Final Results

RNS Number : 0453T

Polar Capital Technology Trust PLC

20 July 2022

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POLAR CAPITAL TECHNOLOGY TRUST PLC

AUDITED RESULTS ANNOUNCEMENT FOR THE FINANCIAL YEAR TO 30 APRIL 2022

FINANCIAL HIGHLIGHTS

FINANCIAL SUMMARY	As at 30 April 2022	As at 30 April 2021	Year Ended 2022	Year Ended 2021
Total net assets	£3,050,985,000	£3,408,763,000	(10.5%)	47.7%
Net Asset Value (NAV) per ordinary share	2305.13p	2496.44p	(7.7%)	45.5%
Benchmark	3504.44	3535.05	(0.9%)	46.4%
Price per ordinary share	2040.00p	2364.00p	(13.7%)	33.3%
Discount of ordinary share price to the NAV per ordinary share~	(11.5%)	(5.3%)
Ordinary shares in issue*	132,356,426	136,544,764	(3.1%)	1.5%
Ordinary shares held in treasury	4,958,574	770,236	543.8%	-

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

KEY DATA	For the year to 30 April 2022
KEY DATA	Local Currency %	Sterling Adjusted %
Benchmark
Dow Jones World Technology Index	(10.1)	(0.9)
Other Indices over the year (total return)
FTSE World	(3.8)	5.8
FTSE All-Share		8.7
S&P 500 Composite	0.2	10.2
Nikkei 225	(5.0)	(12.0)
Eurostoxx 600	6.1	2.3

	As at 30 April
EXCHANGE RATES	2022	2021
US$ to £	1.2555	1.3846
Japanese Yen to £	162.66	151.34
Euro to £	1.1901	1.1502

	For the year to 30 April
EXPENSES	2022	2021
Ongoing charges ratio # -	0.84%	0.82%
Ongoing charges ratio including performance fee # -	0.84%	0.82%

Data supplied by Polar Capital LLP and HSBC Security Services.

# Ongoing charges ratio represents the total expenses of the Company, excluding transaction costs, interest payments, tax and non-recurring expenses expressed, as a percentage of the average daily net asset value, in accordance with guidance issued by the Association of Investment Companies ("AIC").

~ See Alternative Performance Measures provided in the Annual Report.

HISTORIC PERFORMANCE

As at 30 April	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
Net Assets (£m)	503.3	528.8	606.6	793.0	801.3	1,252.5	1,551.6	1,935.6	2,308.6	3,408.8	3,051.0
Share price (pence)	387.0	398.5	442.0	592.0	566.0	947.0	1,148.0	1,354.0	1,774.0	2,364.0	2,040.0
NAV per share (pence)	392.6	412.4	458.4	599.2	605.5	945.4	1,159.7	1,446.4	1,715.6	2,496.4	2,305.1
Indices of Growth¹
Share price	100.0	103.0	114.2	153.0	146.3	244.7	296.6	349.9	458.4	610.9	527.1
NAV per share²	100.0	105.0	116.8	152.6	154.2	240.8	295.4	368.4	437.0	635.9	586.9
Dow Jones World Technology Index ³	100.0	106.0	119.8	155.1	155.0	237.7	278.2	337.8	399.0	584.0	578.9

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

Notes:

¹ Rebased to 100 at 30 April 2012.

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

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

All data sourced from Polar Capital LLP.

For further information please contact:
Ben Rogoff	Ed Gascoigne-Pees
Polar Capital Technology Trust PLC	Camarco
Tel: 020 7227 2700	Tel: 020 3757 4984

STRATEGIC REPORT

CHAIR'S STATEMENT

INTRODUCTION

Shareholders may remember that in the year to April 2021, on which I reported in July 2021, your company's NAV had risen by 45.5%. That followed a ten year period over which the net assets of your Company had grown from £468.7m, to £3.4bn, as technology stocks outperformed markets generally, on the back of extraordinary corporate growth and rising valuations. Last year, I noted that we seemed cautiously to be emerging from the pandemic, but were in something of uncharted territory, and were seeing rising bond yields and inflationary concerns, significant concentration of performance in the largest capitalisation stocks and a rotation from "growth" to "value". Nevertheless, I suggested that the long term supportive trends in the sector remained in place, and shareholders would continue to benefit from disruption .

For the first three quarters of the last financial year, these conditions generally persisted. Inflationary pressures continued to mount, bond yields rose, investors continued to invest in recovery stocks rather than growth stocks and the concentration of performance continued. The share prices of technology stocks suffered in this environment, although corporate performance remained strong. At the end of the financial year (the beginning of 2022) the exuberance in technology stocks continued to unwind. Our manager describes the details of this in the Investment Manager's Report.

Over the year, the Company's NAV fell by 7.7% and your share price fell by 13.7% as the discount widened. The NAV performance was behind the index which fell by just under 1%. UK investors were sheltered from the decline in the technology market by the appreciation of the US dollar against Sterling. Although the manager did hold some cash, the index performance was driven significantly by the very strong relative performance of Apple and Microsoft. The detail of this is set out in the manager's report. We do run into a concentration problem here, in that both companies amount to around 15% of the index each and whilst they are our two largest holdings at between 10% to 11% of our portfolio individually, these positions are still lower than index weightings and not having had an index weight in each has had a significant impact on relative performance. The most significant causes of our underperformance were not having full 15% weightings in those two stocks. The manager wrote about concentration risk at the interim stage and we would not find it easy to justify holding such significant positions in these two companies. We would expect that the concentration of stock performance in the largest companies will diminish as it tends to lead to overvaluation. Investors with long memories will remember the performance of Vodafone after it became 15% of the UK index in 2000.

DISCOUNT MANAGEMENT

The Board actively monitors the discount at which the Company's ordinary shares trade in relation to the Company's underlying NAV. The discount has widened over the last year reflecting the considerable change in sentiment towards technology stocks and market volatility generally. Whilst the Board does not have a formal discount policy or a fixed target level for all times and circumstances, it will continue to exercise its discretion to buy back shares at a discount and to issue shares at a premium in order to seek to reduce the volatility of the share price, to add a small amount to NAV per share and to address significant imbalances in the supply and demand for shares. We have continued to buy back stock regularly and reliably, repurchasing a total of 4,188,338 shares in the year under review (amounting to 3% of the issued share capital) at an average price of 2,355.35 pence per share and an average discount of 9.6%. This produced an uplift in NAV per share of just under 7p per share. After the year end and up to 15 Jul 2022, the Company has bought back a further 1,475,096 shares. We should note that this activity does not preclude the manager determining that a more significant amount than usual on any one day should be purchased if there is, in their view, a particular investment opportunity best accessed through buying shares in the Company rather than buying individual securities .

FEES

We have continued to make progress on our fee structure. In April 2019 we announced a change in the calculation of the performance fee and a reduction in the participation rate for that fee, which took effect from 1st May in that year. In 2021, which was our regular three yearly review of the base management fee, we agreed with Polar Capital a reduction as follows:

Current Base Management Fee Arrangement: Effective 1 May 2022
0.80%	£0-£2bn
0.70%	£2bn-£3.5bn
0.60%	over £3.5bn

Base Management Fee Arrangement to 30 April 2022
1%	Up to £800m
0.85%	£800m-£1.6bn
0.80%	£1.6bn-£2.00bn
0.70%	over £2.0bn

BOARD COMPOSITION

In my statement last year, I reported that the Nominations Committee and the Board would continue with its succession plan during the year. Phase one was completed in September 2021 with the appointment of Catherine Cripps and Jane Pearce as independent non-executive Directors to the Board. It is intended that Jane Pearce will succeed Charlotta Ginman (our current Audit Chair) who will come to the end of her nine years' service in 2024. Both Catherine and Jane will stand for election by Shareholders at the AGM to be held on 8 September 2022, along with those directors standing for re-election.

Phase two of the succession plan was to appoint my successor as Chair of the Board ahead of my retirement at the Company's Annual General Meeting in 2022, as it is the AGM after I reach 11 years' service. In accordance with the Board's tenure policy I am able to remain on the Board for up to 12 years. I am delighted to confirm that Catherine Cripps has been invited by the Board, and has accepted the role of Chair (subject to election by Shareholders at the AGM) when I retire at the forthcoming AGM. I should note that this part of the plan was developed and implemented by the Nominations Committee excluding me, and led by our Senior Independent Director ("SID"), Tim Cruttenden. We also are grateful to our external board evaluator, Tim Stephenson, who reviewed and commented on our plans. The Board believes that Catherine will bring a fresh perspective to its proceedings and look forward to seeing the Company make further progress under her guidance.

DIRECTOR'S FEES

As part of the Board's annual fee review to ensure that remuneration paid to Directors remains competitive and in line with those of its peers, it was noted by the external board evaluator and the Remuneration Committee that the current level of fees paid to the Company's Directors was significantly below the market rate for a large investment trust. Whilst the Board usually favours modest increases year on year (where applicable), it was felt that fees should be competitive and reflective of the current market in order to attract and retain the best candidates. It was also agreed that fees should reflect the increasing workload, time and commitment required from Directors of a FTSE 250 Company. As is detailed further within the Remuneration Committee Report, with effect from 1 May 2022, the base Directors' fee increased by 4.8% to £33,000 and the fee of the Chair by 10% to £55,000. The supplements for the Audit Committee Chair and the Senior Independent Director remain unchanged at £7,000 and £4,200 respectively.

ANNUAL GENERAL MEETING

Assuming we continue to emerge from the pandemic, the AGM will be held on 8 September 2022 at Haberdashers' Hall, 18 West Smithfield, London EC1A 9HQ, a venue you might remember from the 2019 AGM. We will again be holding the AGM as a hybrid meeting supported by Lumi Global. A notice of AGM will be provided to all Shareholders and made available on the Company's website, this includes the formal business to be conducted at the AGM and further details of how Shareholders can join the AGM virtually.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS (ESG)

As detailed in my report last year, we continue to develop our approach to ESG and during the year under review, we continued to engage with our manager to better understand how ESG has been further integrated into the investment and decision-making process. The Board also receives information on how ESG affects Polar Capital as a business and the technology team in particular.

In addition to this, we as a Board have nominated Catherine Cripps to assume the role of ESG lead. Catherine has been responsible for ensuring that the Board is kept abreast of the latest developments in this area to develop how the Company can report to stakeholders in line with such. Catherine has worked with the manager to develop a dashboard which allows us to see how the manager is considering ESG matters, and whether that meets our requirements. We do think the ESG issues raised are important, interesting and complicated. We have also held a number of conversations with our shareholders about their views on ESG matters and how they would like us to report, given their requirements. We have endeavoured to provide information as requested. The ESG report in the Annual Report and Accounts describes, both the Corporate and Investment approach to ESG matters .

OUTLOOK

After more than a decade of easier money and the extraordinary effects of COVID-19, we are seeing considerable turmoil in our financial environment. At this point, long term interest rates in the US and elsewhere have risen sharply. The valuations of companies which were elevated by very low long term interest rates, have, not to put it too finely, cratered. Many investors have not seen inflation rates such as those we currently observe.

At this point, many tech companies are not reporting significant impacts on their trading, but we are aware that company reports can be indicators of the current state, rather than of future problems. We are in uncertain times, and although between us, we've lived through previous savage market downturns and inflationary pressures, it's not clear how our current circumstances play out. We suspect markets could be fearful for some time. However, we do think the basic disruptive opportunities for the companies in our portfolio persist, and we support our Manager's view that we should stick to the fundamental principle that investing in the potential growth in our sector will remain profitable over time .

Finally, as I come to step down from the Board at the AGM may I thank our shareholders, my fellow directors and all the team at Polar Capital for all the support they have given me during my tenure as Chair.

Sarah Bates

Chair

19 July 2022

FINANCIAL AND PERFORMANCE REVIEW FOR THE YEAR ENDED 30 APRIL 2022

The NAV per share fell to 2305.13p as at 30 April 2022 from 2496.44p at the start of the year. The Company's NAV per share total return for the period was a loss of 7.7% and the Company finished the year with a total net assets of £3,051.0m. The Investment Manager's Report sets out in detail the performance of the Company for the financial year. The chart contained in the Annual Report and Accounts shows in greater detail the movement in total net assets for the year.

Total Return

The Company generates returns from both capital growth (capital return) and dividend income received (revenue return). For the year ended 30 April 2022, the total net loss was £258.6m (2021: £1,063.7m gains), of which there was a £241.9m losses (2021: £1,074.2m gain) from capital and a £16.7m losses (2021: £10.5m loss) on our income account which offsets all expenses against dividend income. Full details of the total return can be found in the Statement of Comprehensive Income in the Annual Report and Accounts. We choose as a matter of policy not to allocate our expenses between capital and income, (any performance fee is the only expense allocated to capital). The Company's allocation of expenses is described in Note 2(d) in the annual report and the allocation methodology is considered on an annual basis. The total net losses per share were 191.61p, compared to the previous year's earnings per share of 776.75p. The total net losses per share was made up of 179.25p from capital return and a loss of 12.36p from revenue return .

Capital Return

The investment portfolio was valued at £2,811.1m (2021: £3,243.0m) at the year end 30 April 2022. The investment portfolio delivered a realised loss on disposals of £121.2m (2021: £480.4m gains) and valuation losses on investment of £132.5m (2021: £647.3m gains) for the year ended 30 April 2022. The Company's valuation approach is described in Note 2 (f) in the annual report. The derivative losses of £5.8m (2021: £49.1m losses) represent the call and put options which are used to facilitate efficient portfolio management. Full details of the derivatives are set out in the Investment Manager's Report and Note 6 of the Annual Report and Accounts.

Revenue Return

he investment income of £15.87m (2021: £18.2m) represents dividend income derived from listed investments. The investment income, excluding any one off special dividends, increased by 5.2% for the year and this was driven by changes in holdings, dividend rates, and FX rate changes as the Company's revenue is generally denominated in currencies other than Sterling. The other operating income of £0.031m (2021: £0.008m) was derived mainly from the Money Market Fund (MMF) interest. The increase in interest rates in recent months has enabled banks and MMF to resume payment of interest income. It should be noted, however, that the MMF is held primarily as a cash diversification factor rather than an income generating investment. As stated above, as a matter of policy, all expenses (excluding the performance fee) are charged to revenue and as a result, expenses normally exceed the income received in any given year. As has been the case for many years, the revenue reserve remains therefore negative. The Company historically has not paid dividends given the nature of its focus on longer- term capital growth. The Board reviews this stance on a periodic basis .

Expenses

The total expenses for the year under review amounted to £30.6m (2021: £26.2m) and include investment management fees of £28.3m (2021: £24.1m), administrative expenses of £1.3m (2021: £1.1m) and finance costs of £1.0m (2021: £1.0m). Although the net asset value reduced in absolute terms towards the end of the financial year, on average it had increased during the year under review when compared to the prior year, hence increases in management, depositary and custody fees were incurred during the year. Other expenses remained at a similar level to the last year. There was no performance fee accrued at the year ended 30 April 2022 (2021: £nil). In January 2022 agreement was made with Polar Capital to amend the base management fee tier levels and calculation structure with effect from the new financial year commencing 1 May 2022. Further details can be found in the Strategic Report in the Annual report and Accounts .

Ongoing Charges

The ongoing charges ratio, as calculated in line with the AIC recommended methodology, represents the total expenses of the Company, excluding finance costs, expressed as a percentage of the average daily NAV. This ratio demonstrates to Shareholders the annual percentage reduction in NAV as a result of recurring operational expenses, that is, the expected cost of managing the portfolio. Whilst based on historical information, the ratio provides an indication of the likely level of costs that will be incurred in managing the Company in the future. The ongoing charges ratio for the year to 30 April 2022 was 0.84% (2021: 0.82%). The ongoing charges ratio including the performance fee for the year to 30 April 2022 was also 0.84% (2021: 0.82%) as no performance fee was accrued at the year end. As noted above under expenses, the slight increase in the OCR is mainly due to the increase in management fee during the year which moved in line with the change in net asset value during the year under review. See Alternative Performance Measures in the Annual Report and Accounts .

Cash and Cash Equivalents

As noted in prior years, the Company maintains a relatively high level of cash, closing the year with £311.4m (2021: £212.7m). As noted above, as part of the Company's cash diversification strategy, the Company has taken a cautious approach and has chosen to invest 50% of its USD cash balance into a USD Treasury Money Market Fund. As at 30 April 2022, the Company held the BlackRock Institutional Cash Series - US Treasury Fund with a market value of £92.0m .

Portfolio Turnover

Gearing

The Company can use gearing for investment purposes and as stated in the Annual Report. As at the year end, the Company had fully drawn the two, two-year fixed rate term loans (JPY 3.8bn and USD 36m) with ING Bank N.V. Both loans fall due for repayment on 30 September 2022. The repayment of both loans, totalling approximately £52.0m (2021: £51.1m), would equate to 17% of the cash and cash equivalents readily available to the Company as at 30 April 2022. Consideration to the level of borrowings required by the Portfolio Manager is under review and replacement facilities will be negotiated accordingly with ING Bank N. V. or another provider in due course .

Foreign Exchange

The majority of the Company's assets and revenue are denominated in currencies other than Sterling. As at the year ended the other currency gains of £17.5m represents the exchange gains on currency balances of £18.4m and losses on translation of loan balances of £0.9m. The Company's total return and net assets can be affected by the currency translation and movements in foreign exchange. Note 27 (a) (ii) in the annual report, analyses the currency risk and the management of such risk .

Sarah Bates

Chair

19 July 2022

INVESTMENT MANAGER'S REPORT

MARKET REVIEW

An unexpected monetary volte-face by policymakers amid persistently high inflation weighed on equity markets and valuations during the year. However, losses were more than offset by pronounced US dollar strength which gained more than 12% on a trade-weighted basis and more than 9% against the British Pound (GBP). As a result, the MSCI All Country World Index over the year to 30 April 2022 gained 4.3% in sterling terms, aided by a strong first half characterised by economic reopening, upward earnings revisions, and rampant M&A.

The strength of the US dollar mirrored sharply higher US interest rate expectations following the revelation in November that the Fed no longer believed inflationary pressures were 'transitory'. Energy prices likely played a part in driving this Fed Pivot as oil and commodity prices rose 79% and 54% respectively during the year. Higher risk-free rates (10-year US Treasury yields increased from 1.6% to 2.9%) resulted in a much more challenging fiscal second half with negative headline returns failing to capture the magnitude of the correction experienced by the average stock. While the US, as measured by the S&P 500 Index gained 10.2% in sterling terms (and 0.2% in local terms), drawdowns were significantly greater elsewhere including Europe (Eurostoxx 600 +2.3%), Japan (Nikkei 225 -12.0%) and Asia ex-Japan (MSCI Asia ex-Japan -12.9%) (all returns in sterling terms, unless otherwise stated). Weakest performance was reserved for Chinese stocks (MSCI China -29.8%) where a deluge of regulatory changes and market unfriendly developments took their toll on investor sentiment and lockdowns in Shanghai towards period end reflected the challenge posed by the omicron variant to China's zero-COVID policy .

Small-cap indices meaningfully underperformed during the year, with the Russell 2000 (small cap) declining 9.6% while the Russell 1000 (large-cap) advanced by +6.2% (both in sterling terms). Breadth also continued to deteriorate with just c.25% of NYSE stocks trading above their 200-day average at year-end, compared to 58% a year earlier.

The first half of the year saw markets grind higher amid economic reopening, positive earnings revisions, and record equity inflows. This was possible due to worldwide vaccination programmes that succeeded in breaking the link between COVID-19 infections and deaths. Economic recovery was most evident in consumption trends and in labour market strength, the US unemployment rate falling below 5% by September before returning to pre-COVID levels by year end. The recovery trajectory was complicated by waning fiscal stimulus and labour shortages, exacerbated by the combination of limited improvement in the labour participation rate and early retirement (aka the 'Great Resignation'). However, the most significant headwind was commodity shortages and soaring energy prices with oil surpassing $80/barrel in November for the first time since 2014, while US producer prices rose 8.3% y/y in August, the largest year-on-year increase on record. The combination of shortages and a surfeit of freshly printed liquidity saw CPI increase 5% y/y in May - the fastest growth in consumer prices since August 2008. This led to the June FOMC 'dot plot' implying two rate hikes in 2023, up from zero in March, and, in October, the Fed signalled that it could begin scaling back asset purchases in November. However, equity markets were able to shrug off these negative developments largely due to the Fed maintaining its earlier 'transitory' stance and persistently negative real rates supporting equity multiples.

The emergence of the highly mutated Omicron variant in November was an inauspicious start to what proved a very challenging fiscal second half. In the same month, recently re-nominated Fed Chair Jerome Powell performed a remarkable pivot regarding inflation, declaring "it's probably a good time to retire that word transitory". While the milder variant of COVID likely contributed to a "more hawkish variant of the Fed", it was November's CPI print (+6.5% y/y) - the highest reading since 1982 - that likely forced Powell's hand. Hawkish monetary developments dominated the balance of the year, with the Fed first moving to double the pace of tapering in December. An inflation shock morphed into a rates shock as the release of FOMC minutes in January raised the spectre of rate hikes and quantitative tightening (QT) "sooner or at a faster pace than participants had earlier anticipated".

The first US rate hike since 2018 was also delivered in March, three months after the UK became the first G7 economy to raise interest rates since the pandemic began. By the end of April, markets had priced in Fed Funds at 250bps having anticipated zero rate hikes little more than a year earlier, and 10-year US Treasury yields had backed up to 2.9%, almost doubling during the first four months of 2022. The persistence of inflationary pressures saw other central banks adopt more hawkish positions too, forcing rates higher.

Long-duration stocks felt the full force of this monetary about-turn with the earlier tremor in weaker, more speculative names turning into a full risk-off episode across high growth and long duration names. This was particularly true within small caps where growth stocks trailed value by more than 20% during the year.

In addition to the human tragedy associated with the invasion of Ukraine, the conflict added untimely upside pressure to inflation and downside risk to global growth forecasts. Reflecting the elevated risk of so-called 'policy error' (the Fed tightening against this most uncertain of backdrops) the two-year versus 10-year Treasury yield spread briefly inverted during March, something often seen as a precursor to a recession.

Technology Review

Calendar year 2021 proved a strong recovery year with worldwide IT spending +9% y/y as compared to earlier estimates of +6%. Upside to 2021 forecasts saw the technology sector deliver revenue and earnings growth of 15.7% and 28.9% y/y respectively, well ahead of estimates this time last year of 10.1% and 17.5%. As a result, technology revenue growth ended up only narrowly behind the market (16.5%) although earnings trailed significantly as the market delivered 47.5% growth. This was unsurprising given more difficult comparisons and less incremental leverage in the technology sector. Despite better-than-expected IT spending, technology stocks trailed the broader market during the fiscal year, the Dow Jones World Technology Index declining 1% in sterling terms (total return) due to fading pandemic tailwinds, tough comparisons and extreme factor rotation following the shift in Fed policy. However, and even more extreme than in the broader market, returns were dominated by US stocks which increased 6.6% while non- US technology stocks (as measured by the W2TEC index) fell 22% during the year. Small caps also significantly underperformed, the Russell 2000 (small) technology index declining 10.1% while large-caps (as measured by the Russell 1000 technology index) advanced 6.9%, both in sterling terms. Moreover, US relative strength was driven by an even narrower group of megacap stocks that continued to deliver strong growth against a less uniformly positive backdrop while also enjoying strong ESG-related equity inflows. At year end, just 19% of NASDAQ stocks were trading above their 200-day moving average. Higher multiple, long duration stocks saw very significant multiple compression down from their November highs, as the most expensive quintile of the US technology sector fell -47% while the least expensive (value) quintile only declined -8% through our fiscal year end .

At the sector level, strongest performance was enjoyed by the semiconductor sector as demand remained strong amid chip shortages despite concerns about double-ordering and the durability of the cycle. Strong capex growth (+20% y/y) at the hyperscale public cloud companies led to continued strength in cloud data centre capex benefitting both AMD (+15%) and Nvidia (+36%). While most of the automotive industry struggled with the global chip shortages, Tesla (+35%) enjoyed a stellar period delivering a record number of vehicles and record margins in Q3 and Q4 against a supportive backdrop for electric vehicles .

Value-oriented sectors such as networking (aided by datacentre strength) and hardware also performed well, the latter benefitting from outstanding performance from Apple (+32%), which proved able to deal with ongoing supply constraints to fulfil steady consumer demand for its products. Software stocks trailed (IGV-9%), with average returns significantly worse than headlines due to Microsoft (+21%) as the sector suffered material multiple compression amid higher rate expectations. This trend accelerated into calendar year 2022, which saw software EV/NTM (Enterprise Value / Next Twelve Months) sales multiples compress by 42% by the end of April to an average of 8x. Private Equity buyers stepped in to take advantage of the weakness with Thoma Bravo bidding for Sailpoint (13.4x forward sales) and Anaplan (13.9x forward sales).

Weakest performance was reserved for Internet stocks (and other 'work from home' beneficiaries) which struggled with reopening, difficult comparisons, changes to user tracking, supply chain travails and (towards period end) consumer spending concerns. While the sector struggled (particularly in China, where a series of regulatory crackdowns weighed heavily) the average stock suffered far more than headlines suggest with NASDAQ CTQ Internet Index returning -37%, while Alphabet delivered positive returns (+5%). Softer ecommerce trends and the impact of waning fiscal stimulus checks put pressure on the ecommerce and payments space, including PayPal (-63%) and Shopify (-60%). Amazon (-21%) was not immune as strong AWS results were not enough to offset concerns around ecommerce pull forward and the profitability of its retail business .

Public cloud results remained very solid as the three major public cloud operators (Amazon AWS, Microsoft Azure, Google GCP) reached a collective annual revenue run rate of c.$140bn, up +41% y/y. Many of the bellwether WFH and lockdown beneficiaries more than reversed out earlier gains as companies such as Netflix, DocuSign, Peloton and Spotify broke below pre-COVID levels despite strong growth in their revenues and user bases in the intervening period. The most speculative areas of the market saw the largest drawdowns. The GS Non-Profitable Tech Index returned -47% and the ARK Innovation ETF delivered -57% during the year as investor enthusiasm for 'TAM' (Total Addressable Market) stories abated in the context of more persistent inflation and a higher rate outlook .

Portfolio Performance

The Trust underperformed its benchmark with the net asset value per share falling -7.7% during the fiscal year versus a decline of -0.9% for the Dow Jones World Technology index. The Trust's share price fell by 13.7% reflecting the additional impact of the discount widening from 5.3% to 11.5% during the period. We continue to monitor the discount and the Trust bought back 4.19m shares during the period .

The year was dominated by the reversal of fortunes in high growth / long-duration stocks that were challenged by the combination of reopening headwinds and supply chain travails as well as sustained valuation compression amid soaring energy prices, rampant inflation, higher risk-free rates, and increased risk of recession. As such, adverse stock selection (largely associated with our growth-centric investment approach) was responsible for most of the Trust's underperformance as investors rotated away from smaller, longer-duration assets in favour of more solid, lower-multiple assets. In addition, a handful of mega-cap stocks that explain a large part of our benchmark including Alphabet (+5%), Apple (+33%) and Microsoft (+22%) delivered strong positive returns while smaller-cap peers fell significantly. Given that we are underweight in these names compared to the benchmark, their relative strength dragged on our relative performance. More broadly, the underperformance of smaller companies, which we were overweight relative to the benchmark, during the period acted as a meaningful performance headwind. On the positive side, our average cash position of 5.3% added 95bps of performance (aided by USD strength) although our NDX puts dragged by -17bps for the full year, despite strong recent positive contribution. Asset allocation also benefited from an underweight exposure to China which underperformed following increasingly hostile government scrutiny of technology platforms and (towards period end) economic weakness due to lockdowns .

At the stock level, weakest relative performance was delivered by earlier COVID beneficiaries that suffered a stark reversal in fortune during the year. These included ecommerce companies such as Amazon (-21%) and HelloFresh (-31%) as well as digital payment platforms such as PayPal (-53%) and Square (-55%), which similarly struggled with the slowdown in online sales and the withdrawal of government stimulus .

Two of our largest stock detractors were Internet stocks: Netflix (-59%) which struggled to maintain its earlier subscriber momentum growth amid reopening; and Snap (-49%) which was hurt by user-tracking changes made by Apple. Software companies that had previously enjoyed tailwinds associated with remote and hybrid work also experienced significant drawdowns typified by DocuSign (-60%) and Twilio (-66%). Other software stocks also struggled with valuation compression that more than offset fundamental progress, while a few were punished following more mixed execution including Okta (-51%) and Elastic (-30%). Long-duration stocks were particularly weak as sentiment reversed as risk free rates rose, which negatively impacted companies such as 10x Genomics (-73%) and Guardant Health (-57%). As ever, there were also a few genuine disappointments such as Chegg (-70%) Everbridge (-64%) and 2U (-72%), although these were mostly contained to the portfolio tail. However, the most significant stock level detractors were our underweight positions in Apple (+32%) and Microsoft (+21%) which combined cost nearly -240bps relative, despite strongly contributing to absolute returns .

In terms of positives, the Trust benefitted from the outperformance of cybersecurity stocks which enjoyed strong fundamentals and positive sentiment (buttressed by events in Ukraine) in contrast with software peers. Noteworthy performances were delivered by Tenable (+61%), Cloudflare (+12%) and CrowdStrike (+5%). Companies exposed to strong cloud capex /datacentre spending also performed well including Arista Networks (+61%), AMD (+15%) and Marvell Technology (+41%). Electric vehicle (EV) plays such as Tesla (+35%) and BYD (+60%) continued to benefit from strong adoption trends while managing to avoid too much supply chain disruption. The Trust also benefited from its underweight exposure to Chinese stocks with Alibaba (-54%) the largest individual positive contributor (c.88bps) to relative performance. Strong performance from E-Ink (+172%) is deserving of mention as the Taiwanese manufacturer delivered strong growth aided by Walmart's adoption of its electronic shelf labels.

Portfolio Changes

While our core themes (and our growth-centric approach) had previously mapped well to the pandemic, we continued to realign the portfolio to better position it for reopening. This resulted in us significantly reducing our exposure to earlier work-from-home (WFH) beneficiaries, many of which suffered spectacular reversals.

This resulted in us exiting positions in Adyen, Avalara, Delivery Hero, Fiverr, Kahoot!, ON24, Peloton, Shimano, Wise and Zalando during the year. We also significantly reduced exposure to longer-duration stocks post the Fed pivot in November, exiting Affirm, Pinduoduo and Sea. On the positive side, we continued to add to our semiconductor exposure reflecting myriad thematic drivers (including AI and EV) as well as the ongoing demandsupply imbalance. Changes to the portfolio made during the year meaningfully ameliorated underperformance with the Trust's actual return more than 4.5% ahead of what a static (i.e. unchanged) portfolio would have delivered.

Market Outlook

With the worst of the pandemic apparently behind us, investors could be forgiven for thinking that recovery might have been more straightforward. Instead, we are faced with a more uncertain macroeconomic backdrop than at any stage since the pandemic and - given the loss of policymaker support - arguably since the Great Financial Crisis (GFC). As recently as January, the IMF was forecasting global growth of 4.4% and 3.8% in 2022 and 2023 respectively - a deceleration from an estimated 6.1% in 2021 - reflecting higher interest rates, slower US growth and troubles in China. However, the invasion of Ukraine in late February has seen growth forecasts contract further while resultant soaring food and energy prices have led to inflation expectations of 5.7% in advanced economies and 8.7% in emerging markets this year, significantly ahead of earlier forecasts. Beyond the tragic humanitarian consequences of the war, the conflict has also highlighted Europe's reliance on Russian energy with the EU receiving nearly 40% of its gas and more than a quarter of its oil from Russia. With the war ongoing (and with systemic risk thus far avoided), higher commodity and energy prices will be the primary mechanism for how the conflict affects the global economy. While Russia only explains c.1.6% of global GDP, it is the world's largest exporter of natural gas (c.20% global share) and the second largest exporter of crude oil. Russia is also the largest exporter of wheat (c.20% share) and supplies c.10% of the world's copper and aluminium and 40% of palladium. Consumer spending is being challenged by higher energy costs with UK families said to face the biggest real income squeeze in nearly 50 years. In the US, a gallon of gas recently exceeded $5 - the first time ever - with negative implications for disposable incomes and consumer confidence which recently fell to a decade low .

Sharply higher energy prices also pose a new and substantial risk to an inflationary backdrop that had already become problematic. As previously discussed, inflation has soared almost everywhere with annual CPI growth rates in the US and Europe at multi-decade highs. Originally understood as a supply shock due to COVID-related disruption, the past year has seen higher prices become more pervasive and less transitory. As previously mentioned, US CPI reached +6.5% in November, while in the same month, Eurozone inflation came in at +4.9% y/y, way ahead of the ECB's earlier forecast of +1.5% for 4Q21. Tight labour markets have also led to wage inflation, with unit labour costs +6.3% y/y in 3Q21, the biggest increase since 1982. As a result, the narrative has shifted to inflation as a demand problem caused by stimulus, excess savings, and pent-up demand which, when paired with more inelastic supply, has created a "perfect storm of higher prices".

Since the start of the pandemic, highly accommodative fiscal and monetary policy designed to prevent financial collapse has 'flooded the economy and financial markets' with unprecedented liquidity. Between February 2020 and November 2021, M2 rose $6trn to $21.4trn - equivalent to almost a year's worth of nominal GDP, a record. Excess liquidity was recently estimated at c.$3trn while fiscal support packages have seen government deficits balloon. In the US, the federal budget deficit reached c.$2.8trn, almost three times the 2019 level. The Fed's balance sheet has expanded by almost $5trn too, reaching a record $8.7trn by the end of the calendar year. While the Fed may have "greatly miscalculated" the inflationary impact of earlier stimulus, they could not have known the pandemic would result in a labour supply issue. Just two years ago the pandemic was said to have "triggered one of the worst jobs crises since the Great Depression". Instead, and despite the US economy being 1.4% larger than it was pre-pandemic, there are still 3.6 million fewer people in jobs and nearly 1.9 job openings per job seeker. This is largely the result of the 3m additional 'early retirees' equivalent to c.2% of the US workforce (aka the 'Great Retirement'), another pandemic-related twist which has accelerated the labour market recovery timeline. As a result, wages are rising, with the National Federation for Independent Businesses (NFIB) recently reporting a record net 48% of small businesses increasing worker compensation. Despite this, labour force participation remains subdued at 62.3% (as compared to c.63% pre-pandemic) leading to massive employee churn (aka the 'Great Resignation'). Labour shortages may persist which will put further upward pressure on wages and could presage a self-reinforcing wage-price spiral unless productivity growth improves significantly.

As such, a US tightening cycle was necessary to prevent inflation becoming more embedded in the labour market. While the Fed may appear behind the curve, inflation expectations appear to remain relatively well anchored. The Fed will want to keep it that way; to fail to have pivoted after the November data "would have risked Powell's rhetoric degenerating into self-parody". Since then, rate hikes have begun with further increases anticipated this year and next. The decision by the ECB in early March to accelerate tapering despite events in Ukraine highlighted the fact that central banks will (and should) always prioritise credibility over policy error risk. As such, we expect Powell to "do whatever it takes" to becalm inflation but do not anticipate a Volcker re-run given the very different backdrop with one notable exception - soaring energy prices. Regardless, it is difficult to see how central banks can come to the rescue of markets with interest rates near zero. Moreover, reducing inflation has become an increasingly important political focus, and a more important consideration than bailing out equity investors. At some point concerns about reflexivity will resurface but there is no obligation for the Fed to act and, in any case, we know it failed twice to stop selloffs of as much as 50% in the bear markets that ended in 2002 and 2009.

Until recently, our base case was slowing growth rather than stagflation or recession. However, we have to acknowledge the increasing risks posed to this relatively sanguine view by tighter monetary conditions, war, and soaring energy costs. For now, we are encouraged by earnings expectations that have remained relatively robust with growth in earnings and revenues this year forecast at 7.7% and 11.5% respectively. While these forecasts may prove stale and subject to downward revision, it is worth recalling that while GDP is measured in real terms, earnings estimates are nominal. As such, inflation currently represents a greater risk to multiples than to corporate earnings. Of course, much depends on the durability of cycle-high corporate profit margins given an increasing number of cost pressures. We continue to keep a close eye on the direction of operating earnings given its strongly positive (0.94) correlation with the S&P 500.

Following the recent market correction, valuations look less problematic today with the S&P 500 trading at c.15.8x forward earnings as compared to last year when we noted they were "somewhat extended" at c.23x. As a result, US stocks now trade below both five-year (18.6x) and ten-year (16.9x) averages. However, this year we are forced to consider valuations against a very different inflation backdrop. That said, we are somewhat willing to look through current elevated inflation because longerterm expectations remain well anchored and because the Fed is alive to inflationary risk. Equity valuations should also be somewhat supported by a paucity of alternatives. Compared to bonds, the Fed Model suggests stocks are c.50% undervalued compared to Treasuries, and c.20% undervalued versus investment-grade credit. Cash continues to look unattractive with negative real returns guaranteed in most major markets, although elevated levels of equity market volatility have added to its relative lustre.

Upside risk could manifest via the cessation of hostilities in Ukraine - unlikely in the very near term but possible in time. While a return to the prior equilibrium enjoyed between Russia and the West appears impossible, an end to hostilities could significantly ameliorate current market uncertainty, becalm energy prices, and meaningfully reduce the risk of escalation. Structural inflation fears may also be overdone with many of the imbalances that existed prior to the invasion of Ukraine appearing pandemic-related: pent-up demand boosted by household savings bloated during COVID, supply-chain challenges frustrated by uneven vaccine availability and draconian approaches to COVID containment, particularly in China. Heightened labour market churn also appears to be somewhat pandemic related with the pursuit of more flexible work and/or relocation important reasons for changing jobs. Reopened borders and easier international travel may also ameliorate labour shortages in lowerpaid work where wage growth has been strongest. This malalignment of demand and supply is reminiscent of the post-war period when the end of price controls saw CPI leap from 1.7% in February 1946 to a peak at 19.7% in March 1947, before plunging to zero in 1949. The cause of this volatility was a combination of pent-up demand, as soldiers were demobilised, and plunging industrial production, as factories retooled from armaments to consumer goods. Two years later, production rebounded dramatically, helping to bring inflation down. A similar experience also occurred during the Korean War. Both of these episodes revealed that inflation can rise and fall very quickly without inflation expectations being permanently altered. Fed Chair Powell may have been alluding to this possibility when he stated that "appropriate monetary policy in this environment requires a recognition that the economy evolves in unexpected ways".

Other positive impulses include the so-called 'CFO put' with S&P companies sitting on $2.4trn in cash and other liquid assets. Leverage at public companies (as measured by net debt/EBITDA) is back at 2014 lows which should support capital spending, higher dividends and stock repurchases. It should also fuel greater M&A activity with private equity additionally said to have c.$2.3trn of 'dry powder' cash reserves. During 2022, we have seen private equity spend more than $34bn acquiring three software vendors - Citrix, SailPoint and Anaplan. A return of strategic M&A may also prove supportive too, with $95bn of gross transaction value announced in the videogaming industry alone this year following Microsoft's $69bn bid for Activision Blizzard and Take-Two's $13bn bid for Zynga. In early March, Google also announced the $5.4bn cash acquisition of cybersecurity company Mandiant. We also see many of the conditions necessary for a rally falling into place: the IPO market is essentially shut, and investor sentiment is at post-1992 lows (a recent AAII survey of US retail investors revealed that just 15% of investors are bullish). Small caps have underperformed considerably from highs and new issues have been smashed as the GS Recent Liquid IPO Index has halved from November highs, both of which have typically been preconditions of previous rallies

Market Risks

While COVID remains a wildcard, war, inflation, and recession represent the most significant interconnected risks this year . In terms of COVID, we continue to believe the worst of the pandemic is behind us thanks to vaccine rollouts that have broken the link between cases and mortality, as well as the link between cases and behavioural adjustments. Put differently, most people appear to have concluded that the health risks associated with COVID are no longer significant enough for them to change their behaviour. As long as Omicron remains the dominant strain, our base case is a continuation of the transition from pandemic to endemic disease. The main risk to this is a significantly different new variant that changes the trajectory of the virus. In addition, current lockdowns in China - where omicron is challenging the efficacy of local vaccines and the zero-COVID policy - are a pertinent reminder that COVID is likely to continue disrupting life and supply chains for the foreseeable future. We also cannot know how the Ukraine conflict will evolve. At the same time, China will be watching closely given its One-China Principle is similar to Putin's desire to rebuild a Greater Russia. There is also a real (if small) risk of escalation (evidenced by potential NATO enlargement) - a chilling prospect given Russia controls the world's biggest nuclear arsenal and has been unafraid to sanction the use of chemical weapons in Syria .

The conflict also poses additional risks to the prevailing investment backdrop. History says we should expect higher inflation: as the saying goes, "war is inflationary; peace is deflationary". Put differently, the pursuit of both "guns and butter" comes at an inflationary cost. In the US, inflation spiked during the War of 1812, the American Civil War, WWI, and WWII through the end of the Cold War. We might also do well to consider the implications of permanently higher defence spending and the potential for a new arms race. If so, this may coalesce around hypersonic weapons which reduce the effectiveness of existing ballistic missile defence systems. With the potential to derail the theory of deterrence based on mutually assured destruction (MAD), higher defence budgets look inevitable. Germany has already announced an immediate €100bn budget to modernise its army and an ambition to exceed a target of 2% of GDP in defence spending (from c.1.5% today). This pivot is significant, as was the recent decision by some ESG funds to allow defence stocks within their investment remits. During the Cold War, the US spent around 7% of GDP on defence which détente saw fall to c2.8% today. The war in Ukraine has drawn a line under that peace dividend with US defence spending already forecast to rise towards 3.5-4% over the coming years .

War in Ukraine has also highlighted Europe's dependence on Russian oil and gas, particularly in Germany where 65% of gas comes from Russia. Naturally, this has brought energy security to the fore and Europe's urgent need to reduce this vulnerability. While this should accelerate the clean energy transition, the reality is that it takes a lot of alternative energy to replace gas. The invasion has so shaken Germany that its economic minister from the Green Party is reviewing the possibility of keeping both coal and nuclear plants online to reduce dependence on Russian energy. We are excited about the opportunity to participate in another wave of environmental technology spending, but the climate transition also represents another "slow- moving negative supply shock" because it embeds the cost of carbon emissions in production prices. It is also another reminder we may already be past peak globalisation. This process arguably began with Brexit and Trump's tariff wars but stepped up a gear with COVID when the world's interdependence was tested. Vaccine nationalism was a particularly difficult moment, while post-pandemic challenges have further highlighted the risk associated with global supply chains built on hyperspecialisation and finely-tuned just-in-time (JIT) inventory management. The risks to US equities from a decline in globalisation are not insignificant: Bank of America estimates that globalisation has driven more than half of all margin expansion due to lower COGS on exports, taxes, and labour.

More significantly, the risk is that peak globalisation is part of broader inflation regime shift. In recent years we have seen a wave of populism presage significant minimum wage increases and social unrest, while a number of COVID policy responses in the developed world (such as massive transfer payments indirectly financed by central banks) represent a "generational shift in fiscal policy". The demand for more flexible work post-pandemic is also perhaps symptomatic of a recalibrated relationship between labour and capital that could persist. Taken together, these factors represent a significant challenge to the disinflationary era that has been in place since the early 1980s. Finally, we might highlight the long-term risk posed to the dollar-based system following the freezing of Russian US dollar reserves, described as "the weaponization of money". While a paucity of alternatives suggests limited immediate risk to the dollar's reserve currency status, so- called 'de-dollarisation' could become a key theme in an "increasingly multi-polar and potentially more contentious world" .

Technology Outlook

Earnings outlook

After increasing 9% in 2021, worldwide IT spending is expected to reach $4.4trn this calendar year representing an increase of 4.0%, in current dollar terms. However, this forecast has already been revised lower from +5% forecast in January reflecting deepening geopolitical and macroeconomic risks. For 2022, the technology sector is expected to deliver revenue and earnings growth of 11.2%/12% while the S&P 500 is forecast to grow at 9.8%/10.3% respectively. These forecasts do not look unreasonable, particularly after a solid Q1 results seasons that at the time of writing has seen the sector deliver 11.7% y/y revenue growth. However, guidance has been more mixed than usual, likely reflecting inflation, supply chain challenges, USD strength and the impact of the conflict in Ukraine. These headwinds come at a tricky time for the technology sector's net profit margins which are elevated at c.25% as compared to the five-year average of 21.8%. Sustained US Dollar strength could challenge revenue estimates given the sector's international exposure of 59% (the highest of any sector) vs. 41% for the market .

Valuation

Having made a new cycle high of 28x ahead of the Fed Pivot in November 2021, technology valuations have been in retreat. Today, the forward P/E of the technology sector is c.19 - considerably less than this time last year (26x), below the five-year average (21.7x) but still ahead of the ten-year (18.2x) average. In addition, technology remains the best-capitalised US sector and the only one with net cash. The sector's relative rating has also contracted from post-2004 highs of 1.4x registered in late 2021. Today, technology stocks trade at 1.1x the market PE multiple, towards the middle of its post-dotcom bubble range of 0.9-1.4x and a far cry from levels seen during the dotcom bubble, when the sector traded at more than twice the market multiple. However, as we have long argued, aggregate valuations continue to be diluted by 'cheap' incumbents such as HP and Intel (and now arguably Meta / Facebook) that trade on P/Es of between 7-13x .

Last year, we highlighted how the technology story had hardly gone unnoticed, evidenced by next-generation valuations that had expanded to cycle highs, revisiting levels not seen since the late 1990s. While this group of stocks boasted unusual growth profiles, we cautioned that elevated valuations also reflected several late-cycle features - elevated retail participation, SPAC issuance, concentrated portfolios and 'classic late-cycle exuberance' that had coalesced around long-term 'total addressable market' (TAM) investing. Since then, those pockets of exuberance have been truly burst including ARK (a proxy for TAM investing) which peaked in February 2021 - a full nine months before our own benchmark made its highs- and has subsequently suffered peak-to-trough decline of c.77%. SPACs have fallen by c.50%. At time of writing, valuations across the SaaS space have more than halved across all growth groups. While we have been nervous about high-growth valuations, our own base case did not envisage a derating that would be as deep or dramatic as it is currently proving; what began as an overdue valuation reset has gathered momentum of its own as investors have begun to question the durability of growth and even the validity of some companies' non-GAAP profitability given high (and persistent) levels of share-based compensation. While macroeconomics and the Fed pivot have played a significant part in this, it has been the reversing fortunes of the working from home (WFH) and other pandemic beneficiaries that began this process .

Sending Prioritise/Favoured Themes

Although next-generation valuations are currently under pressure, IT spending priorities are unlikely to change nearly as dramatically. Indeed, a recent JP Morgan survey of 142 Chief Information Officers (CIO) responsible for $114bn spend expect IT budget growth of +5.3% and +5.7% in 2022 and 2023 respectively, versus c.4.8% expected during the pandemic. The survey (and others like it) support the view that IT budgets continue to be reallocated in favour of new technologies. Cloud computing remains the number one IT priority, while other high priority areas include security, digital transformation, analytics, collaboration, and AI. Demand for IT services also remains strong due to accelerated digital demand and the constrained talent environment. In contrast (and at the margin) there does appear to be some levelling off in spend intentions for communications software likely due to reopening/WFH digestion. Hardware also remains one of the slowest growth areas, with PCs seeing a deterioration in CIO prioritisation post-WFH, while the cloud shift continues to represent significant longer-term risk.

More broadly, and consistent with previous years, legacy technologies, and vendors such as IBM, Oracle and Dell are expected to remain market-share donors despite their best efforts (and M&A) to reinvent themselves. At a time when growth stocks are under sustained pressure, this is a good reminder of why value investing within technology is something of a Faustian pact (and why we avoid it). Instead, we construct our portfolio around [seven] core themes: internet advertising / ecommerce, software-as-a-service, cloud infrastructure, cybersecurity, data economy / AI, digital entertainment and connectivity/5G. In addition, we have exposure to a number of secondary themes including fintech/ payments, automotive, clean energy, and medical technology. We are also excited about the long-term disruptive potential of emerging themes such as blockchain and the metaverse .

Technology Risks

As ever, there are multiple risks to our constructive mediumterm view. Many of these relate to macroeconomics (recession; inflation; war, and others) that are covered broadly elsewhere. In addition, we should highlight the risk to technology spending should CEO confidence meaningfully deteriorate. Despite survey results suggesting otherwise, there could be some risk to cloud spending should earlierstage companies/unicorns spend less aggressively. Other 'big picture' risks include widespread component shortages and labour market tightness. Valuation is another risk because even after this atypical correction, technology stocks have retraced back to average, rather than cheap territory versus history. While earnings progress is expected to moderate this year, numbers look at risk of downward revision given the weaker global growth outlook and US Dollar strength while record technology margins could be challenged by soaring input prices, tight labour markets and/or reopening (as companies give up or reinvest some of their pandemic savings).

As we warned last year, a steeper yield curve (noticeably absent at present) is unlikely to prove good news for technology stocks. Regulation remains a key risk with events in China after the aborted IPO of Ant a salient reminder of regulatory risk. That said, we are comforted by the existence of due legal process in liberal democracies painfully absent elsewhere. However, we would not be surprised to see a resurgence in regulatory scrutiny in the US post-COVID. While legislation will not be easy to pass, restrictive legislation has already been proposed by members of both parties that focus on app stores, first party/third party seller conflicts and responsibility for content on internet platforms (revising Section 230). We expect 'Big Tech' and their natural monopolies to continue to invite scrutiny and the drumbeats in Washington to grow louder over the coming year ahead of key lawsuits slated for 2023 .

Concentration Risk

In addition to market and sector specific risks, it would be remiss of us not to remind our shareholders about the concentration risk both within the Trust and the marketcap weighted index around which we construct the portfolio. At the end of June, our three largest holdings - Microsoft, Apple and Alphabet - represented c.28.5% of our NAV and c.41.3% of our benchmark respectively. Five years ago, our top three positions (Alphabet, Apple and Microsoft) accounted for c.22% of NAV and c.30% of our benchmark. The higher concentration of both our portfolio and benchmark reflects the spectacular performance of a handful of stocks that captured the zeitgeist of this cycle. These are unique, nonfungible assets and their long-term success represents their dominance of their respective industries in an interconnected world where network effects are paramount, and the marginal cost of distribution is low. Their influence is not only felt within technology indices; at the end of June, the largest ten stocks (including these three) in the S&P 500 accounted for 28.0% of its market cap. While off recent highs, this level of concentration is commensurate with levels not seen since the early 1980s. Although this makes the portfolio (and indices) more sensitive to the performance of a few stocks, we are encouraged by the fact that the largest ten stocks also explained 29% of index earnings as at year end. Trading at/ around a market multiple, these stocks dominate market cap indices because of their earnings progress, rather than because they sport outlandish valuations as was the case in the late 1990s. We are very comfortable moving materially underweight them should we become concerned about their growth or return prospects, or should we find more attractive risk-reward profiles elsewhere in the market.

Conclusions

As one of the largest beneficiaries of the pandemic, reopening was always going to generate crosscurrents for the technology sector. E-commerce normalisation has led to significant retracements within the internet and payment subsectors which are likely to take time to recapture. However, we are confident that secular tailwinds will reassert themselves, supported by favourable demographics. Software spending growth remains robust as companies digitally transform, automate workflows, gain insight from AI, secure themselves from cyberattacks and apply technology to drive productivity gains. Gartner believe software spending will increase 9.6% this year; IDC size digital transformation as a $10trn opportunity through 2025. And then there's a myriad of other secular themes within technology to get excited about - AI, cybersecurity, electric vehicles (EVs), healthcare and clean energy to name a few, as well as optionality associated with autonomous vehicles, the metaverse and blockchain/ distributed computing. With macroeconomics currently dominating equity markets and near-term volatility high, it is easy to forget how good the long-term technology story is .

Long-term returns ultimately reflect economic value added, even if market disruptions and cyclical impulses can overwhelm the powerful underlying drivers of longer- term technological progress in the short term. If the past year has shown anything, it is the enormous risk associated with hubristic and Panglossian investment approaches: TAM, growth at any price, disregard for liquidity, and high conviction trumping risk management as the basis for portfolio construction. None of these things, however, alter the underlying criticality of technology (via its contribution to total factor productivity) to future economic growth, especially as the other two inputs to growth (capital and labour) may contribute less as they become relatively scarcer. As the OECD puts it (quoting Krugman): "Productivity isn't everything, but in the long run it is almost everything.". Technology is the handmaiden to productivity improvement, and so long as the sector can continue to help the economy become more productive and create economic value, we expect value to continue to accrue to equity holders in the most impactful companies enabling this change.

While valuations have now corrected back to mediumterm averages, they are still susceptible to further downside given increased volatility, the growing influence of energy prices and real rates on equity markets as well as heightened recession risk. The current drawdown (c.21%) is already consistent with the average nonrecessionary bear market (-18% over eight months). However, the average recessionary bear market has seen the market fall by c.33% over 17 months, suggesting the current correction may only be c. two-thirds complete in the event of a recession. That said, technology valuations have meaningfully corrected such that next generation software stocks now trade broadly in line with incumbents on a forward EV/sales basis. The last time this happened was 2015/2016 when the market was also significantly concerned about a hard landing, suggesting that technology stocks have begun to meaningfully price in recession risk. As such, we have begun to rebuild our exposure to higher-growth stocks while maintaining a modest amount of Nasdaq put protection and cash to help ameliorate the impact of further market weakness while ensuring the portfolio remains highly liquid.

Ben Rogoff & Team

19 July 2022

The Investment Managers' Core Themes and ESG Report from a corporate and investment perspective are included in the Annual Report and Accounts

PORTFOLIO REVIEW

Breakdown of Investments by Region	As at 30 April 2022	As at 30 April 2021
US & Canada	74.2%	70.1%
Asia Pacific (ex-Japan)	10.2%	12.6%
Other Net Assets	7.9%	4.9%
Japan	3.4%	4.7%
Europe (inc -UK)	2.9%	7.1%
Middle East & Africa	1.4%	0.6%

Market Capitalisation of Underlying Investments	As at 30 April 2022	As at 30 April 2021
>$10bn	88.0%	91.8%
$1bn-$10bn	11.7%	7.8%
<$1bn	0.3%	0.4%

All data sourced from Polar Capital LLP.

CLASSIFICATION OF INVESTMENTS*

as at 30 April 2022

	North America %	Europe %	Asia Pacific (inc. Middle East) %	Total 30 April 2022 %	Total 30 April 2021 %	Benchmark Weightings as at 30 April 2022
Software	26.5	0.1	1.0	27.6	25.2	25.9
Semiconductors & Semiconductor Equipment	15.4	2.1	4.9	22.4	18.3	22.6
Technology Hardware, Storage & Peripherals	11.7	0.2	2.7	14.6	12.5	14.4
Interactive Media & Services	12.4	-	1.6	14.0	19.6	13.3
Internet & Direct Marketing Retail	2.2	0.1	0.6	2.9	5.0	2.9
IT Services	2.2	-	0.1	2.3	3.5	4.1
Automobiles	0.9	-	0.7	1.6	0.6	1.6
Electronic Equipment, Instruments & Components	-	-	1.6	1.6	2.8	1.6
Communications Equipment	1.5	-	-	1.5	-	1.5
Entertainment	0.4	-	0.8	1.2	2.5	1.2
Aerospace & Defense	0.7	-	-	0.7	0.4	0.7
Machinery	-	-	0.7	0.7	1.3	0.8
Healthcare Equipment & Supplies	0.3	-	0.3	0.6	0.3	0.6
Electrical Equipment	-	0.4	-	0.4	0.2	0.4
Diversified Consumer Services	-	-	-	-	0.9	-
Leisure Products	-	-	-	-	0.8	-
Healthcare Providers & Services	-	-	-	-	0.7	-
Auto Components	-	-	-	-	0.4	-
Media	-	-	-	-	0.1	-
Total investments (£2,811,080,000)	74.2	2.9	15.0	92.1	95.1
Other net assets (excluding loans)	6.0	2.3	1.3	9.6	6.4
Loans	(0.9)	-	(0.8)	(1.7)	(1.5)
Grand total (net assets of £3,050,985,000)	79.3	5.2	15.5	100.0	-
At 30 April 2021 (net assets of £3,408,763,000)	72.4	8.5	19.1	-	100.0

* The classifications are derived from the Benchmark as far as possible. The categorisation of each investment is shown in the portfolio available on the Company's website. Where a dash is shown for the Benchmark it means that the sector is not represented in the Benchmark. Not all sectors of the Benchmark are shown, only those in which the Company has an investment at the financial year end.

FULL PORTFOLIO as at 30 April 2022

					Value of holding		% of net assets
Ranking					30 April 2022	30 April 2021	30 April 2022	30 April 2021
2022	2021	Stock	Sector	Region	'000	'000	%	%
1	(1)	Microsoft	Software	North America	336,977	296,561	11.0	8.7
2	(3)	Apple	Technology Hardware, Storage & Peripherals	North America	305,244	281,211	10.1	8.2
3	(2)	Alphabet	Interactive Media & Services	North America	249,058	292,143	8.2	8.6
4	(9)	Nvidia	Semiconductors & Semiconductor Equipment	North America	95,065	74,141	3.1	2.2
5	(13)	Advanced Micro Devices	Semiconductors & Semiconductor Equipment	North America	86,045	52,175	2.8	1.5
6	(5)	Samsung Electronics	Technology Hardware, Storage & Peripherals	Asia Pacific	82,312	115,503	2.7	3.4
7	(6)	Taiwan Semiconductor	Semiconductors & Semiconductor Equipment	Asia Pacific	82,012	110,029	2.7	3.2
8	(10)	ASML	Semiconductors & Semiconductor Equipment	Europe	59,248	61,023	1.9	1.8
9	(15)	Amazon.com	Internet & Direct Marketing Retail	North America	57,558	47,029	1.9	1.4
10	(22)	ServiceNow	Software	North America	56,280	30,463	1.8	0.9
Top 10 investments					1,409,799		46.2
11	(4)	Meta Platforms (previously Facebook)	Interactive Media & Services	North America	54,509	143,131	1.8	4.2
12	(20)	Micron Technology	Semiconductors & Semiconductor Equipment	North America	48,220	38,249	1.6	1.2
13	(-)	Arista Networks	Communications Equipment	North America	44,318	-	1.5	-
14	(8)	Tencent	Interactive Media & Services	Asia Pacific	43,880	78,674	1.4	2.3
15	(-)	KLA-Tencor	Semiconductors & Semiconductor Equipment	North America	39,816	-	1.3	-
16	(28)	CrowdStrike	Software	North America	39,441	25,213	1.3	0.7
17	(17)	HubSpot	Software	North America	38,675	44,270	1.3	1.3
18	(44)	Marvell Technology	Semiconductors & Semiconductor Equipment	North America	38,601	16,803	1.2	0.5
19	(11)	Applied Materials	Semiconductors & Semiconductor Equipment	North America	36,986	59,068	1.2	1.7
20	(18)	Snap	Interactive Media & Services	North America	36,334	41,944	1.2	1.2
Top 20 investments					1,830,579		60.0
21	(37)	Qualcomm	Semiconductors & Semiconductor Equipment	North America	32,622	19,753	1.0	0.6
22	(26)	Seagate Technology	Technology Hardware, Storage & Peripherals	North America	27,421	28,123	0.9	0.8
23	(-)	Tesla Motors	Automobiles	North America	26,891	-	0.9	-
24	(25)	Mastercard	IT Services	North America	26,330	28,215	0.9	0.8
25	(12)	Adobe	Software	North America	25,980	53,963	0.8	1.6
26	(57)	Lattice Semiconductor	Semiconductors & Semiconductor Equipment	North America	24,788	14,916	0.8	0.4
27	(23)	Zendesk	Software	North America	24,415	30,294	0.8	0.9
28	(21)	Tokyo Electron	Semiconductors & Semiconductor Equipment	Asia Pacific	23,889	38,083	0.8	1.1
29	(-)	Five9	Software	North America	23,654	-	0.8	-
30	(-)	Elastic	Software	North America	23,453	-	0.8	-
Top 30 investments					2,090,022		68.5
31	(88)	Nintendo	Entertainment	Asia Pacific	23,413	8,557	0.8	0.2
32	(96)	BYD	Automobiles	Asia Pacific	23,080	7,073	0.7	0.2
33	(71)	Axon Enterprise	Aerospace & Defense	North America	21,985	12,144	0.7	0.4
34	(51)	CyberArk Software	Software	Asia Pacific	21,721	15,768	0.7	0.5
35	(63)	Monolithic Power Systems	Semiconductors & Semiconductor Equipment	North America	20,305	14,258	0.7	0.4
36	(-)	Pure Storage	Technology Hardware, Storage & Peripherals	North America	19,712	-	0.7	-
37	(42)	Airbnb	Interactive Media & Services	North America	19,708	17,276	0.7	0.5
38	(24)	Visa	IT Services	North America	19,629	29,196	0.6	0.9
39	(-)	E Ink	Electronic Equipment, Instruments & Components	Asia Pacific	19,235	-	0.6	-
40	(7)	Alibaba	Internet & Direct Marketing Retail	Asia Pacific	18,888	79,532	0.6	2.3
Top 40 investments					2,297,698		75.3
41	(-)	Palo Alto Networks	Software	North America	18,479	-	0.6	-
42	(27)	Salesforce.com	Software	North America	18,315	25,730	0.6	0.8
43	(81)	Unity Software	Software	North America	17,761	9,456	0.5	0.3
44	(84)	Smartsheet	Software	North America	16,414	8,900	0.5	0.3
45	(65)	Cloudflare	Software	North America	15,864	13,727	0.5	0.4
46	(76)	Power Integrations	Semiconductors & Semiconductor Equipment	North America	14,930	10,635	0.5	0.3
47	(-)	ON Semiconductor	Semiconductors & Semiconductor Equipment	North America	14,451	-	0.5	-
48	(48)	TripAdvisor	Interactive Media & Services	North America	14,362	16,227	0.5	0.5
49	(64)	Snowflake	Software	North America	13,973	13,956	0.5	0.4
50	(80)	MongoDB	Software	North America	13,343	9,522	0.5	0.3
Top 50 investments					2,455,590		80.5
51	(89)	Shopify	IT Services	North America	13,251	8,338	0.4	0.2
52	(30)	Twilio	Software	North America	13,034	24,094	0.4	0.7
53	(35)	Tenable	Software	North America	12,985	19,893	0.4	0.6
54	(38)	Zoom Video Communications	Software	North America	12,578	19,029	0.4	0.6
55	(101)	SolarEdge Technologies	Semiconductors & Semiconductor Equipment	Asia Pacific	12,519	5,295	0.4	0.2
56	(-)	eMemory Technology	Semiconductors & Semiconductor Equipment	Asia Pacific	12,388	-	0.4	-
57	(36)	Okta	Software	North America	12,146	19,789	0.4	0.6
58	(-)	SiTime	Semiconductors & Semiconductor Equipment	North America	11,860	-	0.4	-
59	(87)	Ceres Power	Electrical Equipment	Europe	11,569	8,743	0.4	0.2
60	(47)	Workday	Software	North America	11,557	16,379	0.4	0.5
Top 60 investments					2,579,477		84.5
61	(-)	Synopsys	Software	North America	11,533	-	0.4	-
62	(53)	MediaTek	Semiconductors & Semiconductor Equipment	Asia Pacific	11,125	15,489	0.4	0.5
63	(49)	TDK	Electronic Equipment, Instruments & Components	Asia Pacific	10,791	15,954	0.4	0.5
64	(-)	Paycom Software	Software	North America	10,780	-	0.3	-
65	(-)	Square	IT Services	North America	9,990	-	0.3	-
66	(72)	Atlassian	Software	Asia Pacific	9,414	12,115	0.3	0.3
67	(-)	Kornit Digital	Machinery	Asia Pacific	9,356	-	0.3	-
68	(106)	Kinaxis	Software	North America	9,169	3,593	0.3	0.1
69	(79)	Qualtrics International	Software	North America	8,840	9,627	0.3	0.3
70	(86)	Dexcom	Healthcare Equipment & Supplies	North America	8,749	8,756	0.3	0.3
Top 70 investments					2,679,224		87.8
71	(-)	Hoya	Healthcare Equipment & Supplies	Asia Pacific	8,746	-	0.3	-
72	(59)	Roblox	Entertainment	North America	8,655	14,585	0.3	0.4
73	(55)	Keyence	Electronic Equipment, Instruments & Components	Asia Pacific	8,251	15,371	0.3	0.4
74	(-)	Coupa Software	Software	North America	7,487	-	0.3	-
75	(58)	Fuji Machine Manufacturing	Machinery	Asia Pacific	7,403	14,793	0.2	0.4
76	(-)	Ambarella	Semiconductors & Semiconductor Equipment	North America	7,377	-	0.2	-
77	(16)	Infineon Technologies	Semiconductors & Semiconductor Equipment	Europe	6,891	44,581	0.2	1.3
78	(60)	Harmonic Drive Systems	Machinery	Asia Pacific	6,430	14,480	0.2	0.4
79	(100)	Hamamatsu Photonics	Electronic Equipment, Instruments & Components	Asia Pacific	6,376	5,299	0.2	0.2
80	(-)	Disco Corporation	Semiconductors & Semiconductor Equipment	Asia Pacific	6,256	-	0.2	-
Top 80 investments					2,753,096		90.2
81	(-)	Naver	Interactive Media & Services	Asia Pacific	6,137	-	0.2	-
82	(-)	UiPath	Software	North America	5,720	-	0.2	-
83	(-)	Intuit	Software	North America	5,521	-	0.2	-
84	(-)	Etsy	Internet & Direct Marketing Retail	North America	5,067	-	0.2	-
85	(-)	CS Disco	Software	North America	4,266	-	0.2	-
86	(-)	DoorDash	Internet & Direct Marketing Retail	North America	4,212	-	0.1	-
87	(94)	Take-Two Interactive Software	Entertainment	North America	3,926	7,108	0.1	0.2
88	(99)	Qt	Software	Europe	3,542	5,731	0.1	0.2
89	(50)	HelloFresh	Internet & Direct Marketing Retail	Europe	3,456	15,942	0.1	0.5
90	(-)	Impinj	Semiconductors & Semiconductor Equipment	North America	3,417	-	0.1	-
Top 90 investments					2,798,360		91.7
91	(-)	Logitech	Technology Hardware, Storage & Peripherals	Europe	3,309	-	0.1	-
92	(107)	Zuken	IT Services	Asia Pacific	3,081	3,582	0.1	0.1
93	(103)	Seeing Machines	Electronic Equipment, Instruments & Components	Asia Pacific	2,894	4,074	0.1	0.1
94	(102)	Tobii	Technology Hardware, Storage & Peripherals	Europe	2,181	4,140	0.1	0.1
95	(109)	ilika	Electronic Equipment, Instruments & Components	Europe	1,254	2,747	-	0.1
96	(110)	Cermetek Microelectronics	Electronic Equipment, Instruments & Components	North America	1	2	-	-
97	(-)	Logitech	Technology Hardware, Storage & Peripherals	Europe	3,309	-	0.1	-
98	(107)	Zuken	IT Services	Asia Pacific	3,081	3,582	0.1	0.1
99	(103)	Seeing Machines	Electronic Equipment, Instruments & Components	Asia Pacific	2,894	4,074	0.1	0.1
100	(102)	Tobii	Technology Hardware, Storage & Peripherals	Europe	2,181	4,140	0.1	0.1
		Total equities	2,811,080			92.1
		Other net assets	239,905			7.9
		Total net assets	3,050,985			100.0

Note: Asia Pacific includes Middle East.

STRATEGIC REPORT

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

Business Model and Regulatory Requirements

The Company's business model follows that of an externally managed investment trust providing Shareholders with access to an actively managed portfolio of technology shares selected on a worldwide basis.

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

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

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

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

Investment Objective and Policy

While observing the Dow Jones World Technology Index (total return, Sterling adjusted, with the removal of relevant withholding taxes) as the Benchmark against which NAV performance is measured, Shareholders should be aware that the portfolio is actively managed and is not designed to track any particular benchmark index or market. The performance of the portfolio can vary from the Benchmark performance, at times considerably.

Over the last four decades the technology industry has been one of the most vibrant, dynamic and rapidly growing segments of the global economy. Technology companies offer the potential for substantially faster earnings growth than the broader market.

Investments are selected for their potential Shareholder returns, not on the basis of technology for its own sake. The Investment Manager believes in rigorous fundamental analysis and focuses on:

· management quality;

· the identification of new growth markets;

· the globalisation of major technology trends; and

· exploiting international valuation anomalies and sector volatility.

Changes to Investment Policy

Any material change to the Investment Policy will require the approval of the Shareholders by way of an ordinary resolution at a general meeting. The Company will promptly issue an announcement to inform Shareholders and the public of any change to its Investment Policy.

Investment Strategy Guidelines and Board Limits

The Board has established guidelines for the Investment Manager in pursuing the Investment Policy. The Board uses these guidelines to monitor the portfolio's exposure to different geographical markets, sub-sectors within technology and the spread of investments across different market capitalisations.

These guidelines are kept under review as cyclical changes in markets and new technologies will bring certain sub-sectors or companies of a particular size or market capitalisation into or out of favour.

Asset Allocation

Technology may be defined as the application of scientific knowledge for practical purposes and technology companies are defined accordingly. While this offers a very broad and dynamic investing universe and covers many different companies, the portfolio of the Company (the 'Portfolio') is focused on companies which use technology or which develop and supply technological solutions as a core part of their business models. This includes areas as diverse as information, media, communications, environmental, healthcare, finance, e-commerce and renewable energy, as well as the more obvious applications such as computing and associated industries.

The Board has agreed a set of parameters which seek to ensure that investment risk is spread and diversified. The Board believes that this provides the necessary flexibility for the Investment Manager to pursue the Investment Objective, given the dynamic and rapid changes in the field of technology, while maintaining a spread of investments.

Market Parameters

With current and foreseeable investment conditions, the Portfolio will be invested in accordance with the Investment Objective and Policy across worldwide markets, generally within the following ranges:

· North America up to 85%.

· Europe up to 40%.

· Japan and Asia up to 55%.

· Rest of the world up to 10%.

The Board has set specific upper exposure limits for certain countries where they believe there may be an elevated risk. The Company does not presently and has not immediate intention to hold stocks in Russia.

The Company will at all times invest and manage its assets in a manner that is consistent with spreading investment risk and invests in a Portfolio comprised primarily of international quoted equities which is diversified across both regions and sectors .

Investment Limits

In applying the Policy, the Company will satisfy the following investment restrictions:

· The Company's interest in any one company will not exceed 10% of the gross assets of the Company, save where the Benchmark weighting of any investee company in the Company's portfolio exceeds this level, in which case the Company will be permitted to increase its exposure to such investee company up to the Benchmark 'neutral' weighting of that company or, if lower, 15% of the Company's gross assets .

· The Company will have a maximum exposure to companies listed in emerging markets (as defined by the MSCI Emerging Markets Index) of 25% of its gross assets .

· The Company may invest in unquoted companies from time to time, subject to prior Board approval. Investments in unquoted companies in aggregate will not exceed 10% of the gross assets of the Company.

Such limits are measured at the time of acquisition of the relevant investment and whenever the Company increases the relevant holding.

In addition to the restrictions set out above, the Company is subject to Chapter 15 of the FCA's Listing Rules which apply to closed ended investment companies with a premium listing on the Official List of the London Stock Exchange.

In order to comply with the current Listing Rules, the Company will not invest more than 10% of its total assets at the time of acquisition in other listed closed ended investment funds, whether managed by the Investment Manager or not. This restriction does not apply to investments in closed ended investment funds which themselves have published investment policies to invest no more than 15% of their total assets in other listed closed ended investment funds. However, the Company will not in any case invest more than 15% of its total assets in other closed ended investment funds.

Cash, Borrowings (Gearing) and Derivatives

The Company may borrow money to invest in the Portfolio over both the long and short-term. Any commitment to borrow funds is agreed by the Board and the AIFM.

The Company's Articles of Association permit borrowings up to the amount of its paid up share capital plus capital and revenue reserves, but any net borrowings in excess of 20% of the Company's net assets at the time of drawdown will only be made with the approval of the Board.

The Investment Manager may also use from time to time derivative instruments, as approved by the Board, such as financial futures, options, contracts-for-difference and currency hedges. These are used for the purpose of efficient portfolio management. Any such use of derivatives will be made in accordance with the Company's policies on spreading investment risk as set out in this investment policy and any leverage resulting from the use of such derivatives will be subject to the restrictions on borrowings.

Cash

The Company may hold cash or cash equivalents if the Investment Manager feels that these will at a particular time or over a period enhance the performance of the Portfolio. The Board has agreed that management of cash may be achieved through the purchase of appropriate government bonds, money market funds or bank deposits depending on the Investment Manager's view of the investment opportunities and the benefits of diversification.

Gearing and Derivatives

The Company may use gearing in the form of bank loans which are used on a tactical basis by the Investment Manager, when considered appropriate. The Board monitors the level of gearing available to the Portfolio Manager and agrees, in conjunction with the AIFM, all bank facilities in accordance with the Investment Policy. The Board approves and controls all bank facilities and any net borrowings over 20% of the Company's net assets at the time of draw down will only be made after approval by the Board.

During the year the Company had two, two-year loan facilities with ING Bank NV: One for 36m US Dollars at a fixed rate of 1.335% pa and one for 3.8bn Japanese Yen at a fixed rate of 0.9% pa, both of which were drawn down on 30 September 2020. These loans fall due for repayment on 30 September 2022. It is anticipated that the loan facilities will be replaced on expiry.

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

The Investment Manager's use of derivatives is monitored by the Board in accordance with the Company's investment policy and any leverage from the use of such derivatives will be subject to the restriction on gearing.

Future Developments

The Board remains positive on the longer-term outlook for technology and the Company will continue to pursue its Investment Objective. The outlook for future performance is dependent to a significant degree on the world's financial markets and their reactions to economic events and other geopolitical forces. In accordance with the Articles of Association, the Board will propose the next five-yearly continuation vote of the Company at the Annual General Meeting to be held in September 2025. The Chair's Statement and the Investment Manager's Report comment on the outlook.

Dividends

The Company's revenue varies from year to year and the Board considers the dividend position each year in order to maintain the Company's status as an investment trust. The revenue reserve remains in deficit and historically the Company has not paid dividends given its focus on capital growth.

The Directors do not recommend, for the year under review, the payment of a dividend (2021: no dividend recommendation).

Service Providers

Polar Capital LLP has been appointed to act as the Investment Manager and AIFM as well as to provide or procure company secretarial services, marketing, including print, production and website services which it arranges through Perivan and Huguenot Limited respectively, and administrative services, including accounting, portfolio valuation and trade settlement which it has arranged to deliver through HSBC Securities Services ('HSS').

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

· Stifel Nicolaus Europe Limited as Corporate Broker;

· Equiniti Limited as Share Registrars;

· HSBC Securities Services as Custodian and Depositary;

· RD:IR for Investor Relations and Shareholder Analysis; and

· Camarco as PR advisors

Investment Management Company and Management of the Portfolio

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

The Investment Manager is Polar Capital LLP ('Polar Capital'), which is authorised and regulated by the Financial Conduct Authority, to act as Investment Manager and AIFM of the Company with sole responsibility for the discretionary management of the Company's assets (including uninvested cash) and sole responsibility to take decisions as to the purchase and sale of individual investments. The Investment Manager also has responsibility for, asset allocation within the limits of the investment policy and guidelines established and regularly reviewed by the Board, all subject to the overall control and supervision of the Board, and procuring accountancy services, company secretarial, marketing and day to day administrative services, including the monitoring of third-party suppliers, which are directly appointed by the Company.

While the Board reviews the performance of the Investment Manager at each Board meeting, and the Company's performance against Benchmark and a peer group of funds with similar objectives, the Management Engagement Committee formally carries out an annual review of the Investment Manager and other suppliers' performance during the year.

Polar Capital provides a team of technology specialists led by Ben Rogoff. Each team member focuses on specific areas while Ben has overall responsibility for the portfolio. Polar Capital also has other specialist and geographically focused investment teams which may contribute to idea generation. The technology investment team's biographies can be found in the Annual Report and Accounts.

The Investment Manager has other investment resources which support the investment team and has experience in administering and managing other investment companies.

Termination Arrangements

The Investment Management Agreement ("IMA") may be terminated by either party giving 12 months' notice, but under certain circumstances the Company may be required to pay up to one year's management charges if immediate notice is given. Compensation will be on a sliding scale if less than 12 months' notice is given. The IMA may be terminated earlier by the Company with immediate effect on the occurrence of certain events, including: (i) if an order has been made or an effective resolution passed for the liquidation of the Investment Manager; (ii) if the Investment Manager ceases or threatens to cease to carry on its business; (iii) where the Company is required to do so by a relevant regulatory authority; (iv) on the liquidation of the Company; or (v) subject to certain conditions, where the Investment Manager commits a material breach of the IMA.

Fee Arrangements

As reported within the Chair's Statement, following negotiations with the Manager, on 12 January 2022 the Company announced that it had concluded its three-yearly review of the base management fee arrangements. The revised terms came into force on 1 May 2022.

Performance periods coincide with the Company's accounting periods. In the event of a termination of the investment management agreement, the date the agreement is terminated will be deemed to be the end of the relevant performance period and any performance fee payable shall be calculated as at that date. Under the terms of the IMA the Board will undertake the three-yearly review of the fee arrangements with the anticipation that any changes proposed and subsequently agreed will take effect from the start of the following financial year.

Management Fee

With effect from 1 May 2022, the base management fee, which is paid by the Company monthly in arrears to the Manager, is calculated on the daily Net Asset Value ('NAV') as follows:

· Tier 1: 0.80 per cent. for such of the NAV up to and including £2bn;

· Tier 2: 0.70 per cent. for such of the NAV between £2bn and £3.5bn;

· Tier 3: 0.60 per cent. for such of the NAV above £3.5bn.

Prior to 1 May 2022, and the fee basis for the financial year ended 30 April 2022, the management fee was payable quarterly in arrears based on the NAV per share ('NAV') on a per share basis as follows:

· Tier 1: 1 per cent. for such of the NAV as exceeds £0 but is less than or equal to £800 million;

· Tier 2: 0.85 per cent. for such of the NAV as exceeds £800 million but is less than or equal to £1.6 billion;

· Tier 3: 0.80 per cent. for such of the NAV as exceeds £1.6 billion but is less than or equal to £2 billion; and

· Tier 4: 0.70 per cent. for such of the NAV as exceeds £2 billion.

Any investment in funds managed by Polar Capital are wholly excluded from the base management fee calculation. In addition to the base management fee, the Investment Manager may be entitled to receive a performance fee as detailed below. Management fees of £28,281,000 (2021: £24,134,000) have been paid for the year to 30 April 2022 of which £6,374,000 (2021: £6,844,000) was outstanding at the year end.

Performance Fee

The performance fee participation rate is 10 per cent. of outperformance above the Benchmark, subject to a cap on the amount which may be paid out in any one year of 1 per cent. of NAV. Any amount over the 1 per cent. payment is written off.

There was no performance fee payable for the year to 30 April 2022 (2021: nil), and therefore no amount (2021: nil) was outstanding at the year end.

Calculation

A notional performance fee entitlement ('NPFE') is calculated and if positive, accrued daily, having made up all past underperformance; however, it is only at the financial year end that payment of the performance fee is tested.

The calculation period starts at the end of the financial year in which the last performance fee was paid and is open until the end of the financial year that the next performance fee is paid.

The 1 per cent. cap is applied as part of the NAV calculation so the performance fee accrual will never exceed 1 per cent. of the NAV.

Any under performance since the last performance fee was paid must be made good before a fee may be paid.

Payment Conditions

On the final day of each financial year the NPFE will be tested:

If the NPFE is positive, then a performance fee may be paid to the Manager if the following conditions have been achieved:

· There has been outperformance of the Benchmark in the financial year;

· The NAV per share at the financial year end is equal to or higher than the NAV per share when the last performance fee was paid; and

· The NAV per share at the financial year end is equal to or higher than the NAV per share at the beginning of the financial year.

· If the NPFE is negative, then no performance fee is paid, and the calculation period remains open

Other

In addition to the above, the Investment Manager is responsible for the first £200,000 of marketing costs (previously £100k) and all research costs.

Continued Appointment of Investment Manager

The Board, through the Management Engagement Committee, has reviewed the performance of the Investment Manager in managing the portfolio over the longer-term. The review also considered the quality of the other services provided, including the strength of the investment team, the depth of the other services provided and the resources available to provide such services.

The Board reflected on the positive impact from the continued recruitment into various teams at the Investment Manager to support the Company, which includes the investment team, marketing, administration, and the organisation on the Company's behalf of third party suppliers, and the quality of the Shareholder communications.

The Board, on the recommendation of the Management Engagement Committee, has concluded that on the basis of longer-term performance, it is in the best interests of Shareholders as a whole that the appointment of Polar Capital LLP as Investment Manager is continued on the terms agreed on 12 April 2019.

LONG-TERM VIABILITY

In accordance with the AIC Code of Corporate Governance, the Company is required to make a forward-looking longer-term viability statement. The Board has considered and addressed the ability of the Company to continue to operate over a period significantly beyond the twelve-month period required for the going concern statement. The Board has considered the industry and market in which the Company operates and the continued appetite for technology investment. The Board continues to use five years as a reasonable term over which the viability of the Company should be viewed; Shareholders have the opportunity to vote on the continuation of the Company every five years, therefore the outlook for the next five-year period incorporates the continuation vote which will be put to Shareholders at the AGM in 2025. The process and matters considered in establishing the longer-term viability are detailed within the Audit Committee Report in the Annual Report and Accounts. In establishing the positive outlook for the Company over the next five years to 30 April 2027, the Board has taken into account:

The ability of the Company to meet its liabilities as they fall due	The financial position of the Company and its cash flows and liquidity position are described in the Strategic Report and the Financial Statements. Note 27 to the Financial Statements includes the Company's policies and process for managing its capital; its financial risk management objectives; details of financial instruments and hedging activities. Exposure to credit risk and liquidity risk are also disclosed. The portfolio comprises investments traded on major international stock exchanges, there is a spread of investments by size of company. The assessment took account of the Company's current financial position, its cash flows and its liquidity position, the principal risks as set out in the Annual Report and the Committee's assessment of any material uncertainties and events that might cast significant doubt upon the Company's ability to continue as a going concern. The assessment was then subject to a sensitivity analysis over a five-year period, which stress tested a number of the key assumptions underlying the forecasts both individually and in aggregate for normal, favourable and stressed conditions and considered whether financing facilities will be renewed. COVID-19 was also factored into the key assumptions made by assessing its impact on the Company's key risks and whether the key risks had increased in their potential to affect the normal, favourable and stressed market conditions. 99.8% of the current portfolio could be liquidated within seven trading days and there is no expectation that the nature of the investments held within the portfolio will be materially different in future. The expenses of the Company are predictable and modest in comparison with the assets and there are no capital commitments foreseen which would alter that position. The ongoing charges of the Company for the year ended 30 April 2022 (excluding performance fees) were 0.84% (2021: 0.82%). Repayment of the bank facilities, drawn down at the year end, and due in September 2022, would equate to approximately 16.7% of the cash or cash equivalents available to the Company at 30 April 2022, without having to liquidate the portfolio of investments. The Company has no employees and consequently does not have redundancy or other employment related liabilities or responsibilities.
The Company will propose a resolution on the continuation of the Company at the AGM in September 2025	Under the AIC SORP, where Shareholders have the opportunity to vote in favour or against a company continuing in existence, it will normally be the case that Shareholders will have to vote in favour of a liquidation before it can occur. It is reasonable to believe that if good performance is achieved over the period until the next continuation vote Shareholders will vote in favour of continuation.
Factors impacting the forthcoming years	The Strategic Report and Governance sections, comprising the Chair's Statement, the Investment Manager's Report and the Strategic Report provide a comprehensive review of factors which may impact the Company in forthcoming years. In making its assessment, the Board considered these factors alongside the Principal Risks and Uncertainties, and their corresponding mitigation and controls, as set out in the Annual Report and Accounts.
Regulatory changes	Despite the increased level of regulation and the unpredictability of future requirements it is considered that regulation will not increase to a level that makes the running of the Company uneconomical in comparison to other competitive products.
Closed-ended Investment Funds	That the business model of being a closed ended investment fund will continue to be wanted by investors and the Investment Objective will continue to be desired and achievable.

Further, the Board recognises that there has been considerable growth in the technology sector and immense change in what is deemed to be a technology company which broadens the universe for potential investment. Technology remains a specialist sector for which there continues to be a need for independent specialist sector investment expertise.

The Board therefore believe it appropriate to confirm their assessment for the longer-term viability of the Company for the next five years to 30 April 2027.

GOING CONCERN

The Board has also considered the ability of the Company to adopt the Going Concern basis for the preparation of the Financial Statements.

Consideration included the Company's current financial position, its cash flows, its liquidity position and its assessment of any material uncertainties and events that might cast significant doubt upon the Company's ability to continue as a going concern. In conjunction with the financial considerations taken into account when reviewing the longer-term viability, the Board considered the performance of the Company's net asset value per share (-7.7%) and the benchmark (-0.9%); the liquidity of the portfolio (an estimated 99.8% can be liquidated over seven days) and the opportunity for investment and reinvestment of funds. In reaching these conclusions and those in the Longer-Term Viability Statement, the stress testing conducted also featured consideration of the effects of COVID-19. This is discussed further in the Report of the Audit Committee in the Annual Report and Accounts. The Board believe that the Company is able to continue in operation and meet its liabilities as they fall due over the next twelve-month period from the date of this Report and it is appropriate to present the Company and the Financial Statements as a Going Concern.

KEY PERFORMANCE INDICATORS

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

KPI	Control process	Outcome
The provision of investment returns to Shareholders measured by long-term NAV growth and relative performance against the Benchmark.	The Board reviews the performance of the portfolio in detail and hears the views of the Investment Manager at each meeting.	At 30 April 2021 the total net assets of the Company amounted to £3,408,763,000 (2020: £2,308,597,000). The Company's NAV has, over the year to 30 April 2021, marginally underperformed the Benchmark. The NAV per share rose by 45.5%% from 1715.59p to 2496.44p while the Benchmark rose 46.4% in Sterling terms over the same period. As at 30 April 2021 the portfolio comprised 110 (2020: 101) investments. Investment performance is explained in the Chair's Statement and the Investment Manager's Report. Over the longer-term, as shown by the historic performance data shown in the financial highlights above, growth in the NAV has exceeded the Benchmark.
Monitoring and reacting to issues created by the discount or premium of the ordinary share price to the NAV per ordinary share with the aim of reduced discount volatility for Shareholders.	The Board receives regular information on the composition of the share register including trading patterns and discount/premium levels of the Company's ordinary shares. A daily NAV per share, diluted when appropriate, calculated in accordance with the AIC guidelines, is issued to the London Stock Exchange. The Board is aware of the vulnerability of a sector specialist investment trust to a change in investor sentiment to that sector. The Board discusses the market factors giving rise to any discount or premium, the long or short-term nature of those factors and the overall benefit to Shareholders of any actions. The market liquidity is also considered when authorising the issue or buy back of shares when appropriate market conditions prevail. The Company does not have an absolute target discount level at which it buys back shares but has historically bought back significant amounts of the outstanding share capital when deemed appropriate and remains ready to do so again. This approach does not preclude a more active approach as discounts widen and the Investment Manager may consider that a single purchase or a series of purchases of shares in current or greater volumes, which would enhance the Company's NAV per share, would be an attractive investment of the Company's cash resources, given the positive long-term prospects for the Company's portfolio. As always, the Board keeps the level of discount under careful review and has been buying back shares actively in recent months at levels set out in the adjacent column.	The discount/premium of the ordinary share price to NAV per ordinary share (diluted when appropriate) has been as follows: Financial year to 30 April 2022 • Minimum discount over year: 0.3% • Maximum discount over year: 15.4% • Average discount over year: 8.6% In the year ended 30 April 2022, the Company bought back 4,188,338 ordinary shares at an average discount of 9.6%, Subsequent to the year end and to 15 July 2022, the Company bought back a further 1,475,096 shares Over the previous five financial years ended 30 April 2022 · Maximum premium over period: 6.1% · Maximum discount over period: 15.9% · Average discount over period: 4.3% Over the previous five financial years ended 30 April 2022 the Company has issued 4,978,841 Ordinary shares as a result of market demand.
To qualify and continue to meet the requirements for Sections 1158 and 1159 of the Corporation Tax Act 2010 ('investment trust status').	The Board receives regular financial information which discloses the current and projected financial position of the Company against each of the tests set out in Sections 1158 and 1159.	This has been achieved for every year since launch in 1996. HMRC has approved the investment trust status subject to the Company continuing to meet the relevant eligibility conditions and ongoing requirements. The Directors believe that the tests have been met in the financial year ended 30 April 2022 and will continue to be met.
Efficient operation of the Company with appropriate investment management resources and services from third party suppliers within a stable and risk controlled environment.	The Board considers annually the services provided by the Investment Manager, both investment and administrative, and reviews on a cycle the provision of services from third parties including the costs of their services. The annual operating expenses are reviewed and any non-recurring project related expenditure approved by the Board	The Board has received and considered satisfactory the internal controls report of the Investment Manager and other key suppliers including contingency arrangements to facilitate the ongoing operations of the Company in the event of withdrawal or failure of services. The ongoing charges of the Company for the year ended 30 April 2022 excluding the performance fee were 0.84% of net assets (2021: 0.82%). There was no performance fee payable for the year ended 30 April 2022 (2021: nil) and therefore the ongoing charges including the performance fee were 0.84% (2021: 0.82%) of net assets.

PRINCIPAL RISKS AND UNCERTAINTIES

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

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

At each Audit Committee, identified principal risks are reviewed and reassessed against the backdrop of the ever changing world the Company is operating in. Furthermore, the Audit Committee carries out, at least annually, a robust assessment of overall risks and uncertainties faced by the Company with the assistance of the Investment Manager.

As part of this process, the Committee also identifies any emerging risks during its review process and continues to closely monitor these risks along with any other emerging risks as they develop and implements mitigating actions as necessary. Current emerging risks include Climate change, inflation, recession and rising interest rates.

The Committee is mindful of the uncertainty surrounding inflation, recession and rising interest rates coupled with the invasion of Ukraine by Russia and the longer term impact this may have on the market and global economy. The impact of this is discussed further in the Chair's Statement and Investment Manager's Report. Further information on how the Committee has assessed the Company's ability to operate as a going concern and the Company's longer-term viability can be found in this Strategic Report and 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 and status arrows to indicate any change in assessment over the past financial year.

Management of risks through Mitigation & Controls
PORTFOLIO RISK
Failure to achieve investment objective due to poor performance	↑
The Board seeks to manage the impact of such risks through regular reporting and monitoring of investment performance. In addition, the Board regularly considers, the level of premium and discount of the share price to the NAV and ways to enhance Shareholder value including share issuance and buy backs. A detailed annual review of the investment strategy is undertaken by the Investment Manager with the Board including analysis of investment markets and sector trends. The Board is committed to a clear communication program to ensure Shareholders understand the investment strategy. A resolution is put forward every five years to provide Shareholders with an opportunity to vote on the continuation of the Company. The last continuation vote was held in September 2020 and had 100% of votes cast in favour, the next continuation resolution will be proposed at the AGM to be held in September 2025. Given the current market volatility as well as the Company's underperformance for the last two years, the Board agreed to elevate this risk following the Company's year-end.
Gearing - Breach of covenants/limits or restrictions	↔
Detailed reports containing financial information are provided to each Board meeting and are used to assess portfolio construction and the degree of risk which the Investment Manager incurs to generate investment returns. Lenders covenants and AIFMD limits are hard coded into the Investment Manager's Bloomberg accounts and trading system which are populated by the Investment Manager's Risk Team. Monthly returns are made to the lender to ensure regular reporting of lending level and covenant monitoring. The Depositary also monitors compliance with lending restrictions. Any material breaches immediately notified to Board
Portfolio management Errors e.g. breach of policy	↔
Investment limits and restrictions are encoded into the dealing and operations systems of the Investment Manager and various oversight functions are undertaken to ensure there is early warning of any potential issue of compliance or regulatory matters. The Investment Manager on behalf of the Company undertakes counterparty monitoring and only trades with brokers which have satisfied the approval process. Trade settlement, currency exposure and all dealing operations are monitored by various systems and groups including the Investment Manager's Operations and Risk Teams and independent monitoring by the depositary.

Management of risks through Mitigation & Controls
OPERATIONAL RISK
Failure to achieve investment objective due to poor performance	↔
The Board carries out an annual review of internal control reports from suppliers which includes the Investment Manager's cyber protocols and disaster recovery procedures.
Accounting, Financial or Custody errors	↔
Due diligence and service reviews are undertaken with third-party service providers including the Custodian and Depository.
IT failure and Cyber Risk	↑
The number, severity and success rate of cyberattacks have increased considerably over recent years However, controls are in place and the Board proactively seeks to keep abreast of developments through updates with representatives of the Investment Manager who undertakes meetings with relevant service providers. The Audit Committee once again sought assurance via the Investment Manager, from each of the Company's service providers on the resilience of their business continuity arrangements. These assurances and the subsequent detailed updates that were given to the Committee provided a satisfactory level of assurance that there had not been, and there was no anticipation of any disruption in the ability of each service provider to fulfil their duties as would typically be expected.
Black Swan event -e.g. unforeseen natural disaster	↔
The Company has a disaster recovery plan in place along with a Black Swan Committee comprised of any two directors, who are able to provide a response to such events as necessary.
Failure of Depositary, Custodian, Sub-Custodian
A full review of the internal control framework is carried out at least annually. Regular reporting is received by the Investment Manager on behalf of the Board from the Depositary on the safe custody of the Company's assets. The Board undertakes independent reviews of the Depositary and external Administrator services and additional resources have been put in place by the Investment Manager. Management accounts are produced and reviewed monthly, statutory reporting and daily NAV calculations are produced by the external Administrator and verified by the Investment Manager.
Supplier risk - failure in provision of efficient services by service providers	↔
The Board considers, approves and monitors supplier appointments. The Investment manager reports on breaches of service level agreements and failure to meet standards as it becomes aware of the issue. Annual controls reports from service providers are reviewed by Board, and exceptions highlighted to the Board. Representatives from each service provider attend meetings to apprise the Board of exceptions found in their control environments. Directors regularly attend due diligence visits to service providers.

Management of risks through Mitigation & Controls
REGULATORY RISKS
Breach of Statutes and Regulation	↔
The Board monitors regulatory change with the assistance of the Investment Manager, Company Secretary and external professional suppliers and implements necessary changes should they be required. The Board receives regulatory reports for discussion and, if required, considers the need for any remedial action. In addition, as an investment company, the Company is required to comply with a framework of tax laws, regulation and company law. The Board keeps abreast of third party service provider internal controls processes to ensure requirements are met in accordance with regulatory requirements.
Failure to effectively communicate with investors	↔
Polar Capital Sales Team and the Corporate Broker provide periodic reports to the Board on communications with shareholders and feedback received. The Audit Committee received the half-year and annual financial statements prior to sign-off and makes recommendations to the Board. Contact details and how to contact the Board are provided in regulatory announcements and in half year and annual reports. The Board are present at the AGM to speak to shareholders.
ECONOMIC AND MARKET RISK
Global geo-political risk	↑
The Board regularly discusses the global geopolitical issues and general economic conditions and developments. Note 27 in the Annual Report and Accounts describes the impact of changes in foreign exchange rates. The Company's largest exposure is to the level of US $ holdings. Subsequent to the Company's year-end, this risk was elevated following the invasion of Ukraine by Russia coupled with the uncertainty and volatility in financial markets. The medium and longer term impacts of this risk will continue to be assessed by the Audit Committee in light of how they may affect the Company's portfolio and the economic and geopolitical environment in which the Company operates within overall.
Uncertainty in regulatory environment and impact of Brexit	↔
Due to the high level of US investments (74.2% based on the NAV) and the low level of UK investments (0.42% based on the NAV) the Board does not believe that there is likely to be any direct impact on the operation of the Company or the structure of the portfolio following the completion of the Brexit transition period. The Company has a varying level of cash which is primarily held in US Dollars and also has loan facilities in both Japanese Yen and US Dollars. Fluctuations in exchange rates are monitored which may impact investor returns. An analysis of currency is given in Note 27 to the Financial Statements.
KEY STAFF RISK
Loss of Portfolio Manager or other Key staff	↔
The strength and depth of investment team provides comfort that there is not over-reliance on one person with alternative senior technology portfolio managers available to act if needed. For each key business process roles, responsibilities and reporting lines are clear and unambiguous. Key personnel are incentivised by equity participation in the investment management company.
Insufficient resource or experience on the Board	↔
Respected recruiters are used to source suitably experienced candidates for Non-executive directorships. A Board, Committee and Individual evaluation process is carried out annually and justification for re-election of Directors is provided in Annual Report to Shareholders.

↑	Increase
↓	Decrease
↔	Unchanged

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, including details of all relevant regulatory and legal duties as a Director when they first join the Board, and continue to receive regular and ongoing updates on relevant legislative and regulatory developments. They also have continued access to the advice and services of the Company Secretary and, when deemed necessary, the Directors can seek independent professional advice. The Schedule of Matters Reserved for the Board, as well as the Terms of Reference of its committees are reviewed annually and further describe Directors' responsibilities and obligations and include any statutory and regulatory duties.

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

SHAREHOLDERS

Engagement

The Directors have considered this duty when making the strategic decisions during the year that affect Shareholders, the confirmation of the continued appointment of the Investment Manager and the recommendation that Shareholders vote in favour of the resolutions to be proposed at the AGM. The Directors have also engaged with and taken account of Shareholders' interests during the year.

The Directors were unable to have the usual face to face interactions with shareholders for most of the financial year due to the guidance from the UK government in respect of gatherings of people, however some of these were replaced with remote meetings between the Chair and investors. Once restrictions allowed, the Directors along with the Portfolio Manager reinstated face to face meetings and interacted with a number of shareholders and institutions in addition to holding the annual Investor Relations dinner in October 2021. Positive feedback was received from all attendees of the dinner who welcomed the opportunity to interact with the Board and Manager again.

The Board will continue to respond to the helpful pointers given and welcome other interaction with shareholders wherever possible; the Portfolio Manager will look to continue face to face shareholder meetings once again in the second half of the year. In addition, the Chair will write to the Company's largest Shareholders following the publication of the Annual Report and Financial Statements offering the opportunity to have a meeting.

The Company's AGM will be held at 2:30pm on Thursday 8 September 2022. Following the events of the COVID-19 years, we have decided to continue to offer the flexibility to Shareholders to attend the meeting either in person or electronically. Feedback from the hybrid meeting held in 2021 was positive and we found that while the meeting was not well-attended when compared to the pre-COVID years, Shareholders were encouraged by the options presented to them which translated into near-equal attendance in person and electronically. The Board recognises that the AGM is an important event for Shareholders and the Company and is keen to ensure that Shareholders are able to exercise their right to vote and participate either in person or electronically. Unless circumstances change, the meeting will be held at Haberdashers' Hall, 18 West Smithfield, London, EC1A 9HQ and online via the Lumi Global Electronic Platform.

The Board believes that shareholder engagement remains important, especially in the current market conditions and is keen that the AGM be a participative event for all Shareholders who attend. Shareholders are encouraged to send any questions ahead of the AGM to the Board via the Company Secretary at cosec@polarcapital.co.uk stating the subject matter as PCTT-AGM. The investment manager gives a presentation and the Chair of the Board and of each Committee attends and are available to respond to questions and concerns from Shareholders.

Should any significant votes be cast against a resolution, the Board will engage with Shareholders. Should this situation occur, the Board will explain in its announcement of the results of the AGM the actions it intends to take to consult Shareholders in order to understand the reasons behind the votes against. Following the consultation, an update will be published no later than six months after the AGM and the Annual Report will detail the impact the Shareholder feedback has had on any decisions the Board has taken and any actions or resolutions proposed.

Relations with Shareholders

The Board and the Manager consider maintaining good communications and engaging with Shareholders through meetings and presentations a key priority. The Board regularly considers the share register of the Company and receives regular reports from the Manager and the Corporate Broker on meetings attended with Shareholders and any concerns that are raised in those meetings. The Board also reviews correspondence from Shareholders and may attend investor presentations.

The Chair has communicated directly with the shareholders representing in the region of 67% of the share register, during the year and responded to comments raised both at the AGM and via email.

Shareholders are able to raise any concerns directly with the Board without using the Manager or Company Secretary as a conduit. The Chair or other Directors are available to Shareholders who wish to raise matters either in person or in writing. The Chair and Directors may be contacted through the registered office of the Company.

Shareholders are kept informed by the publication of annual and half year reports, monthly fact sheets, access to commentary from the Investment Manager via the Company's website and attendance at events in which the Investment Manager presents.

The Company, through the sales and marketing efforts of the Investment Manager, encourages retail investment platforms to engage with underlying Shareholders in relation to Company communications and enable those Shareholders to cast their votes on Shareholder resolutions; the Company however has no responsibility over such platforms. The Board therefore encourage Shareholders invested via the platforms to regularly visit the Company's website or to make contact with the Company directly to obtain copies of Shareholder communications.

The Company has also made arrangements with its registrar for Shareholders, who own their shares directly rather than through a nominee or share scheme, to view their account online at www.shareview.co.uk. Other services are also available via this service.

Outcomes and strategic decisions during the year

Buybacks

Further to shareholder authority being granted, the Company has the facility to conduct share buy backs when, in normal market conditions, it is in the best interests of Shareholders to do so. The Company bought back a total of 4,188,338 shares during the year under review. Subsequent to the year end and to 15 July 2022, the Company bought back a further 1,475,096 shares.

Gearing

The Company is aware of the positive effect that leverage can have in increasing the return to Shareholders when utilised. The Company has term loans with ING Bank NV, which expire in September 2022 and consideration will be given to the renewal of or the replacement of the term loans if it is deemed to be in the best interests of the Company's Shareholders in maximising returns.

Continuation Vote

The Company has within its corporate structure the requirement to hold a continuation vote every five years; ahead of each vote the Board, Investment Manager and Corporate Broker seek the feedback of Shareholders including any concerns, and an indication of whether they were likely to vote in favour of the Company's continuation. The last continuation vote was held in September 2020, for which 100% of the votes cast were in favour, and the next continuation vote will be held at the AGM in September 2025.

Directors Remuneration

As detailed in the Chair's statement and Remuneration Committee report, the remuneration of Directors is reviewed regularly and was increased with effect from 1 May 2021 and again from 1 May 2022, to reflect the greater regulation, increasing workload and to attract and retain the necessary calibre of Director for the Company.

THE INVESTMENT MANAGER

Engagement

Through the Board meeting cycle, which was enhanced in 2020 to include additional monthly informal update meetings, regular updates and the work of the Management Engagement Committee reviewing the services of the Investment Manager twice yearly, the Board is able to safeguard Shareholder interests by:

· Ensuring adherence to the Investment Policy;

· Ensuring excessive risk is not undertaken in the pursuit of investment performance;

· Ensuring adherence to the Investment Management Policy and reviewing the agreed

management and performance fees;

· Reviewing the Investment Manager's decision making and consistency in investment process; and

· Considering the succession plans for the Technology Team in ensuring the continued provision of

· portfolio management services.

Maintaining a close and constructive working relationship with the Manager is crucial as the Board and the Investment Manager both aim to continue to achieve consistent, long-term returns in

line with the Investment Objective. The culture which the Board maintains to ensure this involves encouraging open discussion with the Investment Manager; recognising that the interests of Shareholders and the Investment Manager are aligned, providing constructive challenge and making Directors' experience available to support the Investment Manager. This culture is aligned with the collegiate and meritocratic culture which Polar Capital has developed and maintains.

Outcomes and strategic decisions during the year

ESG

During the year under review, the Board continued to develop its approach to ESG and engages with the Investment manager to better understand how ESG has been further integrated into the investment and decision-making process. The Board also receives information on how ESG affects Polar Capital as a business and the technology team in particular.

In addition to this, the Board has chosen to appoint Catherine Cripps as ESG lead. Catherine has been responsible for ensuring that the Board is kept abreast of the latest developments in this area to develop how the Company can report to stakeholders in line with such. Catherine has worked with the manager to develop a dashboard which allows us to see how the manager is considering ESG matters, and whether that meets our requirements. Please see page the ESG Report in the Annual Report and Accounts for further information.

The Management Engagement Committee has recommended the continued appointment of the Investment Manager on the terms agreed within the Investment Management Agreement.

Fees

During the financial year under the review, a three-yearly review of the fee arrangements was undertaken as per the IMA and following this review, it was agreed that the base management fees be reduced to three tiers. Further information is contained in the Strategic report in the Annual Report and Accounts.

INVESTEE COMPANIES

Stewardship

The Board has instructed the Investment Manager to take into account the published corporate governance policies of the companies in which it invests.

The Board has also considered the Investment Manager's Stewardship Code and Proxy Voting Policy. The Voting Policy is for the Investment Manager to vote at all general meetings of companies in favour of resolutions proposed by the management where it believes that the proposals are in the interests of Shareholders. However, in exceptional cases, where it believes that a resolution could be detrimental to the interests of Shareholders or the financial performance of the Company, appropriate notification will be given and abstentions or a vote against will be lodged.

The Investment Manager reports to the Board, when requested, on the application of the Stewardship Code and Voting Policy. The Investment Manager's Stewardship Code and Voting Policy can be found on the Investment Manager's website in the Corporate Governance section ( www.polarcapital.co.uk ).

The Technology Investment Team also use the services of ISS to assist with their own evaluation of companies' proposals or reporting ahead of casting votes on behalf of the Company at their general meetings. In the event that an investee company has share blocking in place, the default position is to refrain from voting to ensure the ability to trade these stocks if required.

During the year ended 30 April 2022, votes were cast at 97.4% of investee company general meetings held. At 53.5% of those meetings a vote was either cast against management recommendation, withheld or abstained from. Further information on how the Investment Manager considers ESG in its engagement with investee companies can be found in the ESG Report in the Annual Report and Accounts.

Outcomes and strategic decisions during the year

During the year the Board discussed the impact of ESG and how the Investment Manager factors it into its decision making. In addition, consideration was given to the Company's ESG journey going forward and the form this would take.

SERVICE PROVIDERS

Engagement

The Directors have frequent engagement with the Company's other service providers through the annual cycle of reporting and when possible site visits and due diligence meetings. As reflected below, the schedule of deep-dive in-person meetings are due to re-commence in 2022. This engagement is completed with the aim of having effective oversight of delegated services, seeking to improve the processes for the benefit of the Company and to understand the needs and views of the Company's service providers, as stakeholders in the Company. Further information on the Board's engagement with service providers is included in the Corporate Governance Statement and the Report of the Audit Committee. During the year under review, due diligence meetings have been undertaken by the Investment Manager in a virtual fashion and where possible, service providers have joined video conference meetings to present their reports directly to the Board or the Audit Committee as appropriate. While we have been unable to hold in-person due diligence sessions with suppliers due to COVID restrictions a programme of meetings has been put together for the year ahead.

Outcomes and strategic decisions during the year

The reviews of the Company's service providers have been positive and the Directors believe their continued appointment is in the best interests of the Company. The accounting and administration services of HSBC Securities Services (HSS) are contracted through Polar Capital and provided to the Company under the terms of the IMA. The Board, through due diligence undertaken by the Company Secretary and the Polar Capital Compliance team, is satisfied that the service received continues to be of a high standard.

PROXY ADVISORS

Engagement

The support of proxy adviser agencies is important to the Directors, as the Company seeks to retain a reputation for high standards of corporate governance, which the Directors believe contributes to the long-term sustainable success of the Company. The Directors consider the recommendations of these various proxy voting agencies when contemplating decisions that will affect Shareholders and also when reporting to Shareholders through the Half Year and Annual Reports.

Recognising the principles of stewardship, as promoted by the UK Stewardship Code, the Board welcomes engagement with all of its investors. The Board recognises that the views, questions from, and recommendations of many institutional investors and proxy adviser agencies provide a

valuable feedback mechanism and play a part in highlighting evolving Shareholders' expectations and concerns.

Prior to AGMs, the Company engages with these agencies to fact check their advisory reports and clarify any areas or topics that the agency requests. This ensures that whilst the proxy advisory reports provided to Shareholders are objective and independent, the Company's actions and intentions are represented as clearly as possible to assist with Shareholders' decision making when considering the resolutions proposed at the AGM.

Outcomes and strategic decisions during this year

The Nomination Committee considers the time commitment required of Directors and the Board considers each Director's independence on an ongoing basis. The Directors have also considered the proxy adviser agencies policies on overboarding when Directors request approval for additional appointments and when recruiting new Directors. The Board is aware that some investment companies and other AIM listed companies have less regulatory burden than companies with a premium listing and this is taken into consideration when approving such requests. The Board have confirmed that all Directors remain independent and are able to commit sufficient time in fulfilling their duties, including those listed on s172 of the Companies Act. Accordingly, all Directors are standing for election/re-election at the Company's AGM, with the exception of the Chair who shall retire from the Board in line with the Company's succession plans. Further information has been provided where appropriate in each directors biography in the Annual Report and Accounts.

THE AIC

Engagement

The Company is a member of the AIC and has supported lobbying activities such as the consultation on the 2019 AIC Code, the 2021 BEIS Restoring Trust in Audit and Corporate Governance and the FCA's 2021 consultation on Diversity and Inclusion on Company Boards. The Directors also cast votes in the AIC Board Elections each year and regularly attend AIC events.

Approved by the Board on 19 July 2022

By order of the Board

Tracey Lago, FCG

Polar Capital Secretarial Services Limited

Company Secretary

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 they have elected to prepare the financial statements in accordance with UK‑adopted international accounting standards and applicable law. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of its profit or loss for that period. In preparing these financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and estimates that are reasonable, relevant and reliable;

· state whether they have been prepared in accordance with UK ‑ adopted international accounting standards;

· assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

· use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

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

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

RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE ANNUAL REPORT AND FINANCIAL STATEMENTS

We confirm that to the best of our knowledge:

· the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company; and

· the Strategic Report includes a fair review of the development and performance of the business and the position of the issuer, together with a description of the principal risks and uncertainties that they face.

We consider the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

Sarah Bates

Chair

19 July 2022

Status of announcement

The figures and financial information contained in this announcement are extracted from the Audited Annual Report for the year ended 30 April 2022 and do not constitute statutory accounts for the year. The Annual Report and Financial Statements include the Report of the Independent Auditors which is unqualified and does not 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 April 2022 have not yet been delivered to the Registrar of Companies. The figures and financial information for the year ended 30 April 2021 are extracted from the published Annual Report and Financial Statements for the year ended 30 April 2021 and do not constitute the statutory accounts for that year. The Annual Report and Financial Statements for the year ended 30 April 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.

STATEMENT OF COMPREHENSIVE INCOME

for the year ended 30 April 2022

	Notes	Y e a r ended 30 April 2022			Y e a r ended 30 April 2021
	Notes	R evenue return £' 000	Capital return £'000	Total return £'000	Revenue return £'000	Capital return £'000	Total return £'000
I nvestment income	3	15,870	-	15,870	18,156	-	18,156
O t her operating income	4	31	-	31	8	-	8
(Losses)/gains on investments held at fair value	5	-	(253,694)	(253,694)	-	1,127,646	1,127,646
Losses on derivatives	6	-	(5,799)	(5,799)	-	(49,111)	(49,111)
O t her currency gains/(losses)	7	-	17,535	17,535	-	(4,379)	(4,379)
T ot al income		15,901	(241,958)	(226,057)	18,164	1,074,156	1,092,320
E xp enses
I nvestment management fee	8	(28,281)	-	(28,281)	(24,134)	-	(24,134)
Performance fee	8	-	-	-	-	-	-
O t her administrative expenses	9	(1,335)	-	(1,335)	(1,071)	-	(1,071)
T ot al expenses		(29,616)	-	(29,616)	(25,205)	-	(25,205)
( L oss)/profit b efore finance costs and tax		(13,715)	(241,958)	(255,673)	(7,041)	1,074,156	1,067,115
F i nance costs	10	(973)	-	(973)	(996)	-	(996)
( L oss)/profit before tax		(14,688)	(241,958)	(256,646)	(8,037)	1,074,156	1,066,119
T a x	11	(2,000)	-	(2,000)	(2,432)	-	(2,432)
Net (loss)/profit for the year and total comprehensive (expense)/income		(16,688)	(241,958)	(258,646)	(10,469)	1,074,156	1,063,687
( L osses)/earnings per share (basic and diluted) (pence)	12	(12.36)	(179.25)	(191.61)	(7.65)	784.40	776.75

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

The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the AIC.

All items in the above statement derive from continuing operations. The Company does not have any other comprehensive income.

The notes below form part of these Financial Statements.

STATEMENT OF CHANGES IN EQUITY

for the year ended 30 April 2022

		Share capital	C ap ital redemption reserve	Share premium	Special no n - distributable reserve	C ap ital reserves	R evenue reserve	T o ta l
	Notes	£' 000	£' 000	£' 000	£' 000	£' 000	£' 000	£' 000
T ot al equity at 30 April 2020		33,641	12,802	170,532	7 , 5 3 6	2,183,728	(99,642)	2,308,597
Total comprehensive income/(expense):
P rofit/(loss) for the year t o 30 April 2021		-	-	-	-	1,074,156	(10,469)	1,063,687
Transactions with owners, recorded directly to equity:
Issue of ordinary shares		688	-	52,842	-	-	-	53,530
Ordinary shares repurchased into treasury		-	-	-	-	(17,051)	-	(17,051)

T ot al equity at 30 April 2021		34,329	12,802	223,374	7,536	3,240,833	(110,111)	3,408,763
Total comprehensive expense:
Loss for the year to 30 April 2022		-	-	-	-	(241,958)	(16,688)	(258,646)
Transactions with owners, recorded directly to equity
Ordinary shares repurchased into treasury	15	-	-	-	-	(99,132)	-	(99,132)
T o tal equity at 30 April 2022		34,329	12,802	223,374	7,536	2,899,743	(126,799)	3,050,985

The notes below form part of these Financial Statements.

BALANCE SHEET

as at 30 April 2022

	Notes	3 0 April 2022 £ '000	3 0 April 2021 £ '000
Non-current assets
I nvestments held at fair value through profit or loss	13	2,811,080	3,243,034
C urrent assets
R e c e i v a bles		31,096	36,096
O verseas tax recoverable		286	162
C ash and cash equivalents	14	311,363	216,205
D e ri v a t i ve financial instruments	13	6,479	4,090
		349,224	256,553
T ot al assets		3,160,304	3,499,587
Current liabilities
P ayables		(57,284)	(36,241)
Bank loans		(52,035)	-
B an k overdraft	14	-	(3,473)
		(109,319)	(39,714)
Non-current liabilities
Bank loans		-	(51,110)
Net assets		3,050,985	3,408,763
Equity attributable to equity Shareholders
Share capital	15	34,329	34,329
C a pital redemption reserve		12,802	12,802
Share premium		223,374	223,374
Special non-distributable reserve		7,536	7,536
C a pital reserves		2,899,743	3,240,833
R evenue reserve		(126,799)	(110,111)
Total equity		3,050,985	3,408,763
Net asset value per ordinary share (pence)	17	2305.13	2496.44

The Financial Statements were approved and authorised for issue by the Board of Directors on 19 July 2022 and signed on its behalf by:

Sarah Bates

Chair

The notes below form part of these Financial Statements.

Registered number 3224867

CASH FLOW STATEMENT

for the year ended 30 April 2022

	Notes	2022 £ '000	2021 £ '000
C ash flows from operating activities
(Loss)/profit before tax		(256,646)	1,066,119
A d j ustments:
Losses/(gains) on investments held at fair value through profit or loss	5	253,694	(1,127,646)
Losses on derivative financial instruments	6	5,799	49,111
P roceeds of disposal on investments		2,822,328	3,089,314
Purchases of investments		(2,618,737)	(2,998,482)
P roceeds on disposal of derivative financial instruments	13	39,006	8,735
P u rchases of derivative financial instruments	13	(47,194)	(58,545)
(Increase)/decrease in receivables		(64)	116
(Decrease)/increase in payables		(355)	5,720
O verseas tax		(2,124)	(2,500)
Foreign exchange (gains)/losses	7	(17,535)	4,379
Net cash generated from operating activities		178,172	36,321

Cash flows from financing activities
Loans repaid		-	(10,300)
Loans drawn		-	9,870
Ordinary shares repurchased into treasury		(98,001)	(17,051)
Issue of ordinary shares		-	57,078

Net cash (used in)/generated from financing activities		(98,001)	39,597

Net increase in cash and cash equivalents		80,171	75,918

C ash and cash equivalents at the beginning of the year		212,732	146,677
E f f e c t of movement in foreign exchange rates on cash held	7	18,460	(9,863)

Cash and cash equivalents at the end of the year	14	311,363	212,732

	Notes	2022 £ '000	2021 £ '000
Reconciliation of cash and cash equivalents to the Balance Sheet is as follows:
Cash held at bank and derivative clearing houses	14	219,403	162,479
BlackRock's Institutional Cash Series plc (US Treasury Fund), money market fund	14	91,960	50,253

Cash and cash equivalents at the end of the year	14	311,363	212,732

The notes below form part of these Financial Statements.

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 April 2022

1. GENERAL INFORMATION

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

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

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

The Company's presentational currency is Pounds Sterling. All figures are rounded to the nearest thousand pounds (£'000) except as otherwise stated.

2. ACCOUNTING POLICIES

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

(A) BASIS OF PREPARATION

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

Where presentational guidance set out in the Statement of Recommended Practice (SORP) for investment trusts issued by the Association of Investment Companies (AIC) in April 2021 is consistent with the requirements of UK-adopted IAS, the Directors have sought to prepare the Financial Statements on a basis compliant with the recommendations of the SORP.

The financial position of the Company as at 30 April 2022 is shown in the balance sheet above. As at 30 April 2022 the Company's total assets exceeded its total liabilities by a multiple of over 28. The assets of the Company consist mainly of securities that are held in accordance with the Company's Investment Policy, as set out on page l and these securities are readily realisable. The Company has two, two-year fixed rate term loans with ING Bank N.V both of which fall due for repayment on 30 September 2022. The Directors have considered a detailed assessment of the Company's ability to meet its liabilities as they fall due. The assessment took account of the Company's current financial position, its cash flows and its liquidity position. In addition to the assessment the Company carried out stress testing which used a variety of falling parameters to demonstrate the effects in the Company's share price and net asset value. In light of the results of these tests, the Company's cash balances, and the liquidity position, the Directors consider that the Company has adequate financial resources to enable it to continue in operational existence for at least 12 months. Accordingly, the Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the Company's Financial Statements.

(B) PRESENTATION OF STATEMENT OF COMPREHENSIVE INCOME

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

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

Special dividends are recognised on an ex-dividend basis and may be considered to be either revenue or capital items.

The facts and circumstances are considered on a case by case basis before a conclusion on appropriate allocation is reached.

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

Unfranked income includes the taxes deducted at source.

Bank interest, money market fund interest and other income receivable are accounted for on an accruals basis and is recognised in the period in which it was earned.

Interest outstanding at the year end is calculated on a time apportioned basis using the market rates of interest.

(D) EXPENSES AND FINANCE COSTS

All expenses, including finance costs, are accounted for on an accruals basis.

All indirect expenses have been presented as revenue items per the non-allocation method except as follows:

- any performance fees payable are allocated wholly to capital, reflecting the fact that, although they are calculated on a total return basis, they are expected to be attributable largely, if not wholly, to capital performance.

- transaction costs incurred on the acquisition or disposal of investments are expensed either as part of the unrealised gain/loss on investments (for acquisition costs) or as a deduction from the proceeds of sale (for disposal costs).

Finance costs are calculated using the effective interest rate method and are accounted for on an accruals basis.

(E) TAXATION

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

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

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

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

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

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

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

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

(F) INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS

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

On initial recognition the Company has designated all of its investments as held at fair value through profit or loss as defined by UK-adopted IAS.

All investments are measured at subsequent reporting dates at fair value, which is either the bid price or the last traded price, depending on the convention of the exchange on which the investment is quoted. Investments in unit trusts or OEICs are valued at the closing price, the bid price or the single price as appropriate, as released by the relevant investment manager.

Fair values for unquoted investments, or for investments for which there is only an inactive market, are established by using various valuation techniques. These may include recent arms length market transactions, the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models. Where there is a valuation technique commonly used by market participants to price the instrument and that technique has been demonstrated to provide reliable estimates of prices obtained in actual market transactions, that technique is utilised. Where no reliable fair value can be estimated for such instruments, they are carried at cost, subject to any provision for impairment.

Changes in fair value of all investments held at fair value and realised gains and losses on disposal are recognised in the capital return column of the Statement of Comprehensive Income.

(G) RECEIVABLES

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

(H) CASH AND CASH EQUIVALENTS

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

The Company's investment in BlackRock's Institutional Cash Series plc - US Treasury Fund of £91,960,000 (2021: £50,253,000) is managed as part of the Company's cash and cash equivalents as defined under IAS 7.

In the Balance Sheet bank overdrafts are shown within current liabilities.

(I) PAYABLES

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

(J) BANK LOANS

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

(K) DERIVATIVE FINANCIAL INSTRUMENTS

The Company's activities expose it primarily to the financial risks of changes in market prices, foreign currency exchange rates and interest rates. Derivative transactions which the Company may enter into comprise forward exchange contracts, the purpose of which is to manage the currency risks arising from the Company's investing activities, quoted options on shares held within the portfolio, or on indices appropriate to sections of the portfolio, the purpose of which is to provide additional capital return.

The use of financial derivatives is governed by the Company's policies as approved by the Board, which has set written principles for the use of financial derivatives.

A derivative instrument is considered to be used for hedging purposes when it alters the market risk profile of an existing underlying exposure of the Company. The use of financial derivatives by the Company does not qualify for hedge accounting under UK-adopted IAS. As a result, changes in the fair value of derivative instruments are recognised in the Statement of Comprehensive Income as they arise. If capital in nature, associated change in value is presented in the capital return column of the Statement of Comprehensive Income.

(L) RATES OF EXCHANGE

Transactions in foreign currencies are translated into Sterling at the rate of exchange ruling on the date of each transaction. Monetary assets, monetary liabilities and equity investments in foreign currencies at the balance sheet date are translated into Sterling at the rates of exchange ruling on that date. Realised profits or losses on exchange, together with differences arising on the translation of foreign currency assets or liabilities, are taken to the capital return column of the Statement of Comprehensive Income.

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

(M) SHARE CAPITAL

Represents the nominal value of authorised and allocated, called-up and fully paid shares issued.

(N) CAPITAL RESERVES

Capital reserves - gains/losses on disposal includes:

- gains/losses on disposal of investments

- exchange differences on currency balances and on settlement of loan balances

- cost of own shares bought back

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

Capital reserve - revaluation on investments held includes:

- increases and decreases in the valuation of investments and loans held at the year end.

All of the above are accounted for in the Statement of Comprehensive Income except the cost of own shares bought back or issued which are accounted for in the Statement of Changes in Equity.

(O) REPURCHASE OF ORDINARY SHARES (INCLUDING THOSE HELD IN TREASURY)

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

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

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

(P) SHARE ISSUE COSTS

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

(Q) SEGMENTAL REPORTING

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

The Board is of the opinion that the Company is engaged in a single segment of business, namely by investing in a diversified portfolio of technology companies from around the world in accordance with the Company's Investment Objective, and consequently no segmental analysis is provided.

In line with IFRS 8, additional disclosure by geographical segment has been provided in Note 26 to the Financial Statements within the Annual Report.

Further analyses of expenses, investment gains or losses, profit and other assets and liabilities by country have not been given as either it is not possible to prepare such information in a meaningful way or the results are not considered to be significant.

(R) KEY ESTIMATES, JUDGMENTS AND ASSUMPTIONS

Estimates and assumptions used in preparing the Financial Statements are reviewed on an ongoing basis and are based on historical experience and various other factors that are believed to be reasonable under the circumstances. The results of these estimates and assumptions form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources.

The majority of the Company's investments are in US Dollars, the level of which varies from time to time. The Board considers the functional currency to be Sterling. In arriving at this conclusion the Board considered that Sterling is most relevant to the majority of the Company's Shareholders and creditors and the currency in which the majority of the Company's operating expenses are paid.

The only estimates and assumptions that may cause material adjustment to the carrying value of assets and liabilities relate to the valuation of unquoted investments and investments for which there is an inactive market. These are valued in accordance with the techniques set out in Note 2(f). At the year end, there were no unquoted investments (2021: same).

(S) NEW AND REVISED ACCOUNTING STANDARDS

There were no new IFRSs or amendments to IFRSs applicable to the current year which had any significant impact on the Company's Financial Statements.

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

Standards & Interpretations

Effective for periods commencing on or after

IFRS 9, IAS 39, IFRS 7, IFRS

16 and IFRS 4: Interest Rate Benchmark Reform - phase 2 (amended)

IBOR Reform - Phase 2 addresses issues that might affect financial reporting during the reform of an interest rate benchmark, including the effects of changes to contractual cash flows or hedging relationships arising from the replacement of an interest rate benchmark with an alternative benchmark rate.

The Phase 2 amendments apply only to changes required by the interest rate benchmark reform to financial instruments and hedging relationships.

1 January 2021

ii) 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	Y e ar ended 30 April 2022 £ '000	Year ended 30 April 2021 £'000
R evenue:
Overseas Dividend income	15,870	18,156
Total investment income	15,870	18,156

All investment income is derived from listed investments .

Included within income from investments is £172,000 (2021: £3,229,000) of special dividends classified as revenue in nature in accordance with note 2 (c). No special dividends have been recognised in capital (2021: nil).

4. OTHER OPERATING INCOME	Y e ar ended 30 April 2022 £ '000	Y e ar ended 3 0 April 2021 £ '000
Bank interest	4	1
Money market fund interest	27	7
	31	8

5. (LOSSES)/GAINS ON INVESTMENTS HELD AT FAIR VALUE	Y e ar ended 30 April 2022 £ '000	Y e ar ended 3 0 April 2021 £ '000
Net gains on disposal of investments at historic cost	232,360	736,118
Transfer on disposal of investments	(353,508)	(255,764)
(Losses)/gains on disposal of investments based on carrying value at previous balance sheet date	(121,148)	480,354
Valuation (losses)/gains on investments held during the year	(132,546)	647,292
	(253,694)	1,127,646

6. LOSSES ON DERIVATIVES	Y e ar ended 30 April 2022 £ '000	Y e ar ended 3 0 April 2021 £ '000
Losses on disposal of derivatives held	(10,212)	(60,474)
Gains on revaluation of derivatives held	4,413	11,363
	(5,799)	(49,111)

The derivative financial instruments represent the call and put options, which are used for the purpose of efficient portfolio management. As at 30 April 2022, the Company held NASDAQ 100 Stock Index put option and the market value of these open put option position was £6,431,000 (2021: NASDAQ 100 Stock Index put options with a market value of £2,793,000). The Company also held Apple Inc. call options and the market value of these open call option position was £48,000 (2021: Apple Inc. call options with a market value of £1,297,000).

7. OTHER CURRENCY GAINS/(LOSSES)	Y e ar ended 3 0 April 2022 £ '000	Y e ar ended 3 0 April 2021 £ '000
Exchange gains/(losses) on currency balances	18,460	(9,863)
Exchange losses on settlement of loan balances	-	(3,517)
Exchange (losses)/gains on translation of loan balances	(925)	9,001
	17,535	(4,379)

8. INVESTMENT MANAGEMENT AND PERFORMANCE FEE

Y e ar ended 30 April 2022

£ '000

Y e ar ended

30 April 2021

£ '000

I n v estment management fee payableto Polar Capital (charged wholly to

r e ven u e )

28,281

24,134

Performance fee payable to Polar Capital (charged wholly to capital)

There was no performance fee payable in respect of the year nor outstanding at the year end (2021: same).

The basis for calculating the investment management and performance fees are set out in the Strategic Report above and details of all amounts payable to the Manager are given in Note 16 below.

Although the net asset value reduced in absolute terms towards the end of the financial year, on average it had increased during the year under review when compared to the prior year, hence an increase in management fee was incurred during the year.

A new investment management fee arrangement was agreed with the Manager and announced on 12 January 2022. The revised arrangement reduced rates of the base management fee and simplified the structure of the base fee to three tiers. Details of the investment management agreement are disclosed in the Strategic Report above.

9. OTHER ADMINISTRATIVE EXPENSES

	Y e ar ended 3 0 April 2022 £ '000	Y e ar ended 30 April 2021 £ '000
Directors' fees¹ and expenses	229	182
National Insurance Contributions	24	18
Depositary fee ²	233	220
Registrar fee ³	51	43
Custody and other bank charges⁴	358	327
UKLA and LSE listing fees⁵	190	124
Legal & professional fees and other financial services	4	11
AIC fees	21	21
Auditors' remuneration - for audit of the Financial Statements⁶	45	44
Directors' and officers' liability insurance	23	12
AGM expenses⁷	31	10
Corporate brokers' fee⁸	-	37
Marketing expenses⁹	25	-
Shareholder communications	57	57
Other expenses ¹⁰	44	(35)
	1,335	1,071

1. Full disclosure is given in the Directors' Remuneration Report contained within the Company's 2022 Annual Report.

2. Depositary fee is based on the value of the net assets. The daily average net asset value increased by 14.6% during the current financial year compared to the previous year.

3. 2022 includes additional cost in relation to processing of Treasury shares.

4. Custody fees are based on the value of the assets and geographical activity and determined on the pre-approved rate card with HSBC.

5. Fees are based on the market capitalisation of the Company which increased over the last invoice period.

6. The base audit fee for the statutory audit was £45,000 (2021: £40,000k plus overrun fee of £3,500 for the 2020 financial year which was recognised in 2021). Overrun fees incurred in the completion of the 2021 audit and during the financial year 2022, £12,000 and £10,000 respectively. The company recharged these to the investment manager given the nature of the additional audit work undertaken.

7. Includes additional costs in relation to hybrid AGM and 2021 Haberdasher' Hall AGM cancellation due to COVID restrictions in place.

8. 2021/2022 annual fee was offset by the commission credit on shares repurchases.

9. Bespoke promotional marketing cost of £25,000 in Q1 2022. The first £100,000 was absorbed by the Investment Manager.

10. Includes Non-executive Directors search fee and external third party Board evaluation cost.

10. FINANCE COSTS	Y e ar ended 30 April 2022 £ '000	Y e ar ended 3 0 April 2021 £ '000
Interest on loans and overdrafts	973	910
Loan arrangement and facility fees	-	86
	973	996

11. TAXATION	Y e ar ended 30 April 2022 £ '000	Y e ar ended 3 0 April 2021 £ '000
(a) Analysis of tax charge for the year:
Overseas tax	2,000	2,432
Total tax for the year (see Note 11b)	2,000	2,432

(b) Factors affecting tax charge for the year:

The charge for the year can be reconciled to the (loss)/profit per the Statement of Comprehensive Income as follows:

(Loss)/profit before tax	(256,646)	1,066,119
Tax at the UK corporation tax rate of 19%	(48,763)	202,563
Tax effect of non-taxable dividends	(3,015)	(3,450)
Tax effect of gains on investments that are not taxable	45,972	(204,090)
Unrelieved current year expenses and deficits	5,806	4,977
Overseas tax suffered	2,000	2,432
Total tax for the year (see Note 11a)	2,000	2,432

There is an unrecognised deferred tax asset comprising:

Unrelieved management expenses	61,780	41,326
Non-trading loan relationship deficits	1,807	1,194
	63,587	42,520

The deferred tax asset is based on a prospective corporation tax rate of 25% (2021: 19%).

It was substantively enacted on 24 May 2021 that the rate of UK corporation tax will increase from 19% to 25% from 1 April 2023. Therefore, the unrecognised deferred tax asset of £63,587,000 on 30 April 2022 has been calculated using a corporation tax rate of 25%.

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

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

12. (LOSSES)/EARNINGS PER ORDINARY SHARE

	Y e a r ended 30 April 2022			Y e a r ended 30 April 2021
	R evenue return	C ap ital return	T o t al return	R evenue return	C ap ital return	T o t al return
T he calculation of basic earnings per share is based on the following data:
N et (loss)/profit for the ye a r (£'000)	(16,688)	(241,958)	(258,646)	(10,469)	1,074,156	1,063,687
W e ighted average ordinary shares in issue during the year	134,984,460	134,984,460	134,984,460	136,938,993	136,938,993	136,938,993
F rom continuing operations
B asic and diluted - ordinary shares (pence)	(12.36)	(179.25)	(191.61)	(7.65)	784.40	776.75

As at 30 April 2022 there are no potentially dilutive shares in issue and the earnings per share therefore equate to those shown above (2021: there was no dilution).

13. INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS

(i) Investments held at fair value through profit or loss

	Y e ar ended 30 April 2022 £ '000	Y e ar ended 3 0 April 2021 £ '000
Opening book cost	2,199,334	1,566,135
Opening investment holding gains	1,043,700	652,172
Opening fair value	3,243,034	2,218,307
Analysis of transactions made during the year
Purchases at cost	2,639,004	2,978,969
Sales proceeds received	(2,817,264)	(3,081,888)
(Losses)/gains on investments held at fair value	(253,694)	1,127,646
Closing fair value	2,811,080	3,243,034
Closing book cost	2,253,434	2,199,334
Closing investment holding gains	557,646	1,043,700
Closing fair value	2,811,080	3,243,034
Of which:
Listed on a recognised Stock Exchange	2,811,080	3,243,034

The Company received £2,817,264,000 (2021: £3,081,888,000) from disposal of investments in the year. The book cost of these investments when they were purchased were £2,584,904,000 (2021: £2,345,770,000). These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.

Included in additions at cost are purchase costs of £1,005,000 (2021: £1,345,000). Included in proceeds of disposals are sales costs of £1,182,000 (2021: £1,522,000). These costs primarily comprise commission.

(ii) Changes in derivative financial instruments	Y e ar ended 30 April 2022 £ '000	Y e ar ended 3 0 April 2021 £ '000
Valuation at 1 May	4,090	3,391
Additions at cost	47,194	58,545
Proceeds of disposal	(39,006)	(8,735)
Losses on disposal	(10,212)	(60,474)
Valuation gains	4,413	11,363
Valuation at 30 April	6,479	4,090

(iii) Classification under Fair Value Hierarchy:

The table below sets out the fair value measurements using the IFRS 7 fair value hierarchy. Categorisation within the hierarchy has been determined on the basis of the lowest level of input that is significant to the fair value measurement of the relevant asset as follows:

Level 1 - valued using quoted prices in active markets for identical assets.

Level 2 - valued by reference to valuation techniques using observable inputs other than quoted prices included within Level 1.

Level 3 - valued by reference to valuation techniques using inputs that are not based on observable market data.

The valuation techniques used by the company are explained in the accounting policies note above.

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.

	Y e ar ended 30 April 2022 £ '000	Y e ar ended 3 0 April 2021 £ '000
Equity Investments and derivative financial instruments
Level 1	2,817,559	3,247,124
Level 2	-	-
Level 3	-	-
	2,817,559	3,247,124

	Y e ar ended 30 April 2022 £ '000	Y e ar ended 3 0 April 2021 £ '000
Level 3 investments at fair value through profit or loss
Opening balance	-	52
Distribution proceeds	-	(104)
Total gains included in the Statement of Comprehensive Income - on assets held during the year	-	52
Closing balance	-	-

(iv) Unquoted investments

As at 30 April 2022, the portfolio comprised no unquoted investment (30 April 2021: same):

Herald Ventures Limited Partnership made its final distribution of £104,000 in the previous year.

Level 3 investments are recognised at fair value through profit & loss on a recurring basis.

14. CASH AND CASH EQUIVALENTS	3 0 April 2022 £ '000	3 0 April 2021 £ '000
C ash at bank	211,940	165,952
Cash held at derivative clearing houses	7,463	-
Money market funds	91,960	50,253
Cash and cash equivalents	311,363	216,205
Bank overdraft	-	(3,473)
	311,363	212,732

As at 30 April 2022, the Company held BlackRock's Institutional Cash Series plc - US Treasury Fund with a market value of £91,960,000 (30 April 2021: £50,253,000), which is managed as part of the Company's cash and cash equivalents as defined under IAS 7.

15. SHARE CAPITAL

	3 0 April 2022 £ '000	3 0 April 2021 £ '000
A llotted, Called up and Fully paid:
Ordinary shares of 25p each
Opening balance of 136,544,764 (30 April 2021: 134,566,000)	34,136	33,641
Issue of nil (30 April 2021: 2,749,000) ordinary shares	-	688
Repurchase of 4,188,338 (30 April 2021: 770,236) ordinary shares into treasury	(1,047)	(193)
Allotted, called up and fully paid: 132,356,426 (30 April 2021: 136,544,764) ordinary shares of 25p	33,089	34,136
4,958,574 (2021: 770,236) ordinary shares held in treasury	1,240	193
A t 30 April 2022	34,329	34,329

During the year, there were no ordinary shares issued (2021: 2,749,000 ordinary shares were issued, with nominal value of £688,000 for a net consideration received of £53,715,000). A total of 4,188,338 (2021:770,236) ordinary shares were repurchased into treasury at a cost of £98,639,000 (2021: £16,966,000).

Subsequent to the year end, and to 15 July 2022 (latest practicable date), 1,475,096 ordinary shares were repurchased into treasury at an average price of 1,899.35p per share.

16. TRANSACTIONS WITH THE MANAGER AND RELATED PARTY TRANSACTIONS

(A) TRANSACTIONS WITH THE MANAGER

Under the terms of an agreement dated 9 February 2001 the Company has appointed Polar Capital LLP ("Polar Capital") to provide investment management, accounting, secretarial and administrative services. Details of the fee arrangement for these services are given in the Strategic Report. The total management fees, paid under this agreement to Polar Capital in respect of the year ended 30 April 2022 were £28,281,000 (2021: £24,134,000) of which £6,374,000 (2021: £6,844,000) was outstanding at the year end.

There was no performance fee payable in respect of the year nor outstanding at the year end (2021: same).

In addition, with effect from 1 May 2019, the research costs and the first £100,000 of marketing costs are borne by the Manager.

The overrun audit fees of £12,000 and £10,000 were incurred by the Company in the completion of the 2021 audit and during the financial year ended 2022 and were recharged to the Investment Manager given the nature of the additional audit work undertaken. See note 9 and the Audit Committee Report above for more details.

A new investment management agreement was put in place with the Manager and announced on 12 January 2022 which took effect on 1 May 2022. The revised fee arrangement agreed lower rates of the management base fee and simplified the structure of the base fee to three tiers and is calculated on the daily net asset value; The Manager also agreed to increase the contribution to the marketing costs payable by the Company to the first £200,000 per annum. Details of the revised terms of the investment management agreement are provided in the Strategic Report above.

(B) RELATED PARTY TRANSACTIONS

The compensation payable to key management personnel in respect of short term employee benefits is £229,000 (2021: £182,000) which comprises £229,000 (2021: £182,000) paid by the Company to the Directors.

Refer to Company's 2022 Annual Report for the Directors' Remuneration Report including Directors' shareholdings and movements within the year.

17. NET ASSET VALUE PER ORDINARY SHARE

	N e t asset value per share
	3 0 April 2022	3 0 April 2021
U ndiluted:
Net assets attributable to ordinary Shareholders (£'000)	3,050,985	3,408,763
Ordinary shares in issue at end of year	132,356,426	136,544,764
Net asset value per ordinary share (pence)	2305.13	2496.44

As at 30 April 2022, there were no potentially dilutive shares in issue (2021: there was no dilution).

18. POST BALANCE SHEET EVENT

Subsequent to the year end, and to 15 July 2022, 1,475,096 ordinary shares were repurchased and placed in the treasury at an average price of 1,899.35p per share.

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

FORWARD LOOKING STATEMENTS

Certain statements included in this Annual Report and Financial Statements contain forward-looking information concerning the Company's strategy, operations, financial performance or condition, outlook, growth opportunities or circumstances in the countries, sectors or markets in which the Company operates. By their nature, forward looking statements involve uncertainty because they depend on future circumstances, and relate to events, not all of which are within the Company's control or can be predicted by the Company. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Actual results could differ materially from those set out in the forward-looking statements. For a detailed analysis of the factors that may affect our business, financial performance or results of operations, we urge you to look at the principal risks and uncertainties included in the Strategic Report within the Annual Report. No part of these results constitutes, or shall be taken to constitute, an invitation or inducement to invest in Polar Capital Technology Trust plc or any other entity and must not be relied upon in any way in connection with any investment decision. The Company undertakes no obligation to update any forward-looking statements.

Annual Report and Notice of AGM

The Annual Report and Financial Statements for the year ended 30 April 2022 will shortly be available on the Company's website www.polarcapitaltechnologytrust.co.uk and will be posted to Shareholders in late July.

The Annual General Meeting will be held on 8 September 2022, full details of the arrangements will be provided in the Notice of AGM and on the Company's website in due course.

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