REG - abrdn New India IT. - Annual Financial Report
25/06/2025 07:00
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RNS Number : 2342O abrdn New India Investment Trust 25 June 2025
abrdn New India Investment Trust plc
LEI - 549300D2AW66WYEVKF02
Annual Report 31 March 2025
Seeking world-class, well governed companies at the heart of India's growth
abrdnnewindia.co.uk
"India's growth prospects remain undiminished. The country benefits from
favourable demographics with a large, relatively young population and a
growing middle class. Indian corporations are becoming increasingly
sophisticated."
Michael Hughes, Chairman
"The portfolio delivered robust performance over the year, with the strongest
returns coming from stock selection in the energy, financials, communications
services and consumer discretionary sectors."
James Thom and Rita Tahilramani
abrdn Asia Limited,
Investment Manager
Why invest in India?
Aspiration
Rising affluence in India is leading to fast-growing premium consumption in
areas including financial services, autos, food and personal care
Building India
Urbanisation and the current boom in infrastructure development is benefitting
property developers, materials producers and industrial/utilities plays
Financial Inclusion
Digitalisation is enabling the delivery of financial services to India's
under-served mass market while wealth accumulation is creating demand for
financial products
Digital Transformation
India's giant IT services sector helps global companies become digital and
cloud ready
Healthcare
Rising disposable income as well as an increase in chronic diseases are
driving demand for preventative and premium quality healthcare
Going green
Policymakers are committing to a greener and lower carbon future. Investments
in renewable energy, related infrastructure, and environmental management
have a bright future
Why invest in abrdn New India Investment Trust plc?
Robust financial strength and sustainable competitive advantage
Indian companies meeting a 'quality' threshold are included in the portfolio,
displaying both strong financial characteristics and a consistent competitive
advantage in attractive industries or sectors
Quality Management
Quality of management is a key attribute sought in portfolio companies. The
management of the best companies in India is world-class and understands the
importance of good governance to drive the best outcomes for
investors and other stakeholders
A high conviction, concentrated portfolio
The portfolio is built from the bottom up around the best quality stocks in
India and is constructed to provide a high conviction, concentrated exposure
to India's different long term structural growth stories
Financial Highlights and Performance
Financial Highlights
31 March 2025 31 March 2024 % change
Share price (mid market) 756.00p 652.00p +16.0
Net asset value per Ordinary share(A) 889.34p 819.56p +8.5
Discount to net asset value(A) 15.0% 20.4%
Equity shareholders' funds (net assets) £425,599,000 £427,054,000 -0.3
Market capitalisation £361,790,000 £339,744,000 6.5
Net gearing(A) 3.9% 4.1%
Total return per share 62.69p 168.85p
Operating costs
Ongoing charges ratio(A) 0.95% 1.00%
(A) Considered to be an Alternative Performance Measure.
Performance (total return, in Sterling terms)
1 year 3 year 5 year 10 year
% return % return % return % return
Share price(A) +16.0 +34.5 +131.0 +115.3
Net asset value per Ordinary share(A) +8.5 +27.5 +116.6 +131.1
Adjusted net asset value per Ordinary share(AB) +11.7 +34.9 N/A N/A
MSCI India Index (sterling adjusted) +0.7 +27.2 +150.8 +151.2
(A) Considered to be an Alternative Performance Measure.
(B) The NAV adjustment is made because the Company's benchmark, the MSCI India
Index, does not take account of the Indian Capital Gains Tax suffered by the
Company. This measure is also used for the performance related tender, as
discussed in the Chairman's Statement.
Source: Aberdeen plc, Morningstar & Lipper.
STRATEGIC REPORT
Chairman's Statement
Dear Shareholder
After your Company's excellent performance in the six months ended 30
September 2024, we had to navigate a significant market correction in the
second half of our financial year. This pull-back followed a prolonged period
of exceptional performance for equities in the Indian market, which has been
among the top-performing emerging markets over recent years.
I am happy to say that your Company's share price total return in sterling
terms was still a strong 16.0% for the year ended 31 March 2025. The Company's
net asset value ("NAV") per share rose by 11.7% in sterling terms (total
return), after adjusting for Indian capital gains tax, continuing a strong
turnaround in performance first seen in the previous financial year. The total
return of our Benchmark, the MSCI India Index, was 0.7%. These returns were
earned despite a drag on performance from the depreciation of 4.5% in the
exchange rate between the Indian rupee and sterling over the year.
I am particularly pleased that your Company also significantly outperformed
the Benchmark in each of the two halves of the year. Our results in the second
half underscore the resilience of the portfolio during periodic market
downturns.
The largest positive contributions to performance came from good stock picking
in the energy, financials, communication services and consumer discretionary
sectors. Investments in small-cap and mid-cap stocks were among the top
contributors. Our quality investment philosophy has paid off, as evidenced by
the decision to avoid holding India's most valuable company, Reliance
Industries, on governance and transparency grounds.
There were several factors that drove the stock market lower in the second
half of the financial year. On the domestic Indian front, weaker consumer
spending, lower government expenditure, and tight liquidity weighed on market
sentiment. Externally, US President Donald Trump's re-election to the White
House triggered a broad-based rotation of capital out of emerging markets on
the fear of imminent tariffs, geopolitical tensions, and the impact of a
strengthening US dollar on emerging market currencies. India was no exception.
Your Manager believes this slowdown in growth to be temporary. Valuations fell
to more reasonable levels in the second half, which provided an opportunity
selectively to increase the holdings of certain stocks, at lower cost, given
the positive long-term outlook for India.
Shareholder value and Change in Management Fees Calculation
Your Board is very aware of the pressures on the investment trust sector as a
whole and we take seriously our obligations to be proactive and responsive to
shareholder needs.
Our first priority is, of course, for your Company's Manager to provide good
performance in a variety of market conditions.
We continue to work closely with the Manager on performance issues. The Board
travelled to Singapore in February 2025 to hear from James Thom and Rita
Tahilramani, as the Company's investment managers, of improvements to
portfolio construction which were designed to increase conviction in the
portfolio. The Board also met with the Asia-Pacific leadership for Aberdeen
Group plc to learn of the Manager's continued commitment for, and investment
in, its Indian equities research. Accompanied by James and Rita, the Board
then visited Chennai and Mumbai and met with current and prospective investee
companies, following which the Board left India with a renewed sense of its
immense potential for investors.
The Board continues to implement measures to add value for shareholders
introducing, firstly, a five-yearly performance-related conditional tender in
2022. This is triggered if the Company's NAV total return underperforms the
Company's Benchmark over the five-year period from 1 April 2022. Should that
occur, shareholders will be offered the opportunity to realise up to 25 per
cent of their investment for cash at a level close to NAV. For these purposes,
the Company's NAV per share is adjusted for Indian capital gains tax (the
"Adjusted NAV") to enable a like-for-like comparison with the Benchmark.
Pleasingly, over the first three years to 31 March 2025 of the five-year
measurement period, your Company's Adjusted NAV total return was 34.9%, well
ahead of the Benchmark's total return of 27.2% (please see the Alternative
Performance Measures).
Secondly, as announced today, we have negotiated a change to the management
fees following the last decrease two years ago. The Board had been seeking a
further reduction in the fees paid to the Manager, as well as greater
alignment with the returns earned by shareholders from owning the shares of
the Company. Accordingly, the Board is pleased to announce that it has reached
agreement with the Manager to calculate its management fee based on market
capitalisation in place of net assets that will, based on the current share
price, result in a reduction in management fee. With effect from 1 April 2025,
the annual investment management fee is calculated at a rate of 0.8% in
respect of the first £300 million of the Company's market capitalisation and
a rate of 0.6% in respect of the Company's market capitalisation in excess of
£300 million. The Manager will also receive an annual secretarial and fund
administration fee of £45,000, plus applicable VAT, which is subject to
increase annually for inflation.
Thirdly, your Company has faced a stubbornly high discount to NAV for many
years. Our policy is to undertake share buybacks when the Board believes that
this is in the best interests of shareholders, while also having regard to the
overall size of the Company. Buybacks have been meaningfully accretive to NAV,
particularly at higher, long-term discount levels. We stepped up the level of
buybacks over the year under review: the Company bought back into treasury
4,252,117 (2024 - 3,702,011) Ordinary shares. This was equivalent to 8.2% of
the Company's issued share capital (excluding treasury shares) at 1 April 2024
(2023 - 6.6%). Between 1 April 2025 and 19 June 2025, as the latest
practicable date prior to approval of this Report, an additional 1,419,000
Ordinary shares were bought back.
The portfolio's performance, these buybacks and the Manager's energetic
marketing efforts have been positive for the discount, which narrowed from
20.4% to 15.0% over the financial year and, as at 19 June 2025 (as the latest
practicable date), had narrowed further to 8.4%. The Board continues to
explore options to reduce the discount.
The Manager continues to seek the necessary local regulatory permissions to
make unlisted investments in India.
The Board encourages shareholders to visit the Company's website
(www.abrdnnewindia.co.uk) for the latest information and monthly factsheets as
well as accessing podcasts and thought-leadership and macro research articles
published by the Manager.
Gearing and New loan facility
As at 31 March 2025, £19.5 million (2024 - £26m) had been drawn from the
£30m bank loan provided by Royal Bank of Scotland International, which
resulted in net gearing of 3.9% (2024 - 4.1%), reflecting a well-timed
reduction of £6.5m from June 2024. During the year, this gearing had a
marginally positive impact on returns, though the Board and Manager are
conscious of the increased interest cost of gearing and they keep the level of
gearing under regular review. This bank loan was due to expire in August 2025;
however, on 19 June 2025, the Company entered into a new, three-year, £30
million secured revolving credit facility with BNP Paribas London Branch at an
interest rate which represents a considerable saving compared to the rate
charged on the expiring loan.
The ability to gear is one of the advantages of the closed ended company
structure and your Manager continues to seek opportunities to deploy this
facility for the benefit of shareholders.
Impact of Indian Capital Gains Tax
The Company, along with other investment vehicles, is subject to both
short-term and long-term capital gains taxes in India on the growth in the
value of its investment portfolio. These taxes are only paid when the
underlying investments are sold and profits are crystalised although
accounting standards require that funds accrue for any unrealised long term
capital gains taxes. These accruals are deducted from the net asset value of
the portfolio and therefore also affect the Company's performance figures. By
contrast, taxes on capital gains are not accrued for or reflected in the
Benchmark. Regrettably, the Indian Government increased the rates for capital
gains tax in July 2024. At 31 March 2025, this tax accrual amounted to £20.6
million, a small increase on the previous year end figure of £19.4 million,
and equivalent to a reduction in the NAV per share of 43.6p, or 4.8%, at 31
March 2025 (2024 - 37.2p or 4.5%).
Appointment of new Auditor
As explained in more detail in the Audit Committee's Report, during the year
the Board, via the Audit Committee, undertook an audit tender process and,
following consideration of the tenders received, the Board decided to appoint
Deloitte LLP as the Company's Auditor for the year ending 31 March 2026. KPMG
LLP will therefore not be seeking re-appointment as Auditor at the Annual
General Meeting and will issue a statutory statement pursuant to Section 519
of the Companies Act 2006 which will be provided separately with the Annual
Report.
A resolution to appoint Deloitte LLP as the Company's Auditor will be proposed
at the Annual General Meeting.
Annual General Meeting
The Company's AGM will be held at 18 Bishops Square, London E1 6EG at 12.30pm
on Tuesday 23 September 2025. The AGM provides shareholders with an
opportunity to ask any questions that they may have of either the Board or the
Investment Manager. Voting on the resolutions to be put to shareholders will
be conducted by way of a poll and those attending are encouraged to bring with
them a letter of corporate representation in respect of their ownership of
shares in the Company.
The Directors look forward to meeting as many of you as possible over
refreshments which will follow the AGM. Shareholders, whether attending the
AGM or not, are encouraged to submit questions for the Board and/or Investment
Manager, in advance, by email to new.india@aberdeenplc.com.
Online Shareholder Presentation
In order to encourage and promote interaction and engagement with the
Company's shareholders, the Company is holding an interactive Online
Shareholder Presentation (the "Presentation") at 11.00am on 16 September 2025,
to cater for those shareholders who may be unable to attend the AGM. During
the Presentation, shareholders will receive a short introduction from the
Chairman and portfolio update from the Investment Manager, followed by an
interactive question and answer session. The Presentation is being held ahead
of the AGM in order to allow shareholders to submit their proxy votes prior to
the meeting, after hearing an update on the portfolio and performance. Further
information on how to register for the Presentation may be found on the
Company's website.
Board
After serving as a Director since 2016, I shall be retiring from the Board on
31 March 2026. I am pleased to announce that David Simpson, the Senior
Independent Director, will become the Chairman of the Company from 1 April
2026, following his retirement as a director and chairman of Ecofin Global
Utilities and Infrastructure Trust plc in March 2026. David's commercial
experience in India and his knowledge of investment companies makes him
uniquely suited to lead the Board and the Company. This will therefore be my
final Annual Report Chairman's Statement and my last AGM on 23 September 2025.
I should like to take this opportunity to thank all shareholders for their
support of the Company during my tenure, both as a Director and as Chairman.
Update
From 31 March 2025 to 19 June 2025 (the latest practicable date prior to
approval of this Report), the NAV per share total return was 0.2% while the
Benchmark total return was 0.7%. Further to a considerable narrowing of the
discount over the same period, from 15.0% to 8.4%, the share price total
return was 6.9%.
Outlook
In the Half-Yearly Report, I highlighted India's position as a bright spot of
growth within the Asia-Pacific region, characterised by consistent economic
expansion. While this is still the case, the six months ended 31 March 2025
saw a recalibration of investor expectations, resulting in a significant
market correction which our portfolio withstood.
Investing in India requires accepting market volatility and a degree of risk.
Near-term challenges include a slowdown in the global economy and heightened
geopolitical tensions, including the recent exchanges of fire with Pakistan.
On the other hand, investor concerns about relatively high valuations of
Indian companies have been alleviated to some extent by recent market
declines.
India's growth prospects remain undiminished. The country benefits from
favourable demographics with a large, relatively young population and a
growing middle class. Indian corporations are becoming increasingly
sophisticated. Your Manager has adapted the portfolio to prevailing market
conditions and is incorporating new ideas that are poised to benefit from
structural trends.
The Board and I remain confident in the Company's long-term success.
Michael Hughes
Chairman
24 June 2025
Investment Manager's Report
In the year ended 31 March 2025, the Company's net asset value ("NAV") rose by
11.7% in sterling terms (total return), adjusted for Indian capital gains tax.
The Company has continued to recover most of the underperformance seen in 2021
and 2022 for two consecutive years now, as we have stuck to a quality
investment philosophy and repositioned the portfolio towards promising market
segments with long growth runways.
Market review
Since September 2024, when the Indian stock market hit an all-time high, we
have witnessed a significant pullback and profit taking. We have seen a more
acute correction in the small-and-mid-cap ("SMID") space, which is not
surprising given valuations in that segment were getting frothy. In contrast
to developed markets, discounts for SMID stocks are lower than those for
large-cap stocks in India with domestic investor interest sustaining higher
valuations for the former. While our portfolio is skewed more towards large
cap, our considerable SMID exposure delivered strong performance in calendar
2024, and considering this market correction, we are evaluating these stocks
through a bottom-up quality lens.
In this environment, quality stocks have been resilient across the portfolio,
including the core positions that contributed to relative returns,
particularly in the last three months of the year. As such, the Company was
able to deliver strong absolute returns over the full year that were
significantly ahead of the 0.7% total return for the Benchmark.
There were several factors that drove the stock market lower in the second
half of the year under review. On the domestic front, weaker consumer
spending, lower government expenditure, and tight liquidity weighed on market
sentiment. Externally, US President Donald Trump's re-election to the White
House triggered a broad-based rotation of capital out of emerging markets on
the fear of imminent tariffs, geopolitical tensions, and the impact of a
strengthening US dollar on emerging market currencies. India was no exception.
The central bank took steps to boost liquidity in the market, cutting interest
rates by 0.25% in February 2025 and by another 0.25% in April 2025.
Subsequently, in June 2025, it cut rates by a deeper-than-expected 0.5% and
also announced a 1% cut to the cash reserve ratio that will inject additional
liquidity into the financial system in a phased manner over the course of the
fourth quarter. We expect this to act as a boost to the banking sector and to
the economy more broadly.
Meanwhile, on the fiscal side, the Indian Government's FY2026 budget focused
on consumption support for the middle class through readjusting income tax
brackets to provide relief to taxpayers.
We continue to believe that India is structurally well placed, in terms of its
demographics, relatively supportive macroeconomic environment, and political
stability. This holds true in light of the current uncertainties surrounding
President Trump's "reciprocal" tariffs on US trading partners, including India
- in our view, India is relatively better placed compared to other emerging
markets.
Performance overview
The portfolio delivered robust performance over the year, with the strongest
returns coming from stock selection in the energy, financials, communications
services and consumer discretionary sectors.
Our non-benchmark SMID cap position in Aegis Logistics did exceptionally well
over the period, being the top stock performer. The share price has enjoyed a
strong run as investors finally recognised what we had long seen; that this
was a high quality, high growth small-cap stock that had been mispriced by the
market. We scaled up the holding due to our strong conviction, despite the
inherent volatility of small-cap stocks. Aegis continues to report strong
performance with good underlying growth across the business that gives us
confidence to maintain our position. Not holding Reliance Industries also
added to relative returns, as the Benchmark bellwether lagged on softer gross
refining margins and slowing retail business growth. We continue to avoid
Reliance Industries and its subsidiaries on corporate governance grounds and
capital allocation concerns.
Within the financials sector, the portfolio's private sector banks did
relatively better than peers amid the tight liquidity environment. ICICI Bank,
one of the largest absolute positions in the portfolio, outperformed after
reporting good results with standout deposit growth and asset quality. While
HDFC Bank, another significant portfolio position, initially underperformed in
the period as investors feared loan growth could be restricted and margins
squeezed. We saw a gradual turnaround in the share price by the end of the
Company's year. Accordingly, reducing our position in the lender initially
weighed on overall relative returns, which was offset by not holding other
lower quality names in the banking sub-sector. Meanwhile, the Reserve Bank of
India rolled back its anticipated regulatory tightening while also reducing
the burden on microfinance loans and bank loans to non-bank lenders.
Our non-benchmark position in financial services firm, KFin Technologies, also
did well. We introduced the company to the portfolio at the start of the
calendar year 2024, and its share price rose almost 200% over the year,
supported by steady flows into domestic mutual funds. Seen as the proxy for
the rise of the broader Indian equity market, the stock suffered from the
post-September correction, seeing some sharp profit taking in recent months,
before improving again during March.
Holding both Bharti Airtel and Bharti Hexacom in the telecommunication
sub-sector added to our performance. Both stocks performed well over the year
as a result of strong fundamental characteristics, such as improving balance
sheets and momentum in non-cellular businesses.
Within consumer discretionary, our core autos exposure in Mahindra &
Mahindra did well. Indian Hotels, another new addition to the portfolio, also
performed, where it is primed to benefit from the multi-year growth potential
in the domestic travel industry, with consumers seeking more premium
experiences and services.
A detractor from performance was our stock selection in the industrials
sector, specifically in the capital goods sub-sector, where prices corrected
following a strong run and amid a slower-than-expected pace of government and
private spending. However, we continue to highlight 'Building India' as one of
our six key investment themes for the market, and remain invested accordingly,
maintaining positions in the highest conviction stocks in this sector whilst
also protecting the portfolio from near-term volatility.
Overall, we think that the pull-back seen in the Indian stock market since
September offered a much-needed pause, helping to ease valuations to more
reasonable levels and removing some of excess froth from the market. This
happened after three years of robust performance. In some cases, particularly
in the SMID space, we have seen over-reactions in terms of downwards share
price moves, which presents buying opportunities for bottom-up stock pickers
like us.
Portfolio activity
We have continued to introduce attractive stocks that meet our quality
criteria from a bottom-up perspective and are supported by favourable
structural trends. Considering prevailing market dynamics, we have also added
to our exposure in the health care sector, which we expect to be more
resilient in periods of short-term economic volatility and potential growth
slowdown.
We continue to also like the communication services sector where the outlook
is favourable, hence we have topped up our existing holdings there. We funded
the above moves by taking a bit of money out of the more cyclical sectors such
as real estate and industrials, where we anticipate some near-term challenges.
Some of the stocks added during the year are:
Indian Hotels - one of the largest hospitality companies, which has evolved
from a single brand luxury hotel to a range of brands across the hospitality
ecosystem, catering to different price segments. Besides its strong brands,
the company has a robust pipeline and healthy financials.
Poly Medicure - manufactures and supplies a wide variety of consumable medical
devices. We like the strong management team that is becoming increasingly
investor friendly and has a good record of surpassing its own guidance. The
company has a net cash balance sheet despite investing heavily in doubling its
production capacity over recent years.
Brigade Enterprises - a real estate company headquartered in Bangalore, with
businesses in the residential, office, retail and hospitality segments. It has
a competitive edge over larger players in terms of higher corporate governance
and transparency.
Concord Biotech - active pharmaceutical ingredients ("API") manufacturer
focused on fermentation-based APIs enjoying favourable competition dynamics,
given the specialised expertise required. The company's main driver is the
steady growth of its existing core products, with the potential to enlarge its
API portfolios further.
We continue to seek to secure local regulatory permissions to make unlisted
investments in India.
Outlook
After being one of the fastest-growing major economies in recent years, the
first tinges of doubt are creeping into India's rosy growth picture: the
economy is showing signs of a slowdown, the stock market corrected sharply in
late 2024 and near-term corporate earnings expectations have become more
muted. Multiple factors have contributed to this apparent slow-down, including
weaker-than-expected consumer demand and reduced public spending, as well as
relatively soft government revenue. In our view, this is a temporary cyclical
slowdown and, in part, had been self-inflicted with the government focusing
previously on fiscal consolidation whilst the central bank has tightened
liquidity.
The long-term structural story remains intact, with little change to the key
investment themes. There are also signs emerging of a long overdue recovery in
rural demand, helped by a good monsoon while the upcoming harvest season
should help keep food prices at manageable levels. The consumer-focused FY26
Indian national budget is further expected to help with middle income
consumption demand. There is also emphasis from the government for more public
private partnerships for infrastructure projects while the 'Make In India'
manufacturing focus continues, with more money allocated to production-linked
incentive schemes to encourage multinationals to set up production bases in
the country.
On the external front, India is relatively more insulated from the potential
impact of stiff tariffs compared to other markets given that the US has a
relatively lower trade deficit with the country. The recent meeting between
President Trump and Prime Minister Narendra Modi at the White House
underscored the importance to US interests of the bilateral relationship in
the Indo Pacific region. That said, currency turbulence could pressure the
Indian rupee, but the Reserve Bank of India has ample forex reserves to come
to the rescue.
One significant development, after the period end, was heightened geopolitical
tension between India and Pakistan. Both sides exchanged fire in April 2025
after a militant attack on tourists in India-administered Kashmir. This
escalation repeated a similar outburst in 2019 where the responses were
targeted and measured. Subsequently, the countries agreed to a ceasefire,
which, at the time of writing, continues to hold. This serves as a reminder of
the geopolitical risk that India faces with regards to its neighbours that
cannot be overlooked by investors.
From a stock-picking perspective, we are still finding pockets of good growth
and quality across various sectors and sub-sectors even in this temporary
market downturn. The Company's downside is well-protected given our quality
focus, and our defensive holdings are in a good position in case of
profit-taking, and any correction in their share prices would be, in our view,
a buying opportunity.
James Thom and Rita Tahilramani
abrdn Asia Limited
Investment Manager
24 June 2025
Investment Case Studies
HDFC Bank
A company with a strong competitive moat in the form of its mortgage products,
having figured out how to lend to the middle- to low-income segment with the
right systems and processes.
Mergers can be tricky and especially when the liquidity environment starts
turning against you in the months after. This was what happened to HDFC Bank
after July 2023, when it merged with its former parent company, mortgage
lender HDFC.
The merger made strategic sense: it would boost earnings, book value and
capital. Integration risks seemed minimal because of similar corporate
cultures. It would create a bank that was more than twice as big as the
country's next largest private bank in an industry where scale matters.
As long-term shareholders of both HDFC and HDFC Bank, we supported the merger
and were pleased that the boards and management had taken such a bold step to
boost shareholder value.
Following the merger, however, came a period of operational indigestion as the
management team worked through the myriad issues involved in integrating the
two institutions. The company disappointed the market with recalibrations of
the financial statements and a slowdown in share price growth.
Progress was further hampered by a liquidity deficit in the banking system
that widened at the start of 2024 amid a tightening of monetary policy by the
central bank. This made it harder for the newly formed HDFC Bank to shore up
its funding sources and to ultimately reposition itself for future growth.
Today, HDFC Bank is in a much better place. Deposit growth has picked up and
is now being helped along by an easing of the liquidity situation in India as
monetary policy loosens. This is now positioning the bank to grow once again
and to reap the benefits the merger had promised as India's largest private
bank by assets and among the world's top 20 leading banks by market
capitalisation.
HDFC Bank boasts a strong brand and now has a network with more than 90
million customers, over 9,000 branches, and about 21,000 ATMs across 4,150
cities and towns in India. The bank holds stakes in HDFC Life (50.3% stake),
HDFC Ergo General Insurance (50.3%), and HDFC Asset Management (52.5%), all
market-leading businesses.
Mortgage penetration in India is still only 11% of GDP compared to 52% in the
US. Urbanisation and demographics are driving demand, with over 65% of the
population still under 35 years old, while rising wealth and falling interest
rates are improving affordability.
When it comes to asset quality, the track record of HDFC Bank is solid. As of
March 2025, it had a strong and sticky deposit base and a rock-solid balance
sheet with a capital adequacy ratio of 19% compared against a regulatory
minimum of 12%.
HDFC Bank also leads the market on the sustainability front, where it has
committed to be carbon-neutral by financial year 2032. Its board has also
approved a sustainable finance framework, along with a second party opinion.
All in, after initial merger pains, we regard HDFC Bank as well positioned for
opportunities arising from the structural growth of financial services in
India and remaining a key player in the domestic banking landscape for many
years to come.
Indian Hotels
In the early 1900s, Jamsetji Tata was refused entry to Watson's Hotel, one of
the poshest hotels and an exclusive European-only establishment in Bombay at
the time. This snub led the founder of the Tata group to launch India's first
luxury hotel in 1903, the Taj Mahal Palace, with the aim of rivalling the best
in the world. The Taj was the first hotel in the country to have electricity
and, more than a century on, it has become the crown jewel within Indian
Hotels (IHCL), the hotel arm of the Tata group and the largest hospitality
group across South Asia with a global portfolio of around 360 hotels.
Today, "Taj" is an iconic brand that is recognised across the world and is
part of the reason why we invested in Indian Hotels. We also see the group as
benefiting from emerging structural growth trends in the hospitality sector in
India and across South Asia. As the middle class grows and Indians turn
increasingly affluent, we are seeing consumption preferences change and
aspirations evolve. With this comes the rise of premiumisation, experiential
travel and brand consciousness, all of which plays into Indian Hotels' rich
heritage and strong branding. Indian Hotels is expanding its portfolio to
include more upscale and luxury hotels, which are in high demand.
Travel and tourism are also among the fastest-growing economic sectors in
India. The tourism industry regained its 5% contribution to India's GDP in
FY23, and the World Travel and Tourism Council expects this number to reach
the global average of 10%, as the industry grows 7% annually over the next
decade. This positive outlook is borne out by the latest industry numbers,
which also highlights a demand-supply gap. Occupancy is rising, room rates are
firming and revenue per available room (RevPAR) is also increasing. In
February 2025, hotel room occupancy increased by 2-4% compared to last year.
The average room rates (ARR) went up by 14-16% year-on-year, crossing Rs
10,000 for the first time, while RevPAR also rose by 19-21%.
Crucially, domestic tourism has sustained the sector post-pandemic. Religious
tourism accounts for over 60% of domestic travel in India. This is not lost on
the central government, which is investing to boost spiritual journeys. States
like Uttar Pradesh are developing tourist circuits and Uttarakhand and West
Bengal are enhancing infrastructure for pilgrims. A rebound in foreign tourist
arrivals has also helped, along with India's rising appeal as a MICE
(Meetings, Incentives, Conferences, and Exhibitions) destination. Key cities
like Delhi, Bangalore, Chennai, and Hyderabad are seeing strong demand for
business travel, while leisure destinations like Goa and Rajasthan are also
performing well.
Within this promising landscape, Indian Hotels' management remains optimistic
about both the short-term and medium-term outlook, citing sustained growth in
demand. The group recently reported impressive quarterly results with revenue
growth of 29% year on year and EBITDA growth of 32%. The company plans to add
17,600 keys in the next four to five years, adopting a mainly asset-light
model which will help further boost its already healthy return metrics, while
its digital initiatives and loyalty programmes are also seeing a good uptake.
From our perspective, Indian Hotels serves as a strong proxy for the
under-penetration of the branded hotel segment in India and the broader
infrastructure development and economic growth promise of the entire country.
Indian Hotels has also impressively grown beyond what its founder Jamsetji
Tata once said, "If you cannot make it greater, at least preserve it."
Overview of Strategy
Business Model
The business of the Company is that of an investment company which continues
to qualify as an investment trust for UK capital gains tax purposes. The
Directors do not envisage any change either to this model or to the Company's
activities in the foreseeable future.
Investment Objective
The Company aims to provide shareholders with long term capital appreciation
by investment in companies which are incorporated in India, or which derive
significant revenue or profit from India, with dividend yield from the Company
being of secondary importance.
Investment Policy
The Company invests primarily in Indian equity securities.
Delivering the Investment Policy
Risk Diversification
The investment policy is flexible, enabling it to invest in all types of
securities, including equities, debt and convertible securities in companies
listed on the Indian stock exchanges or which are listed on other
international exchanges, and which derive significant revenue or profit from
India. The Company may, where appropriate, invest in open-ended collective
investment schemes and closed-end funds which invest in India and are listed
on the Indian stock exchanges. The Company is free to invest in any particular
market segment or geographical region of India or in small, mid or large
capitalisation companies. The Company may invest up to 10% of its NAV in
unquoted companies in aggregate, measured at the time of each investment.
The Company's portfolio will typically comprise in the region of 25 to 50
holdings, but with due consideration given to spreading investment risk. No
individual issuer is expected normally to represent a greater weight in the
portfolio than the higher of (i) 10% of the Company's net assets or (ii) the
individual issuer's weight in the MSCI India Index (in sterling terms) plus
2%, both as measured at the time of each investment, although there is a
maximum permitted exposure to a single issuer of 20% of the Company's net
assets at all times.
Gearing
The Company is permitted to borrow up to 25% of its net assets (measured when
new borrowings are incurred). It is intended that this power should be used to
leverage the Company's portfolio in order to enhance returns when and to the
extent that it is considered appropriate to do so. Under normal circumstances,
over the longer term and in tandem with the rising value of the Company's
investments, gearing is expected to improve returns.
The Company's gearing is essentially structural in nature but, in addition,
may be used for specific opportunities or circumstances. The Directors take
care to ensure that borrowing covenants permit flexibility of investment
policy.
Currency, Hedging Policy and Derivatives
The Company's financial statements are maintained in Sterling even though,
because of its investment focus, nearly all of its portfolio investments are
denominated and quoted in the Indian Rupee. Although it is not the Company's
present intention to do so, the Company may, where appropriate and economic to
do so, employ a policy of hedging against fluctuations in the rate of exchange
between Sterling and other currencies in which its investments are
denominated. Cash balances are held in such currency or currencies as the
Manager considers appropriate, although it is expected that this would
primarily be Sterling.
Although the Company does not employ derivatives presently, it may do so, if
appropriate, to enhance portfolio returns (of a capital or income nature) and
for efficient portfolio management, that is, to reduce, transfer or eliminate
risk in its investments, including protection against currency risks, or to
gain exposure to a specific market.
Investment Restrictions
It is the investment policy of the Company to invest no more than 15% of its
gross assets in other listed investment companies (including listed investment
trusts). The Company held no investments in other listed investment companies
during the year ended 31 March 2025.
Benchmark
The Company's Benchmark is the MSCI India Index (Sterling-adjusted). The Board
also considers the Adjusted NAV in relation to the conditional tender offer
announced in March 2022.
Key Performance Indicators
At each Board meeting, the Directors consider a number of performance measures
to assess the Company's success in achieving its objective. The main Key
Performance Indicators ("KPIs") identified by the Board in relation to the
Company, which are considered at each Board meeting, are as follows:
KPI Description
Performance of NAV and share price compared to the Benchmark The Board considers the Company's NAV return, the Adjusted NAV return and
share price return, all relative to the Benchmark, to be the best indicators
of performance over time. The figures for this year and for the past three,
five and ten years are set out above for the NAV return and share price total
return. A graph showing NAV and share price total return performance against
the Benchmark over the past five years is shown in the printed Annual Report.
Discount to NAV The discount at which the Company's share price trades relative to the NAV per
share is monitored by the Board.
Ongoing charges The Board regularly monitors the operating costs of the Company and the
ongoing charges for this year and the previous year are disclosed in Financial
Highlights and Performance above.
Principal Risks and Uncertainties
There are a number of risks which, if realised, could have a material adverse
effect on the Company and its financial position, performance and prospects.
The Board has carried out a robust assessment of these risks, including
emerging risks, which include those that would threaten its business model,
future performance and solvency. The principal risks associated with an
investment in the Company's shares are published monthly in the Company's
factsheet which is available from the Company's website: abrdnnewindia.co.uk.
The principal risks and uncertainties, and emerging risks, faced by the
Company are reviewed annually by the Audit Committee in the form of a detailed
risk matrix and heat map and they are described in the table below, together
with any mitigating actions.
In addition, the Board has identified, as an emerging risk, the general
escalation of geo-political risk globally. This may have implications for
investors in India (see "Single Country Risk"). In addition, the Board
considers the implications for the Company's investment portfolio of a
changing climate to constitute an emerging risk. The Board is also conscious
of the development of Artificial Intelligence ("AI"), which may have a
potentially positive or negative impact at Company, sector and country level.
A further emerging risk during the year was the US administration's policy on
tariffs, where the eventual impact remains unclear due to the continuing
negotiations across many jurisdictions, including India (see "Market Risk").
The Board identifies emerging risks if and when they become material.
During the year, it also become evident across the investment sector as a
whole that, due to the prevailing low level of shareholder voting at general
meetings, an activist investor with a large shareholding could seek to pass
resolutions which may not be in the best interests of shareholders as a whole.
The Company has taken steps to improve shareholder awareness of their ability
to vote.
In all other respects, the Company's principal risks and uncertainties have
not changed materially since the date of the previous Annual Report and are
not expected to change materially for the current financial year.
An explanation of other risks relating to the Company's investment activities,
specifically market price, interest rate, liquidity and credit risk, and a
note of how these risks are managed, is contained in Note 17 to the financial
statements.
Description Mitigating Action
Strategic risk - inappropriate business strategy leads to lack of demand for The Board reviews its strategy and investment mandate annually in the context
the Company's shares, leading to its shares trading at a persistent and of developments in markets and taking account of investor feedback.
anomalous discount to its Net Asset Value
Market risk - falls in the prices of securities issued by Indian companies, The Investment Manager seeks to reduce market risk by investing in a wide
which may be caused by company-specific issues or may be determined by local variety of companies with strong balance sheets and the ability to generate
and international economic, political, social, and financial factors, increased earnings. In addition, investments are made in diversified sectors
including pandemics, natural disasters (arising from climate change or in order to reduce the risk of a single large exposure. The Investment Manager
otherwise) or geo-political conflicts. believes that diversification should be looked at in absolute terms rather
than relative to the Benchmark. The performance of the portfolio relative to
the Benchmark and the underlying stock and sector weightings in the portfolio
against their Benchmark weightings are monitored closely by the Board.
Poor investment performance - poor investment performance leads to loss of The investment performance of the Manager is reviewed at each Board meeting
asset value in comparison to the benchmark and/or the peer group, and, over and compared to the benchmark and the peer group. Exposure to a range of risk
time, can lead to a widening of the discount to NAV at which the Company's factors is also reviewed.
shares trade.
Discount - factors which affect the discount to NAV at which the Ordinary The Board keeps under review the discount and undertakes selective buyback of
shares of the Company trade. These may include the popularity of the shares where to do so would be in the best interests of shareholders, balanced
investment objective of the Company, the popularity of investment trust shares against reducing the overall size of the Company.
in general, the investment performance of the Company, and the ease with which
the Company's Ordinary shares can be traded on the London Stock Exchange.
Single country risk - the Company invests in companies which are incorporated The Company's exposure to India is an integral part of its investment
in, or derive significant revenue or profit from, a single country - India. strategy. Risk can be mitigated, to a degree, by the monitoring of emerging
Investing in a single country, which is also an emerging market, is generally risks, and by appropriate actions in relation to portfolio construction,
a higher risk strategy than investing more widely, or in developed markets. liquidity and gearing.
There is likely to be greater political and regulatory risk, and the standards
of disclosures and corporate governance may be less developed than in The Board is kept informed of political, regulatory and tax issues affecting
developed markets. In addition, there may be specific internal political and the portfolio.
social issues, or wider geo-political issues, including disputes between India
and Pakistan, which could lead to social upheaval, unrest, or conflict. These
events may lead to falls in equity markets, and also adverse foreign currency
movements. The Board monitors the Rupee/Sterling exchange rate and reviews the currency
impacts on both capital and income regularly, although the Company did not
hedge its foreign currency exposure during the year.
Supplier risk - The Company is dependent on the services provided by third The Board reviews the overall performance of the Manager and all other key
parties, and in particular the Manager and Depositary. Failure by third service providers on a regular basis. In particular, the Depositary, BNP
parties to carry out their obligations to the Company, or reputational issues Paribas Trust Corporation UK Limited, presents to the Board at least annually
or inadequate succession arrangements, could disrupt the level of service on the Company's compliance with the Alternative Investment Fund Managers
provided. In particular, the insolvency of the depositary or custodian or Directive ("AIFMD"). The Manager separately monitors the activities of the
sub-custodian, or a shortfall in the assets held by that depositary, custodian depositary and reports to the Board on any exceptions arising.
or sub-custodian arising from fraud, operational errors or settlement
difficulties resulting in a loss of assets owned by the Company. In addition, The Board monitors the cyber-security and business recovery policy of all its
there is a risk of a cyber-attack on the Company's service providers which service providers.
could affect its ability to transact, monitor performance and report to
shareholders. There is also a risk of shareholder data held by the registrar
being compromised.
Financial and regulatory - the financial risks associated with the portfolio The financial risks associated with the Company include market risk, liquidity
could result in losses to the Company. In addition, failure to comply with risk and credit risk, all of which are mitigated by the Manager. Further
relevant regulation (including the Companies Act, the Financial Services and details of the steps taken to mitigate the financial risks associated with the
Markets Act, the Alternative Investment Fund Managers Directive, accounting portfolio are set out in Note 17 to the financial statements.
standards, investment trust regulations and the FCA UK Listing Rules,
Disclosure Guidance and Transparency Rules and Prospectus Rules) may have an The Board is responsible for ensuring the Company's compliance with applicable
adverse impact on the Company. regulations. Monitoring of this compliance, and regular reporting to the Board
thereon, has been delegated to the Manager. The Board receives updates from
the Manager and AIC briefings concerning industry changes.
Any change in the Company's tax status or in taxation legislation either in In particular, the Board receives reports from the Manager covering investment
India or in the UK (including the tax treatment of dividends, capital gains or movements, the level and type of forecast income and expenditure and the
other investment income received by the Company) could affect the value of the amount of proposed dividends with a view to ensuring that the Company
investments held by the Company and the Company's ability to provide returns continues to qualify as an investment trust under Chapter 4 of Part 24 of the
to shareholders or alter the post-tax returns to shareholders. Corporation Tax Act 2010. A breach of these regulations would mean that the
Company is no longer exempt from UK capital gains tax on profits realised from
the sale of its investments.
In particular, the calculation of Indian capital gains tax which may be due The Indian capital gains tax provision is calculated by an independent third
can be complex and is dependent on the interpretation of the legislation, party and reviewed at least half-yearly by the Audit Committee.
which may result in an under- or over-provision being made.
Gearing - while the use of gearing should enhance the total return on the The Board is responsible for determining the gearing strategy for the Company,
Ordinary shares where the return on the Company's underlying assets is rising with day-to-day gearing decisions being made by the Investment Manager.
and exceeds the cost of borrowing, it will have the opposite effect where the Borrowings are short term in nature and particular care is taken to ensure
underlying return is less than the cost of borrowing, further reducing the that any bank covenants permit maximum flexibility of investment policy. The
total return on the Ordinary shares. A significant fall in the value of the Board has agreed certain gearing restrictions with the Manager and reviews
Company's investment portfolio could result in a breach of bank covenants and compliance with these guidelines at each Board meeting.
trigger demands for early repayment.
Loan agreements are entered into following review by the Company's lawyers.
Unlisted securities - the Company may invest in unlisted securities, which may At 31 March 2025, there were no unlisted investments in the portfolio. The
not be readily realisable, and may be more difficult to value in the absence Manager is currently seeking the necessary regulatory permissions to make
of a quoted price. There may be less available information and less regulation unlisted investments in India. Once obtained, the Manager will conduct
in respect of disclosures and corporate governance. appropriate due diligence in respect of any unlisted investments. Valuation
will be assessed by an independent third party and reviewed at least
half-yearly by the Audit Committee.
Promoting the Company
The Board recognises the importance of updating existing investors as well as
promoting the Company to prospective investors, with the aim of improving
liquidity in the Company's shares and reducing the discount at which they
trade, thereby enhancing value. Communicating the long-term attractions of the
Company is key.
The Board seeks to achieve this through subscription to, and participation in,
the promotional programme run by Aberdeen on behalf of the range investment
companies under its management.
The Company's financial contribution to the programme is matched by Aberdeen,
whose promotional activities team reports quarterly to the Board giving
analysis of the promotional activities as well as updates on the shareholder
register and any changes in the composition of that register. The Company
further supports the Manager's investor relations programme which involves
regional roadshows as well as promotional and public relations campaigns.
Board Diversity and Succession
The Board recognises the importance of having a range of skilled, experienced
individuals with the right knowledge represented on the Board in order to
allow the Board to fulfil its obligations. The Board also recognises the
benefits, and is committed to, the principle of diversity in its recruitment
of new Board members. The Board will continue to ensure that all appointments
are made on the basis of merit against the specification prepared for each
appointment and will search widely when recruiting any new Director with a
view to maximising diversity. Consequently, the Company does not consider it
appropriate to set specific diversity targets. At 31 March 2025, there were
three male Directors and two female Directors on the Board.
The Board has agreed a policy whereby no Director, including the Chairman,
shall serve for longer than the ninth AGM after the date of their initial date
of appointment as a Director unless in relation to
exceptional circumstances.
Environmental, Social and Human Rights Issues
The Company has no employees as it is managed by abrdn Fund Managers Limited
and there are therefore no disclosures to be made in respect of employees. The
Manager's responsible investment policy is outlined in the printed Annual
Report.
Due to the nature of the Company's business, being a company that does not
offer goods and services to customers, the Board considers that it is not
within the scope of the Modern Slavery Act 2015 because it has no turnover.
The Company is therefore not required to make a slavery and human trafficking
statement.
Notwithstanding this, the Board considers the Company's supply chains, dealing
predominantly with professional advisers and service providers in the
financial services industry, to be low risk in relation to this matter.
Global Greenhouse Gas Emissions and Streamlined Energy and Carbon Reporting
("SECR")
All of the Company's activities are outsourced to third parties. The Company
therefore has no greenhouse gas emissions to report from the operations of its
business, nor does it have responsibility for any other emissions producing
sources under the Companies Act 2006 (Strategic Report and Directors' Reports)
Regulations 2013. For the same reason as set out above, the Company considers
itself to be a low energy user under the SECR regulations and therefore is not
required to disclose energy and carbon information.
Task Force for Climate-related Financial Disclosures ("TCFD")
Under UKLR 11.4.22R, the Company, as a closed ended investment company, is
exempt from complying with the Task Force on Climate-related Financial
Disclosures ("TCFD").
Whilst TCFD is currently not applicable to the Company, the Manager has
produced a product level report (the "Carbon Report") for the Company in
accordance with the FCA's rules and guidance regarding the disclosure of
climate-related financial information consistent with TCFD requirements. These
disclosures are intended to help meet the information needs of market
participants, including institutional clients and consumers of financial
products in relation to the climate-related impact and risks of the Manager's
TCFD in-scope business. The Carbon Report, for the year ended 31 December
2024, is available in 'Key documents' on the Company's website.
Viability Statement
The Company does not have a fixed period strategic plan, but the Board
formally considers risks and strategy on at least an annual basis. The Board
regards the Company, with no fixed life, as a long-term investment vehicle,
but for the purposes of this viability statement has decided that a period of
five years is an appropriate period over which to report. The Board considers
that a five year period reflects the expected time horizon for an investment
in the shares of the Company and also represents a balance between the Board's
confidence in the long-term viability of the Company and the inherent
uncertainties of looking out further than five years.
Taking into account the Company's current position and the potential impact of
its principal risks and uncertainties, the Directors have a reasonable
expectation that the Company will be able to continue in operation and meet
its liabilities as they fall due for a period of five years from the date of
this Report.
In forming this expectation, the Directors looked to the following:
- the Company's assets consist, substantially, of a portfolio of
readily realisable quoted securities, where the Directors monitor the
liquidity of each holding as well as reviewing the outcome of testing
undertaken by the Manager in which the portfolio is subject to adverse
historic market scenarios;
- the principal risks and uncertainties detailed and the steps
taken to mitigate these. The Directors consider the most significant risks,
for assessing the longer term viability of the Company, are any period of
extended poor performance, the level of the discount and the geopolitical
risks inherent in investing in a single emerging market country;
- the implications of the conditional performance related tender,
based on the Company's Adjusted NAV performance relative to the benchmark for
the five years ended 31 March 2027, noting that the performance in the three
years to 31 March 2025 was ahead of the benchmark.
- a significant proportion of the expenses are proportional to the
Company's NAV or market capitalisation and will reduce if these fall;
- the Directors regularly review the Company's level of gearing,
including financial modelling undertaken by the Manager to establish what
level of reduction in the Company's NAV would require to occur in order to
cause a breach in the covenants attached to the Company's £30m bank loan
facility;
- the Company's third-party suppliers continuing to deliver
services to the Company in accordance with the underlying agreements and not
experiencing significant operational difficulties in respect of the services
provided to the Company, although, if required, alternative suppliers could be
engaged to provide these services at limited notice; and
- in advance of expiry in June 2028 of the Company's three-year
£30m loan with BNP Paribas London Branch, the Company will enter into
negotiations with its bankers. If acceptable terms are available from the
existing bankers, or any alternative, the Company would expect to continue to
access borrowings. However, should these terms not be forthcoming, any
outstanding borrowing would be repaid through the proceeds of equity sales.
Duration
The Company does not have a fixed life but, further to a change in the
Articles of Association approved by shareholders at the AGM on 28 September
2022, an ordinary resolution to continue the Company is put to shareholders
every five years, which will next occur at the AGM in 2027.
Future Developments
The Board expects the Company to continue to pursue its investment objective
and accepts that this may involve divergence from the Benchmark. The companies
which make up the investment portfolio are considered by the Investment
Manager to demonstrate resilience and to offer opportunities for investors to
benefit from the development of the broader Indian economy. Further
information on the outlook and future developments of the Company may be found
in the Chairman's Statement and in the Investment Manager's Report.
Michael Hughes
Chairman
24 June 2025
Promoting the Success of the Company
The Purpose of the Company and Role of the Board
The Board is required to report on how it has discharged its duties and
responsibilities under section 172 of the Companies Act 2006. Under this
legislation, the Directors have a duty to promote the success of the Company
for the benefit of its members as a whole, taking into account the likely
long-term consequences of decisions, the need to foster relationships with the
Company's stakeholders and the impact of the Company's operations on
the environment.
The purpose of the Company is to act as a vehicle to provide, over time,
attractive financial returns to its shareholders. Investment trusts, such as
the Company, are long-term investment vehicles and are typically externally
managed, have no employees, and are overseen by an independent non-executive
board of directors.
During the year, the Board comprised between four and five independent
non-executive Directors with a broad range of skills and experience across all
major functions that affect the Company. The Board retains responsibility for
taking all decisions relating to the Company's investment objective and
policy, gearing, corporate governance and strategy, and for monitoring the
performance of the Company's service providers.
The Board's philosophy is that the Company should operate in a transparent
culture where all parties are provided with respect as well as the opportunity
to offer practical challenge and participate in positive debate which is
focused on the aim of achieving the expectations of shareholders and other
stakeholders alike. The Board expects the Manager to act as a responsible
steward of the Company's investments. Further information on the Manager's
responsible investment policy may be found at:
https://www.aberdeenplc.com/en-gb/corporate-sustainability
How the Board Engages with Stakeholders
The Company's main stakeholders are its Shareholders, the Manager, Investee
Companies, Service Providers, Debt Providers and the Environment and
Community. The Board considers its stakeholders at Board meetings and receives
feedback on the Manager's interactions with them.
Stakeholder How the Board Engages
Shareholders The Company's shareholders are key stakeholders and the Board places great
importance on communication with them. The Board welcomes all shareholders'
views and aims to act fairly between all shareholders. The Chairman, Manager
and Company's broker regularly meet with current and prospective shareholders
to discuss performance and shareholder feedback is discussed by the Directors
at Board meetings. In addition, the Chairman meets with major shareholders in
the absence of representatives of the Manager, as necessary.
Regular updates are provided to shareholders through the Annual Report, Half
Yearly Report, Manager's monthly factsheets, Company announcements, including
daily net asset value announcements, and the Company's website. In normal
years, the Company's Annual General Meeting provides a forum, both formal and
informal, for shareholders to meet and discuss issues with the Directors and
Manager.
Manager The Investment Manager's Report details the key investment decisions taken
during the year. The Investment Manager has continued to manage the Company's
assets in accordance with the mandate provided by shareholders, with the
oversight of the Board.
The Board regularly reviews the Company's performance against its investment
objective and the Board undertakes an annual strategy review to ensure that
the Company is positioned well for the future delivery of its objective for
its stakeholders. The Board receives presentations from the Investment Manager
at every Board meeting to help it to exercise effective oversight of the
Investment Manager and the Company's strategy. The Board, through the
Management Engagement Committee, formally reviews the performance of the
Manager at least annually.
Investee Companies Responsibility for actively monitoring the activities of portfolio companies
has been delegated by the Board to the Manager which has sub-delegated that
authority to the Investment Manager.
The Board has also given discretionary powers to the Investment Manager to
exercise voting rights on resolutions proposed by the investee companies
within the Company's portfolio. The Investment Manager reports to the Board on
a quarterly basis on stewardship (including voting) issues.
Through engagement and exercising voting rights, the Investment Manager
actively works with portfolio companies to improve corporate standards,
transparency and accountability, and report thereon to the Board.
Service Providers The Board seeks to maintain constructive relationships with the Company's
suppliers either directly or through the Manager with regular communications
and meetings.
The Audit Committee conducts an annual review of the performance, terms and
conditions of the Company's key service providers to ensure they are
performing in line with Board expectations and providing value for money.
Debt Providers On behalf of the Board, the Manager maintains a constructive working
relationship with the Company's lenders, ensuring compliance with the relevant
loan covenants and arranging for regular updates for lenders on the Company's
business activities, where requested.
Environment and Community The Board and Manager are committed to investing in a responsible manner and
the Investment Manager integrates sustainable considerations into its research
and analysis as part of the investment decision-making process.
Specific Examples of Stakeholder Consideration During the Year
While the importance of giving due consideration to the Company's stakeholders
is not new, and is considered as part of every Board decision, the Directors
were particularly mindful of stakeholder considerations during the following
decisions undertaken during the year ended 31 March 2025.
Reduction in management fee
With effect from 1 April 2025, under the management agreement ("MA"), annual
investment management fees are calculated at 0.8% in respect of the first
£300 million of the Company's market capitalisation and at 0.6% in respect of
the Company's market capitalisation in excess of £300 million. Previously,
fees were higher due to their calculation on the basis of net assets.
Share buybacks
During the year the Company bought back 4.3 million shares (2024: 3.7
million), providing a small accretion to the NAV per share and a degree of
liquidity to the market. The Board is pleased to note that the discount
reduced from 20.4% to 15.0% over the year as a result of both improved
investment performance and the higher level of buy-backs compared to the
previous year. By 19 June 2025, the discount had narrowed further to 8.4%.
Online shareholder presentation
The Company held an online shareholder presentation on 12 September 2024 to
encourage and promote interaction and engagement with the Company's
shareholders. During the presentation, shareholders received updates from the
Chairman and Investment Manager and were then able to participate in an
interactive question and answer session.
As explained in the Chairman's Statement, the Board is holding an Online
Shareholder Presentation at 11.00am on 16 September 2025. The event is being
held ahead of the AGM in order to allow shareholders to submit their proxy
votes at least two business days prior to the AGM after receiving an update on
portfolio performance and the outlook for Indian equities.
Performance
Ten Year Financial Record
Year to 31 March 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Total income (£'000) 374 3,104 3,318 3,602 5,185 4,517 5,059 6,123 4,903 4,808
Per share (p)
Net revenue (loss)/return (1.06) (0.28) (0.71) (0.35) 2.08 0.19 (0.28) (0.59) (3.77) (4.24)
Dividends(A) N/A N/A N/A N/A 1.00 N/A N/A N/A N/A N/A
Total (loss)/return (23.42) 125.81 2.12 41.90 (120.34) 216.25 69.64 (60.00) 168.85 62.69
Net asset value per share (p)
Basic 362.07 487.88 490.00 531.90 411.41 627.05 697.30 641.32 819.56 889.34
Shareholders' funds (£'000) 213,874 288,190 289,444 314,196 241,583 366,106 403,995 357,919 427,054 425,599
(A) 2020 dividend represents 0.22p per share paid from revenue reserves and
0.78p per share paid from capital reserves.
Top Ten Investments
As at 31 March 2025
9.5% HDFC Bank 9.5% ICICI Bank
HDFC Bank is India's leading private sector bank that now has a complete suite ICICI Bank has been delivering superior growth and returns improvement without
of retail banking products after the merger with HDFC, India's leading compromising on asset quality. It has leveraged on its scale as well as retail
provider of mortgage finance. The bank has solid underwriting standards and a and digital franchise to grow in mortgages and also growing off a low base in
progressive digital stance, further strengthening its competitive edge. business banking and SMEs.
6.4% Bharti Airtel 5.9% Tata Consultancy Services
Bharti Airtel remains the leading telecom service provider with a pan-India A top-class Indian IT services provider with the most consistent execution and
reach and sophisticated customer base with higher average mobile spending. lowest attrition rates. It is a long-term compounder with a decent outlook for
revenue growth and order wins over the medium term.
4.6% Infosys 4.4% Power Grid Corporation of India
One of India's best software developers, it continues to impress with its Power Grid Corporation of India forms the backbone of India's electricity
strong management, solid balance sheet and sustainable business model. infrastructure. It is poised to play a key role in the growth of renewable
energy delivery to the grid over the next few decades as the government plans
ambitious renewable targets for the electricity sector.
4.3% Aegis Logistics 3.2% Mahindra & Mahindra
A strong and conservative player in India's gas and liquids logistics sector, With two main operating divisions, autos and farm equipment, Mahindra &
Aegis Logistics has capacity to expand. In addition, the government's push for Mahindra is expected to enjoy the benefits of a strong SUV model cycle, new
the adoption of cleaner energy has boosted its liquefied natural gas business. line-up of electric vehicles and capital allocation improvement from the group
level.
3.2% SBI Life Insurance 3.1% J.B. Chemicals & Pharmaceuticals
Among the leading domestic life insurers, SBI Life's competitive edge comes One of the top pharmaceutical companies in India by sales, with a strong
from a wide reach of SBI branches, highly productive agents, a low cost ratio business manufacturing for other companies. The company has an attractive
and a reputable brand. financial profile, an experienced and capable management team, and is pursuing
multiple growth opportunities on which it is executing well.
Portfolio
As at 31 March 2025
Valuation Total assets(AB)
2025 2025
Company Industry £'000 %
HDFC Bank Financials 42,257 9.5
ICICI Bank Financials 42,222 9.5
Bharti Airtel Communication Services 28,342 6.4
Tata Consultancy Services Information Technology 26,402 5.9
Infosys Information Technology 20,266 4.6
Power Grid Corporation of India Utilities 19,413 4.4
Aegis Logistics Energy 19,313 4.3
Mahindra & Mahindra Consumer Discretionary 14,384 3.2
SBI Life Insurance Financials 14,255 3.2
J.B. Chemicals & Pharmaceuticals Health Care 13,982 3.1
Ten largest investments 240,836 54.1
Indian Hotels Consumer Discretionary 13,554 3.0
Vijaya Diagnostic Centre Health Care 13,491 3.0
Ultra Tech Cement Materials 10,843 2.4
Godrej Properties Real Estate 10,802 2.4
KFIN Technologies Financials 10,146 2.3
Hindustan Unilever Consumer Staples 10,033 2.3
Phoenix Mills Real Estate 9,657 2.2
Hindalco Industries Materials 9,590 2.2
Info Edge Communication Services 9,468 2.1
Global Health India Health Care 8,971 2.0
Top twenty investments 347,391 78.0
Siemens Industrials 8,407 1.9
Havells India Industrials 8,394 1.9
Pidilite Industries Materials 7,993 1.8
Cholamandalam Investment and Finance Financials 7,752 1.7
UNO Minda Consumer Discretionary 6,639 1.5
KEI Industries Industrials 6,560 1.5
Coforge Information Technology 6,322 1.4
Axis Bank Financials 6,265 1.4
Bharti Hexacom Communication Services 6,165 1.4
Titan Consumer Discretionary 6,121 1.4
Top thirty investments 418,009 93.9
Tata Consumer Products Consumer Staples 5,559 1.2
ABB India Industrials 4,825 1.1
Poly Medicure Health Care 4,552 1.0
PB Fintech Financials 4,494 1.0
Aptus Value Housing Finance Financials 3,908 0.9
Brigade Enterprises Real Estate 3,807 0.9
Concord Biotech Health Care 3,804 0.9
Coromandel International Materials 3,586 0.8
Syngene International Health Care 3,426 0.8
APAR Industries Industrials 3,145 0.7
Top forty investments 459,115 103.2
Supreme Industries Materials 3,143 0.7
Bajaj Auto Consumer Discretionary 1,843 0.4
Total investments 464,101 104.3
Net liabilities (before deducting prior charges)(A) (19,014) (4.3)
Total assets(AB) 445,087 100.0
(A) Excluding loan balances.
(B) Including net liabilities and deferred tax liability on Indian capital
gains.
Unless otherwise stated, investments are in common stock.
Sector Analysis
Sector Breakdown Percentage
As at 31 March 2025
Financials 28.3
Information Technology 11.4
Health Care 10.4
Communication Services 9.5
Consumer Discretionary 9.2
Real Estate 7.6
Industrials 6.7
Real Estate 5.2
Utilities 4.2
Energy 4.2
Consumer Staples 3.3
100.0
Directors' Report
The Directors present their Report and the audited Financial Statements of the
Company for the year ended 31 March 2025, taking account of any events between
the year end and the date of approval of this Report.
Results
The Company's results, including its performance for the year against its Key
Performance Indicators ("KPIs"), may be found above.
Investment Trust Status and ISA Compliance
The Company is registered as a public limited company in England & Wales
under registration number 02902424 and has been accepted by HM Revenue &
Customs as an investment trust for accounting periods beginning on or after 1
April 2012, subject to the Company continuing to meet the eligibility
conditions of s1158 of the Corporation Tax Act 2010 (as amended) and S.I.
2011/2099. In the opinion of the Directors, the Company's affairs have been
conducted in a manner to satisfy these conditions to enable it to continue to
qualify as an investment trust for the year ended 31 March 2025. The Company
intends to manage its affairs so that its shares will be qualifying
investments for the stocks and shares component of an Individual Savings
Account ("ISA").
Capital Structure
During the year ended 31 March 2025 the Company bought back into treasury
4,252,117 (2024 - 3,702,011) Ordinary shares. This was equivalent to 8.2% of
the Company's issued share capital (excluding treasury shares) at 1 April 2024
(2023 - 6.6%). As at 31 March 2025, the Company's issued share capital
consisted of 47,855,793 Ordinary shares (2024 - 52,107,910 Ordinary shares)
with voting rights, each share holding one voting right in the event of a
poll, and an additional 11,214,347 (2024 - 6,962,230) Ordinary shares in
treasury, with no voting rights or entitlement to receive dividends. Between 1
April 2025 and 19 June 2025, an additional 1,419,000 Ordinary shares were
bought back resulting in the Company's issued share capital consisting of
46,436,793 Ordinary shares and an additional 12,633,347 shares in treasury.
Ordinary shareholders are entitled to vote on all resolutions which are
proposed at general meetings of the Company. The Ordinary shares carry a right
to receive dividends. On a winding up, after meeting the liabilities of the
Company, the surplus assets will be paid to Ordinary shareholders in
proportion to their shareholdings. There are no restrictions on the transfer
of Ordinary shares in the Company other than certain restrictions which may
from time to time be imposed by law and regulation.
Manager and Company Secretaries
The Company has appointed the Manager as its alternative investment fund
manager, to provide investment management, risk management, promotional
activities and administration and company secretarial services to the Company.
The Company's portfolio is managed by the Investment Manager by way of a group
delegation agreement in place between the Manager and Investment Manager. In
addition, the Manager has sub-delegated administrative and secretarial
services to abrdn Holdings Limited and promotional activities to abrdn
Investments Limited.
With effect from 1 April 2025, under the management agreement ("MA"), annual
investment management fees are calculated at 0.8% in respect of the first
£300 million of the Company's market capitalisation and at 0.6% in respect of
the Company's market capitalisation in excess of £300 million. The Company
will also pay an annual secretarial and fund administration fee of £45,000,
plus applicable VAT, which will increase each year in line with inflation.
Until 31 March 2025, annual investment management fees were calculated on the
same rates as above, but as a proportion of the Company's net assets.
There is a rebate for any fees received in respect of any investments by the
Company in investment vehicles managed by Aberdeen. The MA is terminable by
either party on not less than six months' notice. In the event of termination
on less than the agreed notice period, compensation is payable to the Manager
in lieu of the unexpired notice period.
The fees, and other expenses, payable to the Manager during the year ended 31
March 2025 are disclosed in Notes 4 and 5 to the Financial Statements. The
investment management fees are chargeable 100% to revenue.
Corporate Governance
The Company is committed to high standards of corporate governance and its
Statement of Corporate Governance is set out in the section below.
Directors
At 31 March 2025, the Board consisted of a non-executive Chairman and four
non-executive Directors, all of whom served throughout the year with the
exception of Irina Miklavchich who was appointed a Director on 20 November
2024.
The Senior Independent Director was David Simpson, the Chairman of the Audit
Committee was Andrew Robson and the Chairman of the Management Engagement
Committee was Rebecca Donaldson.
Board Diversity
The Board recognises the importance of having a range of skilled, experienced
individuals with the right knowledge represented on the Board in order to
allow it to fulfil its obligations. The Board also recognises the benefits and
is supportive of the principle of diversity in its recruitment of new Board
members. The Board will not display any bias for age, gender, race, sexual
orientation, religion, ethnic or national origins, socio-economic background
or disability in considering the appointment of its Directors.
The Board will continue to ensure that all appointments are made on the basis
of merit against the specification prepared for each appointment. In doing so,
the Board will take account of the three targets set out in the FCA's UK
Listing Rules, which are set out in the tables below.
The Board has resolved that the Company's year end date is the most
appropriate date for disclosure purposes. The following information has been
provided by each Director through the completion of questionnaires. There have
been no changes since the year end as at the date of approval of this Report.
Table for reporting on sex as at 31 March 2025
Number of Board members Percentage of the Board Number of senior positions on the Board Number in executive management Percentage of executive management
(CEO, CFO, Chair and SID
Men 3 60% 2
(note 3) n/a n/a
(note 3) (note 3)
Women 2 40% (note 1) -
Not specified/prefer not to say - - -
Table for reporting on ethnic background as at 31 March 2025
Number of Board members Percentage of the Board Number of senior positions on the Board Number in executive management Percentage of executive management
(CEO, CFO, Chair and SID
White British or other White 5 100% 100%
(including minority-white groups)
(note 3) n/a n/a
(note 3) (note 3)
Minority ethnic - 0% (note 2)
Not specified/prefer not to say - 0% -
1. Meets the target that at least 40% of Directors are
women as set out in FCA UKLR 6.6.6R (9)(a)(i)
2. Does not meet the target that at least one Director
is from a minority ethnic background as set out in FCA UKLR 6,6.6R (9)(a)(iii)
3. The Company is externally managed and does not
employ any executive staff, specifically it has neither a CEO nor CFO. The
Board adopts the view that the roles of Chairman of the Board, Senior
Independent Director and Chairman of each of the Board Committees are senior
board positions for these purposes. Rebecca Donaldson chairs the Management
Engagement Committee and therefore the Board considers that, accordingly, the
Company effectively meets the target that at least one of the senior board
positions is held by a woman.
The Board considers that five Directors is appropriate for an investment
trust, and retirement of each Director at the AGM following the ninth
anniversary of their appointment, unless in relation to exceptional
circumstances, to be an appropriate tenure for Board members.
While the targets for diversity are inevitably more challenging to achieve for
a smaller board with infrequent appointment opportunities, the Board is fully
supportive of the principles behind the targets and these will be carefully
considered in all future appointments. The biographical details of the
Directors are included on the Company's website and the most recent Board
appointment was in November 2024.
Chairman and Senior Independent Director
The Chairman is responsible for providing effective leadership to the Board,
by setting the tone of the Company, demonstrating objective judgement and
promoting a culture of openness and debate. The Chairman facilitates the
effective contribution and encourages active engagement by each Director. In
conjunction with the Company Secretary, the Chairman ensures that Directors
receive accurate, timely and clear information to assist them with effective
decision-making. The Chairman acts upon the results of the Board evaluation
process by recognising strengths and addressing any weaknesses and also
ensures that the Board engages with major shareholders and that all Directors
understand shareholder views.
The Senior Independent Director acts as a sounding board for the Chairman and
acts as an intermediary for other directors, when necessary. Working closely
with the Nomination Committee, the Senior Independent Director takes
responsibility for an orderly succession process for the Chairman and leads
the annual appraisal of the Chairman's performance. The Senior Independent
Director is also available to shareholders to discuss any concerns they may
have.
Directors' Insurances and Indemnities
The Company maintains insurance in respect of Directors' and Officers'
liabilities in relation to their acts on behalf of the Company. Furthermore,
each Director of the Company is entitled to be indemnified out of the assets
of the Company to the extent permitted by law against all costs, charges,
losses, expenses and liabilities incurred by them in the actual or purported
execution and/or discharge of their duties and/or the exercise or purported
exercise of their powers and/or otherwise in relation to or in connection with
their duties, powers or office. These rights are included in the Articles of
Association of the Company and the Company has granted deeds of indemnities to
each Director on this basis.
Management of Conflicts of Interest and Anti-Bribery Policy
The Board has a procedure in place to deal with a situation where a Director
has a conflict of interest. As part of this process, the Directors prepare a
list of other positions held and all other conflict situations that may need
to be authorised either in relation to the Director concerned or his/her
connected persons. The Board considers each Director's situation and decides
whether to approve any conflict, taking into consideration what is in the best
interests of the Company and whether the Director's ability to act in
accordance with his/her wider duties is affected. Each Director is required to
notify the Company Secretaries of any potential, or actual, conflict
situations which will need authorising by the Board. Authorisations given by
the Board are reviewed at each Board meeting.
No Director has a service contract with the Company although Directors are
issued with letters of appointment upon taking up office. Other than the deeds
of indemnity referred to above, there were no contracts with the Company
during, or at the end of the year, in which any Director was interested.
The Board takes a zero-tolerance approach to bribery and has adopted
appropriate procedures designed to prevent bribery. The Manager also takes a
zero-tolerance approach and has its own detailed policy and procedures in
place to prevent bribery and corruption.
In relation to the corporate offence of failing to prevent tax evasion, it is
the Company's policy to conduct all business in an honest and ethical manner.
The Company takes a zero-tolerance approach to facilitation of tax evasion
whether under UK law or under the law of any foreign country and is committed
to acting professionally, fairly and with integrity in all its business
dealings and relationships.
Board Committees
The Directors have appointed a number of Committees as set out below. Copies
of each Committee's terms of reference, which define its responsibilities and
duties, are available on the Company's website or from the Company
Secretaries, on request.
Audit Committee
The Audit Committee's Report may be found below.
Management Engagement Committee
The Board has established a Management Engagement Committee comprising all of
the Directors, which was chaired throughout the year by Rebecca Donaldson.
The Committee is responsible for reviewing matters concerning the management
agreement which exists between the Company and the Manager together with the
promotional activities programme operated by the Manager to which the Company
contributes. The terms and conditions of the Manager's appointment, including
an evaluation of performance and fees, are reviewed annually and were last
considered at the meeting of the Committee in November 2024.
In monitoring the performance of the Manager, the Committee considers the
investment approach and investment record of the Manager over shorter and
longer-term periods, taking into account the Company's performance against the
Benchmark and peer group funds. The Committee also reviews the management
processes, risk control mechanisms and promotional activities of the Manager.
The Committee considers the continuing appointment of the Manager, on the
terms agreed, to be in the interests of the shareholders because it believes
that the Manager has the investment management, promotional and associated
secretarial and administrative skills required for the effective and
successful operation of the Company.
Nomination Committee
The Board has established a Nomination Committee, comprising all of the
Directors, which was chaired by Michael Hughes during the year. The Committee
is responsible for undertaking an annual evaluation of the Board as well as
longer term succession planning and, when appropriate, oversight of
appointments to the Board
In May 2025, the Board facilitated a self-assessment evaluation, the outcome
of which was discussed by the Chairman with the other Directors. David
Simpson, as the Senior Independent Director, provided feedback to the Chairman
regarding his evaluation by the other Directors.
In relation to the appointment of Irina Miklavchich as a Director, the Company
engaged Tyzack Partners, an independent search agency with no other connection
to the Company.
The names, biographies and contribution of each of the Directors, available on
the Company's website, indicate their range of experience as well as length of
service. Each Director has the requisite high level and range of business and
financial experience which enables the Board to provide clear and effective
leadership and proper stewardship of the Company.
Irina Miklavchich, being eligible, retires and offers herself for election as
a Director of the Company. Michael Hughes, Rebecca Donaldson, David Simpson
and Andrew Robson, each being eligible, retire and offer themselves for
individual re-election as Directors of the Company.
The Board as a whole, with the relevant Director abstaining, believes that
each Director remains independent of the Manager and free of any relationship
which could materially interfere with the exercise of his or her independent
judgement on issues of strategy, performance, resources and standards of
conduct and confirms that, following formal performance evaluations, the
individuals' performance continues to be effective and demonstrates commitment
to the role.
The Directors attended scheduled Board and Committee meetings during the year
ended 31 March 2025 as follows (with their eligibility to attend the relevant
meeting in brackets):
Director Board and Committee Meetings Audit Committee Meetings Management Engagement Committee Meetings Nomination
Committee Meetings
Michael Hughes 8 (8) 3 (3) 1 (1) 2 (2)
David Simpson 8 (8) 3 (3) 1 (1) 2 (2)
Andrew Robson 8 (8) 3 (3) 1 (1) 2 (2)
Rebecca Donaldson 8 (8) 3 (3) 1 (1) 2 (2)
Irina Miklavchich (A) 5 (5) 2 (2) 1 (1) 2 (2)
(A) Appointed as a Director on 20 November 2024
The Board has adopted a policy that all Directors, including the Chairman,
shall not serve beyond the ninth AGM after their initial appointment as a
Director of the Company, unless in relation to exceptional circumstances.
The ninth anniversary of Michael Hughes' appointment as a Director is 7
September 2025. The other Directors have determined that it is in the best
interests of shareholders that Michael Hughes continue as Chairman until 31
March 2026 in order to coincide with the appointment of David Simpson as
Chairman following his retirement as a director of Ecofin Global Utilities and
Infrastructure Trust plc in March 2026. Led by Andrew Robson, in the absence
of Michael Hughes as retiring Chairman and David Simpson as prospective
Chairman, the other Directors considered David Simpson's present capacity,
expected future capacity, contribution to the Board and independence (as
assessed under the AIC Code on Corporate Governance) and approved his
appointment as Chairman of the Board with effect from 1 April 2026.
Accordingly, the Board is recommending, at the next AGM, the election of Irina
Miklavchich as a Director and the individual re-elections of Michael Hughes,
Rebecca Donaldson, David Simpson and Andrew Robson as Directors.
As the Company has no employees and the Board is comprised wholly of
non-executive directors and, given the size and nature of the Company, the
Board has not established a separate remuneration committee and Directors'
fees are determined by the Nomination Committee.
Accountability and Audit
The responsibilities of the Directors and the Auditor, in connection with the
financial statements, appear in the section below and in the Auditor's report.
The Directors who held office at the date of approval of this Directors'
Report confirm that, so far as they are each aware, there is no relevant audit
information of which the Company's Auditor is unaware, and each Director has
taken all the steps that he or she could reasonably be expected to have taken
as a Director in order to make himself or herself aware of any relevant audit
information and to establish that the Company's Auditor is aware of that
information. Additionally, there have been no important events since the year
end which warrant disclosure.
The Directors review, as applicable, the level of non-audit services provided
by the Auditor, together with the Auditor's procedures in connection with the
provision of such services. No non-audit services were provided by the auditor
during the year or to the date of this Report. The Directors remain satisfied
that the Auditor is objective and independent.
Going Concern
In accordance with the Financial Reporting Council's guidance on Going Concern
and Liquidity Risk, the Directors have reviewed the Company's ability to
continue as a going concern. The Company's assets consist substantially of a
portfolio of quoted securities which in most circumstances are realisable
within a short timescale. The Directors are mindful of the principal risks and
uncertainties disclosed and the financial risks in Note 17 to the financial
statements and have reviewed income forecasts detailing revenue and expenses
for at least 12 months from the date of this Report. Accordingly, the
Directors believe that, the Company has adequate financial resources to
continue in operational existence for the foreseeable future and for at least
12 months from the date of this Report.
In August 2022, the Company entered into a three-year, £30 million revolving
credit facility with Royal Bank of Scotland International Limited (London
Branch) (the "RBSI Facility"), part of NatWest Group plc, of which £19.5
million was drawn down at 31 March 2025 (2024 - £26.0 million). In advance of
the expiry of the RBSI Facility in August 2025, the Company commenced
negotiations to refinance the borrowings which resulted in the approval by the
Board, on 19 June 2025, of the Company entering into a three-year, £30
million revolving credit facility with BNP Paribas London Branch.
The Board has set limits for borrowing and regularly reviews the level of any
gearing and compliance with banking covenants.
The results of stress testing prepared by the Manager, which models a sharp
decline in market levels and income, demonstrated that the Company had the
ability to raise sufficient funds so as to both pay expenses and remain within
its debt covenants, and to continue to meet its liabilities as they fall due
for at least 12 months from the date of this Report.
Responsible Investment
The Board is aware of its duty to act in the interests of the Company. The
Board acknowledges that there are risks associated with investment in
companies which fail to conduct business in a socially responsible manner.
Responsibility for actively monitoring the sustainability investing activities
of portfolio companies has been delegated by the Board to the Manager which
has sub-delegated that authority to the Investment Manager. Further
information may be found at:
https://www.aberdeenplc.com/en-gb/corporate-sustainability
Substantial Interests
The Company had been notified of the following share interests above 3% in the
Company as at 31 March 2025:
Shareholder Number of shares held % held
City of London Investment Management 7,544,312 15.8
Lazard Asset Management 6,547,915 13.7
Clients of Interactive Investor (execution only) 5,208,458 10.9
Clients of Hargreaves Lansdown (execution only) 4,258,094 8.9
Clients of Aberdeen 3,803,731 7.9
Allspring Global Investments 2,117,625 4.4
The above interests at 31 March 2025 were unchanged at the date of approval of
this Report other than in relation to City of London Investment, which advised
the Company on 15 May 2025 of a holding of 7,531,812 shares, equivalent to
16.0% of the Company's shares in issue (excluding treasury shares).
Relations with Shareholders
The Directors place great importance on communication with shareholders. The
Annual Report is widely distributed to other parties who have an interest in
the Company's performance. Shareholders and investors may obtain up-to-date
information on the Company through its website, abrdnnewindia.co.uk. The
Company responds to correspondence from shareholders on a wide range of issues
(for contact details, please see Additional Shareholder Information).
The Board's policy is to communicate directly with shareholders and their
representative bodies without the involvement of the Manager in situations
where direct communication is required and representatives from the Board
offer to meet with major shareholders on an annual basis in order to gauge
their views.
In addition, members of the Board may accompany the Manager when undertaking
meetings with institutional shareholders.
The Company Secretaries only act on behalf of the Board, not the Manager, and
there is no filtering of communication. At each Board meeting the Board
receives full details of any communication from shareholders to which the
Chairman responds, as appropriate, on behalf of the Board.
The Notice of AGM included within the Annual Report is normally sent out at
least 20 working days in advance of the meeting. All shareholders have the
opportunity to put questions to the Board and Manager prior to the Company's
AGM.
Annual General Meeting
The AGM will be held on 23 September 2025 and the Notice of AGM and related
notes may be found in the printed Annual Report. Resolutions relating to the
following items will be proposed at the AGM as special business:
Amendment to Articles of Association
Resolution 9, which is an ordinary resolution, will be put to the AGM to
increase the annual limit on aggregate fees payable by the Company to the
Directors under Article 101. The Directors wish to make provision in the event
that the Board composition were to expand in number in the future, and/or fees
required to be increased, and are proposing that an aggregate annual limit of
£250,000 (or such other amount as may from time to time be determined by
Ordinary Resolution of the Company) be approved by shareholders, replacing the
current limit of £200,000. Further information regarding Resolution 9 may be
found in the Directors' Remuneration Report, below.
Share Repurchases (Resolution 10)
At the AGM held on 20 September 2024, shareholders approved the renewal of the
authority for the Company to repurchase its Ordinary shares.
The principal aim of a share buy back facility is to reduce the volatility in
the discount. In addition, the purchase of shares, when they are trading at a
discount, should result in an increase in the NAV per share for the remaining
shareholders. This authority, if conferred, will only be exercised if to do so
would result in an increase in the NAV per share for the remaining
shareholders, and if it is in the best interests of shareholders generally.
Any purchase of shares will be made within guidelines established from time to
time by the Board. It is proposed to seek shareholder authority to renew this
facility for another year at the AGM. Under the Listing Rules, the maximum
price that may be paid on the exercise of this authority must not exceed the
higher of: (i) 105% of the average of the middle market quotations for the
shares over the five business days immediately preceding the date of purchase;
and (ii) the higher of the last independent trade and the highest current
independent bid on the trading venue where the purchase is carried out. The
minimum price which may be paid is 25p per share. Shares which are purchased
under this authority will either be cancelled or held as treasury shares.
Renewal of the authority to buy back shares is sought at the AGM as the Board
considers that this mechanism has assisted in lowering the volatility of the
discount reflected in the Company's share price and is also accretive, in NAV
terms, for continuing shareholders. Special resolution 10 in the Notice of AGM
will, if passed, renew the authority to purchase in the market a maximum of
14.99% of shares in issue as at 24 June 2025, being the nearest practicable
date to the approval of this Report (equivalent to approximately 7.0 million
Ordinary shares). Such authority will expire on the date of the AGM in 2026 or
on 30 September 2026, whichever is earlier. This means in effect that the
authority will have to be renewed at the next AGM, or earlier, if the
authority has been exhausted.
Issue of Shares (Resolutions 11 and 12)
Ordinary resolution 11 in the Notice of AGM will, if passed, renew the
authority to allot unissued share capital up to an aggregate of 10%,
equivalent to approximately 4.6 million Ordinary shares, of the Company's
existing issued share capital, excluding treasury shares, as at 24 June 2025.
Such authority will expire on the date of the AGM in 2026 or on 30 September
2026, whichever is earlier, which means that the authority will have to be
renewed at the next AGM or, earlier, if the authority has been exhausted.
When shares are to be allotted for cash, the Companies Act 2006 (the "Act")
provides that existing shareholders have pre-emption rights and that the new
shares must be offered first to such shareholders in proportion to their
existing holding of shares. However, shareholders can, by Special resolution,
authorise the Directors to allot shares otherwise than by a pro rata issue to
existing shareholders. Special resolution 12 will, if passed, give the
Directors power to allot for cash equity securities up to 10% (equivalent to
approximately 4.6 million Ordinary shares), of the Company's existing issued
share capital as at 24 June 2025, as if Section 561(1) of the Act did not
apply. This is the same nominal amount of share capital which the Directors
are seeking the authority to allot pursuant to resolution 11. This authority
will expire on the date of the AGM in 2026 or on 30 September 2026, whichever
is earlier, which means that the authority will have to be renewed at the next
AGM or, earlier, if the authority has been exhausted. This authority will not
be used in connection with a rights issue by the Company.
The Company is permitted to buy back and hold shares in treasury and then sell
them at a later date for cash, rather than cancelling them. The Treasury Share
Regulations require such sale to be on a pre-emptive, pro rata, basis to
existing shareholders unless shareholders agree by Special resolution to
disapply such pre-emption rights. Accordingly, in addition to giving the
Directors power to allot unissued Ordinary share capital on a non pre-emptive
basis, resolution 12, if passed, will give the Directors authority to sell
Ordinary shares from treasury on a non pre-emptive basis. No dividends may be
paid on any shares held in treasury and no voting rights will attach to such
shares. The benefit of the ability to hold treasury shares is that such shares
may be resold.
This should give the Company greater flexibility in managing its share capital
and improve liquidity in its shares. The Board would only expect to issue new
Ordinary shares or sell Ordinary shares from treasury at a price per Ordinary
share which represented a premium to the NAV per share. It is also the
intention of the Board that sales from treasury would only take place when the
Board believes that to do so would assist in the provision of liquidity to the
market.
The Directors intend to use the authorities given by resolutions 11 and 12 to
allot shares, or sell shares from treasury, and disapply pre-emption rights
only in circumstances where this will be clearly beneficial to shareholders as
a whole. The issue proceeds would be available for investment in line with the
Company's investment policy.
Recommendation
The Board considers all of the Resolutions to be put to shareholders at the
AGM to be in the best interests of the Company and its members as a whole and
are likely to promote the success of the Company for the benefit of its
members as a whole. Accordingly, the Board unanimously recommends that
shareholders should vote in favour of the resolutions to be proposed at the
Annual General Meeting, as they intend to do in respect of their own
shareholdings, amounting to 23,738 Ordinary shares.
Additional Information
Where not provided elsewhere in the Directors' Report, the following provides
the additional information required to be disclosed by The Large and
Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.
The Company is not aware of any significant agreements to which it is a party,
apart from the management agreement, that take effect, alter or terminate upon
a change of control of the Company following a takeover. Other than the
management agreement with the Manager, further details of which are set out
above, the Company is not aware of any contractual or other agreements which
are essential to its business which might reasonably be expected to have to
been disclosed in the Directors' Report.
The financial risk management objectives and policies arising from its
financial instruments and the exposure of the Company to risk are disclosed in
Note 17 to the Financial Statements.
Michael Hughes,
Chairman
24 June 2025
Statement of Corporate Governance
abrdn New India Investment Trust plc (the "Company") is committed to high
standards of corporate governance. The Board is accountable to the Company's
shareholders for good governance and this statement describes how the Company
has applied the principles identified in the UK Corporate Governance Code as
published in July 2018 (the "UK Code"), which is available on the Financial
Reporting Council's (the "FRC") website: frc.org.uk and is applicable for the
Company's Year.
The Board has also considered the principles and provisions of the AIC Code of
Corporate Governance as published in February 2019 (the "AIC Code"). The AIC
Code addresses the principles and provisions set out in the UK Code, as well
as setting out additional provisions on issues that are of specific relevance
to the Company. The AIC Code is available on the AIC's website: theaic.co.uk.
The Board intends to report against the AIC Code on Corporate Governance,
published in August 2024 and applicable for accounting periods beginning on or
after 1 January 2025, in relation to its future year ending 31 March 2026.
The Board considers that reporting against the principles and provisions of
the AIC Code, which has been endorsed by the FRC, provides more relevant
information to shareholders.
The Board confirms that, during the year ended 31 March 2025, the Company has
complied with the provisions of the AIC Code, and the relevant provisions of
the UK Code, except for those provisions relating to:
- the composition of the Audit Committee (AIC Code provision 29):
the other Directors consider that it is appropriate for the Chairman of the
Board to be a member of, but not chair, the Audit Committee, due to the
Board's small size, the lack of any perceived conflict of interest, and
because the other Directors believe that Michael Hughes was independent on
appointment and continued to be independent; and
- the establishment of a remuneration committee (AIC Code
provision 37): for the reasons set out in the AIC Code the Board considers
that this provision is not relevant to the position of the Company, being an
externally managed investment company. In particular, all of the Company's
day-to-day management and administrative functions are outsourced to third
parties. As a result, the Company has no executive directors, employees or
internal operations. The Company
has therefore not reported further in respect of this provision.
Further information on how the Company has applied the AIC Code, the UK Code,
the Companies Act 2006 and
the FCA's DTR 7.2.6 can be found in the Annual Report as follows:
- the composition and operation of the Board and its Committees
are detailed in the Directors' Report and in the Audit Committee;
- the Board's policy on diversity and information on Board
diversity is in the Directors' Report;
- the Company's approach to internal controls and risk management
is detailed in the Audit Committee's Report;
- the contractual arrangements with the Manager and details of the
annual assessment of the Manager may be found in the Directors' Report;
- the Company's capital structure and voting rights are summarised
in the Directors' Report;
- the substantial interests disclosed in the Company's shares are
listed in the Directors' Report;
- the rules concerning the appointment and replacement of
Directors are contained in the Company's Articles of Association and are
summarised in the Directors' Remuneration Report. There are no agreements
between the Company and its Directors concerning compensation for loss of
office; and
- the powers to issue or buy back the Company's ordinary shares,
which are sought annually, and any amendments to the Company's Articles of
Association require a special resolution (75% majority) to be passed by
shareholders and information on these resolutions may be found in the
Directors' Report.
Michael Hughes,
Chairman
24 June 2025
Audit Committee's Report
The Audit Committee presents its Report for the year ended 31 March 2025.
Committee Composition
The Directors have appointed an Audit Committee (the "Committee") consisting
of the whole Board, which was chaired by Andrew Robson throughout the year.
The other members of the Committee consider that it is appropriate for the
Chairman of the Board to be a member of, but not chair, the Committee. The
Chairman of the Board possesses significant financial experience which the
other Committee members consider to be valuable. The Board is small and, if
the Chairman of the Board were to be excluded, the Committee would comprise
only four Directors which may lead to quorum issues if decisions are required
at short notice. In addition, the other Committee members are satisfied that
there is no conflict of interest arising and value the input of the Chairman
of the Board to the Committee's deliberations.
The Directors have satisfied themselves both that at least one of the
Committee's members has recent and relevant financial experience (Andrew
Robson is a member of the Institute of Chartered Accountants in England and
Wales), and that the Committee as a whole possesses competence relevant to the
investment trust sector.
Role of the Audit Committee
The principal function of the Committee is to assist the Board in relation to
the reporting of financial information, the review of financial controls and
the management of risk.
The Committee meets not less than twice each year, in line with the cycle of
annual and half-yearly reports, which is considered by the Directors to be a
frequency appropriate to the size and complexity of the Company. The Committee
has defined terms of reference which are reviewed and re-assessed for their
adequacy on an annual basis. Copies of the terms of reference are available
from the Company's website or from the Company Secretaries, on request.
In summary, the Committee's main functions are:
- to review and monitor the internal control systems and risk
management systems (including review of non-financial risks) on which the
Company is reliant;
- to consider annually whether there is a need for the Company to have
its own internal audit function;
- to review and monitor the integrity of the half-yearly report and
annual financial statements of the Company;
- to review, and report to the Board on, the significant financial
reporting issues and judgements made in connection with the preparation of the
Company's financial statements, half-yearly reports, announcements and related
formal statements;
- to review the content of the Annual Report and advise the Board on
whether, taken as a whole, it is fair, balanced and understandable and
provides the information necessary for shareholders to assess the Company's
position and performance, business model and strategy;
- to meet with the Auditor to review their proposed audit programme of
work and the findings of the Auditor. The Committee shall also use this as an
opportunity to assess the effectiveness of the audit process;
- to develop and implement policy on the engagement of the Auditor to
supply non-audit services. During the year under review, no non-audit services
were provided to the Company by KPMG LLP. All non-audit services must be
approved in advance by the Committee and will be reviewed in light of
statutory requirements to maintain the Auditor's independence;
- to review a statement from the Manager detailing the arrangements in
place whereby its staff may, in confidence, escalate concerns about possible
improprieties in matters of financial reporting or other matters
(whistleblowing);
- to review and approve the remuneration and terms of engagement of
the Auditor;
- to monitor and review annually the Auditor's independence,
objectivity, effectiveness, resources and qualification;
- to monitor the requirement for rotation of the Auditor and to
oversee any tender for the external audit of the Company;
- to keep under review the appointment of the Auditor and to recommend
to the Board and shareholders the reappointment of the existing auditor or, if
appropriate, the appointment of a new Auditor; and
- to evaluate its own performance each year, in relation to
discharging its main functions, by means of a section devoted to the Committee
within the Directors' annual self-evaluation.
Activities during the Year
The Committee met on three occasions during the year to consider the Annual
Report, the Half-Yearly Report and the Company's system of risk management and
internal control. Reports from the Manager's internal audit, business risk and
compliance departments were considered by the Committee at these meetings. The
Committee also conducted an audit tender during the year, as set out below.
Review of Internal Controls Systems and Risk Management
The Board is ultimately responsible for the Company's system of internal
control and risk management and for reviewing its effectiveness. The Committee
confirms that there is a robust process for identifying, evaluating and
managing the Company's significant business and operational risks, that it was
in place for the year ended 31 March 2025 and up to the date of approval of
this Annual Report, that it is regularly reviewed by the Board and accords
with the FRC guidance on internal controls.
The principal risks and uncertainties facing the Company are identified in the
Strategic Report.
The design, implementation and maintenance of controls and procedures to
safeguard the assets of the Company and, to manage its affairs properly,
extends to operational and compliance controls and risk management. This
includes controls over financial reporting risks related to the preparation of
the Annual Report, which are delegated to the Manager as part of the
Management Agreement ("MA") and the Committee receives regular reports from
the Manager as to how these controls are operating.
Internal control and risk management systems are monitored and supported by
the Manager's business risk and compliance functions which undertake periodic
examination of business processes, including compliance with the terms of the
MA, and ensures that any recommendations to improve controls are implemented.
Risk is considered in the context of the FRC and the UK Code guidance and
includes financial, regulatory, market, operational and reputational risk.
Risks are identified and documented through a risk heat-map, which is a
pictorial representation of the risks faced by the Company, after taking
account of any mitigating controls to minimise
the risk, ranked in order of likelihood and impact on
the Company.
The key components designed to provide effective risk management and internal
control are outlined below:
- the Manager prepares forecasts and management accounts which allow the
Board to assess the Company's activities and review its performance; the
emphasis is on obtaining the relevant degree of assurance and not merely
reporting by exception;
- the Board and Manager have agreed clearly-defined investment criteria,
specified levels of authority and exposure limits. Reports on these issues,
including performance statistics and investment valuations, are regularly
submitted to the Board, and there are meetings with the Manger and Investment
Manager
as appropriate;
- as a matter of course, the Manager's compliance department continually
reviews the Manager's operations; and
- written agreements are in place which specifically define the roles and
responsibilities of the Manager and other third-party service providers.
The Committee has considered the need for an internal audit function but, due
to the delegation of certain business functions to the Manager, has decided to
place reliance on the Manager's systems and internal audit procedures,
including the ISAE3402 Report, a global assurance standard for reporting on
internal controls for service organisations, commissioned by the Manager's
immediate parent company, Aberdeen Group plc. At its June 2025 meeting, the
Committee carried out an annual assessment of risk management and internal
controls for the year ended 31 March 2025 by considering documentation from
the Manager, including the internal audit and compliance functions, and taking
account of events since 31 March 2025.
The system of internal control and risk management is designed to meet the
Company's particular needs and the risks to which it is exposed. Accordingly,
this system is designed to manage, rather than eliminate, the risk of failure
to achieve business objectives and, by its nature, can only provide
reasonable, and not absolute, assurance against misstatement and loss.
External Agencies
The Board has contractually delegated to external agencies, including the
Manager and other service providers, certain services: the management of the
investment portfolio, the depositary services (which include the custody and
safeguarding of the assets), the share registration services and the
day-to-day accounting and company secretarial requirements. Each of these
contracts was entered into after full and proper consideration by the Board of
the quality and cost of services offered in so far as they relate to the
affairs of the Company. The Committee receives and considers reports from each
service provider, including the Manager, on a regular basis. In addition, ad
hoc reports and information are supplied to the Board as requested.
Significant Financial Reporting Issues addressed
During its review of the Company's financial statements for the year ended 31
March 2025, the Committee identified a significant financial reporting risk
facing the Company which is unchanged from the prior year, namely valuation
and existence of investments, as well as several additional risks.
Valuation and Existence of Investments
The valuation of investments is undertaken in accordance with the accounting
policies, disclosed in Notes 2(a) and 2(g) to the financial statements. With
reference to the IFRS 13 fair value hierarchy, all of the Company's
investments at 31 March 2025 were categorised as Level 1 as they are
considered liquid and quoted in active markets. The portfolio is reviewed and
verified by the Manager on a regular basis and management accounts including a
full portfolio listing are prepared each month and circulated to the Board.
BNP Paribas Trust Corporation UK Limited (the "Depositary") has been appointed
as depositary to safeguard the assets of the Company. The Depositary checks
the consistency and accuracy of its records on a monthly basis and reports its
findings to the Manager. Separately, the investment portfolio is reconciled
regularly by the Manager.
Other issues addressed
As well as fraud risk and corporate governance and disclosures, the other
accounting area of financial reporting particularly considered by the
Committee was compliance with Sections 1158 and 1159 of the Corporation Tax
Act 2010. Approval of the Company as an investment trust under those
sections for financial years commencing on or after 1 April 2012 has been
obtained and ongoing compliance with the eligibility criteria is monitored on
a regular basis by the Manager and reported to the Directors.
In addition the Committee conducted its annual review of the Auditor as well
as undertaking a tender for the external audit of the Company.
The Financial Reporting Council ("FRC") reviewed the Company's Annual Report
for the year ended 31 March 2024. The Committee was pleased to note that the
FRC had no questions or queries but did make suggestions for improvements to
the tax disclosures and Alternative Performance Measures. The Committee has
considered these suggestions and made appropriate amendments in this Annual
Report.
Review of Auditor
The Committee has reviewed, and considered appropriate, the effectiveness of
the Auditor including:
Independence - the Auditor discusses with the Committee, at least annually,
the steps it takes to ensure its independence and objectivity and makes the
Committee aware of any potential issues, explaining all relevant safeguards;
Quality of audit work - including the ability to resolve issues in a timely
manner (identified issues are satisfactorily and promptly resolved), its
communications/presentation of outputs (the explanation of the audit plan, any
deviations from it and the subsequent audit findings are comprehensive and
comprehensible), and working relationship with management (the Auditor has an
effective working relationship with the Manager). The Committee was satisfied
that the Independent Auditor demonstrated an appropriate level of scepticism
of the Manager's judgement - an example was the interpretation of Indian
capital gains tax legislation, where the Manager had pursed a prudent
approach; and
Quality of people and service - including continuity and succession plans (the
audit team is made up of sufficient, suitably experienced staff with provision
made for knowledge of the investment trust sector and retention on rotation of
the senior statutory auditor).
Audit tender and proposed appointment of Deloitte LLP as Auditor
Listed companies are required to tender the external audit at least every ten
years and to change Auditor at least every twenty years. The Committee had
last undertaken an audit tender in 2016 when KPMG LLP was appointed as Auditor
in respect of the financial years ended on or after 31 March 2017.
Accordingly, the Company was required to tender the external audit no later
than for the year ending 31 March 2027.
During the year, the Committee conducted a tender for the external audit for
the years ending on or after 31 March 2026. KPMG LLP, as the incumbent
Auditor, was invited to participate in the tender, alongside four other audit
firms. The Committee received presentations from three firms, following which
two were recommended to the Board before Deloitte LLP was selected as the
proposed Auditor.
Deloitte LLP has expressed its willingness to be appointed Auditor.
Shareholders will have the opportunity to vote on this appointment at the AGM
on 23 September 2025; Resolution 8 proposes the appointment of Deloitte LLP as
Auditor and also seeks authorisation for the Directors to fix the Auditor's
remuneration for the year to 31 March 2026.
In accordance with professional and regulatory standards, the audit director
responsible for the audit is rotated at least every five years in order to
protect independence and objectivity and to provide fresh challenge to the
business. The year ended 31 March 2025 is the second year for which Carla
Cassidy has served as the senior statutory auditor.
The Committee recorded its appreciation for the service provided by KPMG LLP.
Andrew Robson
Chairman of the Audit Committee
24 June 2025
Directors' Remuneration Report
This Directors' Remuneration Report comprises three parts:
1. a Remuneration Policy, which is subject to a binding shareholder vote
every three years - was most recently approved by shareholders at the AGM on
27 September 2023 where the votes for the relevant resolution, on a poll,
were: For - 32,556,121 votes (99.8%); Against - 55,148 votes (0.2%); and
Withheld - 28,130 votes. The Remuneration Policy will be put to shareholders
again at the AGM in 2026;
2. an annual Implementation Report, which is subject to an advisory
vote; and
3. an Annual Statement.
The law requires the Company's Auditor to audit certain of the disclosures
provided. Where disclosures have been audited, they are indicated as such. The
Auditor's opinion is included in their report.
The Directors' Remuneration Policy and level of Directors' remuneration are
determined by the Nomination Committee, which was chaired by Michael Hughes
throughout the year, and comprises all of the Directors. The Remuneration
Policy is reviewed by the Nomination Committee on an annual basis.
Remuneration Policy
The Board's policy is that the remuneration of non-executive Directors should
be sufficient to attract Directors of the quality required to run the Company
successfully. The remuneration should also reflect the nature of the
Directors' duties, responsibilities and the value of their time spent and be
fair and comparable to that of other investment trusts that are similar in
size and have a similar capital structures and investment objectives.
Appointment
- The Company only intends to appoint non-executive Directors.
- All the Directors are non-executive appointed under the terms of Letters
of Appointment.
- Directors must retire and be subject to election, at the first AGM after
their appointment, and re-election at least every three years thereafter,
although the Board has approved a policy of annual re-election.
- New appointments to the Board will be placed on the fee applicable to all
Directors at the time of appointment.
- No incentive or introductory fees will be paid to encourage a
Directorship.
- The Directors are not eligible for bonuses, pension benefits, share
options, long term incentive schemes or other benefits.
- Directors are entitled to reimbursement of out-of-pocket expenses incurred
in connection with the performance of their duties, including travel expenses.
- The Company indemnifies its Directors for all costs, charges, losses,
expenses and liabilities which may be incurred in the discharge of their
duties.
Performance, Service Contracts, Compensation and Loss of Office
- The Directors' remuneration is not subject to any performance-related fee.
- No Director has a service contract.
- No Director was interested in contracts with the Company during the period
or subsequently.
- The terms of appointment provide that a Director may be removed without
notice.
- Compensation will not be due upon leaving office.
- No Director is entitled to any other monetary payment or to any assets of
the Company.
Statement of Voting at General Meeting
At the Company's last AGM, held on 20 September 2024, shareholders approved
the Directors' Remuneration Report (other than the Directors' Remuneration
Policy) in respect of the year ended 31 March 2024 and the following proxy
votes were received on the Resolution: For - 28,355,149 votes (99.9%); Against
- 36,879 votes (0.1%); and Withheld - 14,967 votes.
The fact that the Remuneration Policy is subject to a binding vote at every
third AGM does not imply any change on the part of the Company. The principles
remain the same as for previous years. There have been no changes to the
Directors' Remuneration Policy during the period of this Report nor are there
any proposals for the foreseeable future.
This part of the Remuneration Report provides details of the Company's
Remuneration Policy for Directors of the Company. This policy takes into
consideration the principles of the UK Corporate Governance Code. No
shareholder views were sought in setting the Remuneration Policy although any
comments received from shareholders would be considered on an ongoing basis.
As the Company has no employees and the Board is comprised wholly of
non-executive Directors and, given the size and nature of the Company, the
Board has not established a separate Remuneration Committee during the year
under review. The Nomination Committee is responsible for determining
Directors' remuneration.
The Directors' Remuneration Policy was approved by shareholders at the AGM on
27 September 2023.
Implementation Report
The Directors are non-executive and the limit on their aggregate annual fees
is set at £200,000 within the Company's Articles of Association. This limit
may only be amended by shareholder resolution and a resolution to increase the
limit from £150,000 was last approved by shareholders at the AGM in 2018.
Resolution 9 in the Notice of the Annual General Meeting to be held on 23
September 2025 seeks shareholders' approval to increase this limit to
£250,000.
Review of Directors' Fees
The Directors' fees for the year and the preceding year are set out in the
table below.
Year ended 31 March 2025 31 March 2024
£
£
Chairman 40,000 40,000
Chairman of Audit Committee 34,500 34,500
Director 30,000 30,000
The Nomination Committee carried out a review of Directors' annual fees during
the year, including assessing the prevailing inflation rate and the increased
time required by the Company to devote to regulatory matters, The Nomination
Committee concluded that these should change, with effect from 1 April 2025,
to the following rates: £44,000 for the Chairman, £37,000 for the Chairman
of the Audit Committee, £34,000 for the Senior Independent Director and
£33,000 for each other Director. There are no further fees to disclose as the
Company has no employees, chief executive or executive directors.
Spend on Pay
As the Company has no employees, the Directors do not consider it appropriate
to present a table comparing remuneration paid to employees with distributions
to shareholders. The fees paid to Directors are shown in the table below.
Company Performance
During the year the Board carried out a review of investment performance. The
graph shows the share price total return (assuming all dividends are
reinvested) to Ordinary shareholders compared to the total return from the
Benchmark for the ten-year period to 31 March 2025 (rebased to 100 at 31 March
2015). This Benchmark was selected for comparison purposes as it is used by
the Board for investment performance measurement.
Fees Payable (Audited)
The Directors who served in the year received the fees, as set out in the
table below, which excluded employers' National Insurance contributions.
Year ended Year ended
31 March 2025 31 March 2024
Director £ £
Michael Hughes 40,000 40,000
David Simpson 30,000 30,000
Andrew Robson 34,500 34,500
Rebecca Donaldson 30,000 30,000
Irina Miklavchich (A) 10,917 n/a
Total 145,417 134,500
(A) Appointed as a Director on 20 November 2024
Fees are pro-rated where a change takes place during a financial year. There
were no payments to third parties from the fees referred to in the table
above.
Annual Percentage Change in Directors' Remuneration (Audited)
The table below sets out the annual percentage change in Directors' fees for
the past five years.
Year ended Year ended Year ended Year ended Year ended
31 March
31 March 31 March 31 March 31 March
2021
2025 2024 2023 2022
%
%
%
%
%
Michael Hughes (A) 0.0 18.3 22.9 1.9 1.9
David Simpson (B) 0.0 3.4 153.1 n/a n/a
Andrew Robson (C) 0.0 61.6 n/a n/a n/a
Rebecca Donaldson (D) 0.0 3.5 5.5 74.6 n/a
Irina Miklavchich (E) 100.0 n/a n/a n/a n/a
Hasan Askari (F) n/a n/a -47.8 1.4 1.4
Stephen White (F) n/a n/a -46.5 1.7 1.7
Rachel Beagles (G) n/a n/a n/a n/a -51.0
(A) Appointed as a Director on 7 September 2026 and Chairman on 28 September
2022.
(B) Appointed as a Director on 1 November 2021 and Senior Independent Director
on 28 September 2022.
(C) Appointed as a Director on 1 August 2022 and Chairman of the Audit
Committee on 28 September 2022.
(D) Appointed as a Director on 1 September 2020.
(E) Appointed as a Director on 20 November 2024.
(F) Retired as a Director on 28 September 2022.
(G) Retired as a Director on 23 September 2020.
Directors' Interests in the Company (Audited)
The Directors are not required to have a shareholding in the Company. The
Directors (including their connected persons) at 31 March 2025 and 31 March
2024 had no interest in the share capital of the Company other than those
interests, all of which are beneficial, in the table below, which were also
unchanged as at the date of this Report:
31 March 2025 31 March 2024
Ord. 25p Ord. 25p
Michael Hughes 8,115 8,115
David Simpson 3,860 3,860
Andrew Robson 4,000 4,000
Rebecca Donaldson 5,763 4,471
Irina Miklavchich 2,000 n/a
Annual Statement
On behalf of the Board and in accordance with Part 2 of Schedule 8 of the
Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment)
Regulations 2013, the Board confirms that the above Report on Remuneration
Policy and Remuneration Implementation summarises, as applicable, for the year
ended 31 March 2025:
- the major decisions on Directors' remuneration;
- any substantial changes relating to Directors' remuneration made during
the year; and
- the context in which the changes occurred and in which decisions have been
taken.
Michael Hughes,
Chairman
24 June 2025
Statement of Directors' responsibilities in respect of the Annual Report and financial statements
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law they have elected to prepare the financial
statements in accordance with UK-adopted international accounting standards
and applicable law.
Under company law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Company and of its profit or loss for that period. In
preparing these financial statements, the Directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable, relevant and
reliable;
- state whether they have been prepared in accordance with UK adopted
international accounting standards;
- assess the Company's ability to continue as a going concern, disclosing,
as applicable, matters related to going concern; and
- use the going concern basis of accounting unless they either intend to
liquidate the Company or to cease operations or have no realistic alternative
but to do so.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that its financial statements comply with the Companies
Act 2006. They are responsible for such internal control as they determine
is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error, and have general
responsibility for taking such steps as are reasonably open to them to
safeguard the assets of the Company and to prevent and detect fraud and other
irregularities.
Under applicable law and regulations, the Directors are also responsible for
preparing a Strategic Report, Directors' Report, Directors' Remuneration
Report and Corporate Governance Statement that complies with that law and
those regulations.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website but not
for the content of any information included on the website that has been
prepared or issued by third parties. Legislation in the UK governing the
preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.
In accordance with Disclosure Guidance and Transparency Rule 4.1.14R, the
financial statements will form part of the annual financial report prepared
using the single electronic reporting format under the TD ESEF Regulation. The
auditor's report on these financial statements provides no assurance over the
ESEF format.
Responsibility Statement of the Directors in respect of the Annual Financial
Report
We confirm that to the best of our knowledge:
- the financial statements, prepared in accordance with the applicable set
of accounting standards, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company; and
- the strategic report includes a fair review of the development and
performance of the business and the position of the issuer, together with a
description of the principal risks and uncertainties that they face.
We consider the annual report and accounts, taken as a whole, is fair,
balanced and understandable and provides the information necessary for
shareholders to assess the Company's position and performance, business model
and strategy.
For and on behalf of the Board
Michael Hughes,
Chairman
24 June 2025
Statement of Comprehensive Income
Year ended Year ended
31 March 2025 31 March 2024
Revenue Capital Revenue Capital
return return Total return return Total
Notes £'000 £'000 £'000 £'000 £'000 £'000
Income
Income from investments 3 4,664 - 4,664 4,722 - 4,722
Interest 3 144 - 144 181 - 181
Gains on investments held at fair value through profit or loss 10(a) - 47,026 47,026 - 106,805 106,805
Currency losses - (498) (498) - (403) (403)
4,808 46,528 51,336 4,903 106,402 111,305
Expenses
Investment management fees 4 (3,428) - (3,428) (2,964) - (2,964)
Administrative expenses 5 (1,057) - (1,057) (957) - (957)
(4,485) - (4,485) (3,921) - (3,921)
Profit before finance costs and taxation 323 46,528 46,851 982 106,402 107,384
Finance costs 6 (1,981) - (1,981) (2,544) - (2,544)
(Loss)/profit before taxation (1,658) 46,528 44,870 (1,562) 106,402 104,840
Taxation 7 (471) (12,924) (13,395) (472) (13,346) (13,818)
(Loss)/profit for the year (2,129) 33,604 31,475 (2,034) 93,056 91,022
(Loss)/return per Ordinary share (pence) 9 (4.24) 66.93 62.69 (3.77) 172.62 168.85
The Company does not have any income or expense that is not included in
"(Loss)/profit for the year", and therefore this represents the "Total
comprehensive income for the year", as defined in IAS 1 (revised).
All of the (loss)/profit and total comprehensive income is attributable to the
equity holders of the Company. There are no non-controlling interests.
The total column of this statement represents the Statement of Comprehensive
Income of the Company, prepared in accordance with UK-adopted International
Accounting Standards. The revenue and capital columns are supplementary to
this and are prepared under guidance published by the Association of
Investment Companies (see Note 2 to the Financial Statements).
All items in the above statement derive from continuing operations.
The accompanying notes are an integral part of these financial statements.
Statement of Financial Position
As at As at
31 March 2025 31 March 2024
Notes £'000 £'000
Non-current assets
Investments held at fair value through profit or loss 10 464,101 465,789
Current assets
Cash at bank 3,727 6,452
Other receivables 11 195 2,403
3,922 8,855
Current liabilities
Bank loan 12(a) (19,488) (25,953)
Other payables 12(b) (2,308) (2,231)
(21,796) (28,184)
Net current liabilities (17,874) (19,329)
Non-current liabilities
Deferred tax liability on Indian capital gains 13 (20,628) (19,406)
Net assets 425,599 427,054
Share capital and reserves
Ordinary share capital 14 14,768 14,768
Share premium account 25,406 25,406
Capital redemption reserve 4,484 4,484
Capital reserve 385,498 384,824
Revenue reserve (4,557) (2,428)
Equity shareholders' funds 425,599 427,054
Net asset value per Ordinary share (pence) 16 889.34 819.56
The financial statements were approved by the Board of Directors and
authorised for issue on 24 June 2025 and were signed on its behalf by:
Michael Hughes
Chairman
The accompanying notes are an integral part of these financial statements.
Statement of Changes in Equity
Year ended 31 March 2025
Share Capital
Share premium redemption Capital Revenue
capital account reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 April 2024 14,768 25,406 4,484 384,824 (2,428) 427,054
Net gain/(loss) after taxation - - - 33,604 (2,129) 31,475
Buyback of share capital to treasury - - - (32,930) - (32,930)
Balance at 31 March 2025 14,768 25,406 4,484 385,498 (4,557) 425,599
Year ended 31 March 2024
Share Capital
Share premium redemption Capital Revenue
capital account reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 April 2023 14,768 25,406 4,484 313,655 (394) 357,919
Net gain/(loss) after taxation - - - 93,056 (2,034) 91,022
Buyback of share capital to treasury - - - (21,887) - (21,887)
Balance at 31 March 2024 14,768 25,406 4,484 384,824 (2,428) 427,054
The accompanying notes are an integral part of these financial statements.
Statement of Cash Flows
Year ended Year ended
31 March 2025 31 March 2024
Notes £'000 £'000
Cash flows from operating activities
Dividend income received 4,664 4,722
Interest income received 12 (4)
Investment management fee paid (3,448) (3,203)
Other cash expenses (1,438) (970)
Cash (outflow)/inflow from operations (210) 545
Interest paid (2,093) (2,248)
Net cash outflow from operating activities (2,303) (1,703)
Cash flows from investing activities
Purchases of investments (136,654) (96,207)
Sales of investments 187,528 128,508
Indian capital gains tax paid on sales (11,703) (5,088)
Net cash inflow from investing activities 39,171 27,213
Cash flows from financing activities
Buyback of shares (32,482) (21,792)
Repayment of loan (6,500) (4,000)
Costs associated with loan (113) (41)
Net cash outflow from financing activities (39,095) (25,833)
Net decrease in cash and cash equivalents (2,227) (323)
Cash and cash equivalents at the start of the year 6,452 7,178
Effect of foreign exchange rate changes (498) (403)
Cash and cash equivalents at the end of the year 17 3,727 6,452
The accompanying notes are an integral part of these financial statements.
Notes to the Financial Statements
For the year ended 31 March 2025
1. Principal activity
The principal activity of the Company is that of an investment trust company
within the meaning of Section 1158 of the Corporation Tax Act 2010 ("s1158").
2. Accounting policies
(a) Basis of preparation. The accounting policies which follow set out those
policies which apply in preparing the financial statements for the year ended
31 March 2025.
The financial statements have been prepared in accordance with UK-adopted
international accounting standards ("IFRS"). The Company adopted all of the
IFRS which took effect during the year.
The financial statements have also been prepared in accordance with the
Companies Act 2006 and the Statement of Recommended Practice (SORP),
"Financial Statements of Investment Trust Companies and Venture Capital
Trusts," issued in July 2022.
The Directors have reviewed the Company's ability to continue as a going
concern. The Company's assets consist substantially of a portfolio of quoted
securities which in most circumstances are realisable within a short
timescale. The Directors are mindful of the principal risks and uncertainties
and the financial risks disclosed in Note 17 to the financial statements and
have reviewed cashflow forecasts detailing revenue and expenses for at least
12 months from the date of this Report. Accordingly, the Directors believe
that the Company has adequate financial resources to continue in operational
existence for at least 12 months from the date of this Report.
In August 2022, the Company entered into a three-year, £30 million revolving
credit facility (the "Facility") with Royal Bank of Scotland International
Limited (London Branch), part of NatWest Group plc, of which £19.5m was drawn
down at 31 March 2025 (2024 - £26m). The Board has set limits for borrowing
and regularly reviews the level of any gearing and compliance with banking
covenants.
The results of stress testing prepared by the Manager, which models a sharp
decline in market levels and income, demonstrated that the Company has the
ability to raise sufficient funds so as to both pay expenses and remain within
its debt covenants.
Having taken these factors into account, the Directors believe that the
Company has adequate resources to continue in operational existence and has
the ability to meet its financial obligations as they fall due for a period of
at least twelve months from the date of approval of this Report. For these
reasons, the Company continues to adopt the going concern basis of accounting
in preparing the financial statements.
Significant estimates and judgements. The preparation of financial statements
in conformity with IFRS requires the use of certain critical accounting
estimates which requires management to exercise its judgement in the process
of applying the accounting policies. The Directors do not believe that any
accounting judgements or estimates have been applied to these financial
statements that have a significant risk of causing material adjustment to the
carrying amount of assets and liabilities within the next financial year. The
Company considers the selection of Sterling as its functional currency to be a
key judgement.
Functional currency. The Company's investments are made in Indian Rupee and US
Dollar, however the Board considers the Company's functional currency to be
Sterling. In arriving at this conclusion, the Board considered that the shares
of the Company are listed on the London Stock Exchange, it is regulated in the
United Kingdom, principally having its shareholder base in the United Kingdom
and also pays expenses in Sterling, as it would dividends, where declared by
the Company.
New and amended accounting standards and interpretations. The Company applied
certain Standards and Amendments, which are effective for annual periods
beginning on or after 1 January 2024. The adoption of these Standards and
Amendments did not have a material impact on the financial results of the
Company. The nature is described below:
- IAS 1 Amendments (Classification of Liabilities as Current or Non-Current)
- IAS 1 Amendments (Non-current Liabilities with Covenants)
At the date of authorisation of these financial statements, the following
amendments to Standards and Interpretations were assessed to be relevant and
are all effective for annual periods beginning on or after 1 January 2025 and
thereafter;
- IAS 21 Amendments (Lack of Exchangeability)
The Company intends to adopt the Standards and Interpretations in the
reporting period when they become effective and the Board does not anticipate
that the adoption of these Standards and Interpretations in future periods
will materially impact the Company's financial results in the period of
initial application although there may be revised presentations to the
Financial Statements and additional disclosures.
(b) Presentation of Statement of Comprehensive Income. In order to better reflect
the activities of an investment trust company and in accordance with guidance
issued by the AIC, supplementary information which analyses the Statement of
Comprehensive Income between items of a revenue and capital nature has been
presented in the Statement of Comprehensive Income.
(c) Segmental reporting. The Board has considered the requirements of IFRS 8
'Operating Segments' and is of the view that the Company is engaged in a
single segment business, which is one of investing in Indian quoted equities
and that therefore the Company has only a single operating segment. The Board
of Directors, as a whole, has been identified as constituting the chief
operating decision maker of the Company. The key measure of performance used
by the Board to assess the Company's performance is the total return on the
Company's net asset value, as calculated under IFRS, and therefore no
reconciliation is required between the measure of profit or loss used by the
Board and that contained in the financial statements.
(d) Income. Dividends receivable on equity shares are recognised in the Statement
of Comprehensive Income on the ex-dividend date, and gross of any applicable
withholding tax. Dividends receivable on equity shares where no ex-dividend
date is quoted are brought into account when the Company's right to receive
payment is established. Special dividends are credited to capital or revenue,
according to their circumstances. Where a company has elected to receive
dividends in the form of additional shares rather than in cash, the amount of
the cash dividend foregone is recognised in the Statement of Comprehensive
Income. Provision is made for any dividends not expected to be received.
Interest receivable from cash and short-term deposits is accrued to the end of
the financial year.
(e) Expenses and interest payable. All expenses, with the exception of interest
expenses, which are recognised using the effective interest method, are
accounted for on an accruals basis. Expenses are charged to the revenue column
of the Statement of Comprehensive Income except as follows:
- expenses which are incidental to the acquisition or disposal of an
investment are charged to the capital column of the Statement of Comprehensive
Income and separately identified and disclosed in note 10 (b); and
- 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
the investments can be demonstrated.
(f) Taxation. The tax expense represents the sum of the tax currently payable and
deferred tax. Tax payable is based on the taxable profit for the year. Taxable
profit differs from profit before tax as reported in the Statement of
Comprehensive Income because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that are
never taxable or deductible. The Company's liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by
the Statement of Financial Position date.
Deferred tax. Deferred tax is recognised in respect of all temporary
differences at the Statement of Financial Position date, where transactions or
events that result in an obligation to pay more tax in the future or right to
pay less tax in the future have occurred at the Statement of Financial
Position date. This is subject to deferred tax assets only being recognised if
it is considered more likely than not that there will be suitable profits from
which the future reversal of the temporary differences can be deducted.
Deferred tax assets and liabilities are measured at the rates applicable to
the legal jurisdictions in which they arise, using enacted tax rates that are
expected to apply at the date the deferred tax position is unwound.
(g) Investments. Investments have been designated upon initial recognition as fair
value through profit or loss. Investments are recognised and de-recognised at
trade date where a purchase or sale is under a contract whose terms require
delivery within the timeframe established by the market concerned, and are
measured initially at fair value. Subsequent to initial recognition,
investments are recognised at fair value through profit or loss.
The Company classifies its investments based on their contractual cash flow
characteristics and the Company's business model for managing the assets. The
business model, which is the determining feature, is such that the portfolio
of investments is managed, and performance and risk is evaluated, on a fair
value basis. The Manager is also compensated based on the fair value of the
Company's assets. Consequently, all investments are measured at fair value
through profit or loss.
Investments are recognised and de-recognised at trade date where a purchase or
sale is under a contract whose terms require delivery within the timeframe
established by the market concerned, and are measured at fair value. For
listed investments, this is deemed to be bid market prices or closing prices
on a recognised stock exchange.
Gains and losses arising from the changes in fair value are included in net
profit or loss for the period as a capital item. Transaction costs are treated
as a capital cost.
(h) Cash and cash equivalents. Cash comprises cash in hand and at banks and
short-term deposits. Cash equivalents are short-term, highly-liquid
investments that are readily convertible to known amounts of cash, and that
are subject to an insignificant risk of changes in value.
(i) Other receivables. The Company has adopted the classification and measurement
provisions of IFRS 9 'Financial Instruments' as other receivables are held to
collect contractual cash flows and give rise to cash flows representing solely
payments of principal and interest. As such they are measured at amortised
cost. Other receivables held by the Company do not carry any interest, they
have been assessed as not having any expected credit losses over their
lifetime due to their short-term nature and low credit risk.
(j) Other payables. The Company has adopted the classification and measurement
provisions of IFRS 9 'Financial Instruments'. Other payables are non-interest
bearing and are stated at amortised cost.
(k) Borrowings. Bank loans are initially recognised at cost, being the fair value
of the consideration received, net of any issue expenses. Subsequently, they
are measured at amortised cost using the effective interest method. Finance
charges are accounted for on an accruals basis using the effective interest
rate method and are charged 100% to revenue.
(l) Nature and purpose of reserves
Called-up share capital. The Ordinary share capital on the Statement of
Financial Position relates to the number of shares in issue and in treasury.
Only when the shares are cancelled, either from treasury or directly, is a
transfer made to the capital redemption reserve. This reserve is not
distributable.
Share premium account. The balance classified as share premium includes the
premium above nominal value from the proceeds on issue of any equity share
capital comprising Ordinary shares of 25p. This reserve is not distributable.
Capital redemption reserve. The capital redemption reserve arose when Ordinary
shares were redeemed, and subsequently cancelled by the Company, at which
point an amount equal to the par value of the Ordinary share capital was
transferred from the Ordinary share capital to the capital redemption reserve.
This reserve is not distributable.
Capital reserve. This reserve reflects any gains or losses on investments
realised in the period along with any increases and decreases in the fair
value of investments held that have been recognised in the Statement of
Comprehensive Income. The part of this reserve represented by realised capital
gains is available for distribution by way of dividend. Subsequent to the
special reserve being extinguished, the capital reserve has been used to fund
the share buy-backs by the Company.
Revenue reserve. This reserve reflects all income and costs which are
recognised in the revenue column of the Statement of Comprehensive Income. The
revenue reserve is distributable by way of dividend.
(m) Foreign currency. Overseas monetary assets and liabilities are converted into
Sterling at the rate of exchange ruling at the Statement of Financial Position
date. Transactions during the year involving foreign currencies are converted
at the rate of exchange ruling at the transaction date. Any gain or loss
arising from a change in exchange rates subsequent to the date of the
transaction is included as an exchange gain or loss and recognised in the
Statement of Comprehensive Income.
(n) Cash flow statement classification of investments. Cash flow relating to
investments have been presented as investing cash flows as opposed to cash
flows from operating activities. The Board considered this to be an
appropriate classification reflecting the fact that these cashflows are
allocated towards resources intended to generate future income and cash flows,
in line with the definition of investing activities within IAS 7.
3. Income
2025 2024
£'000 £'000
Income from investments ·
Overseas dividends 4,664 · 4,722
·
Other income ·
Deposit interest 144 · 172
Other interest - · 9
144 · 181
Total income 4,808 · 4,903
4. Investment management fees
2025 2024
£'000 £'000
Investment management fees 3,428 · 2,964
The Company has an agreement with the Manager for the provision of management
and secretarial services.
During the year, the management fee was payable monthly in arrears and was
based on an annual amount of 0.8% up to £300 million and 0.6% thereafter of
the Company's net assets valued monthly. The management agreement is
terminable by either the Company or the Manager on six months' notice. The
amount payable in respect of the Company for the year was £3,428,000 (2024 -
£2,964,000) and the balance due to the Manager at the year end was £499,000
(2024 - £520,000).
5. Administrative expenses
2025 2024
£'000 £'000
Directors' fees 145 · 135
Promotional activities 208 · 190
Auditor's remuneration: ·
- fees payable for the audit of the Company's annual financial statements 80 · 70
Legal and advisory fees 95 · 59
Custodian and overseas agents' charges 378 · 319
Depositary fees 49 · 39
Other 102 · 145
1,057 · 957
The Manager supports the Company with promotional activities through its
participation in the abrdn Investment Trust Share Plan and ISA. The total fees
paid and payable under the agreement during the year were £208,000 (2024 -
£190,000) and £110,000 (2024 - £98,000) was due to the Manager at the year
end.
The only fees paid to KPMG LLP by the Company are the audit fees of £79,500
(2024 - £70,000). The amounts disclosed above for Auditor's remuneration are
all shown net of VAT.
6. Finance costs
2025 2024
£'000 £'000
In relation to bank loans 1,981 · 2,544
Finance costs are charged 100% to revenue as disclosed in the accounting
policies.
7. Taxation
2025 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
(a) Analysis of charge for the year
Indian capital gains tax charge on sales - 11,766 11,766 · - · 5,088 · 5,088
Overseas taxation 471 - 471 · 472 · - · 472
Total current tax charge for the year 471 11,766 12,237 · 472 · 5,088 · 5,560
Movement in deferred tax liability on Indian capital gains - 1,158 1,158 · - · 8,258 · 8,258
Total tax charge for the year 471 12,924 13,395 · 472 · 13,346 · 13,818
· · ·
The Company is liable to Indian capital gains tax under Section 115 AD of the
Indian Income Tax Act 1961. Accordingly, when investments are realised at a
value above cost and investments are held at fair value above cost, a tax
charge will result. The Company has recognised a deferred tax liability of
£20,628,000 (2024 - £19,406,000) on capital gains which may arise if Indian
investments are sold. Up to 22 July 2024 Indian CGT was charged at 10% on
long-term holdings and 15% on short-term holdings. From 23 July 2024 Indian
CGT is charged at 12.5% on long-term holdings and 20% on short-term holdings.
On 1 April 2020, the Indian Government withdrew an exemption from withholding
tax on dividend income. Dividends are received net of 20% withholding tax and
an excess charge of 4%. A further surcharge of either 2% or 5% is applied if
the receipt exceeds a certain threshold. Of this total charge, 10% of the
withholding tax is irrecoverable with the remainder being offset against the
deferred tax liability on Indian capital gains in the first instance where
there are capital gains during the year or if not then it is shown in the
Statement of Financial Position as an asset due for reclaim.
(b) Factors affecting the tax charge for the year. The tax charged for the year
can be reconciled to the (loss)/profit per the Statement of Comprehensive
Income as follows:
2025 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
(Loss)/profit before tax (1,658) 46,528 44,870 · (1,562) · 106,402 · 104,840
· · ·
UK corporation tax on (loss)/profit at the standard rate of 25% (2024 - (415) 11,632 11,217 · (391) · 26,601 · 26,210
25%)(A)
Effects of: · · ·
Gains on investments held at fair value through profit or loss not taxable not - (11,757) (11,757) · - · (26,702) · (26,702)
subject to UK corporation tax
Currency losses not taxable - 125 125 · - · 101 · 101
Deferred tax not recognised in respect of tax losses 1,580 - 1,580 · 1,474 · - · 1,474
Corporate interest restriction - - - · 93 · - · 93
Expenses not deductible for tax purposes 1 - 1 · 4 · - · 4
Indian capital gains tax charged on sales - 11,766 11,766 · - · 5,088 · 5,088
Movement in deferred tax liability on Indian capital gains - 1,158 1,158 · - · 8,258 · 8,258
Irrecoverable overseas withholding tax 471 - 471 · 472 · - · 472
Non-taxable dividend income (1,166) - (1,166) · (1,180) · - · (1,180)
Total tax charge 471 12,924 13,395 · 472 · 13,346 · 13,818
(A) The tax reconciliation above reconciles the Company's tax charge to the UK
corporation tax rate because the Company is a UK company and, although the net
total charge primarily relates to Indian Capital Gains Tax, the most
significant reconciling items normally relate to the exemptions from UK tax on
both dividend income and capital gains.
(c) At 31 March 2025, the Company had surplus management expenses and loan
relationship debits of £45,520,000 (2024 - £39,202,000) with a tax value of
£11,380,000 (2024 - £9,801,000) based on enacted tax rates, in respect of
which a deferred tax asset has not been recognised. No deferred tax asset has
been recognised because the Company is not expected to generate taxable income
in the future in excess of the deductible expenses of those future periods.
Therefore, it is unlikely that the Company will generate future taxable
revenue that would enable the existing tax losses to be utilised.
8. Ordinary dividends on equity shares
After the payment of operational expenses, there was no revenue available for
distribution by way of dividend for the year ended 31 March 2025 (2024 -
£nil).
9. (Loss)/return per Ordinary share
2025 2024
Revenue Capital Total Revenue Capital Total
Net (loss)/profit for the year (£'000) (2,129) 33,604 31,475 · (2,034) · 93,056 · 91,022
Weighted average number of Ordinary shares in issue 50,206,923 · · · 53,907,480
(Loss)/return per Ordinary share (pence) (4.24) 66.93 62.69 · (3.77) · 172.62 · 168.85
10. Investments held at fair value through profit or loss
2025 2024
(a) Valuation £'000 £'000
Opening book cost 302,906 · 296,380
Opening investment holdings fair value gains 162,883 · 94,991
Opening valuation 465,789 · 391,371
Movements in the year: ·
Purchases 136,625 · 95,183
Sales - proceeds (185,339) · (127,570)
Gains on investments 47,026 · 106,805
Closing valuation 464,101 · 465,789
·
·
2025 2024
£'000 £'000
Closing book cost 334,380 · 302,906
Closing investment holdings fair value gains 129,721 · 162,883
Closing valuation 464,101 · 465,789
·
The Company generated £185,339,000 (2024 - £127,570,000) from investments
sold in the period. The book cost of these investments when they were
purchased was £105,151,000 (2024 - £88,658,000). 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.
(b) Transaction costs. During the year, expenses were incurred in acquiring or
disposing of investments classified as fair value through profit or loss.
These have been expensed through the capital column of the Statement of
Comprehensive Income, and are included within gains on investments at fair
value through profit or loss in the Statement of Comprehensive Income. The
total costs were as follows:
·
2025 2024
£'000 £'000
Purchases 231 · 165
Sales 293 · 178
524 · 343
·
The above transaction costs are calculated in line with the AIC SORP. The
transaction costs in the Company's Key Information Document provided by the
Manager are calculated on a different basis and in line with the PRIIPs
regulations.
11. Other receivables
2025 2024
£'000 £'000
Amounts due from brokers 139 · 2,328
Prepayments and accrued income 56 · 75
195 · 2,403
None of the above amounts are past their due date or impaired (2024 - nil).
12. Current liabilities
2025 2024
(a) Bank loan £'000 £'000
Loans repayable within one year 19,488 · 25,953
In August 2022, the Company entered into a three year £30 million
multi-currency revolving loan facility with Royal Bank of Scotland
International Limited (London Branch). £19.5 million was drawn down at 31
March 2025 (31 March 2024 - £26 million) at an all-in interest rate of 8.055%
until 10 April 2025 (2024 - 8.7873% until 2 April 2024). On 30 June 2022, the
Company agreed an extension of the facility to 5 August 2025, incurring
£105,000 of expenses which are amortised over the remaining life of the loan.
On 19 June 2025, the Company renewed its facility with BNP Paribas, London
Branch for three years and at the date of this Report the Company had drawn
down £19.5 million at an all-in interest rate of 5.51% until 21 July 2025.
The terms of the loan facility contain covenants that consolidated gross
borrowings should not exceed 20% of adjusted investment portfolio value, the
net asset value shall not at any time be less than £150 million and the
investment portfolio contains a minimum of 25 eligible investments. The
Company complied with all covenants during the year and up to the date of
signing this Report.
1. 2. 3. 4. 5.
2025 2024
(b) Other payables £'000 £'000
Amounts due to brokers - · 29
Amounts due to brokers relating to buybacks to treasury 898 · 453
Other creditors 1,410 · 1,749
2,308 · 2,231
13. Non-current liabilities
2025 2024
£'000 £'000
Deferred tax liability on Indian capital gains 20,628 · 19,406
14. Ordinary share capital
2025 2024
Number £'000 · Number · £'000
Authorised 200,000,000 50,000 · 200,000,000 · 50,000
· ·
Issued and fully paid · ·
Ordinary shares of 25p each 47,855,793 11,964 · 52,107,910 · 13,028
· ·
Held in treasury: · ·
Ordinary shares of 25p each 11,214,347 2,804 · 6,962,230 · 1,740
59,070,140 14,768 · 59,070,140 · 14,768
· ·
The Ordinary shares give shareholders voting rights, the entitlement to all of
the capital growth in the Company's assets, and to all the income from the
Company that is resolved to be distributed.
During the year 4,252,117 (2024 - 3,702,011) Ordinary shares of 25p each were
repurchased by the Company at a total cost, including transaction costs, of
£32,930,000 (2024 - £21,887,000). All of the shares were placed in treasury.
Shares held in treasury represent 18.98% (2024 - 11.79%) of the Company's
total issued shares at the year end. Shares held in treasury do not carry a
right to receive dividends.
15. Analysis of changes in net debt
Net
Currency Cash Non-cash
2024 differences flows movements 2025
£'000 £'000 £'000 £'000 £'000
Cash and short term deposits 6,452 (498) (2,227) - 3,727
Debt due within one year (25,953) - 6,500 (35) (19,488)
(19,501) (498) 4,273 (35) (15,761)
· · · · ·
· · · · ·
Net
Currency Cash Non-cash
2023 differences flows movements 2024
£'000 £'000 £'000 £'000 £'000
Cash and short term deposits · 7,178 · (403) · (323) · - · 6,452
Debt due within one year · (29,918) · - · 4,000 · (35) · (25,953)
· (22,740) · (403) · 3,677 · (35) · (19,501)
· · · · ·
A statement reconciling the movement in net funds to the net cash flow has not
been presented as there are no differences from the above analysis.
16. Net asset value per Ordinary share
The net asset value per Ordinary share is based on a net asset value of
£425,599,000 (2024 - £427,054,000) and on 47,855,793 (2024 - 52,107,910)
Ordinary shares, being the number of Ordinary shares in issue at the year end,
excluding shares held in treasury.
17. Financial instruments
Risk management. The Company's investment activities expose it to various
types of financial risk associated with the financial instruments and markets
in which it invests. The Company's financial instruments comprise securities
and other investments, cash balances and debtors and creditors that arise
directly from its operations; for example, in respect of sales and purchases
awaiting settlement, and debtors for accrued income.
The Board has delegated the risk management function to the Manager under the
terms of its management agreement with the Manager (further details of which
are included under note 4). The Board regularly reviews and agrees policies
for managing each of the key financial risks identified with the Manager. The
types of risk and the Manager's approach to the management of each type of
risk, are summarised below. Such approach has been applied throughout the year
and has not changed since the previous accounting period. The numerical
disclosures exclude short-term debtors and creditors on the grounds of their
materiality.
Risk management framework. The directors of the Manager collectively assume
responsibility for the Manager's obligations under the AIFMD including
reviewing investment performance and monitoring the Company's risk profile
during the year.
The Manager is a fully integrated member of Aberdeen, which provides a variety
of services and support to the Manager in the conduct of its business
activities, including in the oversight of the risk management framework for
the Company. The Manager has delegated the day to day administration of the
investment policy to the Investment manager, which is responsible for ensuring
that the Company is managed within the terms of its investment guidelines and
the limits set out in its pre-investment disclosures to investors (details of
which can be found on the Company's website). The Manager has retained
responsibility for monitoring and oversight of investment performance, product
risk and regulatory and operational risk for the Company.
The Manager conducts its risk oversight function through the operation of the
Aberdeen's risk management processes and systems which are embedded within the
Aberdeen's operations. Aberdeen's Risk Division supports management in the
identification and mitigation of risks and provides independent monitoring of
the business. The Division includes Compliance, Business Risk, Market Risk and
Risk Management. The team is headed up by Aberdeen's Chief Risk Officer, who
reports to the CEO of the Group. The Risk Division achieves its objective
through embedding the Risk Management Framework throughout the organisation
using Aberdeen's operational risk management system ("SHIELD").
Aberdeen's Internal Audit Department is independent of the Risk Division and
reports directly to Aberdeen's CEO and to the Audit Committee of Aberdeen's
Board of Directors. The Internal Audit Department is responsible for providing
an independent assessment of Aberdeen's control environment.
Aberdeen's corporate governance structure is supported by several committees
to assist the board of directors of Aberdeen, its subsidiaries and the Company
to fulfil their roles and responsibilities. Aberdeen's Risk Division is
represented on all committees, with the exception of those committees that
deal with investment recommendations. The specific goals and guidelines on the
functioning of those committees are described on the committees' terms of
reference.
Market risk. The fair value or future cash flows of a financial instrument
held by the Company may fluctuate because of changes in market prices. This
market risk comprises three elements - interest rate risk, foreign currency
risk and other price risk.
Interest rate risk. The interest rate risk profile of the portfolio of the
Company's financial assets and liabilities, excluding equity holdings which
are all non-interest bearing, at the Statement of Financial Position date was
as follows:
Weighted average Weighted
period for which average Fixed Floating
rate is fixed interest rate rate rate
At 31 March 2025 Years % £'000 £'000
Assets
Sterling - 2.96 - 2,212
US Dollars - - - 4
Indian Rupee - - - 1,511
- 3,727
Weighted average Weighted
period for which average Fixed Floating
rate is fixed interest rate rate rate
Years % £'000 £'000
Liabilities · · · ·
Bank loan - £19,500,000 0.08 8.05 19,488 -
Weighted average Weighted
period for which average Fixed Floating
rate is fixed interest rate rate rate
At 31 March 2024 Years % £'000 £'000
Assets · · · ·
Sterling · - · 3.69 · - · 6,032
US Dollars · - · - · - · 8
Indian Rupee · - · - · - · 412
· · · - · 6,452
· · · ·
· · · ·
Weighted average Weighted
period for which average Fixed Floating
rate is fixed interest rate rate rate
Years % £'000 £'000
Liabilities
Bank loan - £26,000,000 · 0.17 · 8.79 · 25,953 · -
The weighted average interest rate is based on the current yield of each
asset, weighted by its market value. The weighted average interest rate on
bank loans is based on the interest rate payable, weighted by the total value
of the loans. The maturity date of the Company's loans is shown in note 12.
The floating rate assets consist of cash deposits on call earning interest at
prevailing market rates.
The Company's equity portfolio and short-term debtors and creditors (excluding
bank loans) have been excluded from the above tables.
Management of the risk. The possible effects on fair value and cash flows that
could arise as a result of changes in interest rates are taken into account
when making investment and borrowing decisions.
Interest rate sensitivity. The sensitivity analyses below have been determined
based on the exposure to interest rates for both derivative and non-derivative
instruments at the Statement of Financial Position date and the stipulated
change taking place at the beginning of the financial year and held constant
throughout the reporting period in the case of instruments that have floating
rates.
The rate of interest on the loan is the percentage rate per annum which is the
aggregate of the applicable margin, adjusted SONIA rate and mandatory cost if
any.
If interest rates had been 100 basis points higher or lower (based on current
parameter used by Manager's Investment Risk Department on risk assessment) and
all other variables were held constant, the Company's revenue return for the
year ended 31 March 2025 would have decreased/increased by £181,000 (2024 -
decrease/increase £182,000). This is mainly attributable to the Company's
exposure to interest rates on its floating rate cash balances and bank loans.
These figures have been calculated based on cash positions and bank loans at
each year end.
In the opinion of the Directors, the above sensitivity analyses are not
representative of the year as a whole, since the level of exposure changes
frequently as part of the interest rate risk management process used to meet
the Company's objectives. The risk parameters used will also fluctuate
depending on the current market perception.
Foreign currency risk. The Company's total return and net assets can be
significantly affected by currency translation movements as the majority of
the Company's assets and income are denominated in currencies other than
Sterling, which is the Company's functional currency.
Management of the risk. It is not the Company's policy to hedge this risk but
it reserves the right to do so, to the extent possible.
The revenue account is subject to currency fluctuation arising on dividends
paid in foreign currencies. The Company does not hedge this currency risk.
Foreign currency exposure by currency of denomination:
2025 2024
Net Total Net Total
Overseas monetary currency Overseas monetary currency
investments assets exposure investments assets exposure
£'000 £'000 £'000 £'000 £'000 £'000
US Dollar - 4 4 · - · 8 · 8
Indian Rupee 464,101 1,650 465,751 · 465,789 · 2,711 · 468,500
464,101 1,654 465,755 · 465,789 · 2,719 · 468,508
Foreign currency sensitivity. The following tables show the impact to a 10%
increase and a 10% decrease in Sterling against the foreign currency in which
the Company has exposure.
If Sterling were to strengthen by 10%, there would be following impact:
2025 2024
Equity(A) Equity(A)
£'000 £'000
US Dollar - · (1)
Indian Rupee (42,341) · (42,591)
(42,341) · (42,592)
·
If Sterling were to weaken by 10%, there would be following impact:
·
2025 2024
Equity(A) Equity(A)
£'000 £'000
US Dollar - · 1
Indian Rupee 51,750 · 52,056
51,750 · 52,057
(A) Represents total current exposure to other currencies as defined above.
Price risk. Price risks (ie, changes in market prices other than those arising
from interest rate or currency risk) may affect the value of the quoted
investments.
Management of the risk. It is the Board's policy to hold an appropriate spread
of investments in the portfolio in order to reduce the risk arising from
factors specific to a sector. Both the allocation of assets and the stock
selection process act to reduce market risk. The Manager actively monitors
market prices throughout the year and reports to the Board, which meets
regularly in order to review investment strategy. The investments held by the
Company are all listed on the Bombay (Mumbai) Stock Exchange and/or The Indian
National Stock Exchange.
Price risk sensitivity. If market prices at the Statement of Financial
Position date had been 15% higher or lower (which the Directors consider to be
a reasonable potential change in market prices) while all other variables
remained constant, the return attributable to Ordinary shareholders for the
year ended 31 March 2025 would have increased /(decreased) by £69,615,000
(2024 - increased/(decreased) by £69,868,000) and capital reserves would have
increased /(decreased) by the same amount.
Liquidity risk. This is the risk that the Company will encounter difficulty in
meeting obligations associated with financial liabilities.
Management of the risk. The Board imposes borrowing limits to ensure gearing
levels are appropriate to market conditions and reviews these on a regular
basis. Borrowings comprise a £30 million revolving multi-currency credit
facility, which expires on 5 August 2025. Other payables are settled within
one year. Details of borrowings and other payables at 31 March 2025 are shown
in note 12.
Liquidity risk is not considered to be significant as the Company's assets
comprise mainly readily realisable securities, which can be sold to meet
funding commitments if necessary. Short-term flexibility is achieved through
the use of the loan facility, details of which can be found in note 12.
Details of the Board's policy on gearing are shown in the interest rate risk
section of this note.
Liquidity risk exposure. The Company has a £30 million uncommitted
multicurrency revolving loan facility, of which £19,500,000 (2024 -
£26,000,000) was drawn down at the year end. Other payables amounted to
£2,308,000 (2024 - £2,231,000).
Credit risk. This is failure of the counterparty to a transaction to discharge
its obligations under that transaction, which could result in the Company
suffering a loss.
Management of the risk. The risk is actively managed as follows:
- investment transactions are carried out with a number of brokers, whose
credit standing is reviewed periodically by the Manager, and limits are set on
the amount that may be due from any one broker;
- the risk of counterparty exposure due to failed trades causing a loss to the
Company is mitigated by the review of failed trade reports by the Manager on a
daily basis. In addition, both stock and cash reconciliations to custodians'
records are performed on a daily basis by the Manager to ensure discrepancies
are investigated on a timely basis. The Manager's Compliance department
carries out periodic reviews of the Custodian's operations and reports its
findings to the Manager's Risk Management Committee and to the Board of the
Company. This review will also include checks on the maintenance and security
of investments held; and
- cash is held only with reputable banks whose credit ratings are monitored on a
regular basis.
None of the Company's financial assets are secured by collateral or other
credit enhancements (2024 - none).
Credit risk exposure. In summary, compared to the amounts included in the
Statement of Financial Position, the maximum exposure to credit risk at 31
March was as follows:
2025 2024
Statement of Statement of
Financial Maximum Financial Maximum
Position Exposure Position Exposure
£'000 £'000 £'000 £'000
Current assets · ·
Loans and receivables 195 195 · 2,403 · 2,403
Cash at bank and in hand 3,727 3,727 · 6,452 · 6,452
3,922 3,922 · 8,855 · 8,855
The exposure noted in the above table is not representative of the exposure
across the year as a whole.
None of the Company's financial assets are past due or impaired (2024 - none).
Fair values of financial assets and financial liabilities. The fair value of
bank loans are represented in the table below;
2025 2024
£'000 £'000
Bank loan 19,488 · 25,953
Investments held at fair value through profit or loss are valued at their
quoted bid prices which equate to their fair values.
The fair value and the carrying value of the bank loan in the Statement of
Financial Position are the same at £19,488,000 as at 31 March 2025 (2024 -
£25,953,000) due to its short-term nature.
The Directors are of the opinion that the other financial assets and
liabilities carried at amortised cost equates to their fair value.
18. Capital management policies and procedures
The Company's capital management objectives are:
- to ensure that the Company will be able to continue as a going concern; and
- to maximise the income and capital return to its equity shareholders through
an appropriate balance of equity capital and debt. The policy is that debt
should not exceed 25% of net assets.
The Board, with the assistance of the Manager monitors and reviews the broad
structure of the Company's capital on an ongoing basis. This review includes:
- the planned level of gearing, which includes taking account of the Manager's
views on the market;
- the opportunity to buy back equity shares for cancellation or holding in
treasury, which takes account of the difference between the net asset value
per share and the share price (ie the level of share price discount or
premium);
- the opportunity for new issues of equity shares; and
- the extent to which any revenue in excess of that which is required to be
distributed should be retained.
The Company's objectives, policies and processes for managing capital are
unchanged from the preceding accounting period.
19. Fair value hierarchy
IFRS 13 'Fair Value Measurement' requires an entity to classify fair value
measurements using a fair value hierarchy that reflects the subjectivity of
the inputs used in making measurements. The fair value hierarchy has the
following levels:
Level 1: quoted (unadjusted) market prices in active markets for identical
assets or liabilities;
Level 2: valuation techniques for which the lowest level input that is
significant to the fair value measurement is directly or indirectly
observable; and
Level 3: valuation techniques for which the lowest level input that is
significant to the fair value measurement is unobservable.
The financial assets and liabilities measured at fair value in the Statement
of Financial Position are grouped into the fair value hierarchy at the
Statement of Financial Position date are as follows:
Level 1 Level 2 Level 3 Total
As at 31 March 2025 Note £'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss
Quoted equities · a) 464,101 - - 464,101
Net fair value · 464,101 - - 464,101
·
· · · · ·
Level 1 Level 2 Level 3 Total
As at 31 March 2024 Note £'000 £'000 £'000 £'000
Financial assets at fair value through profit or loss · · · · ·
Quoted equities · a) · 465,789 · - · - · 465,789
Net fair value · · 465,789 · - · - · 465,789
a) Quoted equities. The fair value of the Company's investments in quoted
equities has been determined by reference to their quoted bid prices at the
reporting date. Quoted equities included in Fair Value Level 1 are actively
traded on recognised stock exchanges.
20. Controlling party
In the opinion of the Directors on the basis of shareholdings advised to them,
the Company has no immediate or ultimate controlling party.
21. Related party transactions
Directors' fees and interests. Fees payable during the year to the Directors
and their interests in shares of the Company are disclosed within the
Directors' Remuneration Report.
22. Transactions with the Manager
The Company has an agreement with abrdn Fund Managers Limited for the
provision of management, secretarial, accounting and administration services
and for the carrying out of promotional activities in relation to the Company.
Details of transactions during the year and balances outstanding at the year
end are disclosed in notes 4 and 5.
23. Subsequent events
As noted in the Chairman's Statement, the Company and Manager have agreed to a
change in management fee arrangements with effect from 1 April 2025. From this
date, the management fee will be charged at a rate of 0.8% per annum on the
first £300 million of the Company's market capitalisation and at a rate of
0.6% per annum thereafter.
In addition, the Company has also agreed to pay an administration fee at the
rate of £45,000 per annum plus applicable VAT, which will increase each year
in line with Consumer Prices Inflation.
On 19 June 2025, the Company entered into a new, three-year, £30 million
secured revolving credit facility with BNP Paribas London Branch replacing the
existing facility with Royal Bank of Scotland International Limited (London
Branch).
Alternative Performance Measures
Alternative performance measures are numerical measures of the Company's
current, historical or future performance, financial position or cash flows,
other than financial measures defined or specified in the applicable financial
framework. The Company's applicable financial framework includes IFRS and the
AIC SORP. The Directors assess the Company's performance against a range of
criteria which are viewed as particularly relevant for closed-end investment
companies.
Adjusted net asset value per Ordinary share(A)
This performance measure is used to provide a like for like comparison with
the Company's Benchmark for the purposes of the potential five-yearly
performance-related conditional tender offer announced on 24 March 2022, which
was first in effect from 1 April 2022 and is therefore not applicable to
earlier reporting periods. Further details on the conditional tender may be
found in the Chairman's Statement.
2025 2024
Net assets attributable (£'000) 425,599 427,054
Accumulated Indian CGT charge since 1 April 2022 (£'000) 24,400 11,476
Net assets attributable excluding Indian CGT charge (£'000) 449,999 438,530
Number of Ordinary shares in issue 47,855,793 52,107,910
Adjusted net asset value per Ordinary share(A) 940.32p 841.58p
(A) Adjusted NAV is the Company's NAV after adding back all Indian capital
gains tax paid or accrued since 1 April 2022 in respect of realised and
unrealised gains made on investments. This adjustment is made because the
Company's benchmark, the MSCI India Index does not take account of Indian
Capital Gains Tax.
Discount to net asset value per Ordinary share
The discount is the amount by which the share price is lower than the net
asset value per share with debt at par value, expressed as a percentage of the
net asset value.
2025 2024
NAV per Ordinary share a 889.34p 819.56p
Share price b 756.00p 652.00p
Discount (a-b)/a 15.0% 20.4%
Net gearing
Net gearing measures the total borrowings less cash and cash equivalents
divided by shareholders' funds, expressed as a percentage. Under AIC reporting
guidance cash and cash equivalents includes amounts due to and from brokers at
the year end.
2025 2024
Borrowings (£'000) a 19,488 25,953
Cash (£'000) b 3,727 6,452
Amounts due to brokers (£'000) c 898 482
Amounts due from brokers (£'000) d 139 2,328
Shareholders' funds (£'000) e 425,599 427,054
Net gearing (a-b+c-d)/e 3.9% 4.1%
Ongoing charges ratio
The ongoing charges ratio has been calculated in accordance with guidance
issued by the AIC as the total of investment management fees and
administrative expenses are expressed as a percentage of the average net asset
values with debt at par value throughout the year.
2025 2024
Investment management fees (£'000) 3,428 2,964
Administrative expenses (£'000) 1,057 957
Less: non-recurring charges(A) (£'000) (23) -
Ongoing charges (£'000) 4,462 3,921
Average net assets (£'000) 470,792 391,393
Ongoing charges ratio 0.95% 1.00%
(A) Professional fees unlikely to recur.
The ongoing charges ratio provided in the Company's Key Information Document
is calculated in line with the PRIIPs regulations which includes amongst other
things, the cost of borrowings and transaction costs.
Total return
NAV and share price total returns show how the NAV and share price has
performed over a period of time in percentage terms, taking into account both
capital returns and dividends paid to shareholders. Share price and NAV total
returns are monitored against open-ended and closed-ended competitors, and the
Benchmark, respectively. Adjusted NAV is the Company's NAV after adding back
all Indian capital gains tax paid or accrued since 1 April 2022 in respect of
realised or unrealised gains made on investments. This adjustment is made
because the Company's benchmark, the MSCI India Index does not take account of
Indian Capital Gains Tax.
Share
Year ended 31 March 2025 NAV Adjusted NAV Price
Opening at 1 April 2024 a 819.56p 841.58p 652.00p
Closing at 31 March 2025 b 889.34p 940.32p 756.00p
Price movements c=(b/a)-1 8.5% 11.7% 16.0%
Dividend reinvestment(A) d N/A N/A N/A
Total return c+d +8.5% +11.7% +16.0%
Share
Year ended 31 March 2024 NAV Adjusted NAV Price
Opening at 1 April 2023 a 641.32p 637.97p 512.00p
Closing at 31 March 2024 b 819.56p 841.58p 652.00p
Price movements c=(b/a)-1 27.8% 31.9% 27.3%
Dividend reinvestment(A) d N/A N/A N/A
Total return c+d +27.8% +31.9% +27.3%
Share
Three years ended 31 March 2025 NAV Adjusted NAV Price
Opening at 1 April 2022 a 697.30p 697.30p 562.00p
Closing at 31 March 2025 b 889.34p 940.32p 756.00p
Price movements c=(b/a)-1 +27.5% +34.9% +34.5%
Dividend reinvestment(A) d N/A N/A N/A
Total return c+d +27.5% +34.9% +34.5%
(A) NAV total return involves investing the net dividend in the NAV of the
Company with debt at par value on the date on which that dividend goes
ex-dividend. Share price total return involves reinvesting the net dividend in
the share price of the Company on the date on which that dividend goes
ex-dividend.
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 March 2025 or 2024 but is derived
from those accounts. Statutory accounts for 2024 have been delivered to the
registrar of companies. The auditor has reported on those accounts; their
reports were (i) unqualified, (ii) did not include a reference to any matters
to which the auditor drew attention by way of emphasis without qualifying
their report and (iii) did not contain a statement under section 498 (2) or
(3) of the Companies Act 2006.
The statutory accounts for the financial year ended 31 March 2025 have been
approved by the Board and audited and will be filed with the Registrar of
Companies in due course.
The Company's AGM will be held at 18 Bishops Square, London E1 6EG at 12.30pm
Tuesday 23 September 2025.
The Annual Report will be posted to shareholders in July 2025. Further copies
may be ordered from the Manager's website:
https://www.aberdeeninvestments.com/en-gb/trusts
(https://www.aberdeeninvestments.com/en-gb/trusts) .
On behalf of the Board
abrdn Holdings Limited
Secretaries
24 June 2025
END
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