Final Results

RNS Number : 5043Q

Polar Capital Global Financials Tst

21 February 2023

 

POLAR CAPITAL GLOBAL FINANCIALS TRUST PLC

Legal Entity Identifier: 549300G5SWN8EP2P4U41

AUDITED ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED

30 NOVEMBER 2022

PERFORMANCE HIGHLIGHTS FOR THE YEAR ENDED 30 NOVEMBER 2022

Performance (Sterling total return)		For the year ended 30 November 2022 %	Since Inception %
Net asset value (NAV) per ordinary share (1)*		1.9	125.9
Ordinary share price (2)*		-7.6	102.8
Ordinary share price including subscription share value (3)*		-	107.3
Benchmark (Sterling total return) (4) MSCI ACWI Financials Chain-linked benchmark		6.8 6.8	123.4 134.9
Other Indices and peer group (Sterling total return)
MSCI World Index		-1.0	184.5
FTSE All Share Index		6.5	73.4
Lipper Financial Sector (5)		-0.3	97.6
Performance since Reconstruction on 22 April 2020 (Sterling total return)		Since Reconstruction %
NAV per ordinary share (6)*			73.6
Benchmark (4)			67.2
Financials	As at 30 November 2022	As at 30 November 2021	% Change
Total net assets^	£541,272,000	£457,247,000	+18.4
NAV per ordinary share	166.3p	167.5p	-0.7
Ordinary share price	154.6p	172.0p	-10.1
(Discount)/premium per ordinary share*	-7.0%	2.7%
Net gearing*	6.0%	5.2%
Earnings per Ordinary share (7)	For the year ended 30 November 2022	For the year ended 30 November 2021
Revenue Return	4.45p	4.42p
Capital Return	(2.75p)	24.57p
Total	1.70p	28.99p
Expenses*
Ongoing Charges	0.87%	1.02%
Ongoing charges including performance fee (8)	0.65%	0.98%

Dividends (9)

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

Pay date	Amount per ordinary share	Ordinary Shares In issue	Record date	Ex-date	Declared Date
First interim: 31 August 2022	2.40p	330,440,000	5 August 2022	4 August 2022	1 July 2022
Second interim: 28 February 2023	2.05p	324,779,000	3 February 2023	2 February 2023	18 January 2023
Total (2021: 4.40p)	4.45p

Note 1 

The total return NAV performance for the period is calculated by reinvesting the dividends in the assets of the Company from the relevant ex-dividend date. Performance since inception has been calculated using the initial NAV of 98p and the NAV on 30 November 2022. Dividends are deemed to be reinvested on the ex-dividend date as this is the methodology used by the Company's benchmark and other indices.

Note 2 

The total return share price performance is calculated by reinvesting the dividends in the shares of the Company from the relevant ex-dividend date. Performance since inception has been calculated using the launch price of 100p to the closing price on 30 November 2022.

Note 3 

The total return share price performance since inception includes the value of the subscription shares issued free of payment at launch on the basis of one for every five Ordinary shares and assumes such were held throughout the period from launch to the final conversion date of 31 July 2017. Performance is calculated by reinvesting the dividends in the shares of the Company from the relevant ex-dividend date and uses the launch price of 100p per Ordinary share and the closing price per ordinary share on 30 November 2022.

Note 4 

Chain linked benchmark is a combination of 3 benchmarks which have been in operation over the period. From inception until 31 August 2016 the Company's benchmark was the MSCI World Financials Index, which included Real Estate as a constituent until its removal that year. From 1 September 2016 to 23 April 2020 the benchmark was the MSCI World Financials + Real Estate Net Total Return Index. From 23 April 2020, the benchmark changed to MSCI ACWI Financials Net Total Return Index (in Sterling) due to the Company's exposure to emerging market equities and its limited exposure to real estate equities.

Note 5 

Dynamic average of open ended funds in the Lipper Financial Sector Universe which comprised 43 open ended funds in the year under review.

Note 6 

The total return NAV performance since the Reconstruction is calculated by reinvesting the dividends in the assets of the Company from the relevant ex-dividend date. The new performance fee period runs from the date of the Reconstruction. The opening NAV for the performance fee of 102.8p is the closing NAV the day before the tender offer was completed.

Note 7

Refer to Note 11 below for more details.

Note 8

The decrease in ongoing charges including performance fee reflects the write back of the performance fee accrual in the year under review.

Note 9

Refer to Note 12 below for more details.

^ The change in net assets reflects shares reissued from treasury in the year, new shares issued, placing, buybacks, dividend paid and market movements.

* Alternative Performance Measure, see below for further explanations.

Data sourced by HSBC Securities Services Limited, Polar Capital LLP and Lipper.

Status of Announcement 

The figures and financial information contained in this announcement are extracted from the draft unaudited financial results for the year ended 30 November 2022 and do not constitute statutory accounts for that year. Once finalised, the Annual Report and Financial Statements will include the Report of the Independent Auditors which is expected to be unqualified and not expected to contain a statement under either section 498(2) or Section 498(3) of the Companies Act 2006. The Annual Report and Financial Statements for the year ended 30 November 2022 have not yet been delivered to the Registrar of Companies.

The figures and financial information for the year ended 30 November 2021 have been extracted from the published Annual Report and Financial Statements for the year ended 30 November 2021 and do not constitute the statutory accounts for that year. The Annual Report and Financial Statements for the year ended 30 November 2021 have been delivered to the Registrar of Companies and included the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 498(2) or Section 498(3) of the Companies Act 2006.

The Directors' Remuneration Report and certain other helpful shareholder information has not been included in this announcement but will form part of the finalised Annual Report which will be available on the Company's website and will be sent to shareholders in February 2023.

National Storage Mechanism 

A copy of the Annual Report once published will be submitted to the National Storage Mechanism ('NSM') and will then be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Neither the contents of the Company's website nor the contents of any website accessible from the hyperlinks on the Company's website (or any other website) are incorporated into or form part of this announcement.

CHAIRMAN'S STATEMENT

Dear Shareholders,

In this, my final report as Chairman of your Company, I look back on a financial year in which Covid-related health concerns were replaced in the headlines by a war in Europe; post-Covid supply disruptions; the return of inflation; and, not just the end of whatever-it-takes quantitative easing (QE), but a 180 degree policy reversal by major central banks in favour of raising rates and quantitative tightening (QT). In the broad market corrections that followed there were few places to hide. Highly unusually, steep declines in public equity markets were mirrored in bond markets, private equity strategies and a range of alternative asset classes, in particular crypto currency.

With this background, I am pleased to report a positive net asset value (NAV) total return, further growth in the issued share capital of the Company, and an increase in the dividend.

To adopt a popular sporting cliche, the year under review became a game of two halves. The financial year began with continued strong demand for the Company's shares and a persistent share price premium to NAV, satisfied by further share sales from the treasury account and the issuance of new shares. However, following the Russian invasion of Ukraine and the reversal of the easy money policy by major central banks, trading in the Company's shares could not resist the negative sentiment that pervaded markets generally. As a result, the Company's shares moved from trading at a premium to NAV to a discount.

Throughout the financial year the Company has been very proactive in, firstly, responding to appetite for the Company's shares in the early months of the year, and subsequently intervening to support trading in the Company's shares through buy-backs once sentiment across markets deteriorated. This extensive activity is described in the share capital changes section of my report below .

The end of the financial year also saw the completion of the second stage of our Board succession plan as detailed in my report last year. On the first day of the 2023 financial year we said goodbye to Katrina Hart and welcomed to the Board two new members, Angela Henderson and Susie Arnott. Katrina had been with the Company as Chair of the Management Engagement Committee since its launch in 2013. On behalf of the Board and Shareholders I want to thank Katrina for her diligent service to the Company. More details on the execution of our succession plan can be found below.

Investment Performance

2022 was a year of wealth destruction not seen in over a generation. A wide range of capital markets and alternative asset classes reeled under the onslaught from an outbreak of war in Europe, an unexpected surge in inflation and a monetary policy response that marked the end of an unprecedented easy money era. It heralded a central bank race to slam the brakes on with official interest rate rises and liquidity draining QT programmes.

Despite the geopolitical and economic maelstrom, I can report that the Company generated a total return of 1.9% over the financial year helped by a decline in sterling and the value attributes of much of the financials sector. This return was behind that of the Company's benchmark, the MSCI ACWI Financials Index, which delivered a total return of 6.8%, but ahead of the negative 0.3% return of the Lipper open-ended peer group of financial equity funds, both in sterling terms.

Since its launch in 2013 the Company's total return has been 125.9% compared to 123.4% for the MSCI ACWI Financials Index and 97.6% for the Lipper open ended peer group. Since the Company's restructure in April 2020, it has delivered a total return of 73.6% compared to a benchmark return of 67.2%.

Over the financial year the Company's share price did not mirror the positive NAV total return. Reflecting the sharp deterioration in market sentiment, the Company's shares moved from a premium to NAV of 2.7% at the start of the financial year to a discount of 7.0%. As a result, the Company's ordinary share price fell by 10.1% over the financial year.

Complicating investment management over the year were significant disparities in the performance of subsectors within the investment universe. From a share price perspective, financials did not behave as an homogenous sector. For example, significant share price declines were experienced in companies priced for growth such as small cap US banks and certain FinTech companies, and in capital market sensitive asset managers, whereas general insurance companies showed strong share price gains. Similarly, there was little correlation in share price performance by country where, for example, commodity producing countries fared better as they were relative beneficiaries of some of the developments that hurt the broader markets.

At the start of the year the portfolio was positioned for further post-Covid recovery. This made the portfolio vulnerable to the war in Ukraine and the subsequent inflation and monetary policy response. The Manager responded by positioning the portfolio more defensively, principally switching certain bank exposures in favour of non-life insurers, and into fixed income securities following the sharp rise in bond yields. Gearing was also eliminated during the year in response to the poor market background. However, by the end of the financial year gearing was restored to around 6% of the portfolio as the Manager sought to exploit better valuations and specific opportunities from the sector's performance disparity. The Manager's investment activity is described in detail in the Investment Manager's Report.

Share Capital Changes

In April 2020 a Company reconstruction took place in the form of a 100% tender offer and the replacement of the fixed end-of-life with a five yearly tender offer. In last year's statement I reported on the extraordinary growth in the Company's share capital that followed. In the 2021 financial year the Company responded to a persistent share price premium to NAV and strong demand for the Company's shares by issuing a total of 76,555,000 new ordinary shares following the conversion of a successful C Share issue. In addition, a further 73,374,000 shares were re-issued from treasury.

The extraordinary volatility witnessed broadly across capital markets during the 2022 financial year is reflected in changes to the Company's share capital in the latest reporting period. The year began with continued strong demand for the Company's shares which quickly exhausted the remaining 6.35m shares held in treasury. To accommodate further demand the Company issued new shares under its AGM authority which by the end of January 2022 was almost completely depleted. Consequently, the Company sought a refreshed authority at a GM held on 1 February 2022. The total number of new ordinary shares issued under these two authorities during 2022 financial year amounted to 25.645 million shares. At the same time the Company utilised its ability to place further new shares as per the 2021 C share Prospectus. Two such placements took place on 1 February and 25 February 2022 for a total of 26.775 million new ordinary shares.

In total, during the first half of the 2022 financial year, a total of 58.77 million ordinary shares were issued at an average price of £1.74 and an average premium to NAV of 1.85%, with an accretive effect on NAV of 0.23p per share and adding £102.12m to the Company's NAV.

The Russian invasion of Ukraine on 24 February 2022 brought an abrupt end to share issuance as investors withdrew demand from stock markets.

Coupled with a reversal of monetary policy by major central banks in the face of a surge in inflation to 50-year highs, market sentiment deteriorated across the board. The Company's share price moved from a premium to NAV to a discount in keeping with the trend in the investment trust market generally.

At the time of the Company's reconstruction in April 2020 the Board made a commitment to provide support to the trading of the Company's shares if and when required. Specifically, the Board stated that it would take a proactive approach to providing liquidity in the Company's shares with the intention that, in normal market conditions, the shares will trade at a discount to NAV of no wider than an average of 5 per cent over the longer term.

The Board delegated authority to the Manager and our Corporate Broker to purchase shares in order to support liquidity under clear parameters consistent with the Board's commitment. These parameters are designed to ensure that the Company does not displace any market demand for shares, but is available to support liquidity if required once market demand is satisfied.

The first purchase under this delegated authority was made on 10 May 2022. During the 2022 financial year the Company bought back shares on 91 occasions, purchasing in total 6.356 million shares at an average discount of 8.99% and an average price of £1.44 for a total of £9.2m. These purchases have been accretive to NAV equivalent to 0.26p per share.

The Board remained in close dialogue with the Manager and Corporate Broker throughout this period. As a result, the Board was able to adjust the delegated share buyback parameters on three occasions during the year to allow more discretion and capacity to meet its commitment as market conditions changed. As a result, only on one trading day was it necessary to request the Board's special permission to exceed the terms of the parameters - the permission was granted.

By the end of the financial year, trading in the Company's shares steadily improved, narrowing the discount in the share price to 7.0%. This improvement continued into the early weeks of the new financial year during which, at the time of writing, only 205,000 shares have been purchased in the market as the discount settled close to 5%. All shares purchased under this delegated authority have been placed in treasury.

For the financial year as a whole, the net effect of this proactive approach to share capital management was to increase the outstanding shares in public hands by 52.414 million with a further 6.356 million shares held in treasury. The net cash proceeds raised over the year were £92.95m and the market cap of the Company rose from £470m at the beginning of the financial year to £503m at the end of the financial year. We warmly welcome all our new Shareholders and thank our existing Shareholders for their continuing support through this tumultuous time.

Dividends

For the previous two financial years the Company was able to maintain its total dividend at 4.40p per ordinary share despite a sharp fall in the income generated by the Company's investment portfolio in the face of Covid and the recession that followed. It had been able to do so by exploiting one of the advantages of the investment trust structure, drawing on distributable reserves built up in previous years.

In August 2022 the Company paid an unchanged first interim dividend for the current financial year of 2.40p per ordinary share. Although income from investments began to recover as the world economy opened up following an easing of the Covid pandemic, distributable reserves were required once again to support the August 2022 dividend.

On 18 January 2023 the Company announced a second interim dividend for the 2022 financial year of 2.05p per ordinary share payable on 28 February 2023, bringing the total dividend for the financial year to 4.45p, a small increase on previous years. This second interim dividend was almost fully covered by earnings in the period, requiring minor support from distributable reserves.

Looking ahead, the Manager has discretion to invest up to 10% of the portfolio in fixed income securities and the recent rise in bond yields presents an opportunity to increase revenues from this source. The recent trend in distributions from the underlying equity holdings has been positive as well. However, looking forward, further growth in the Company's dividend distribution remains uncertain given brewing economic headwinds.

Costs

At the time of the Company's reconstruction in 2020, the Manager agreed to a reduction in its base management fee from 0.85% per annum of the lower of the Company's market capitalisation and NAV, to 0.70% per annum of the Company's NAV. The Company continues to maintain tight control of other expenses. For the 2022 financial year the Ongoing Charges Ratio ("OCR") fell from 1.02% of the Company's NAV to 0.87%, the lowest OCR in the life of the Company.

In addition to a management fee, the Manager can also earn an investment performance fee. The fee is calculated on performance since the reconstruction in April 2020 and is accrued and only paid at the time of the five yearly tender. The performance fee is calculated as 10% of the excess performance over the total return of the benchmark plus a hurdle of 1.5% p.a. Any performance fee accrual can be reduced by subsequent underperformance of the benchmark plus hurdle rate measured over the five-year period. The Strategic Report within the Annual Report provides further detail.

In the previous two financial years investment performance generated a performance fee accrual. However, due to underperformance in the 2022 financial year, the performance fee accrual has been reduced to nil. As a result, the OCR including performance fee fell from 0.98% of NAV in financial year 2021 to 0.65% in financial year 2022. Although NAV performance since the reconstruction relative to the benchmark remains positive, there was no performance fee accrual balance remaining at the end of the 2022 financial year. The Board continues to believe that the performance fee structure aligns the interests of Shareholders and the Manager by providing a performance incentive with safeguards for Shareholders that rewards only long-term excellent performance.

Board Succession

The Company was launched in June 2013 with three Directors, Ms Elliot, Ms Hart and me. A fourth Director, Simon Cordery, joined the Board in July 2019. As the AIC Code recommended 9-year tenure approached for the original directors, the Board tabled a succession plan in 2021 that would provide refreshment while ensuring sufficient retention of Company knowledge and avoiding a cliff-edge of Director departures in the future.

I have reported on the completion of phase one of this plan with the appointment in November 2021 of Cecilia McAnulty replacing Joanne Elliot as Audit Chair. In order to allow an orderly transition of her role, Joanne stepped down from the Board following the AGM in April 2022.

I am pleased to report the completion of phase two of the succession plan. During the second half of 2022 the Board undertook an extensive and thorough search for a replacement for Katrina Hart, Chair of the Management Engagement Committee. The search was sensitive to maintaining an appropriate diversity and experience mix among Board members.

I am pleased to report that the search was concluded successfully. On 1 December 2022 Katrina retired from the Board and at the same time two new Directors were appointed.

After a career as a buyside analyst and portfolio manager specialising in global financials, Susie Arnott transitioned into a number of advisory roles focused on sustainable investing and social impact. Susie has replaced Katrina as Chair of the Management Engagement Committee where she will be able to bring her experience to engaging on portfolio management and ESG issues with the Manager and other service providers.

At the same time Angela Henderson has also joined the Board. With a career foundation in financial services and capital markets, Angela now has long experience as a non-executive director on a variety of boards including asset management companies and closed-ended investment vehicles. Angela brings a strong governance record and a clear understanding of the financials sector.

On behalf of the Board I would like to thank Katrina for her service to the Company over the past 9 years. The Board has benefited from Katrina's industry experience in her role as Chair of the Management Engagement Committee, ensuring appropriate oversight of the Manager and other service providers. As a Board colleague, Katrina has demonstrated exemplary diligence and a collegiate style that has positively contributed to the workings of the Board. She leaves with the very best wishes from those with whom she has shared the Polar Capitals Global Financials Trust journey.

Following a Board Nominations Committee held on 1 February 2023, I am pleased to confirm that Simon Cordery has been invited by the Board and has accepted the role of Chair (subject to re-election by Shareholders at the AGM) when I retire at the forthcoming AGM on 30 March 2023. The Board believes that Simon will bring a fresh perspective to its proceedings and the Board looks forward to seeing the Company make further progress under his guidance.

Environmental, Social and Governance (ESG) Considerations

The Board welcomes the growing expectations placed on the financial community to adopt more sustainable and inclusive behaviour and business practices. As well as delivering better outcomes for society as a whole, the Board believes that ESG factors will increasingly drive successful investment performance.

The Company outsources all its business operations and therefore has limited control over environmental and social deliverables. Instead, it works with and through its suppliers to better understand their ESG strategy. The Board succession plan described above specifically included ESG as a key search parameter, reflecting the importance the Board places on its ESG oversight responsibilities. The appointment of Susie Arnott, with her deep social finance background, extends the Board's skills mix into this important area. As Chair of the Management Engagement Committee, Susie has been asked to review the Committee's terms of reference to ensure that ESG factors are fully integrated into the Committee's and Board's work.

During the course of the past year, the Board has continued to engage with the Manager to monitor progress on its adoption of ESG principles in both its investment process and its corporate conduct. During the year the Manager has worked to refine further external third party ESG rating methodologies and matrices for use in its investment process. As a result, the investment team has developed a proprietary scoring process, assigning its own internal ESG ratings. The analysis incorporates both quantitative and qualitative factors derived from company disclosures, management meetings, regulatory reports and third-party ESG ratings providers. The Board supports the proprietary approach adopted by the Manager given the team's expertise, experience and proximity to companies in the financials investment universe. The Board will continue to monitor and input into the implementation of the Manager's proprietary ESG ratings in stock selection as well as their engagement with investee companies.

Further detail is provided in the ESG Report within the Annual Report and Accounts.

Following the appointment of Ms Henderson and Ms Arnott the Board complies with the FCA Diversity and Inclusion policy as it relates to minimum participation by women and, with Cecilia McAnulty as Audit Chair, at least one female member of the Board holding a senior Board position. The Board is aware of the FCA policy target concerning ethnic minority background which the Board currently does not fulfil. It is a particular challenge for a small Board to meet all the experience, skills and diversity criteria required to perform its duties on behalf of Shareholders. Our search process and recent experience is described in the Corporate Governance Report in the Annual Report and Accounts.

Management Team

The portfolio is currently co-managed by Nick Brind, John Yakas and George Barrow. As referenced in the announcement released on 14 February 2023, John Yakas will be retiring from Polar Capital with effect from 30 June 2023 and stepping back to an advisory role. The Board would like to express its thanks to John who has been part of the investment team since the launch of the Company in 2013 and has seen it through some very difficult and some very rewarding times. John's expertise and views on the financials sector along with his affable character will be missed. The team responsible for the management of the portfolio has significant experience of investing in the financial sector having grown both its size, from three to five since the Company's inception in 2013, as well as the assets for which they are responsible. As part of the transition process, George Barrow, who has been part of the team since 2008, was named co-manager in 2020. We wish John every happiness in his retirement.

Outlook

As we look forward in early 2023, the global economy and investors have a lot to deal with. The long list of headwinds is well known - war and geopolitics, decades high inflation, painful monetary tightening, structural labour market challenges, energy supply shortages, China and its Covid policy, to name a few. The predicament for policy makers and investors determining how far, how fast and for how long, will characterise the outcomes. It is not surprising that the most common description of the near-term outlook is 'uncertain'.

Initially not taking the inflation threats seriously, major central banks ended 2022 trying to restore some severely damaged credibility. In public statements that echoed the 'whatever it takes' mantra that underlay their previous 'too-easy-for-too-long' monetary stance, central bankers insisted they were serious about dealing with inflation. Even the Bank of Japan threw in the towel on its particularly long standing easy monetary policy stance. Despite this noise, concerns remain that inflation in developed countries will remain above central bank targets for a while, given stubbornly strong labour markets, and that fiscal and monetary policy may be at odds with each other. This concern can be seen in that, for the first time since 2014, the 2023 new year started with no sovereign bonds available at negative yields. Only 2 years ago more than 4000 such bonds, worth $18.4 trillion, were in negative yield territory.

Perceived as a cyclical sector with value characteristics, the prospects of the financials sector are balanced in this environment, as seen by its performance in 2022. The largest sub-sector, banks, are typically seen as vulnerable cyclicals in an economic slowdown. However, this traditional view requires qualification. In part driven by regulatory and accounting changes, banks in developed markets have better quality balance sheets and are better provisioned with greater capital and liquidity buffers than at any time since the global financial crisis (GFC). Banks delivered these improvements despite the huge hurdle of prolonged easy money and zero interest rates. This hurdle is now firmly in the past, and, although there are likely to be adjustment headaches for the broad economy, banks are one of the clear winners from this return to monetary policy normality.

The underlying recovery in the banking sector post the GFC has yet to be reflected in valuations, especially in Europe. Despite bumper profits, higher dividends and share buybacks, investors have not re-rated banks. For now, they choose to focus on the risk of greater non-performing loans despite evidence that the system is generally well-provisioned and has capacity to grow profits and provide further provisions given buoyant net interest income. The emergence of the "shadow banking" sector since the GFC which has pursued new lending aggressively, and the somewhat anaemic loan growth which many established banks have experienced in recent years are likely to now prove helpful in mitigating the need for large provisions. On the balance of risks, investors may be surprised by how well banks perform through the expected economic slowdown.

Beyond banks, in other sub-sectors there are different drivers for risk and performance, offering good performance diversification and opportunity. Asset managers and investment banks are vulnerable to further market corrections and depressed capital market activity, while general insurers have more stable earnings. Although troubled at the moment, we anticipate that FinTech will respond positively to any sign that interest rates have reached a peak and growth is back on the agenda. In addition, the significant rise in bond yields has re-opened another income opportunity for the Company given its discretion to invest up to 10% of its portfolio in fixed income securities. Overall, the breadth, depth and diversity of the sector offer both risk management potential and attractive return opportunities as the uncertain headwinds overhanging the global economy are played out.

While the near-term uncertainty remains high, the portfolio is balanced between cyclically exposed banks, both small and large cap, and more defensive sectors such as non-life insurers and fixed income securities. This puts the Company in a good position to navigate further economic and political setbacks, ready to turn more aggressive when the time is right. The Board believes that once investors look through the current negative market sentiment, the financials sector will be seen as an attractive home for capital given its breadth and diversity of opportunity, its relative valuations and its pro-cyclical correlation.

This year's AGM, to be held on 30 March 2023 at Polar Capital's London offices, will be my last as Chairman and a Director of your Company.

I was fortunate to join the Board of the Company at its launch in 2013. Although the financial sector was still recovering from the fallout from the global financial crisis, sufficient shareholders saw its potential at launch for further rehabilitation. Many of them remain shareholders today. At first our journey together was relatively uneventful, only to become a rollercoaster as the original fixed term end-of-life coincided with the outbreak of Covid and the worst economic crisis since the War. Again, despite it being the most difficult of times, enough shareholders were willing to look through local difficulties and supported the continuation of the Trust. Their loyalty and belief were rewarded as, shortly afterwards, the Company experienced an extraordinary period of growth in its share capital base with its market cap quintupling over a two year period.

I step down from the Board as the sector faces a different menu of headwinds. However, I am confident that the great strides taken broadly across the sector to strengthen balance sheets, risk management processes and operational efficiency will be recognised in performance. I want to express my sincere thanks to our shareholders who have supported our vision for the sector at launch and during the Company's rather eventful life.

Throughout my time as Chairman, I have been highly fortunate to receive first class support from the Company's sponsor, Polar Capital - from investment management, operational risk controls, financial reporting, to best-in-class sales and marketing and company secretarial services. The management of Polar Capital has consistently engaged constructively with the Board in dealing with the needs of the Company, always acting in the best interests of your Company despite any potential or actual conflicts of interest. I am confident they will continue to do so and will remain committed to the investment trust sector.

Finally, to my Board colleagues, past and present, I wish to express my heartfelt gratitude for their collaboration on my tour of duty. I have seen up close how their wisdom, professionalism and dedication have benefitted the Company through both good and bad times.

I am the last of the original three directors whose tenure has required them to step down from the Board. Having overseen the transition to a new Board, under the leadership of Simon I am confident that the Company will continue to receive the stewardship shareholders should expect during the next phase of the Company's life.

Robert Kyprianou

Chairman

20 February 2023

INVESTMENT MANAGER'S REPORT

Investment Review

Performance

Equity markets fell over the period under review (1 December 2021 to 30 November 2022) as the impact of rising interest rates, further lockdowns in China, Russia's invasion of Ukraine and the resulting impact on energy prices, and volatility in the UK gilts market hit sentiment and more than offset better corporate earnings. The strength of the US dollar cushioned falls for sterling investors, as did a late rally in equity markets in October and November.

Government bonds fell sharply over the year as the US Federal Reserve, European and other central banks raised interest rates at a faster pace than previously expected. However, concern about the impact on the outlook for growth resulted in the US yield curve inverting (when the interest rate on long term bonds is lower than that on shorter dated bonds), to levels not seen since the early 1980s, a historically good predictor of recessions.

Against this background, financials outperformed wider equity markets. During the 12 months, the Trust's net asset value total return rose 1.9%, while its benchmark index, the MSCI All Country World Financials Net Total Return Index, rose 6.8%. In contrast, global equity markets, as illustrated by the MSCI All Country World Total Return Index, fell 1.4% and the Lipper open-ended peer group of financial equity sector funds fell 0.3%. Since launch, the Trust's net asset value has returned 125.9% against the MSCI All Country World Financials Net Total Return Index return of 123.4% and the Lipper open-ended peer group return of 97.6%.

Notwithstanding the good performance of the sector and that the Trust's net asset value outperformed its peers and wider equity markets, relative performance was disappointing. The Trust's outperformance versus its peers, we believe, was probably due to the Trust's lower exposure to FinTech companies which performed poorly, and higher exposure to insurance companies, which performed extremely strongly over the period.

While we had strong performance from our holdings in the insurance sector - Arch Capital and Beazley both benefited from large rises in their share prices - the Trust's large overweight holding in faster-growing, smaller US banks more than offset this and was the most significant drag on performance relative to benchmark, along with a holding in PayPal Holdings.

Underweight exposure to commodity-exporting countries such as Australia, Saudi Arabia, Brazil and South Africa, but also Japan, impacted performance and more than offset positive contributions from the positioning in the likes of the UK, Indonesia and Ireland. Gearing was a small positive contributor to performance while currency and fixed income were small negative contributors, with exposure to fixed income having been reduced materially in recent years.

Market Review

In what was one of the worst years for financial markets, with bond markets suffering sharp falls, markets finished the year where they started, namely at odds with Federal Reserve guidance on the outlook for interest rates. As central banks turned more hawkish at the beginning of the financial year, there was a steep rise in bond yields which also led to a sharp sell-off in equity markets. This led initially to a rally in stocks tagged as value and a decline in growth stocks, albeit against a background of falling equity markets.

Financials is primarily a value sector due to its low valuation metrics and, in the main, benefited from rising interest rates and bond yields. However, there are a number of companies within the sector that are deemed growth stocks and consequently trade at high valuations - these fell sharply. While highly-rated stocks did see further pressure over the year, it would be an oversimplification to say value stocks outperformed while growth stocks underperformed.

Financial sub-sector performance

Banks Insurance Diversified financials FinTech

+6.9% +20.8% 0.0% -23.5%

Source: Bloomberg; MSCI/Factset

Russia's invasion of Ukraine in February 2022 coupled with a stronger than anticipated international response understandably overshadowed other news. There was a significant impact on commodities, especially energy markets in Europe, exacerbated by the strength in the US dollar, albeit the prices of many commodities fell over the second half of the year. The impact of China's zero-Covid policy and political ructions in the UK also impacted markets to dampen sentiment.

Sector Review

At the beginning of the period, financials saw significant outperformance. This was led by banks, but also insurance companies due to the positive correlation they have with higher bond yields, in anticipation that it would boost the earnings of banks as yields on their loans rise faster than what they had to pay out on deposits. However, banks gave up that outperformance as investors pulled back from the subsector with concerns about the outlook for growth, following the invasion of Ukraine, and therefore the increased risk of higher loan losses which would act as a headwind to earnings.

Equally, diversified financials, where we are underweight the benchmark, also struggled to perform against this background. While the subsector covers a broad spectrum of companies, from stock exchanges, asset managers and investment banks to information service companies, those that are more sensitive to the level of financial markets - in particular asset managers - suffered sharp share price falls as fund flows turned negative and expectations for performance fees and future fund raises fell. Investment banks were also weak in anticipation of lower activity in capital markets.

Conversely, non-life insurance companies proved far more resilient. First, they are more defensive, being less economically sensitive as insurance losses are for the most part driven by weather-related losses and accidents. Second, insurance rates continued to increase faster than claims costs, albeit with exceptions including UK motor insurance. Third, like banks, they are a beneficiary of rising interest rates and bond yields as this increases their investment income.

FinTech companies were extremely weak over the period, primarily due to very high valuations coming under significant pressure as discount rates increased and disappointment around earnings, while regulatory concerns impacted the 'buy now/pay later' sector. This also reflected broader weakness in the technology sector, with unprofitable companies the worst affected and some large, well-known unquoted FinTech businesses seeing significant falls in their valuations, while others saw their business models questioned.

Investment Activity

At the beginning of the reporting period, the Trust's investment portfolio was positioned in the expectation that growth would remain respectable, as economies continued to open up post-Covid and rising interest rates and bond yields would be a boost for banks' earnings and therefore share prices. Consequently, the portfolio was overweight banking stocks, notably faster-growing, smaller regional banks in the US which we saw as the biggest beneficiary of this trend.

Gearing had already been reduced to 5.2% at the end of November 2021 from a high of 12.7% in November 2020, reflecting the fact that valuations had risen sharply over the preceding 12 months. However, with the onset of war in Ukraine, rises in commodity prices and concerns around the impact on growth of rising interest rates, we positioned the portfolio more defensively. As a result, the proportion of the portfolio in banks was reduced by close to seven percentage points, largely through a reduction in our holdings in US and European banks, while exposure to more defensive companies within the sector, such as non-life insurers, was increased.

The shift to a more defensive portfolio was also reflected in individual stock positioning. For example, new holdings were purchased in, among others, Visa, Intact Financial Corporation, Marsh McLennan and Royal Bank of Canada, while we added to holdings in Berkshire Hathaway, Chubb and Wells Fargo. All of these are seen as more defensive, with insurance companies and Visa being less economically sensitive while the two banks are seen as more defensive when compared to their peers, the former in part due to the resilience of the Canadian economy. We also added to holdings in other commodity-driven economies such as Norway and Indonesia for the same reasons.

Conversely, holdings in JPMorgan, Citizens Financial Group, UBS Group, SVB Financial Group and Signature Bank - all seen as more sensitive to volatility in financial markets - were reduced, and the residual holdings in the latter two were sold later in the period. Holdings in Intesa Sanpaolo and ING Groep, both European banks, were sold as the proximity of the war to Europe led us to reduce our European bank exposure in the expectation it would have a significant impact on the region, albeit the banks have performed much better than we expected at the time of the invasion.

With equity markets suffering significant weakness at the end of September, we started to reverse some of the more defensive positioning as we felt financial markets were discounting a much deeper downturn than was justified. This was done through a combination of; adding to our holdings in JPMorgan, HSBC and Toronto-Dominion; starting new holdings in, among others, AIB Group and BOC Hong Kong; selling holdings in Baloise Holding, First Republic Bank and Shinhan Financial Group: reducing holdings such as Arch Capital, Berkshire Hathaway and Western Alliance.

We remained underweight asset managers and reduced our holding in Blackstone, the US alternative asset manager which suffered from having to cap redemptions from its listed property fund. We sold the remaining position later in the year in preference for a holding in Ares Management, which we perceived as more defensive. Alternative asset managers are an area we like for the long term due to the locked-up capital on which they earn fees and demand for underlying asset classes. In the short term, we saw risks around their ability to continue to grow at the pace they have in recent years.

In Asia, we continue to have a large overweight to Indian private sector banks which continue to see attractive growth. We do not invest in state banks as we do not believe they are good underwriters of risk. We made small changes to our holdings in AIA Group and Hong Kong Exchanges and Clearing which we saw as beneficiaries of China relaxing its zero-Covid policy, while adding to our holding in Prudential which should also be a beneficiary.

In Indonesia and Malaysia, both commodity-boosted economies, we added to holdings in Bank Central Asia and Bank Rakyat Indonesia Persero and started a new position in Hong Leong Bank. This was partially offset by reductions in our exposure to Thailand, an economy which has struggled as tourism and domestic consumption has been impacted by the delayed reopening of China and less government support during Covid.

The reinsurance sector has had a difficult few years, as a succession of natural disasters and other losses led to disappointing returns. During the year, a number of companies in the sector reduced the amount of capital allocated to reinsurance. Consequently, as reinsurance rates were expected to rise sharply, reflecting continued increase in demand for reinsurance due to climate change and inflation, for the first time since the launch of the Trust we also took a small position in Hannover Rueck, a reinsurance company - albeit other holdings in the portfolio with exposure to reinsurance would also benefit.

At inception close to 10% of the Company's portfolio was invested in fixed income securities, primarily to generate extra income. These holdings were for the most part sold in recent years as the yields on offer fell and became much less attractive. However, with the back-up in yields in 2022, we significantly increased exposure in October and November acquiring new holdings in bonds issued by, for example, AIB Group, IG Group Holdings, Nationwide Building Society, Legal & General Group, Rothesay Life and BNP Paribas at yields of between 8% and 12%.

We have been cautious of investing in unquoted companies in the past few years, in part as valuations appeared very unattractive but also as we saw better value in listed companies, especially with the fall in equity markets during the pandemic. Nevertheless, we did participate in a fund raising for Moneybox, a UK wealth and savings platform, in February 2022 which we believe has exciting potential.

Gearing, which dropped at one point during the middle of the year to a position where we had net cash available, ended the period at 6%.

Active Share

Active share - a measure of how actively a portfolio is managed with 0% reflecting a fund that replicates its benchmark and 100% where none of the securities overlap with the underlying benchmark- fell again this year to 69.6% at the end of the period under review from 76.5%. A higher number increases the probability that a fund will outperform or underperform its benchmark. The fall over the year reflects the changes highlighted above where the portfolio was positioned more defensively albeit that there remain significant differences between the portfolio and the benchmark.

The high active share in part reflects companies which we consider part of the wider universe but which are not included in the Trust's benchmark, such as Mastercard, or in the case of HDFC Bank, India's largest private bank, that, due to restrictions on foreign ownership, does not meet the threshold required by MSCI for index inclusion. However as indicated by the attribution analysis chart in the Annual Report, which lists the active positions, there are also many companies where we have a much larger or smaller position than the benchmark. For example, the portfolio has a smaller holding in Berkshire Hathaway than the benchmark and no holdings at all in Commonwealth Bank of Australia or Goldman Sachs.

Outlook

Looking forward, we remain very constructive on the outlook for financials, despite the shorter-term uncertainties which would argue for caution in a sector that is cyclical. Today, banks are more robust with significantly greater levels of capital and liquidity than before the global financial crisis. Importantly, their risk appetite coming into this downturn is at a level which would suggest much lower loan losses. In plain English, banks have made far fewer bad loans than they have in previous cycles.

Furthermore, banks have been benefiting from the rise in interest rates which has led to their net interest margins widening, that is to say the interest income they earn on loans has increased faster than the increase in what they have to pay out on savings accounts. Despite inflationary pressures, costs have been contained at a manageable level. Consequently bank earnings have risen over the year as analysts have had to factor in the changing interest rate environment. For some banks this has been significant, albeit not enough in many cases to offset weaker sentiment resulting in bank stocks derating.

The unknowns looking forward for bank investors will be the degree and duration of the downturn and therefore the cost to bank profitability. There are good reasons to believe loan losses will be modest, but this is complicated by the fact that the amount of loan loss provisions banks will have to set aside is likely to be larger than the actual losses due to accounting rules. As we saw during the pandemic, this led to banks taking significantly more loan loss provisions than they needed as the majority were written back when bad debts did not increase to the extent expected.

A cautious investor may look at the rise in interest rates and inflation, anecdotal stories of individuals and small businesses struggling with bills, the inversion of the yield curve, swill the tea leaves and quite reasonably assume that the downturn will be severe. Conversely, the evidence so far shows that savings built up during the pandemic and more robust corporate balance sheets, plus help from governments to offset increased energy costs, has allowed consumers and corporates to withstand the slowdown which explains why delinquencies have not yet risen meaningfully. The increase in loan loss provisions seen in recent results announcements does not undermine this view as it is driven by accounting rules.

The uncertainty is whether the banking sector will see further weakness along with wider equity markets, in anticipation that the downturn will be more severe than that priced in by financial markets, before recovering as investors realise this is not a repeat of the global financial crisis or the early 1990s downturn. Or do investors start to see through the shorter-term weakness and see the value in buying banking shares and bid up share prices to reflect their longer-term value and earnings potential?

Unlike the banking sector, where investors have understandably stepped back as they see risks of a recession impacting short-term earnings and have for the most part ignored the longer-term improvement in their earnings from higher interest rates, for non-life insurance companies, investors are willing to look through the shorter-term impact to their earnings. We have been very constructive on the non-life insurance sector and continue to be, though we are conscious that its performance as described above was in part due to its defensive characteristics.

However, with non-life insurance companies there has also been a material improvement in underlying earnings, from better underwriting returns, due to higher insurance premiums relative to claims costs as well as higher investment income. Understandably, investors have willingly paid a higher multiple for that stream of earnings. Reinsurance companies that write property-catastrophe insurance and other risks have equally performed well despite 2022 being a poor year for returns, as reinsurance premium rates have risen sharply.

We continue to remain cautious on asset managers and investment banks, the former as, notwithstanding the recent rally in financial markets, we believe flows will likely continue to remain weak, and in the latter as they rely on activity in capital markets which we believe will be slow to recover. We own shares in MSCI and S&P Global as beneficiaries of the continued demand for ETFs and demand for data and services across their product areas, in the latter instance as a credit rating agency.

As highlighted in the interim report to the end of May 2022, S&P and MSCI, which compile many US and global indices, include FinTech companies within the technology sector not the financial sector. Any investments in this area continue to be off-benchmark and effectively result in us having an overweight position. However, they have announced that they will be moving certain payment companies, notably PayPal Holdings, Visa and Mastercard, into the financial sector indices in March this year.

The portfolio remains overweight banking stocks, albeit by not as much as this time last year, where we see material upside in share prices. Otherwise, broadly the portfolio remains positioned in more defensive areas of the sector, notably non-life insurance, payments, fixed income securities and information services companies. Nevertheless, we have increased our exposure to Asia to benefit from the recovery of China's self-imposed zero-Covid policies as well as Europe, at the expense of the US. Gearing has also increased by a couple of percentage points.

The rally in financial markets over the last few months on the back of lower energy prices, in particular, in Europe, and softer inflation data has increased the probability of a shallower downturn and led to hopes of a "soft landing". Financials outperformed wider equity markets in both 2021 and 2022 and if this proves to be correct we would expect them to extend this outperformance for a third consecutive year. However, much will depend on how central banks react to the more positive data on inflation. Furthermore, will inflation come down quickly, as implied by financial markets, or will it prove to be more stubborn as history would suggest, albeit history is largely from the 1970s and 1980s when unions had greater power? Either way, we believe the next 10 years will be far better for the financials sector now the era of cheap money has ended.

Nick Brind, John Yakas & George Barrow

20 February 2023

Note

We would draw shareholders attention to www.polarcapitalglobalfinancialstrust.com for regular monthly portfolio updates and commentary.

  Full Investment Portfolio

As at 30 November 2022

Ranking					Market Value £'000		% of total net assets
2022	2021	Stock	Sector	Country	2022	2021	2022	2021
1	(1)	JP Morgan Chase	Banks	North America	30,627	26,539	5.7%	5.8%
2	(2)	Bank of America	Banks	North America	25,887	18,455	4.8%	4.0%
3	(6)	CHUBB	Insurance	Europe	22,493	11,340	4.2%	2.5%
4	(-)	Berkshire Hathaway	Diversified Financials	North America	21,302	-	3.9%	-
5	(3)	HDFC Bank	Banks	Asia (ex-Japan)	21,022	13,111	3.9%	2.9%
6	(37)	Wells Fargo	Banks	North America	20,754	5,957	3.8%	1.3%
7	(23)	HSBC Holdings	Banks	United Kingdom	14,656	8,153	2.7%	1.8%
8	(26)	AIA Group	Insurance	Asia (ex-Japan)	13,874	7,833	2.6%	1.7%
9	(-)	DBS Group	Banks	Asia (ex-Japan)	13,200	-	2.4%	-
10	(8)	PNC Financial Services	Banks	North America	13,112	11,112	2.4%	2.4%
Top 10 investments					196,927		36.4%
11	(7)	Toronto-Dominion Bank	Banks	North America	12,439	11,305	2.3%	2.4%
12	(15)	Sumitomo Mitsui Financial	Banks	Japan	11,789	9,264	2.2%	2.0%
13	(-)	Visa	Software & Services	North America	11,108	-	2.1%	-
14	(5)	Arch Capital	Insurance	North America	10,533	12,572	1.9%	2.7%
15	(-)	Marsh & McLennan	Insurance	North America	10,041	-	1.8%	-
16	(-)	DNB Bank	Banks	Europe	9,896	-	1.8%	-
17	(22)	Bank Central Asia Indonesia	Banks	Asia (ex-Japan)	9,890	8,204	1.8%	1.8%
18	(12)	Mastercard	Software & Services	North America	9,805	9,466	1.8%	2.1%
19	(49)	Bank Rakyat	Banks	Asia (ex-Japan)	9,183	4,235	1.7%	1.0%
20	(-)	U.S. Bancorp	Banks	North America	8,972	-	1.7%	-
Top 20 investments					300,583		55.5%
21	(-)	AIB Group	Banks	Europe	8,949	-	1.7%	-
22	(35)	Beazley	Insurance	United Kingdom	8,909	6,767	1.6%	1.5%
23	(4)	Citizens Financial Group	Banks	North America	8,570	13,086	1.6%	2.9%
24	(10)	UBS Group	Banks	Europe	8,488	10,279	1.6%	2.3%
25	(-)	Charles Schwab	Diversified Financials	North America	7,967	-	1.5%	-
26	(32)	Sampo	Insurance	Europe	7,909	6,858	1.4%	1.5%
27	(16)	Morgan Stanley	Diversified Financials	North America	7,558	9,083	1.4%	2.0%
28	(-)	IndusInd Bank	Banks	Asia (ex-Japan)	6,898	-	1.3%	-
29	(-)	Intact Financial Corporation	Insurance	North America	6,836	-	1.3%	-
30	(44)	Standard Chartered	Banks	United Kingdom	6,552	5,129	1.2%	1.1%
Top 30 investments					379,219		70.1%
31	(-)	The Travelers Companies	Insurance	North America	6,484	-	1.2%	-
32	(-)	Prudential	Insurance	United Kingdom	6,402	-	1.2%	-
33	(43)	Bank of NT Butterfield	Banks	North America	6,310	5,240	1.2%	1.1%
34	(-)	Royal Bank of Canada	Banks	North America	5,858	-	1.1%	-
35	(36)	Tisco Financial	Banks	Asia (ex-Japan)	5,805	5,999	1.1%	1.3%
36	(53)	Hong Kong Exchange and Clearing	Diversified Financials	Asia (ex-Japan)	5,746	4,081	1.1%	0.9%
37	(19)	Enterprise Financial Services	Banks	North America	5,685	8,424	1.0%	1.8%
38	(13)	East West Bancorp	Banks	North America	5,660	9,452	1.0%	2.1%
39	(-)	Mitsubishi UFJ Financial Group	Banks	Japan	5,629	-	1.0%	-
40	(9)	Nordea Bank	Banks	Europe	5,502	10,907	1.0%	2.4%
Top 40 investments					438,300		81.0%
41	(-)	MSCI	Diversified Financials	North America	5,497	-	1.0%	-
42	(-)	Hannover Rueck	Insurance	Europe	5,456	-	1.0%	-
43	(60)	FinecoBank Banca Fineco	Banks	Europe	5,293	2,781	1.0%	0.6%
44	(-)	Cullen Frost Bankers	Banks	North America	5,263	-	1.0%	-
45	(31)	Allianz	Insurance	Europe	5,078	7,079	0.9%	1.6%
46	(41)	Lancashire	Insurance	United Kingdom	5,024	5,485	0.9%	1.2%
47	(33)	S&P Global	Diversified Financials	North America	4,923	6,826	0.9%	1.5%
48	(-)	Comerica	Banks	North America	4,914	-	0.9%	-
49	(-)	CaixaBank	Banks	Europe	4,851	-	0.9%	-
50	(-)	Hong Leong Bank	Banks	Asia (ex-Japan)	4,775	-	0.9%	-
Top 50 investments					489,374		90.4%
51	(-)	Regions Financial	Banks	North America	4,710	-	0.9%	-
52	(-)	Macquarie	Diversified Financials	Asia (ex-Japan)	4,644	-	0.9%	-
53	(-)	Bank of China (Hong Kong)	Banks	Asia (ex-Japan)	4,634	-	0.9%	-
54	(-)	Ares Management	Diversified Financials	North America	4,236	-	0.8%	-
55	(47)	Direct Line Insurance	Insurance	United Kingdom	4,091	4,763	0.7%	1.0%
56	(-)	Axis Bank	Banks	Asia (ex-Japan)	3,789	-	0.7%	-
57	(58)	Ares Capital	Diversified Financials	North America	3,393	2,998	0.6%	0.7%
58	(21)	Housing Development Finance	Banks	Asia (ex-Japan)	3,206	8,209	0.5%	1.8%
59	(-)	Pension Insurance 7.375% Prep Bond	Fixed Income	Fixed Income	2,576	-	0.5%	-
60	(73)	International Personal Finance 9.75% 2025 Bond	Fixed Income	Fixed Income	2,563	1,357	0.5%	0.3%
Top 60 investments					527,216		97.4%
61	(-)	Rothesay Life 4.875% Prep Bond	Fixed Income	Fixed Income	2,548	-	0.5%	-
62	(-)	Legal  General Group 5.625% Prep Bond	Fixed Income	Fixed Income	2,542	-	0.5%	-
63	(-)	Golub Capital	Diversified Financials	North America	2,465	-	0.5%	-
64	(61)	VPC Specialty Lending Investments	Fixed Income	Fixed Income	2,428	2,392	0.4%	0.5%
65	(-)	Lancashire 5.625% 2041 Bond	Fixed Income	Fixed Income	2,348	-	0.4%	-
66	(-)	Moneybox (unquoted)	Diversified Financials	United Kingdom	2,310	-	0.4%	-
67	(-)	IG Group 3.125% 2028 Bond	Fixed Income	Fixed Income	2,284	-	0.4%	-
68	(65)	Atom Bank (unquoted)	Banks	United Kingdom	2,241	1,921	0.4%	0.4%
69	(-)	AIB Group 6.25% Prep Bond	Fixed Income	Fixed Income	2,056	-	0.4%	-
70	(-)	Aviva 6.875% Prep Bond	Fixed Income	Fixed Income	2,030	-	0.4%	-
Top 70 Investments					550,468		101.7%
71	(74)	Riverstone Credit Opportunities	Fixed Income	Fixed Income	2,026	1,325	0.4%	0.3%
72	(-)	Barclays 8.875% Prep Bond	Fixed Income	Fixed Income	1,978	-	0.4%	-
73	(-)	Societe Generale 5.375% Perp Bond	Fixed Income	Fixed Income	1,978	-	0.4%	-
74	(-)	Phoenix Group 5.625% 2031 Bond	Fixed Income	Fixed Income	1,919	-	0.4%	-
75	(-)	BNP Paribas 7% Perp Bond	Fixed Income	Fixed Income	1,867	-	0.3%	-
76	(-)	Nationwide Building Society 5.75% Perp Bond	Fixed Income	Fixed Income	1,785	-	0.3%	-
77	(-)	CaixaBank 5.875% Perp Bond	Fixed Income	Fixed Income	1,771	-	0.3%	-
78	(-)	Rothesay Life 6.875% Perp Bond	Fixed Income	Fixed Income	1,675	-	0.3%	-
79	(-)	Natwest Group 2.105% 2031 Bond	Fixed Income	Fixed Income	1,646	-	0.3%	-
80	(66)	Gresham House	Diversified Financials	United Kingdom	1,625	1,803	0.3%	0.4%
Top 80 Investments					568,738		105.1%
81	(70)	Provident Financial 2032 8.875% Bond	Fixed Income	Fixed Income	1,593	1,706	0.3%	0.4%
82	(-)	Chesnara 4.75% 2032 Bond	Fixed Income	Fixed Income	1,275	-	0.2%	-
83	(-)	Shawbrook Group 9% 2030 Bond	Fixed Income	Fixed Income	480	-	0.1%	-
84	(77)	Jupiter 8.875% 2030 Bond	Fixed Income	Fixed Income	456	528	0.1%	0.1%
85	(-)	Rothesay Life 5% Perp Bond	Fixed Income	Fixed Income	206	-	0.0%	-
Total Investments					572,748		105.8%
Other net liabilities					(31,476)		(5.8%)
Total net assets					541,272		100.0%

Note: Figures in brackets denote comparative rankings as at 30 November 2021.

Portfolio Review

 As at 30 November 2022

Geographical Exposure*	Benchmark weighting as at 30 November 2022**	30 November 2022	30 November 2021
North America	53.0%	50.1%	47.6%
Asia (ex-Japan)	18.0%	19.8%	19.9%
Europe	14.5%	15.5%	19.2%
United Kingdom	4.6%	9.4%	11.7%
Fixed Income	-	7.8%	2.2%
Japan	3.8%	3.2%	2.0%
Latin America	-	-	1.7%
Eastern Europe	-	-	1.1%
Other net liabilities	-	(5.8%)	(5.4%)
Total		100.0%	100.0%

Sector Exposure*	Benchmark weighting as at 30 November 2022**	30 November 2022	30 November 2021
Banks	48.3%	60.1%	70.2%
Insurance	22.0%	20.7%	13.7%
Diversified Financials	29.6%	13.3%	14.9%
Fixed Income	-	7.8%	2.2%
Software & Services	-	3.9%	4.4%
Other net liabilities	-	(5.8%)	(5.4%)
Total		100.0%	100.0%

Market Capitalisation*	Benchmark weighting as at 30 November 2022**	30 November 2022	30 November 2021
Large (>US$5bn)	98.6%	98.7%	85.6%
Medium (US$0.5bn - US$5bn)	1.4%	5.9%	18.2%
Small (<US$0.5bn)	-	1.2%	1.6%
Other net liabilities	-	(5.8%)	(5.4%)
Total		100.0%	100.0%

* Based on the net assets as at 30 November 2022 of £541.3m (2021: £457.2m).

** The classifications are derived from the Benchmark as far as possible. Not all geographical areas or sectors of the Benchmark are shown, only those in which the Company had an investment at the year end.

STRATEGIC REPORT

The Strategic Report section of this Annual Report comprises the Chairman's Statement, the Investment Manager's Report, including information on the portfolio, and this Strategic Report. This Report has been prepared to provide information to Shareholders on the Company's strategy and the potential for this strategy to succeed, including a fair review of the Company's performance during the year ended 30 November 2022, the position of the Company at the year end and a description of the principal risks and uncertainties. Throughout the Strategic Report there are certain forward-looking statements made by the Directors in good faith based on the information available to them at the time of their approval of this Report. Such statements should be treated with caution due to inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

Business Model and Regulatory Arrangements

The Company's business model follows that of an externally managed investment trust providing Shareholders with access to a portfolio of listed or quoted securities issued by companies in the financials sector. Its shares are listed on the main market of the London Stock Exchange.

The Company is designated an Alternative Investment Fund ('AIF') under the Alternative Investment Fund Management Directive ('AIFMD') and, as required by the Directive, has contracted with Polar Capital LLP to act as the Alternative Investment Fund Manager ('AIFM') and HSBC Bank Plc to act as the Depositary.

Both the AIFM and the Depositary have responsibilities under AIFMD for ensuring that the assets of the Company are managed in accordance with the investment policy and are held in safe custody. The Board remains responsible for setting the investment strategy and operational guidelines as well as meeting the requirements of the Financial Conduct Authority ('FCA') Listing Rules and the Companies Act 2006.

The AIFMD requires certain information to be made available to investors in AIFs before they invest and requires that material changes to this information be disclosed in the Annual Report of each AIF. Investor Disclosure Documents, which set out information on the Company's investment strategy and policies, gearing, risk, liquidity, administration, management, fees, conflicts of interest and other Shareholder information are available on the Company's website.

There have been no material changes to the information requiring disclosure. Any information requiring immediate disclosure pursuant to the AIFMD will be disclosed to the London Stock Exchange. Statements from the Depositary and the AIFM can be found on the Company's website.

Investment Objective and Policy

The Company's investment objective is to generate for investors a growing dividend income together with capital appreciation. The Company seeks to achieve its objective by investing in a global portfolio primarily consisting of listed or quoted securities issued by companies in the financials sector operating in banking, insurance, property and other sub-sectors. The portfolio is diversified by geography, industry sub-sector and stock market capitalisation.

The Company may have a small exposure to unlisted and unquoted companies, but in aggregate, this is not expected to exceed 10% of total assets at the time of investment. The Company will not invest more than 10% of total assets, at the time of investment, in other listed closed-ended investment companies and no single investment will normally account for more than 10% of the portfolio at the time of investment.

The Company may employ levels of borrowing from time to time with the aim of enhancing returns, currently subject to an overall maximum of 20% (increased from 15% at the time of the reconstruction in April 2020) of net assets at the time the relevant borrowing is taken out. Actual levels of borrowing may change from time to time based on the Manager's assessment of risk and reward.

The Company may invest through equities, index-linked and other debt securities, cash deposits, money market instruments, foreign currency exchange transactions, forward transactions, index options and other instruments including derivatives. Forward transactions, derivatives (including put and call options on individual positions or indices) and participation notes may be used to gain exposure to the securities of companies falling within the Company's investment policy or to seek to generate income from the Company's position in such securities, as well as for efficient portfolio management. Any use of derivatives for investment purposes is made on the basis of the same principles of risk spreading and diversification that apply to the Company's direct investments. The Company may hedge exposure to foreign currencies if considered appropriate for efficient portfolio management.

The Board

As the day to day management of the Company is outsourced to service providers, the Board's focus at each meeting is on investment performance, including the outlook and strategy, processes and ESG. The Board also considers the Company's structure and growth ensuring Shareholders' interests are at the forefront of any structural or capital change. In addition, the management and provision of services received from third-party service providers and the risks inherent in the various matters are regularly reviewed and discussed. Further information on the composition of the Board can be found on in the full Annual Report and Accounts.

Strategy and Investment Approach

The Manager's investment process is a six-stage process primarily driven by a bottom-up fundamental analysis of individual companies, albeit with macroeconomic inputs. The Manager regularly uses both quantitative and qualitative screens to rank companies on a risk-adjusted basis, since the fundamental view is that long-term returns in most financial stocks are driven by their success in writing risk, rather than short-term growth trends. The approach involves undertaking a detailed income statement and balance sheet analysis and values a company based on the Capital Asset Pricing Model that compares a company's return on equity to its cost of capital (the latter taking account of both stock and country risk) to provide a fair price/book valuation. This valuation (coupled with other more standard valuation systems) is then ranked across the global universe and added to scores focused on other variables such as profitability, risk, ESG and growth metrics to provide a model portfolio and so a focus for additional stock-specific research. When possible, the portfolio Managers undertake trips to the US, Europe and Asia to meet companies as well as those they meet in London, leveraging off the combined experience of the Manager's team of five fund managers and analysts who focus on the global financials sector.

There are no limits on the exposure of the investment portfolio to either small or mid-cap companies but the majority of the portfolio is invested in companies with a market capitalisation greater than US$5bn. The Manager has discretion to invest up to 10% of the portfolio in debt securities.

The vast majority of the investment portfolio is invested in companies that not only offer capital appreciation but pay dividends, which are expected to rise over time, so as to meet the necessary income required to facilitate the payment of a rising level of dividends to Shareholders. The Board, together with the Manager will continue to assess the likely income capability of the portfolio in a post Covid environment to determine the appropriate longer-term distribution level.

Service Providers

Polar Capital LLP has been appointed to act as the Investment Manager and AIFM as well as to provide or procure company secretarial, marketing and administrative services, including accounting, portfolio valuation and trade settlement which it has arranged to deliver through HSBC Securities Services.

The Company also contracts directly, on terms agreed periodically, with a number of third parties for the provision of specialist services:

· HSBC Securities Services as Custodian and Depositary;

· Stifel Nicolaus Europe Limited as Corporate Broker;

· Equiniti Limited as Share Registrars;

· PricewaterhouseCoopers LLP as Independent Auditors;

· RD:IR for investor relations and shareholder analysis;

· Marten & Co as third-party research providers;

· Camarco as PR advisors;

· Perivan as Designers and Printers for shareholder communications; and

· Huguenot Limited as Website Designers and internet hosting services.

Under the terms of the Investment Management Agreement ("IMA") the Manager is also responsible for monitoring third-party suppliers which are directly appointed by the Company. The Manager has, with the consent of the Directors, delegated the provision of certain of these administrative functions to HSBC Securities Services and to Polar Capital Secretarial Services Limited. The fees of HSBC Securities Services are paid by the Company. The Board believes that the benefits gained by utilising the services of a Company Secretary provided by the Manager significantly outweigh the potential for a conflict of interest perceived by PIRC. Further information is contained in the Corporate Governance Report in the full Annual Report and Accounts.

Benchmark

The Company measures the Manager's performance against the MSCI ACWI Financials Net Total Return Index ('the Benchmark'). This has been used to measure the performance of the Company since 23 April 2020, although the Manager does not seek to replicate the index in constructing the Company's portfolio. The portfolio may, therefore, diverge substantially from the constituents of this Benchmark.

Although the Company evaluates its performance against the Benchmark, this is neither a target nor a determinant of investment strategy. The purpose of the Benchmark is to set out a reasonable measure of performance for Shareholders and an appropriate base which, together with an additional hurdle, forms the level above which the Manager earns a performance fee.

Investment Management Company and Management of the Portfolio

As the Company is an investment vehicle for Shareholders, the Directors have sought to ensure that the business of the Company is managed by a leading specialist investment management team and that the investment strategy is attractive to Shareholders. The Directors believe that a strong working relationship with the Manager will achieve the optimum return for Shareholders. As such, the Board and Manager operate in a supportive, co-operative and open environment.

The Investment Manager is Polar Capital LLP ("Polar Capital") which is authorised and regulated by the Financial Conduct Authority, to act as Investment Manager and AIFM of the Company with sole responsibility for the discretionary management of the Company's assets (including uninvested cash) and sole responsibility for decisions as to the purchase and sale of individual investments. The Manager also has responsibility for asset allocation within the limits of the investment policy and guidelines established and regularly reviewed by the Board, all subject to the overall control and supervision of the Board.

Information is provided to the Directors on a timely basis, covering all aspects of relevant management, regulatory and financial information. The Board receives a report from the Manager at each Board meeting and may ask representatives of the Manager to attend Board meetings enabling Directors to probe further on matters of concern or seek clarification as appropriate. While the Board reviews the performance of the Manager at each Board meeting, and the Company's performance against Benchmark and a peer group of funds with similar objectives, the Management Engagement Committee formally carries out an annual review of the Manager and other suppliers' performance during the year.

Polar Capital provides a team of financial specialists and the portfolio is jointly managed by Mr Nick Brind, Mr John Yakas and Mr George Barrow, supported by other financials specialists within the team. The Manager has other investment resources which support the investment team and has experience in administering and managing other investment companies.

Termination Arrangements

The IMA may be terminated by either party giving 12 months' notice. The IMA may be terminated earlier by the Company with immediate effect on the occurrence of certain events, including: (i) if an order has been made or an effective resolution passed for the liquidation of the Manager; (ii) if the Manager ceases or threatens to cease to carry on its business; (iii) where the Company is required to do so by a relevant regulatory authority; (iv) on the liquidation of the Company; or (v) subject to certain conditions, where the Manager commits a material breach of the IMA. In the event the IMA is terminated by the Company, except in the event of termination by the Company for certain specified causes, the base fee and the performance fee will be calculated pro rata for the period up to and including the date of termination.

Fee Arrangements

Management Fee

Under the terms of the IMA, the Manager is entitled to a management fee together with reimbursement of reasonable expenses incurred by it in the performance of its duties. The Management fee is payable monthly in arrears and, with effect from 7 April 2020, is charged at a rate of 0.70% per annum of the Company's NAV based on the lower of the Company's market capitalisation and NAV. In accordance with the Directors' policy on the allocation of expenses between income and capital, in each financial year 80% of the management fee payable is charged to capital and the remaining 20% to revenue.

Performance Fee

The Manager may be entitled to a performance fee equal to 10% of the excess of the performance fee hurdle and payable at the end of each five-year period, the first period being from 23 April 2020 to 30 June 2025 and at five yearly intervals thereafter.

For the purposes of calculating the performance fee, the Company's NAV (adjusted to reflect dividends paid, and any performance impact caused by the issue or buyback of ordinary shares) at 30 June 2025, being the end of the relevant Performance Period, will be used. As reported last year, the significant growth of the Company's share capital since reconstruction in April 2020 created an unintended outcome from the performance fee calculation methodology. The methodology was amended to reflect the increase in the NAV per share and the performance fee accrual recalculated from the date of the reconstruction. No performance fee has been paid or accrued as at 30 November 2022. Where a performance fee becomes payable it will be charged 100% to capital.

Performance and Key Performance Objectives

The Board appraises the performance of the Company and the Manager as the key supplier of services to the Company against key performance indicators ('KPIs'). The objectives of the KPIs comprise both specific financial and Shareholder related measures. These KPIs have not differed from the prior year.

KPI	Control process	Outcome
The provision of investment returns to Shareholders measured by long-term NAV total return relative to the Benchmark and a comparator group.	The Board reviews at each meeting the performance of the portfolio and considers the views of the Manager and the value delivered to Shareholders through NAV growth and dividends paid. The Board also receives monthly reports on performance against both the Benchmark and a comparator group of open-ended investment funds.	The Company's NAV total return, over the year ended 30 November 2022, was 1.9%* while the Benchmark delivered 6.8% over the same period. Since inception the NAV total return was 125.9%* compared to 134.9% for the Benchmark and 97.6% for a comparator group. The Company ranks 9 out of a comparator group of 33 open ended funds within the Lipper Financial Sector universe since inception and 1 out of 6 within a smaller comparable group of funds regularly considered by the Board as at 30 November 2022.
The achievement of a progressive dividend policy.	Financial forecasts are reviewed to track income and distributions.	A total of two interim dividends amounting to 4.45p (2021: 4.40p) per ordinary share have been paid or declared in respect of the financial year ended 30 November 2022. While the aim to achieve dividend growth remains there is no guarantee that this can be achieved.
Monitoring and reacting to issues created by the discount or premium of the ordinary share price to the NAV per ordinary share with the aim of reducing volatility for shareholders.	The Board receives regular information on the composition of the share register including trading patterns and discount/premium levels of the Company's ordinary shares. The Board discusses and authorises the issue or buy back of shares when appropriate. specialist investment trust to a change in investor sentiment towards that sector. While there is no formal policy the Board discusses the market factors giving rise to any discount or premium, the long or short-term nature of those factors and the overall benefit to Shareholders of any mitigating actions. The market liquidity is also considered when authorising the issue or buy back of shares when appropriate market conditions prevail. A daily NAV per share, calculated in accordance with the AIC guidelines is issued to the London Stock Exchange.	The discount of the ordinary share price to the NAV per ordinary share at the year end was 7.0%* compared with a premium of 2.7% at the year ended 30 November 2021. The discount for the investment trust sector at 30 November 2022 was 13.5%. During the year under review, the Company issued a total of 31,944,680 ordinary shares. In addition, the Company executed two Subsequent Placings under the terms of the Prospectus issued on 12 May 2021, resulting in the issue of a further 26,775,320 new ordinary shares. In the year ended 30 November 2022, the Company bought back 6,356,000 ordinary shares at an average discount of 9.0%. Subsequent to the year end and to 16 February 2023, the Company bought back a further 790,000 shares. All shares bought back have been placed into treasury for reissue to the market under the appropriate conditions.
To qualify and continue to meet the requirements for Sections 1158 and 1159 of the Corporation Tax Act 2010 ('investment trust status').	The Board receives regular financial information which discloses the current and projected financial position of the Company against each of the tests set out in Sections 1158 and 1159. Please refer to the Directors Report for further information.	The Company has been granted investment trust status annually since its launch on 1 July 2013 and is deemed to be granted such status for each subsequent year subject to the Company continuing to satisfy the conditions of Section 1158 of the Corporation Tax Act 2010 and other associated ongoing requirements. The Directors believe that the tests have been met in the financial year ended 30 November 2022 and will continue to be met.
Efficient operation of the Company with appropriate investment management resources and services from third party suppliers within a stable and risk controlled environment.	The Board considers annually the services provided by the Manager, both investment and administrative, and reviews on a cycle the provision of services from third parties including the costs of their services. The annual operating expenses are reviewed and any non-recurring project related expenditure approved by the Board.	The Board, through the Audit Committee has received and considered satisfactory the internal controls report of the Manager and other key suppliers including contingency arrangements to facilitate the ongoing operations of the Company in the event of withdrawal or failure of services. The ongoing charges for the year ended 30 November 2022 excluding the performance fee were 0.87% of net assets (2021: 1.02%)*. The ongoing charges including the performance fee payable were 0.65% (2021: 0.98%)*. The decrease in ongoing charges including performance fee reflects the write back of the performance fee accrual in the year under review

*See Alternative Performance Measures provided in the Annual Report

PRINCIPAL RISKS AND UNCERTAINTIES

The Board is responsible for the management of risks faced by the Company and, through delegation to the Audit Committee, has established procedures to manage risk, oversee the internal control framework and determine the nature and extent of the principal risks the Company is willing to take in order to achieve its long-term strategic objectives.

The established risk management process the Company follows identifies and assesses various risks, their likelihood, and possible severity of impact, considering both internal and external controls and factors that could provide mitigation. A post mitigation risk impact score is then determined for each principal risk.

The Audit Committee carries out, at least annually, a robust assessment of the principal risks and uncertainties with the assistance of the Manager, continually monitors identified risks and meets to discuss both long-term and emerging risks outside of the normal cycle of Audit Committee meetings.

During the year the Audit Committee, in conjunction with the Board and the Manager, undertook a full review of the Company's Risk Map including the mitigating factors and controls to reduce the impact of the risks. The Committee continues to closely monitor these risks along with any other emerging risks as they develop and implements mitigating actions as necessary.

The Committee is mindful of the uncertainty surrounding inflation, recession and rising interest rates coupled with the invasion of Ukraine by Russia and the longer term impact this may have on the market and global economy. The impact of this is discussed further in the Chairman's Statement and Manager's Report. Further information on how the Committee has assessed the Company's ability to operate as a going concern and the Company's longer-term viability can be found in the Report of the Audit Committee.

The principal risks are detailed on the following pages along with a high-level summary of their management through mitigation over the past financial year.

Principal Business Risks and Uncertainties	Management of Risks through Mitigation & Controls
Business
Failure to achieve investment objective, investment performance below agreed benchmark objective or market/ industry average.	The Board seeks to manage the impact of such risks through regular reporting and monitoring of investment performance against a comparator group of open-ended funds, the Benchmark and other agreed indicators of relative performance. In months when the Board is not scheduled to meet, it receives a monthly report containing financial information on the Company including gearing and cash balances. Performance and strategy are reviewed throughout the year at regular Board meetings where the Board can challenge the Manager. The Board also receives a monthly commentary from the Manager in the form of factsheets for all the specialist financial sector funds managed by Polar Capital. The Board is committed to a clear communication programme to ensure Shareholders understand the investment strategy. This is maintained through the use of monthly factsheets which have a market commentary from the Manager as well as portfolio data, an informative website as well as annual and half year reports. The Management Engagement Committee considers the suitability of the Manager on the basis of performance and other services provided .
Loss of portfolio manager or other key staff.	The strength and depth of investment team provides comfort that there is not over-reliance on one person with alternative portfolio managers available to act if needed. For each key business process roles, responsibilities and reporting lines are clear and unambiguous. Key personnel are incentivised by equity participation in the investment management company.
Persistent excessive share price discount to NAV.	In consultation with its advisors, including the corporate broker, the Board regularly considers the level of the share price premium/discount to the NAV and the Board reviews ways to enhance Shareholder value including share issuance and buy backs.
Principal Business Risks and Uncertainties PORTFOLIO MANAGEMENT	Management of Risks through Mitigation & Controls
While the portfolio is diversified across a number of stock markets worldwide, the investment mandate is focused on financials and thus the portfolio is more sensitive to investor sentiment and the commercial acceptance of the sector than a general investment portfolio. The Company's portfolio is exposed to risks such as market price, credit, liquidity, foreign currency and interest rates. The portfolio is actively managed. The Manager's style focuses primarily on the investment opportunity of individual stocks and, accordingly, may not follow the makeup of the Benchmark. This may result in returns which are not in line with the Benchmark. The degree of risk which the Manager incurs in order to generate the investment returns and the effect of gearing on the portfolio by borrowed funds can magnify the portfolio returns per share positively or negatively.	The Board has set appropriate investment limits against which it monitors the position of the portfolio. They include guidelines on exposures to certain investment markets and sectors. The Board discusses with the Manager at each Board meeting its views on the sector. At each Board meeting the composition and diversification of the portfolio by geographies, sectors and capitalisations are considered along with sales and purchases of investments. Individual investments are discussed with the Manager as well as the Manager's general views on the various investment markets and the financials sector in particular. Analytical performance data and attribution analysis is presented by the Manager. The policies for managing the risks posed by exposure to market prices, interest rates, foreign currency exchange rates, credit and liquidity are set out in Note 27 to the financial statements. Shareholders have sight of the entire portfolio and geographic exposure of investments.
Gearing, either through bank debt or the use of derivatives, may be utilised from time to time. Whilst the use of gearing is intended to enhance the NAV total return, it will have the opposite effect when the return on the Company's investment portfolio is negative.	The arrangement of any new banking facilities and gearing limits under such arrangements are controlled by the Board. Derivatives are considered as being a form of gearing and their use has been agreed by the Board. The deployment of borrowed funds (if any) is based on the Manager's assessment of risk and reward. At 30 November 2022 the Company was 6.0% geared (2021: 5.2%).
The ability to continue the dividend policy may be compromised due to lower income as a result of changes in underlying companies' policies, or changes in the portfolio construction, regulatory intervention, local taxes or as a result of the currency exposure underlying the portfolio. This could result in a lower level of dividend being paid than intended or previously paid.	The Board monitors income and currency exposure through monthly management accounts and discussion. In the event of there being insufficient income during the financial year the Company has built up revenue reserves on which to draw to pay dividends. Equally, in the event of the revenue reserves being fully utilised the Company may use other distributable reserves. See notes 22 to 24 in the full Annual Report and Accounts. The Board and the Manager will continue to assess the income capability of the portfolio and determine the appropriate longer-term dividend level based on how economies and businesses perform.
Infrastructure	Management of Risks through Mitigation & Controls
There are risks from the failure of, or disruption to, operational and accounting systems and processes provided by the Manager including any subcontractors to which the Manager has delegated a task as well as directly appointed suppliers. The mis-valuation of investments or the loss of assets from the custodian or sub custodians could affect the NAV per share or lead to a loss of Shareholder value. There is taxation risk that the Company may fail to continue as an investment trust and suffer capital gains tax or fail to recover as fully as possible withholding taxes on overseas investments. The legal and regulatory risks include failure to comply with the FCA's Prospectus Rules, Listing Rules and Disclosure Guidance and Transparency Rules; not meeting the provisions of the Companies Act 2006 and other UK and overseas legislation affecting UK companies and not complying with accounting standards. Further risks arise from not keeping abreast of changes in legislation and regulations which have in recent years been substantial.	At each Board meeting the Board receives an administration report that provides details on general corporate matters including legislative and regulatory developments and changes. The Board conducts an annual review of suppliers and their internal control reports, which includes the disaster recovery procedures of the Manager. Regular reporting from the Depositary on the safe custody of the Company's assets and the operation of control systems related to the portfolio reconciliation is monitored. Specialist advice is sought on taxation issues as and when required. The Audit Committee has oversight of such work. Information and guidance on legal and regulatory risks is managed by using the Manager or professional advisers where necessary and the submission of reports to the Board for discussion and, if required, any remedial action or changes considered necessary. The Board monitors new developments and changes in the regulatory environment. Whilst it has no control over such changes, the Board seeks to ensure that their impact on the Company is understood and complied with.
Principal Business Risks and Uncertainties External	Management of Risks through Mitigation & Controls
There is significant exposure to the economic cycles of the markets in which the underlying investments conduct their business operations as well as the economic impact on investment markets where such investments are listed. The fluctuations of exchange rates can also have a material impact on Shareholder returns.	The Board regularly discusses global geopolitical issues and general economic conditions and developments. The impact on the portfolio from other geopolitical changes are monitored through existing control systems and discussed regularly by the Board. While it is difficult to quantify the impact of such changes, it is not anticipated that they will fundamentally affect the business of the Company or make investing in the financials sector any less desirable. The longer term effects of inflation, recession and the war in Ukraine will continue to be assessed by the Audit Committee in light of how they will impact the Company's portfolio and the overall economic and geopolitical environment in which the Company operates. Note 27 describes the risks posed by changes in foreign exchange rates. The Manager has the ability to hedge foreign currency if it is thought appropriate at the time.

SECTION 172 OF THE COMPANIES ACT 2006

The statutory duties of the Directors are listed in s171-177 of the Companies Act 2006. Under s172, Directors have a duty to promote the success of the Company for the benefit of its members (our Shareholders) as a whole and in doing so have regard to the consequences of any decision in the long term, as well as having regard to the Company's stakeholders amongst other considerations. The fulfilment of this duty not only helps the Company achieve its Investment Objective but ensures decisions are made in a responsible and sustainable way for Shareholders.

To ensure that the Directors are aware of, and understand, their duties, they are provided with an induction when they first join the Board; the induction includes both functional, operational and support arrangements for the Company and also relevant regulatory and legal duties of a director. The Directors continue to receive regular and ongoing updates on relevant legislative and regulatory developments and have access to the advice and services of the Company Secretary and, when deemed necessary, the Directors can seek independent professional advice. The Schedule of Matters Reserved for the Board, as well as the Terms of Reference of its Committees, are reviewed annually and further describe Directors' responsibilities and obligations and include any statutory and regulatory duties.

The Board seeks to understand the needs and priorities of the Company's stakeholders and these are taken into account during discussions and as part of the decision-making process. As an externally managed investment company, the Company does not have any employees or customers, however the key stakeholders and a summary of the Board's consideration and actions where possible in relation to each group of stakeholders are described in the table below.

Stakeholder Group	How we engage with them
Shareholders	The Directors have considered this duty when making the strategic decisions during the year that affect Shareholders, including the continued appointment of the Manager and the recommendation that Shareholders vote in favour of the resolutions proposed at both the General Meeting held on 1 February 2022 and the Annual General Meeting held on 7 April 2022 at which Shareholder authorities were renewed. In response to positive market sentiment, the Company continued issuing the ordinary shares held in treasury until the account was reduced to nil and thereafter, new ordinary shares, into the market and completed two subsequent placing processes in accordance with the terms of the Prospectus issued in May 2021. In total, within the financial year ending 30 November 2022, 58,770,000 ordinary shares were issued into the market. In contrast to the positive share issues, market sentiment turned markedly negative in February 2022 following the instigation of war by Russia on Ukraine and the economic fallout thereafter; no further shares have been issued to date. The Directors monitored the market carefully, noting the change in sentiment across all sectors. When deemed appropriate, the positive issue status reversed with the Company becoming active buyers in the market utilising the Shareholder authority to buy back shares when the discount widened outside of an acceptable range for what had become normal market conditions. Within the financial year, the Company bought back a total of 6,356,000 shares and these were placed into treasury. Since the financial year end to 16 February 2023, a further 790,000 shares have been bought back. The Directors will continue to monitor the market and take the appropriate action when deemed necessary. The Company's AGM will be held at 11:30am on Thursday 30 March 2023 at the offices of Polar Capital, 16 Palace Street, London SW1E 5JD and the Board is keen to ensure that Shareholders are able to exercise their right to vote and participate. All resolutions will be voted on by a poll and Shareholders are encouraged to submit their proxy votes ahead of the deadline. The Board believes that Shareholder engagement remains important, especially in the current market conditions and is keen that the AGM be a participative event for all. To enable all Shareholders to hear the Managers' presentation, this year a pre-recorded presentation reviewing the year past and the outlook for 2022-2023 will be uploaded to the Company's website ahead of the AGM. The AGM in-person meeting will comprise the formal business and questions only. Shareholders are encouraged to send any questions ahead of the AGM to the Board via the Company Secretary at [e-mail] stating the subject matter as PCFT AGM. We ask that any questions are received by close of business on Tuesday 28 March 2023. The Chairs of the Board and of the Committees, along with the Manager, will attend and be available to respond to questions and concerns from Shareholders. Should any significant votes be cast against a resolution, the Board will engage with Shareholders and explain in its announcement of the results of the AGM the actions it intends to take to consult Shareholders in order to understand the reasons behind the votes against. Following the consultation, an update will be published no later than six months after the AGM and the Annual Report will detail the impact the Shareholder feedback has had on any decisions the Board has taken and any actions or resolutions proposed. Relations with shareholders The Board and the Manager consider maintaining good communications and engaging with Shareholders through meetings and presentations a key priority. The Board regularly considers the share register of the Company and receives regular reports from the Manager and the Corporate Broker on meetings attended with Shareholders and any concerns that are raised in those meetings. The Board also reviews any correspondence from Shareholders and may attend investor presentations. Shareholders are kept informed by the publication of annual and half year reports, monthly fact sheets, access to commentary from the Manager via the Company's website and attendance at events at which the Manager presents. Shareholders are able to raise any concerns directly with the Board without using the Manager or Company Secretary as a conduit. The Chairman or other Directors are available to Shareholders who wish to raise matters either in person or in writing. The Chairman and Directors may be contacted through the registered office of the Company or by emailing [e-mail]. The Company, through the sales and marketing efforts of the Manager, encourages retail investment platforms to engage with underlying Shareholders in relation to Company communications and enable those Shareholders to cast their votes on Shareholder resolutions; the Company however has no responsibility over such platforms. The Board therefore encourages Shareholders invested via platforms to regularly visit the Company's website or to make contact with the Company directly to obtain copies of Shareholder communications. The Company has also made arrangements with its registrar for Shareholders who own their shares directly rather than through a nominee or share scheme to view their account online at www.shareview.co.uk. Other services are also available via this website. Outcomes and strategic decisions during the year Over the financial year, the share capital has seen a net increase of 19% as a direct result of investor demand. Such demand has been addressed by treasury and new share issuance and completion of the two subsequent placing processes under the terms of the Prospectus dated May 2021. When considering share issues and share buy backs, the Board has remained mindful of existing Shareholders by ensuring any issuance was not dilutive of NAV per share. In all cases, costs associated with the processes were controlled and absorbed by incoming Shareholders and were therefore not damaging to the value of the existing Shareholders. Where received, the views of Shareholders were taken into account in any actions undertaken.
Manager	Through the Board meeting cycle, regular updates and the work of the Management Engagement Committee in reviewing the services of the Manager annually, the Board is able to safeguard Shareholder interests by: · Ensuring adherence to the Investment Policy; · Ensuring excessive risk is not undertaken in the pursuit of investment performance; · Ensuring adherence to the Investment Management Policy and reviewing the agreed management and performance fees; · Ensuring the Manager develops a suitable approach and activity level in relation to matters of an ESG nature; and · Reviewing the Investment Manager's decision making and consistency of its investment process. Maintaining a close and constructive working relationship with the Manager is crucial as the Board and the Manager both aim to continue to deliver consistent, long-term returns in line with the Investment Objective. The culture which the Board maintains to achieve this involves encouraging open discussion with the Manager, ensuring that the interests of Shareholders and the Manager are aligned, providing constructive challenge and making Directors' experience available to support the Manager. This culture is aligned with the collegiate and meritocratic culture which Polar Capital has developed and maintains. Outcomes and strategic decisions during the year The Board in its capacity as the Management Engagement Committee has recommended the continued appointment of the Manager on the terms agreed within the Investment Management Agreement. During the year under review, the Board continued to develop its approach to ESG and engages with the Manager to better understand how ESG has been further integrated by Polar Capital across the business and the financials team in particular. Please see the ESG Report in the full Annual Report and Accounts for further information.
Investee Companies	The Board has instructed the Manager to take into account the published corporate governance policies of the companies in which they invest. The Board has also considered the Manager's Stewardship Code and Proxy Voting Policy. The Proxy Voting Policy directs the Manager to vote at all general meetings of companies in line with Institutional Shareholder Services ("ISS") policy. However, in exceptional cases, where the Manager believes that a resolution would be detrimental to the interests of Shareholders or the financial performance of the Company, appropriate notification will be given and abstentions or a vote against will be lodged. The Manager voted at 73 company meetings over the year ended 30 November 2022, with 5.7% of all votes being against management and 35% of meetings having at least one vote against, withheld or abstained. The Manager reports to the Board, when requested, on the application of the Stewardship Code and Voting Policy. The Manager's Stewardship Code and Voting Policy can be found on the Manager's website in the Corporate Governance section (www.polarcapital.co.uk). Further information on how the Manager considers ESG in its engagement with investee companies can be found in the ESG Report in the full Annual Report and Accounts. Outcomes and strategic decisions during the year During the year, the Board discussed the impact of ESG and how the Manager incorporated ESG factors into its strategy and investment and decision-making processes. The Board receives information on how ESG factors affect the portfolio and receives feedback from the Manager on the development of its ESG processes; the Board has separately engaged with third party suppliers to review their ESG policies and ascertain how they also integrate ESG into their organisations.
Service Providers	The Directors have frequent engagement with the Company's service providers through the annual cycle of reporting and due diligence meetings or site visits by the Manager. This engagement is undertaken with the aim of having effective oversight of delegated services, seeking to improve the processes for the benefit of the Company and to understand the needs and views of the Company's service providers, as stakeholders in the Company. Further information on the Board's engagement with service providers is included in the Corporate Governance Statement and the Report of the Audit Committee. Outcomes and strategic decisions during the year The reviews of the Company's service providers have been positive and the Directors believe their continued appointment is in the best interests of Shareholders. The accounting and administration services of HSBC Securities Services (HSS) are contracted through Polar Capital and provided to the Company under the terms of the IMA. However, the Board continues to conduct due diligence service reviews in conjunction with the Company Secretary and is satisfied that the services received continue to be of a high standard.
Proxy Advisors	The support of the major institutional investors and proxy adviser agencies is important to the Directors, as the Company seeks to retain a reputation for high standards of corporate governance, which the Directors believe contributes to the long-term sustainable success of the Company. The Directors consider the recommendations of these various proxy voting agencies when contemplating decisions that will affect Shareholders and also when reporting to Shareholders through the Half Year and Annual Reports. Recognising the principles of stewardship, as promoted by the UK Stewardship Code, the Board welcomes engagement with all of its investors. The Board recognises that the views and recommendations of many institutional investors and proxy adviser agencies provide a valuable feedback mechanism and play a part in highlighting evolving Shareholder expectations and concerns. Prior to AGMs, the Company engages with these agencies to fact check their advisory reports and clarify any areas or topics that the agency requests. This ensures that whilst the proxy advisory reports provided to Shareholders are objective and independent, the Company's actions and intentions are represented as clearly as possible to assist with Shareholders' decision making when considering the resolutions proposed at the AGM.
AIC	The Company is a member of the AIC and has supported lobbying activities such as the consultation on the 2019 AIC Code, the 2021 BEIS Restoring Trust in Audit and Corporate Governance and the FCA's 2021 consultation on Diversity and Inclusion on Company Boards. The Directors may cast votes in the AIC Board Elections each year and regularly attend AIC events.

The Nomination Committee considers the time commitment required of Directors and the Board considers each Director's independence on an ongoing basis. The Board has confirmed that all Directors remain independent and able to commit sufficient time to fulfil their duties, including those listed in s172 of the Companies Act. Accordingly, all Directors are standing for election or re-election at the Company's AGM.

Approved by the Board on 20 February 2023.

By order of the Board

Tracey Lago FCG

Polar Capital Secretarial Services Limited

Company Secretary

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare Financial Statements for each financial year. Under that law the Directors have prepared the Financial Statements in accordance with the UK-adopted International Accounting Standards (UK-adopted IAS) and applicable law. Additionally, the Financial Conduct Authority's Disclosure Guidance and Transparency Rules require the directors to prepare the Financial Statements in accordance with UK-adopted IAS.

Under company law, the Directors must not approve the Financial Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing the financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· state whether they have been prepared in accordance with UK-adopted IAS, subject to any material departures disclosed and explained in the Financial Statements;

· make judgements and accounting estimates that are reasonable and prudent; and

· prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

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 responsible for such internal controls as they determine is necessary to enable the preparation of Financial Statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that comply with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.

Directors' confirmations

The Directors consider that the annual report and financial statements taken as a whole, is fair, balanced and understandable and provides the information necessary for Shareholders to assess the Company's position and performance, business model and strategy.

Each of the Directors, whose names and functions are listed in the Strategic Report, confirm that, to the best of their knowledge:

· the Company's Financial Statements, which have been prepared in accordance with applicable accounting standards give a true and fair view of the assets, liabilities, financial position and profit/loss of the Company; and

· the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

In the case of each Director in office at the date the Directors' Report is approved:

· so far as the Director is aware, there is no relevant audit information of which the Company's auditors are unaware; and

· they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Robert Kyprianou

Chairman

20 February 2023

Statement of Comprehensive Income

For the year ended 30 November 2022

	Notes	Year ended 30 November 2022			Year ended 30 November 2021
		Revenue return £'000	Capital return £'000	Total return £'000	Revenue return £'000	Capital return £'000	Total return £'000
Investment income	3	17,473	-	17,473	10,640	-	10,640
Other operating income	4	146	-	146	-	-	-
(Losses)/gains on investments held at fair value	5	-	(5,540)	(5,540)	-	56,942	56,942
Losses on derivatives		-	(103)	(103)	-	(115)	(115)
Other currency losses	6	-	(819)	(819)	-	(1,337)	(1,337)
Total income/(expense)		17,619	(6,462)	11,157	10,640	55,490	66,130
Expenses
Investment management fee	7	(727)	(2,907)	(3,634)	(449)	(1,795)	(2,244)
Performance Fee	7	-	1,164	1,164	-	105	105
Other administrative expenses	8	(870)	(19)	(889)	(865)	(10)	(875)
Total expenses		(1,597)	(1,762)	(3,359)	(1,314)	(1,700)	(3,014)
Profit/(loss) before finance costs and tax		16,022	(8,224)	7,798	9,326	53,790	63,116
Finance costs	9	(249)	(996)	(1,245)	(91)	(6,575)	(6,666)
Profit/(loss) before tax		15,773	(9,220)	6,553	9,235	47,215	56,450
Tax	10	(1,484)	381	(1,103)	(870)	(670)	(1,540)
Net profit/(loss) for the year and total comprehensive income/(expense)		14,289	(8,839)	5,450	8,365	46,545	54,910
Earnings/(losses) per ordinary share (pence)	11	4.45	(2.75)	1.70	4.42	24.57	28.99

The total column of this statement represents the Company's Statement of Comprehensive Income, prepared in accordance with UK-adopted International Accounting Standards.

The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.

The amounts dealt with in the Statement of Comprehensive Income are all derived from continuing activities.

The notes to follow form part of these financial statements.

Statement of Changes in Equity

For the year ended 30 November 2022

	Notes	Year ended 30 November 2022
		Called up share capital £'000	Capital redemption reserve £'000	Share premium reserve £'000	Special distributable reserve £'000	Capital reserves £'000	Revenue reserve £'000	Total equity £'000
Total equity at 1 December 2021		13,967	251	219,163	131,947	83,744	8,175	457,247
Total comprehensive (expense)/income: (Loss)/profit for the year ended 30 November 2022		-	-	-	-	(8,839)	14,289	5,450
Transactions with owners, recorded directly to equity:
Issue of shares out of treasury	15	-	-	4,483	6,477	-	-	10,960
Issue of new ordinary shares (including costs)	15	1,282	-	43,765	-	-	-	45,047
Issue of new ordinary shares pursuant to placings (including costs)	15	1,339	-	43,969	-	-	-	45,308
Shares bought back and held in treasury	15	-	-	-	(9,175)	-	-	(9,175)
Equity dividends paid	12	-	-	-	(993)	-	(12,572)	(13,565)
Total equity at 30 November 2022		16,588	251	311,380	128,256	74,905	9,892	541,272

	Notes	Year ended 30 November 2021
		Called up share capital £'000	Capital redemption reserve £'000	Share premium reserve £'000	Special distributable reserve £'000	Capital reserves £'000	Revenue reserve £'000	Total equity £'000
Total equity at 1 December 2020		10,139	251	55,890	57,111	35,469	6,883	165,743
Total comprehensive income:
Profit for the year ended 30 November 2021		-	-	-	-	46,545	8,365	54,910
Transactions with owners, recorded directly to equity:
Issue of shares out of treasury	15	-	-	42,351	74,836	-	-	117,187
Issue of ordinary shares from C share conversion	15	3,828	-	120,971	-	1,730	-	126,529
Issue cost		-	-	(49)	-	-	-	(49)
Equity dividends paid	12	-	-	-	-	-	(7,073)	(7,073)
Total equity at 30 November 2021		13,967	251	219,163	131,947	83,744	8,175	457,247

The notes to follow form part of these financial statements.

Balance Sheet

As at 30 November 2022

	Notes	30 November 2022 £'000	30 November 2021 £'000
Non-current assets
Investments held at fair value through profit or loss	13	572,748	482,100
Current assets
Receivables		1,977	959
Overseas tax recoverable		1,184	597
Cash and cash equivalents	14	29,793	26,388
Fair value of open derivative contracts	13	6	-
		32,960	27,944
Total assets		605,708	510,044
Current liabilities
Payables		(3,778)	(659)
Bank loan		-	(50,418)
		(3,778)	(51,077)
Non-current liabilities
Performance fee provision		-	(1,164)
Indian capital gains tax provision		(151)	(556)
Bank loan		(60,507)	-
		(60,658)	(1,720)
Net assets		541,272	457,247
Equity attributable to equity shareholders
Called up share capital	15	16,588	13,967
Capital redemption reserve		251	251
Share premium reserve		311,380	219,163
Special distributable reserve		128,256	131,947
Capital reserves		74,905	83,744
Revenue reserve		9,892	8,175
Total equity		541,272	457,247
Net asset value per ordinary share (pence)	16	166.34	167.50

The notes to follow form part of these financial statements.

Cash Flow Statement

For the year ended 30 November 2022

	Notes	Year ended 30 November 2022 £'000	Year ended 30 November 2021 £'000
Cash flows from operating activities
Profit before tax		6,553	56,450
Adjustments for non-cash items:
Losses/(gains) on investments held at fair value through profit or loss		5,540	(56,942)
Scrip dividends received		(11)	(115)
Amortisation on fixed interest securities		(3)	(5)
Finance costs relating to C shares		-	6,210
Adjusted profit before tax		12,079	5,598
Adjustments for:
Purchases of investments, including transaction costs		(508,484)	(454,569)
Sales of investments, including transaction costs		414,210	216,527
Increase in receivables		(838)	(229)
(Decrease)/increase in payables		(510)	9
Indian capital gains tax		(18)	(114)
Greek sales tax		(6)	-
Overseas tax deducted at source		(2,071)	(1,194)
Exchange losses on the loan facility		1,642	452
Net cash used in operating activities		(83,996)	(233,520)
Cash flows from financing activities
Net proceeds from issue of shares out of treasury		11,301	116,988
Net proceeds from issue of new ordinary shares		45,140	-
Net proceeds from share placings		45,308	-
Shares repurchased into treasury		(9,137)	-
Issue cost paid		(93)	(57)
Gross proceeds from issue of C shares		-	122,000
C share issue costs paid		-	(1,773)
Loan repaid		(1,647)	-
Loan drawn		10,094	30,066
Equity dividends paid	12	(13,565)	(7,073)
Net cash generated from financing activities		87,401	260,151
Net increase in cash and cash equivalents		3,405	26,631
Cash and cash equivalents at the beginning of the year		26,388	(243)
Cash and cash equivalents at the end of the year	14	29,793	26,388

The notes to follow form part of these financial statements.

Notes to the Financial Statements

For the year ended 30 November 2022

1  General Information

Polar Capital Global Financial Trust plc is a public limited company registered in England and Wales whose shares are traded on the London Stock Exchange.

The principal activity of the Company is that of an investment trust company within the meaning of Section 1158/1159 of the Corporation Tax Act 2010 and its investment approach is detailed in the Strategic Report.

The Board has determined that Sterling is the Company's functional currency and the presentational currency of the financial statements because it is the currency which is most relevant to the majority of the Company's shareholders and creditors and is the currency in which the majority of the Company's operating expenses are paid. All figures are rounded to the nearest thousand pounds (£'000) except as otherwise stated.

2  Accounting Policies

The principal accounting policies, which have been applied consistently for all years presented, are set out below:

(a)  Basis of Preparation

The Company's financial statements have been prepared and approved by the Directors in accordance with UK-adopted international accounting standards ("UK-adopted IAS").

The financial statements have been prepared on a going concern basis under the historical cost convention, as modified by the revaluation of investments and derivative financial instruments at fair value through profit or loss.

Where presentational guidance set out in the Statement of Recommended Practice (SORP) for investment trusts issued by the Association of Investment Companies (AIC) in July 2022 is consistent with the requirements of UK-adopted IAS, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.

The financial position of the Company as at 30 November 2022 is shown in the balance sheet above. As at 30 November 2022 the Company's total assets exceeded its total liabilities by a multiple of over 9.4. The assets of the Company consist mainly of securities that are held in accordance with the Company's Investment Policy, as set in the Annual Report and these securities are readily realisable. The Directors have considered a detailed assessment of the Company's ability to meets its liabilities as they fall due. The assessment took account of the Company's current financial position, its cash flows and its liquidity position. In addition to the assessment the Company carried out stress testing, which used a variety of falling parameters to demonstrate the effects on the Company's share price and net asset value. In light of the results of these tests, the Company's cash balances, and the liquidity position, the Directors consider that the Company has adequate financial resources to enable it to continue in operational existence for at least 12 months. Accordingly, the Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the Company's financial statements.

(b)  Presentation of the Statement of Comprehensive Income

In order to better reflect the activities of an investment trust company and in accordance with the guidance set out by the AIC, supplementary information which analyses the Statement of Comprehensive Income between items of a revenue and capital nature has been presented alongside the Statement of Comprehensive Income. The result presented in the revenue return column is the measure the Directors believe appropriate in assessing the Company's compliance with certain requirements set out in Section 1158 of the Corporation Tax Act 2010.

(c)  Income

Dividends receivable from equity shares are taken to the revenue return column of the Statement of Comprehensive Income on an ex-dividend basis.

Special dividends are recognised on an ex-dividend basis and may be considered to be either revenue or capital items. The facts and circumstances are considered on a case-by-case basis before a conclusion on appropriate allocation is reached.

Where the Company has received dividends in the form of additional shares rather than in cash, the amount of the cash dividend foregone is recognised in the revenue return column of the Statement of Comprehensive Income. Any excess in value of shares received over the amount of cash dividend foregone is recognised in the capital return column of the Statement of Comprehensive Income.

The fixed returns on debt securities and non-equity shares are recognised under the effective interest rate method.

Bank interest is accounted for on an accrual basis. Interest outstanding at the year end is calculated on a time apportionment basis using market rates of interest.

(d)  Written Options

The Company may write exchange-traded options with a view to generating income. This involves writing short-dated covered call options and put options. The use of financial derivatives is governed by the Company's policies, as approved by the Board.

These options are recorded initially at fair value, based on the premium income received, and are then measured at subsequent reporting dates at fair value. Changes in the fair value of the options are recognised in the capital return for the year.

The option premiums are recognised evenly over the life of the option and shown in the revenue return, with an appropriate amount shown in the capital return to ensure the total return reflects the overall change in the fair value of the options.

Where an option is exercised, any balance of the premium is recognised immediately in the revenue return with a corresponding adjustment in the capital return based on the amount of the loss arising on exercise of the option.

(e)  Expenses and Finance Costs

All expenses, including the management fee, are accounted for on an accrual basis.

Expenses are allocated wholly to the revenue column of the Statement of Comprehensive Income except as follows:

Expenses are charged to the capital column of the Statement of Comprehensive Income where a connection with the maintenance or enhancement of the value of investments can be demonstrated. In this respect the investment management fees have been charged to the Statement of Comprehensive Income 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, 20% of the investment management fees are charged to the revenue account and 80% charged to the capital account of the Statement of Comprehensive Income.

Finance costs of the C shares issued by the Company, which were classified as a liability, are recognised as an expense in the capital column of the Statement of Comprehensive Income.

Finance costs, other than those relating to the C shares, are calculated using the effective interest rate method and are accounted for on an accruals basis and, in line with the management fee expense, are charged 20% to the revenue account and 80% to the capital account of the Statement of Comprehensive Income.

Any performance fee accrued is charged entirely to capital as the fee is based on the outperformance of the Benchmark and is expected to be attributable largely, if not wholly, to capital performance. A provision will be recognised when outperformance has been achieved in accordance with the calculations detailed in the Annual Report.

The research costs relate solely to specialist financial research and are accounted for on an accrual basis. They are allocated 20% to revenue and 80% to capital in line with the expected long-term split of revenue and capital return from the Company's investment portfolio.

(f)  Taxation

The tax expense represents the sum of the overseas withholding tax deducted from investment income, tax currently payable and deferred tax.

The tax currently payable is based on the taxable profits for the year ended 30 November 2022. Taxable profit differs from net profit as reported in the Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted at the balance sheet date.

In line with the recommendations of the SORP, the allocation method used to calculate tax relief on expenses presented against capital returns in the supplementary information in the Statement of Comprehensive Income is the "marginal basis". Under this basis, if taxable income is capable of being offset entirely by expenses presented in the revenue return column of the Statement of Comprehensive Income, then no tax relief is transferred to the capital return column.

Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

Investment trusts which have approval as such under Section 1158 of the Corporation Tax Act 2010 are not liable for taxation on UK capital gains.

The company is liable to Indian capital gains tax under Section 115 AD of the Indian Income Tax Act 1961. The Indian capital gains tax provision represents an estimate of the amount of tax payable by the Company. Tax amounts payable may differ from this provision depending on when the Company disposes of its investments. The current provision for Indian capital gains tax is calculated based on the long term (securities held more than one year) or short term (securities held less than one year) nature of the investments and the applicable tax rate at the year end. Currently, the short-term tax rate is 15% and the long-term tax rate is 10%. The estimated tax charge is subject to regular review including a consideration of the likely period of ownership, tax rates and market valuation movements. The provision at the year end is recognised in the Balance Sheet and the year-on-year movement in the provision is recognised in the Statement of Comprehensive Income.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or when the asset is realised based on tax rates that have been enacted or substantively enacted at the balance sheet date.

Deferred tax is charged or credited in the Statement of Comprehensive Income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

(g)  Investments Held at Fair Value Through Profit or Loss

When a purchase or sale is made under contract, the terms of which require delivery within the timeframe of the relevant market, the investments concerned are recognised or derecognised on the trade date and are initially measured at fair value.

On initial recognition the Company has designated all of its investments as held at fair value through profit or loss as defined by UK-adopted IAS. All investments are measured at subsequent reporting dates at fair value, which is either the bid price or the last traded price, depending on the convention of the exchange on which the investment is quoted.

Written options are valued at fair value using quoted bid prices.

Index futures are valued at the difference between exchange settlement prices and inception prices.

All investments, classified as fair value through profit or loss, are further categorised into the fair value hierarchy detailed below.

Changes in fair value of all investments and derivatives held at fair value are recognised in the capital return column of the Statement of Comprehensive Income. Gains or losses on derivative financial instruments are treated as capital or revenue depending on the motive and circumstances of the transaction. Where positions are undertaken to protect or enhance capital, the returns are capital and where they are generating or protecting revenue, the returns are revenue.

In respect of unquoted investments, or where the market for a financial instrument is not active, fair value is established by using various valuation techniques, in accordance with the International Private Equity and Venture Capital ("IPEVC") Valuation Guidelines - Edition December 2018. These may include using reference to recent arm's length market transactions between knowledgeable, willing parties, if available, reference to recent rounds of re-financing undertaken by investee companies involving knowledgeable parties, reference to the current fair value of another instrument that is substantially the same or a relevant comparable.

(h)  Receivables

Receivables are initially recognised at fair value and subsequently measured at amortised cost. Receivables do not carry any interest and are short-term in nature and are accordingly stated at their nominal value (amortised cost) as reduced by appropriate allowances for estimated irrecoverable amounts.

(i)  Cash and Cash Equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, maturity of three months or less, highly liquid investments that are readily convertible to known amounts of cash.

(j)  Dividends Payable

Dividends payable to shareholders are recognised in the financial statements when they are paid, or in the case of final dividends, when they are approved by the Shareholders.

(k)  Payables

Payables are not interest-bearing and are initially valued at fair value and subsequently stated at their nominal value (amortised cost).

(l)  Bank Loans

Interest-bearing bank loans are initially recognised at cost, being the proceeds received net of direct issue costs, and subsequently at amortised cost. The amounts falling due for repayment within one year are included under current liabilities and more than one year under non-current liabilities in the Balance Sheet.

(m)  Foreign Currency Translation

Transactions in foreign currencies are translated into Sterling at the rate of exchange ruling on the date of each transaction. Monetary assets, monetary liabilities and equity investments in foreign currencies at the balance sheet date are translated into Sterling at the rates of exchange ruling on that date.

Realised profits or losses on exchange, together with differences arising on the translation of foreign currency assets or liabilities, are taken to the capital return column of the Statement of Comprehensive Income.

Foreign exchange gains and losses arising on investments held at fair value are included within changes in fair value.

(n)  Share Capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity, as a deduction, net of tax, from the proceeds.

(o)  Capital Reserves

Capital reserve arising on investments sold includes:

-  gains/losses on disposal of investments;

-  exchange differences on currency balances; and

-  other capital charges and credits charged to this account in accordance with the accounting policies above.

Capital reserve arising on investments held includes:

-  increases and decreases in the valuation of investments held at the balance sheet date.

All of the above are accounted for in the Statement of Comprehensive Income.

When making a distribution to shareholders, the Directors determine the profits available for distribution by reference to the 'Guidance on realised and distributable profits under the Companies Act 2006' issued by the Institute of Chartered Accountants in England and Wales and the Institute of Chartered Accountants of Scotland in April 2017. The availability of distributable reserves in the Company is dependent on those dividends meeting the definition of qualifying consideration within the guidance and on the available cash resources of the Company and other accessible sources of funds. The distributable reserves are therefore subject to any future restrictions or limitations at the time such distribution is made.

(p)  Repurchase of Ordinary Shares (including those held in treasury)

Where applicable, the costs of repurchasing Ordinary Shares including related stamp duty and transaction costs are taken directly to equity and reported through the Statement of Changes in Equity as a charge on the special distributable reserve. Share repurchase transactions are accounted for on a trade date basis.

The nominal value of ordinary share capital repurchased and cancelled is transferred out of called up share capital and into the capital redemption reserve.

Where shares are repurchased and held in treasury, the transfer to capital redemption reserve is made if and when such shares are subsequently cancelled.

Where the shares held in treasury are reissued, the amount of the sales proceed up to the repurchased cost of those shares is transferred back into special distributable reserve, the excess of the sales proceeds over the repurchased cost is transferred to share premium.

(q)  Share Issue Costs

Where applicable, costs incurred directly in relation to the issue of new shares together with additional share listing costs have been deducted from the share premium reserve.

(r) Accounting for C Shares

While the C Shares were in issue, the assets and liabilities attributable to the C Shares were accounted in a separate ring-fenced pool distinct from the net assets attributable to the Ordinary Shares. A proportion of the management fee, other administrative expenses and finance costs were also allocated to the C Share pool.

The C Shares issued represented contracts for conversion into a variable number of Ordinary Shares and therefore are classified as a liability of the Company. The income, expenses and capital gains and losses generated by the C Shares pool of assets during the period these shares were in existence, are included in the Statement of Comprehensive Income in their respective categories and the total is charged or credited back within finance costs in the capital column. The issue costs of the C shares are also recognised as a finance cost and charged to the capital column of the Statement of Comprehensive Income.

(s) Segmental Reporting

Under IFRS 8 Operating Segments, operating segments are considered to be the components of an entity about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The chief operating decision maker has been identified as the Investment Manager (with oversight from the Board).

The Directors are of the opinion that the Company has only one operating segment and as such no distinct segmental reporting is required.

(t) Accounting Estimates and Judgements

The preparation of financial statements in conformity with UK-adopted IAS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Estimates and assumptions used in preparing the financial statements are reviewed on an ongoing basis and are based on historical experience and various other factors that are believed to be reasonable under the circumstances. The results of these estimates and assumptions form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources.

The key judgements and sources of estimation uncertainty that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities and expenses in future periods are as follows:

Valuation of Level 3 Investments

Investments valued using valuation techniques include unlisted financial investments, which by their nature, do not have an externally quoted price based on regular trades.

The valuation techniques used may include the techniques described in note 2(g). When determining the inputs into the valuation techniques used, priority is given to publicly available prices from independent sources when available, but overall the source of pricing is chosen with the objective of arriving at a fair value measurement that reflects the price at which an orderly transaction would take place between market participants at the balance sheet date.

(u) New and revised accounting Standards

There were no new UK-adopted IAS or amendments to UK-adopted IAS applicable to the current year which had any significant impact on the Company's financial statements.

i) The following new or amended standards became effective for the current annual reporting period and the adoption of the standards and interpretations have not had a material impact on the financial statements of the Company.

Standards & Interpretations		Effective for periods commencing on or after
IFRS 9, IAS 39, IFRS 7, IFRS 16 and IFRS 4: Interest Rate Benchmark Reform - phase 2 (amended)	"IBOR Reform - Phase 2 addresses issues that might affect financial reporting during the reform of an interest rate benchmark, including the effects of changes to contractual cash flows or hedging relationships arising from the replacement of an interest rate benchmark with an alternative benchmark rate. The Phase 2 amendments apply only to changes required by the interest rate benchmark reform to financial instruments and hedging relationships.	1 January 2021

ii) At the date of authorisation of the Company's financial statements, there were no relevant standards that potentially impact the Company are in issue but are not yet effective and have not been applied in the financial statements.

The Directors expect that the adoption of the standards listed above will have either no impact or that any impact will not be material on the financial statements of the Company in future periods.

3   Investment Income

	Year ended 30 November 2022 £'000	Year ended 30 November 2021 £'000
Revenue:
UK dividends	2,660	1,108
Overseas dividends	13,812	8,962
Scrip dividends	11	115
Interest on debt securities	990	455
Total investment income	17,473	10,640

Included within income from investments is £748,000 (2021: £502,000) of special dividends classified as revenue in nature in accordance with note 2 (c). No special dividends have been recognised in capital (2021: nil).

4   Other Operating Income

	Year ended 30 November 2022 £'000	Year ended 30 November 2021 £'000
Bank interest	146	-
Total other operating income	146	-

5   (Losses)/Gains on Investments Held at Fair Value

	Year ended 30 November 2022 £'000	Year ended 30 November 2021 £'000
Net (losses)/gains on disposal of investments at historic cost	(11,901)	32,893
Less fair value adjustments in earlier years	(32,737)	(17,736)
(Losses)/gains based on carrying value at previous balance sheet date	(44,638)	15,157
Valuation gains on investments held during the year	39,098	41,785
	(5,540)	56,942

6   Other Currency Losses 

	Year ended 30 November 2022 £'000	Year ended 30 November 2021 £'000
Exchange gains/(losses) on currency balances	823	(885)
Exchange losses on the loan facility	(1,642)	(452)
	(819)	(1,337)

7   Investment Management and Performance Fee

	Year ended 30 November 2022 £'000	Year ended 30 November 2021 £'000
Management fee
- charged to revenue	727	449
- charged to capital	2,907	1,795
Investment management fee payable to Polar Capital LLP	3,634	2,244
Performance fee payable to Polar Capital (charged wholly to capital)*	(1,164)	(105)

Management fees are allocated 20% to revenue and 80% to capital. Details of the investment management and performance fees are set out in the Strategic Report in the Annual Report. * In the previous two years the Company generated a performance fee accrual. In 2022, the company underpeformend and the prior year provisions have been written back resulting in a credit to the Statement of Comprehensive Income .

8   Other Administrative Expenses (including VAT where appropriate)

		Year ended 30 November 2022 £'000	Year ended 30 November 2021 £'000
Directors' fees1		144	124
Directors' NIC		13	9
Auditors' remuneration - for audit of the Financial Statements2		50	38
Depositary fee3		35	29
Registrar fee		31	33
Custody and other bank charges4		114	84
UKLA and LSE listing fees		36	26
Legal & professional fees		36	102
AIC fees		19	15
Directors' and officers' liability insurance		16	13
Corporate broker's fee		43	43
Marketing expenses5		88	105
Research costs - allocated to revenue6		5	3
Shareholder communications		24	23
HSBC administration fee3		171	180
Other expenses7		45	38
Total other administrative expenses allocated to revenue		870	865
Research costs - allocated to capital6		19	10
Total other administrative expenses		889	875

1  Full disclosure is given in the Directors' Remuneration Report in the Annual Report. 

2  The base audit fee for the statutory audit was £44,000. Overrun fee of £6,000 incurred in the completion of the 2021 audit due to the change in performance fee methodology. In addition, PwC were appointed as Reporting Accountant to the Company in connection with the placing programme, such service was deemed to be a non-audit service for which a fee of £24,000 was paid. The amount has been charged to capital reserves as defined under IAS 32. 

3  Fees are determined on the pre-approved rate card with HSBC.   

4  Fee is based on the value of the assets and geographical activity and determined on the pre-approved rate card with HSBC.  

5  Includes marketing bespoke expenses payable to Polar Capital LLP of £50,000 (2021: £54,000). 

6  Research costs (which applied from 3 January 2018) payable by the Company relate solely to specialist financial research. 

7  Includes non-executive Director search costs in the current and prior year.  .

Ongoing charges represents the total expenses of the Company, excluding finance costs and tax, expressed as a percentage of the average daily net asset value, in accordance with AIC guidance issued in May 2012.

The ongoing charges ratio excluding performance fee for the year ended 30 November 2022 was 0.87% (2021: 1.02%). The ongoing charges ratio including the performance fee was 0.65% (2021: 0.98%). See Alternative Performance Measures below.  

9  Finance Costs

	Year ended 30 November 2022			Year ended 30 November 2021
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
Interest on loans and overdrafts	201	804	1,005	68	272	340
Loan arrangement fees	48	192	240	23	93	116
Net gains attributable to C shares	-	-	-	-	4,529	4,529
C share issues costs	-	-	-	-	1,681	1,681
	249	996	1,245	91	6,575	6,666

Finance costs are allocated 20% to revenue and 80% to capital with the exception of the costs related to C shares charged 100% to capital.

10   Taxation 

a) Analysis of tax charge/(credit) for the year:

	Year ended 30 November 2022			Year ended 30 November 2021
	Revenue return £'000	Capital return £'000	Total return £'000	Revenue return £'000	Capital return £'000	Total return £'000
Overseas tax	1,465	-	1,465	896	-	896
Tax relief in capital	19	(19)	-	-	-	-
Withholding tax recovered	-	-	-	(26)	-	(26)
Indian capital gains tax	-	(368)	(368)	-	670	670
Greek Sales tax	-	6	6	-	-	-
Total tax charge/(credit) for the year (see note 10b)	1,484	(381)	1,103	870	670	1,540

b) Factors affecting tax charge/(credit) for the year:

The charge/(credit) for the year can be reconciled to the profit/(loss) per the Statement of Comprehensive Income as follows:
	Year ended 30 November 2022			Year ended 30 November 2021
	Revenue r eturn £'000	Capital return £'000	Total return £'000	Revenue return £'000	Capital return £'000	Total return £'000
Profit/(loss) before tax	15,773	(9,220)	6,553	9,235	47,215	56,450
Tax at the UK corporation tax rate of 19% (2021: 19%)	2,997	(1,751)	1,246	1,755	8,971	10,726
Tax effect of non-taxable dividends	(2,940)	-	(2,940)	(1,773)	-	(1,773)
Losses/(gains) on investments that are not taxable	-	1,228	1,228	-	(10,543)	(10,543)
Overseas tax suffered	1,465	-	1,465	896	-	896
Indian capital gains tax	-	(368)	(368)	-	670	670
Greek sales tax	-	6	6	-	-	-
Current period expenses not tax deductible	-	-	-	-	1,180	1,180
Unrelieved current period expenses and deficits	-	504	504	25	392	417
Withholding tax recovered	-	-	-	(26)	-	(26)
Tax relief on overseas tax suffered	(38)	-	(38)	(7)	-	(7)
Total tax charge/(credit)for the year (see note 10a)	1,484	(381)	1,103	870	670	1,540

c) Factors that may affect future tax charges:

The Company has an unrecognised deferred tax asset of £1,968,000 (2021: £1,345,000). The deferred tax asset is based on a prospective corporation tax rate of 25% (2021: 25%). The Finance Act 2021 received Royal Assent on 10 June 2021 and the rate of Corporation Tax of 25% effective from 1 April 2023 has been used to calculate the potential deferred tax asset.

It is unlikely that the Company will generate sufficient taxable profits in the future to utilise these expenses and deficits and therefore no deferred tax asset has been recognised.

Due to the Company's tax status as an investment trust and the intention to continue meeting the conditions required to obtain approval of such status in the foreseeable future, the Company has not provided UK tax on any capital gains arising on the revaluation or disposal of investments held by the Company.

The Company is liable to Indian capital gains tax under Section 115 AD of the Indian Income Tax Act 1961. A tax provision on Indian capital gains is calculated based on the long term (securities held more than one year) or short term (securities held less than one year) nature of the investments and the applicable tax rate at the year end. The current rates of short-term tax rates are 15% and the long term tax rates are 10% respectively.  At the year ended 30 November 2022, the Company has a deferred tax liability of £151,000 (2021: £556,000) on capital gains which may arise if Indian investments are sold.

11   Earnings/(Losses) Per Ordinary Share 

	Year ended 30 November 2022			Year ended 30 November 2021
	Revenue return	Capital return	Total return	Revenue return	Capital return	Total return
The calculation of basic earnings/(losses) per share is based on the following data:
Net profit/(loss) for the year (£'000)	14,289	(8,839)	5,450	8,365	46,545	54,910
Weighted average number of ordinary shares in issue during the year	320,762,691	320,762,691	320,762,691	189,457,425	189,457,425	189,457,425
From continuing operations
Basic - ordinary shares (pence)	4.45	(2.75)	1.70	4.42	24.57	28.99

As at 30 November 2022 there were no potentially dilutive shares in issue (2021: nil).

12   Amounts Recognised as Distributions to Ordinary Shareholders in the Year

  Dividends paid in the year ended 30 November 2022

Payment date	No. of shares	Amount per share	Year ended 30 November 2022 £'000
28 February 2022	281,730,000	2.00p	5,635
31 August 2022	330,440,000	2.40p	7,930
			13,565

The revenue available for distribution by way of dividend for the year is £14,289,000 (2021: £8,365,000).

The total dividends payable in respect of the financial year ended 30 November 2022, which is the basis on which the requirements of section 1158 Corporation Tax Act 2010 are considered, are set out below:

Payment date	No. of shares	Amount per share	Year ended 30 November 2022 £'000
31 August 2022	330,440,000	2.40p	7,930
28 February 2023	324,779,000	2.05p	6,658
			14,588

The total dividends payable in respect of the financial year ended 30 November 2021, which is the basis on which the requirements of section 1158 Corporation Tax Act 2010 are considered, are set out below:  

Payment date	No. of shares	Amount per share	Year ended 30 November 2021 £'000
31 August 2021	182,475,000	2.40p	4,379
28 February 2022	281,730,000	2.00p	5,635
			10,014

All dividends are paid as interim dividends, and all have been charged to revenue, where necessary utilising the revenue reserve and in exceptional circumstances utilising the special distributable reserve. £831,000 for the dividend paid on 28 February 2022 and £162,000 for the dividend paid on 31 August 2022 were partially paid from the special distributable reserve. See Directors Report in the Annual Report for further details.

13   Investments Held at Fair Value Through Profit or Loss

a) Investments held at fair value through profit or loss

	30 November 2022 £'000	30 November 2021 £'000
Opening book cost	422,479	152,439
Opening investment holding gains	59,621	35,572
Opening fair value	482,100	188,011
Analysis of transactions made during the year
Purchases at cost	510,922	453,669
Sales proceeds received	(414,737)	(216,527)
(Losses)/gains on investments held at fair value	(5,540)	56,942
Amortisation on fixed interest securities	3	5
Closing fair value	572,748	482,100
Closing book cost	506,766	422,479
Closing investment holding gains	65,982	59,621
Closing fair value	572,748	482,100

The Company received £414,737,000 (2021: £216,527,000) from disposal of investments in the year. The book cost of these investments when they were purchased were £426,638,000 (2021: £183,634,000). These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.

The following transaction costs, including stamp duty and broker commissions, were incurred during the year:

	30 November 2022 £'000	30 November 2021 £'000
On acquisitions	565	570
On disposals	327	205
	892	775

b) Changes in Derivative Financial Instruments

(i) Index Futures	30 November 2022 £'000	30 November 2021 £'000
Valuation at 1 December 2021	-	-
Additions at cost	109	-
Proceeds of disposal	-	-
Losses on disposal	(109)	-
Valuation gains	6	-
Valuation at 30 November 2022	6	-

The company invested in index futures during the year for the purposes of efficient portfolio management. There was 15 ICF Long Gilt March 2023 contracts held at year ended 30 November 2022 (2021: nil).

(ii) Contract for Difference	30 November 2022 £'000	30 November 2021 £'000
Valuation at 1 December 2021	-	-
Additions at cost	-	1,598
Proceeds of disposal	-	(1,483)
Losses on disposal	-	(115)
Valuation Gains	-	-
Valuation at 30 November 2022	-	-

The contract for difference was utilised in the prior year for the purpose of efficient portfolio management. There was no contract for difference held at year ended 30 November 2022 (2021: same).

(c) Fair Value of Open Derivative Contracts	30 November 2022 £'000	30 November 2021 £'000
ICF Long Gilt March 2023 Futures	6	-
Total	6	-

(d) Fair value hierarchy

'The Company's financial instruments within the scope of IFRS 7 that are held at fair value comprise its investment portfolio and derivative financial instruments.

They are categorised into a hierarchy consisting of the following three levels:
Level 1 - valued using quoted prices in active markets for identical assets or liabilities.
Level 2 - valued by reference to valuation techniques using observable inputs other than quoted market prices included within Level 1.
Level 3 - valued by reference to valuation techniques using inputs that are not based on observable market data.

Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to 'the fair value measurement of the relevant asset'.

Details of the valuation techniques used by the Company are given in note 2(g) above.

The following tables set out the fair value measurements using the IFRS 7 hierarchy at 30 November 2022 and 2021:

	30 November 2022
	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Equity Investments and derivative financial instruments	526,173	-	4,551	530,724
Interest bearing securities	42,030	-	-	42,030
Total	568,203	-	4,551	572,754
The Level 3 investment relates to the shares in Atom Bank and Moneybox.
	30 November 2021
	Level 1 £'000	Level 2 £'000	Level 3 £'000	Total £'000
Equity Investments	470,165	-	1,921	472,086
Interest bearing securities	10,014	-	-	10,014
Total	480,179	-	1,921	482,100

The Level 3 investment relates to the shares in Atom Bank.

There have been no transfers during the year between Levels 1 and 2. A reconciliation of fair value measurements in Level 3 is set out below.

Level 3 investments at fair value through profit or loss	30 November 2022 £'000	30 November 2021 £'000
Opening balance	1,921	2,120
Additions at cost	3,000	256
Total loss included in the statement of Comprehensive -on assets held at the year end	(370)	(455)
Closing balance	4,551	1,921

Level 3 Investments are recognised at fair value through profit or loss on a recurring basis.

Level 3 investments are valued in accordance with the accounting policy in Note 2(g) above.

A +/- 10% change in the price used to value the investment in the level 3 investments at the year end would result in a +/- £455,000 (2021: £192,000) impact on the gains or losses on investments held at fair value in the Statement of Comprehensive Income.    

e)  Unquoted investments 

The value of the unquoted investments as at 30 November 2022 was £4,551,000 (2021: £1.921,000) and the portfolio comprised the following holdings:

	30 November 2022 £'000	30 November 2021 £'000
Atom Bank	2,241	1,921
Money Box	2,310	-
	4,551	1,921

Atom Bank is a UK digital bank founded in 2014 and based in Durham. It currently offers fixed rate and instant access savings products, business banking loans and retail mortgages.

At 31 March 2022 (Atom Bank's financial year end), Atom Bank announced that it had made pre-tax losses of £11,927,000 (2021: £62,379,000) and had net assets attributable to shareholders of £251,094,000 (2021: £141,330,000).   

The valuation of Atom Bank was reviewed by the Investment Manager and the Board during both the half year and full year financial results process. In February, the investment of Atom Bank was increased to the price at which the bank raised £70m of capital. In November the bank announced a further capital raise at the same valuation. 

Moneybox is an on-line UK savings and wealth platform and provides mobile applications which enable customers to make regular savings into tax efficient products, such as ISAs, or a personal pension, as well as various savings accounts. 

At 31 May 2021 (Moneybox's financial year end), Moneybox announced that it had made pre-tax losses of £10,198,000 and had net assets attributable to shareholders of £31,917,000.  

The valuation of Moneybox was reviewed by the Investment Manager and the Board during both the half year and full year financial results process. During the year, the valuation of Moneybox was reduced following a sharp fall in the valuations of listed comparators.

14   Cash and Cash Equivalents 

	30 November 2022 £'000	30 November 2021 £'000
Cash at bank	29,652	26,383
Cash held at derivative clearing houses	141	5
	29,793	26,388

15 Called Up Share Capital

	30 November 2022 £'000	November 2021 £'000
Allotted, Called up and Fully paid:
Ordinary shares of 5p each:
Opening balance of 272,980,000* (30 November 2021: 123,050,100)	13,649	6,153
Issue of 25,644,680 (2021: nil) new ordinary shares	1,282	-
Issue of 26,775,320 (2021: nil) new ordinary shares pursuant to placings	1,339	-
Issue of 6,350,000 (2021: 73,374,900) ordinary shares out of treasury	318	3,668
Issue of nil ordinary shares (2021: 76,555,000) from conversion of C shares	-	3,828
Repurchase of 6,356,000 (2021: nil) ordinary shares into treasury	(318)	-
Allotted, Called up and Fully paid: 325,394,000 (30 November 2021:  272,980,000) ordinary shares of 5p	16,270	13,649
6,356,000 (2021: 6,350,000) ordinary shares held in treasury	318	318
At 30 November 2022	16,588	13,967

*Excluding shares held in Treasury

This reserve is not distributable.

During the year, there were 6,356,000 ordinary shares repurchased into treasury for a total net consideration of £9,175,000 (2021: nil). A total of 6,350,000 (2021: 73,374,900) ordinary shares were issued out of treasury for a total net consideration of £10,960,000 (2021: £117,187,000).

The Company also issued 25,644,680 new ordinary shares from the block listing facility (2021: nil) for a total consideration of £45,140,000 less expenses of £93,000 (2021: £nil).

The Company also undertook a share placing programme, the first placing at the end of January 2022 and second placing at the end of February 2022 under the Prospectus issued on 12 May 2021. This resulted in a total allotment of 26,775,320 new ordinary shares for a total consideration of £46,022,000 less expenses of £714,000.

In the prior year the Company issued 122,000,000 C Shares for gross proceeds of £122,000,000. On admission, the C shareholders held rights over a ring-fenced portfolio attributable to the C shares and this portfolio was invested in accordance with the Company's Investment Policy. These were duly converted into 76,555,000 ordinary shares on 13 August 2021, based on a conversion ratio as calculated in accordance with the terms and conditions of the Company's Articles which was approved at the General Meeting on 16 June 2021 and as summarised in the Prospectus.

Subsequent to the year end to 16 February 2023, the Company has purchased a further 790,000 shares out of treasury for a total net consideration of £1,247,000 into treasury.

The ordinary shares held in treasury have no voting rights and are not entitled to dividends.

16.   Net Asset Value Per Ordinary Share 

	30 November 2022	30 November 2021
Net assets attributable to ordinary shareholders (£'000)	541,272	457,247
Ordinary shares in issue at end of year	325,394,000	272,980,000
Net asset value per ordinary share (pence)	166.34	167.50

As at 30 November 2022, there were no potentially dilutive shares in issue (2021: nil).

17. Transactions with the Investment Manager and Related Party Transactions

a) Transactions with the manager 

Under the terms of an agreement dated 11 June 2013 the Company has appointed Polar Capital LLP ("Polar Capital") to provide investment management, accounting, secretarial and administrative services.  Details of the fee arrangement for these services are given in the Strategic Report.  The total fees, paid under this agreement to Polar Capital in respect of the year ended 30 November 2022 were £3,634,000 (2021: £2,244,000) of which £305,000 (2021: £272,000) was outstanding at the year end.

A performance fee based on cumulative relative performance since 23 April 2020, amounting to £nil (2021: £1,164,000) £ has been accrued at the year end, of which £1,164,000 (2021: £105,000) was written back in the current year. Any accrued performance fee is payable at the end of each five-year tender period, the next being in 2025. See Strategic Report within the Annual Report for more details.

In addition, the total research costs in respect of the period from 1 January 2022 to the year ended 30 November 2022 were £24,000 (2021: £13,000) of which £11,000 (2021 : £7,000) was outstanding at the year end.

b) Related party transactions 

The Company has no employees and therefore no key management personnel other than the Directors. The Company paid £144,000 (2021: £124,000) to the Directors of which £47,000 (2021:  £33,000) was outstanding at the year end. The Remuneration Report is provided in the Annual Report. When dividends are paid by the Company these are received by the Directors who own shares at the same rates and terms as by all other shareholders.

18. Post Balance Sheet Events

Subsequent to the year end, a further 790,000 ordinary shares were bought back and held in treasury. Following these buy backs, the total number of ordinary shares in issue was 324,604,000 and the share held in treasury was 7,146,000.

There are no other significant events that have occurred after the end of the reporting period to the date of this report which require disclosure.

Alternative Performance Measures (APMs)

In assessing the performance of the Company, the Investment Manager and the Directors use the following APMs which are not defined in accounting standards or law but are considered to be known industry metrics:

Net Asset Value (NAV)

The NAV is the value attributed to the underlying assets of the Company less the liabilities, presented either on a per share or total basis.

The 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. See Note 16 above for detailed calculations. The NAV per ordinary share is published daily.

NAV Total Return (APM)

The NAV total return shows how the net asset value per share has performed over a period of time taking into account both capital returns and dividends paid to shareholders. The NAV total return performance for the period is calculated by reinvesting the dividends in the assets of the Company from the relevant ex-dividend date.

		Year ended 30 November 2022	Year ended 30 November 2021
Opening NAV per share	a	167.5p	134.7p
Closing NAV per share	b	166.3p	167.5p
Dividend reinvestment factor	c	1.026183	1.028548
Adjusted closing NAV per share	d = b*c	170.7p	172.3p
NAV total return for the year	(d / a)-1	1.9%	27.9%

NAV Total Return Since Inception (APM)

NNAV total return since inception is calculated as the change in NAV from the initial NAV of 98p, assuming that dividends paid to shareholders are reinvested on the ex-dividend date in ordinary shares at their net asset value.

		Year ended 30 November 2022	Year ended 30 November 2021
NAV per share at inception	a	98.0p	98.0p
Closing NAV per share	b	166.3p	167.5p
Dividend reinvestment factor	c	1.331251	1.297759
Adjusted closing NAV per share	d = b*c	221.4p	217.4p
NAV total return since inception	(d / a)-1	125.9%	121.8%

NAV Total Return Since Reconstruction (APM)

NAV total return since reconstruction is calculated as the change in NAV from the NAV of 102.8p, which was the closing NAV the night before the tender offer on 22 April 2020, assuming that dividends paid to shareholders are reinvested on the ex dividend date in ordinary shares at their net asset value.

		Year ended 30 November 2022	Year ended 30 November 2021
Rebased NAV per share at reconstruction	a	102.8p	102.8p
Closing NAV per share	b	166.3p	167.5p
Dividend reinvestment factor	c	1.073252	1.045722
Adjusted closing NAV per share	d = b*c	178.5p	175.2p
NAV total return since reconstruction	(d / a)-1	73.6%	70.4%

Share Price Total Return (APM)

Share price total return shows how the share price has performed over a period of time. It assumes that dividends paid to shareholders are reinvested in the shares at the time the shares are quoted ex-dividend.

		Year ended 30 November 2022	Year ended 30 November 2021
Opening share price	a	172.0p	136.5p
Closing share price	b	154.6p	172.0p
Dividend reinvestment factor	c	1.028037	1.029365
Adjusted closing share price	d = b*c	158.9p	177.1p
Share price total return for the year	(d / a)-1	-7.6%	29.7%

Share Price Total Return Since Inception (APM)

Share price total return since inception is calculated as the change in share price from the launch price of 100p, assuming that dividends paid to shareholders are reinvested on the ex-dividend date.

		Year ended 30 November 2022	Year ended 30 November 2021
Share price at inception	a	100.0p	100.0p
Closing share price	b	154.6p	172.0p
Dividend reinvestment factor	c	1.311772	1.276163
Adjusted closing share price	d = b*c	202.8p	219.5p
Share price total return since inception	(d / a)-1	102.8%	119.5%

Share Price Total Return Including Subscription Share Value (APM)

The share price total return including subscription share value performance since inception includes the value of the subscription shares issued free of payment at launch on the basis of one-for-five ordinary shares and assumes such were held throughout the period from launch to the conversion date of 31 July 2017. Performance is calculated by reinvesting the dividends in the shares of the Company from the relevant ex-dividend date and uses the launch price of 100p per ordinary share.

		Year ended 30 November 2022	Year ended 30 November 2021
Share price at inception	a	100.0p	100.0p
Closing share price	b	154.6p	172.0p
Dividend reinvestment factor	c	1.340750	1.304651
Adjusted closing share price	d = b*c	207.3p	224.4p
Share price total return including subscription share value since inception	(d / a)-1	107.3%	124.4%

(Discount)/Premium (APM)

A description of the difference between the share price and the net asset value per share usually expressed as a percentage (%) of the net asset value per share. If the share price is higher than the NAV per share the result is a premium. If the share price is lower than the NAV per share, the shares are trading at a discount.

		30 November 2022	30 November 2021
Closing share price	a	154.6p	172.0p
Closing NAV per share	b	166.3p	167.5p
(Discount)/premium per ordinary share	(a / b)-1	-7.0%	2.7%

Ongoing Charges (APM)

Ongoing charges are calculated in accordance with AIC guidance by taking the Company's annual ongoing charges, excluding performance fees and exceptional items, if any, and expressing them as a percentage of the average daily net asset value of the Company over the year.

Ongoing charges include all regular operating expenses of the Company. Transaction costs, interest payments, tax and nonrecurring expenses are excluded from the calculation as are the costs incurred in relation to share issues and share buybacks.

Where a performance fee is paid or is payable, a second ongoing charge is provided, calculated on the same basis as the above but incorporating the movement in the performance fee provision.

		Year ended 30 November 2022	Year ended 30 November 2021
Investment Management Fee (Note 7 above)		3,634,000	2,244,000
Other Administrative Expenses (Note 8 above)		889,000	875,000
	a	4,523,000	3,119,000
Average daily net assets value	b	519,515,000	306,287,000
Ongoing Charges excluding performance fee	a / b	0.87%	1.02%
Performance fee (Note 7 above)	c	(£1,164,000)	(£105,000)
	d = a+c	3,359,000	3,014,000
Ongoing charges including performance fee	d / b	0.65%	0.98%

Net Gearing (APM)

Gearing is calculated in line with AIC guidelines and represents net gearing. This is defined as total assets less cash and cash equivalents divided by net assets. The total assets are calculated by adding back the bank loan. Cash and cash equivalents are cash and purchases and sales for future settlement outstanding at the year end.

		30 November 2022	30 November 2021
Net assets	a	541,272,000	457,247,000
Bank loan	b	60,507,000	50,418,000
Total assets	c = (a+b)	601,779,000	507,665,000
Cash and cash equivalents (including amounts awaiting settlement)	d	£27,855,000	26,729,000
Net gearing	(c-d)/a-1	6.0%	5.2%

AGM 

The Annual Report and separate Notice of Annual General Meeting will be posted to Shareholders in February 2023 and will be available from the Company Secretary at the Company's Registered Office, (16 Palace Street London SW1E 5JD) and on the Company's website. The AGM will be held at the Company's Registered Office at 11:30am on Thursday 30 March 2023.

Forward Looking Statements

Certain statements included above contain forward-looking information concerning the Company's strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the countries, sectors or markets in which the Company operates. By their nature, forward-looking statements involve uncertainty because they depend on future circumstances, and relate to events, not all of which are within the Company's control or can be predicted by the Company. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Actual results could differ materially from those set out in the forward-looking statements. For a detailed analysis of the factors that may affect our business, financial performance or results of operations, we urge you to look at the principal risks and uncertainties included in the Strategic Report Section of the Annual Report and Financial Statements.

No part of these preliminary results constitutes, or shall be taken to constitute, an invitation or inducement to invest in Polar Capital Global Financials Trust plc or any other entity and must not be relied upon in any way in connection with any investment decision. The Company undertakes no obligation to update any forward-looking statements. Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

 

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