Final Results

RNS Number : 5538W

Polar Capital Global Health Tst PLC

13 December 2023

POLAR CAPITAL GLOBAL HEALTHCARE TRUST PLC

Legal Entity Identifier: 549300YV7J2TWLE7PV84

AUDITED RESULTS ANNOUNCEMENT FOR THE YEAR ENDED

30 SEPTEMBER 2023

FINANCIAL HIGHLIGHTS

For the year to 30 September 2023

Performance
Net Asset Value per Ordinary Share (Total Return)*			4.21%
Benchmark index (MSCI ACWI Health Care Index (total return in sterling with dividends reinvested))			1.19%
Share Price Total Return*			1.92%
Since restructuring
Net asset value per Ordinary share (total return) since restructuring *~			67.56%
Benchmark index total return since restructuring			66.01%
Expenses	2023	2022
Ongoing charges*	0.87%	0.84%
Financials	As at 30 September 2023	As at 30 September 2022	Change %
Total net assets (Group and Company)	£419,182,000	£404,833,000	3.5%
Net asset value per Ordinary share	345.66p	333.83p	3.5%
Net asset value per ZDP share^	120.41p	116.91p	3.0%
Price per Ordinary share	319.00p	315.00p	1.3%
Discount per Ordinary share*	7.7%	5.6%
Price per ZDP share^	116.00p	114.00p	1.8%
Net gearing*	9.37%	7.41%
Ordinary shares in issue (excluding those held in treasury)	121,270,000	121,270,000	-
Ordinary shares held in treasury	2,879,256	2,879,256	-
ZDP shares in issue^	32,128,437	32,128,437	-

Dividends

The Company has paid or declared the following dividends relating to the financial year ended 30 September 2023:

Pay date	Amount per Ordinary share	Record Date	Ex-Date	Declared Date
First interim: 31 August 2023	1.00p	4 August 2023	3 August 2023	11 July 2023
Second interim: 29 February 2024	1.20p	2 February 2024	1 February 2024	12 December 2023
Total (2022: 2.10p)	2.20p

* See Alternative Performance Measures provided in the Annual Report.

~ The Company's portfolio was restructured on 20 June 2017. The total return NAV performance since restructuring is calculated by reinvesting the dividends in the assets of the Company from the relevant payment date.

^ For information purposes.

For further information please contact:

Ed Gascoigne-Pees

Camarco

Tele. 020 3757 4984

Tracey Lago, FCG

Polar Capital Global Healthcare Trust Plc

Tele. 020 7227 2742

John Regnier-Wilson

Polar Capital LLP

Tele. 020 7227 2725

STATUS OF ANNOUNCEMENT

The figures and financial information contained in this announcement are extracted from the Audited Annual Report for the year ended 30 September 2023 and do not constitute statutory accounts for the period. 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 September 2023 have not yet been delivered to the Registrar of Companies. The figures and financial information for the period ended 30 September 2022 are extracted from the published Annual Report and Financial Statements for the period ended 30 September 2022 and do not constitute the statutory accounts for that year. The Annual Report and Financial Statements for the period ended 30 September 2022 have been delivered to the Registrar of Companies and included the Report of the Independent Auditors which was unqualified and did not contain a statement under either section 498(2) or Section 498(3) of the Companies Act 2006.

The Directors' Remuneration Report and certain other helpful Shareholder information have not been included in this announcement but forms part of the Annual Report which will be available on the Company's website and will be sent to Shareholders in December 2023.

CHAIR'S STATEMENT

Dear Shareholders,

On behalf of the Board, I am pleased to provide to you the Company's Annual Report for the year ended 30 September 2023.

Performance

The Company has performed well this year, ending the year 3.02% ahead of its benchmark (MSCI ACWI Healthcare Index, Total Return), performing well against the peer group and returning a NAV per share total return of 4.21%. This was despite the year under review continuing to be a difficult period for markets with challenging macro-economic conditions and geo-political events, which have sadly continued into the current year.

Whilst we are now seeing inflation and interest rates somewhat stabilising, the longer term effects of this continue to be felt and we have seen discounts across the investment trust sector in general widen considerably. At the financial year end the discount was 7.7% compared to the prior year figure of 5.6%.

The outperformance was driven by strong stock selection, largely out of the focus on the three key themes highlighted in last year's Annual report and Financial Statements, namely: rising utilisation, disrupting the delivery of healthcare and consolidation.

Further detail is provided within the Manager's Report.

Outlook

Whilst the healthcare sector has been somewhat out of favour against the broader market, fundamentals remain extremely strong with valuations still very attractive. There is much to be excited about, as demonstrated during the year by the delivery and announcement of ground-breaking medical developments e.g. in Alzheimer's research and the introduction onto the market of highly effective weight-loss medications.

The Managers believe that while the themes that generated performance last year will still be relevant, there are three further areas which may drive shorter term returns: innovation, the growing use of technology, such as AI and robotics, and Emerging Markets. Further detail is provided in the Manager's Report.

We believe all of these factors support our optimism for continued strong performance for the Company during the current financial year.

Dividends

The Company's focus continues to remain on capital growth and consequently dividends are expected to represent a relatively small part of Shareholders' total return. The Company has a policy to pay two small dividends per year.

In August 2023 the Company paid an interim dividend of 1.00p per ordinary share. The Board has declared a further interim dividend of 1.20p per ordinary share payable to shareholders on the register as at 2 February 2024. This will bring the total dividend paid for the financial year under review to 2.20p per ordinary share, a small increase on the previous financial year.

Share Capital

The Company has 121,270,000 ordinary shares in issue as at the date of writing and no shares have been bought back or issued during the financial year under review. The Company's share price on 30 September 2023 was 319.00p (2022: 315.00p). The Company's market capitalisation at the financial year end was £386.9m (2022: £382.0m). The Board has reconfirmed the authority given to the Manager to use discretion to purchase shares in the market when deemed appropriate to do so.

Subsidiary Undertaking

The Company is parent to a wholly owned subsidiary, PCGH ZDP Plc. The subsidiary was created as part of the Company's restructure in 2017; the purpose of the subsidiary is to issue zero dividend preference ("ZDP") shares and provide a loan to the parent in the form of structural gearing. The subsidiary has a fixed life whereby the loan will be repaid and the ZDP shares will be redeemed in June 2024 at which time the entity will be liquidated. The Company remains in a strong position to repay the outstanding loan amount at the time of redemption. Options for repayment are either through new alternative gearing facilities or by raising cash via the sale of stock within the portfolio. The Company has no current intention to refinance the loan. Further information on the redemption process is provided on the Company's website www.polarcapitalglobalhealthcaretrust.co.uk.

The Board

As referenced in my statement to Shareholders last year, the Board is aware of the FCA's Diversity and Inclusion Policy and notes that its current composition does not meet the recommended gender or ethnicity requirements. Given the Company's fixed life and the potential reconstruction in 2025, the Board (via the Nomination Committee) has concluded that the appropriate time for recruitment would be shortly before or after any reconstruction plans. We have engaged with some of our major shareholders via our Company Secretary and they are understanding of this timeframe. It is a priority of the Board to be able to meet all aspects of the FCA's Diversity policy as part of future succession plans. At the appropriate time, the Board will ensure that diversity continues to be considered throughout any recruitment process, especially when compiling a shortlist of candidates and selecting individuals for interview.

There have been no changes to the membership of the Board during the year under review. The Directors' biographical details are available on the Company's website and are provided in the Annual Report.

As reported in the last interim report, we have been joined by a board apprentice, Ei-Lene Heng. Ei-Lene will sit with us as a Board for c.12 months to gain experience before continuing her career and potential future director roles. An interview with Ei-Lene on her experience as a Board apprentice is contained in the Annual Report and Accounts.

Annual General Meeting

The Company's Annual General Meeting ("AGM") will be held at 16 Palace Street at 2:30pm on Thursday, 8 February 2024. The notice of AGM has been provided to Shareholders and will also be available on the Company's website. Detailed explanations of the formal business and the resolutions to be proposed at the AGM are contained within the Shareholder Information section and in the Notice of AGM. We will once again upload a copy of the Manager's Investment Presentation to the Company's website ahead of the AGM and will hold the formal business of the meeting in person. We have provided a zoom link in the Notice of AGM which will enable anyone interested to view the formal business and ask questions via the on-line chat function. The Managers will be available to answer questions and meet shareholders present. All formal business resolutions will be voted on by a poll and we therefore encourage shareholders to submit their votes ahead of the meeting by proxy card which is provided with the Notice of Meeting.

Lisa Arnold

Chair

12 December 2023

INVESTMENT MANAGER'S REPORT - FOR THE YEAR ENDED 30 SEPTEMBER 2023

The objective of Polar Capital Global Healthcare Trust plc (the Company) is to generate long-term capital appreciation by investing in a globally diversified portfolio of healthcare companies.

The Company's diversification strategy, coupled with its focus on large-capitalisation healthcare companies with robust, medium-term growth outlooks, helps drive the positive risk/ return profile of the underlying assets, relative to the more volatile areas of healthcare. Further, the broad investment remit affords the opportunity to invest in growth areas regardless of the economic, political and regulatory environment. Importantly, the Company also has the opportunity to invest in earlier-stage, more innovative and disruptive companies that tend to be lower down the market-capitalisation and liquidity scales. This is a key advantage of the Company's closed ended structure. Regardless of size, subsector or geography, stock selection is central to the process, as we look to identify companies where there is a disconnect between valuations and the near and medium-term growth drivers.

In terms of structure, the majority of the Company's assets (calculated on a gross basis and referred to as the Growth portfolio) will be invested in companies with a market capitalisation >$5bn at the time of investment, with the balance invested in companies with a market capitalisation <$5bn (a maximum of 20% of gross assets, and referred to as the Innovation portfolio). At the end of the reporting period, 31 companies in the portfolio were Growth investments (95.0% of net assets) and 11 were Innovation investments (14.3%). Structural debt, in the form of Zero Dividend Preference shares, currently offers access to additional liquidity and the opportunity to enhance returns.

Market Cap at	30 September 2023	30 September 2022
Large (>US$10bn)	80.4%	78.5%
Medium (US$5bn - US$10bn)	14.6%	16.0%
Small (<US$5bn)	14.3%	12.8%
Other net liabilities	(9.3%)	(7.3%)
	100.0%	100.0%

Over the financial year to 30 September 2023, the Company delivered a NAV per share total return of 4.2%, a 3.0% outperformance of its benchmark, the MSCI All Country World Daily Net Total Return Health Care Index. The absolute performance of the healthcare sector was modestly positive, up 1.2% over the reporting period, but it underperformed the broader market, as tracked by the MSCI All Country World Net Total Return Index (all figures above are in sterling terms) which was up 10.5%.

A cautious investing environment, very much apparent in the first three months of the financial year with investors favouring more defensive sectors, changed in early 2023 and was replaced with a heightened sense of optimism. That optimism, driven by better-than-expected economic growth and receding fears of a recession, was evident in the outperformance of more economically sensitive areas of the market such as communication services, information technology and consumer discretionary. This trend, while volatile, persisted until the end of July, when investors reverted once again to safety on the back of higher interest rates and worries of a deteriorating macroeconomic environment should interest rates stay higher for longer.

Reflecting on the Company's performance, there was strong stock selection across the entire market-capitalisation spectrum, partially offset by negative allocation, with the Company's above benchmark exposure to small and mid-capitalisation stocks the biggest drag on performance. Within the benchmark, distributors, healthcare supplies and healthcare facilities all performed strongly over the period, reflecting an acceleration in utilisation and consumption - a central investment theme for the Company in 2023.

At the other end of the scale, the past 12 months have been difficult for the healthcare services, life sciences tools and services, and managed healthcare subsectors. The healthcare services and managed care subsectors both struggled thanks to the fear of elevated medical costs, driven by increased utilisation and patient volumes. The life sciences tools and services subsector suffered from a variety of earnings headwinds including post-Covid destocking, a dramatic slowdown in China and more conservative spending from their biopharmaceutical customers.

As set out in last year's annual report, the focus was very much on three key investment themes:

· Rising utilisation: during the year, medical device companies, healthcare facilities and distributors all pointed to an increase in both utilisation (i.e. patient volumes), and the consumption of healthcare products and services.

· Disrupting the delivery of healthcare: comments from the managed care industry also underpinned our view that more and more healthcare procedures are being delivered in lower-cost, outpatient settings, especially among US seniors.

· Consolidation: we witnessed the completion of several mergers and acquisitions during the financial year, despite greater scrutiny from the US Federal Trade Commission.

The themes discussed above will continue to be relevant as we look forward to the next financial year, but we have modified our emphasis into areas where we see the most interesting and underappreciated near-term investment opportunities, namely innovation, artificial intelligence (AI) and emerging markets. We explore these themes in more detail below, under 'Healthcare: Fundamentals remain strong'.

PERFORMANCE REVIEW

Over the financial year to the end of September 2023, the Company achieved a positive return on net assets of 4.2%, which was 3.0% ahead of its benchmark. This performance was delivered despite a challenging backdrop whereby the overall healthcare sector underperformed the broader market. In sterling terms, global equity markets posted muted returns in the first three months of the financial year with investors adopting a cautious approach which saw more defensive areas of the market (and healthcare) outperform.

The Company entered the financial year with a large exposure to healthcare facilities and biotechnology along with a positive view on managed care. The biggest underweights were in the pharmaceuticals, healthcare equipment and supply sectors, alongside a smaller underweight in life sciences tools and services and healthcare services. During the second quarter of this reporting period, consistent with our view that utilisation of healthcare would start to pick up in 2023, we turned more positive on healthcare equipment, healthcare supplies and pharmaceuticals, added additional exposure to healthcare facilities but reduced our positioning in managed care to an underweight. Also, the exposure to life sciences tools and services was switched to an overweight. However, as 2023 progressed, with fear over the macroeconomic picture became more challenging due to persistent inflation, and a high interest rate environment, we closed the underweight in managed care and reduced the holdings in life sciences tools and services and biotechnology. From a subsector point of view, the largest positive contributors to performance were biotechnology, healthcare equipment and facilities thanks to strong selection and positive allocation. On the other hand, stock-picking and allocation in life sciences tools and services were the most significant detractors to performance, together with weak selection effect in distributors.

From a market-capitalisation perspective, stock selection was positive across the entire range. For the larger-capitalisation investments, in which the Company was underweight relative to the benchmark, allocation was slightly negative but stock-picking was substantially stronger. By contrast, small and midsized healthcare companies had a very challenging period, especially at the start of the financial year and towards the end of it.

To put this into perspective, the Russell 2000 Healthcare Index underperformed the S&P 500 Healthcare index by over 32%, in dollar terms, over the course of the year. Consequently, given the Company's overexposure to small and mid-capitalisation stocks, the allocation effect was negative.

On a geographical basis, all regions contributed positively except the Middle East and Africa. The largest contributors were Asia Pacific ex-Japan, where selection was productive; Europe, where allocation was particularly favourable; and North America, which benefitted from both good selection and allocation.

The active management of gearing did not have a meaningful contribution to performance after accounting for foreign exchange moves.

Top 10 Relative Contributors (%)

Top 10	Average Stock Weight	Active Weight	Stock Return	Stock Return vs BM	Total Attribution
Zealand Pharma A/S	3.45	3.45	73.33	72.14	2.13
Pfizer	0.00	-3.15	-27.80	-28.99	1.13
Roche Holding AG	0.00	-3.07	-20.71	-21.90	0.87
Legend Biotech Corp	1.52	1.47	50.75	49.55	0.72
Seagen	1.14	0.82	41.97	40.77	0.67
CVS Health Corp	0.00	-1.42	-32.97	-34.16	0.62
Max Healthcare Institute	1.60	1.58	25.05	23.86	0.61
AstraZeneca	4.48	1.64	11.65	10.45	0.60
HCA Healthcare	3.09	2.34	22.55	21.35	0.59
Bristol Myers Squibb	0.00	-1.97	-25.24	-26.44	0.57

Source: Polar Capital, as at 30 September 2023.

Positive relative contributors to performance for the financial year included Zealand Pharma, Pfizer, Roche Holding, Legend Biotech, and Seagen.

Zealand Pharma is a Danish biotechnology company focused on developing drugs for metabolic and gastrointestinal diseases. During the period, the company reported encouraging clinical data for its pipeline assets targeting short bowel syndrome and, more importantly, obesity. The stock's strong performance reflects the euphoria that surrounds obesity assets as witnessed with those of Eli Lilly and Novo Nordisk (note the Company did not own Novo Nordisk, during the reporting period).

The lack of exposure to Pfizer, a company that benefitted significantly from the Covid pandemic by producing vaccines and other therapeutics, was a positive contributor. The company's relatively poor performance was mainly due to management's failure to set the right expectations for sales of Covid-related products, driving negative earnings revisions, and dramatically increased spend on R&D for its non-Covid pipeline.

Also, not holding Roche Holding was beneficial to the portfolio's performance. The Swiss pharmaceutical giant, like Pfizer, saw its earnings estimates being cut throughout the financial year as revenue for its Covid diagnostics portfolio decreased faster than initially anticipated and other areas of its portfolio also delivered sales below consensus. Additionally, the company suffered from pipeline disappointments for important assets in Alzheimer's disease and oncology.

Legend Biotech, a biotechnology company with a focus on tumour treatment, released extremely compelling clinical data for a drug called Carvykti. Used for the treatment of multiple myeloma, a bone marrow cancer, the trial in question met its primary endpoint of a significant improvement in progression-free survival. The stock was further buoyed when partner Johnson & Johnson reported better than expected sales for Carvykti.

Seagen, delivered a strong end to their 2022 financial year, reported 2023 guidance that was well received by the market and also highlighted significant progress and opportunities in the pipeline. In February 2023, shares came under further upwards pressure due to rumours that Pfizer was in discussion to acquire Seagen. These rumours were confirmed in early March, when Pfizer announced its intention to buy Seagen for a deal worth nearly $43bn.

Bottom 10 Relative Contributors (%)

Bottom 10	Average Stock Weight	Active Weight	Stock Return	Stock Return vs BM	Total Attribution
Novo Nordisk A/S	0.00	-3.31	64.63	63.43	-1.71
Cytokinetics	2.55	2.55	-44.32	-45.52	-1.66
Revance Therapeutics	1.80	1.80	-61.10	-62.30	-1.01
Bio-Rad Laboratories	2.07	1.95	-21.32	-22.51	-0.74
Inspire Medical Systems	1.24	1.24	2.44	1.25	-0.59
Option Care Health	1.33	1.33	-5.87	-7.07	-0.55
Agilent Technologies	1.02	0.48	-15.19	-16.39	-0.48
Acadia Healthcare	2.37	2.37	-17.65	-18.85	-0.42
Merck KGaA	1.57	1.25	-5.60	-6.79	-0.40
Novartis	1.17	-1.49	27.92	26.72	-0.38

Source: Polar Capital, as at 30 September 2023. Past performance is not indicative or a guarantee of future results.

Negative relative contributors to performance for the financial year 2023 included Novo Nordisk, Cytokinetics, Revance Therapeutics, Bio-Rad Laboratories, and Inspire Medical Systems.

The lack of exposure to Novo Nordisk, a Danish pharmaceutical business with the only commercialised latest-generation Glucagon-Like Peptide-1 (GLP-1) drug to target obesity, was the largest detractor during the financial year.

As mentioned earlier, and discussed in more detail below, investors' appreciation for the market opportunity for Novo Nordisk's weight-loss drug Wegovy and similar assets skyrocketed on the back of exceptional commercial success and compelling new clinical results.

Cytokinetics, a US biotechnology company developing drugs that modulate muscle function to treat principally cardiovascular diseases, was caught in the selloff of early-stage biotechnology stocks after the collapse in March of Silicon Valley Bank, an important institution that at the time financed over half the US venture capital-backed healthcare and technology companies. In addition, investors started to question the market opportunity for Cytokinetics' key asset aficamten following a slow launch of Bristol-Myers Squibb's Camzyos, a drug with a similar mechanism of action and target indication as aficamten, although this is the typical pattern for newly launched cardiovascular medicines.

Revance Therapeutics commercialises Daxxify, a toxin approved for the treatment of frown lines and in development for therapeutics use (cervical dystonia in adults, migraine etc). Despite extremely encouraging sales from the very first month of Daxxify's launch, subsequent quarters did not see such a rapid pace of sales and sentiment soured on the product. Investors were additionally disappointed when, during the capital market day in September 2023, management announced their intention to pivot away from its premium-pricing model for Daxxify, a decision that led the market to question the differentiation of the product versus Abbvie's market-leading product Botox.

Life sciences tools and services company Bio-Rad Laboratories reported a series of downgrades to both their fiscal year 2023 and medium-term expectations. Like many other businesses in the industry, Bio-Rad Laboratories faced a number of challenges which included customers' inventory destocking, biopharmaceutical funding constraints and tighter sanctions in Russia.

Inspire Medical Systems is a medical technology company whose sole focus is the treatment of obstructive sleep apnoea (OSA) through hypoglossal-nerve stimulation. Despite delivering excellent revenue growth and guidance upgrades in the first two quarters of the calendar year, the stock lost over 35% of its value in August and September 2023. The company's future growth was seen as being negatively impacted by the significant potential growth in use of the latest weight-loss drugs which could significantly shrink the funnel of new patients with OSA, a condition which is often associated with obesity.

Healthcare: Fundamentals remain strong

The 2022 Annual Report focused on three key themes we believed were accelerating:

· Healthcare delivery disruption accelerating including the shift to value-based care: Not just driving patient volumes through lower-cost settings but coordinating care to drive better outcomes.

· Utilisation: Working through the ever-growing backlog of patients as healthcare systems globally learn to live with Covid.

· Consolidation: Healthcare is highly fragmented and heavily populated with companies that have robust cashflows and strong balance sheets. M&A activity has increased of late and is highly likely to continue on the same path.

We continue to believe the above themes will be important for some time, however in a rapidly evolving environment the following themes are not only topical but also have significant commercial relevance:

· Innovation: 2023 has witnessed a number of highly significant medical breakthroughs in a broad range of therapeutic categories.

· Artificial intelligence and machine learning: Advancements in machine learning algorithms, greater access to data and the availability of more powerful mobile networks could materially accelerate the pace of change in the healthcare industry.

· Emerging markets: After a challenging period, especially in China, emerging markets should be a source of growth driven by an ever-increasing demand for healthcare products and services.

Innovation: Reaching new heights

It is stating the obvious that the biopharmaceutical sector, and indeed the broader healthcare industry, is highly innovative as scientists attempt to tackle difficult to treat diseases with novel ground-breaking treatment modalities. This innovation has shifted to a new level in 2023 where we have seen positive clinical data in areas of high unmet medical need such as early-stage breast cancer, late-stage lung cancer, chronic obstructive pulmonary disease (smoker's cough), Alzheimer's disease and obesity. Focussing on just one disease area as an example, with more than one billion (Source: Obesity Statistics in 2023, Forbes Health) people suffering from obesity worldwide, the societal challenge and commercial opportunity is simply enormous.

GLP-1s and obesity: Weighing up pros and cons

One of the biopharmaceutical industry's most significant breakthroughs in recent times has been in the field of obesity, with the field led by Eli Lilly and Novo Nordisk, the former being the largest holding in the Company at the end of the financial year. In terms of development of this category, Eli Lilly has developed tirzepatide which contains a GLP-1 that has utility in both the treatment of diabetes and obesity. The drug has multi-factorial mechanisms of action, all of which contribute to the drug's efficacy. Not only do GLP-1s stimulate insulin synthesis and secretion from the pancreas, they also increase insulin sensitivity, reduce the pace of gastric emptying and appear to work with the brain to reduce food intake. In terms of efficacy, tirzepatide has demonstrated weight loss >20% over a 72-week period. Novo Nodisk's drug, Wegovy, has demonstrated high-teens percentage weight loss over a 68-week period.

The impact GLP-1s are having on weight loss is hugely impressive, but there is just as much excitement with some of the secondary benefits of the drug class. Novo Nordisk released the top-line results of a cardiovascular outcomes study called SELECT which revealed that Wegovy reduces the risk of major adverse cardiovascular events by 20% in adults with obesity and established cardiovascular disease. So not only does the drug help patients lose weight, but it also reduces their risk of further serious cardiovascular events, such as myocardial infarction (heart attack) and stroke. Further, Novo Nordisk and Eli Lilly are also looking at how these drugs could help patients with disorders such as obstructive sleep apnoea (a disorder where breathing stops and starts while you sleep), pain associated with osteoarthritis, heart failure, non-alcoholic steatohepatitis (fatty liver disease) and diabetes prevention. Clearly we need to see the final data from the ongoing clinical trials, but it is easy to understand why the scientific community, and indeed the investment community, is so excited by the potential of these drugs. For context, by 2030 the combined estimated sales of Eli Lilly' tirzepatide and Novo Nordisk's Wegovy is c$40bn in obesity alone (Source: Bloomberg), a figure that only represents modest penetration of the global pandemic that is obesity.

The euphoria surrounding the positive implications of the obesity drugs is easy to understand, but it is the potentially negative long-term implications for other healthcare subsectors that needs more careful consideration. Continuous glucose monitoring, for example, is an area where the market is starting to question the total addressable market given the GLP-1s' positive effect on controlling blood sugar levels and, potentially, delaying the need for diabetics to move on to insulin. An even bigger concern for medical device companies that have exposure to diabetes is the potential for GLP-1s to prevent diabetes. Obstructive sleep apnoea is another area where GLP-1s could prove effective, as illustrated by the pressure being seen on the valuations of companies that manufacture continuous positive airway pressure devices and implants that are used to open airways. Another concern, albeit a bit more tenuous, is the impact that obesity drugs could have on the demand for large joints such as hips and knees. Novo Nordisk is running a clinical trial that is looking at not just weight loss, but also at how much knee pain participants suffer from and how this affects participants' daily life. With osteoarthritis the most common cause of joint replacements, there is some concern that the demand for large joint replacements will wane over time.

In conclusion, obesity medications could have a hugely positive impact on the health of millions of patients globally and could be of financial benefit to healthcare systems spending huge amounts of money to treat effects of the disease. In terms of investment opportunities, the companies developing the drugs are understandably attracting lots of attention, but it is also the supply chain in areas like manufacturing and distribution that should benefit from the huge demand for the therapies. Relevant Company investments included Zealand Pharma, Aptar Group and Beckton Dickinson, in addition to the holding in Eli Lilly. However, it is important to remain measured given we are a very long way from solving the world's obesity pandemic. Not because the drugs aren't effective, but because access to care will remain a challenge for many, and not just in emerging markets.

Artificial intelligence: Adding value today

Another hot topic of conversation in 2023 has been artificial intelligence (AI) and machine learning (ML) and how they can be used to make healthcare more productive. AI and ML technologies can sift through enormous volumes of health data and analyse it much faster than humans can. For example, AI can assist physicians with note taking and content summaries that can help ensure that medical records are as accurate and as thorough as possible. AI could also automate coding in hospitals and the sharing of information between departments and billing. Fraud prevention is another area where AI and ML can be used to help identify unusual or suspicious patterns in insurance claims, diagnostic procedures and billing. In essence, the opportunities for AI and ML to add value in a very heavily regulated industry are endless but it makes sense to focus on areas where there is tangible evidence of progress and where we can invest today.

Diagnostics is a field of medicine where AI and ML are starting to have a material impact on accuracy and, more importantly, patient outcomes. Take colonoscopy for example, a technique that remains the gold standard in detecting and preventing colorectal cancer. The current procedure does have limitations with some studies suggesting that more than half of post-colonoscopy colon cancer cases arise from lesions missed at patients' previous colonoscopies. Researchers at the Mayo Clinic are investigating how AI can be used to improve polyp detection. In the case of colon cancer, the AI system works alongside the physician in real time, scanning the colonoscopy video feed and drawing small, red boxes around polyps that might otherwise get overlooked.

AI-based real-time image analysis software is also being used in ultrasound machines to enhance sonographers' ability to interpret images. Obstetrics has embraced the technology given its impact on efficiency and workflow but more importantly its ability to reduce omissions and errors. A good example is Intelligent Ultrasound's SCANNAV Assist software that has been incorporated into GE Healthcare's Volusion SWIFT ultrasound machines.

Revenue cycle management is also benefitting from intelligent automation, with US company R1 RCM one of the leading protagonists. Hospitals, health systems and physician groups can all benefit from technologies and services that improve financial performance and promote patient satisfaction. Patient scheduling, pre-registration and clearance, coding and processes to deal with denials can all benefit enormously from predictive, technology-driven solutions. As for the patients, efficient and organised scheduling, registration, admissions and payment can lead to high levels of satisfaction, and importantly, high levels of retention.

Relevant Company investments included Intuitive Surgical, Iqvia, Intelligent Ultrasound and R1 RCM.

Emerging markets: Is China on the road to recovery?

The lifting of the Covid lockdowns was the catalyst for a strong rebound in economic activity in China in early 2023. However, growth stalled, with falling consumer spending, a real estate crisis and slumping exports all contributing factors. This macro slowdown adversely affected a number of industries, including the life sciences tools and services sector. There are also some healthcare-specific challenges that have been weighing on the sector in recent months, primarily an anti-corruption campaign that is looking to "resolutely punish corruption" in the medical sector "with a zero-tolerance attitude".

Promoting systematic governance throughout the entire healthcare sector, the anti-corruption campaign seeks to uncover questionable links between hospital managers, doctors and medical representatives. If successful, the campaign could significantly advance China's healthcare industry, making it more affordable and freeing much-needed resources for innovative medicines, devices, technologies and services. However, the initiative has resulted in a slowdown in activity with doctors reluctant to participate in academic conferences or prescribe imported drugs. There has also been a marked decline in orthopaedic and ophthalmic surgeries as clinicians and surgeons temporarily reduce activity. Further, medical device companies have highlighted a modest impact on capital placements in the short term with hospital procurement processes also under the microscope.

As soon as the Chinese healthcare system has successfully navigated its way through the anti-corruption campaign, investors can once again focus on the strong, underlying fundamentals of the region. Government policy is supportive for healthcare, encouraging investment in research and development to satisfy the desire for best-in-class medicines. Further, volume-based procurement (VBP), which has weighed on the biopharmaceutical and medical device industries for the past five years, appears to be stabilising. The government is comfortable with the price adjustments VBP has put in place and is easing up on its policies, seeking a greater balance between cost control and innovation. With a more supportive regulatory backdrop, coupled with a recovery in the economy, companies with significant exposure to China could be interesting as we look into 2024, with life sciences tools and services, medical devices and biopharmaceuticals the most likely beneficiaries stocks.

Positioning and process: Constructive on biotechnology, healthcare facilities, healthcare supplies and equipment

We remain constructive on the healthcare sector as a whole, in particular on biotechnology, healthcare facilities, healthcare supplies and equipment, which were three of our largest overweight subsector positions as at 29 September 2023. Despite the challenging environment for early-stage biotechnology investing, we remain constructive on the broader subsector, which continues to be innovative and highly productive with many of the Company's investments in businesses with either late-stage assets or commercialised drugs or both. Consolidation was a key theme highlighted in last year's report and we were pleased to see that the pace of M&A activity picked up in 2023, with many large biopharmaceutical companies announcing their intention to acquire biotechnology assets in order to reinvigorate revenue growth and strengthen their pipelines.

From a geographical perspective, the Company continues to have an overweight stance in Europe and Japan. The biggest change to the portfolio was moving North America from being an overweight to an underweight, which does not reflect a less positive perspective on the region but was an effect of stock selection and changes in the allocation to subsectors.

We entered the year with an underweight in healthcare supplies and equipment given the challenges the industry faced (supply-chain constraints, low hospital volumes due to staffing shortages, a strengthening US dollar). However, our stance turned more positive towards the start of 2023 with the view that utilisation of healthcare would start to reaccelerate after a period of low hospital and procedural volumes during the pandemic. This thesis proved accurate and we believe utilisation will continue to stay elevated at least for the short term, hence our overweight in the sector as at the end of the financial year. Additionally, the medical technology sector is ripe to take advantage of the opportunities afforded by AI which is already being deployed, for instance to assist medical imaging reading (Intelligent Ultrasound Group) and in robotic surgery (Intuitive Surgical).

Increased utilisation should also be beneficial for healthcare facilities, therefore our overweight in the sector has not changed significantly over the period under review. As delivery disruption is an important secular trend in healthcare, our holdings in the sector are in businesses providing access to healthcare services in the lowest-cost settings such as the home and outpatient facilities or Ambulatory Surgery Centres (ASC) and businesses involved in behavioural health services.

As in the past, the pharmaceuticals sector remains a significant underweight relative to the benchmark for the Company. We take the view that, collectively, pharmaceutical companies have fairly uninspiring revenue and earnings growth profiles. However, there are therapeutic areas which are very attractive and could lead to significant revenue and earnings growth. Such an area of interest is metabolic health which covers diseases such as diabetes and obesity. Over the year we increased our exposure to this theme by adding to our holdings in Eli Lilly which, together with Zealand Pharma (a biotechnology company), is the most direct expression of our positive view on weight-loss therapies.

Geographical Exposure at	30 September 2023	30 September 2022
United States	65.1 %	72.3%
United Kingdom	10.6 %	6.4%
Denmark	8.3%	4.3%
Japan	7.6 %	6.9 %
Switzerland	7.1 %	6.4 %
France	3.9 %	2.6 %
Sweden	2.8 %	2.9 %
Germany	2.3%	2.2 %
India	0.8 %	-
Ireland	0.8 %	1.0 %
Netherlands	-	2.3 %
Other net liabilities	(9.3%)	(7.3%)
Total	100%	100.0%

Source: Polar Capital

Sector Exposure at	30 September 2023	30 September 2022
Pharmaceuticals	30.8%	31.3%
Biotechnology	20.2%	28.3%
Healthcare Equipment	15.4%	12.1%
Managed Healthcare	11.1%	13.1%
Healthcare Facilities	9.7%	7.4%
Healthcare Supplies	7.6%	2.9%
Life Sciences Tools & Services	6.8%	4.3%
Metal & Glass Containers	2.5%	2.4%
Healthcare Services	2.4%	2.1%
Healthcare Technology	2.0%	1.5%
Healthcare Distributors	0.8%	1.9%
Other net liabilities	(9.3%)	(7.3%)
Total	100%	100%

Source: Polar Capital

While the previous tables focus on subsector and geographical weightings, bottom-up stock selection is central to the team's investment process. The healthcare industry is extremely complicated and dynamic, and subject to varied news flow which lends itself to active management. We look to take advantage of dislocations between near-term valuations and medium-term fundamentals. Our own in-house idea generation is complemented by input from external research, with conviction built through company meetings, investor conferences and dialogue with expert physician and consultant networks. The team also has a strong valuation discipline, looking at a large number of metrics including sales and earnings revisions, price-to-earnings, enterprise values and free cashflow.

Zero Dividend Preference shares

In terms of a top-down strategy for the Company's portfolio, active decisions are made on market capitalisation, subsector and geographical exposure, depending on the current macro outlook of the team which is formulated with the help of third-party research and monitoring many key risk indicators. The debt raised through the original issuance of Zero Dividend Preference (ZDP) shares allows the ability to take on gearing with the aim of enhancing returns. As a reminder, the PCGH ZDP plc was incorporated with a limited life of seven years, ending on 19 June 2024, on which date the ZDP Shares will be repaid and the PCGH ZDP plc Board will convene a general meeting to propose a resolution to voluntarily wind up the operations of the Company.

Net Gearing

During the financial year, gearing averaged 7.5%, but it has been adjusted to reflect the risk/reward outlook throughout the past 12 months. In the first eight months, gearing was kept at an average of c7% in order to strike a balance between our constructive outlook on the healthcare sector and more cautious posturing with regards to broader equity markets and the macroeconomic environment. However, as the year progressed and the underperformance of the healthcare sector relative to the broader market widened, gearing was increased to take advantage of the opportunities this dislocation offered. We therefore exited the 2023 financial year with net gearing at 9.4%.

Outlook for healthcare: Primed for a change in fortunes

one for healthcare with investors favouring more economically sensitive sectors as they ponder the idea of avoiding a recession and enjoying a so-called soft landing. With sentiment weak, and exchange-traded fund (ETF) outflows pointing to diminished appetite for the healthcare sector, the classic contrarian indicators are pointing to a more constructive stance. More importantly, healthcare's fundamentals remain strong, as illustrated by the delivery of ground-breaking medical breakthroughs, a material pickup in utilisation and patient volumes plus much-needed progress in shifting the site of care out of inpatient hospital settings and in to lower-cost, more efficient outpatient settings such as surgery day centres and ASCs.

As we look forward to the next financial year, there is much to engage and excite. The introduction of highly effective weight-loss medications has created huge amounts of interest, and is driving significant dispersions in returns for the so-called GLP-1 winners (the drug developers, device manufacturers and distributors) versus the GLP-1 losers (medical device companies with exposure to areas such as sleep apnoea, diabetes and orthopaedics). However, once the market has all the relevant clinical data and the euphoria dies down, there will likely be a wide range of interesting investment opportunities driven by the recent dislocation.

The adoption of AI platforms machine and ML software could revolutionise select diagnostic procedures, improving clinician workflow and driving superior outcomes for patients. In a highly complex and data-intensive industry, AI and ML are also being used to drive efficiencies for healthcare systems in areas such as revenue collection, patient scheduling and insurance claims. Emerging markets, especially China, are another area of interest which could see a renaissance in the coming months and years as the healthcare system finds the right balance between cost control, compliance and attracting innovative, best-in-class therapies, devices and capital equipment.

In conclusion, the healthcare sector is heavily out of favour but attractively valued, is delivering high levels of innovation and has consistently shown the ability to deliver strong revenue and earnings growth, regardless of the economic, political and regulatory environment. It is these characteristics that fuel our optimism for the year ahead.

James Douglas and Gareth Powell

Co-Managers of the Polar Capital Global Healthcare Trust plc

12 December 2023

PORTFOLIO REVIEW

Full Investment Portfolio

As at 30 September

Ranking		Stock	Sector	Country	Market Value £'000		% of total net assets
2023	2022				2023	2022	2023	2022
1	(5)	Eli Lilly	Pharmaceuticals	United States	28,037	16,997	6.7%	4.2%
2	(1)	Johnson & Johnson	Pharmaceuticals	United States	26,228	35,964	6.2%	8.9%
3	(4)	AstraZeneca	Pharmaceuticals	United Kingdom	25,937	19,761	6.2%	4.9%
4	(3)	Abbvie	Biotechnology	United States	25,463	24,932	6.1%	6.2%
5	(-)	Elevance Health	Managed Healthcare	United States	21,404	-	5.1%	-
6	(33)	Zealand Pharma	Biotechnology	Denmark	19,655	7,437	4.7%	1.8%
7	(-)	Intuitive Surgical	Healthcare Equipment	United States	17,482	-	4.2%	-
8	(9)	Humana	Managed Healthcare	United States	14,748	13,908	3.5%	3.4%
9	(10)	Alcon	Healthcare Supplies	Switzerland	14,397	12,040	3.4%	3.0%
10	(13)	HCA Healthcare	Healthcare Facilities	United States	13,830	10,872	3.3%	2.7%
Top 10 investments					207,181		49.4%
11	(-)	Becton Dickinson	Healthcare Equipment	United States	12,453	-	3.0%	-
12	(20)	Astellas Pharma	Pharmaceuticals	Japan	12,333	9,701	2.9%	2.4%
13	(-)	Takeda Pharmaceutical	Pharmaceuticals	Japan	12,312	-	2.9%	-
14	(-)	Zimmer Biomet	Healthcare Equipment	United States	12,304	-	2.9%	-
15	(16)	Acadia Healthcare	Healthcare Facilities	United States	10,787	10,082	2.6%	2.5%
16	(23)	Molina Healthcare	Managed Healthcare	United States	10,611	9,603	2.5%	2.4%
17	(18)	DexCom	Healthcare Equipment	United States	10,560	9,812	2.5%	2.4%
18	(22)	Aptargroup	Metal & Glass Containers	United States	10,480	9,623	2.5%	2.4%
19	(11)	Swedish Orphan Biovitrum	Biotechnology	Sweden	10,400	11,758	2.5%	2.9%
20	(-)	Lonza	Life Sciences Tools & Services	Switzerland	10,358	-	2.5%	-
Top 20 investments					319,779		76.2%
21	(-)	Coloplast	Healthcare Supplies	Denmark	10,077	-	2.4%	-
22	(32)	Tenet Healthcare	Healthcare Facilities	United States	10,069	7,582	2.4%	1.9%
23	(-)	IQVIA	Life Sciences Tools & Services	United States	9,993	-	2.4%	-
24	(-)	R1 RCM	Healthcare Services	United States	9,878	-	2.4%	-
25	(-)	Merck KGaA	Pharmaceuticals	Germany	9,758	-	2.3%	-
26	(-)	Legend Biotech	Biotechnology	United States	9,565	-	2.3%	-
27	(-)	BioMerieux	Healthcare Equipment	France	8,777	-	2.1%	-
28	(6)	Cytokinetics	Biotechnology	United States	8,172	14,673	1.9%	3.6%
29	(30)	Bio-Rad Laboratories	Life Sciences Tools & Services	United States	8,099	7,879	1.9%	1.9%
30	(-)	Hikma Pharmaceuticals	Pharmaceuticals	United Kingdom	8,026	-	1.9%	-
Top 30 investments					412,193		98.2%
31	(-)	EssilorLuxottica	Healthcare Supplies	France	7,447	-	1.8%	-
32	(15)	Genmab	Biotechnology	Denmark	5,125	10,197	1.2%	2.5%
33	(-)	MoonLake Immunotherapeutics	Biotechnology	Switzerland	5,022	-	1.2%	-
34	(39)	Medley	Healthcare Technology	Japan	4,953	2,901	1.2%	0.7%
35	(-)	Indivior	Pharmaceuticals	United Kingdom	4,142	-	1.0%	-
36	(-)	Global Health/India	Healthcare Facilities	India	3,562	-	0.8%	-
37	(37)	Intelligent Ultrasound	Healthcare Technology	United Kingdom	3,272	3,049	0.8%	0.8%
38	(34)	Uniphar	Healthcare Distributors	Ireland	3,196	4,171	0.8%	1.0%
39	(31)	Revance Therapeutic	Pharmaceuticals	United States	2,914	7,647	0.7%	1.9%
40	(38)	LivaNova	Healthcare Equipment	United Kingdom	2,808	2,950	0.7%	0.7%
Top 40 investments					454,634		108.4%
41	(-)	Amvis	Healthcare Facilities	Japan	2,350	-	0.6%	-
42	(-)	Swedish Orphan Biovitrum rights Issue	Biotechnology	Sweden	1,271	-	0.3%	-
Total equities					458,255		109.3%
Other net liabilities					(39,073)		(9.3%)
Net assets					419,182		100.0%

Note - Sectors are from the GICS (Global Industry Classification Standard).

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 this strategy to succeed, including a fair review of the Company's performance during the year ended 30 September 2023, the position of the Company at the year end and a description of the principal risks and uncertainties, including both economic and business risk factors underlying any such forward-looking information.

BUSINESS MODEL AND REGULATORY ARRANGEMENTS

The Company's business model follows that of an externally managed investment trust providing Shareholders with access to a global portfolio of healthcare stocks.

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

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

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

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

INVESTMENT OBJECTIVE AND POLICY

The Company's Investment Objective is to generate capital growth through investments in a global portfolio of healthcare stocks.

he Company will seek to achieve its objective by investing in a diversified global portfolio consisting primarily of listed equities. The portfolio is diversified by geography, industry sub-sector and investment size.

The portfolio will comprise a single pool of investments, but for operational purposes, the Investment Manager will maintain a Growth portfolio and an Innovation portfolio. Innovation companies are broadly defined by the Investment Manager as small/mid cap innovators that are driving disruptive change, giving rise not only to new drugs and surgical treatments but also to a transformation in the management and delivery of healthcare. The Growth portfolio is expected to comprise a majority of the Company's assets. For this purpose, once an innovation stock's market capitalisation has risen above US $5bn, it will ordinarily then be treated as a growth stock.

The relative ratio between the two portfolios may vary over the life of the Company due to factors such as asset growth and the Investment Manager's views as to the risks and opportunities offered by investments in each pool and across the combined portfolio. The original make-up of the combined portfolio was of up to 50 stocks, with growth stocks being primarily US listed. In 2018, the Board authorised an increase to the number of stocks able to be held to 65 and confirmed there is no restriction on geographical exposure.

The combined portfolio will therefore be made up of interests in up to 65 companies, with no single investment accounting for more than 10% (or 15% in the case of an investment in another fund managed by the Investment Manager) of the Gross Assets at the time of investment. The innovation portfolio may include stocks which are neither quoted nor listed on any stock exchange but the exposure to such stocks, in aggregate, will not exceed 5% of Gross Assets at the time of investment. In the event that the Investment Manager launches a dedicated healthcare innovation fund, the Company's exposure to innovation stocks may be achieved in whole or in part by an investment in that fund. In any event, the Company will not, without the prior consent of the Board, acquire more than 15% of any such healthcare innovation fund's issued share capital.

The Board remains positive on the outlook for healthcare and the Company will continue to pursue its Investment Objective in accordance with the stated investment policy and strategy. Future performance is dependent to a significant degree on the world's financial markets and their reactions to economic events and other geo-political forces. The Chair's Statement and the Investment Manager's Report comment on the development and performance of the business during the financial year, the outlook and potential risks to the performance of the portfolio.

STRATEGY AND INVESTMENT APPROACH

The Investment Manager's investment process is primarily based on bottom-up fundamental analysis. The Investment Manager uses a qualitative filter consisting of key criteria to build up a watch-list of securities that is monitored on a regular basis. Due diligence is then carried out on the individual securities on the watch-list. Each individual holding is assessed on its own merits in terms of risk: reward including ESG criteria. While the Company expects normally to be fully or substantially invested, the Company may hold cash or money market instruments pending deployment in the portfolio. In addition, it will have the flexibility, when the Investment Manager perceives there to be actual or expected adverse equity market conditions, to maintain cash holdings as it deems appropriate.

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 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, namely:

· Panmure Gordon & Co as Corporate Broker;

· Herbert Smith Freehills LLP as Solicitors;

· HSBC Securities Services as Custodian and Depositary;

· Equiniti Limited as Share Registrars;

· RD:IR for Investor Relations and Shareholder Analysis;

· Camarco as PR advisors;

· PricewaterhouseCoopers LLP as Independent Auditors;

· Huguenot Limited as website designers and internet hosting services; and

· Perivan Limited as designers and printers for shareholder communications.

GEARING

Following the restructure of the Company in June 2017, the Company maintains long-term structural gearing in the form of a loan from the wholly owned subsidiary PCGH ZDP Plc. No short-term borrowings have been made and there are no arrangements made for any bank loans. The Articles of Association provide that the Company may borrow up to 15% of its Net Asset Value at the time of drawdown, for tactical deployment when the Board believes that gearing will enhance returns to shareholders.

In accordance with the Articles of Association of the subsidiary company, PCGH ZDP Plc, and the loan agreement between the Company as parent and subsidiary, the Board intends that the subsidiary company will be put into voluntarily liquidation through a General Meeting on 19 June 2024. The Company has no current intention to refinance the loan made by the subsidiary company and remains in a strong position to repay the outstanding amount at the time of redemption of the ZDP shares.

Further details of the loan provided by the subsidiary are given in the Annual Report and Accounts.

BENCHMARK

The Company will measure the Investment Manager's performance against the MSCI ACWI Healthcare Index total return, in sterling with dividends reinvested. Although the Company has a benchmark, this is neither a target nor determinant of investment strategy. The portfolio may diverge substantially from the constituents of this index. The purpose of the Benchmark is to set a reasonable measure of performance for shareholders above which the Investment Manager earns a share for any outperformance it has delivered.

INVESTMENT MANAGEMENT COMPANY AND MANAGEMENT OF THE PORTFOLIO

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 Polar Capital LLP (the Investment Manager) will 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. Polar Capital provides a team of healthcare specialists and the portfolio is co-managed by Mr James Douglas and Mr Gareth Powell. The Investment Manager has other resources which support the investment team and has experience in managing and administering other investment trust companies.

Under the terms of the IMA, the Investment Manager also provides or procures 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. The Investment Manager has, with the consent of the Directors, delegated the provision of certain of these administrative functions to HSBC Securities Services and to Polar Capital Secretarial Services Limited.

Fee Arrangements

Management Fee

Under the terms of the IMA, the Investment Manager will be entitled to a management fee together with reimbursement of reasonable expenses incurred by it in the performance of its duties. The management fee is payable monthly in arrears and is charged at the rate of 0.75% (prior to 1 October 2020: 0.85%) per annum based on the lower of the market capitalisation and adjusted net asset value. In accordance with the Directors' policy on the allocation of expenses between income and capital, in each financial year 80% of the management fee payable is charged to capital and the remaining 20% to income.

Performance Fee

The Investment Manager may receive a performance fee paid in cash when various performance parameters are met. No performance fee has been accrued or is due to be paid for the year ended 30 September 2023 (2022: nil). Further details on the termination arrangements and performance fee methodology and calculation are provided within the Shareholder Information in the Annual Report.

PERFORMANCE AND KEY PERFORMANCE OBJECTIVES

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. These KPI's 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.

The Board also considers the value delivered to shareholders through NAV growth and dividends paid.

As at 30 September 2023, the total net assets of the Company amounted to £419,182,000 (2022: £404,833,000).

The Company's NAV total return, over the year ended 30 September 2023, was 4.21% while the Benchmark Index over the same period was 1.19%. The Company's performance is explained further in the Investment Manager's Report.

Since restructuring on 20 June 2017, the total return of the NAV was 67.56% and the benchmark was 66.01%. Investment performance is explained in the Chair's Statement and the Investment Manager's Report.

The achievement of the dividend policy.

Financial forecasts are reviewed to track income and distributions.

Two dividends have been paid or are payable in respect of the year ended 30 September 2023 totalling 2.20p per share (2022: two dividends totalling 2.10p per share).

The Company's focus remains on capital growth. While the Company continues to aim to pay two dividends per year these are expected to be a small part of a shareholder total return.

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. The Board discusses and authorises the issue or buy back of shares when appropriate.

The Board is aware of the vulnerability of a sector specialist investment trust to a change in investor sentiment to that sector. While there is no formal discount policy the Board discusses the market factors giving rise to any discount or premium, the long or short-term nature of those factors and the overall benefit to shareholders of any actions. The market liquidity is also considered when authorising the issue or buy back of shares when appropriate market conditions prevail.

A daily NAV per share, calculated in accordance with the AIC guidelines is issued to the London Stock Exchange.

The discount of the ordinary share price to the NAV per ordinary share at the year ended 30 September 2023 was 7.7% (2022: 5.6%).

During the year ended 30 September 2023, no new shares were issued or bought back.

The number of shares in issue, as at the year end was 124,149,256 of which 2,879,256 were held in treasury. The total voting rights of the Company are 121,270,000 shares.

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.

The Company was granted investment trust status annually up to 1 October 2014 and is deemed to be granted such status for each subsequent year subject to the Company continuing to satisfy the conditions of section 1158 of the Corporation Tax Act 2010 and other associated ongoing requirements.

The Directors confirm that the tests have been met in the financial year ended 30 September 2023 and believe that they will continue to be met.

To ensure the efficient operation of the Company by monitoring the services provided by third party suppliers, including the Investment Manager, and controlling ongoing charges.

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 the contingency arrangements to facilitate the ongoing operations of the Company in the event of withdrawal or failure of services.

The ongoing charges for the year ended 30 September 2023 were 0.87%, compared to 0.84% the previous year.

Risk Management

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

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

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

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

The Committee is mindful of the continued impact of geopolitical events as well as the effects of inflation and rising interest rates. Whilst we are seeing signs of inflation slowing and energy prices reducing, the continuation of the Russian war on Ukraine, and also the Middle East crisis has created further market volatility and continues to impact supply chains whilst high interest rates continue to be felt by consumers. Geopolitical events such as these can have a significant impact on global financial markets, and the 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 the Report of the Audit Committee and in the Annual Report.

The key risks, which are those classified as having the highest risk impact score post mitigation, are detailed below with a high-level summary of the management through mitigation and status arrows to indicate any change in assessment over the past year.

Portfolio Management
	Description	Assessment	Mitigation
Investment Performance	Breach of Investment policy, Investment Manager unable to deliver the Investment Objective leading to poor performance against the benchmark or market/industry average.	Unchanged from previous year.	The Board seeks to mitigate the impact of such risks through the regular reporting and monitoring of the Company's investment performance against its peer group, benchmark and other agreed indicators of relative performance. 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. At each meeting the Board discusses developments in healthcare and drug pipelines with the Investment Manager in addition to the composition and diversification of the portfolio with sales and purchases of investments and the degree of risk which the Investment Manager incurs to generate investment returns. Individual investments are discussed with the Investment Manager as well as the Investment Manager's general views on the various investment markets and the healthcare sector in particular. Analytical performance data and attribution analysis is presented by the Investment Manager. The Board is committed to a clear communication program to ensure shareholders understand the investment strategy. This is maintained through the use of monthly factsheets which have a market commentary from the Investment Manager as well as portfolio data, an informative website as well as annual and half year reports.
Gearing	Inability to repay ZDP loan and or inappropriate use of derivatives.	Decreased from previous year.	The Board considered the benefits and drawbacks of the structural debt at the time of restructuring and concluded that the ability to lock-in an effective interest rate of 3% pa for the 7-year life would be beneficial to investment returns, the Board remains of the same belief. The asset cover necessary to repay the ZDP shares is reviewed at each Board meeting. If any flexible gearing is contemplated the Board would agree the overall levels of gearing with the AIFM. The arrangement of bank facilities and drawing of funds under such arrangements are controlled by the Board. Derivatives are considered as being a form of gearing and a policy for their use has been agreed by the Board. The deployment of any borrowed funds is based on the Investment Manager's assessment of risk and reward. The Board intends that the subsidiary company will be put into voluntarily liquidation through a General Meeting on 19 June 2024. The Company has no current intention to refinance the loan made by the subsidiary company and remains in a strong position to repay the outstanding amount at the time of redemption of the ZDP shares.
Discount/Premium	Persistent discount in excess of Board or Shareholder acceptable levels.	Unchanged from previous year.	The Board regularly considers, in comparison to the sector and peers, the level of premium and discount of the share price to the NAV and ways to enhance Shareholder value including share issuance and buy backs. The Board has carefully monitored the discount level and market movements and has discussed performance with the Managers and advisers. The discount of the Company widened during the year under review and as at 30 September 2023, the discount of the ordinary share price to the NAV per ordinary share was 7.7% (2022: 5.6%). The Chair also meets regularly with key shareholders to understand any concerns and views as detailed in the Chair's Statement and within the s172 Report. Further detail on the performance and the impact of market movements on the Company is given in the Investment Manager's Report.
Trading	Execution of unauthorised trade/dealing error. Error or breach may cause regulatory investigation leading to fines, reputational damage and risk to investment trust status.	Unchanged from previous year.	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.
Operational Risk
	Description	Assessment	Mitigation
Service Failure	Failure in services provided by the Investment Manager, Custodian, Depositary or other service providers; Accounting, Financial or Custody Errors resulting in regulatory investigation or financial loss, failure of trade settlement, potential loss of Shareholder assets and investment trust status.	Unchanged from previous year.	The Board carries out an annual review of internal control reports from suppliers which includes cyber protocols and disaster recovery procedures. Due diligence and service reviews are undertaken with third-party service providers including the Custodian and Depositary. 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. Accounting records are tested, and valuations verified independently as part of the year-end financial reporting process.
Cyber Risk	Cyber-attack causing disruption to or failure of operational and accounting systems and processes provided by the Investment Manager creating an unexpected event and/or adverse impact on personnel or the portfolio.	Unchanged from previous year.	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.
Key Person	Loss of Investment Manager or other key management professionals. Impact on investor confidence leading to widening of the discount and/or poor performance creating a period of uncertainty and potential termination of the Investment Management Agreement.	Unchanged from previous year.	The strength and depth of investment team provides comfort that there is not over-reliance on one person with alternative portfolio managers available to act if needed. For each key business process roles, responsibilities and reporting lines are clear and unambiguous. Key personnel are incentivised by equity participation in the investment management company.
Shareholder Communications	Failure to effectively communicate significant events to the shareholder and investor base.	Unchanged from previous year.	Polar Capital Sales Team and the Corporate Broker provide periodic reports to the Board on communications with shareholders and feedback received. The Board is committed to a clear communication programme to ensure Shareholders understand the investment strategy. This is maintained through the use of monthly factsheets which have a market commentary from the Investment Manager as well as portfolio data, an informative website as well as annual and half year reports. Contact details and how to contact the Board are provided in regulatory announcements and the Board are present at the AGM to speak to shareholders.
Regulatory Risk
	Description	Assessment	Mitigation
	Non-compliance with statutes, regulations and disclosure requirements, including FCA listed company regime and Companies Act 2006; s1158/1159 of the Corporation Tax Act 2010, the Companies Act 2006 and other UK, European and overseas legislation affecting UK companies including MiFID II and the GDPR. Not complying with accounting standards could result is a suspension of listing or loss of investment trust status, reputational damage and Shareholder activism. Further risks arise from not keeping abreast of changes in legislation and regulations which have in recent years been substantial.	Unchanged from previous year.	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.
Economic and Market Risk
	Description	Assessment	Mitigation
	Financial loss due to unexpected natural disaster or other unpredictable event disrupting the ability to operate or significant exposure to the economic cycles of the markets in which the underlying investments conduct their business operations as well as the economic impact on investment markets where such investments are listed. Fluctuations in stock markets and currency exchange rates could be advantageous or disadvantageous to the Company and its performance. Disruption to trading platforms and support services.	Unchanged from previous year.		The Board regularly discusses global geopolitical issues and general economic conditions and developments. The impact on the portfolio from other geopolitical changes are monitored through existing control systems and discussed regularly by the Board. While it is difficult to quantify the impact of such changes, it is not anticipated that they will fundamentally affect the business of the Company or make healthcare investing any less desirable. The longer term effects of inflation, recession, the war in Ukraine and the Middle East crisis will continue to be assessed by the Audit Committee in light of how they will impact the Company's portfolio and the overall economic and geopolitical environment in which the Company operates. The Company through the Investment Manager, has a disaster recovery plan in place.

SECTION 172 OF THE COMPANIES ACT 2006

The statutory duties of the Directors are listed in s171-177 of the Companies Act 2006. The Board recognises that 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 wider stakeholders amongst other considerations. The fulfilment of this duty not only helps the Company achieve its Investment Objective but ensures decisions are made in a responsible and sustainable way for shareholders.

To ensure that the Directors are aware of, and understand, their duties, they are provided with an induction when they first join the Board, including details of all relevant regulatory and legal duties as a Director 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 discussions and as part of the decision-making process. As an externally managed investment company, the Company does not have any employees or customers, however the key stakeholders and a summary of the Board's consideration and actions where possible in relation to each group of stakeholders are described in the table below.

STAKEHOLDER GROUP	HOW WE ENGAGE WITH THEM
SHAREHOLDERS	The Directors have considered this duty when making the strategic decisions during the year that affect shareholders, including the continued appointment of the Investment Manager and the recommendation that shareholders vote in favour of the resolutions for the Company to continue and to renew the allotment and buy back authorities at the AGM. The Directors have also engaged with and taken account of shareholders' interests during the year. The Company's AGM will be held at 2:30pm on Thursday 8 February 2024 at the offices of Polar Capital, 16 Palace Street, London SW1E 5JD. 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. Any changes to these arrangements will be communicated through the Company's website and via a Regulatory Information Service announcement. 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. As was the case in 2023, shareholders will once again have the opportunity to hear the Managers' pre-recorded presentation, reviewing the Company's performance in the year and the outlook for 2023-2024, in advance of the AGM. The presentation will be uploaded to the Company's website ahead of the AGM. In addition, Shareholders will also be able to watch the proceedings of the AGM live via Zoom Conference. Details of how to access the online link are provided in the Notice of AGM. The AGM in-person meeting will comprise the formal business and questions only. Shareholders are encouraged to send any questions ahead of the AGM to the Board via the Company Secretary at [email protected] stating the subject matter as PCGH-AGM. The Chairs of the Board and of the Committees, along with the Managers, will be in attendance at the AGM and will be available to respond to questions and concerns from shareholders. Should any significant votes be cast against a resolution, the Board will engage with shareholders and explain in its announcement of the results of the AGM the actions it intends to take to consult shareholders in order to understand the reasons behind the votes against. Following the consultation, an update will be published no later than six months after the AGM and the Annual Report will detail the impact the Shareholder feedback has had on any decisions the Board has taken and any actions or resolutions proposed. Relations with shareholders The Board and the Manager consider maintaining good communications and engaging with shareholders through meetings and presentations a key priority. The Board regularly considers the share register of the Company and receives regular reports from the Manager and the Corporate Broker on meetings attended with shareholders and any concerns that are raised in those meetings. The Board also reviews correspondence from shareholders and may attend investor presentations. Shareholders are kept informed by the publication of annual and half year reports, monthly fact sheets, access to commentary from the Investment Manager via the Company's website and attendance at events at which the Investment Manager presents. Shareholders are able to raise any concerns directly with the Chair or the Board without intervention of the Manager or Company Secretary, they may do this either in person at the AGM or at other events, or in writing either via the registered office of the Company or to the Chair's specific email address [email protected]. 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 AGM To enable more shareholders the opportunity to hear the Investment Manager's AGM presentation, the Board has opted to pre-record and upload this to the website ahead of the voting deadline and in-person formal business AGM. In addition, shareholders will also have the opportunity to watch the proceedings of the AGM live via Zoom Conference. Details of how to access the online link are provided in the Notice of AGM.
INVESTMENT MANAGER	Through the Board meeting cycle, regular updates and the work of the Management Engagement Committee reviewing the services of the Investment Manager annually, the Board is able to safeguard Shareholder interests by: · Ensuring adherence to the Investment Policy; · Ensuring excessive risk is not undertaken in the pursuit of investment performance; · Ensuring adherence to the Investment Management Policy and reviewing the agreed management and performance fees; and · Reviewing the Investment Manager's decision making and consistency in investment process. 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 The Board continued to engage with the Investment Manager to understand how ESG has been integrated into the overall house style, the healthcare team investment approach and decision making as well as the methodology behind this. The Board also receives information on how ESG affects Polar Capital as a business and the healthcare team in particular. Consumer Duty The Board has worked with the Investment Manager to ensure the obligations of the new Consumer Duty regulations are appropriately applied to the Company. In light of the obligations, all communications including the website, fact sheets and other published documentation, have been reviewed to ensure they are appropriate for all end users. A 'value for money' assessment has also been undertaken and is made available to distributors on request for their due diligence processes. Management The Management Engagement Committee has recommended and the Board has approved the continued appointment of the Investment Manager on the terms set out within the Investment Management Agreement.
INVESTEE COMPANIES	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 the Investment Manager believes that a resolution would be detrimental to the interests of shareholders or the financial performance of the Company, appropriate notification will be given and abstentions or a vote against will be lodged. The Investment Manager has voted at 49 company meetings over the year ended 30 September 2023, with 5.4% of all votes being against management and 37% of meetings having at least one against or withheld vote. 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). 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 The Board receives information on the ratings of investee companies and is able to use this as a tool to inform discussions with the Manager during Board meetings.
SERVICE PROVIDERS	The Directors have frequent engagement with the Company's other service providers through the annual cycle of reporting and due diligence meetings or site visits. 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 and where possible, service providers have joined meetings to present their reports directly to the Board or the Audit Committee as appropriate. 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 continue to monitor service levels and due diligence reviews conducted by the Company Secretary and is satisfied that the service received continues to be of a high standard.
PROXY ADVISORS	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. Outcomes and strategic decisions during the year Where possible the Chair and other representatives of the Company have engaged with the stewardship teams of some larger investors to understand and address their expectations in terms of board governance, recruitment and diversity. Prior to AGMs, the Company engages with these agencies to fact check their advisory reports and clarify any areas or topics contained within the report. 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.

Approved by the Board on 12 December 2023

By order of the Board

TRACEY LAGO, FCG

Polar Capital Secretarial Services Limited

Company Secretary

STATEMENT OF DIRECTORS' RESPONSIBILITIES

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

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

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

· select suitable accounting policies and then apply them consistently;

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

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

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

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that its Financial Statements and the Directors' Remuneration Report 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 Group 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.

Directors' confirmations

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

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

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

· the Group Financial Statements, which have been prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the group; and

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

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

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

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

Lisa Arnold

Chair

12 December 2023

STATEMENT OF COMPREHENSIVE INCOME

For the year ended 30 September 2023

	Note	Group			Group
		Year ended 30 September 2023			Year ended 30 September 2022
		Revenue return £'000	Capital return £'000	Total return £'000	Revenue return £'000	Capital return £'000	Total return £'000
Investment income	3	4,804	-	4,804	4,427	-	4,427
Other operating income	4	104	-	104	26	-	26
Gains on investments held at fair value	5	-	19,574	19,574	-	22,985	22,985
Other currency losses	6	-	(1,130)	(1,130)	-	(610)	(610)
Total income		4,908	18,444	23,352	4,453	22,375	26,828

Expenses
Investment management fee	7	(650)	(2,598)	(3,248)	(602)	(2,406)	(3,008)
Other administrative expenses	8	(712)	(13)	(725)	(599)	(59)	(658)
Total expenses		(1,362)	(2,611)	(3,973)	(1,201)	(2,465)	(3,666)

Profit before finance costs and tax		3,546	15,833	19,379	3,252	19,910	23,162
Finance costs	9	(9)	(1,161)	(1,170)	-	(1,096)	(1,096)

Profit before tax		3,537	14,672	18,209	3,252	18,814	22,066
Tax	10	(598)	(715)	(1,313)	(535)	-	(535)
Net profit for the year and total comprehensive income		2,939	13,957	16,896	2,717	18,814	21,531
Earnings per Ordinary share (pence)	12	2.42	11.51	13.93	2.24	15.51	17.75

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

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

The Group does not have any other income or expense that is not included in net profit for the year. The net profit for the year disclosed above represents the Group's total comprehensive income.

There are no dilutive securities and therefore the Earnings per Share and the Diluted Earnings per share are the same.

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year.

The notes below form part of these Financial Statements.

STATEMENTS OF CHANGES IN EQUITY

For the year ended 30 September 2023

	Note	Group and Company Year ended 30 September 2023
	Note	Called up share capital £'000	Capital redemption reserve £'000	Share premium reserve £'000	Special distributable reserve £'000	Capital reserves £'000	Revenue reserve £'000	Total Equity £'000
Total equity at 1 October 2022		31,037	6,575	80,685	3,672	280,791	2,073	404,833
Total comprehensive income:
Profit for the year ended 30 September 2023		-	-	-	-	13,957	2,939	16,896
Transactions with owners, recorded directly to equity:
Equity dividends paid	11	-	-	-	-	-	(2,547)	(2,547)
Total equity at 30 September 2023		31,037	6,575	80,685	3,672	294,748	2,465	419,182

	Note	Group and Company Year ended 30 September 2022
	Note	Called up share capital £'000	Capital redemption reserve £'000	Share premium reserve £'000	Special distributable reserve £'000	Capital reserves £'000	Revenue reserve £'000	Total Equity £'000
Total equity at 1 October 2021		31,037	6,575	80,685	3,672	261,977	1,782	385,728
Total comprehensive income:
Profit for the year ended 30 September 2022		-	-	-	-	18,814	2,717	21,531
Transactions with owners, recorded directly to equity:
Equity dividends paid	11	-	-	-	-	-	(2,426)	(2,426)
Total equity at 30 September 2022		31,037	6,575	80,685	3,672	280,791	2,073	404,833

The notes below form part of these Financial Statements.

BALANCE SHEETS

As at 30 September 2023

	Notes	Group		Company
	Notes	30 September 2023 £'000	30 September 2022 £'000	30 September 2023 £'000	30 September 2022 £'000
Non-current assets
Investments held at fair value	13	458,255	434,419	458,255	434,419
Investment in subsidiary	13	-	-	50	50

Current assets
Cash and cash equivalents	24	4,680	7,546	4,630	7,496
Receivables	14	505	233	505	233
Overseas tax recoverable		678	666	678	666
		5,863	8,445	5,813	8,395

Total assets		464,118	442,864	464,118	442,864

Current liabilities
Bank overdraft	24	(2,014)	-	(2,014)	-
Payables	15	(3,981)	(470)	(3,981)	(470)
Zero dividend preference shares	16	(38,687)	-	-	-
Loan from subsidiary		-	-	(38,687)	-
		(44,682)	(470)	(44,682)	(470)
Non-current liabilities
Zero Dividend Preference shares	16	-	(37,561)	-	-
Loan from subsidiary		-	-	-	(37,561)
Indian capital gains tax provision		(254)	-	(254)	-
Total liabilities		(44,936)	(38,031)	(44,936)	(38,031)

Net assets		419,182	404,833	419,182	404,833

Equity attributable to equity Shareholders
Called up share capital	17	31,037	31,037	31,037	31,037
Share premium reserve	19	80,685	80,685	80,685	80,685
Capital Redemption reserve	18	6,575	6,575	6,575	6,575
Special distributable reserve	20	3,672	3,672	3,672	3,672
Capital reserves	21	294,748	280,791	294,748	280,791
Revenue reserve		2,465	2,073	2,465	2,073
Total equity		419,182	404,833	419,182	404,833

Net asset value per Ordinary share (pence)	23	345.66	333.83	345.66	333.83
Net asset value per ZDP share (pence)	23	120.41	116.91	-	-

The parent company has taken advantage of section 408 of the Companies Act 2006 and has not included its own income statement in the Financial Statements. The parent company's profit for the year was £16,896 (2022: £21,531,000).

The Financial Statements were approved and authorised for issue by the Board of Directors on 12 December 2023 and signed on its behalf by

Lisa Arnold

Chair

Registered number 7251471

The notes below form part of these Financial Statements.

CASH FLOW STATEMENTS

For the year ended 30 September 2023

		Group and Company
	Note	Year ended 30 September 2023 £'000	Year ended 30 September 2022 £'000
Cash flows from operating activities
Profit before finance costs and tax		19,379	23,162
Adjustment for non-cash items:
Gains on investments held at fair value through profit or loss		(19,574)	(22,985)
Adjusted (profit)/loss before tax		(195)	177

Adjustments for:
Purchases of investments, including transaction costs		(503,002)	(480,136)
Sales of investments, including transaction costs		501,992	476,716
(Increase)/decrease in receivables		(272)	27
Increase in payables		259	101
Indian capital gains tax		(461)	-
Overseas tax deducted at source		(610)	(629)
Net cash used in operating activities		(2,289)	(3,744)

Cash flows from financing activities
Interest paid		(44)	(2)
Equity dividends paid	11	(2,547)	(2,426)
Net cash used in financing activities		(2,591)	(2,428)

Net decrease in cash and cash equivalents		(4,880)	(6,172)

Cash and cash equivalents at the beginning of the year		7,546	13,718
Cash and cash equivalents at the end of the year	24	2,666	7,546

The notes below form part of these Financial Statements.

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 September 2023

1. General Information

The consolidated Financial Statements for the year ended 30 September 2023 comprise the Financial Statements of the Company and its wholly-owned subsidiary PCGH ZDP plc (together referred to as the 'Group').

The principal activity of the Group 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 Group and Company's presentational currency is pounds sterling (rounded to the nearest £'000). Pounds sterling is also the functional currency of the Group and Company because it is the currency which is most relevant to the majority of the Group and Company's shareholders and creditors and the currency in which the majority of the Group and Company's operating expenses are paid.

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 Group and Company's Financial Statements have been prepared and approved by the Directors in accordance with UK- adopted international accounting standards ("UK-adopted IAS") and with the requirements of the Companies Act 2006.

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

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

Basis of consolidation - The Group Financial Statements consolidate the Financial Statements of the Company and its wholly owned subsidiary, PCGH ZDP plc, drawn up to the same accounting date. The subsidiary is consolidated from the date of its incorporation.

The Company has taken advantage of the exemption under section 408 of the Companies Act 2006 and accordingly has not presented a separate parent company income statement.

The financial position of the Group and Company as at 30 September 2023 are shown in the balance sheet as above. As at 30 September 2023 the Group and Company's total assets exceeded its total liabilities by a multiple of over 9. The assets of the Group and Company consist mainly of securities that are held in accordance with the Group and Company's Investment Policy, as set out above and these securities are readily realisable. The Directors have considered a detailed assessment of the Group and Company's ability to meet their liabilities as they fall due. The assessment took account of the Group and Company's current financial positions, their cash flows and their liquidity positions and the loan due for repayment to PCGH ZDP plc in June 2024. In addition to the assessment, the Group and Company carried out stress testing which used a variety of falling parameters to demonstrate the effects on the Group and Company's share prices and net asset values. In light of the results of these tests, the Group and Company's cash balances, and the liquidity positions, the Directors consider that the Group and Company have adequate financial resources to enable them 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 Group and Company's Financial Statements.

(b) Presentation of the Statement of Comprehensive Income

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

Dividends receivable from equity shares are recognised and 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 Group and 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.

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

(d) Written Options

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

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

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

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

(e) Expenses

All expenses, including the management fee, are accounted for on an accruals basis and are recognised when they fall due.

All expenses have been presented as revenue items except as follows:

Expenses are charged to the capital column of the Statement of Comprehensive Income where a connection with the maintenance or enhancement of the value of investments can be demonstrated. In this respect the investment management fees have been charged to the Statement of Comprehensive Income in line with the Board's expected long-term split of returns, in the form of capital gains and income from the Group and Company's portfolio. As a result 20% of the investment management fees are charged to the revenue account and 80% charged to the capital account of the Statement of Comprehensive Income.

The performance fee (when payable) is charged entirely to capital as the fee is based on the out-performance of the Benchmark and is expected to be attributable largely, if not wholly, to capital performance.

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

Finance costs

The ZDP shares are designed to provide a pre-determined capital growth from their original issue price of 100p on 20 June 2017 to a final capital repayment of 122.99p on 19 June 2024. The initial capital will increase at a compound interest rate of 3% per annum.

No dividends are payable on the ZDP shares. The provision for the capital growth entitlement of the ZDP shares is included as a finance cost and charged 100% to capital within the Statement of Comprehensive Income (AIC SORP paragraph 53 - issued July 2022).

Overdraft interest costs are allocated 20% to revenue and 80% to capital in line with the Board's expected long-term split of revenue and capital return from the Company's investment portfolio.

Share issue costs

Costs incurred directly in relation to the issue of shares in the subsidiary are borne by the Company and taken 100% to capital. Share issue costs relating to ordinary share issues by the Company are taken 100% to the share premium account.

Zero Dividend Preference (ZDP) shares

Shares issued by the subsidiary are treated as a liability of the Group, and are shown in the Balance Sheet at their redemption value at the Balance Sheet date. The appropriations in respect of the ZDP shares necessary to increase the subsidiary's liabilities to the redemption values are allocated to capital in the Statement of Comprehensive Income. This treatment reflects the Board's long-term expectations that the entitlements of the ZDP shareholders will be satisfied out of gains arising on investments held primarily for capital growth.

(f) Taxation

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

The tax currently payable is based on the taxable profits for the year ended 30 September 2023. 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 Group and 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 Taxes Act 2010 are not liable for taxation on capital gains.

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

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

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

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

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

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

On initial recognition the Group and 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.

All investments, classified as fair value through profit or loss, are further categorised into the following fair value hierarchy:

Level 1: Unadjusted prices quoted in active markets for identical assets and liabilities.

Level 2: Having inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: Having inputs for the asset or liability that are not based on observable market data.

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.

In the event a security held within the portfolio is suspended then judgement is applied in the valuation of that security.

(h) Receivables

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

(i) Cash and Cash Equivalents

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

(j) Dividends Payable

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

(k) Payables

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

(l) Foreign Currency Translation

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

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

(m) Capital Reserves

Capital reserve arising on investments sold includes:

· gains/losses on disposal of investments

· exchange differences on currency balances

· transfer to subsidiary in relation to ZDP funding requirement

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

Capital reserve arising on investments held includes:

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

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

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

(n) Repurchase of Ordinary Shares (Including Those Held in Treasury)

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

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

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

(o) Segmental Reporting

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

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

(p) Key Estimates and judgements

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 Group and Company do not consider that there have been any significant estimates or assumptions in the current financial year.

(q) New and revised accounting Standards

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

i) There were no relevant standards effective for the current annual reporting period that potentially impact the Group and

Company in issue.

ii) At the date of authorisation of the Group and Company's Financial Statements, the following relevant standards that potentially impact the Group and Company are in issue but are not yet effective and have not been applied in the

Financial Statements.

Standards & Interpretations

Effective for periods commencing on or after

Disclosure of Accounting

Policies (Amendments to IAS 1

and IFRS Practice Statement 2)

Requirement amended to disclose material accounting policies instead of significant accounting policies and provided guidance in making materiality judgements to accounting policy disclosure.

1 January 2023

Definition of Accounting

Estimates (amendments to

IAS 8)

The amendment introduced the definition of accounting estimates and included other amendments to IAS 8 to help entities distinguish changes in accounting estimates from changes in accounting policy.

1 January 2023

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 Group and Company in future periods.

3. Investment Income

	Year ended 30 September 2023 £'000	Year ended 30 September 2022 £'000
Revenue:
UK Dividend income	591	472
Overseas Dividend income	4,213	3,955
Total investment income allocated to revenue	4,804	4,427

4. Other Operating Income

Year ended

30 September

2023

£'000

Year ended

30 September

2022

£'000

Bank interest

104

Total other operating income

104

5. Gains on Investments Held at Fair Value

	Year ended 30 September 2023 £'000	Year ended 30 September 2022 £'000
Net gains on disposal of investments at historic cost	33,182	18,524
Less fair value adjustments in earlier years	(14,297)	(11,626)
Gains based on carrying value at previous balance sheet date	18,885	6,898
Valuation gains on investments held during the year	689	16,087
	19,574	22,985

6. Other Currency losses

Year ended

30 September

2023

£'000

Year ended

30 September

2022

£'000

Exchange losses on currency balances

(1,130

(610)

7. Investment Management Fee

	Year ended 30 September 2023 £'000	Year ended 30 September 2022 £'000
Management fee
- charged to revenue	650	602
- charged to capital	2,598	2,406
Investment management fee payable to Polar Capital LLP	3,248	3,008

Management fees are allocated 20% to revenue and 80% to capital. Details of the fee arrangements are given in the Strategic

Report above.

8. Other Administrative Expenses (Including VAT where appropriate)

	Year ended 30 September 2023 £'000	Year ended 30 September 2022 £'000
Directors' fees and expenses¹	143	136
Directors' NIC	14	14
Auditors' remuneration²: For audit of the Group and Company Financial Statements	60	48
Depositary fee	30	23
Registrar fee	37	30
Custody and other bank charges	42	37
UKLA and LSE listing fees³	40	3
Legal & professional fee	5	6
AIC fees	21	21
Directors' and officers liability insurance	18	16
Corporate brokers fee	25	25
Marketing expenses⁴	47	43
Research costs - allocated to revenue⁵	3	15
Shareholder communications	17	22
HSBC administration fee	208	158
Other expenses	2	2
Total other administrative expenses allocated to revenue	712	599
Research cost - allocated to capital⁵	13	59
Total other administrative expenses	725	658

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

2 2023 includes £8,000 (2022: £6,875) paid to the Auditors for the audit of PCGH ZDP Plc.

3 Prior year reflects write off of PCCH ZDP FCA fee accrual which no longer applies.

4 Includes marketing expenses payable to Polar Capital LLP of £15,500 ( 2022: £22,500).

5 Research costs payable by the Company amounted to £16,000, and cover the 3 months to 31 December 2022. (£74,000 - full year). These costs are allocated 20% to revenue and 80% to capital and are included in the ongoing charges calculation. With effect from 1 January 2023, specialist research costs are absorbed by Polar Capital.

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

The ongoing charges ratio for the year ended 30 September 2023 was 0.87% (2022: 0.84%). See Alternative Performance Measures provided in the annual report.

9. Finance Costs

	Year ended 30 September 2023			Year ended 30 September 2022
	Revenue return	Capital return	Total return	Revenue return	Capital return	Total return
	£'000	£'000	£'000	£'000	£'000	£'000
Interest on overdrafts	9	35	44	-	2	2
Appropriation to ZDP shares	-	1,126	1,126	-	1,094	1,094
Total finance costs	9	1,161	1,170	-	1,096	1,096

10. Taxation

	Year ended 30 September 2023			Year ended 30 September 2022
	Revenue return £'000	Capital return £'000	Total return £'000	Revenue return £'000	Capital return £'000	Total return £'000
a) Analysis of tax charge for the year:
Overseas tax	598	-	598	535	-	535
Indian capital gains tax	-	715	715	-	-	-
Total tax for the year (see note 10b)	598	715	1,313	535	-	535
b) Factors affecting tax charge for the year:
The charge for the year can be reconciled to the profit per the Statement of Comprehensive Income as follows:

Profit before tax	3,537	14,672	18,209	3,252	18,814	22,066
Tax at the UK corporation tax rate of 22% (2022: 19%)	778	3,228	4,006	617	3,575	4,192
Tax effect of non-taxable dividends	(1,057)	-	(1,057)	(841)	-	(841)
Gains on investments that are not taxable	-	(4,058)	(4,058)	-	(4,251)	(4,251)
Non taxable expenses not utillised in the year	279	582	861	224	468	692
Overseas tax suffered	598	-	598	535	-	535
Indian capital gains tax	-	715	715	-	-	-
Expenses not allowable	-	248	248	-	208	208
Total tax for the year (see note 10a)	598	715	1,313	535	-	535

c) Factors that may affect future tax charges:

The Company has an unrecognised deferred tax asset of £7,312,000 (2022: £6,334,000). The deferred tax asset is based on the

current corporation tax rate of 25% (2022: 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 obtain 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.

The Company is liable to Indian capital gains tax under Section 115 AD of the Indian Income Tax Act 1961. A tax provision on Indian capital gains is calculated based on the long term (securities held more than one year) or short term (securities held less than one year) nature of the investments and the applicable tax rate at the year end. The current rates of short-term tax rates are 15% and the long term tax rates are 10% respectively. At the year ended 30 September 2023, the Company has a deferred tax liability of £254,000 (2022: £nil) on capital gains which may arise if Indian investments are sold.

11. Amounts Recognised as Distributions to Ordinary Shareholders in the Year

Dividends paid in the year ended 30 September 2023

Payment date	No of shares	Pence per share	Year ended 30 September 2023 £'000
28 February 2023	121,270,000	1.10p	1,334
31 August 2023	121,270,000	1.00p	1,213
			2,547

The revenue available for distribution by way of dividend for the year is £2,939,000 (2022: £2,717,000).

The total dividends payable in respect of the financial year ended 30 September 2023 which is the basis on which the

requirements of Section 1158 Corporation Tax Act 2010 are considered, is set out below:

Payment date	No of shares	Pence per share	Year ended 30 September 2023 £'000
31 August 2023	121,270,000	1.00p	1,213
29 February 2024	121,270,000	1.20p	1,455
			2,668

Dividends paid in the year ended 30 September 2022

Payment date	No of shares	Pence per share	Year ended 30 September 2022 £'000
28 February 2022	121,270,000	1.00p	1,213
31 August 2022	121,270,000	1.00p	1,213
			2,426

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

Payment date	No of shares	Pence per share	Year ended 30 September 2022 £'000
31 August 2022	121,270,000	1.00p	1,213
28 February 2023	121,270,000	1.10p	1,334
			2,547

All dividends are paid as interim dividends, and all have been charged to revenue, where necessary utilising the revenue reserves.

The dividends paid in February each year relate to a dividend declared in respect of the previous financial year but paid in the

current accounting year.

12. Earnings per Ordinary Share

	Year ended 30 September 2023			Year ended 30 September 2022
	Revenue return	Capital return	Total return	Revenue return	Capital return	Total return
The calculation of basic earnings per share is based on the following data:
Net profit for the year (£'000)	2,939	13,957	16,896	2,717	18,814	21,531
Weighted average Ordinary shares in issue during the year	121,270,000	121,270,000	121,270,000	121,270,000	121,270,000	121,270,000
Basic - Ordinary shares (pence)	2.42	11.51	13.93	2.24	15.51	17.75

As at 30 September 2023 there were no potentially dilutive shares in issue.

13. Investments held at fair value

a) Investments held at far value through profit or loss

	30 September 2023 £'000	30 September 2022 £'000
Opening book cost	401,521	380,123
Opening investment holding gains	32,898	28,438
Opening fair value	434,419	408,561
Analysis of transactions made during the year
Purchases at cost	506,254	477,549
Sales proceeds received	(501,992)	(474,676)
Gains on investments held at fair value	19,574	22,985
Closing fair value	458,255	434,419
Closing book cost	438,965	401,521
Closing investment holding gains	19,290	32,898
Closing fair value	458,255	434,419

The Company received £501,992,000 (2022: £474,676,000) from disposal of investments in the year. The book cost of these investments when they were purchased were £468,810,000 (2022: £456,152,000). These investments have been revalued over time and until they were sold, any unrealised gains/losses were included in the fair value of the investments.

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

	30 September 2023 £'000	30 September 2022 £'000
On acquisition	481	310
On disposal	257	224
	738	534

b) Fair value hierarchy

30 September

2023

£'000

30 September

2022

£'000

Level 1 assets

458,255

434,419

Valuation at the end of the year

458,255

434,419

All Level 1 assets are traded on a recognised Stock Exchange.

c) Subsidiary undertaking

Company and business	Country of registration, incorporation and operation	Number and class of shares held by the Company	Holding
PCGH ZDP Plc	England and Wales	50,000 Ordinary shares of £1	100%

The Company is a public limited company with the sole purpose of issuing Zero Dividend Preference (ZDP) shares. The registered office is at Polar Capital, 16 Palace Street, London SW1E 5JD.

The investment is stated in the Company's Financial Statements at cost, which is considered by the Directors to equate to fair value.

The subsidiary is non-trading and the value of the net assets have not changed since the acquisition of the Ordinary share capital by the Company. The cost is therefore considered to equate to the fair value of the shares held.

14. Called up Share Capital

Ordinary shares - Allotted, Called up and Fully paid:	30 September 2023 £'000	30 September 2022 £'000
Ordinary shares of nominal value 25p each:
Opening balance of 121,270,000 (2022: 121,770,000)	30,317	30,317
Allotted, Called up and Fully paid: 121,270,000 (2022: 121,270,000) Ordinary shares of 25p	30,317	30,317
2,879,256 (2022: 2,879,256) Ordinary shares, held in treasury	720	720
At 30 September 2023	31,037	31,037

No Ordinary shares were repurchased or issued during the year (2022: nil).

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

15. Net Asset Value Per Share

Ordinary shares	30 September 2023	30 September 2022
Net assets attributable to Ordinary Shareholders (£'000)	419,182	404,833
Ordinary shares in issue at end of year	121,270,000	121,270,000
Net asset value per Ordinary share (pence)	345.66	333.83
Total issued Ordinary shares	124,149,256	124,149,256
Ordinary shares held in treasury	2,879,256	2,879,256
Ordinary shares in issue	121,270,000	121,270,000

As at 30 September 2023 there were no potentially dilutive shares in issue.

16. Cash and Cash Equivalents

	30 September 2023 £'000	30 September 2022 £'000
Cash at bank	4,630	7,496
Bank Overdraft	(2,014)	-
Company cash and cash equivalents	2,616	7,496
Cash held at subsidiary	50	50
Group cash and cash equivalents	2,666	7,546

17. Transactions with the Investment Manager and Related Party Transactions

(a) Transactions with the Manager

Under the terms of an agreement dated 26 May 2010 the Group has appointed Polar Capital [[P ("Polar Capital") to provide investment management, accounting, secretarial and administrative services. Details of the fee arrangement for these services are given in the Strategic Report. The total fees, paid under this agreement to Polar Capital in respect of the year ended 30 September 2023 were £3,248,000 (2022: £3,008,000) of which £537,000 (2022: £259,000) was outstanding at the year-end.

In addition, the total research cost in respect of the year ended 30 September 2023 was £16,000 (2022: £74,000). As at the year end, £nil (2022: £54,800) was outstanding. From 1 January 2023 all research costs are payable by Polar Capital. Refer to note 8 above for more details.

(b) Related party transactions

The Group and Company has no employees and therefore no key management personnel other than the Directors. The Group and Company paid £143,000 (2022: £136,000) to the Directors and the Remuneration Report including Directors' shareholdings and movements within the year is set out within the full Annual Report.

Refer to note 13(c) for details of the subsidiary undertaking.

18. Post Balance Sheet Events

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

AGM

The Annual Report and separate Notice for the Annual General Meeting will be posted to Shareholders in December 2023 and is available from the Company Secretary at the Company's Registered Office, (16 Palace Street London SW1E 5JD) or from the Company's website. The AGM will be held at the Company's Registered Office at 2:30pm on 8 February 2024.

FORWARD LOOKING STATEMENTS

Certain statements included in the 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 Section the Annual Report and Financial Statements.

No part of these results constitutes, or shall be taken to constitute, an invitation or inducement to invest in Polar Capital Global Healthcare Trust plc or any other entity, and must not be relied upon in any way in connection with an investment decision. The Company undertakes no obligation to update any forward-looking statements.

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

-END-

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Polar Capital Global Healthcare

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Lisa Arnold

Chair

STRATEGIC REPORT

Chair

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