, through a single investment, exposure to
the global healthcare sector through a diversified portfolio
of shares in pharmaceutical and biotechnology companies
and related securities.
The Company’s strategy is to create value for shareholders
by addressing its investment objective.
As an externally managed investment trust, all of the
Company’s day-to-day managements and administrative
functions are outsourced to service providers. As a result,
the Company has no executive directors, employees or
internal operations. The Company employs Frostrow
Capital LLP (Frostrow) as its Alternative Investment Fund
Manager (AIFM), OrbiMed Capital LLC (OrbiMed) as its
Portfolio Manager, J.P. Morgan Europe Limited as its
Depositary and J.P. Morgan Securities LLC as its Custodian
and Prime Broker. Further details about their appointments
can be found in the Business Review on pages 28 and 29.
The Company is an investment company within the meaning
of Section 833 of the Companies Act 2006 and has been
approved by HM Revenue & Customs as an investment trust
(for the purposes of Section 1158 of the Corporation Tax Act
2010). As a result the Company is not liable for taxation on
capital gains. The Directors have no reason to believe that
approval will not continue to be retained. The Company is not
a close company for taxation purposes.
The Board is responsible for all aspects of the Company’s
affairs, including the setting of parameters for and the
monitoring of the investment strategy a s well as the
review of investment performance and policy. It also has
responsibility for all strategic issues, the dividend policy,
the share issuance and buy-back policy, gearing, share
price and discount/premium monitoring and corporate
governance matters.
CONTINUATION OF THE COMPANY
A resolution was passed at the Annual General Meeting
held in 2019 that the Company continues as an investment
trust for a further five year period. In accordance with the
Company’s Articles of Association, shareholders will have
an opportunity to vote on the continuation of the Company
at the Annual General Meeting to be held in 2024 and every
five years thereafter.
THE BOARD
The Board of the Company comprises Doug McCutcheon
(Chair), Sarah Bates, Sven Borho, Dr Bina Rawal,
Humphrey van der Klugt, Tim Livett and Jo Parfrey. All of
these Directors, with the exception of Tim Livett and Jo
Parfrey served throughout the year. All are independent
non-executive Directors with the exception of Sven Borho
who is not considered to be independent by the Board.
Further information on the Directors can be found on
pages 41 to 43.
All Directors, with the exception of Sarah Bates, are seeking
election or re-election by shareholders at this year’s Annual
General Meeting.
DIVIDEND POLICY
It is the Company’s policy to pay out dividends to
shareholders at least to the extent required to maintain
investment trust status for each financial year. Such
dividends will typically be paid twice a year by means of an
interim dividend and a final dividend.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT 28
BUSINESS REVIEW CONTINUED
KEY PERFORMANCE INDICATORS (‘KPIs’)
Ongoing charges ratio
The Board assesses the Company’s performance in
meeting its objectives against KPI’s as follows. The KPI’s
have not changed from the previous year:
The Board continues to be conscious of expenses and
works hard to maintain a balance between good quality
service and costs.
•
•
Net asset value (‘NAV’) per share total return against the
Benchmark;*
Discount/premium of share price to NAV per
share;* and
• Ongoing charges ratio.*
*
Alternative Performance Measure (See Glossary beginning on page 98)
Information on the Company’s performance is provided in
the Statement from the Chair and the Portfolio Manager’s
Review and a record of these measures is shown on
pages 1, 2 and 3. Further information can be found in the
Glossary beginning on page 97.
NAV per share total return against the Benchmark
The Directors regard the Company’s NAV per share total
return as being the overall measure of value delivered to
shareholders over the long term. This reflects both net
asset value growth of the Company and dividends paid to
shareholders.
The Board considers the most important comparator,
against which to assess the NAV per share total return
performance, to be the MSCI World Health Care Index
measured on a net total return, sterling adjusted basis
(the ‘Benchmark’). As noted on pages 8 and 9, OrbiMed has
flexibility in managing the investments and are not limited
by the make up of the Benchmark. As a result, investment
decisions are made that differentiate the Company from the
Benchmark and therefore the Company’s performance may
also be different to that of the Benchmark.
A full description of performance during the year under
review is contained in the Portfolio Manager’s Review
beginning on page 14 of this Annual Report.
Share price discount/premium to NAV per share
The share price discount/premium to the NAV per share
is considered a key indicator of performance as it impacts
the share price total return of shareholders and can
provide an indication of how investors view the Company’s
performance and its Investment Objective.
PRINCIPAL SERVICE PROVIDERS
The principal service providers to the Company are the
AIFM, Frostrow, the Portfolio Manager, OrbiMed, the
Custodian and Prime Broker J.P. Morgan Securities LLC,
and the Depositary, J.P. Morgan Europe Limited. Details
of their key responsibilities follow and further information
on their contractual arrangements with the Company
are included in the Report of the Directors beginning on
page 44.
Alternative investment fund manager (‘AIFM’)
Frostrow under the terms of its AIFM agreement with
the Company provides, inter alia, the following services:
•
oversight of the portfolio management function
delegated to OrbiMed Capital LLC;
• portfolio administration and valuation;
•
risk management services;
• marketing and shareholder services;
•
share price discount and premium management;
• administrative and secretarial services;
•
advice and guidance in respect of corporate governance
requirements;
• maintenance of the Company’s accounting records;
• maintenance of the Company’s website;
•
•
preparation and dispatch of annual and half-year
reports (as applicable) and monthly fact sheets; and
ensuring compliance with applicable legal and
regulatory requirements.
During the year, under the terms of the AIFM Agreement,
Frostrow received a fee as follows:
On market capitalisation up to £150 million: 0.3%; in the
range £150 million to £500 million: 0.2%; in the range
£500 million to £1 billion: 0.15%; in the range £1 billion to
£1.5 billion: 0.125%; over £1.5 billion: 0.075%. In addition,
Frostrow receives a fixed fee per annum of £57,500.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT BUSINESS REVIEW CONTINUED
29
Portfolio manager
OrbiMed under the terms of its portfolio management
agreement with the AIFM and the Company provides,
inter alia, the following services:
•
•
•
the seeking out and evaluating of investment
opportunities;
recommending the manner by which monies should be
invested, disinvested, retained or realised;
advising on how rights conferred by the investments
should be exercised;
• analysing the performance of investments made; and
•
advising the Company in relation to trends, market
movements and other matters which may affect the
investment objective and policy of the Company.
OrbiMed receives a base fee of 0.65% of NAV and a
performance fee of 15% of outperformance against the
Benchmark as detailed on page 44.
Depositary, custodian and prime broker
J.P. Morgan Europe Limited acts as the Company’s
Depositary and J.P. Morgan Securities LLC as its Custodian
and Prime Broker.
J.P. Morgan Europe Limited, as Depositary, must take
reasonable care to ensure that the Company is managed in
accordance with the Financial Conduct Authority’s Investment
Funds Sourcebook, the AIFMD and the Company’s Articles of
Association. The Depositary must in the context of this role
act honestly, fairly, professionally, independently and in the
interests of the Company and its shareholders.
The Depositary receives a variable fee based on the size of
the Company as set out on pages 44 and 45.
J.P. Morgan Europe Limited has discharged certain of its
liabilities as Depositary to J.P. Morgan Securities LLC.
Further details of this arrangement are set out on page 45.
J.P. Morgan Securities LLC, as Custodian and Prime Broker,
provides the following services under its agreement with
the Company:
•
safekeeping and custody of the Company’s investments
and cash;
• processing of transactions;
•
provision of an overdraft facility. Assets up to 140% of
the value of the outstanding overdraft can be taken as
collateral. See page 93 for further details; and
•
foreign exchange services.
AIFM AND PORTFOLIO MANAGER EVALUATION
AND RE-APPOINTMENT
The performance of the AIFM and the Portfolio Manager is
reviewed continuously by the Board and the Management
Engagement & Remuneration Committee (the “Committee”)
with a formal evaluation being undertaken each year. As
part of this process, the Committee monitors the services
provided by the AIFM and the Portfolio Manager and
receives regular reports and views from them.
The Committee also receives comprehensive performance
measurement reports to enable it to determine whether
or not the performance objectives set by the Board have
been met. The Committee reviewed the appropriateness of
the appointment of the AIFM and the Portfolio Manager in
March 2023 with a positive recommendation being made to
the Board.
The Board believes the continuing appointment of the AIFM
and the Portfolio Manager, under the terms described on
pages 28 and 29, is in the interests of shareholders as a
whole. In coming to this decision, it took into consideration,
inter alia, the following:
•
•
the quality of the service provided and the depth of
experience of the company management, company
secretarial, administrative and marketing team that the
AIFM allocates to the management of the Company; and
the quality of the service provided and the quality and
depth of experience allocated by the Portfolio Manager
to the management of the portfolio and the long-term
performance of the portfolio in absolute terms and by
reference to the Benchmark.
RISK MANAGEMENT
The Board is responsible for the management of risks
faced by the Company. Through delegation to the Audit
& Risk Committee, the Board has established procedures
to manage risk, to review the Company’s internal control
framework and establish the level and nature of the
principal risks the Company is prepared to accept in order
to achieve its long-term strategic objective. At least twice
a year the Audit & Risk Committee carries out a robust
assessment of the principal risks and uncertainties with the
assistance of Frostrow (the Company’s AIFM) identifying
the principal risks faced by the Company. These principal
risks and the ways they are managed or mitigated are
detailed on the following pages.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT 30
BUSINESS REVIEW CONTINUED
Principal risks and uncertainties
Mitigation
Market risks
By the nature of its activities and Investment
Objective, the Company’s portfolio is exposed to
fluctuations in market prices (from both individual
security prices and foreign exchange rates) and
due to exposure to the global healthcare sector, it
is expected to have higher volatility than the wider
market. As such investors should be aware that
by investing in the Company they are exposing
themselves to market risks and those additional
risks specific to the sectors in which the
Company invests, such as political interference in
drug pricing.
In addition, OrbiMed’s approach is expected to
lead to performance that will deviate from that
of comparators, including both market indices
and other investment companies investing in
healthcare.
The Company also uses leverage (both through
derivatives and gearing) the effect of which is
to amplify the gains or losses the Company
experiences.
Geopolitical/regulatory and macro economic risk
Macro events may have an adverse impact
on the Company’s performance by causing
exchange rate volatility, changes in tax or
regulatory environments, and/or a fall in market
prices. Emerging markets, which a portion of the
portfolio is exposed to, can be subject to greater
political uncertainty and price volatility than
developed markets.
To manage these risks the Board and the AIFM have appointed OrbiMed to
manage the portfolio within the remit of the investment objective and policy,
and imposed various limits and guidelines, set out on pages 8 and 9. These
limits ensure that the portfolio is diversified, reducing the risks associated
with individual stocks, and that the maximum exposure (through derivatives
and an overdraft facility) is limited. The compliance with those limits and
guidelines is monitored daily by Frostrow and OrbiMed and reported to the
Board monthly.
In addition, OrbiMed reports at each Board meeting on the performance of the
Company’s portfolio, which encompasses the rationale for stock selection
decisions, the make-up of the portfolio, potential new holdings and, derivative
activity and strategy (further details on derivatives can be found in note 16
beginning on page 89).
The Company does not currently hedge its currency exposure.
While such events are outside the control of the Company the Board reviews
regularly, and discusses with the Portfolio Manager, the wider economic and
political environment, along with the portfolio exposure and the execution of
the investment policy against the long-term objectives of the Company. The
ongoing tensions in the Asia Pacific Region and also the instability caused
by the war in the Ukraine have featured in these discussions. The Portfolio
Manager’s risk team perform systematic risk analysis, including country and
industry specific risk monitoring.
The Board monitors regulatory developments but relies on the services of its
external advisers to ensure compliance with applicable law and regulations.
The Board has appointed a specialist investment trust AIFM and Company
Secretary who provides industry and regulatory updates at each Board meeting.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT BUSINESS REVIEW CONTINUED
31
Principal risks and uncertainties
Mitigation
Unquoted investment risk
The Company’s risk could be increased by its
investment in unquoted companies. These
investments may be more difficult to buy, sell
or value, so changes in their valuations may be
greater than for listed assets. The valuation of
unquoted investments requires considerable
judgement as explained in Note1(a) beginning
on page 79 and as such realisations may be
materially lower than the value as estimated
by the Company. Particular events, outside
the control of the Company, may also have
a significant impact on the valuation and
considerable uncertainty may exist around the
potential future outcomes for each investment.
Investment management key person risk
There is a risk that the individuals responsible
for managing the Company’s portfolio may leave
their employment or may be prevented from
undertaking their duties.
To mitigate this risk the Board and AIFM have set a limit of 10% of the
portfolio, calculated at the time of investment, that can be held in unquoted
investments and have established a robust and consistent valuation policy
and process as set out in Note 1(b) on page 80, which is in line with UK GAAP
requirements and the International Private Equity and Venture Capital (IPEV)
Guidelines. The Board also monitors the performance of these investments
compared to the additional risks involved.
The Board manage this risk by:
•
•
•
•
appointing OrbiMed, who operate a team environment such that the loss
of any individual should not impact on service levels;
receiving reports from OrbiMed at each Board meeting, such report
includes any significant changes in the make-up of the team supporting
the Company;
meeting the wider team, outside the designated lead managers, at
OrbiMed’s offices and encouraging the participation of the wider OrbiMed
team in investor updates; and
delegating to the Management Engagement & Remuneration Committee,
responsibility to perform an annual review of the service received from
OrbiMed, including, inter alia, the team supporting the lead managers and
succession planning.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT 32
BUSINESS REVIEW CONTINUED
Principal risks and uncertainties
Mitigation
Counterparty risk
In addition to market and foreign currency risks,
discussed above, the Company is exposed to
risk arising from the use of counterparties. If a
counterparty were to fail, the Company could
be adversely affected through either delay in
settlement or loss of assets.
The most significant counterparty the Company
is exposed to is J.P. Morgan Securities LLC
which is responsible for the safekeeping
of the Company’s assets and provides the
overdraft facility to the Company. As part of
the arrangements with J.P. Morgan Securities
LLC they may take assets, up to 140% of the
value of the drawn overdraft, as collateral
and have first priority security interest or lien
over all of the Company’s assets. Such assets
taken as collateral may be used, loaned, sold,
rehypothecated or transferred by J.P. Morgan
Securities LLC. Although the Company maintains
the economic benefit from the ownership of
those assets it does not hold any of the rights
associated with those assets. Any of the
Company’s assets taken as collateral are not
covered by the custody arrangements provided
by J.P. Morgan Securities LLC. The Company is,
however, afforded protection in accordance with
SEC rules and U.S. legislation equal to the value
of the assets that have been rehypothecated.
Service provider risk
The Company is reliant on the systems of the its
service providers and as such disruption to, or a
failure of, those systems (including, for example,
as a result of cyber-crime or a ‘black-swan’
event) could lead to a failure to comply with law
and regulations leading to reputational damage
and/ or financial loss.
This risk is managed by the Board through:
•
•
•
•
•
•
reviews of the arrangements with, and services provided by, the
Depositary and the Custodian and Prime Broker to ensure that the
security of the Company’s assets is being maintained. Legal opinions are
sought, where appropriate, as part of this review. Also, the Board regularly
monitors the credit rating of the Company’s Custodian and Prime Broker;
monitoring of the assets taken as collateral (further details can be found
in note 16 beginning on page 89);
reviews of OrbiMed’s approved list of counterparties, the Company’s use
of those counterparties and OrbiMed’s process for monitoring, and adding
to, the approved counterparty list;
monitoring of counterparties, including reviews of internal control reports
and credit ratings, as appropriate;
by primarily investing in markets that operate DVP (Delivery Versus
Payment) settlement. The process of DVP mitigates the risk of losing the
principal of a trade during the settlement process; and
J.P. Morgan Securities LLC is subject to regular monitoring by J.P. Morgan
Europe Limited, the Company’s Depositary, and the Board receives regular
reports from J.P. Morgan Europe Limited.
To manage these risks the Board:
•
•
•
•
•
receives a monthly compliance report from Frostrow, which includes,
inter alia, details of compliance with applicable laws and regulations;
reviews internal control reports, key policies, including measures taken to
combat cyber security issues, and also the disaster recovery procedures
of its service providers;
maintains a risk matrix with details of risks the Company is exposed to,
the controls relied on to manage those risks and the frequency of the
controls operation;
receives updates on pending changes to the regulatory and legal environment
and progress towards the Company’s compliance with these; and
has considered the increased risk of cyber-attacks and received
reports and assurance at meetings with its service providers where the
information security controls in place were reviewed.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT BUSINESS REVIEW CONTINUED
33
Principal risks and uncertainties
Mitigation
ESG related risks
Both the Board and the Portfolio Manager
recognise the importance of having a coherent
ESG policy. There is a risk that investing in
companies that disregard ESG factors will have a
negative impact on investment returns and also
that the Company itself may become unattractive
to investors if ESG is not appropriately considered
in the Portfolio Manager’s decision making
process.
The Portfolio Manager provides ESG reports at each Board meeting,
highlighting examples where ESG issues influenced investment decisions and/
or led to engagement with an investee company. The Portfolio Manager also
produces a quarterly ESG update.
The Board ensures that the Portfolio Manager’s ESG approach is in line with
standards elsewhere and the Board’s expectations. A summary of the Portfolio
Manager’s approach to Responsible Investing can be found on pages 25 and 26.
Shareholder relations and share price performance risk
The Company is also exposed to the risk,
particularly if the investment strategy and
approach are unsuccessful, that the Company
may underperform resulting in the Company
becoming unattractive to investors and a
widening of the share price discount to NAV per
share. Also, falls in stock markets and the risk of
a global recession, are likely to adversely affect
the performance of the Company’s shares.
In managing this risk the Board:
•
•
•
•
•
reviews the Company’s Investment Objective in relation to market, and
economic, conditions and the operation of the Company’s peers;
discusses at each Board meeting the Company’s future development and
strategy;
reviews the shareholder register at each Board meeting;
actively seeks to promote the Company to current and potential investors; and
has implemented a discount/premium control mechanism.
The Board undertakes a regular review of the Company’s share price
compared to the NAV per share. Further information can be found on page 34.
Company promotional activities have been delegated to Frostrow, who report
to the Board at each Board meeting on these activities.
Emerging risks
COMPANY PROMOTION
The Company has carried out a robust assessment of
the Company’s emerging and principal risks and the
procedures in place to identify emerging risks are described
below. The International Risk Governance Council definition
of an ‘emerging’ risk is one that is new, or is a familiar
risk in a new or unfamiliar context or under new context
conditions (re-emerging). Failure to identify emerging risks
may cause reactive actions rather than being proactive
and, in worst case, could cause the Company to become
unviable or otherwise fail or force the Company to change
its structure, objective or strategy.
The Audit & Risk Committee reviews a risk map at its half-
yearly meetings. Emerging risks are discussed in detail as
part of this process and also throughout the year to try to
ensure that emerging (as well as known) risks are identified
and, so far as practicable, mitigated. There are currently
no emerging risks being monitored by the Audit & Risk
Committee.
The Company has appointed Frostrow to provide marketing
and investor relations services, in the belief that a
well-marketed investment company is more likely to grow
over time, have a more diverse and stable shareholder
register and will trade at a superior rating to its peers.
Frostrow actively promotes the Company in the following
ways:
Engaging regularly with institutional investors,
discretionary wealth managers and a range of
execution-only platforms: Frostrow regularly talks and
meets with institutional investors, discretionary wealth
managers and execution-only platform providers to discuss
the Company’s strategy and to understand any issues
and concerns, covering both investment and corporate
governance matters;
Making Company information more accessible: Frostrow
works to raise the profile of the Company by targeting key
groups within the investment community, holding annual
investment seminars, overseeing PR output and managing
the Company’s website and wider digital offering, including
Portfolio Manager videos and social media;
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT 34
BUSINESS REVIEW CONTINUED
Disseminating key Company information: Frostrow
performs the Investor Relations function on behalf of the
Company and manages the investor database. Frostrow
produces all key corporate documents, distributes monthly
Fact Sheets, Annual Reports and updates from OrbiMed on
portfolio and market developments; and
Monitoring market activity, acting as a link between the
Company, shareholders and other stakeholders: Frostrow
maintains regular contact with sector broker analysts and
other research and data providers, and conducts periodic
investor perception surveys, liaising with the Board to
provide up-to-date and accurate information on the latest
shareholder and market developments.
DISCOUNT/PREMIUM CONTROL
The Board undertakes a regular review of the level of
discount/premium and consideration is given to ways in
which share price performance may be enhanced, including
the effectiveness of marketing, share issuance and share
buybacks, where appropriate.
It is the Board’s policy to buy back the Company’s shares
if the share price discount to the net asset value per share
exceeds 6% on an ongoing basis. Shares repurchased
are held as treasury shares. Treasury shares can be sold
back to the market at a later date at a premium to the
cum-income net asset value per share (See Glossary
beginning on page 97). Shareholders should note, however,
that it remains very possible for the discount to be greater
than 6% for extended periods of time particularly when
sentiment towards the Company, the sector and to
investment trusts generally remains poor.
While buy backs may prove unable to prevent the discount
from widening, they also enhance the net asset value per
share for remaining shareholders and go some way to
dampening discount volatility which can adversely affect
investors’ risk adjusted returns.
At times when there are unsatisfied buying orders for the
Company’s shares in the market, the Company has the
ability to issue new shares or to re-issue treasury shares
at a small premium to the cum income net asset value
per share. This acts as an effective share price premium
management tool.
Details of share issuance and share buybacks are set out
on page 46.
SOCIAL, HUMAN RIGHTS AND
ENVIRONMENTAL MATTERS
The Directors, through the Company’s Portfolio Manager,
encourage companies in which investments are made
to adhere to best practice with regard to corporate
governance. In light of the nature of the Company’s
business there are no relevant human rights issues and the
Company does not have a human rights policy.
The Company recognises that social and environmental
issues can have an effect on some of its investee
companies.
The Company is an investment trust and so its
own direct environmental impact is minimal. As an
externally- managed investment trust, the Company does
not have any employees or maintain any premises, nor does
it undertake any manufacturing or other physical operations
itself. All its operational functions are outsourced to third
party service providers. Therefore, the Company has no
material, direct impact on the environment or any particular
community and the Company itself has no environmental,
human rights, social or community policies. The Board
of Directors consists of seven Directors, five of whom
are resident in the UK, one in Canada and one in the U.S.
The Board holds the majority of its regular meetings in the
U.K., with usually one meeting held each year in New York,
and has a policy that travel, as far as possible, is minimal,
thereby minimising the Company’s greenhouse gas
emissions. Further details concerning greenhouse gas
emissions can be found within the Report of the Directors
on page 48. Video conferencing has proved to be a very
effective way of holding meetings, and this medium
continues to be used alongside in person meetings.
The Portfolio Manager engages with the Company’s
underlying investee companies in relation to their corporate
governance practices and the development of their policies
on social, community and environmental matters.
INTEGRITY AND BUSINESS ETHICS
The Company is committed to carrying out business in an
honest and fair manner with a zero-tolerance approach to
bribery, tax evasion and corruption. As such, policies and
procedures are in place to prevent this. In carrying out its
activities, the Company aims to conduct itself responsibly,
ethically and fairly, including in relation to social and human
rights issues.
The Company believes that high standards of ESG make
good business sense and have the potential to protect
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT BUSINESS REVIEW CONTINUED
35
and enhance investment returns. The Portfolio Manager’s
investment criteria provide that ESG and ethical issues are
taken into account and best practice is encouraged by the
Board. The Board’s expectations are that its principal service
providers have appropriate governance policies in place.
TASKFORCE FOR CLIMATE-RELATED
FINANCIAL DISCLOSURES (“TCFD”)
The Company notes the TCFD recommendations on
climate-related financial disclosures. The Company is an
investment trust with no employees, internal operations or
property and, as such, it is exempt from the Listing Rules
requirement to report against the TCFD framework.
LONGER-TERM VIABILITY
The Board has carried out a robust assessment of the
principal risks facing the Company including those that would
threaten its business model, future performance, solvency or
liquidity. The Board has drawn up a matrix of risks facing the
Company and has put in place a schedule of investment limits
and restrictions, appropriate to the Company’s investment
objective and policy, in order to mitigate these risks as far as
practicable. The principal risks and uncertainties which have
been identified, and the steps taken by the Board to mitigate
these as far as possible, are shown on pages 29 to 33.
The Board believes it is appropriate to assess the
Company’s viability over a five year period. This period is
also deemed appropriate due to our Portfolio Manager’s
long-term investment horizon and also what it believes to
be investors’ horizons, taking account of the Company’s
current position and the potential impact of the principal
risks and uncertainties as shown on pages 29 to 33. The
Directors also took into account the liquidity of the portfolio
and the expectation that the Company will pass the next
continuation vote in 2024 when considering the viability of
the Company over the next five years and its ability to meet
liabilities as they fall due.
The Directors do not expect there to be any significant
change in the principal risks that have been identified or
the adequacy of the mitigating controls in place, and do
not envisage any change in strategy or objectives or any
events that would prevent the Company from continuing to
operate over that period as the Company’s assets are liquid,
its commitments are limited and the Company intends to
continue to operate as an investment trust.
Based on this assessment, the Directors have a reasonable
expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the
next five-year period.
STAKEHOLDER INTERESTS AND BOARD
DECISION-MAKING (SECTION 172 OF THE
COMPANIES ACT 2006)
The Directors are required to explain more fully how they
have discharged their duty under s172 of the Companies
Act 2006 in promoting the success of the Company for the
benefit of the members as a whole. This includes the likely
consequences of the Directors’ decisions in the long-term
and how they have taken wider stakeholders’ needs into
account.
The Directors aim to act fairly between the Company’s
stakeholders. The Board’s approach to shareholder
relations is summarised in the Corporate Governance
Report beginning on page 50. The Statement from the
Chair beginning on page 4 provides an explanation of
actions taken by the Directors during the year to achieve
the Board’s long-term aim of ensuring that the Company’s
shares trade at a price close to the NAV per share.
As an externally managed investment trust, the Company
has no employees, customers, operations or premises.
Therefore, the Company’s key stakeholders (other
than its shareholders) are considered to be its service
providers. The need to foster business relationships with
the service providers and maintain a reputation for high
standards of business conduct are central to the Directors’
decision-making as the Board of an externally managed
investment trust. The Directors believe that fostering
constructive and collaborative relationships with the
Company’s service providers will assist in their promotion
of the success of the Company for the benefit of all
shareholders.
The Board engages with representatives from its
service providers throughout the year. Representatives
from OrbiMed and Frostrow are in attendance at each
Board meeting. As the Portfolio Manager and the AIFM
respectively, the services they provide are fundamental
to the long-term success and smooth running of the
Company. The Statement from the Chair and the Business
Review on pages 4 to 7 and also on page 29, describe
relevant decisions taken during the year relating to OrbiMed
and Frostrow. Further details about the matters discussed
in Board meetings and the relationship between OrbiMed
and the Board are set out in the Corporate Governance
Report beginning on page 50.
Representatives from other service providers are asked to
attend Board meetings when deemed appropriate.
Further details are set out overleaf.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT 36
BUSINESS REVIEW CONTINUED
Who?
Stakeholder
group
Investors
Why?
How?
The benefits of engagement with the
company's stakeholders
How the board, the portfolio manager and the AIFM
have engaged with the company’s stakeholders
Clear communication of the Company’s strategy
and the performance against the Company’s
objective can help the share price trade at a
narrower discount or a premium to its net asset
value per share which benefits shareholders.
New shares can be issued to meet demand
without net asset value per share dilution to
existing shareholders. Increasing the size of the
Company can benefit liquidity as well as spread
costs.
Share buy backs are undertaken at the discretion
of the Directors.
The Portfolio Manager and Frostrow, on behalf
of the Board, complete a programme of investor
relations throughout the year. In addition, the
Chairman met with a number of the Company’s
larger shareholders during the year.
An analysis of the Company’s shareholder
register is provided to the Directors at each Board
meeting along with marketing reports from
Frostrow. The Board reviews and considers the
marketing plans on a regular basis. Reports from
the Company’s broker are submitted to the Board
on investor sentiment and industry issues.
Key mechanisms of engagement include:
•
•
The Annual General Meeting, where the
Portfolio Manager provides an update on the
Company’s performance and strategy. This is
followed by a question and answer section.
The Company’s website which hosts reports,
articles and insights, and monthly fact sheets.
• One-on-one and group investor meetings.
•
•
•
Should any significant votes be cast
against a resolution proposed at the Annual
General Meeting the Board will engage with
shareholders.
The Board will explain in its announcement
of the results of the Annual General Meeting
any actions it intends to take to consult
shareholders in order to understand the
reasons behind significant votes against.
Following any consultation, an update would
be published no later than six months after
the Annual General Meeting and the Annual
Report will detail the impact shareholder
feedback has had on any decisions the Board
has taken and any actions or resolutions
proposed.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT BUSINESS REVIEW CONTINUED
37
What?
Outcomes and actions
What were the key areas of engagement?
What actions were taken, including main decisions?
Key areas of engagement with investors
•
•
Ongoing dialogue with shareholders concerning the
strategy of the Company, performance and the portfolio.
The Portfolio Manager and Frostrow meet regularly
with shareholders and potential investors to discuss
the Company’s strategy, performance and portfolio.
The Chairman also met with key shareholders during
the year to discuss the Company’s investment strategy
including ESG.
Frostrow and the Portfolio Manager engage with retail investors
through a number of different channels:
(i)
The Company’s website, which is maintained by Frostrow,
contains articles, webinars and quarterly updates;
(ii) A distribution list of shareholders (retail and professional)
which is maintained by Frostrow and is used to
communicate with investors on a regular basis;
(iii) The Portfolio Manager provides annual presentations online
– (webcasts) and offline (Annual General Meeting), which
shareholders are able to attend and participate in; and
(iv) Frostrow ensures that the Company is available through a
wide range of leading execution only platforms.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT 38
BUSINESS REVIEW CONTINUED
Who?
Why?
How?
Stakeholder group
Portfolio Manager
Service Providers
The benefits of engagement with the
company's stakeholders
How the board, the portfolio manager and the AIFM
have engaged with the company’s stakeholders
Engagement with the Company’s Portfolio
Manager is necessary to evaluate their
performance against the Company’s stated
strategy and to understand any risks or
opportunities this may present. The Board
ensures that the Portfolio Manager’s
environmental, social and governance (“ESG”)
approach is in line with standards elsewhere and
the Board’s expectations.
Engagement also helps ensure that the Portfolio
Manager’s fees are closely monitored and remain
competitive.
Gaining a deeper understanding of the portfolio
companies and their strategies as well as
incorporating consideration of ESG factors into
the investment process assists in understanding
and mitigating risks of an investment as well as
identifying future potential opportunities.
The Company contracts with third parties for
other services including: custody, company
secretarial, accounting & administration and
registrar. The Company ensures that the
third parties to whom the services have been
outsourced complete their roles in line with their
service level agreements thereby supporting the
Company in its success and ensuring compliance
with its obligations.
The Board met regularly with the Company’s
Portfolio Manager throughout the year. The
Board also receives monthly performance and
compliance reporting.
The Portfolio Manager’s attendance at each Board
meeting provides the opportunity for the Portfolio
Manager and Board to further reinforce their
mutual understanding of what is expected from
both parties.
The Board encourages the Company’s Portfolio
Manager to engage with companies and in
doing so expects ESG issues to be an important
consideration.
The Board receives an update on Frostrow’s
engagement activities by way of a dedicated
report at Board meetings and at other times
during the year as required.
The Board and Frostrow, acting in its capacity
as AIFM, engage regularly with other service
providers both in one-to-one meetings and via
regular written reporting. This regular interaction
provides an environment where topics, issues and
business development needs can be dealt with
efficiently and collegiately.
The Board together with Frostrow also carried
out a review of the service providers’ business
continuity plans and additional cyber security
provisions.
The review of the performance of the Portfolio
Manager and Frostrow is a continuous process
carried out by the Board and the Management
Engagement & Remuneration Committee with a
formal evaluation being undertaken annually.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT BUSINESS REVIEW CONTINUED
39
What?
Outcomes and actions
What were the key areas of engagement?
What actions were taken, including main decisions?
Key areas of engagement with the Portfolio Manager on an ongoing basis are portfolio composition, performance, outlook
and business updates.
•
•
Regular review of the performance and make up of the
investment portfolio.
The integration of ESG factors into the Portfolio Manager’s
investment processes.
Key areas of engagement with Service Providers
•
The Directors have frequent engagement with the
Company’s other service providers through the annual cycle
of reporting. This engagement is completed with the aim of
maintaining an effective working relationship and oversight
of the services provided.
Key areas of engagement with the broker
•
The Board is cognisant that the trading of the Company‘s
shares at a persistent and significant discount or premium
to the prevailing NAV per share is not in the interests of
shareholders.
•
•
•
•
The Board engaged with the Portfolio Management team
to discuss the Company’s overall performance as well as
developments in individual portfolio companies and wider
macroeconomic developments.
The Portfolio Manager reports on ESG issues at each Board
meeting.
No specific action required as 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.
Throughout the year the Board closely monitored the
Company’s discount/premium to NAV per share and
received regular updates from the broker. 2,836,483 shares
were bought back during the year, and a further 1,299,037
shares were bought back since the year-end to 5 June
2023. No new shares were issued during the year, nor
following the year-end to 5 June 2023. (Please see the
Statement from the Chair on page 5 for further information.)
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT
40
BUSINESS REVIEW CONTINUED
PERFORMANCE AND FUTURE DEVELOPMENTS
ALTERNATIVE PERFORMANCE MEASURES
The Financial Statements (on pages 75 to 95) set out the
required statutory reporting measures of the Company’s
financial performance. In addition, the Board assesses the
Company’s performance against a range of criteria which
are viewed as particularly relevant for investment trusts,
which are explained in greater detail in the Strategic Report,
under the heading ‘Key Performance Indicators’ on page 28.
By order of the Board
Frostrow Capital LLP
Company Secretary
6 June 2023
A review of the Company’s year, its performance and
the outlook for the Company can be found in the Chair’s
Statement on pages 4 to 7 and in the Portfolio Manager’s
Review on pages 14 to 23.
The Company’s overall strategy remains unchanged.
LOOKING TO THE FUTURE
The Board concentrates its attention on the Company’s
investment performance and OrbiMed’s investment
approach and on factors that may have an effect on
this approach. Marketing reports are given to the Board
at each board meeting by the AIFM which include how
the Company will be promoted and details of planned
communications with existing and potential shareholders.
The Board is regularly updated by the AIFM on wider
investment trust industry issues and discussions are held
at each Board meeting concerning the Company’s future
development and strategy.
A review of the Company’s year, its performance since the
year-end and the outlook for the Company can be found in
the Chair’s Statement on pages 4 to 7 and in the Portfolio
Manager’s Review on pages 14 to 23. It is expected that the
Company’s Strategy will remain unchanged in the coming
year.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023STRATEGIC REPORT BOARD OF DIRECTORS
41
DOUG MCCUTCHEON
SARAH BATES
SVEN BORHO
Independent Non-Executive Chair
Independent Non-Executive Director
Non-Executive Director
Joined the Board in 2013
Joined the Board in 2018
Joined the Board in 2012 and became Chair
on 6 July 2022
Annual Remuneration Year Ended 2023:
£47,894
Committee Membership
Doug attends the Audit & Risk Committee
by invitation and is a member of
the Nominations and Management
Engagement & Remuneration Committees.
Annual Remuneration Year Ended 2023:
£36,007
Committee Membership
Sarah is Chair of the Nominations
Committee and is the Senior Independent
Director. Sarah is also a member of the
Audit & Risk and Management Engagement
& Remuneration Committees.
Shareholding in the Company
20,000
Shareholding in the Company
7,200
Skills and Experience
Doug is the President of Longview Asset
Management Ltd., an independent
investment firm that manages the capital of
families, charities and endowments. Prior
to this, Doug was an investment banker
for 25 years at UBS and its predecessor
firm, S.G. Warburg, where, most recently,
he was the head of Healthcare Investment
Banking for Europe, the Middle East, Africa
and Asia- Pacific. Doug is involved in
philanthropic organisations with a focus
on healthcare and education. He attended
Queen’s University, Canada.
Other Appointments
Doug is a non-executive Director of
Labrador Iron Ore Royalty Corporation listed
on the Toronto Stock Exchange.
Standing for re-election:
Yes
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 35 years.
Sarah is a fellow of CFA UK.
Other Appointments
Sarah is a non-executive Director and the
Senior Independent Director of Alliance
Trust PLC. Sarah is also Chair of The
John Lewis Partnership Pensions Trust,
of BBC Pension Investments Limited
and of the Universities Superannuation
Fund Investment Management Limited.
Sarah is a member of the BBC Pension
Scheme Investment Committee and is an
Ambassador for Chapter Zero, a mentor
for Chairmen Mentors International and a
senior adviser to Lansons PR.
Standing for re-election:
No
Annual Remuneration Year Ended 2023: Nil
Committee Membership
Sven is not a member of any of the
Company’s Committees.
Shareholding in the Company
10,000
Skills and Experience
Sven H. Borho, CFA, is a founder and
Managing Partner of OrbiMed. Sven heads
the public equity team and he is the portfolio
manager for OrbiMed’s public equity and
hedge funds. He has been a portfolio
manager for the firm’s funds since 1993 and
has played an integral role in the growth of
OrbiMed’s asset management activities.
He started his career in 1991 when he
joined OrbiMed’s predecessor firm as
a Senior Analyst covering European
pharmaceutical firms and biotechnology
companies worldwide. Sven studied
business administration at Bayreuth
University in Germany and received a M.Sc.
(Econs.), Accounting and Finance, from The
London School of Economics.
Other Appointments
Sven is a Managing Partner of OrbiMed and
does not have any other appointments.
Standing for re-election:
Yes
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE
42
BOARD OF DIRECTORS CONTINUED
HUMPHREY VAN DER KLUGT, FCA
TIM LIVETT
Independent Non-Executive Director
Independent Non-Executive Director
Joined the Board in 2016
Joined the Board on 1 September 2022
Annual Remuneration Year Ended 2023: £40,503*
Annual Remuneration Year Ended 2023: £20,124*
Committee Membership
A Chartered Accountant, Humphrey is a member of the Audit
& Risk, the Management Engagement & Remuneration and the
Nominations Committees.
Committee Membership
A qualified accountant, Tim is Chair of the Audit & Risk
Committee and is a member of the Management Engagement &
Remuneration and Nominations Committees.
Shareholding in the Company
3,000
Shareholding in the Company
2,175
Skills and Experience
Humphrey was formerly Chairman of Fidelity European Values
PLC and a Director of Murray Income Trust PLC, BlackRock
Commodities Income Investment Trust plc and J P Morgan
Claverhouse Investment Trust plc. Prior to this Humphrey was a
fund manager and Director of Schroder Investment Management
Limited and in a 22 year career was a member of their Group
Investment and Asset Allocation Committees. Prior to joining
Schroders, he was with Peat Marwick Mitchell & Co (now KPMG)
where he qualified as a Chartered Accountant in 1979.
Other Appointments
Humphrey is a non-executive Director of Allianz Technology
Trust PLC.
Standing for re-election:
Yes
Skills and Experience
Tim was formerly Chief Financial Officer at Wellcome Trust, the
global charitable foundation focused on health research, and at
Virgin Atlantic Limited. He has an extensive and broad financial
background. Tim studied chemistry at Oxford University.
Other Appointments
Tim is the Chief Financial Officer at Caledonia Investments PLC.
He is also a non-executive Director of Premier Marinas Group
and a member of the Valuation and Audit & Risk Committees at
Oxford University Endowment Management.
Standing for election:
Yes
*Tim Livett succeeded Humphrey van der Klugt as Chair of the
Audit & Risk Committee on 1 March 2023.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE
Parfrey_Jo-0154
Parfrey_Jo-0155
Parfrey_Jo-0156
Parfrey_Jo-0159
BOARD OF DIRECTORS CONTINUED
Parfrey_Jo-0161
Parfrey_Jo-0162
43
Parfrey_Jo-0163
JO PARFREY
DR BINA RAWAL
Independent Non-Executive Director
Independent Non-Executive Director
Joined the Board on 1 September 2022
Joined the Board in 2019
Annual Remuneration Year Ended 2023: £19,584
Annual Remuneration Year Ended 2023: £33,573
Committee Membership
Jo is Chair of the Management Engagement & Remuneration
Committee and is a member of the Audit & Risk and
Nominations Committees
Shareholding in the Company
2,000
Parfrey_Jo-0165
Skills and Experience
Jo was formerly a non-executive Director of Guy’s and St Thomas’
Enterprises Limited and of LGV Capital Partners Limited. A
Chartered Accountant, Jo has extensive experience of both global
investment trusts and healthcare, including life sciences. Jo studied
chemistry at Oxford University.
Other Appointments
Jo is non-executive Director and Chair of the Audit Committee of
Henderson International Income Trust plc, and a non-executive
Director of Octopus AIM VCT. She is also a non-executive Director
and Chair of the Audit Committee of Start Codon Limited and IESO
Digital Health Limited and the non-executive Chair of Babraham
Research Campus Limited.
Standing for election:
Yes
Committee Membership
Dr Rawal is a member of the Audit & Risk, Management
Engagement & Remuneration and Nominations Committees.
Shareholding in the Company
2,606
Parfrey_Jo-0167
Skills and Experience
Dr Rawal, a physician scientist with 25 years’ experience in
Research and Development, has held senior executive roles
in drug development and scientific evaluation in four global
pharmaceutical companies. She has also worked in senior roles
with two medical research funding organisations: Wellcome Trust
and Cancer Research UK.
Other Appointments
Dr Rawal is a non-executive Director of the Central London
Community Healthcare NHS Trust and of Vann Limited. Dr Rawal
is also a Trustee on the Board of the Social Mobility Foundation.
Standing for re-election:
Yes
Parfrey_Jo-0168
Parfrey_Jo-0169
Parfrey_Jo-0173
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE
44
REPORT OF THE DIRECTORS
The Directors present their Annual
Report on the affairs of the Company
together with the audited financial
statements and the Independent
Auditors’ Report for the year ended
31 March 2023.
SIGNIFICANT AGREEMENTS
Details of the services provided under these agreements are
included in the Strategic Report on pages 28 and 29.
Alternative investment fund management
agreement
Frostrow is the designated AIFM for the Company on
the terms and subject to the conditions of the alternative
investment fund management agreement between the
Company and Frostrow (the “AIFM Agreement”).
The notice period on the AIFM Agreement with Frostrow is
12 months, termination can be initiated by either party.
Details of the fee payable to Frostrow can be found on
page 28.
Portfolio management agreement
Under the AIFM Agreement Frostrow has delegated the
portfolio management function to OrbiMed, under a
portfolio management agreement between it, the Company
and Frostrow (the “Portfolio Management Agreement”).
OrbiMed receives a periodic fee equal to 0.65% p.a. of the
Company’s NAV and a performance fee as set out in the
Performance Fee section below. Its agreement with the
Company may be terminated by either party giving notice of
not less than 12 months.
Performance fee
Dependent on the level of long-term outperformance of
the Company, OrbiMed is entitled to a performance fee.
The performance fee is calculated by reference to the
amount by which the Company’s NAV performance has
outperformed the Benchmark (see inside front cover for
details of the Benchmark).
The fee is calculated quarterly by comparing the cumulative
performance of the Company’s NAV with the cumulative
performance of the Benchmark since the launch of the
Company in 1995. The performance fee amounts to 15.0% of
any outperformance over the Benchmark. Provision is made
within the daily NAV per share calculation as required and in
accordance with generally accepted accounting standards.
In order to ensure that only sustained outperformance
is rewarded, at each quarterly calculation date any
performance fee payable is based on the lower of:
(i)
The cumulative outperformance of the portfolio over the
Benchmark as at the quarter end date; and
(ii) The cumulative outperformance of the portfolio over the
Benchmark as at the corresponding quarter end date in
the previous year
less any cumulative outperformance on which a
performance fee has already been paid.
The effect of this is that outperformance has to be
maintained for a twelve month period before it is paid.
In 2022, due to underperformance against the Benchmark,
a reversal of prior period performance fee provisions
totalling £18.9 million occurred.
As at 31 March 2023 no performance fees were accrued or
payable (31 March 2022: £NIL).
Depositary agreement
The Company appointed J.P. Morgan Europe Limited
(the “Depositary”) as its Depositary in accordance with the
AIFMD on the terms and subject to the conditions of the
Depositary agreement between the Company, Frostrow and
the Depositary (the “Depositary Agreement”).
Under the terms of the Depositary Agreement the Company
has agreed to pay the Depositary a fee calculated at 1.75bp
on net assets up to £150 million, 1.50 bps on net assets
between £150 million and £300 million, 1.00bps on net
assets between £300 million and £500 million and 0.50bps
on net assets above £500 million.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE REPORT OF THE DIRECTORS CONTINUED
45
The Depositary has delegated the custody and safekeeping
of the Company’s assets to J.P. Morgan Securities LLC (the
“Custodian and Prime Broker”) pursuant to a delegation
agreement between the Company, Frostrow, the Depositary and
the Custodian and Prime Broker (the “Delegation Agreement”).
The Delegation Agreement transfers the Depositary’s
liability for the loss of the Company’s financial instruments
held in custody by the Custodian and Prime Broker to the
Custodian and Prime Broker as permitted by the AIFMD.
The Company has consented to the transfer and reuse
of its assets by the Custodian and Prime Broker (known
as “rehypothecation”) in accordance with the terms of an
institutional account agreement between the Company, the
Custodian and Prime Broker and certain other J.P. Morgan
entities (as defined therein). See page 29 for further details.
Prime brokerage agreement
The Company appointed J.P. Morgan Securities LLC on
the terms and subject to the conditions of the prime
brokerage agreement between the Company, Frostrow
and the Depositary (the “Prime Brokerage Agreement”).
The Custodian and Prime Broker receives interest on the
drawn overdraft as detailed in note 12 on page 88.
The Custodian and Prime Broker is a registered
broker-dealer and is regulated by the United States
Securities and Exchange Commission.
RESULTS AND DIVIDENDS
The results attributable to shareholders for the year and the
transfer to reserves are shown on pages 75 and 76. Details
of the Company’s dividend record can be found on page 3.
Substantial interests in share capital
The Company was aware of the following substantial interests in the voting rights of the Company as at 30 April 2023, the
latest practicable date before publication of the Annual Report:
Shareholder
Rathbone Brothers plc
Investec Wealth & Investment Limited
Interactive Investor
Hargreaves Lansdown plc
Forsyth Barr
Charles Stanley & Co Limited
Quilter Cheviot Investment Management
Brewin Dolphin
Craigs Investment Partners
Embark Investment Services
Evelyn Partners
30 April 2023
31 March 2023
Number of
shares
5,337,704
4,813,077
4,022,116
3,629,237
3,123,010
2,968,048
2,224,071
2,178,985
2,135,474
1,978,362
1,970,589
% of issued
share
capital
8.6
7.8
6.5
5.9
5.0
4.8
3.6
3.5
3.5
3.2
3.2
Number of
shares
5,397,419
4,834,049
4,043,897
3,664,664
3,236,119
2,969,340
2,233,656
2,188,383
2,136,181
2,011,799
1,953,965
% of issued
share
capital
8.6
7.7
6.5
5.8
5.2
4.7
3.6
3.5
3.4
3.2
3.1
As at 31 March 2023 the Company had 62,620,763 shares in issue (excluding 2,438,015 shares held in treasury).
As at 30 April 2023 there were 61,933,349 shares in issue (excluding 3,125,429 shares held in treasury).
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE 46
REPORT OF THE DIRECTORS CONTINUED
CAPITAL STRUCTURE
The Company’s capital structure comprises solely ordinary
shares.
During the year, and to 5 June 2023, no new shares were
issued. A total of 2,836,483 shares were repurchased during
the year at an average discount of 8.8% to the prevailing cum
income NAV per share. These shares are held in treasury.
Following the year-end, to 5 June 2023, the latest practicable
date prior to the publication of this Annual Report, a further
1,299,037 shares were repurchased at an average discount
of 10.0% to the cum income NAV per share. These shares
are also held in treasury. As at 5 June 2023 3,737,052 shares
were held in treasury (2022: 80,509).
Voting rights in the Company’s shares
Details of the voting rights in the Company’s shares at the
date of this Annual Report are given in note 9 to the Notice
of Annual General Meeting on page 104. Each shareholder
is entitled to one vote on a show of hands and, on a poll, one
vote for every share held.
Share split
The price of the Company’s ordinary shares of 25p each
(“Ordinary Shares”) has increased substantially over the last
10 years and as at 5 June 2023 (being the latest practicable
date prior to publication of this document), the closing
mid market share price was 3,275.0p. To assist monthly
savers and those who reinvest their dividends or are looking
to invest smaller amounts the Directors believe that it is
appropriate to propose the sub-division of each Ordinary
Share into 10 new ordinary shares of 2.5p each (“New
Ordinary Shares”). The Directors believe that the sub-division
(the “Share Split”) may also improve the liquidity in and
marketability of the Company’s shares which would benefit
all shareholders. Following the Share Split, each shareholder
will hold 10 New Ordinary Shares for each Ordinary Share
that they held immediately prior to the Share Split. Whilst
the Share Split will increase the number of ordinary shares
the Company has in issue, upon the Share Split becoming
effective the net asset value, share price and dividend
per share can be expected to become one-tenth of their
respective values immediately preceding the Share Split.
A holding of New Ordinary Shares following the Share Split
will represent the same proportion of the issued ordinary
share capital of the Company as the corresponding holding
of Ordinary Shares immediately prior to the Share Split. The
Share Split will not affect, therefore, the overall value of a
shareholder’s holding in the Company. By way of example,
taking the net asset value (including current year revenue)
and mid market share price as at 5 June 2023 of 3,646.3p
and 3,275.0p respectively per Ordinary Share, if the Share
Split had become effective as at that date, each holder of one
Ordinary Share would receive 10 New Ordinary Shares with
an aggregate net asset value and share price of 364.6p and
327.5p (figures rounded to one decimal place), respectively
immediately following the Share Split. The New Ordinary
Shares will rank pari passu with each other and will carry the
same rights and be subject to the same restrictions as the
Ordinary Shares, including the same rights to participate in
dividends paid by the Company.
The ex-dividend date and the payment date for the final
dividend payable per share in 2023 are before the date of
the Share Split and so the dividend payable on 26 July 2023
will not be affected. In future years, dividends per share will
be one-tenth of the level that they would otherwise have
been but a shareholder who neither buys nor sell shares
will continue to receive the same amount in dividends as
they would otherwise receive. Communication preferences
and mandates and other instructions for the payment of
dividends via CREST or in paper form will, unless and until
revised, continue to apply to the New Ordinary Shares.
The Share Split will not itself give rise to any liability to UK
income tax (or corporation tax on income) for shareholders.
For the purposes of UK capital gains tax and corporation tax
on chargeable gains, the receipt of the New Ordinary Shares
will be treated as the same asset as the shareholder’s
holding of Ordinary Shares and as having been acquired
at the same time, and for the same consideration, as the
shareholder’s holding of Ordinary Shares.
The Share Split requires the approval of shareholders and,
accordingly, Resolution 13 at this year’s AGM seeks such
approval. The Share Split is conditional on the New Ordinary
Shares being admitted to the Official List of the Financial
Conduct Authority and to trading on the London Stock
Exchange’s main market for listed securities. Application
for such admissions will be made and, if they are accepted,
it is proposed that the last day of dealings in the Ordinary
Shares will be 26 July 2023 (with the record date for the
Share Split being 6.00 p.m. on that date) and that dealings in
the New Ordinary Shares will commence on 27 July 2023. If
Resolution 13 is passed, the Share Split will become effective
on admission of the New Ordinary shares to the Official List,
which is expected to be at 8.00 a.m. on 27 July 2023. The
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE REPORT OF THE DIRECTORS CONTINUED
47
aggregate nominal value of the Company’s issued share
capital as at 5 June 2023 was £16,264,694.50 and comprised
61,321,726 ordinary shares of 25p each (a further 3,737,052
ordinary shares were held in treasury). If the Share Split is
applied to the issued share capital as at 27 July 2023, the
total aggregate nominal value of the share capital will remain
at £16,264,694.50 but will comprise 613,217,260 ordinary
shares of 2.5p each in issue and a further 37,370,520
ordinary shares in treasury.
The New Ordinary Shares may be held in uncertificated
or certificated form. Following the Share Split becoming
effective, share certificates in respect of the Ordinary shares
will cease to be valid and will be cancelled. New certificates
in respect of the New Ordinary Shares will be issued to
those shareholders who hold their Ordinary Shares in
certificated form and are expected to be dispatched not
later than 4 August 2023. No temporary documents of title
will be issued. Transfers of New Ordinary Shares between
27 July 2023 and the dispatch of new certificates will be
certified against the Company’s register of members held
by the Company’s Registrars. It is expected that the ISIN
(GB0003385308) of the Ordinary Shares will be disabled
in CREST at the close of business on 26 July 2023 and the
New Ordinary Shares will be credited to CREST accounts on
27 July 2023.
DIRECTORS’ & OFFICERS’ LIABILITY
INSURANCE COVER
Directors’ & officers’ liability insurance cover was
maintained by the Company during the year ended
31 March 2023 and to the date of this report. It is intended
that this policy will continue for the year ending 31 March
2024 and subsequent years.
DIRECTORS’ INDEMNITIES
During the year under review and to the date of this report,
indemnities were in force between the Company and each
of its Directors under which the Company has agreed to
indemnify each Director, to the extent permitted by law, in
respect of certain liabilities incurred as a result of carrying
out his or her role as a Director of the Company. The
Directors are also indemnified against the costs of defending
any criminal or civil proceedings or any claim by the
Company or a regulator as they are incurred provided that
where the defence is unsuccessful the Director must repay
those defence costs to the Company. The indemnities are
qualifying third party indemnity provisions for the purposes
of the Companies Act 2006.
A copy of each deed of indemnity is available for inspection
at the Company’s registered office during normal business
hours and will be available for inspection at the Annual
General Meeting. Please refer to the Chairman’s Statement
on pages 4 to 7 for details of this year’s Annual General
Meeting arrangements.
POLITICAL AND CHARITABLE DONATIONS
The Company has not in the past and does not intend in the
future to make political or charitable donations.
MODERN SLAVERY ACT 2015
The Company does not provide goods or services in the
normal course of business, and as a financial investment
vehicle does not have customers. The Directors do not
therefore consider that the Company is required to make a
statement under the Modern Slavery Act 2015 in relation to
slavery or human trafficking.
ANTI-BRIBERY AND CORRUPTION POLICY
The Board has adopted a zero tolerance approach to
instances of bribery and corruption. Accordingly it expressly
prohibits any Director or associated persons when acting
on behalf of the Company, from accepting, soliciting, paying,
offering or promising to pay or authorise any payment, public
or private in the UK or abroad to secure any improper benefit
for themselves or for the Company.
The Board ensures that its service providers apply the same
standards in their activities for the Company.
A copy of the Company’s Anti Bribery and Corruption Policy
can be found on its website at www.worldwidewh.com. The
policy is reviewed regularly by the Audit & Risk Committee.
CRIMINAL FINANCES ACT 2017
The Company has a commitment to zero tolerance towards
the criminal facilitation of tax evasion.
GLOBAL GREENHOUSE GAS EMISSIONS
The Company has no greenhouse gas emissions to report
from its operations, nor does it have responsibility for any
other emissions producing sources under the Companies
Act 2006 (Strategic Reports and Directors’ Reports)
Regulations 2013 or the Companies (Directors’ Report) and
Limited Liability Partnerships (Energy and Carbon Report)
Regulations 2018, including those within the Company’s
underlying investment portfolio. Consequently, the Company
consumed less than 40,000 kWh of energy during the year in
respect of which the Report of the Directors is prepared and
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE 48
REPORT OF THE DIRECTORS CONTINUED
therefore is exempt from the disclosures required under the
Streamlined Energy and Carbon Reporting criteria.
that, accordingly, it is appropriate to continue to adopt the
going concern basis in preparing the financial statements.
COMMON REPORTING STANDARD (‘CRS’)
ARTICLES OF ASSOCIATION
Amendments of the Company’s Articles of Association
requires a special resolution to be passed by shareholders.
REQUIREMENTS OF THE LISTING RULES
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 that there are
no disclosures to be made under Listing Rule 9.8.4.
UK SANCTIONS
The Board has made due diligence enquiries of the service
providers that process the Company’s shareholder data, to
ensure the Company’s compliance with the UK sanctions
regime. The relevant service providers have confirmed that
they check the Company’s shareholder data against the UK
sanctions list on a daily basis. At the date of this report, no
sanctioned individuals had been identified on the Company’s
shareholder register. The Board notes that stockbrokers
and execution-only platforms also carry out their own
due diligence.
By order of the Board
Frostrow Capital LLP
Company Secretary
6 June 2023
CRS is a global standard for the automatic exchange of
information commissioned by the Organisation for Economic
Cooperation and Development and incorporated into UK law
by the International Tax Compliance Regulations 2015. CRS
requires the Company to provide certain additional details
to HMRC in relation to certain shareholders. The reporting
obligation began in 2016 and is an annual requirement. The
Registrars, Link Group, have been engaged to collate such
information and file the reports with HMRC on behalf of the
Company.
CORPORATE GOVERNANCE
The Corporate Governance Report is set out on
pages 50 to 57.
GOING CONCERN
The financial statements have been prepared on a going
concern basis. The Directors consider this is the appropriate
basis as the Company has adequate resources to continue
in operational existence for the foreseeable future,
being taken as 12 months after approval of the financial
statements. The Company’s shareholders are asked every
five years to vote for the continuation of the Company,
this will next be put to shareholders at the Annual General
Meeting to be held in 2024. The content of the Company’s
portfolio, trading activity, the Company’s cash balances and
revenue forecasts, and the trends and factors likely to affect
the Company’s performance are reviewed and discussed at
each Board meeting. The Board has considered a detailed
assessment of the Company’s ability to meet its liabilities
as they fall due, including stress and liquidity tests which
modelled the effects of substantial falls in markets and
significant reductions in market liquidity, on the Company’s
net asset value, its cash flows and its expenses. Further
information is provided in the Audit & Risk Committee Report
beginning on page 58.
Based on the information available to the Directors at the
date of this report, including the results of these stress
tests, the conclusions drawn in the Viability Statement on
page 34, the Company’s cash balances, and the liquidity of
the Company’s listed investments, the Directors are satisfied
that the Company has adequate financial resources to
continue in operation for at least the next 12 months and
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE STATEMENT OF DIRECTORS’ RESPONSIBILITIES
49
The Directors are responsible for preparing the Annual
Report and the Financial Statements in accordance with
applicable law and regulations. In preparing these financial
statements, the Directors are required to:
•
•
•
•
•
select suitable accounting policies and apply them
consistently;
make judgements and estimates that are reasonable
and prudent;
follow applicable UK accounting standards comprising
FRS 102;
prepare the financial statements on a going concern
basis unless it is inappropriate to presume that the
Company will continue in business; and
prepare a director’s report, a strategic report and a
director’s remuneration report which comply with the
requirements of the Companies Act 2006.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Company
and enable them to ensure that the financial statements
and the Directors’ Remuneration Report comply with
the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for
taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The Directors are responsible for ensuring that the Report
of the Directors and other information included in the
Annual Report is prepared in accordance with company
law in the United Kingdom. They are also responsible for
ensuring that the Annual Report includes information
required by the Listing Rules of the FCA.
The Directors are also responsible for ensuring that the
Annual Report and the Financial Statements are made
available on a website. The Annual Report and the Financial
Statements are published on the Company’s website at
www.worldwidewh.com and via Frostrow’s website at
www.frostrow.com. The maintenance and integrity of
these websites, so far as it relates to the Company, is the
responsibility of Frostrow. The work carried out by the
Auditors does not involve consideration of the maintenance
and integrity of these websites and, accordingly, the
Auditors accept no responsibility for any changes that
have occurred to the financial statements since they
were initially presented on these websites. Visitors to the
websites need to be aware that legislation in the United
Kingdom governing the preparation and dissemination of
the financial statements may differ from legislation in their
jurisdiction.
DISCLOSURE OF INFORMATION TO THE
AUDITORS
So far as the Directors are aware, there is no relevant
information of which the Auditors are unaware. The
Directors have taken all steps they ought to have taken to
make themselves aware of any relevant audit information
and to establish that the Auditors are aware of such
information.
RESPONSIBILITY STATEMENT OF THE
DIRECTORS IN RESPECT OF THE ANNUAL
FINANCIAL REPORT
The Directors confirm to the best of their knowledge that:
•
•
•
the Annual Report and the Financial Statements
have been prepared in accordance with applicable
accounting standards, give a true and fair view of the
assets, liabilities, financial position and the return for the
year ended 31 March 2023;
the Chairman’s Statement, Strategic Report and the
Report of the Directors include a fair review of the
information required by 4.1.8R to 4.1.11R of the FCA’s
Disclosure Guidance and Transparency Rules; and
the Annual Report and the Financial Statements,
includes a fair review of the development and
performance of the Company and of its financial
position, together with a description of the principal
risks and uncertainties it faces. Also, that taken as
a whole they are fair, balanced and understandable
and provide the information necessary to assess the
Company’s performance, business model and strategy.
On behalf of the Board
Doug McCutcheon
Chair
6 June 2023
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE 50
CORPORATE GOVERNANCE
THE BOARD AND COMMITTEES
Responsibility for effective governance lies with the Board. The governance framework of the Company reflects the fact that
as an investment company it has no employees and outsources portfolio management to OrbiMed and risk management,
company management, company secretarial, administrative and marketing services to Frostrow.
Chair – Doug McCutcheon
Senior Independent Director – Sarah Bates
THE BOARD
Five additional non-executive Directors, all considered independent, except for Sven Borho (see page 41 for further
information).
Key responsibilities:
•
to provide leadership and set strategy, values and standards within a framework of prudent effective controls which
enable risk to be assessed and managed;
•
•
to ensure that a robust corporate governance framework is implemented; and
to challenge constructively and scrutinise performance of all outsourced activities.
Management Engagement &
Remuneration Committee
Chair
Jo Parfrey
All Independent Directors
Key responsibilities:
•
to review regularly the
contracts, the performance and
remuneration of the Company’s
principal service providers;
•
•
to set the Directors’
Remuneration Policy; and
to review the terms and
conditions of the Directors’
appointments.
Audit & Risk Committee
Nominations Committee
Chair
Sarah Bates
All Independent Directors
Key responsibilities:
•
to review regularly the Board’s
structure and composition; and
•
to make recommendations
for any changes or new
appointments.
Chair
Tim Livett*
All Independent Directors
(excluding the Chair,
Doug McCutcheon)
Key responsibilities:
•
to review the Company’s financial
reports;
•
•
to oversee the risk and control
environment and financial
reporting; and
to have primary responsibility
for the relationship with the
Company’s external Auditors, to
review their independence and
performance, and to determine
their remuneration.
* The Board believes that Tim Livett has the necessary recent and relevant financial experience to Chair the Company’s Audit & Risk Committee.
Copies of the full terms of reference, which clearly define the responsibilities of each Committee, can be obtained from the
Company Secretary and can be found at the Company’s website at www.worldwidewh.com. Copies will also be available for
inspection on the day of the Annual General Meeting.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE CORPORATE GOVERNANCE CONTINUED
51
CORPORATE GOVERNANCE STATEMENT
The Board is committed to maintaining and demonstrating
high standards of corporate governance. The Board has
considered the principles and recommendations of the AIC
Code of Corporate Governance published in February 2019
(‘AIC Code’). The AIC Code addresses all the principles set
out in the UK Corporate Governance Code (the ‘UK Code’),
as well as setting out additional provisions on issues that
are of specific relevance to the Company.
The Financial Reporting Council has confirmed that by
following the AIC Code boards of investment companies
will meet their obligations in relation to the UK Code and
paragraph 9.8.6 of the UK Listing Rules.
The Board considers that reporting in accordance with the
principles and recommendations of the AIC Code (which
has been endorsed by the Financial Reporting Council)
provides more relevant and comprehensive information
to shareholders. By reporting against the AIC Code, the
Company meets its obligations under the UK Code (and
associated disclosure requirements under paragraph
9.8.6 of the Listing Rules) and as such does not need to
report further on issues contained in the UK Code which
are irrelevant to the Company as an externally-managed
investment company, including the provisions relating
to the role of the chief executive, executive directors’
remuneration and the internal audit function.
The Company has complied with the principles and
recommendations of the AIC Code.
The AIC Code can be viewed at www.theaic.co.uk and the
UK Code can be viewed on the Financial Reporting Council
website at www.frc.org.uk. The Corporate Governance
Report on pages 50 to 57, forms part of the Report of the
Directors on pages 44 to 48.
BOARD LEADERSHIP AND PURPOSE
Purpose and strategy
The purpose and strategy of the Company are described in
the Strategic Report.
THE BOARD
providers. No member of the Board is a Director of another
investment company managed by OrbiMed, nor has any
Board member (with the exception of Sven Borho) been
an employee of OrbiMed or any of the Company’s service
providers. Further details regarding the Directors can be
found on pages 41 to 43.
The Board carefully considers the various guidelines for
determining the independence of non-executive Directors,
placing particular weight on the view that independence
is evidenced by an individual being independent of mind,
character and judgement. All Directors retire at the
AGM each year and, if appropriate, seek election or re-
election. Each Director has signed a letter of appointment
to formalise the terms of their engagement as a
non-executive Director, copies of which are available on
request at Frostrow’s offices.
BOARD CULTURE
The Board aims to consider and discuss differences
of opinion, unique vantage points and to exploit fully
areas of expertise. The Chair encourages open debate
to foster a supportive and co-operative approach for all
participants. Strategic decisions are discussed openly and
constructively. The Board aims to be open and transparent
with shareholders and other stakeholders and for the
Company to conduct itself responsibly, ethically and fairly
in its relationships with service providers.
The Board has gained assurance on whistleblowing
procedures at the Company’s principal service providers
to ensure employees at those companies are supported in
speaking up and raising concerns. No concerns relating to
the Company were raised during the year.
Shareholder relations
The Company has appointed Frostrow to provide marketing
and investor relations services, in the belief that a well
marketed investment company is more likely to grow over
time, have a more diverse, stable list of shareholders and
its shares will trade at close to net asset value per share
over the long run. Frostrow actively promotes the Company
as set out on pages 33 and 34.
The Board is responsible for the effective Stewardship of
the Company’s affairs. Strategy issues and all operational
matters of a material nature are considered at its meetings.
The Board consists of seven non-executive Directors,
each of whom, with the exception of Sven Borho, is
independent of OrbiMed and the Company’s other service
Shareholder communications
The Board, the AIFM and the Portfolio Manager consider
maintaining good communications with shareholders
and engaging with larger shareholders through meetings
and presentations a key priority. Shareholders are being
informed by the publication of annual and half-year
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE 52
CORPORATE GOVERNANCE CONTINUED
reports which include financial statements. These reports
are supplemented by the daily release of the net asset
value per share to the London Stock Exchange and the
publication of monthly fact sheets. All this information,
including interviews with the Portfolio Manager, is available
on the Company’s website at www.worldwidewh.com.
The Board monitors the share register of the Company;
it also reviews correspondence from shareholders at
each meeting and maintains regular contact with major
shareholders. Shareholders who wish to raise matters with
a Director may do so by writing to them at the registered
office of the Company.
The Board supports the principle that the Annual General
Meeting be used to communicate with private investors, in
particular. Shareholders are encouraged to attend the AGM,
where they are given the opportunity to question the Chair,
the Board and representatives of the Portfolio Manager. In
addition, the Portfolio Manager makes a presentation to
shareholders covering the investment performance and
strategy of the Company at the AGM. Voting at the AGM is
conducted on a poll and details of the proxy votes received
in respect of each resolution will be made available on the
Company’s website.
Significant holdings and voting rights
Details of the shareholders with substantial interests in the
Company’s shares, the Directors’ authorities to issue and
repurchase the Company’s shares, and the voting rights of
the shares are set out in the Directors’ Report.
BOARD MEETINGS
The Board meets formally at least four times each
year. A representative of OrbiMed attends all meetings;
representatives from Frostrow are also in attendance at
each Board meeting. The Independent Directors also meet
before each formal Board meeting without representatives
from Frostrow and OrbiMed being present. The Chair
encourages open debate to foster a supportive and
co-operative approach for all participants.
The Board has agreed a schedule of matters specifically
reserved for decision by the Board. This includes
establishing the investment objectives, strategy and
the Benchmark, the permitted types or categories of
investments, the markets in which transactions may
be undertaken, the amount or proportion of the assets
that may be invested in any geography or category of
investment or in any one investment, and the Company’s
share issuance and share buyback policies.
The Board, at its regular meetings, undertakes reviews of
key investment and financial data, revenue projections and
expenses, analyses of asset allocation, transactions and
performance comparisons, share price and net asset value
performance, marketing and shareholder communication
strategies, the risks associated with pursuing the
investment strategy, peer group information and industry
issues.
The Chair is responsible for ensuring that the Board
receives accurate, timely and clear information.
Representatives of OrbiMed and Frostrow Capital LLP
report regularly to the Board on issues affecting the
Company.
The Board is responsible for strategy and has established
an annual programme of agenda items under which it
reviews the objectives and strategy for the Company at
each meeting.
CONFLICTS OF INTEREST
Company Directors have a statutory obligation to avoid a
situation in which they (and connected persons) have, or
can have, a direct or indirect interest that conflicts, or may
possibly conflict, with the interests of the Company. The
Board has in place procedures for managing any actual or
potential conflicts of interest. No conflicts of interest arose
during the year under review.
BOARD FOCUS AND RESPONSIBILITIES
With the day to day management of the Company
outsourced to service providers the Board’s primary
focus at each Board meeting is reviewing the investment
performance and associated matters, such as, inter alia,
future outlook and strategy, gearing, asset allocation,
investor relations, marketing, and industry issues.
In line with its primary focus, the Board retains
responsibility for all the key elements of the Company’s
strategy and business model, including:
•
•
the Investment Objective, Policy and Benchmark,
incorporating the investment and derivative guidelines
and limits, and changes to these;
the maximum level of gearing and leverage the
Company may employ;
•
a review of performance against the Company’s KPIs;
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE CORPORATE GOVERNANCE CONTINUED
53
a review of the performance and continuing
appointment of service providers; and
independent after appointment, while being consistent with
the need for regular refreshment and diversity.
•
•
the maintenance of an effective system of oversight,
risk management and corporate governance.
The Investment Objective, Policy, and Benchmark, including
the related limits and guidelines, are set out on pages 8
and 9, along with details of the gearing and leverage levels
allowed.
Details of the principal KPIs and further information on the
principal service providers, their performance and continuing
appointment, along with details of the principal risks, and
how they are managed, are set out in the Strategic Report.
The Corporate Governance Report, on pages 50 to 57,
includes a statement of compliance with corporate
governance codes and best practice, and the Business
Review (pages 26 to 41) includes details of the internal
control and risk management framework within which the
Board operates.
BOARD COMPOSITION AND SUCCESSION
Succession planning
The Board regularly considers its structure and recognises
the need for progressive refreshment. (Please see the
Statement from the Chair on page 6 for further information).
The Board has an approved succession planning policy to
ensure that (i) there is a formal, rigorous and transparent
procedure for the appointment of new Directors; and (ii) the
Board is comprised of members who collectively display
the necessary balance of professional skills, experience,
length of service and industry/Company knowledge.
During the year, the Board reviewed the policy on Directors’
tenure and considered the overall length of service of the
Board as a whole.
Policy on the tenure of the chair and other
non-executive directors
The tenure of each non-executive Director, including the
Chair, is not ordinarily expected to exceed nine years.
However, the Board has agreed that the tenure of the
Chair may be extended for an agreed time provided such
an extension is conducive to the Board’s overall orderly
succession. The Board believes that this more flexible
approach to the tenure of the Chair is appropriate in the
context of the regulatory rules that apply to investment
companies, which ensure that the Chair remains
The Board has been refreshing its membership and
will continue to do so over time. It may be the case that
Directors serve for longer than nine years to ensure that
any changes made are done so in an orderly and structured
manner. All Directors seek election or re-election every year.
Further details regarding the refreshment process can be
found in the Chair’s Statement on pages 4 to 7.
The Board subscribes to the view that long serving
Directors should not necessarily be prevented from forming
part of an independent majority. The Board considers that
a Director’s tenure does not necessarily reduce his or her
ability to act independently and will continue to assess
each Director’s independence annually, through a formal
performance evaluation. Please see page 55 for further
information.
Appointments to the board
The Nominations Committee considers annually the skills
possessed by the Board and identifies any skill shortages
to be filled by new Directors.
The rules governing the appointment and replacement
of Directors are set out in the Company’s articles
of association and the aforementioned succession
planning policy. Where the Board appoints a new Director
during the year, that Director will stand for election by
shareholders at the next AGM. Subject to there being
no conflict of interest, all Directors are entitled to vote
on candidates for the appointment of new Directors
and on the recommendation for shareholders’ approval
for the Directors seeking re-election at the AGM. When
considering new appointments, the Board endeavours to
ensure that it has the capabilities required to be effective
and oversee the Company’s strategic priorities. This will
include an appropriate range, balance and diversity of skills,
experience and knowledge. The Company is committed to
ensuring that any vacancies arising are filled by the most
qualified candidates.
Diversity policy
The Board supports the principle of Boardroom diversity,
of which gender and ethnicity are two important aspects.
The Company’s policy is that the Board and its committees
should be comprised of directors with a diverse range of
skills, knowledge and experience and that appointments
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE 54
CORPORATE GOVERNANCE CONTINUED
should be made on merit against objective criteria,
including diversity in its broadest sense.
The Board will continue to give due regard to the new
diversity targets in the Listing Rules as follows:
The objective of the policy is to have a broad range of
approaches, backgrounds, skills, knowledge and experience
represented on the Board. To this end, achieving a diversity
of perspectives and backgrounds on the Board will be a key
consideration in any director search process. The Board
encourages any recruitment agencies it engages to find a
diverse range of candidates that meet the criteria agreed for
each appointment and, from the shortlist, aims to ensure
that a diverse range of candidates is brought forward for
interview.
a) At least 40% of individuals on the board are women;
b) At least one of the senior board positions is held by a
woman; and
c) At least one individual on the board is from a minority
ethnic background.
In accordance with the Listing Rules, the Board has
provided the following information in relation to its diversity
as at the year end.
Men
Women
Not specified/prefer not to say
White British or other White (including minority-white groups)
Mixed/Multiple Ethnic Groups
Asian/Asian British
Black/African/Caribbean/Black British
Other ethnic group, including Arab
Not specified/ prefer not to say
Number of
Board
Members
Percentage of
the Board
Number of
senior
positions on
the Board*
4
3
–
57%
43%
–
2
1
–
Number of
Board
Members
Percentage of
the Board
Number of
senior
positions on
the Board*
6
–
1
–
–
–
86%
–
14%
–
–
–
3
–
–
–
–
–
*The format of the above tables is prescribed in the Listing Rules which define ‘senior positions on the Board’ as ‘CEO, CFO, SID and Chair’. However, as an
externally managed investment trust, the Company has no executive management functions, including the roles of CEO and CFO, and the Company has therefore
excluded columns relating to executive management. In the absence of the aforementioned roles, the Board considers the Chair of the Audit & Risk Committee
to be a senior position and therefore the Company has defined the ‘senior positions on the Board’ as Chair, Senior Independent Director and Chair of the Audit &
Risk Committee.
The information above was obtained by asking the Directors to indicate on an anonymous form, how they should be
categorised for the purposes of the Listing Rules disclosures.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE CORPORATE GOVERNANCE CONTINUED
55
MEETING ATTENDANCE
The number of meetings held during the year of the Board and its Committees, and each Director’s attendance level, is
shown below:
Type and number of meetings held in 2022/23
Sir Martin Smith^
Sarah Bates
Sven Borho*
Tim Livett+
Humphrey van der Klugt
Doug McCutcheon~
Jo Parfrey**
Dr Bina Rawal
Board
(6)
Audit & Risk
Committee
(2)
Nominations
Committee
(1)
Management
Engagement &
Remuneration
Committee
(1)
3
6
5
2
5
6
2
6
–
2
–
1
2
1
1
2
0
1
–
1
1
1
1
1
0
1
–
1
1
1
1
1
^ Sir Martin Smith was not a member of the Audit & Risk Committee. He retired from the Board on 6 July 2022
* Sven Borho does not sit on any of the Company’s Committees
+ Tim Livett joined the Board on 1 September 2022
~Doug McCutcheon become the Chair of the Company on 6 July 2022. He ceased to be a member of the Audit & Risk Committee on that day
** Jo Parfrey joined the Board on 1 September 2022
All of the serving Directors with the exception of Humphrey van der Klugt, attended the Annual General Meeting held on
6 July 2022. Humphrey was unable to attend the Annual General Meeting and also a Board Meeting as he was unwell. Sven
Borho was unable to attend one Board Meeting due to a prior long-standing commitment.
BOARD EVALUATION
During the year the performance of the Board, its
committees and individual Directors (including each
Director’s independence) was evaluated through a formal
assessment led by the Senior Independent Director. The
performance of the Chair was also evaluated by the Senior
Independent Director. The review concluded that the Board
was working well. The Board is satisfied that the structure,
mix of skills and operation of the Board continue to be
effective and relevant for the Company.
As an independent external review of the Board was
undertaken in 2021 the next such review will be held in 2024.
The Board pays close attention to the capacity of individual
Directors to carry out their work on behalf of the Company.
In recommending individual Directors to shareholders for
re-election, it considered their other Board positions and
their time commitments and is satisfied that each Director
has the capacity to be fully engaged with the Company’s
business. The Board has considered the position of all of
the Directors as part of the evaluation process, and believes
that it would be in the Company’s best interests to propose
them for election and/or re-election (with the exception
of Sarah Bates who will be retiring from the Board on the
date of this year’s AGM) at the forthcoming AGM for the
following reasons:
Doug McCutcheon joined the Board in November 2012
and became Chair in July 2022. Doug was an investment
banker at S.G. Warburg and then UBS for 25 years, most
recently as the head of Healthcare Investment Banking for
Europe, the Middle East, Africa and Asia-Pacific. It is noted
that Doug has been a Director of the Company for more
than nine years. The Board has agreed to this period of
longer service to ensure an orderly succession. The Senior
Independent Director conducted a preliminary evaluation of
the Chair shortly after his appointment with no issues being
raised. The Board continues to believe that Doug remains
independent in thought and judgement.
Sven Borho joined the Board in June 2018. Sven is a
founder and Managing Partner of OrbiMed and heads
their public Equity team and is the portfolio Manager for
OrbiMed’s public equity and hedge funds.
Humphrey van der Klugt joined the Board in February 2016.
A former fund manager and Director of Schroder Investment
Management Limited, Humphrey has extensive experience of
the investment trust sector. He is a Chartered Accountant.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE 56
CORPORATE GOVERNANCE CONTINUED
Tim Livett joined the Board on 1 September 2022.
A qualified accountant, Tim is Chair of the Audit & Risk
Committee.
Tim is the Chief Financial Officer at Caledonia Investments
PLC, and is also a member of the Valuation and Audit & Risk
Committees at Oxford University Endowment Management.
He was formerly Chief Financial Officer at Wellcome Trust,
the global charitable foundation focused on health research.
He has an extensive and broad financial background.
Tim studied chemistry at Oxford University.
Jo Parfrey joined the Board on 1 September 2022.
Jo is Chair of the Management Engagement &
Remuneration Committee. She is a non-executive
Director and Chair of the Audit Committee of Henderson
International Income Trust plc, and a non-executive Director
of Octopus AIM VCT. She is also a non-executive Director
and Chair of the Audit Committee of Start Codon Limited
and IESO Digital Health Limited and the non-executive
Chair of Babraham Research Campus Limited. A Chartered
Accountant, Jo has extensive experience of both global
investment trusts and healthcare, including life services.
Jo studied chemistry at Oxford University.
Dr Bina Rawal joined the Board on November 2019. A
physician with 25 years’ experience in life sciences research
and development, she has held senior executive roles in
drug development and scientific evaluation in four global
pharmaceutical companies.
The Chair is pleased to report that following a formal
performance evaluation, the Directors’ performance
continues to be effective and they continue to demonstrate
commitment to the role.
TRAINING AND ADVICE
New appointees to the Board are provided with a full
induction programme. The programme covers the
Company’s investment strategy, policies and practices.
The Directors are also given key information on the
Company’s regulatory and statutory requirements as they
arise including information on the role of the Board, matters
reserved for its decision, the terms of reference of the
Board Committees, the Company’s corporate governance
practices and procedures and the latest financial
information. It is the Chair’s responsibility to ensure that the
Directors have sufficient knowledge to fulfil their role and
Directors are encouraged to participate in training courses
where appropriate.
The Directors have access to the advice and services of a
Company Secretary through its appointed representative
which is responsible to the Board for ensuring that Board
procedures are followed and that applicable rules and
regulations are complied with. The Company Secretary
is also responsible for ensuring good information flows
between all parties.
There is an agreed procedure for Directors, in the
furtherance of their duties, to take independent professional
advice if necessary at the Company’s expense.
RISK MANAGEMENT AND INTERNAL
CONTROLS
The Board has overall responsibility for the Company’s
risk management and internal control systems and for
reviewing their effectiveness. The Company applies the
guidance published by the Financial Reporting Council on
internal controls. Internal control systems are designed to
manage, rather than eliminate, the risk of failure to achieve
the business objective and can provide only reasonable
and not absolute assurance against material misstatement
or loss. These controls aim to ensure that the assets of
the Company are safeguarded, that proper accounting
records are maintained and that the Company’s financial
information is reliable. The Directors have a robust process
for identifying, evaluating and managing the significant
risks faced by the Company, which are recorded in a risk
matrix. The Audit & Risk Committee, on behalf of the Board,
considers each risk as well as reviewing the mitigating
controls in place. Each risk is rated for its “likelihood” and
“impact” and the resultant numerical rating determines its
ranking into ‘Principal/Key’, ‘Significant’ or ’Minor’. This
process was in operation during the year and continues in
place up to the date of this report. The process also involves
the Audit & Risk Committee receiving and examining regular
reports from the Company’s principal service providers. The
Board then receives a detailed report from the Audit & Risk
Committee on its findings. The Directors have not identified
any significant failures or weaknesses in respect of the
Company’s internal control systems.
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57
BENEFICIAL OWNERS OF SHARES –
INFORMATION RIGHTS
Beneficial owners of shares who have been nominated by
the registered holder of those shares to receive information
rights under section 146 of the Companies Act 2006 are
required to direct all communications to the registered
holder of their shares rather than to the Company’s
registrar, Link Group, or to the Company directly.
The Company has adopted a nominee share code which is
set out on the following page.
The annual and half-year financial reports, and a monthly
fact sheet are available to all shareholders. The Board, with
the advice of Frostrow, reviews the format of the annual
and half-year financial reports so as to ensure they are
useful to all shareholders and others taking an interest in the
Company. In accordance with best practice, the annual report,
including the Notice of the Annual General Meeting, is sent
to shareholders at least 20 working days before the meeting.
Separate resolutions are proposed for substantive issues.
ANNUAL GENERAL MEETING
The following information to be considered at the
forthcoming annual general meeting is important
and requires your immediate attention.
If you are in any doubt about the action you should take,
you should seek advice from your stock broker, bank
manager, solicitor, accountant or other financial adviser
authorised under the Financial Services and Markets
Act 2000 (as amended). If you have sold or transferred all
of your ordinary shares in the Company, you should pass
this document, together with any other accompanying
documents, including the form of proxy, at once to the
purchaser or transferee, or to the stock broker, bank or other
agent through whom the sale or transfer was effected, for
onward transmission to the purchaser or transferee
The Company’s Annual General Meeting will be held at
Saddlers’ Hall, 40 Gutter Lane, London EC2V 6BR on
Tuesday, 18 July 2023 from 12.30 p.m. Please refer to the
Chair’s Statement beginning on page 4 for details of this
year’s arrangements.
Resolution 17
Authority to buy-back shares
Resolution 18
Authority to hold General Meetings (other
than the Annual General Meeting) on at
least 14 clear days’ notice
Resolutions 13 and 14 will be proposed as Ordinary
Resolutions and resolutions 15 to 18 will be proposed as
Special Resolutions.
The full text of the resolutions can be found in the Notice of
Annual General Meeting on pages 101 to 105. Explanatory
notes regarding the resolutions can be found on pages 106
and 107.
EXERCISE OF VOTING POWERS
The Board and the AIFM have delegated authority to
OrbiMed to vote the shares owned by the Company. The
Board has instructed that OrbiMed submit votes for such
shares wherever possible. This accords with current best
practice whilst maintaining a primary focus on financial
returns. OrbiMed may refer to the Board on any matters of
a contentious nature. The Board has reviewed OrbiMed’s
Voting Guidelines and is satisfied with their approach.
The Company does not retain voting rights on any shares
that are held as collateral in connection with the overdraft
facility provided by J.P. Morgan Securities LLC.
NOMINEE SHARE CODE
Where shares are held in a nominee company name, the
Company undertakes:
•
•
to provide the nominee company with multiple copies of
shareholder communications, so long as an indication
of quantities has been provided in advance; and
to allow investors holding shares through a nominee
company to attend general meetings, provided the
correct authority from the nominee company is
available.
Nominee companies are encouraged to provide the
necessary authority to underlying shareholders to attend
the Company’s general meetings.
In particular, resolutions relating to the following items will
be proposed at the forthcoming Annual General Meeting.
By order of the Board
Resolution 13
Proposed share split
Resolution 14
Authority to allot shares
Resolution 15
Authority to disapply pre-emption rights
Resolution 16
Authority to sell shares held in treasury
on a non pre-emptive basis
Frostrow Capital LLP
Company Secretary
6 June 2023
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE 58
AUDIT & RISK COMMITTEE REPORT
INTRODUCTION FROM THE CHAIRMAN
I am pleased to present my first formal report to
shareholders as Chair of the Audit & Risk Committee, for the
year ended 31 March 2023.
COMPOSITION AND MEETINGS
The Committee comprises those Directors considered to
be independent by the Board. The Chair of the Company
is not a member of the Committee but attends meetings
by invitation. The Committee met twice during the year
and attendance by each Director is shown in the table on
page 55. The Board has taken note of the requirements
that the Committee as a whole should have competence
relevant to the sector in which the Company operates and
that at least one member of the Committee should have
recent and relevant financial experience. The Committee
is satisfied that it is properly constituted in both respects. I
was appointed Chair of the Committee on 1 March 2023,
I succeeded Humphrey van der Klugt in this role.
Humphrey remains a member of the Committee. I am
a qualified accountant and have been a member of a
number of Audit & Risk Committees over many years.
The other Committee members have a combination of
financial, investment and other relevant experience gained
throughout their careers.
The experience of the Committee members can be
assessed from the Directors’ biographies set out on pages
41 to 43.
RESPONSIBILITIES
The Committee’s main responsibilities during the year were:
1.
To review the Company’s Half-Year and Annual Report.
In particular, the Committee considered and advised the
Board on whether the Annual Report and the Financial
Statements, taken as a whole, is fair, balanced and
understandable, allowing shareholders to more easily
assess the Company’s strategy, investment policy,
business model and financial performance.
2.
To review the risk management and internal control
processes of the Company and its key service providers.
Further details of the Committee’s review are included in
the Principal Risks section beginning on page 29.
3.
To develop and implement a policy for the engagement
of the external Auditors and agreeing the scope of its
work and its remuneration. Also, to be responsible for
the selection process of the external Auditors (including
the leadership of an audit tender process) and to have
primary responsibility for the Company’s relationship
with the external Auditors.
To review the effectiveness of the external audit and the
process.
To review the independence and objectivity of the
external Auditors.
To consider any non-audit work to be carried out by the
Auditors. The Committee reviews the need for non-audit
services to be provided by the Auditors and authorises
such on a case by case basis, having consideration
to the cost effectiveness of the services and the
independence and objectivity of the Auditors.
To consider the need for an internal audit function.
Since the Company delegates its day-to-day operations
to third parties and has no employees, the Committee
has determined there is no requirement for such a
function.
4.
5.
6.
7.
8.
To assess the going concern and viability of the
Company, including the assumptions used.
9. To report its findings to the Board.
A comprehensive description of the Committee’s role, its
duties and responsibilities, can be found in its terms of
reference which are available for review on the Company’s
website at www.worldwidewh.com.
WORK OF THE AUDIT & RISK COMMITTEE
DURING THE YEAR
Annual Report and Financial Statements
The production of the Company’s Annual Report (including
the audit by the Company’s external Auditors) is a thorough
process involving input from a number of different areas.
In order to be able to confirm that the Annual Report is fair,
balanced and understandable, the Board has requested that
the Committee advise on whether it considers these criteria
have been satisfied. As part of this process the Committee
has considered the following:
•
the procedures followed in the production of the Annual
Report, including the processes in place to assure the
accuracy of the factual content;
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE AUDIT & RISK COMMITTEE REPORT CONTINUED
59
•
•
the extensive levels of review that were undertaken in
the production process, by the Company’s AIFM and the
Committee; and
the internal control environment as operated by the
Portfolio Manager, AIFM and other service providers.
•
•
gaining an overall understanding of the performance of
the portfolio both in capital and revenue terms through
comparison to the Benchmark; and
conducting a review of how the Company’s derivative
positions were monitored.
As a result of the work undertaken by the Committee, it
has confirmed to the Board that the Annual Report and the
Financial Statements for the year ended 31 March 2023,
taken as a whole, is fair, balanced and understandable
and provides the information necessary for shareholders
to assess the Company’s financial position, performance,
business model and strategy.
The Committee addressed the overall accuracy of
the annual report by considering the draft Annual
Report, a letter from Frostrow in support of the letter of
representation made by the Board to the Auditors and the
Auditors’ Report to the Committee.
The committee also considered a number of key reporting
matters which are outlined in the following sections.
Valuation and ownership of the Company’s
investments and derivatives, including unquoted
investments
The Committee dealt with this matter by:
•
•
•
ensuring that all investment holdings and cash/
deposit balances had been agreed to an independent
confirmation from the Custodian and Prime Broker
or relevant counterparty. In addition, receiving and
reviewing details of the internal control procedures
in place at the Portfolio Manager, the AIFM and the
Custodian and Prime Broker and also regular reports
from both the Custodian and Prime Broker and also
the Depositary (whose role it is to ensure that the
Company’s assets are safeguarded and to verify their
valuation);
reconfirming its understanding of the processes in
place to record investment transactions and income,
and to value both the quoted and unquoted holdings in
the portfolio;
reviewing and amending, where necessary, the
Company’s register of key risks in light of changes to
the portfolio and the investment environment;
In addition, the Committee considered the valuation of
unquoted investments. The Company has the ability
to make unquoted investments within its investment
portfolio, up to a limit of 10% of the portfolio at the time of
acquisition. Both the Company’s Directors and the AIFM
need to ensure that an appropriate value is placed on
such investments within the Company’s net asset value.
The Committee has worked with the Company’s Portfolio
Manager and the AIFM to establish clear guidelines for the
valuation of unquoted investments, including the use of
valuations produced by independent external valuers, where
appropriate.
Calculation of AIFM, portfolio management and
performance fees
The AIFM, Portfolio Management and Performance fees
are calculated in accordance with the AIFM and Portfolio
Management Agreements. The Auditors perform agreed
upon procedures over any performance fee payable to
the Portfolio Manager prior to payment. The Auditors also
recalculate the AIFM and Portfolio Management fee as part
of the audit.
Investment trust status
The Committee approached and dealt with ensuring
compliance with Section 1158 of the Corporation Tax
Act 2010, by seeking confirmation from Frostrow that the
Company continues to meet the eligibility conditions on a
monthly basis.
Withholding Tax
The Committee monitored the reclamation of withholding
tax, receiving regular updates from Frostrow on the process
and the appointment of specialist local agents.
Investment performance
The Committee gained an overall understanding of the
performance of the investment portfolio both in capital and
revenue terms through ongoing discussions and analysis
with the Company’s Portfolio Manager and also with
comparison to suitable key performance indicators (see
page 28).
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE 60
AUDIT & RISK COMMITTEE REPORT CONTINUED
Accounting policies
During the year the Committee ensured that the accounting
policies, as set out on pages 79 to 83, were applied
consistently throughout the year. In light of there being
no unusual transactions during the year or other possible
reasons, the Committee agreed that there was no reason to
change the policies.
Half year report and financial statements
The Committee reviewed the Half Year Report and Financial
Statements, which are not audited or reviewed by the
external Auditors, to ensure that the accounting policies
used in the Annual Financial Statements were also used at
the half-year stage and that they portrayed a fair balanced
and understandable picture of the period in question.
Going concern and viability statement
Having reviewed the Company’s financial position and
liabilities, the Committee is satisfied that it is appropriate for
the Board to prepare the financial statements on the going
concern basis. Further detail is provided on page 48. The
Committee’s review of the Company’s financial position
included consideration of the cash and cash equivalent
position of the Company; the diversification of the portfolio;
and the analysis of portfolio liquidity, which estimated a
liquidation of c.84.5% of the portfolio within 10 trading days
(based on current market volumes).
The Committee also considered the longer-term viability of
the Company in connection with the Board’s statement in
the Strategic Report on page 35. The Committee reviewed
the Company’s financial position (including its cash flows
and liquidity position), the principal risks and uncertainties,
the expectation that the Company will pass the next
continuation vote in 2024, and the results of stress tests
and scenarios which considered the impact of severe stock
market volatility on shareholders’ funds. This included
modelling substantial market falls, and significantly reduced
market liquidity. The scenarios assumed that there would
be no recovery in asset prices and that listed portfolio
companies which have cut or cancelled any dividends due
since the coronavirus outbreak would not reinstate them.
The results demonstrated the impact on the Company’s
NAV, its expenses, its cash flows and its ability to meet
its liabilities. In even the most stressed scenario, the
Company was shown to have sufficient cash, or to be able
to liquidate a sufficient portion of its listed holdings, in order
to be able to meet its liabilities as they fall due. Based on
the information available to the Directors at the time, the
Committee therefore concluded it was reasonable for the
Board to expect that the Company will be able to continue
in operation and meet its liabilities as they fall due over the
next five financial years. The Committee expects that the
Company will continue to exist for the foreseeable future
and at least for the period of the assessment.
Internal controls and risk management
As set out on page 29 the Board is responsible for the risk
assessment and review of internal controls of the Company,
undertaken in the context of the overall investment
objective.
The review covers the key business, operational,
compliance and financial risks facing the Company. In
arriving at its judgement of what risks the Company faces,
the Board has considered the Company’s operations in the
light of the following factors:
•
•
•
•
the nature of the Company, with all management
functions outsourced to third party service providers;
the nature and extent of risks which it regards as
acceptable for the Company to bear within its overall
investment objective;
the threat of such risks becoming a reality; and
the Company’s ability to reduce the incidence and
impact of risk on its performance.
Against this background, a risk matrix has been developed
which covers key risks the Company faces, the likelihood of
their occurrence and their potential impact, how these risks
are monitored and mitigating controls in place. The Board
has delegated to the Committee the responsibility for the
review and maintenance of the risk matrix and it reviews,
in detail, the risk matrix each time it meets, bearing in mind
any changes to the Company, its environment or service
providers since the last review. Any significant changes to
the risk matrix are discussed with the whole Board.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE AUDIT & RISK COMMITTEE REPORT CONTINUED
61
Principal service providers
Auditors’ reappointment
In addition to reviewing the systems of internal control in
place at the Company’s principal service providers, the
Committee also reviewed the cyber security strategies
adopted by them.
PwC have indicated their willingness to continue to act as
Auditors to the Company for the forthcoming year and a
resolution for their re-appointment will be proposed at the
AGM.
The Committee reviews the scope and effectiveness of the
audit process, including agreeing the Auditors’ assessment
of materiality and monitors the Auditors’ independence and
objectivity. It conducted a review of the performance of the
Auditors during the year and concluded that performance
was satisfactory and there were no grounds for change.
Meetings
This year the nature and scope of the audit together with
PwC’s audit plan were considered by the Committee on
3 November 2022. I, as Chair of the Committee, had a
separate meeting with them specifically to discuss the audit
and any issues that arose. The Committee then met PwC
on 23 May 2023 via video conference to review formally
the outcome of the audit and to discuss the limited issues
that arose. The Committee also discussed the presentation
of the Annual Report with the Auditors and sought their
perspective.
Independence and effectiveness
In order to fulfil the Committee’s responsibility regarding the
independence of the Auditors, the Committee reviewed:
•
•
•
•
the senior audit personnel in the audit plan for the year,
the Auditors’ arrangements concerning any conflicts of
interest,
the extent of any non-audit services, and
the statement by the Auditors that they remain
independent within the meaning of the regulations and
their professional standards.
The Committee also reviews the outcomes of the FRC’s
annual Audit Quality Reviews and discusses the findings
with the Auditors.
Depositary
During the year, the Committee reviewed reports from the
Depositary on their regulatory oversight and due diligence
duties. Nothing material was brought to the attention of the
Committee.
Internal audit
The Committee considered whether there was a need for
the Company to have an internal audit function. As the
Company delegates its day-to-day operations to third
parties and has no employees, the Committee concluded
that there was no such need.
EXTERNAL AUDIT
Appointment and tenure
PricewaterhouseCoopers LLP (“PwC”) were the Auditors
for the financial year and this was their ninth audit of the
Company. They were appointed on 14 July 2014 following
a formal tender process and this appointment has been
renewed at each subsequent AGM.
As a public company listed on the London Stock Exchange,
the Company is subject to mandatory auditor rotation
requirements. The Company will put the external audit out
to tender at least every 10 years, and change auditor at
least every 20 years. In addition, the Committee continues
to consider annually the need to go to tender for audit
quality, remuneration or independence reasons. It is
expected that the next audit tender will take place in the
autumn of this year, in order that the successful candidate’s
appointment or re-appointment can be approved by
shareholders at the AGM to be held in 2024. A range of
audit firms will be considered not just those who are
considered to be part of the “Big Four” group of audit firms.
The Committee will be mindful of any potential conflicts
of interest. Any firms providing services to the Company
within a two-year period of the date of the audit tender will
be unable to participate.
The Committee has adopted formal audit tender guidelines
to govern the audit tender process.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE 62
AUDIT & RISK COMMITTEE REPORT CONTINUED
Remuneration
The Committee approved a fee of £53,900 for the audit
for the year ended 31 March 2023 (2022: £46,725). While
this represents an increase on the previous year’s fee, the
Committee believes that the fee is in line with general audit
fees payable for the investment trust sector and is reflective
of the level of work required to audit a listed company.
Non-audit services policy
The Company operates on the basis whereby the provision
of all non-audit services by the Auditors has to be pre-
approved by the Committee. Such services are only
permissible where no conflicts of interest arise, the service
is not expressly prohibited by audit legislation, where the
independence of the Auditors is not likely to be impinged
by undertaking the work and the quality and the objectivity
of both the non-audit work and audit work will not be
compromised. The Committee will monitor the need for
non-audit work to be performed by the Auditors, if any, in
accordance with the Company’s non-audit services policy.
AUDIT & RISK COMMITTEE CONFIRMATION
The Audit & Risk Committee confirms that it has carried
out a review of the effectiveness of the system of internal
financial control and risk management during the year, as
set out above and that:
(a) An ongoing procedure for identifying, evaluating and
managing significant risks faced by the Company was
in place for the year under review and up to 6 June
2023. This procedure is regularly reviewed by the Board;
and
(b) It is responsible (on behalf of the Board) for the
Company’s system of internal controls and for reviewing
its effectiveness and that it is designed to manage the
risk of failure to achieve business objectives. This can
only provide reasonable not absolute assurance against
material misstatement or loss.
A copy of the Company’s non-audit services policy can be
found on the Company’s website at
www.worldwidewh.com.
Tim Livett
Chair of the Audit & Risk Committee
6 June 2023
No non-audit fees were paid to the Auditors during the
year (2022: £5,000 in respect of agreed upon procedures in
relation to their review of the Company’s performance fee
payment).
The Committee has considered the extent and nature of
non-audit work performed by the Auditors and is satisfied
that this did not impinge on their independence and is a
cost effective way for the Company to operate.
PERFORMANCE EVALUATION
The Committee’s performance over the past year was
reviewed and discussed as part of the annual Board
evaluation. The evaluation considered the composition of
the Committee and the efficacy of Committee meetings,
as well as assessing the Committee’s role in monitoring
and overseeing the Company’s financial reporting and
accounting, risk management and internal controls,
compliance with corporate governance regulations and also
the assessment of the external audit.
I am pleased to confirm that the evaluation result was
positive and no matters of concern or requirements for
change were highlighted.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE DIRECTORS’ REMUNERATION REPORT
63
INTRODUCTION FROM THE CHAIR
This report has been prepared in accordance with Schedule
8 of the Large and Medium-sized Companies and Groups
(Accounts and Reports) (Amendment) Regulation 2013, the
requirements of Section 421 of the Companies Act 2006
and the Enterprise and Regulatory Reform Act 2013. The
Directors’ Remuneration Report is subject to an annual
advisory vote and therefore an Ordinary Resolution for the
approval of this report will be put to shareholders at the
Company’s forthcoming AGM.
The law requires the Company’s Auditors to audit
certain of the disclosures provided in this report. Where
disclosures have been audited, they are indicated as such
and the Auditors’ audit opinion is included in its report to
shareholders on pages 68 to 74.
The Management Engagement & Remuneration
Committee (the “Committee”) considers the framework
for the remuneration of the Directors on an annual basis.
It reviews the ongoing appropriateness of the Directors’
Remuneration Policy and the individual remuneration
of Directors by reference to the activities and particular
complexities of the Company and comparison with other
companies of a similar structure and size. This is in-line
with the AIC Code.
An Ordinary Resolution proposing the adoption of the
Directors’ Remuneration Report was put to shareholders
at the Annual General Meeting of the Company held on 6
July 2022, and was passed with 99.9% of the votes cast by
shareholders voting in favour of the Resolution.
As noted in the Strategic Report, all of the Directors are
non-executive and therefore there is no Chief Executive
Officer. The Company does not have any employees.
There is therefore no Chief Executive Officer or employee
information to disclose.
Directors’ remuneration policy
The Directors’ Remuneration Policy provides that fees
payable to the Directors should reflect the time spent by
the Board on the Company’s affairs and the responsibilities
borne by the Directors and should be sufficient to enable
candidates of high calibre to be recruited. Directors are
remunerated in the form of fees payable monthly in arrears,
paid to the Director personally or to a specified third
party. There are no long-term incentive schemes, share
option schemes, pension arrangements, bonuses, or other
benefits in place and fees are not specifically related to the
Directors’ performance, either individually or collectively.
The remuneration for the non-executive Directors is
determined within the limits set out in the Company’s
Articles of Association. The present limit is £350,000 in
aggregate per annum. The amount paid in aggregate
to the Directors in 2023 is set out in the table on the
following page.
A binding resolution to approve the Directors’
Remuneration Policy was put to shareholders at the Annual
General Meeting held in 2020, and was passed with 99.8%
of shareholders voting in favour of the Resolution. The
aforementioned Directors’ Remuneration Policy provisions
apply until the next time that they are put to shareholders
for the renewal of that approval, which must be at
intervals of not more than three years, or if the Directors’
Remuneration Policy is varied. As approval of this policy
was last granted by shareholders at the Annual General
Meeting held in July 2020, shareholder approval will
again be sought at the Annual General Meeting to be held
this year.
Directors’ appointment
None of the Directors has a service contract. The terms of
their appointment provide that Directors shall retire and be
subject to election at the first Annual General Meeting after
their appointment and to re-election annually thereafter. The
terms also provide that a Director may be removed without
notice and that compensation will not be due on leaving office.
Directors’ fees
During the year, the Committee agreed that each Director’s
fees should be increased by 2.0% with effect from 1 April
2023.
The Committee noted that the fees had not been increased
the previous year and the prevailing high level of inflation.
The table overleaf shows the level of fees paid to Directors
and the percentage increase from the prior year.
With the exception of Tim Livett and Jo Parfrey, all of the
Directors, as at the date of this report, served throughout
the year. The table overleaf excludes any employer’s
national insurance contributions, if applicable.
The Directors are entitled to be reimbursed for reasonable
expenses incurred by them in connection with the
performance of their duties and attendance at Directors’
and shareholder meetings.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE 64
DIRECTORS’ REMUNERATION REPORT CONTINUED
Year Ending
31 March 2024
Year Ended
31 March 2023
Year Ended
31 March 2022
Fee Level
(per annum)
£54,213
£41,956
£36,727
£34,244
%
Change
2.0
2.0
2.0
Fee Level
(per annum)
£53,150
£41,133
£36,007
%
Change
–
–
–
Fee Level
(per annum)
£53,150
£41,133
£36,007
2.0
£33,573
–
£33,573
%
Change
4.0
4.0
4.0
4.0
Director
Chair
Audit & Risk Committee Chair
Senior Independent Director
Director
Sums paid to third parties
None of the fees referred to in the below table were paid to any third party in respect of the services provided by any of the Directors.
Directors’ emoluments for the year (audited)
Sir Martin Smith*
Humphrey van der Klugt
Sarah Bates#
Dr David Holbrook^
Tim Livett**
Doug McCutcheon
Jo Parfrey**
Sven Borho+
Dr Bina Rawal
Total
Date of
Appointment
to the Board
8 November 2007
15 February 2016
22 May 2013
8 November 2007
1 September 2022
7 November 2012
1 September 2022
7 June 2018
1 November 2019
Fixed fees
(£)
2023
14,105
40,503
36,007
–
20,124
47,894
19,584
–
33,573
211,790
Taxable
Expenses
(£)†
2023
–
–
–
–
–
–
–
–
–
–
Total (£)
2023
14,105
40,503
36,007
–
20,124
47,894
19,584
–
33,573
211,790
Fixed fees
(£)
2022
53,150
41,133
35,389
9,833
–
33,573
–
33,573
206,651
Taxable
Expenses
(£)†
2022
865
–
–
–
–
–
Total (£)
2022
54,015
41,133
35,389
9,833
–
33,573
–
–
865
–
33,573
207,516
† Taxable expenses primarily comprise travel and associated expenses incurred by the Directors in attending Board and Committee meetings in London. These are
reimbursed by the Company and, under HMRC Rules, are subject to tax and National Insurance and therefore are treated as a benefit in kind within this table.
* Sir Martin Smith retired from the Board on 6 July 2022.
# Sarah Bates was appointed as the Senior Independent Director with effect from 8 July 2021.
^ Dr David Holbrook retired from the Board on 8 July 2021.
** Tim Livett and Jo Parfrey joined the Board on 1 September 2022.
+ Sven Borho has waived his Director’s fee.
Tim Livett succeeded Humphrey van der Klugt as Chair of the Audit & Risk Committee with effect from 1 March 2023.
In certain circumstances, under HMRC rules travel and other out of pocket expenses reimbursed to the Directors may be
considered as taxable benefits. Where expenses are classed as taxable under HMRC guidance, they are shown in the taxable
expenses column of the Directors’ remuneration table along with the associated tax liability.
No communications have been received from shareholders regarding Directors’ remuneration.
Directors’ interests in the Company’s shares (audited)
Sir Martin Smith
– Trustee
Sarah Bates
Sven Borho
Humphrey van der Klugt
Tim Livett
Doug McCutcheon
Jo Parfrey
Dr Bina Rawal
Ordinary
Shares of 25p each
31 March
2023
–
–
7,200
10,000
3,000
2,175
20,000
2,000
2,606
31 March
2022
11,871
2,725
7,200
10,000
3,000
–
20,000
–
1,810
46,981
56,606
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE DIRECTORS’ REMUNERATION REPORT CONTINUED
65
Share price total return
Annual statement
The chart below illustrates the total shareholder return
for a holding in the Company’s shares as compared to
the Benchmark, which the Board has adopted as the key
measure of the Company’s performance.
TOTAL SHAREHOLDER RETURN FOR THE TEN YEARS
TO 31 MARCH 2023
%
On behalf of the Board, I confirm that the Directors’
Remuneration Policy, set out on page 63 of this Annual
Report, and Directors’ Remuneration Report set out on
page 63 to 65 summarise, as applicable, for the year to
31 March 2023:
(a) the major decisions on Directors’ remuneration;
(b) any substantial changes relating to Directors’
remuneration made during the year; and
(c) the context in which the changes occurred and
decisions have been taken.
Mar
14
Mar
15
Mar
16
Mar
17
Mar
18
Mar
19
Mar
20
Mar
21
Mar
22
Mar
23
Chair of the Management Engagement & Remuneration
Committee
Jo Parfrey
WWH Share Price (total return) (236.9%)
Benchmark (total return) (229.9%)
Rebased to 100 as at 31 March 2013
Source: Morningstar
6 June 2023
500
400
300
200
100
0
Mar
13
Relative cost of directors’ remuneration
The bar chart below shows the comparative cost of
Directors’ fees compared with the level of dividend
distribution and ongoing charges for 2022 and 2023.
(cid:101)(cid:80)
(cid:21)(cid:21)(cid:19)(cid:19)(cid:19)
(cid:21)(cid:19)(cid:19)(cid:19)(cid:19)
(cid:20)(cid:27)(cid:19)(cid:19)(cid:19)
(cid:20)(cid:25)(cid:19)(cid:19)(cid:19)
(cid:20)(cid:23)(cid:19)(cid:19)(cid:19)
(cid:20)(cid:21)(cid:19)(cid:19)(cid:19)
(cid:20)(cid:19)(cid:19)(cid:19)(cid:19)
(cid:27)(cid:19)(cid:19)(cid:19)
(cid:25)(cid:19)(cid:19)(cid:19)
(cid:23)(cid:19)(cid:19)(cid:19)
(cid:21)(cid:19)(cid:19)(cid:19)
(cid:19)
(cid:39)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:821)
(cid:41)(cid:72)(cid:72)(cid:86)
(cid:21)(cid:19)(cid:21)(cid:22)
(cid:39)(cid:76)(cid:89)(cid:76)(cid:71)(cid:72)(cid:81)(cid:71)(cid:86)
(cid:21)(cid:19)(cid:21)(cid:22)
(cid:50)(cid:81)(cid:74)(cid:82)(cid:76)(cid:81)(cid:74)
(cid:38)(cid:75)(cid:68)(cid:85)(cid:74)(cid:72)(cid:86)(cid:13)
(cid:21)(cid:19)(cid:21)(cid:22)
(cid:39)(cid:76)(cid:85)(cid:72)(cid:70)(cid:87)(cid:82)(cid:85)(cid:86)(cid:821)
(cid:41)(cid:72)(cid:72)(cid:86)
(cid:21)(cid:19)(cid:21)(cid:21)
(cid:39)(cid:76)(cid:89)(cid:76)(cid:71)(cid:72)(cid:81)(cid:71)(cid:86)
(cid:21)(cid:19)(cid:21)(cid:21)
(cid:50)(cid:81)(cid:74)(cid:82)(cid:76)(cid:81)(cid:74)
(cid:38)(cid:75)(cid:68)(cid:85)(cid:74)(cid:72)(cid:86)(cid:13)
(cid:21)(cid:19)(cid:21)(cid:21)
(cid:13)(cid:3)(cid:36)(cid:79)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:51)(cid:72)(cid:85)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:48)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:3)(cid:11)(cid:86)(cid:72)(cid:72)(cid:3)(cid:42)(cid:79)(cid:82)(cid:86)(cid:86)(cid:68)(cid:85)(cid:92)(cid:3)(cid:69)(cid:72)(cid:74)(cid:76)(cid:81)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:82)(cid:81)(cid:3)(cid:83)(cid:68)(cid:74)(cid:72)(cid:3)(cid:28)(cid:27)(cid:12)(cid:17)
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE 66
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
WORLDWIDE HEALTHCARE TRUST PLC
REPORT ON THE AUDIT OF THE FINANCIAL
STATEMENTS
Opinion
In our opinion, Worldwide Healthcare Trust PLC’s financial
statements:
•
•
give a true and fair view of the state of the Company’s
affairs as at 31 March 2023 and of its loss and cash
flows for the year then ended;
have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, including FRS
102 “The Financial Reporting Standard applicable in the
UK and Republic of Ireland”, and applicable law); and
•
have been prepared in accordance with the
requirements of the Companies Act 2006.
We have audited the financial statements, included
within the Annual Report, which comprise: the Statement
of Financial Position as at 31 March 2023; the Income
Statement, the Statement of Changes in Equity and the
Statement of Cash Flows for the year then ended; and
the notes to the financial statements, which include a
description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit &
Risk Committee.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described
in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remained independent of the Company in accordance
with the ethical requirements that are relevant to our
audit of the financial statements in the UK, which includes
the FRC’s Ethical Standard, as applicable to listed public
interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that
non-audit services prohibited by the FRC’s Ethical Standard
were not provided.
We have provided no non-audit services to the Company in
the period under audit.
Our audit approach
Overview
Audit scope
•
The Company is a standalone Investment Trust
Company and engages Frostrow Capital LLP
(the“AIFM”) to manage its assets.
•
•
•
We conducted our audit of the financial statements
using information from the AIFM and J.P. Morgan
Europe Limited with whom the AIFM have engaged to
provide certain administrative functions.
We tailored the scope of our audit taking into account
the types of investments within the Company, the
involvement of the third parties referred to above, the
accounting processes and controls, and the industry in
which the Company operates.
We obtained an understanding of the control
environment in place at the AIFM and adopted a fully
substantive testing approach using reports obtained
from the AIFM and service providers.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF WORLDWIDE HEALTHCARE TRUST PLC CONTINUED
67
Key audit matters
•
Income from investments.
•
Valuation and existence of investments.
Materiality
•
Overall materiality: £21,500,000 (2022: £22,682,000)
based on approximately 1% of net assets.
•
Performance materiality: £16,125,000 (2022:
£17,011,000).
The scope of our audit
As part of designing our audit, we determined materiality
and assessed the risks of material misstatement in the
financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’
professional judgement, were of most significance in the
audit of the financial statements of the current period and
include the most significant assessed risks of material
misstatement (whether or not due to fraud) identified by
the auditors, 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. These matters, and any comments we make on the
results of our procedures thereon, were addressed in the
context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE 68
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF WORLDWIDE HEALTHCARE TRUST PLC CONTINUED
Key audit matter
Income from investments
Refer to the Audit & Risk Committee Report,
Accounting Policies and Notes to the Financial
Statements.
ISAs (UK) presume there is a risk of fraud in income
recognition because of the pressure management
may feel to achieve a certain objective. In this
instance, we consider that ‘income’ refers to all the
Company’s income streams, both revenue and capital
(including gains and losses on investments).
As the Company has a capital objective, there
might be an incentive to overstate income in that
category if capital is particularly underperforming.
As such, we focussed this risk on the existence/
occurrence of gains/losses on investments and
completeness of dividend income recognition and its
presentation in the Income Statement as set out in
the requirements of The Association of Investment
Companies’ Statement of Recommended Practice
(the “AIC SORP”).
How our audit addressed the key audit matter
We assessed the accounting policy for income recognition for
compliance with accounting standards and the AIC SORP and
performed testing to confirm that income had been accounted
for in accordance with this stated accounting policy.
We found that the accounting policies implemented were in
accordance with accounting standards and the AIC SORP, and
that income has been accounted for in accordance with the
stated accounting policy.
We understood and assessed the design and implementation of
key controls surrounding income recognition.
The gains/losses on investments held at fair value comprise
realised and unrealised gains/losses. For unrealised gains/
losses, we sample tested the valuation of the portfolio at the
year-end (see below), together with testing the reconciliation of
opening and closing investments. For realised gains/losses, we
tested a sample of disposal proceeds by agreeing the proceeds
to bank statements and we re-performed the calculation of a
sample of realised gains/losses.
In addition, we tested a sample of dividend receipts by agreeing
the dividend rates from all investments to independent third
party sources.
To test for completeness, we tested that the appropriate
dividends had been received in the year by reference
to independent data of dividends declared for all listed
investments during the year. Our testing did not identify any
unrecorded dividends.
We tested the allocation and presentation of dividend income
between the revenue and capital return columns of the Income
Statement in line with the requirements set out in the AIC SORP.
We did not find any special dividends that were not treated in
accordance with the AIC SORP.
No material misstatements were identified from this testing.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF WORLDWIDE HEALTHCARE TRUST PLC CONTINUED
69
Key audit matter
How our audit addressed the key audit matter
Valuation and existence of investments
Refer to the Audit & Risk Committee Report,
Accounting Policies and Notes to the Financial
Statements.
The investment portfolio at 31 March 2023 principally
comprised of listed equity investments and unquoted
equity investments and totalled £2,186,417,000. We
focused on the valuation and existence of investments
because investments represent the principal element
of the net asset value as disclosed in the Statement of
Financial Position in the financial statements.
We tested the valuation of all listed investments by agreeing the
prices used in the valuation to independent third party sources.
We tested the existence of all listed investments by agreeing the
holdings of each investment to an independent confirmation
from the Custodian and Prime Broker, J.P. Morgan Securities
LLC, as at 31 March 2023.
For unquoted investments we understood and evaluated the
valuation methodology applied, by reference to the International
Private Equity and Venture Capital Valuation guidelines
(IPEV),and tested the techniques used by the Directors in
determining the fair value of unquoted investments. Our testing,
performed on a sample basis, included:
•
•
•
•
assessing the appropriateness of the valuation models
used;
testing the inputs either through validation to appropriate
third party sources, or where relevant, assessing the
reasonableness of significant estimates and judgements
used;
assessing the potential impact of climate change on the
valuation of the unquoted investments; and
assessing the ongoing impact of geopolitical events on the
valuation of investments.
We found that the Directors’ valuations of unquoted
investments were materially consistent with the IPEV guidelines
and that the assumptions used to derive the valuations
within the financial statements were reasonable based on the
investee’s circumstances or consistent with appropriate third
party sources. No material misstatements were identified
from this testing.
We tested the existence of the unquoted investment portfolio
by agreeing a sample of the holdings to independently obtained
third party confirmations as at 31 March 2023. No variances
were identified from this testing.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE 70
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF WORLDWIDE HEALTHCARE TRUST PLC CONTINUED
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the Company, the accounting processes and controls, and the
industry in which it operates.
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the Directors made subjective judgements, for example in respect of significant
accounting estimates that involved making assumptions and considering future events that are inherently uncertain.
The impact of climate risk on our audit
As part of our audit we made enquiries of management to understand the process management adopted to assess the
extent of the potential impact of climate risk on the Company’s financial statements and support the disclosures made
within the Company’s financial statements.
The Directors and the AIFM concluded that there was no material impact on the financial statements. Our evaluation of this
included assessing how the Directors had incorporated climate risk factors into the key area of judgement and estimation
in the financial statements, being in relation to the process of valuation of unquoted investments. We also considered
the consistency of the climate change disclosures included in the Strategic Report with the financial statements and our
knowledge from our audit.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and
extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall Company materiality
£21,500,000 (2022: £22,682,000).
How we determined it
Approximately 1% of net assets.
Rationale for benchmark applied We believe that net assets is the primary measure used by the shareholders in
assessing the performance of the entity, and is a generally accepted auditing
benchmark for investment trust Company audits. This benchmark provides an
appropriate and consistent year on year basis for our audit.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected
and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the
scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for
example in determining sample sizes. Our performance materiality was 75% (2022: 75%) of overall materiality, amounting to
£16,125,000 (2022: £17,011,000) for the Company financial statements.
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our
normal range was appropriate.
We agreed with the Audit & Risk Committee that we would report to them misstatements identified during our audit above
£1,075,000 (2022: £1,134,000) as well as misstatements below that amount that, in our view, warranted reporting for
qualitative reasons.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF WORLDWIDE HEALTHCARE TRUST PLC CONTINUED
71
Conclusions relating to going concern
Reporting on other information
Our evaluation of the Directors’ assessment of the
Company’s ability to continue to adopt the going concern
basis of accounting included:
•
•
•
•
evaluating the Directors’ updated risk assessment
and considering whether it addressed relevant threats,
including the heightened economic uncertainty as a
result of recent global events;
evaluating the Directors’ assessment of potential
operational impacts, considering their consistency with
other available information and our understanding of
the business and assessed the potential impact on the
financial statements;
reviewing the Directors’ assessment of the Company’s
financial position in the context of its ability to
meet future expected operating expenses and debt
repayments, their assessment of liquidity as well as
their review of the operational resilience of the Company
and oversight of key third-party service providers; and
assessing the implication of significant reductions in
NAV as a result of market performance on the ongoing
ability of the Company to operate.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the Company’s ability to continue as a
going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded
that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements is
appropriate.
However, because not all future events or conditions can
be predicted, this conclusion is not a guarantee as to the
Company’s ability to continue as a going concern.
In relation to the Directors’ reporting on how they have
applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to
the Directors’ statement in the financial statements about
whether the Directors considered it appropriate to adopt the
going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.
The other information comprises all of the information in
the Annual Report other than the financial statements and
our auditors’ report thereon. The Directors are responsible
for the other information. Our opinion on the financial
statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except
to the extent otherwise explicitly stated in this report, any
form of assurance thereon.
In connection with our audit of the financial statements,
our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to
be materially misstated. If we identify an apparent material
inconsistency or material misstatement, we are required
to perform procedures to conclude whether there is a
material misstatement of the financial statements or a
material misstatement of the other information. If, based
on the work we have performed, we conclude that there is
a material misstatement of this other information, we are
required to report that fact. We have nothing to report based
on these responsibilities.
With respect to the Strategic report and the Report of the
Directors, we also considered whether the disclosures
required by the UK Companies Act 2006 have been
included.
Based on our work undertaken in the course of the audit,
the Companies Act 2006 requires us also to report certain
opinions and matters as described below.
Strategic report and the Report of the Directors
In our opinion, based on the work undertaken in the
course of the audit, the information given in the Strategic
report and the Report of the Directors for the year ended
31 March 2023 is consistent with the financial statements
and has been prepared in accordance with applicable legal
requirements.
In light of the knowledge and understanding of the
Company and its environment obtained in the course of the
audit, we did not identify any material misstatements in the
Strategic Report and the Report of the Directors.
Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration
Report to be audited has been properly prepared in
accordance with the Companies Act 2006.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE 72
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF WORLDWIDE HEALTHCARE TRUST PLC CONTINUED
Corporate governance statement
The Listing Rules require us to review the Directors’
statements in relation to going concern, longer-term
viability and that part of the corporate governance
statement relating to the Company’s compliance with the
provisions of the UK Corporate Governance Code specified
for our review. Our additional responsibilities with respect to
the corporate governance statement as other information
are described in the Reporting on other information section
of this report.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the
corporate governance statement is materially consistent
with the financial statements and our knowledge obtained
during the audit, and we have nothing material to add or
draw attention to in relation to:
•
•
•
•
•
The Directors’ confirmation that they have carried out a
robust assessment of the emerging and principal risks;
The disclosures in the Annual Report that describe
those principal risks, what procedures are in place to
identify emerging risks and an explanation of how these
are being managed or mitigated;
The Directors’ statement in the financial statements
about whether they considered it appropriate to
adopt the going concern basis of accounting in
preparing them, and their identification of any material
uncertainties to the Company’s ability to continue to do
so over a period of at least twelve months from the date
of approval of the financial statements;
The Directors’ explanation as to their assessment of
the Company’s prospects, the period this assessment
covers and why the period is appropriate; and
The Directors’ 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 its assessment, including any
related disclosures drawing attention to any necessary
qualifications or assumptions.
Our review of the Directors’ statement regarding the longer-
term viability of the Company was substantially less in
scope than an audit and only consisted of making inquiries
and considering the Directors’ process supporting their
statement; checking that the statement is in alignment with
the relevant provisions of the UK Corporate Governance
Code; and considering whether the statement is consistent
with the financial statements and our knowledge and
understanding of the Company and its environment
obtained in the course of the audit.
In addition, based on the work undertaken as part of
our audit, we have concluded that each of the following
elements of the corporate governance statement is
materially consistent with the financial statements and our
knowledge obtained during the audit:
•
•
•
The Directors’ statement that they consider the
Annual Report, taken as a whole, is fair, balanced and
understandable, and provides the information necessary
for the members to assess the Company’s position,
performance, business model and strategy;
The section of the Annual Report that describes the
review of effectiveness of risk management and internal
control systems; and
The section of the Annual Report describing the work of
the Audit & Risk Committee.
We have nothing to report in respect of our responsibility
to report when the Directors’ statement relating to the
Company’s compliance with the Code does not properly
disclose a departure from a relevant provision of the Code
specified under the Listing Rules for review by the auditors.
Responsibilities for the financial statements and
the audit
Responsibilities of the Directors for the financial
statements
As explained more fully in the Statement of Directors’
Responsibilities, the Directors are responsible for the
preparation of the financial statements in accordance with
the applicable framework and for being satisfied that they
give a true and fair view. The Directors are also 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.
In preparing the financial statements, the Directors are
responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis
of accounting unless the Directors either intend to liquidate
the Company or to cease operations, or have no realistic
alternative but to do so.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF WORLDWIDE HEALTHCARE TRUST PLC CONTINUED
73
Auditors’ responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditors’ report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
financial statements.
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above,
to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud, is
detailed below.
Based on our understanding of the Company and industry,
we identified that the principal risks of non-compliance
with laws and regulations related to breaches of section
1158 of the Corporation Tax Act 2010, and we considered
the extent to which non-compliance might have a
material effect on the financial statements. We evaluated
management’s incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk
of override of controls), and determined that the principal
risks were related to posting inappropriate journal entries
to increase revenue (investment income and capital gains)
or to increase net asset value, and management bias in
accounting estimates. Audit procedures performed by the
engagement team included:
•
•
•
discussions with the AIFM and the Audit & Risk
Committee, including consideration of known or
suspected instances of non-compliance with laws and
regulation and fraud;
reviewing relevant meeting minutes, including those of
the Audit & Risk Committee;
assessment of the Company’s compliance with the
requirements of section 1158 of the Corporation Tax Act
2010, including recalculation of numerical aspects of
the eligibility conditions;
•
•
•
challenging assumptions and judgements made by
management in their significant accounting estimates,
in particular in relation to the valuation of unquoted
investments (see related key audit matter above);
identifying and testing journal entries, in particular
any material or revenue-impacting manual journal
entries posted as part of the Annual Report preparation
process; and
designing audit procedures to incorporate
unpredictability around the nature, timing or extent of
our testing.
There are inherent limitations in the audit procedures
described above. We are less likely to become aware of
instances of non-compliance with laws and regulations that
are not closely related to events and transactions reflected
in the financial statements. Also, the risk of not detecting
a material misstatement due to fraud is higher than the
risk of not detecting one resulting from error, as fraud may
involve deliberate concealment by, for example, forgery or
intentional misrepresentations, or through collusion.
Our audit testing might include testing complete
populations of certain transactions and balances, possibly
using data auditing techniques. However, it typically
involves selecting a limited number of items for testing,
rather than testing complete populations. We will often
seek to target particular items for testing based on their
size or risk characteristics. In other cases, we will use audit
sampling to enable us to draw a conclusion about the
population from which the sample is selected.
A further description of our responsibilities for the audit of
the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared
for and only for the Company’s members as a body in
accordance with Chapter 3 of Part 16 of the Companies
Act 2006 and for no other purpose. We do not, in giving
these opinions, accept or assume responsibility for any
other purpose or to any other person to whom this report
is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE 74
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF WORLDWIDE HEALTHCARE TRUST PLC CONTINUED
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to
you if, in our opinion:
•
•
•
•
we have not obtained all the information and
explanations we require for our audit; or
adequate accounting records have not been kept by the
Company, or returns adequate for our audit have not
been received from branches not visited by us; or
certain disclosures of Directors’ remuneration specified
by law are not made; 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.
We have no exceptions to report arising from this
responsibility.
Appointment
Following the recommendation of the Audit & Risk
Committee, we were appointed by the members on
14 July 2014 to audit the financial statements for the year
ended 31 March 2015 and subsequent financial periods.
The period of total uninterrupted engagement is 9 years,
covering the years ended 31 March 2015 to 31 March 2023.
Allan McGrath (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Edinburgh
6 June 2023
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023GOVERNANCE INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
Notes
Revenue
£’000
Gains/(Losses) on investments
Exchange losses on currency
balances
Income from investments
AIFM, portfolio management and
performance fees
Other expenses
Net return/(loss) before finance
charges and taxation
Finance costs
Net return/(loss) before taxation
Taxation
Net return/(loss) after taxation
Return/(loss) per share
9
2
3
4
5
6
7
75
2023
Capital
£’000
10,388
Total
£’000
10,388
(18,302)
(18,302)
Revenue
£’000
2022
Capital
£’000
Total
£’000
–
–
(152,475)
(152,475)
(6,342)
(6,342)
–
–
23,945
–
23,945
23,471
–
23,471
(877)
(16,657)
(17,534)
(1,142)
(22)
(1,164)
(938)
(1,305)
1,061
(529)
123
(1,834)
21,926
(24,593)
(2,667)
21,228
(158,285)
(137,057)
(193)
(3,658)
(3,851)
(40)
(761)
(801)
21,733
(28,251)
(6,518)
21,188
(159,046)
(137,858)
(2,021)
(248)
(2,269)
(3,668)
–
(3,668)
19,712
(28,499)
(8,787)
17,520
(159,046)
(141,526)
30.6p
(44.2)
(13.6)
26.8p
(243.5)
(216.7)
The “Total” column of this statement is the Income Statement of the Company. The “Revenue” and “Capital” columns are supplementary to
this and are prepared under guidance published by The Association of Investment Companies.
All revenue and capital items in the above statement derive from continuing operations.
The Company has no recognised gains and losses other than those shown above and therefore no separate Statement of Total
Comprehensive Income has been presented.
The accompanying notes are an integral part of these statements.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS 76
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
At 1 April 2022
Net (loss)/return after taxation
Final dividend paid in respect of year ended
31 March 2022
Interim dividend paid in respect of year ended
31 March 2023
Shares purchased for treasury
Shares cancelled from treasury
At 31 March 2023
FOR THE YEAR ENDED 31 MARCH 2022
At 1 April 2021
Net (loss)/return after taxation
Final dividend paid in respect of year ended
31 March 2021
Interim dividend paid in respect of year ended
31 March 2022
New shares issued
Shares purchased for treasury
At 31 March 2022
Share
capital
£’000
16,385
–
–
–
–
Share
capital
£’000
16,078
–
–
–
307
–
Capital
redemption
reserve
£’000
Share
premium
account
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Total
shareholders’
funds
£’000
8,221
841,599
1,381,038
20,990
2,268,233
–
–
–
–
–
(28,499)
19,712
(8,787)
-
-
(91,514)
–
(12,721)
(12,721)
(4,490)
(4,490)
–
–
(91,514)
–
(120)
120
16,265
8,341
841,599
1,261,025
23,491
2,150,721
Capital
redemption
reserve
£’000
Share
premium
account
£’000
Capital
reserve
£’000
Revenue
reserve
£’000
Total
shareholders’
funds
£’000
8,221
796,357
1,542,628
18,141
2,381,425
–
–
–
45,242
(159,046)
17,520
(141,526)
–
–
–
(10,085)
(10,085)
(4,586)
(4,586)
–
–
45,549
(2,544)
–
(2,544)
16,385
8,221
841,599
1,381,038
20,990
2,268,233
–
–
–
–
–
–
–
–
–
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS STATEMENT OF FINANCIAL POSITION
As at 31 March 2023
77
Fixed assets
Investments
Derivative – OTC swaps
Current assets
Debtors
Cash
Current liabilities
Creditors: amounts falling due within one year
Derivative – OTC swaps
Net current liabilities
Total net assets
Capital and reserves
Share capital
Capital redemption reserve
Share premium account
Capital reserve
Revenue reserve
Total shareholders' funds
Net asset value per share
Notes
2023
£’000
2022
£’000
9
2,186,417
2,379,848
9 & 10
209
283
2,186,626
2,380,131
11
4,376
58,925
14,724
26,594
63,301
41,318
12
(72,105)
(147,804)
9 & 10
(27,101)
(5,412)
(99,206)
(153,216)
(35,905)
(111,898)
2,150,721
2,268,233
13
16,265
16,385
8,341
8,221
841,599
841,599
17
1,261,025
1,381,038
23,491
20,990
2,150,721
2,268,233
14
3,434.5p
3,465.2p
The financial statements on pages 75 to 95 were approved by the Board of Directors and authorised for issue on 6 June 2023 and were
signed on its behalf by:
Doug McCutcheon
Chair
The accompanying notes are an integral part of this statement.
Worldwide Healthcare Trust PLC – Company Registration Number 3023689 (Registered in England)
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS
78
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
Net cash inflow/(outflow) from operating activities
Purchases of investments and derivatives
Sales of investments and derivatives
Realised (loss)/gain on foreign exchange transactions
Net cash inflow/(outflow) from investing activities
Issue of shares
Shares repurchased
Equity dividends paid
Interest paid
Net cash (outflow)/inflow from financing activities
Decrease/(Increase) in net cash/(debt)
Notes
18
2023
£’000
5,394
2022
£’000
(13,329)
13
13
(1,189,133)
(1,330,279)
1,404,617
1,253,138
(18,240)
(5,541)
197,244
(82,682)
–
48,126
(91,514)
(2,544)
(17,211)
(14,671)
(3,851)
(801)
(112,576)
30,110
90,062
(65,901)
Cash flows from operating activities include interest received of £2,301,000 (2022: £968,000) and dividends received of £20,507,000
(2022: £23,853,000).
RECONCILIATION OF NET CASH FLOW MOVEMENT TO MOVEMENT IN NET CASH/(DEBT)
Decrease/(Increase) in net cash/(debt) resulting from cashflows
Losses on foreign currency cash and cash equivalents
Movement in net cash/(debt) in the year
Net debt at 1 April
Net cash/(debt) at 31 March
2023
£’000
2022
£’000
90,062
(65,901)
(62)
(801)
90,000
(66,702)
(87,003)
(20,301)
2,997
(87,003)
Net cash/(debt) includes the bank overdraft of £55,928,000 (2022: £113,597,000) (see note 12) and cash as per the balance sheet of
£58,925,000 (2022: £26,594,000).
The accompanying notes are an integral part of this statement.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
79
1. ACCOUNTING POLICIES
The principal accounting policies, all of which have been applied consistently throughout the year in the preparation of these financial
statements, are set out below:
(A) Basis of preparation
These financial statements have been prepared in accordance with the Companies Act 2006, FRS 102 ‘The Financial Reporting
Standard applicable in the UK and Ireland’ (‘UK GAAP’) and the guidelines set out in the Statement of Recommended Practice (‘SORP’),
published in February 2021, for Investment Trust Companies and Venture Capital Trusts issued by the Association of Investment
Companies (‘AIC’), the historical cost convention, as modified by the valuation of investments and derivatives at fair value. The Board
has considered a detailed assessment of the Company’s ability to meet its liabilities as they fall due, including stress and liquidity tests
which modelled the effects of substantial falls in markets and significant reductions in market liquidity (including further stressing the
current economic conditions) on the Company’s financial position and cash flows. The results of the tests showed that the Company
would have sufficient cash, or the ability to liquidate a sufficient proportion of its listed holdings, to meet its liabilities as they fall due.
Based on the information available to the Directors at the time of this report, including the results of the stress tests, the Company’s
cash balances, and the liquidity of the Company’s listed investments, the Directors are satisfied that the Company has adequate
financial resources to continue in operation for at least the next 12 months from the date of approval of these financial statements
and that, accordingly, it is appropriate to adopt the going concern basis in preparing these financial statements.
The Company’s financial statements are presented in sterling, being the functional and presentational currency of the Company.
All values are rounded to the nearest thousand pounds (£’000) except where otherwise indicated.
In addition, investments and derivatives held at fair value are categorised into a fair value hierarchy based on the degree to which the
inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety,
which are described as follows:
• Level 1 – Quoted prices in active markets.
•
Level 2 – Inputs other than quoted prices included within Level 1 that are observable (i.e. developed using market data), either
directly or indirectly.
•
Level 3 – Inputs are unobservable (i.e. for which market data is unavailable).
Presentation of the Income Statement
In order to reflect better the activities of an investment trust company and in accordance with the SORP, supplementary information
which analyses the Income Statement between items of a revenue and capital nature has been presented alongside the Income
Statement. The net revenue return is the measure the Directors believe appropriate in assessing the Company’s compliance with
certain requirements set out in Sections 1158 and 1159 of the Corporation Tax Act 2010.
Critical Accounting Judgements and Key Sources of Estimation Uncertainty
Critical accounting judgements and key sources of estimation uncertainty used in preparing the financial information are continually
evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be
reasonable. The resulting estimates will, by definition, seldom equal the related actual results.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS 80
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
1. ACCOUNTING POLICIES continued
In the course of preparing the financial statements, the only key source of estimation uncertainty in the process of applying the
Company’s accounting policies, is in relation to the valuation of the unquoted (Level 3) investments. The nature of estimation means
that the actual outcomes could differ from those estimates, possibly significantly. The estimates relate to the investments where there
is no appropriate market price i.e. the private investments. Whilst the board considers the methodologies and assumptions adopted
in the valuation are supportable, reasonable and robust, because of the inherent uncertainty of valuation, those estimated values may
differ significantly from the values that would have been used had a ready market for the investment existed. As at 31 March 2023,
there is no single key assumption used in the valuation of the unquoted investments, or other key source of estimation uncertainty,
that, in the Directors’ opinion has a significant risk of causing a material adjustment to the carrying values of assets and liabilities within
the next financial year.
Unquoted investments are all valued in line with the accounting policy set out below.
(B) Investments
Investments are measured under FRS 102 and are measured initially, and at subsequent reporting dates, at fair value. Investments
are recognised and de-recognised at trade date where a purchase or sale is under a contract whose terms require delivery within the
time frame established by the market concerned. Changes in fair value and gains or losses on disposal are included in the Income
Statement as a capital item.
For quoted securities fair value is either bid price or last traded price, depending on the convention of the exchange on which the
investment is listed.
Fair value is the price for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
In estimating the fair value of unquoted investments, the AIFM and Board apply valuation techniques which are appropriate in light of
the nature, facts and circumstances of the investment, and use reasonable current market data and inputs combined with judgement
and assumptions and apply these consistently. The following principles used in determining the valuation of unquoted investments,
are consistent with the International Private Equity and Venture Capital Valuation (“IPEV”) Guidelines. The assumptions and estimates
made in determining the fair value of each unquoted investment are considered at least each six months or sooner if there is a
triggering event. An example of where a valuation would be considered out of the six-month cycle is the success or failure of a drug
under development to meet an anticipated outcome of its trial, announcement of the company undergoing an initial public offering, or
other performance against tangible development milestones.
The primary valuation method applied in the valuation of the unquoted investments is the probability-weighted expected return method
(PWERM), which considers on a probability weighted basis the future outcomes for the investment. When using the PWERM method
significant judgements are made in estimating the various inputs into the model and recognising the sensitivity of such estimates.
Examples of the factors where significant judgement is made include, but are not limited to, the probability assigned to potential future
outcomes; discount rates; and, the likely exit scenarios for the investor company, for example, IPO or trade sale.
Where the investment being valued was itself made recently, or there has been a third party transaction in the investment, the price
of the transaction may provide a good indication of fair value. Using the Price of Recent Investment technique is not a default and at
each reporting date the fair value of recent investments is estimated to assess whether changes or events subsequent to the relevant
transaction would imply a material change in the investment’s fair value.
When using the price of a recent transaction in the valuations the Company looks to ‘re-calibrate’ this price at each valuation point by
reviewing progress within the investment, comparing against the initial investment thesis, assessing if there are any significant events
or milestones that would indicate the value of the investment value has changed materially and considering whether an alternative
methodology would be more appropriate.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS CONTINUED
81
1. ACCOUNTING POLICIES continued
(C) Derivative financial instruments
The Company uses derivative financial instruments (namely put and call options and equity swaps).
All derivative instruments are valued initially, and at subsequent reporting dates, at fair value in the Statement of Financial Position.
The equity swaps are accounted for as Fixed Assets or Current Liabilities.
All gains and losses on over-the-counter (OTC) equity swaps are accounted for as gains or losses on investments. Where there has
been a re-positioning of the swap, gains and losses are accounted for on a realised basis. All such gains and losses have been debited
or credited to the capital column of the Income Statement.
Cash collateral held by counterparties is included within cash, except where there is a right of offset against the overdraft facility.
(D) Investment income
Dividends receivable are recognised on the ex-dividend date. Where no ex-dividend date is quoted, dividends are recognised when the
Company’s right to receive payment is established. Foreign dividends are grossed up at the appropriate rate of withholding tax, with the
withholding tax recognised in the taxation charge.
Income from fixed interest securities is recognised on a time apportionment basis so as to reflect the effective interest rate. Deposit
interest is accounted for on an accruals basis.
(E) Expenses
All expenses are accounted for on an accruals basis. Expenses are charged through the revenue column of the Income Statement
except as follows:
•
•
expenses which are incidental to the acquisition or disposal of an investment are charged to the capital column of the Income
Statement; and
expenses are charged to the capital column of the Income Statement where a connection with the maintenance or enhancement
of the value of the investments can be demonstrated. In this respect the portfolio management and AIFM fees have been charged
to the Income Statement in line with the Board’s expected long-term split of returns, in the form of capital gains and income, from
the Company’s portfolio. As a result 5% of the portfolio management and AIFM fees are charged to the revenue column of the
Income Statement and 95% are charged to the capital column of the Income Statement.
Any performance fee is charged in full to the capital column of the Income Statement.
(F) Finance costs
Finance costs are accounted for on an accruals basis. Finance costs are charged to the Income Statement in line with the Board’s
expected long-term split of returns, in the form of capital gains and income, from the Company’s portfolio. As a result 5% of the
finance costs are charged to the revenue column of the Income Statement and 95% are charged to the capital column of the Income
Statement. Finance charges are accounted for on an accruals basis in the Income Statement using the effective interest rate method
and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS 82
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
1. ACCOUNTING POLICIES continued
(G) Taxation
The tax effect of different items of expenditure is allocated between capital and revenue using the marginal basis.
Deferred taxation is provided on all timing differences that have originated but not been reversed by the Statement of Financial Position
date other than those differences regarded as permanent. This is subject to deferred tax assets only being recognised when it is
probable that there will be suitable profits from which the reversal of timing differences can be deducted. Any liability to deferred tax is
provided for at the rate of tax enacted or substantially enacted.
(H) Foreign currency
Transactions recorded in overseas currencies during the year are translated into sterling at the appropriate daily exchange rates.
Assets and liabilities denominated in overseas currencies at the Statement of Financial Position date are translated into sterling at the
exchange rates ruling at that date.
Exchange gains/losses on foreign currency balances
Any gains or losses on the translation of foreign currency balances, including the foreign currency overdraft, whether realised or
unrealised, are taken to the capital or the revenue column of the Income Statement, depending on whether the gain or loss is of a
capital or revenue nature.
(I) Capital redemption reserve
This reserve arose when ordinary shares were redeemed by the Company and subsequently cancelled. When ordinary shares are
redeemed by the Company and subsequently cancelled, an amount equal to the par value of the ordinary share capital is transferred
from the ordinary share capital to the capital redemption reserve.
(J) Capital reserve
The following are transferred to this reserve:
• gains and losses on the disposal of investments;
•
•
•
exchange differences of a capital nature, including the effects of changes in exchange rates on foreign currency borrowings;
expenses, together with the related taxation effect, in accordance with the above policies; and
changes in the fair value of investments and derivatives.
This reserve can be used to distribute realised capital profits by way of dividend or share buy backs. Any gains in the fair value of
investments that are not readily convertible to cash are treated as unrealised gains in the capital reserve. Distributions are only payable
out of the capital reserve if capital reserves are greater than the proposed distribution and positive on the date of distribution.
(K) Revenue reserve
The revenue reserve is distributable by way of dividend. Dividends are only payable out of the revenue reserve if revenue reserves are
greater than the proposed dividend and positive on the date of distribution.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS CONTINUED
83
1. ACCOUNTING POLICIES continued
(L) Dividend payments
Dividends paid by the Company on its shares are recognised in the financial statements in the year in which they become payable and
are shown in the Statement of Changes in Equity.
(M) Cash and cash equivalents
Cash comprises cash at bank and cash equivalents are short-term, highly liquid investments that are readily convertible to known
amounts of cash and are subject to an insignificant risk of changes in value.
Bank overdrafts are considered as a component of cash and cash equivalents as they are repayable on demand and form an integral
part of the Company’s cash management.
2. INCOME FROM INVESTMENTS
Income from investments
Overseas dividends
Fixed interest income
UK dividends
Other income
Derivatives
Deposit interest
Total income from investments
Total income comprises:
Dividends
Interest
2023
£’000
2022
£’000
18,431
19,678
184
3,212
772
2,825
21,827
23,275
79
2,039
151
45
23,945
23,471
21,643
22,503
2,302
968
23,945
23,471
3. AIFM, PORTFOLIO MANAGEMENT AND PERFORMANCE FEES
AIFM fee
Portfolio management fee
Performance fee (reversal)*
Revenue
£’000
151
726
–
877
2023
Capital
£’000
2,862
Total
£’000
3,013
13,795
14,521
–
–
16,657
17,534
Revenue
£’000
160
778
–
938
2022
Capital
£’000
3,046
Total
£’000
3,206
14,781
15,559
(18,888)
(18,888)
(1,061)
(123)
* During the year ended 31 March 2022, due to underperformance against the Benchmark, a reversal of prior period performance fee provisions totalling
£18,888,000 occurred.
See page 44 for further information on the performance fee.
Further details on the above fees are set out in the Strategic Report on pages 28 and 29 and in the Report of the Directors on
page 44.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS 84
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
4. OTHER EXPENSES
Directors’ remuneration
Employer’s NIC on Directors’ remuneration
Auditors’ remuneration for the audit of the Company’s financial statements
Auditors’ remuneration for non-audit services
Depositary and custody fees
Listing fees
Registrar fees
Legal and professional costs
Broker fees
Other costs
Professional fees (Capital)^
Details of the amounts paid to Directors are included in the Directors’ Remuneration Report on page 64.
^ Professional fees in respect of acquisition of unquoted investments. These fees do not form part of the ongoing charge ratio.
5. FINANCE COSTS
Finance costs
6. TAXATION
(A) Analysis of charge in year
Corporation tax at 19% (2022: 19%)
Overseas taxation
Revenue
£’000
193
2023
Capital
£’000
3,658
Total
£’000
3,851
Revenue
£’000
40
Revenue
£’000
–
2,021
2,021
2023
Capital
£’000
–
248
248
Total
£’000
–
2,021
2,269
Revenue
£’000
–
3,668
3,668
2022
Capital
£’000
761
2022
Capital
£’000
–
–
–
2023
£’000
212
2022
£’000
207
18
54
–
208
85
45
181
(15)
354
1,142
22
1,164
20
47
5
213
77
63
255
117
301
1,305
529
1,834
Total
£’000
801
Total
£’000
–
3,668
3,668
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS CONTINUED
85
6. TAXATION continued
(B) Factors affecting the tax charge for the year
Approved investment trusts are exempt from tax on capital gains made within the Company.
The tax charged for the year is higher (2022: higher) than the standard rate of corporation tax of 19% (2022: 19%).
The difference is explained below.
Revenue
£’000
2023
Capital
£’000
Total
£’000
Revenue
£’000
2022
Capital
£’000
Total
£’000
Net return before taxation
21,733
(28,251)
(6,518)
21,188
(159,046)
(137,858)
Corporation tax at 19% (2022: 19%)
4,129
(5,415)
(1,286)
4,026
(30,219)
(26,193)
Non-taxable gains on investments
–
1,551
Overseas withholding taxation
Overseas capital gains tax
Non taxable dividends
Excess management expenses
Total tax charge
(C) Provision for deferred tax
2,021
–
(4,112)
(17)
2,021
–
248
–
3,864
248
1,551
2,021
248
3,668
–
(4,112)
(4,276)
3,847
2,269
250
3,668
–
30,175
30,175
–
–
–
44
–
3,668
–
(4,276)
294
3,668
No provision for deferred taxation has been made in the current or prior year. The Company has not provided for deferred tax
on capital profits and losses arising on the revaluation or disposal of investments, as it is exempt from tax on these items
because of its status as an investment trust company.
The Company has not recognised a deferred tax asset of £49,985,000 (25% tax rate) (2022: £45,055,000 (25% tax rate)) as
a result of excess management expenses and overdraft expenses. It is not anticipated that these excess expenses will be
utilised in the foreseeable future.
7. RETURN/(LOSS) PER SHARE
The return/(loss) per share is based on the following figures:
Revenue return
Capital (loss)
Weighted average number of ordinary shares in issue during the year
Revenue return per ordinary share
Capital (loss) per ordinary share
2023
£’000
2022
£’000
19,712
17,520
(28,499)
(159,046)
(8,787)
(141,526)
64,474,422
65,307,132
30.6p
26.8p
(44.2p)
(243.5p)
(13.6p)
(216.7p)
The calculation of the total, revenue and capital (loss)/return per ordinary share is carried out in accordance with IAS 33,
“Earnings per Share”, in accordance with the requirements of FRS 102.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS 86
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
8. DIVIDENDS
Under UK Company Law, final dividends are not recognised until they are approved by shareholders and interim dividends are
not recognised until they are paid. They are also debited directly from reserves. Amounts recognised as distributable in these
financial statements were as follows:
Final dividend in respect of the year ended 31 March 2022
Interim dividend in respect of the year ended 31 March 2023
Final dividend in respect of the year ended 31 March 2021
Interim dividend in respect of the year ended 31 March 2022
2023
£’000
12,721
4,490
–
–
2022
£’000
–
–
10,085
4,586
17,211
14,671
In respect of the year ended 31 March 2023, an interim dividend of 7.0p per share was paid on 11 January 2023. A final
dividend of 24.0p will be payable, subject to shareholder approval, on 26 July 2023, the associated ex dividend date
will be 8 June 2023. The total dividends payable in respect of the year ended 31 March 2023 amount to 31.0p per share
(2022: 26.5p per share). The aggregate cost of the final dividend, based on the number of shares in issue (excluding shares
held in treasury) at 5 June 2023, will be £14,717,000. In accordance with FRS 102 dividends will be reflected in the financial
statements for the year in which they become payable. Total dividends in respect of the financial year, which is the basis on
which the requirements of s1158 of the Corporation Tax Act 2010 are considered, are set out below.
Revenue available for distribution by way of dividend for the year
Interim dividend in respect of the year ended 31 March 2022
Final dividend in respect of the year ended 31 March 2022
Interim dividend in respect of the year ended 31 March 2023
Final dividend in respect of the year ended 31 March 2023*
Net retained revenue
* based on 61,321,726 shares in issue (excluding shares held in treasury) as at 5 June 2023.
2023
£’000
2022
£’000
19,712
17,520
–
–
(4,586)
(12,721)
(4,490)
(14,717)
–
–
505
213
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS CONTINUED
87
9. INVESTMENTS AND DERIVATIVE FINANCIAL INSTRUMENTS
Cost at 1 April 2022
Quoted
Investments
£’000
Unquoted
Investments
£’000
Derivative
Financial
Instruments -
Net
£’000
Total
£’000
1,952,701
136,760
–
2,089,461
Investment holdings gains/(losses) at 1 April 2022
254,674
35,713
(5,129)
285,258
Valuation at 1 April 2022
Movement in the year:
Purchases at cost
Sales - proceeds
Transfer between levels*
2,207,375
172,473
(5,129)
2,374,719
1,168,434
–
–
1,168,434
(1,390,864)
(4,332)
1,072
(1,394,124)
14,019
(14,019)
–
–
Net movement in investment holding gains/(losses)
42,283
(8,952)
(22,835)
10,496
Valuation at 31 March 2023
Cost at 31 March 2023
2,041,247
145,170
(26,892)
2,159,525
1,828,139
122,597
–
1,950,736
Investment holding gains/(losses) at 31 March 2023
213,108
22,573
(26,892)
208,789
Valuation at 31 March 2023
* See Note 16.
2,041,247
145,170
(26,892)
2,159,525
The Company received £1,393,875,000 (2022: £1,253,317,000) from investments and derivatives sold in the year. The book
cost of these was £1,307,159,000 (2022: £1,278,065,000). These investments and derivatives have been revalued over time
and until they were sold any unrealised gains/losses were included in the fair value of the investments.
Net movement in investment holding gains/(losses) in the year
Net movement in derivative holding (losses)/gains in the year
Effective interest rate amortisation
Gains/(Losses) on investments
2023
£’000
2022
£’000
33,331
(130,139)
(22,835)
(21,985)
(108)
(351)
10,388
(152,475)
Purchase transaction costs were £1,660,000 (2022: £1,668,000). Sales transaction costs were £1,266,000 (2022: £1,244,000).
These comprise mainly commission and stamp duty.
10. DERIVATIVE FINANCIAL INSTRUMENTS
Fair value of OTC equity swaps (asset)
Fair value of OTC equity swaps (liability)
See note 9 above for movements during the year.
2023
£’000
209
2022
£’000
283
(27,101)
(5,412)
(26,892)
(5,129)
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS 88
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
11. DEBTORS
Amounts due from brokers
Withholding taxation recoverable
VAT recoverable
Prepayments and accrued income
12. CREDITORS AMOUNTS FALLING DUE WITHIN ONE YEAR
Amounts due to brokers
Overdraft drawn*
Other creditors and accruals
2023
£’000
2022
£’000
88
10,581
2,882
2,587
–
–
1,406
1,556
4,376
14,724
2023
£’000
2022
£’000
9,432
30,131
55,928
113,597
6,745
4,076
72,105
147,804
* The Company’s borrowing requirements are met through the utilisation of an overdraft facility provided by J.P. Morgan Securities LLC. The overdraft is drawn down
in U.S. dollars. Interest on the drawn overdraft is charged at the United States Overnight Bank Funding Rate plus 45 basis points.
As described on page 93, J.P. Morgan Securities LLC may take investments up to 140% of the value of the overdrawn balance as collateral and has been granted a
first priority security interest or lien over the Company’s assets.
13. SHARE CAPITAL
Issued and fully paid at 1 April 2022
Shares purchased for treasury
Shares cancelled from treasury
At 31 March 2023
Issued and fully paid:
Ordinary Shares of 25p
Shares
number
Treasury
shares
number
Total
shares
in issue
number
65,457,246
80,509
65,537,755
(2,836,483)
2,836,483
–
–
(478,977)
(478,977)
62,620,763
2,438,015
65,058,778
2023
£’000
2022
£’000
16,265
16,385
During the year ended 31 March 2023 no new shares were issued, 2,836,483 shares were repurchased into treasury at a cost
of £91,514,000 (2022: 1,227,500 shares were issued raising £45,549,000 and 80,509 shares were repurchased for treasury at
a cost of £2,544,000).
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS CONTINUED
89
14. NET ASSET VALUE PER SHARE
Net asset value per share
2023
2022
3,434.5p
3,465.2p
The net asset value per share is based on the assets attributable to equity shareholders of £2,150,721,000 (2022:
£2,268,233,000) and on the number of shares in issue at the year end (excluding those shares held in treasury) of 62,620,763
(2022: 65,457,246).
15. RELATED PARTIES
The following are considered to be related parties:
• Frostrow Capital LLP (the Company’s AIFM, a related party under the Listing Rules only)
• OrbiMed Capital LLC (the Company’s Portfolio Manager)
• The Directors of the Company
Sven Borho is a Managing Partner at OrbiMed and has waived his Director’s fee of £33,573 (2022: £33,573). Details of
fees paid to OrbiMed by the Company can be found in note 3 on page 83. All material related party transactions have been
disclosed in notes 3 and 4 on pages 83 and 84.
Details of the remuneration of all Directors can be found on page 65. Details of the Directors’ interests in the capital of the
Company can also be found on page 64.
Three current and two former partners at OrbiMed have a minority financial interest totalling 20% in Frostrow, the Company’s
AIFM. Details of the fees paid to Frostrow by the Company can be found in note 3 on page 83.
16. FINANCIAL INSTRUMENTS
Risk management policies and procedures
The Company’s financial instruments comprise securities and other investments, derivative instruments, cash balances,
overdrafts and debtors and creditors that arise directly from its operations.
As an investment trust, the Company invests in equities and other investments for the long term so as to secure its
investment objective. In pursuing its investment objective, the Company is exposed to a variety of risks that could result in a
reduction in the Company’s net assets.
The main risks that the Company faces arising from its financial instruments are:
(i) market risk (including foreign currency risk, interest rate risk and other price risk)
(ii) liquidity risk
(iii) credit risk
These risks, with the exception of liquidity risk, and the Directors’ approach to the management of them have not changed
from the previous accounting year. The AIFM, in close co-operation with the Board and the Portfolio Manager, co-ordinates
the Company’s risk management.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS 90
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
16. FINANCIAL INSTRUMENTS continued
Use of derivatives
Equity swaps are used within the Company’s portfolio.
OTC equity swaps
The Company uses OTC equity swap positions to gain access to the Indian and Chinese markets when it is more cost
effective to gain access via swaps or to gain exposure to thematic baskets of stocks.
Offsetting disclosure
Swap trades and OTC derivatives are traded under ISDA† Master Agreements. The Company currently has such agreements
in place with Goldman Sachs and JP Morgan.
These agreements create a right of set-off that becomes enforceable only following a specified event of default, or in other
circumstances not expected to arise in the normal course of business. As the right of set-off is not unconditional, for financial
reporting purposes, the Company does not offset derivative assets and derivative liabilities.
†International Swap Dealers Association Inc.
(i) Other price risk
In pursuance of the Company’s Investment Objective the Company’s portfolio, including its derivatives, is exposed to the risk
of fluctuations in market prices and foreign exchange rates.
The Board manage these risks through the use of limits and guidelines, monthly compliance reports from Frostrow and
reports from Frostrow and OrbiMed presented at each Board meeting.
Other price risk exposure
The Company’s gross exposure to other price risk is represented by the fair value of the investments and the underlying
exposure through the derivative investments held at the year end as shown in the table below.
Investments
OTC equity swaps
2023
2022
Assets
£’000
Liabilities
£’000
Notional*
exposure
£’000
Assets
£’000
Liabilities
£’000
Notional*
exposure
£’000
2,186,417
–
2,186,417
2,379,848
–
2,379,848
209
(27,101)
190,704
283
(5,412)
135,018
2,186,626
(27,101)
2,377,121
2,380,131
(5,412)
2,514,866
* The notional exposure is calculated in accordance with the AIFMD requirements for calculating exposure via derivatives. See glossary beginning on page 97.
Other price risk sensitivity
If market prices of all of the Company’s financial instruments including the derivatives at the Statement of Financial Position
date had been 25% higher or lower (2022: 25% higher or lower) while all other variables remained constant: the revenue return
would have decreased/increased by £0.2 million (2022: £0.2 million); the capital return would have increased/decreased by
£596.6 million (2022: £625.4 million); and, the return on equity would have increased/decreased by £594.6 million (2022:
£625.2 million). The calculations are based on the portfolio as at the respective Statement of Financial Position dates and are
not representative of the year as a whole.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS CONTINUED
91
16. FINANCIAL INSTRUMENTS continued
(ii) Foreign currency risk
A significant proportion of the Company’s portfolio and derivative positions are denominated in currencies other than sterling
(the Company’s functional currency, and the currency in which it reports its results). As a result, movements in exchange rates
can significantly affect the sterling value of those items.
Foreign currency exposure
The fair values of the Company’s monetary assets and liabilities that are denominated in foreign currencies are shown below.
U.S. dollar
Swiss franc
Japanese yen
Hong Kong dollar
Other
Current
assets
£’000
2023
Current
liabilities
£’000
Investments
£’000
Current
assets
£’000
2022
Current
liabilities
£’000
Investments
£’000
115,823
(124,286)
1,488,321
64,264
(169,551)
1,821,239
2,466
793
–
194
–
–
–
–
84,999
2,202
135,398
109,170
201,798
332
851
155
–
114
113,899
83,225
(851)
190,260
–
30,803
119,276
(124,286)
2,019,686
67,804
(170,288)
2,239,426
Foreign currency sensitivity
The following table details the sensitivity of the Company’s net return for the year and shareholders’ funds to a 10% increase
and decrease in sterling against the relevant currency (2022: 10% increase and decrease).
These percentages have been determined based on market volatility in exchange rates over the previous 12 months. The
sensitivity analysis is based on the Company’s significant foreign currency exposures at each Statement of Financial Position
date.
2023
USD
£’000
YEN
£’000
Sterling depreciates
188,606
15,132
CHF
£’000
9,718
HKD
£’000
USD
£’000
12,130
206,233
2022
YEN
£’000
9,297
CHF
£’000
HKD
£’000
12,900
21,140
Sterling appreciates
(154,314)
(12,381)
(7,951)
(9,925)
(168,736)
(7,606)
(10,555)
(17,296)
(iii) Interest rate risk
Interest rate changes may affect:
–
the interest payable on the Company’s variable rate borrowings;
–
the level of income receivable from floating and fixed rate securities and cash at bank and on deposit;
–
the fair value of investments in fixed interest securities.
Interest rate exposure
The Company’s main exposure to interest rate risks is through its overdraft facility with J.P. Morgan Securities LLC, which is
repayable on demand, and its holding in fixed interest securities. The exposure of financial assets and liabilities to fixed and
floating interest rates, is shown below.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS 92
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
16. FINANCIAL INSTRUMENTS continued
At 31 March 2023, the Company held no investments in securitised debt (2022: 0.4% of the portfolio). The exposure is shown
in the table below.
2023
2022
Weighted
average
period
for which
rate is
fixed
Years
Weighted
average
fixed
interest
rate
%
–
–
–
–
–
–
–
–
Weighted
average
period
for which
rate is
fixed
Years
Weighted
average
fixed
interest
rate
%
Fixed
rate
£’000
Floating
rate
£’000
–
–
–
–
–
–
2.9
2.6
100,366
(97,369)
(217,596)
(214,599)
Fixed
rate
£’000
5,024
–
–
–
Floating
rate
£’000
–
56,336
(143,339)
(140,147)
5,024
(227,150)
Unquoted debt
investments
Cash
Overdraft facility
Financed swap
positions
All interest rate exposures are held in U.S. dollars.
Cash of £100.4 million (2022: £56.3 million) was held as collateral against the financed swap positions, of which £41.4 million
(2022: £29.7 million) was offset against the overdraft position.
Interest rate sensitivity
If interest rates had been 1% higher or lower and all other variables were held constant, the Company’s net return for the year
ended 31 March 2023 and the net assets would increase/decrease by £2.1 million (2022: increase/decrease by £2.3 million).
(iv) Liquidity risk
This is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.
Management of the risk
Liquidity risk is not considered significant as the majority of the Company’s assets are investments in quoted securities that
are readily realisable within one week, in normal market conditions. There maybe circumstances where market liquidity is
lower than normal. Stress tests have been performed to understand how long the portfolio would take to realise in such
situations. The Board is comfortable that in such a situation the Company would be able to meet its liabilities as they fall due.
Liquidity exposure and maturity
Contractual maturities of the financial liability exposures as at 31 March 2023, based on the earliest date on which payment
can be required, are as follows:
Overdraft facility
Amounts due to brokers and accruals
OTC equity swaps
2023
2022
3 to 12
months
£’000
3 months
or less
£’000
3 to 12
months
£’000
–
–
97,369
16,177
–
–
3 months
or less
£’000
143,339
30,131
27,101
–
5,412
–
27,101
113,546
5,412
173,470
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS CONTINUED
93
16. FINANCIAL INSTRUMENTS continued
£41.4 million of cash held as collateral is offset against the overdraft facility in the Statement of Financial Position, as set out
in Note 16(iii) above.
(v) Credit risk
Credit risk is the risk of failure of a counterparty to discharge its obligations resulting in the Company suffering a financial loss.
The carrying amounts of financial assets best represent the maximum credit risk at the Statement of Financial Position date.
The Company’s quoted securities are held on its behalf by J.P. Morgan Securities LLC acting as the Company’s Custodian and
Prime Broker.
As noted on page 32, certain of the Company’s assets can be held by J.P. Morgan Securities LLC as collateral against
the overdraft provided by them to the Company. As at 31 March 2023 such assets held by J.P. Morgan Securities LLC are
available for rehypothecation (see Glossary on page 99). As at 31 March 2023, assets with a total market value of £134.7
million (2022: £203.1 million) were available to J.P. Morgan Securities LLC to be used as collateral against the overdraft
facility which equates to 140% of the overdrawn position (calculated on a settled basis).
CREDIT RISK EXPOSURE
Unquoted debt investments
Derivative – OTC equity swaps
Current assets:
Other receivables (amounts due from brokers, dividends and interest receivable)
Cash
2023
£’000
–
209
2022
£’000
5,024
283
4,376
58,925
14,724
26,594
(vi) Fair value of financial assets and financial liabilities
Financial assets and financial liabilities are either carried in the Statement of Financial Position at their fair value (investments
and derivatives) or the Statement of Financial Position amount is a reasonable approximation of fair value (due from brokers,
dividends and interest receivable, due to brokers, accrual, cash at bank, and the overdraft).
(vii) Hierarchy of investments
The Company has classified its financial assets designated at fair value through profit or loss and the fair value of derivative
financial instruments using a fair value hierarchy that reflects the significance of the inputs used in making the fair value
measurements. The hierarchy has the following levels:
• Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
•
Level 2 – inputs other than quoted prices included with Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices); and
• Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS 94
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
16. FINANCIAL INSTRUMENTS continued
As of 31 March 2023
Investments held at fair value through profit or loss
Derivatives: OTC swaps (assets)
Derivatives: OTC swaps (liabilities)
Level 1
£’000
2,041,247
–
–
Level 2
£’000
Level 3
£’000
Total
£’000
–
209
(27,101)
145,170
2,186,417
–
–
209
(27,101)
Financial instruments measured at fair value
2,041,247
(26,892)
145,170
2,159,525
As at 31 March 2023, ten equity investments and a deferred consideration investment have been classified as level 3. All level
3 positions have been valued in accordance with the accounting policy set out in Note 1(b).
During 2023 one unquoted investment was transferred to Level 1 following their initial public offerings.
As of 31 March 2022
Investments held at fair value through profit or loss
Derivatives: OTC swaps (assets)
Derivatives: OTC swaps (liabilities)
Level 1
£’000
2,207,375
–
–
Level 2
£’000
Level 3
£’000
Total
£’000
–
283
(5,412)
172,473
2,379,848
–
–
283
(5,412)
Financial instruments measured at fair value
2,207,375
(5,129)
172,473
2,374,719
As at 31 March 2022, one debt, twelve equity and a deferred consideration investment have been classified as Level 3. All
level 3 positions have been valued using an independent third party pricing source or using the price of a recent transaction.
During 2022 four unquoted investments were transferred to Level 1 following their initial public offerings.
(viii) Capital management policies and procedures
The Company’s capital management objectives are to ensure that it will be able to continue as a going concern and to
maximise the income and capital return to its equity shareholders through an appropriate level of gearing or leverage.
The Board’s policy on gearing and leverage is set out on page 9.
As at 31 March 2023, the Company had a net leverage percentage of 10.5% (2022: 10.9%).
The capital structure of the Company consists of the equity share capital, retained earnings and other reserves as shown in
the Statement of Financial Position on page 77.
The Board, with the assistance of the AIFM and the Portfolio Manager, monitors and reviews the broad structure of the
Company’s capital on an ongoing basis. This includes a review of:
–
the planned level of gearing, which takes into account the Portfolio Manager’s view of the market;
–
the need to buy back equity shares, either for cancellation or to hold in treasury, in light of any share price discount to net
asset value per share in accordance with the Company’s share buy-back policy;
–
the need for new issues of equity shares, including issues from treasury; and
–
the extent to which revenue in excess of that which is required to be distributed should be retained.
The Company’s objectives, policies and processes for managing capital are unchanged from the preceding accounting year.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS CONTINUED
95
17. CAPITAL RESERVE
At 1 April 2022
Net gains/(losses) on investments
Expenses and taxation charged to capital
Exchange loss on currency balances
Shares repurchased for Treasury
At 31 March 2023
Capital Reserves
Investment
Holding
Gains*
£’000
Other
£’000
Total
£’000
932,497
448,541
1,381,038
86,857
(76,469)
10,388
(20,585)
(18,302)
(91,514)
–
–
–
(20,585)
(18,302)
(91,514)
888,953
372,072
1,261,025
* Investment holding gains relate to the revaluation of investments and derivatives held at the reporting date. (See note 9 beginning on page 87 for further details).
Under the Company’s Articles of Association, sums within “capital reserves – other” are also available for distribution.
18. RECONCILIATION OF OPERATING (LOSS)/RETURN TO NET CASH INFLOW/(OUTFLOW) FROM
OPERATING ACTIVITIES
Loss before finance charges and taxation
Add: capital loss before finance charges and taxation
Revenue return before finance charges and taxation
Expenses charged to capital
Decrease in other debtors
Increase/(Decrease) in provisions, and other creditors and accruals
Net taxation suffered on investment income
Amortisation
Net cash inflow/(outflow) from operating activities
2023
£’000
2022
£’000
(2,667)
(137,057)
24,593
158,285
21,926
21,228
(16,679)
150
532
1,342
2,669
(32,120)
(2,564)
(3,960)
(108)
(351)
5,394
(13,329)
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FINANCIAL STATEMENTS 96
SHAREHOLDER INFORMATION
Share prices
The Company’s shares are listed on the London Stock
Exchange under ‘Investment Companies’. The price is given
daily in the Financial Times and other newspapers.
Change of address
Communications with shareholders are mailed to the
address held on the share register. In the event of a change
of address or other amendment this should be notified to
the Company’s Registrars, Link Group, under the signature
of the registered holder.
Daily net asset value
The daily net asset value of the Company’s shares can be
obtained on the Company’s website at www.worldwidewh.com
and is published daily via the London Stock Exchange.
FINANCIAL CALENDAR
31 March
Financial Year End
May
July
Final Results Announced
Annual General Meeting
30 September
Half Year End
November
Half Year Results Announced
January/July
Dividends Payable
Annual general meeting
The Annual General Meeting of Worldwide Healthcare Trust
PLC will be held at Saddlers’ Hall, 40 Gutter Lane, London
EC2V 6BR on Tuesday, 18 July 2023 from 12.30 p.m. Please
refer to the Statement from the Chair on pages 4 to 7 for
details of this year’s arrangements.
Dividends
The Company pays an interim and a final dividend in
January and July each year. Shareholders who wish to
have dividends paid directly into a bank account, rather
than by cheque to their registered address, can complete a
mandate form for the purpose. Mandates may be obtained
from the Company’s Registrars, Link Group, on request.
See page 110 for their contact details.
Profile of the company’s ownership
% of Ordinary Shares held at 31 March.
(cid:53)(cid:87)(cid:78)(cid:91)(cid:70)(cid:89)(cid:74)(cid:5)(cid:60)(cid:74)(cid:70)(cid:81)(cid:89)(cid:77)(cid:5)(cid:50)(cid:70)(cid:83)(cid:70)(cid:76)(cid:74)(cid:87)(cid:88)(cid:5)(cid:70)(cid:83)(cid:73)(cid:5)(cid:53)(cid:87)(cid:78)(cid:91)(cid:70)(cid:89)(cid:74)(cid:5)(cid:39)(cid:70)(cid:83)(cid:80)(cid:88)
(cid:56)(cid:77)(cid:70)(cid:87)(cid:74)(cid:88)(cid:5)(cid:77)(cid:74)(cid:81)(cid:73)(cid:5)(cid:91)(cid:78)(cid:70)(cid:5)(cid:78)(cid:83)(cid:91)(cid:74)(cid:88)(cid:89)(cid:82)(cid:74)(cid:83)(cid:89)(cid:5)(cid:85)(cid:81)(cid:70)(cid:89)(cid:75)(cid:84)(cid:87)(cid:82)(cid:88)
(cid:50)(cid:90)(cid:89)(cid:90)(cid:70)(cid:81)(cid:5)(cid:43)(cid:90)(cid:83)(cid:73)(cid:88)
(cid:53)(cid:87)(cid:78)(cid:91)(cid:70)(cid:89)(cid:74)(cid:5)(cid:60)(cid:74)(cid:70)(cid:81)(cid:89)(cid:77)(cid:5)(cid:50)(cid:70)(cid:83)(cid:70)(cid:76)(cid:74)(cid:87)(cid:88)(cid:5)(cid:70)(cid:83)(cid:73)(cid:5)(cid:53)(cid:87)(cid:78)(cid:91)(cid:70)(cid:89)(cid:74)(cid:5)(cid:39)(cid:70)(cid:83)(cid:80)(cid:88)
(cid:53)(cid:74)(cid:83)(cid:88)(cid:78)(cid:84)(cid:83)(cid:88)
(cid:56)(cid:77)(cid:70)(cid:87)(cid:74)(cid:88)(cid:5)(cid:77)(cid:74)(cid:81)(cid:73)(cid:5)(cid:91)(cid:78)(cid:70)(cid:5)(cid:78)(cid:83)(cid:91)(cid:74)(cid:88)(cid:89)(cid:82)(cid:74)(cid:83)(cid:89)(cid:5)(cid:85)(cid:81)(cid:70)(cid:89)(cid:75)(cid:84)(cid:87)(cid:82)(cid:88)
(cid:46)(cid:83)(cid:88)(cid:90)(cid:87)(cid:70)(cid:83)(cid:72)(cid:74)
(cid:55)(cid:74)(cid:89)(cid:70)(cid:78)(cid:81)
(cid:50)(cid:90)(cid:89)(cid:90)(cid:70)(cid:81)(cid:5)(cid:43)(cid:90)(cid:83)(cid:73)(cid:88)
(cid:53)(cid:74)(cid:83)(cid:88)(cid:78)(cid:84)(cid:83)(cid:88)
(cid:40)(cid:77)(cid:70)(cid:87)(cid:78)(cid:89)(cid:78)(cid:74)(cid:88)
(cid:46)(cid:83)(cid:88)(cid:90)(cid:87)(cid:70)(cid:83)(cid:72)(cid:74)
(cid:43)(cid:90)(cid:83)(cid:73)(cid:5)(cid:84)(cid:75)(cid:5)(cid:43)(cid:90)(cid:83)(cid:73)(cid:88)
(cid:55)(cid:74)(cid:89)(cid:70)(cid:78)(cid:81)
(cid:46)(cid:83)(cid:91)(cid:5)(cid:57)(cid:87)(cid:90)(cid:88)(cid:89)(cid:88)
(cid:40)(cid:77)(cid:70)(cid:87)(cid:78)(cid:89)(cid:78)(cid:74)(cid:88)
(cid:40)(cid:84)(cid:87)(cid:85)(cid:84)(cid:87)(cid:70)(cid:89)(cid:74)
(cid:43)(cid:90)(cid:83)(cid:73)(cid:5)(cid:84)(cid:75)(cid:5)(cid:43)(cid:90)(cid:83)(cid:73)(cid:88)
(cid:41)(cid:78)(cid:87)(cid:74)(cid:72)(cid:89)(cid:84)(cid:87)(cid:88)
(cid:46)(cid:83)(cid:91)(cid:5)(cid:57)(cid:87)(cid:90)(cid:88)(cid:89)(cid:88)
(cid:40)(cid:84)(cid:87)(cid:85)(cid:84)(cid:87)(cid:70)(cid:89)(cid:74)
(cid:41)(cid:78)(cid:87)(cid:74)(cid:72)(cid:89)(cid:84)(cid:87)(cid:88)
(cid:22)(cid:19)(cid:24)
(cid:22)(cid:19)(cid:26)
(cid:22)(cid:19)(cid:22)
(cid:21)(cid:19)(cid:28)
(cid:21)(cid:19)(cid:27)
(cid:21)(cid:19)(cid:26)
(cid:21)(cid:19)(cid:22)
(cid:22)(cid:19)(cid:24)
(cid:22)(cid:19)(cid:22)
(cid:24)(cid:19)(cid:26)
(cid:24)(cid:19)(cid:25)
(cid:21)(cid:19)(cid:28)
(cid:22)(cid:19)(cid:26)
(cid:28)(cid:19)(cid:24)
(cid:29)(cid:19)(cid:29)
(cid:21)(cid:19)(cid:27)
(cid:21)(cid:19)(cid:26)
(cid:21)(cid:19)(cid:22)
(cid:24)(cid:19)(cid:26)
(cid:24)(cid:19)(cid:25)
(cid:28)(cid:19)(cid:24)
(cid:29)(cid:19)(cid:29)
(cid:23)(cid:25)(cid:19)(cid:26)
(cid:23)(cid:27)(cid:19)(cid:21)
(cid:23)(cid:25)(cid:19)(cid:26)
(cid:23)(cid:27)(cid:19)(cid:21)
(cid:23)(cid:21)(cid:23)(cid:24)
(cid:23)(cid:21)(cid:23)(cid:24)
(cid:22)(cid:19)(cid:22)
(cid:22)(cid:19)(cid:22)
(cid:22)(cid:19)(cid:22)
(cid:21)(cid:19)(cid:26)
(cid:21)(cid:19)(cid:23)
(cid:21)(cid:19)(cid:22)
(cid:22)(cid:19)(cid:30)
(cid:22)(cid:19)(cid:22)
(cid:22)(cid:19)(cid:22)
(cid:22)(cid:19)(cid:22)
(cid:24)(cid:19)(cid:29)
(cid:21)(cid:19)(cid:26)
(cid:21)(cid:19)(cid:23)
(cid:22)(cid:19)(cid:30)
(cid:28)(cid:19)(cid:26)
(cid:21)(cid:19)(cid:22)
(cid:24)(cid:19)(cid:29)
(cid:28)(cid:19)(cid:26)
(cid:23)(cid:25)(cid:19)(cid:23)
(cid:23)(cid:21)(cid:23)(cid:21)
(cid:23)(cid:21)(cid:23)(cid:23)
(cid:26)(cid:29)(cid:19)(cid:26)
(cid:23)(cid:21)(cid:23)(cid:21)
(cid:23)(cid:21)(cid:23)(cid:23)
(cid:26)(cid:29)(cid:19)(cid:26)
(cid:23)(cid:25)(cid:19)(cid:23)
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FURTHER INFORMATION GLOSSARY OF TERMS AND ALTERNATIVE
PERFORMANCE MEASURES (‘APMS’)
97
ALTERNATIVE INVESTMENT FUND MANAGERS
DIRECTIVE (AIFMD)
Agreed by the European Parliament and the Council of the
European Union and transported into UK legislation, the
AIFMD classifies certain investment vehicles, including
investment companies, as Alternative Investment Funds
(AIFs) and requires them to appoint an Alternative
Investment Fund Manager (AIFM) and a depositary to
manage and oversee the operations of the investment
vehicle. The Board of the Company retains responsibility
for strategy, operations and compliance and the Directors
retain a fiduciary duty to shareholders.
Alternative performance measure (‘APM’)
An APM is a numerical measure of the Company’s current,
historical or future financial performance, financial position
or cash flows, other than a financial measure defined or
specified in the applicable financial framework. In selecting
these Alternative Performance Measures, the Directors
considered the key objectives and expectations of typical
investors in an investment trust such as the Company.
Discount or premium*
Equity swaps
An equity swap is an agreement where one party
(counterparty) transfers the total return of an underlying
equity position to the other party (swap holder) in exchange
for a payment of the principal, and interest for financed
swaps, at a set date. Total return includes dividend income
and gains or losses from market movements. The exposure
of the holder is the market value of the underlying equity
position.
The Company uses two types of equity swap:
•
•
funded, where payment is made on acquisition. They
are equivalent to holding the underlying equity position
with the exception of additional counterparty risk and
not possessing voting rights in the underlying; and,
financed, where payment is made on maturity. Financed
swaps increase exposure by the value of the underlying
equity position, with no initial outlay and no increase
in the investment portfolio’s value – there is therefore
embedded leverage within a financed swap due to the
deferral of payment to maturity.
The Company employs swaps for two purposes:
A description of the difference between the share price and
the net asset value per share. The size of the discount or
premium is calculated by subtracting the share price from
the net asset value per share and is usually expressed as a
percentage (%) of the net asset value per share. If the share
price is higher than the net asset value per share the result
is a premium. If the share price is lower than the net asset
value per share, the shares are trading at a discount.
•
•
To gain access to individual stocks in the Indian,
Chinese and other emerging markets, where the
Company is not locally registered to trade or is able to
gain in a more cost efficient manner than holding the
stocks directly; and,
To gain exposure to thematic baskets of stocks (a
Basket Swap). Basket Swaps are used to build exposure
to themes, or ideas, that the Portfolio Manager believes
the Company will benefit from and where holding a
Basket Swap is more cost effective and operationally
efficient than holding the underlying stocks or individual
swaps.
Gearing*
Gearing is calculated as the overdraft drawn, less net
current assets (excluding dividends), divided by Net Assets,
expressed as a percentage. For years prior to 2013, the
calculation was based on borrowings as a percentage of
Net Assets.
* Alternative Performance Measure
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FURTHER INFORMATION 98
GLOSSARY OF TERMS AND ALTERNATIVE PERFORMANCE MEASURES (‘APMS’) CONTINUED
International swaps and derivatives association (‘ISDA’)
ISDA has created a standardised contract (the ISDA Master Agreement) which sets out the basic trading terms between the
counterparties to derivative contracts.
Leverage*
Leverage is defined in the AIFMD as any method by which the AIFM increases the exposure of an AIF. In addition to the
gearing limit the Company also has to comply with the AIFMD leverage requirements. For these purposes the Board has set
a maximum leverage limit of 140% for both methods. This limit is expressed as a % with 100% representing no leverage or
gearing in the Company. There are two methods of calculating leverage as follows:
The Gross Method is calculated as total exposure divided by Shareholders’ Funds. Total exposure is calculated as net assets,
less cash and cash equivalents, adding back cash borrowing plus derivatives converted into the equivalent position in their
underlying assets.
The Commitment Method is calculated as total exposure divided by Shareholders Funds. In this instance total exposure is
calculated as net assets, less cash and cash equivalents, adding back cash borrowing plus derivatives converted into the
equivalent position in their underlying assets, adjusted for netting and hedging arrangements.
See the definition of Equity Swaps for more details on how exposure through these instruments is calculated.
Investments
OTC equity swaps
Shareholders’ funds
Leverage %
2023
£’000
2022
£’000
Fair Value
Exposure*
Fair Value
Exposure*
2,186,417
2,186,417
2,379,848
2,379,848
(26,892)
190,704
(5,129)
135,018
2,159,525
2,377,121
2,374,719
2,514,866
2,150,721
10.5%
2,268,233
10.9%
* Calculated in accordance with AIFMD requirements using the Commitment Method
MSCI World Health Care Index (the Company’s Benchmark)
The MSCI World Health Care Index is designed to capture the large and mid capitalisation segments across 23 developed
markets countries: All securities in the index are classified as healthcare as per the Global Industry Classification Standard
(GICS). Developed Markets countries include: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany,
Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland
the UK and the U.S. The net total return of the Index is used which assumes the reinvestment of any dividends paid by its
constituents after the deduction of relevant withholding taxes. The performance of the Index is calculated in U.S.$ terms.
Because the Company’s reporting currency is £ the prevailing U.S.$/£ exchange rate is applied to obtain a £ based return.
NAV per share (pence)
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 share price is determined
by the relationship between the demand and supply of the shares.
* Alternative Performance Measure
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FURTHER INFORMATION GLOSSARY OF TERMS AND ALTERNATIVE PERFORMANCE MEASURES (‘APMS’) CONTINUED
99
Net asset value (NAV) per share total return*
The theoretical total return on shareholders’ funds per share, reflecting the change in NAV assuming that dividends paid
to shareholders were reinvested at NAV at the time the shares were quoted ex-dividend. A way of measuring investment
management performance of investment trusts which is not affected by movements in discounts/premiums.
NAV Total Return
Opening NAV
(Decrease) in NAV
Closing NAV
% (decrease) in NAV
Impact of reinvested dividends
NAV Total Return
2023
p
3,465.2
(30.7)
3,434.5
(0.9%)
0.8%
(0.1%)
2022
p
3,703.0
(237.8)
3,465.2
(6.4%)
0.6%
(5.8%)
Ongoing Charges*
Ongoing charges are calculated by taking the Company’s annualised ongoing charges, excluding finance costs, taxation,
performance fees and exceptional items, and expressing them as a percentage of the average daily net asset value of the
Company over the year.
AIFM & Portfolio Management fees (Note 3)
Other Expenses – Revenue (Note 4)
Total Ongoing Charges
Performance fees paid/crystallised
Total
Average net assets
Ongoing Charges
Ongoing Charges (including performance fees paid or crystallised during the year)
Rehypothecation
2023
£’000
17,534
1,142
18,676
–
18,676
2,247,296
0.8%
0.8%
2022
£’000
18,765
1,305
20,070
12,861
32,931
2,356,131
0.9%
1.4%
Rehypothecation is the practice by banks and brokers of using, for their own purposes, assets that have been posted as
collateral by clients.
Share Price Total Return*
Return to the investor on mid-market prices assuming that all dividends paid were reinvested.
Share Price Total Return
Opening share price
(Decrease)/increase in share price
Closing share price
% (decrease)/increase in share price
Impact of reinvested dividends
Share Price Total Return
* Alternative Performance Measure
2023
p
3,275.0
(160.0)
3,115.0
(4.8%)
0.7%
(4.1%)
2022
p
3,695.0
(420.0)
3,275.0
(11.4%)
0.6%
(10.8%)
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FURTHER INFORMATION 100
HOW TO INVEST
RETAIL INVESTORS ADVISED BY IFAS
The Company currently conducts its affairs so that its shares can be recommended by Independent Financial Advisers
(‘IFAs’) in the UK to ordinary retail investors in accordance with the Financial Conduct Authority (‘FCA’) rules in relationship
to non-mainstream investment procedures and intends to continue to do so. The shares are excluded from the FCA’s
restrictions which apply to non-mainstream investment products because they are shares in an investment trust.
INVESTMENT PLATFORMS
The Company’s shares are traded openly on the London Stock Exchange and can be purchased through a stock broker
or other financial intermediary. The shares are available through savings plans (including Investment Dealing Accounts,
ISAs, Junior ISAs and SIPPs) which facilitate both regular monthly investments and lump sum investments in the
Company’s shares. There are a number of investment platforms that offer these facilities. A list of some of them, that is not
comprehensive nor constitutes any form of recommendation, can be found below:
AJ Bell Youinvest
http://www.youinvest.co.uk/
Barclays Smart Investor
https://www.smartinvestor.barclays.co.uk/
Bestinvest
http://www.bestinvest.co.uk/
Charles Stanley Direct
https://www.charles-stanley-direct.co.uk/
Halifax Share Dealing
https://www.halifaxsharedealing-online.co.uk/
Hargreaves Lansdown
http://www.hl.co.uk/
HSBC
iDealing
https://www.hsbc.co.uk/investments/
http://www.idealing.com/
Interactive Investor
http://www.iii.co.uk/
IWEB
http://www.iweb-sharedealing.co.uk/share-dealing-home.asp
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FURTHER INFORMATION NOTICE OF THE ANNUAL GENERAL MEETING
101
Notice is hereby given that the Annual General Meeting of Worldwide Healthcare Trust PLC will be held at Saddlers' Hall,
40 Gutter Lane, London EC2V 6BR on Tuesday, 18 July 2023 from 12.30 p.m. for the following purposes:
Ordinary Resolutions
To consider and, if thought fit, pass the following resolutions which will be proposed as ordinary resolutions:
1.
That the Report of the Directors and the audited Accounts for the year ended 31 March 2023 together with the Report of
the Auditors thereon be received and adopted.
2. To approve the payment of a final dividend of 24.0p per ordinary share for the year ended 31 March 2023.
3. To approve the Company’s dividend policy, as set out on page 27 of the Annual Report for the year ended 31 March 2023.
4. To re-elect Mr Humphrey van der Klugt as a Director of the Company.
5. To re-elect Mr Doug McCutcheon as a Director of the Company.
6. To re-elect Mr Sven Borho as a Director of the Company.
7. To re-elect Dr Bina Rawal as a Director of the Company.
8. To elect Mr Tim Livett as a Director of the Company.
9. To elect Ms Jo Parfrey as a Director of the Company.
10. To re-appoint PricewaterhouseCoopers LLP as the Company’s Auditors and to authorise the Audit & Risk Committee to
determine their remuneration.
11. To approve the Directors’ Remuneration Report for the year ended 31 March 2023.
12. To approve the Directors’ Remuneration Policy.
Proposed share split
13. THAT each of the issued ordinary shares of 25p each in the capital of the Company (including for the avoidance of doubt
ordinary shares held in treasury) be and is hereby sub-divided into ten ordinary shares of 2.5p each (the “New Ordinary
Shares”) having the rights and being subject to the restrictions and obligations set out in the articles of association of the
Company, provided that such sub-division shall be conditional on, and shall take effect on, the New Ordinary Shares being
admitted to the Official List of the Financial Conduct Authority and to trading on the main market of the London Stock
Exchange, which is expected to occur at 8.00 a.m. on 27 July 2023 (or such other time and/or date as the Directors may
in their absolute discretion determine).
Authority to allot shares
14. THAT in substitution for all existing authorities the Directors be and are hereby generally and unconditionally authorised
in accordance with section 551 of the Companies Act 2006 (the “Act”) to exercise all powers of the Company to allot
relevant securities (within the meaning of section 551 of the Act) up to a maximum aggregate nominal amount equal
to 10% of the issued share capital of the Company at 5 June 2023 (or, if changed, the number representing 10% of the
issued share capital of the Company at the date at which this resolution is passed), provided that this authority shall
expire at the conclusion of the Annual General Meeting of the Company to be held in 2024 or 15 months from the date
of passing this resolution, whichever is the earlier, unless previously revoked, varied or renewed, by the Company in
General Meeting and provided that the Company shall be entitled to make, prior to the expiry of such authority, an offer
or agreement which would or might require relevant securities to be allotted after such expiry and the Directors may allot
relevant securities pursuant to such offer or agreement as if the authority conferred hereby had not expired.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FURTHER INFORMATION 102
NOTICE OF THE ANNUAL GENERAL MEETING CONTINUED
Special Resolutions
To consider and, if thought fit, pass the following resolutions which will be proposed as special resolutions:
Disapplication of pre-emption rights
15. THAT in substitution for all existing powers (and in addition to any power conferred on them by resolution 16 set out
in the notice convening the Annual General Meeting at which this resolution is proposed (“Notice of Annual General
Meeting”)) the Directors be and are hereby generally empowered pursuant to Section 570 of the Companies Act 2006 (the
“Act”) to allot equity securities (within the meaning of Section 560 of the Act) for cash pursuant to the authority conferred
on them by resolution 14 set out in the Notice of Annual General Meeting or otherwise as if Section 561(1) of the Act did
not apply to any such allotment:
(a) pursuant to an offer of equity securities open for acceptance for a period fixed by the Directors where the equity securities
respectively attributable to the interests of holders of shares in the capital of the Company (“Shares”) are proportionate (as
nearly as may be) to the respective numbers of Shares held by them but subject to such exclusions or other arrangements
in connection with the issue as the Directors may consider necessary, appropriate or expedient to deal with equity
securities representing fractional entitlements or to deal with legal or practical problems arising in any overseas territory,
the requirements of any regulatory body or stock exchange, or any other matter whatsoever;
(b) provided that (otherwise than pursuant to sub-paragraph (a) above) this power shall be limited to the allotment of equity
securities up to an aggregate nominal value equal to 10% of the issued share capital of the Company at 5 June 2023
(or, if changed, the number representing 10% of the issued share capital of the Company at the date at which this
resolution is passed) and provided further that (i) the number of equity securities to which this power applies shall be
reduced from time to time by the number of treasury shares which are sold pursuant to any power conferred on the
Directors by resolution 16 set out in the Notice of Annual General Meeting and (ii) no allotment of equity securities shall
be made under this power which would result in Shares being issued at a price which is less than the net asset value per
Share as at the latest practicable date before such allotment of equity securities as determined by the Directors in their
reasonable discretion; and
and such power shall expire at the conclusion of the next Annual General Meeting of the Company after the passing of
this resolution or 15 months from the date of passing this resolution, whichever is earlier, unless previously revoked,
varied or renewed by the Company in General Meeting and provided that the Company shall be entitled to make, prior
to the expiry of such authority, an offer or agreement which would or might otherwise require equity securities to be
allotted after such expiry and the Directors may allot equity securities pursuant to such offer or agreement as if the power
conferred hereby had not expired.
16. THAT in substitution for all existing powers (and in addition to any power conferred on them by resolution 15 set out in
the Notice of Annual General Meeting) the Directors be and are hereby generally empowered pursuant to Section 570 of
the Companies Act 2006 (the “Act”) to sell relevant shares (within the meaning of Section 560 of the Act) if, immediately
before the sale, such shares are held by the Company as treasury shares (as defined in Section 724 of the Act (“treasury
shares”)), for cash as if Section 561(1) of the Act did not apply to any such sale provided that:
(a) this power shall be limited to the sale of relevant shares having an aggregate nominal value equal to 10% of the
issued share capital of the Company at 5 June 2023 (or, if changed, the number representing 10% of the issued share
capital of the Company at the date at which this resolution is passed) and provided further that the number of relevant
shares to which power applies shall be reduced from time to time by the number of Shares which are allotted for cash
as if Section 561(1) of the Act did not apply pursuant to the power conferred on the Directors by resolution 15 set out
in the Notice of Annual General Meeting,
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FURTHER INFORMATION
NOTICE OF THE ANNUAL GENERAL MEETING CONTINUED
103
and such power shall expire at the conclusion of the next Annual General Meeting of the Company after the passing of
this resolution or 15 months from the date of passing this resolution, whichever is earlier, unless previously revoked,
varied or renewed by the Company in General Meeting and provided that the Company shall be entitled to make, prior
to the expiry of such authority, an offer or agreement which would or might otherwise require treasury shares to be
sold after such expiry and the Directors may sell treasury shares pursuant to such offer or agreement as if the power
conferred hereby had not expired.
Authority to repurchase ordinary shares
17. THAT the Company be and is hereby generally and unconditionally authorised in accordance with section 701 of the
Companies Act 2006 (the “Act”) to make one or more market purchases (within the meaning of section 693 of the Act) of
ordinary shares in the capital of the Company (“Shares”) (either for retention as treasury shares for future reissue, resale,
transfer or cancellation), provided that:
(a) the maximum aggregate number of Shares authorised to be purchased shall be that number of shares which is equal
to (i) unless and until resolution 13 (“Resolution 13”) in the notice convening the Annual General Meeting at which this
resolution is proposed becomes unconditional to 14.99% of the issued share capital of the Company as of the value
of the date of the passing of this resolution and (ii) if Resolution 13 becomes unconditional to 14.99% of the issued
share capital of the Company immediately following Resolution 13 becoming unconditional;
(b) the minimum price (exclusive of expenses) which may be paid for a Share is 25 pence;
(c) the maximum price (exclusive of expenses) which may be paid for a Share is an amount equal to the greater of
(i) 105% of the average of the middle market quotations for a Share as derived from the Daily Official List of the
London Stock Exchange for the five business days immediately preceding the day on which that Share is purchased
and (ii) the higher of the price of the last independent trade and the highest then current independent bid on the
London Stock Exchange as stipulated in the technical standards referred to in Article 5(6) of the Market Abuse
Regulation (EU) No. 596/2014 (which forms part of UK law by virtue of the European Union (Withdrawal) Act 2018);
(d) the authority hereby conferred shall expire at the conclusion of the Annual General Meeting of the Company to be held
in 2024 or, if earlier, on the expiry of 15 months from the date of the passing of this resolution unless such authority is
renewed prior to such time; and
(e) the Company may make a contract to purchase Shares under this authority before the expiry of such authority which
will or may be executed wholly or partly after the expiration of such authority, and may make a purchase of Shares in
pursuance of any such contract.
General meetings
18. THAT the Directors be authorised to call general meetings (other than the Annual General Meeting of the Company) on
not less than 14 clear days’ notice, such authority to expire on the conclusion of the next Annual General Meeting of the
Company, or, if earlier, on the expiry 15 months from the date of the passing of the resolution.
By order of the Board
Frostrow Capital LLP
Company Secretary
6 June 2023
Registered Office:
One Wood Street
London EC2V 7WS
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FURTHER INFORMATION
104
NOTICE OF THE ANNUAL GENERAL MEETING CONTINUED
NOTES
1.
Members are entitled to appoint a proxy to exercise all or any of their rights to attend and to speak and vote on their behalf at the meeting. A shareholder may
appoint more than one proxy in relation to the meeting provided that each proxy is appointed to exercise the rights attached to a different share or shares held
by that shareholder. A proxy need not be a shareholder of the Company.
A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolutions. If no voting indication
is given, a proxy may vote or abstain from voting at his/her discretion. A proxy may vote (or abstain from voting) as he or she thinks fit in relation to any other
matter which is put before the meeting.
This year, hard copy forms of proxy have not been included with this notice. Members can vote by: logging onto www.signalshares.com and following
instructions; requesting a hard copy form of proxy directly from the registrars, Link Group at shareholderenquiries@linkgroup.co.uk or in the case of CREST
members, utilising the CREST electronic proxy appointment service in accordance with the procedures set out below. To be valid any proxy form or other
instrument appointing a proxy must be completed and signed and received by post or (during normal business hours only) by hand at Link Group, PXS1,
10th Floor, Central Square, 29 Wellington Street, Leeds LS1 4DL no later than 12.30 p.m. on Friday, 14 July 2023.
In the case of a member which is a company, the instrument appointing a proxy must be executed under its seal or signed on its behalf by a duly authorised
officer or attorney or other person authorised to sign. Any power of attorney or other authority under which the instrument is signed (or a certified copy of it)
must be included with the instrument.
The return of a completed proxy form, other such instrument or any CREST Proxy Instruction (as described below) will not prevent a shareholder attending the
meeting and voting in person if he/she wishes to do so.
Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy information rights (a “Nominated
Person”) may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or have someone else
appointed) as a proxy for the meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such
agreement, have a right to give instructions to the shareholder as to the exercise of voting rights.
The statement of the rights of shareholders in relation to the appointment of proxies in paragraphs 1 and 3 above does not apply to Nominated Persons. The
rights described in these paragraphs can only be exercised by shareholders of the Company.
Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, only shareholders registered on the register of members of the Company (the
“Register of Members”) at the close of business on Friday, 14 July 2023 (or, in the event of any adjournment, on the date which is two days before the
time of the adjourned meeting) will be entitled to attend and vote or be represented at the meeting in respect of shares registered in their name at that time.
Changes to the Register of Members after that time will be disregarded in determining the rights of any person to attend and vote at the meeting.
As at 5 June 2023 (being the last business day prior to the publication of this notice) the Company’s issued share capital consists of 65,058,778 ordinary
shares, carrying one vote each. The Company holds 3,737,052 shares in treasury. Therefore, the total voting rights in the Company as at 5 June 2023 are
61,321,726.
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described
in the CREST Manual. CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a service provider(s),
should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a “CREST Proxy Instruction”) must
be properly authenticated in accordance with the specifications of Euroclear UK and Ireland Limited (“CRESTCo”), and must contain the information required
for such instruction, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to
the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID RA10) no later than
48 hours before the time appointed for holding the meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp
applied to the message by the CREST Application Host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner
prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other
means.
CREST members and, where applicable, their CREST sponsors, or voting service providers should note that CRESTCo does not make available special
procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy
Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or
has appointed a voting service provider, to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure
that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST
sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system
and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities
Regulations 2001.
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will
be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Register of Members in respect of the joint holding (the
first named being the most senior).
Members who wish to change their proxy instructions should submit a new proxy appointment using the methods set out above. Note that the cut-off time for
receipt of proxy appointments (see above) also applies in relation to amended instructions; any amended proxy appointment received after the relevant cut-off
time will be disregarded.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FURTHER INFORMATION
NOTICE OF THE ANNUAL GENERAL MEETING CONTINUED
105
16.
Members who have appointed a proxy using the hard-copy proxy form and who wish to change the instructions using another hard-copy form, should contact
Link Group on 0371 664 0300 or +44 371 664 0300. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United
Kingdom are charged at the applicable international rate. Lines are open 09.00 to 17.30 Monday to Friday excluding public holidays in England and Wales.
17. If a member submits more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence.
In order to revoke a proxy instruction, members will need to inform the Company. Members should send a signed hard copy notice clearly stating their intention
18.
to revoke a proxy appointment to Link Group, PXS1, 29 Wellington Street, 10th Floor, Central Square, Leeds LS1 4DL.
In the case of a member which is a company, the revocation notice must be executed under its common seal or signed on its behalf by an officer of the
company or an attorney for the company. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified copy of
such power of attorney) must be included with the revocation notice. If a member attempts to revoke their proxy appointment but the revocation is received
after the time for receipt of proxy appointments (see above) then, subject to paragraph 4 on page 104, the proxy appointment will remain valid.
Location of the Annual General Meeting
Saddlers’ Hall, 40 Gutter Lane, London EC2V 6BR
How To Vote
If you hold your shares directly you can:
• Log on to https://www.signalshares.com and follow the instructions; or
•
Request a hard copy form of proxy from the Company’s registrars, Link Group, by emailing shareholderenquiries@
linkgroup.co.uk or by calling +44 (0)371 664 0300 and returning the completed form to Link Group, PXS1, 10th Floor,
Central Square, 29 Wellington Street, Leeds LS1 4DL, no later than 12.30 pm on Friday, 14 July 2023.
If you hold your shares via an investment platform (e.g. Hargreaves Lansdown) or a nominee, you should contact them to
enquire about arrangements to vote.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FURTHER INFORMATION
106
EXPLANATORY NOTES TO THE RESOLUTIONS
Resolution 1 – To receive and adopt the Annual
Report and Accounts
The Annual Report and Accounts for the year ended
31 March 2023 will be presented to the Annual General
Meeting (AGM). These accounts accompany this Notice of
Meeting.
New Ordinary Shares being admitted to the Official List of
the Financial Conduct Authority and to trading on the main
market of the London Stock Exchange, which is expected to
occur at 8.00 a.m. on 27 July 2023 (or such other time and/
or date as the Directors may in their absolute discretion
determine). See pages 6, 46 and 47 for further information.
Resolution 2 – To approve a Final Dividend
The rationale for the payment of a final dividend is set out in
the Statement from the Chair beginning on page 4 and the
Report of the Directors on page 45.
Resolution 3 – Approval of the Company’s Dividend
Policy
Resolution 3 seeks shareholder approval of the Company’s
dividend policy, which is set out on page 27.
Resolutions 4 to 9 – Election and/or Re-election of
Directors
Resolutions 4 to 9 deal with the election and/or re-election
of each Director. Biographies of each of the Directors can
be found on pages 41 to 43 of the annual report.
The Board has confirmed, following a performance review,
that the Directors standing for re-election and election
continue to perform effectively.
Resolution 10 – Re-appointment of Auditors and
the determination of their remuneration
Resolution 10 relates to the re-appointment of
PricewaterhouseCoopers LLP as the Company’s
independent Auditors to hold office until the next AGM
of the Company and also authorises the Audit & Risk
Committee to set their remuneration.
Resolution 11 – Directors’ Remuneration Report
The Directors’ Remuneration Report is set out in full in the
annual report on pages 63 to 65.
Resolution 12 – Directors’ Remuneration Policy
The Directors’ Remuneration Policy is set out on page 63.
Resolution 13 – Proposed Share Split
That each of the issued ordinary shares of 25p each in
the capital of the Company (including for the avoidance of
doubt ordinary shares held in treasury) be and is hereby
sub-divided into ten ordinary shares of 2.5p each (the
“New Ordinary Shares”) having the rights and being subject
to the restrictions and obligations set out in the articles
of association of the Company, provided that such sub-
division shall be conditional on, and shall take effect on, the
Resolutions 14, 15 and 16 – Issue of Shares
Ordinary Resolution 14 in the Notice of AGM will renew
the authority to allot the unissued share capital up to an
aggregate nominal amount equal to 10% of the aggregate
nominal amount of the Company’s issued share capital
on 5 June 2023, being the nearest practicable date prior
to the signing of this Report (or if changed, the number
representing 10% of the issued share capital of the
Company at the date at which the resolution is passed).
Such authority will expire on the date of the next AGM or
after a period of 15 months from the date of the passing
of the resolution, whichever is earlier. This means that the
authority will have to be renewed at the next AGM.
When shares are to be allotted for cash, Section 551 of
the Companies Act 2006 (the “Act”) provides that existing
shareholders have pre-emption rights and that the new
shares must be offered first to such shareholders in
proportion to their existing holding of shares. However,
shareholders can, by special resolution, authorise the
Directors to allot shares otherwise than by a pro rata
issue to existing shareholders. Special Resolution 15 will,
if passed, give the Directors power to allot for cash equity
securities up to an aggregate nominal amount equal to
10% of the Company’s share capital on 5 June 2023 (or if
changed, the number representing 10% of the issued share
capital of the Company at the date at which the resolution
is passed), as if Section 551 of the Act does not apply.
This is the same nominal amount of share capital which
the Directors are seeking the authority to allot pursuant to
Resolution 16. This authority will also expire on the date
of the next Annual General Meeting or after a period of 15
months, whichever is earlier. This authority will not be used
in connection with a rights issue by the Company.
Under the Companies (Acquisition of Own Shares)
(Treasury Shares) Regulations 2003 (as amended) (the
“Treasury Share Regulations”) the Company is permitted
to buyback and hold shares in treasury and then sell them
at a later date for cash, rather than cancelling them. The
Treasury Share Regulations require such sale to be on a
pre-emptive, pro rata, basis to existing shareholders unless
shareholders agree by special resolution to disapply such
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FURTHER INFORMATION EXPLANATORY NOTES TO THE RESOLUTIONS CONTINUED
107
pre-emption rights. Accordingly, in addition to giving the
Directors power to allot unissued share capital on a non
pre-emptive basis pursuant to Resolution 15, Resolution 16,
if passed, will give the Directors authority to sell shares held
in treasury on a non pre-emptive basis. No dividends may
be paid on any shares held in treasury and no voting rights
will attach to such shares. The benefit of the ability to hold
treasury shares is that such shares may be resold. This
should give the Company greater flexibility in managing its
share capital, and improve liquidity in its shares. It is the
intention of the Board that any re-sale of treasury shares
would only take place at a premium to the cum income net
asset value per share. It is also the intention of the Board
that sales from treasury would only take place when the
Board believes that to do so would assist in the provision
of liquidity to the market. The number of treasury shares
which may be sold pursuant to this authority is limited
to an aggregate nominal amount equal to 10% of the
Company’s share capital on 5 June 2023 (or if changed,
the number representing 10% of the issued share capital of
the Company at the date at which the resolution is passed)
(reduced by any equity securities allotted for cash on a
non-pro rata basis pursuant to Resolution 15, as described
above). This authority will also expire on the date of the
next Annual General Meeting or after a period of 15 months,
whichever is earlier.
The Directors intend to use the authority given by
Resolutions 14, 15 and 16 to allot shares and disapply
pre-emption rights only in circumstances where this will
be clearly beneficial to shareholders as a whole. The issue
proceeds would be available for investment in line with
the Company’s investment policy. No issue of shares will
be made which would effectively alter the control of the
Company without the prior approval of shareholders in
general meeting.
New Shares will only be issued at a premium to the
Company’s cum income net asset value per share at the
time of issue.
Resolution 17 – Share Repurchases
The Directors wish to renew the authority given by
shareholders at the previous AGM. The principal aim of a
share buyback facility is to enhance shareholder value by
acquiring shares at a discount to net asset value, as and
when the Directors consider this to be appropriate. The
purchase of Shares, when they are trading at a discount to
net asset value per share should result in an increase in the
net asset value per share for the remaining shareholders.
This authority, if conferred, will only be exercised if to do
so would result in an increase in the net asset value per
share for the remaining shareholders and if it is in the best
interests of shareholders generally. Any purchase of shares
will be made within guidelines established from time to time
by the Board. It is proposed to seek shareholder authority to
renew this facility for another year at the AGM.
Under the current Listing Rules, the maximum price that
may be paid on the exercise of this authority must not
exceed the higher of (i) 105% of the average of the middle
market quotations for the shares over the five business
days immediately preceding the date of purchase and
(ii) the higher of the last independent trade and the highest
current independent bid on the trading venue where the
purchase is carried out. The minimum price which may be
paid is 25p per Share. Existing shares which are purchased
under this authority will either be cancelled or held as
Treasury Shares.
Special Resolution 17 in the Notice of AGM will renew the
authority to purchase in the market a maximum of 14.99%
of the issued share capital of the Company as at the date
of the passing of the resolution, and after Resolution 13
becomes unconditional, 14.99% of the issued share capital
of the Company as changed by that resolution. Such
authority will expire on the date of the next AGM or after
a period of 15 months from the date of passing of the
resolution, whichever is earlier. This means in effect that the
authority will have to be renewed at the next AGM or earlier
if the authority has been exhausted.
Resolution 18 – General Meetings
Special Resolution 18 seeks shareholder approval for the
Company to hold General Meetings (other than the AGM) at
14 clear days’ notice. The Board confirms that the shorter
notice period would only be used where it was merited by
the purpose of the meeting.
Recommendation
The Board considers that the resolutions relating to the
above items are in the best interests of shareholders as a
whole. Accordingly, the Board unanimously recommends
to the shareholders that they vote in favour of the above
resolutions to be proposed at the forthcoming AGM as the
Directors intend to do in respect of their own beneficial
holdings totalling 46,981 shares.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FURTHER INFORMATION 108
REGULATORY DISCLOSURES
ALTERNATIVE INVESTMENT FUND MANAGERS
DIRECTIVE (AIFMD) DISCLOSURES
Investment objective and leverage
A description of the investment strategy and objectives of
the Company, the types of assets in which the Company
may invest, the techniques it may employ, any applicable
investment restrictions, the circumstances in which it may
use leverage, the types and sources of leverage permitted
and the associated risks, any restrictions on the use of
leverage and the maximum level of leverage which the AIFM
and Portfolio Manager are entitled to employ on behalf of
the Company and the procedures by which the Company
may change its investment strategy and/or the investment
policy can be found on pages 8 and 9 under the heading
“Investment Strategy”.
The table below sets out the current maximum permitted
limit and actual level of leverages for the Company: as a
percentage of net assets
Maximum level of leverage
Actual level at 31 March 2023
Gross
Method
140.0%
115.0%
Commitment
Method
140.0%
110.5%
REMUNERATION OF AIFM STAFF
Following completion of an assessment of the application
of the proportionality principle to the FCA’s AIFM
Remuneration Code, the AIFM has disapplied the pay-out
process rules with respect to it and any of its delegates.
This is because the AIFM considers that it carries out
non- complex activities and is operating on a small scale.
Further disclosures required under the AIFM Rules can
be found within the Investor Disclosure Document on the
Company’s website: www.worldwidewh.com.
SECURITY FINANCING TRANSACTIONS
DISCLOSURES
As defined in Article 3 of Regulation (EU) 2015/2365,
securities financing transactions (SFT) include repurchase
transactions, securities or commodities lending and
securities or commodities borrowing, buy-sellback
transactions or sell-buyback transactions and margin
lending transactions. Whilst the Company does not engage
in such SFT’s, it does engage in Total Return Swaps (TRS)
therefore, in accordance with Article 13 of the Regulation,
the Company’s involvement in and exposure to Total Return
Swaps for the accounting year ended 31 March 2023 are
detailed below.
Global data
Amount of assets engaged in TRS
The following table represents the total value of assets
engaged in TRS:
TRS
Concentration Data
£’000
(26,892)
% of AUM
(1.3%)
Counterparties
The following table provides details of the counterparties
and their country of incorporation (based on gross volume
of outstanding transactions with exposure on a gross
basis) in respect of TRS as at the balance sheet date:
Goldman Sachs
JPMorgan
Country of
Incorporation
U.S.A.
U.S.A.
£’000
141,042
49,662
Aggregate transaction data
Type, quality, maturity, tenor and currency of collateral
No collateral was received by the Company in respect
of TRS during the year to 31 March 2023. The collateral
provided by the Company to the above counterparties is set
out below.
Type
Cash
Currency
Maturity
Quality
£’000
USD
less than 1 day
n/a
100,366
Maturity tenor of TRS
The following table provides an analysis of the maturity
tenor of open TRS positions (with exposure on a gross
basis) as at the balance sheet date:
Maturity
1 to 3 months
3 to 12 months
TRS
Value
£’000
–
190,704
Settlement and clearing
OTC derivative transactions (including TRS) are entered
into by the Company under an International Swaps
and Derivatives Associations, Inc. Master Agreement
(“ISDA Master Agreement”). An ISDA Master Agreement
is a bilateral agreement between the Company and a
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FURTHER INFORMATION REGULATORY DISCLOSURES CONTINUED
109
counterparty that governs OTC derivative transactions
(including TRS) entered into by the parties. All OTC
derivative transactions entered under an ISDA Master
Agreement are netted together for collateral purposes,
therefore any collateral disclosures provided are in respect
of all OTC derivative transactions entered into by the
Company under the ISDA Master agreement, not just total
return swaps.
Safekeeping of collateral
There was no non-cash collateral provided by the Company
in respect of OTC derivatives (including TRS) with the
counterparties noted above as at the statement of financial
position date.
Return and cost
All returns from TRS transactions will accrue to the
Company and are not subject to any returns sharing
arrangements with the Company’s AIFM, Portfolio Manager
or any other third parties. Returns from those instruments
are disclosed in Note 9 to the Company’s financial
statements.
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FURTHER INFORMATION 110
COMPANY INFORMATION
Directors
Portfolio Manager
Shareholder Portal
Doug McCutcheon (Chair)
Sarah Bates (Senior Independent
Director and Chair of the
Nominations Committee)
Sven Borho
Humphrey van der Klugt, FCA
Tim Livett (Chair of the
Audit & Risk Committee)
Jo Parfrey (Chair of the
Management Engagement &
Remuneration Committee)
Dr Bina Rawal
Company Registration Number
3023689 (Registered in England)
The Company is an investment
company as defined under Section 833
of the Companies Act 2006
Website
Website: www.worldwidewh.com
Registered Office
One Wood Street
London EC2V 7WS
Alternative Investment Fund
Manager, Company Secretary and
Administrator
Frostrow Capital LLP
25 Southampton Buildings, London
WC2A 1AL
Telephone: 0203 008 4910
E-mail: info@frostrow.com
Website: www.frostrow.com
Authorised and regulated by the Financial Conduct
Authority
If you have an enquiry about the
Company or if you would like to receive
a copy of the Company’s monthly
fact sheet by e-mail, please contact
Frostrow Capital using the above
e-mail address.
OrbiMed Capital LLC
601 Lexington Avenue, 54th Floor
New York NY 10022
Website: www.orbimed.com
Registered under the U.S. Securities & Exchange
Commission
Depositary
J.P. Morgan Europe Limited
25 Bank Street London
E14 5JP
Independent Auditors
PricewaterhouseCoopers LLP
Atria One
144 Morrison Street
Edinburgh
EH3 8EX
Custodian and Prime Broker
J.P. Morgan Securities LLC
Suite 1, Metro Tech Roadway
Brooklyn, NY 11201
USA
Stockbroker
Winterflood Securities Limited
The Atrium Building
Cannon Bridge, 25 Dowgate Hill
London EC4R 2GA
Registrars
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds LS1 4DL
E-mail: shareholderenquiries@
linkgroup.co.uk Telephone (in UK): 0371
664 0300† Telephone (from overseas):
+ 44 371 664 0300†
Shareholder Portal:
www.signalshares.com
Website: www.linkgroup.eu
Please contact the Registrars if you
have a query about a certificated
holding in the Company’s shares.
† Calls are charged at the standard geographic rate
and will vary by provider. Calls outside the UK are
charged at the applicable international rate. Lines
are open between 09.00 and 17.30 Monday to Friday
excluding public holidays in England and Wales.
You can register online to view your
holdings using the Share Portal,
a service offered by Link Group at
www.signalshares.com.
The Share Portal is an online service
enabling you to quickly and easily
access and maintain your shareholding
online – reducing the need for
paperwork and providing 24 hour
access to your shareholding details.
Through the Share Portal you may:
• Cast your proxy vote online;
•
View your holding balance and get
an indicative valuation;
• View movements on your holding;
• Update your address;
•
•
•
Register and change bank mandate
instructions so that dividends
can be paid directly to your bank
account;
Elect to receive shareholder
communications electronically; and
Access a wide range of shareholder
information including the ability to
download shareholder forms.
Share Price Listings
The price of your shares can be found
in various publications including the
Financial Times, The Daily Telegraph,
The Times and The Scotsman.
The Company’s net asset value per
share is announced daily and is available,
together with the share price, on the
TrustNet website at www.trustnet.com.
Identification Codes
Shares: SEDOL
: 0338530
: GB0003385308
: WWH
ISIN
BLOOMBERG : WWH LN
EPIC
Foreign Account Tax
Compliance Act (“FATCA”)
Global Intermediary Identification
Number (GIIN) : FIZWRN.99999.SL.826
Legal Entity Identifier (LEI) :
5493003YBCY4W1IMJU04
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023FURTHER INFORMATION
WORLDWIDE HEALTHCARE TRUST PLC
A
WORLDWIDE HEALTHCARE TRUST PLC Annual Report for the year ended 31 March 2023
25 SOUTHAMPTON BUILDINGS
LONDON
WC2A 1AL
WWW.WORLDWIDEWH.COM
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A member of the Association of Investment Companies
CBP008251
This report is printed on Revive 100% White Silk a totally recycled paper
produced using 100% recycled waste at a mill that has been awarded the
ISO 14001 certificate for environmental management.
The pulp is bleached using a totally chlorine free (TCF) process.
This report has been produced using vegetable based inks.
Disability Act
Copies of this annual report and other documents issued by the Company are available from the
Company Secretary. If needed, copies can be made available in a variety of formats, including
Braille, audio tape or larger type as appropriate. You can contact the Registrar to the Company,
Link Group, which has installed telephones to allow speech and hearing impaired people who have
their own telephone to contact them directly, without the need for an intermediate operator, for this
service please call 0800 731 1888. 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 RNID) you should dial 18001 followed by the number you wish to dial.
STRATEGIC REPORT